Exhibit 4.11
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RECEIVABLES PURCHASE AGREEMENT
dated as of December 13, 1994
between
AMERISOURCE CORPORATION,
as Seller
and
AMERISOURCE RECEIVABLES CORPORATION,
as Purchaser
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TABLE OF CONTENTS
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement to Purchase and Sell ........................ 1
SECTION 1.2 Timing of Purchases and Contributions ................. 2
SECTION 1.3 Consideration for Purchases ........................... 5
SECTION 1.4 No Recourse ........................................... 5
SECTION 1.5 No Assumption of Obligations Relating
to Receivables, Related Assets or Contracts ........... 5
SECTION 1.6 True Sales ............................................ 5
SECTION 1.7 Addition of Sellers ................................... 6
SECTION 1.8 Termination of Status as a Seller ..................... 6
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 Calculation of Purchase Price ......................... 7
SECTION 2.2 Definitions and Calculations Related
to Purchase Price Percentage .......................... 8
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.
SECTION 3.1 Purchase Price Payments ............................... 9
SECTION 3.2 The ARC Note .......................................... 11
SECTION 3.3 Application of Collections and Other Funds ............ 11
SECTION 3.4 Servicing of Receivables and Related Assets ........... 12
SECTION 3.5 Adjustments for Noncomplying Receivables,
Dilution and Cash Discounts ........................... 12
SECTION 3.6 Payments and Computations, Etc ........................ 12
ARTICLE IV
CONDITIONS TO PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase .............. 13
SECTION 4.2 Certification as to Representations and Warranties .... 14
SECTION 4.3 Effect of Payment of Purchase Price ................... 14
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of the Seller .......... 15
SECTION 5.2 Representations and Warranties of ARC ................. 20
ARTICLE VI
GENERAL COVENANTS OF THE SELLER
SECTION 6.1 Affirmative Covenants ................................. 21
SECTION 6.2 Reporting Requirements ................................ 24
SECTION 6.3 Negative Covenants .................................... 25
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE TRANSFERRED ASSETS
SECTION 7.1 Rights of ARC ......................................... 28
SECTION 7.2 Responsibilities of the Seller ........................ 28
SECTION 7.3 Further Action Evidencing Purchases ................... 29
SECTION 7.4 Collection of Receivables; Rights
of ARC and Its Assignees .............................. 30
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination by the Seller ............................. 31
SECTION 8.2 Automatic Termination ................................. 31
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Seller ............................. 32
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments; Waivers, Etc ............................. 34
SECTION 10.2 Notices, Etc ......................................... 34
SECTION 10.3 Cumulative Remedies .................................. 35
SECTION 10.4 Binding Effect; Assignability;
Survival of Provisions ............................... 35
SECTION 10.5 Governing Law ........................................ 35
SECTION 10.6 Costs, Expenses and Taxes ............................ 35
SECTION 10.7 Submission to Jurisdiction ........................... 36
SECTION 10.8 Waiver of Jury Trial ................................. 36
SECTION 10.9 Integration .......................................... 37
SECTION 10.10 Counterparts ......................................... 37
SECTION 10.11 Acknowledgment and Consent ........................... 37
SECTION 10.12 No Partnership or Joint Venture ...................... 38
SECTION 10.13 No Proceedings ....................................... 38
SECTION 10.14 Severability of Provisions ........................... 38
SECTION 10.15 Recourse to ARC ...................................... 38
EXHIBITS
EXHIBIT A Form of ARC Note
EXHIBIT B Form of AmeriSource Certificate
EXHIBIT C Form of Seller Assignment Certificate
SCHEDULES
SCHEDULE 1 Litigation and Other Proceedings
SCHEDULE 2 Offices of the Seller where Records are Maintained
SCHEDULE 3 Legal Names, Trade Names and Names Under Which the
Companies Do Business
SCHEDULE 4 Changes in Financial Condition
APPENDIX
APPENDIX A Definitions
This RECEIVABLES PURCHASE AGREEMENT, dated as of December 13, 1994 (this
"Agreement"), is made between AMERISOURCE CORPORATION, a Delaware corporation
(the "Seller"), and AMERISOURCE RECEIVABLES CORPORATION, a Delaware corporation
("ARC"). Except as otherwise defined herein, capitalized terms have the
meanings that Appendix A assigns to them, and this Agreement shall be
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interpreted in accordance with the conventions set forth in Parts B, C and D of
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Appendix A.
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WHEREAS, pursuant to the Pooling Agreement, ARC intends to transfer its
interests in the Receivables sold pursuant hereto, together with Receivables
contributed to ARC by the Seller from time to time, to the Trust in order to,
among other things, finance its purchases hereunder;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement to Purchase and Sell . On the terms and subject to
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the conditions set forth in this Agreement (including the conditions to
purchases set forth in Article IV), the Seller agrees to sell, transfer, assign,
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set over and otherwise convey to ARC and ARC agrees to purchase from the Seller,
at the times set forth in Section 1.2, all of the Seller's right, title and
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interest in, to and under:
(a) each Receivable of the Seller (other than Contributed
Receivables) and any Notes Receivable that existed and were owing to the
Seller as at the closing of the Seller's business on the Initial Cut-Off
Date,
(b) each Receivable created by the Seller (other than Contributed
Receivables) and any Notes Receivable that arise during the period from and
including the closing of the Seller's business on the Initial Cut-Off Date
to but excluding the Purchase Termination Date,
(c) all Related Security with respect to all Receivables (other than
Contributed Receivables) of the Seller,
(d) all proceeds of the foregoing, including all funds received by
any Person in payment of any amounts owed (including invoice prices,
finance charges, interest and all other charges, if any) in respect of any
Receivable described above (other than a Contributed Receivable) or Related
Security with respect to any such Receivable, or
otherwise applied to repay or discharge any such Receivable (including
insurance payments that the Seller or the Servicer applies in the ordinary
course of its business to amounts owed in respect of any such Receivable
(it being understood that property insurance covering inventory is not so
applied and is not included in this grant) and net proceeds of any sale or
other disposition of repossessed goods that were the subject of any such
Receivable) or other collateral or property of any Obligor or any other
party directly or indirectly liable for payment of such Receivables (other
than Returned Goods), and
(e) all Records relating to any of the foregoing.
As used herein, (i) "Purchased Receivables" means the items listed above in
clauses (a) and (b), (ii) "Related Purchased Assets" means the items listed
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above in clauses (c), (d) and (e), (iii) "Related Assets" means the Related
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Purchased Assets and the Related Contributed Assets, (iv) "Purchased Assets"
means the Purchased Receivables and the Related Purchased Assets, and (v)
"Transferred Assets" means the Purchased Receivables, the Contributed
Receivables and the Related Assets.
SECTION 1.2 Timing of Purchases and Contributions .
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(a) Closing Date Purchases. All of the Purchased Assets of the
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Seller that existed at the closing of the Seller's business on the Initial Cut-
Off Date will be sold or (in accordance with the Subscription Agreement)
contributed automatically to ARC on the Closing Date.
(b) Regular Purchases and Contributions. Except as otherwise provided in
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Section 8.2, until the end of Phase I (or, if earlier, the Purchase Termination
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Date), each Receivable and the Related Assets with respect thereto shall be sold
by the Seller to ARC unless the Receivable and Related Assets with respect
thereto have been contributed by the Seller to ARC in accordance with the
Subscription Agreement. The time at which each such sale and contribution
becomes effective shall be determined in accordance with the remaining
provisions of this Section 1.2. During Phase II, until the Purchase Termination
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Date and except as otherwise provided in Section 8.2, each Receivable shall be
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deemed to have been sold by the Seller to ARC immediately (and without further
action by any Person) upon the opening of business on the Determination Date for
such Receivable, unless the Receivable and Related Assets have been contributed
to ARC in accordance with the Subscription Agreement at such time.
(c) Determination Date Calculations. No later than 11:00 a. m., New York
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City time, on each Determination Date during Phase I, the Servicer will
determine (which determination will be set forth in the Daily Report for such
Determination Date):
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(i) the aggregate Unpaid Balance of Receivables (the
"Available Receivables") originated on each Origination Date occurring
on or after the previous Business Day but prior to such Determination
Date,
(ii) the Minimum Return for the Available Receivables,
(iii) the amount of the Cash Transfer (if any) that would be
made on such day if the Available Receivables were sold by the Seller
to ARC, and transferred by ARC to the Trust, on such day,
(iv) the net increase (if any) that would be made in the ARC
Revolving Amount on such day if the Available Receivables were sold by
the Seller to ARC, and transferred by ARC to the Trust, on such day,
(v) the "Transfer Value" for the Available Receivables, which
shall be the sum of the amounts determined pursuant to clauses (iii)
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and (iv) above, and
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(vi) the excess (which may be a positive or negative number) of
the Transfer Value of the Available Receivables over the Minimum
Return for the Available Receivables; any such negative excess being
the "Shortfall" for such Determination Date.
(d) Sale Timing if No Shortfall Exists. If there is no Shortfall on such
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Determination Date (and no Look Back Period is then in effect), the Available
Receivables will be sold by the Seller to ARC on that day, effective as of the
time the Trustee initiates a wire transfer of that day's Cash Transfer to ARC;
provided, that on any such Determination Date for which there is no Cash
Transfer, such sale by the Seller shall be effective upon the Trustee's receipt
of the Daily Report for such day.
(e) Sale Timing if a Shortfall Exists. If a Shortfall shall exist
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on such Determination Date:
(i) the Servicer shall, no later than 11:00 a.m., New York time,
on the Determination Date, notify the Trustee and the Seller Agent by
telephone (to be promptly confirmed by telecopy),
(ii) the Seller shall deliver to the Seller Agent, no later
than 11:15 a.m., New York time, on the Determination Date, a
certificate in the form attached as Exhibit B (the "AmeriSource
Certificate") signed by a senior officer of AmeriSource identified
pursuant to the Original Seller Credit Agreement as being acceptable
to the Seller Agent for such purpose that (A) specifies whether an
Event of Default or an Unmatured Event of Default then exists (and, if
such an event exists, describing such event in detail), and (B) sets
forth the End-of-the-Day Seller Excess Borrowing Base
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for such day, as well as the calculation thereof. The AmeriSource
Certificate may provide that the End-of-the-Day Seller Excess
Borrowing Base has been calculated on the basis of the most recently
required Borrowing Base Certificate under the Original Seller Credit
Agreement, but in that event the AmeriSource Certificate shall also
include a representation and warranty by AmeriSource to Seller Agent
and each Seller Party that AmeriSource has no reason to believe that
the End-of-the-Day Seller Excess Borrowing Base set forth therein
would be any lower than $40,000,000 if calculated on the basis of a
new Borrowing Base Certificate delivered under the Original Seller
Credit Agreement as of the Determination Date.
(iii) a period (the "Look Back Period") will commence; it being
understood that the Look Back Period will end on the date the Trustee
receives or is deemed to receive a Stop Date Notice or a Confirmation
Notice, and
(iv) the Affected Receivables will not be sold by the Seller to
ARC, or transferred by ARC to the Trust, unless and until the Trustee
receives or is deemed to receive a Confirmation Notice.
(f) Deemed Confirmation Notice. If on the basis of the AmeriSource
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Certificate the End-of-the-Day Seller Excess Borrowing Base equals or exceeds
$40,000,000, the Seller shall notify the Trustee and the Servicer as soon as
practical in writing. Such notice shall be deemed to constitute a Confirmation
Notice from the Seller Agent to the Trustee and the Servicer.
(g) Additional Look Back Period Calculations. On each Business Day
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(other than the first Determination Date) falling in a Look Back Period, the
mechanics described in clauses 1.2(c) through 1.2(f) will be repeated, with the
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modifications that (i) all calculations (including calculations of the permitted
Cash Transfer, the Transfer Value, the Shortfall and the End-of-the-Day Excess
Borrowing Base) shall be made on a cumulative basis, as if all of the days in
the Look Back Period were a single day, (ii) references to "Available
Receivables" shall be deemed to be references to all Affected Receivables
arising during the Look Back Period, (iii) references to the Determination Date
will be deemed to be references to the day on which such mechanics are
performed, (iv) Segregated Cash shall be recomputed on the basis of such day's
Daily Reports, and (v) no additional Look Back Period will commence, and instead
the existing Look Back Period will continue. If, on any such day, there is no
Shortfall on such a cumulative basis or, on the basis of the AmeriSource
Certificate, the End-of-the-Day Seller Excess Borrowing Base equals or exceeds
$40,000,000, then the Seller shall notify the Trustee and the Servicer in
writing, and the Servicer shall cause Segregated Cash in an amount not less than
the amount assumed to be received by the Seller Agent for purposes of the
calculation of the End-of-the-Day Seller Excess Borrowing Base to be transferred
by the Trust to ARC on such day. Such notice from the Seller to the Trustee and
the Servicer shall be deemed to constitute a Confirmation Notice from the Seller
Agent to the Trustee and the Servicer.
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(h) Effect of Confirmation Notice. If the Trustee receives a
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Confirmation Notice by 2:00 p. m., New York City time, on any Business Day
(including the Determination Date) during the Look Back Period, the Affected
Receivables shall be sold by the Seller to ARC on such day. If the Trustee
receives a Confirmation Notice on a day which is not a Business Day, or after
2:00 P.M., New York City time, on a Business Day, the Affected Receivables shall
be sold by the Seller to ARC on the next Business Day. Any such sales shall be
effective as of the time the Trustee initiates a wire transfer of an amount
equal to the Segregated Cash (including that day's Cash Transfer) to ARC;
provided, that if the amount of such Segregated Cash is zero, such sale by the
Seller shall be effective upon the Trustee's receipt of the Confirmation Notice.
(i) Deemed Stop Date Notice. If the Seller Agent has not delivered
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(or been deemed to deliver) either a Stop Date Notice or a Confirmation Notice
to the Trustee by 11:15 a.m., New York time, on the 5th Business Day after the
Determination Date in any Look Back Period, the Seller Agent shall be deemed to
have given a Stop Date Notice on such day.
(j) Trustee Reliance. The Trustee shall be entitled to rely
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exclusively on the Servicer's determination of whether a Shortfall exists or the
conditions specified in Section 1.2(f) or 1.2(g) exist, and such determination
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shall be binding on all parties to the Transaction Documents.
SECTION 1.3 Consideration for Purchases . On the terms and subject to the
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conditions set forth in this Agreement, ARC agrees to make Purchase Price
payments to the Seller in accordance with Article III.
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SECTION 1.4 No Recourse . Except as specifically provided in this
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Agreement, the sale and purchase of Purchased Assets under this Agreement shall
be without recourse to the Seller; it being understood that the Seller shall be
liable to ARC for all representations, warranties, covenants and indemnities
made by the Seller pursuant to the terms of this Agreement, all of which
obligations are limited so as not to constitute recourse to the Seller for the
credit risk of the Obligors.
SECTION 1.5 No Assumption of Obligations Relating to Receivables, Related
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Assets or Contracts . Neither ARC, the Servicer nor the Trustee shall have any
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obligation or liability to any Obligor or other customer or client of the Seller
(including any obligation to perform any of the obligations of the Seller under
any Receivable, related Contracts or any other related purchase orders or other
agreements). No such obligation or liability is intended to be assumed by ARC,
the Servicer or the Trustee hereunder, and any assumption is expressly
disclaimed.
SECTION 1.6 True Sales . The Seller and ARC intend the transfers of
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Receivables hereunder to be true sales by the Seller to ARC that are absolute
and irrevocable and that provide ARC with the full benefits of ownership of the
Receivables, and neither the Seller
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nor ARC intends the transactions contemplated hereunder to be, or for any
purpose to be characterized as, loans from ARC to the Seller.
SECTION 1.7 Addition of Sellers . Any Subsidiary or Affiliate of the
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Seller may become a Seller hereunder and sell its accounts receivable and
property of the types that constitute Related Assets hereunder to ARC if the
Rating Agency Condition is satisfied with respect to such addition. The Seller
and its Subsidiary or Affiliate that is proposed to be added as a Seller shall
give to ARC and the Applicable Rating Agencies not less than 30 days' prior
written notice of the effective date of the addition of the Subsidiary or
Affiliate as a Seller. Once the notice has been given, any addition of a
Subsidiary or Affiliate of the Seller as a Seller pursuant to this section shall
become effective on the first Business Day following the expiration of the 30-
day period (or such later date as may be specified in the notice) on which (i)
the Rating Agency Condition has been satisfied, (ii) the Seller has given the
notice described in Section 3.05(e) of the Pooling Agreement to ARC, (iii) the
Servicer shall have delivered to the Trustee a supplement to the Settlement
Statement then in effect as described in Section 3.05(e) of the Pooling
Agreement and (iv) the Subsidiary or Affiliate and the parties hereto shall have
executed and delivered the agreements, instruments and other documents and the
amendments or other modifications to the Transaction Documents, in form and
substance reasonably satisfactory to ARC and the Trustee, that ARC or the
Trustee reasonably determines are necessary or appropriate to effect the
addition.
SECTION 1.8 Termination of Status as a Seller . (a) At any time when
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more than one Person is a Seller, a Seller may terminate its obligation to sell
its Receivables and Related Assets to ARC if:
(i) the Seller (a "Terminating Seller") shall have given ARC
not less than 30 days' prior written notice of its intention to terminate
the obligations, which notice shall be given by ARC to the Trustee and the
Applicable Rating Agencies,
(ii) an Authorized Officer of the Terminating Seller shall have
certified that the termination by the Terminating Seller of its status as a
Seller will not have a Material Adverse Effect, and
(iii) both immediately before and after giving effect to the
termination by the Terminating Seller, no Liquidation Event or Unmatured
Liquidation Event or Pay-Out Event shall have occurred and be continuing or
shall reasonably be expected to occur.
Any termination by a Seller shall become effective on the first Business
Day that follows the day on which the requirements of clauses (a)(i) through
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(iii) shall have been satisfied (or such later date specified in the notice or
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certificate referred to in the clauses). Any termination by a Seller shall
terminate its right and obligation to sell Receivables and Related Assets
hereunder to ARC and ARC's agreement, with respect to the Terminating Seller, to
purchase the Receivables and Related Assets; provided, however, that the
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termination shall not relieve the Terminating Seller of any of its other
Obligations, to the extent the Obligations relate to Receivables (and Related
Assets with respect thereto) originated by the Terminating Seller prior to the
effective date of the termination.
(b) A Seller's right and obligation to sell its Receivables and Related
Assets to ARC shall terminate immediately if the Seller ceases to be a
Subsidiary of the Seller; provided, however, that the termination shall not
relieve the Seller of any of its other Obligations, to the extent the
Obligations relate to Receivables (and Related Assets with respect thereto)
originated by the Seller prior to the effective date of the termination.
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 Calculation of Purchase Price. (a) On each Business Day
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(including the Closing Date), the Servicer shall deliver to ARC, the Trustee and
the Seller a Daily Report with respect to ARC's purchases of Receivables from
the Seller:
(i) that are to be made on the Closing Date (in the case of the Daily
Report to be delivered on the Closing Date) or
(ii) that were made on the immediately preceding Business Day (in the
case of each subsequent Daily Report).
(b) On each day when Receivables or Notes Receivable are purchased by ARC
from the Seller pursuant to Article I, the "Purchase Price" to be paid to the
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Seller on such day for the Purchased Receivables and Related Purchased Assets
that are to be sold by the Seller on such day shall be determined in accordance
with the following formula:
PP = AUB x PPP
where:
PP = the aggregate Purchase Price for the Purchased Receivables and
Related Purchased Assets to be purchased from the Seller on such
day
AUB the "Aggregate Unpaid Balance" of the Purchased Receivables that
are to be purchased from the Seller on such day. For purposes of
this calculation, "Aggregate Unpaid Balance" shall mean (i) for
purposes of calculating the Purchase Price to be paid to the
Seller on the Closing Date, the sum of the Unpaid Balance of each
Receivable generated by the Seller, as measured as at the closing
of the Seller's business on the
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Initial Cut-Off Date, and (ii) for purposes of calculating the
Purchase Price on each Business Day thereafter, the sum of the
Unpaid Balance of each Receivable to be purchased from the Seller
on such day, calculated at the time of the Receivable's sale to
ARC
PPP = the Purchase Price Percentage applicable to the Receivables to be
purchased from the Seller on such day, as determined pursuant to
Section 2.2.
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SECTION 2.2 Definitions and Calculations Related to Purchase Price
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Percentage .
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(a) "Purchase Price Percentage" for the Receivables to be sold by the
Seller on any day shall mean the percentage determined in accordance with the
following formula:
PPP = 100% - (LD + PDRR + RGP)
where:
PPP = the Purchase Price Percentage in effect on such day for the
Seller,
LD = the Loss Discount (expressed as a percentage) in effect on such
day for the Seller, as determined pursuant to subsection (b)
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below,
PDRR = the Purchase Discount Reserve Ratio (expressed as a percentage)
in effect on such day for the Seller, as determined on such day
pursuant to subsection (c) below, and
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RGP = the Returned Goods Percentage.
The Purchase Price Percentage, the Loss Discount and the Purchase Discount
Reserve Ratio shall be recomputed by the Servicer on each Report Date, in each
case as of the then most recent Cut-Off Date, and shall become effective on the
next Settlement Date.
(b) "Loss Discount" in effect for any day for the Seller means a
percentage equal to the Loss to Liquidation Ratio (expressed as a percentage) as
in effect on such day (it being understood that the allocation of certain
miscellaneous items will be required to be estimated for this purpose).
(c) "Purchase Discount Reserve Ratio" for the Receivables to be sold by
the Seller on any day shall mean a percentage determined in accordance with the
following formula:
PDRR = (TD x DR) + PD
--
360
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where:
PDRR = the Purchase Discount Reserve Ratio in effect on such day for the
Seller,
TD = the Turnover Days for the Receivables originated by the Seller
during the immediately preceding Calculation Period,
DR = the Discount Rate (expressed as a percentage) in effect on such
day as determined pursuant to subsection (d) below, and
PD = a profit discount equal to 0.25%.
(d) "Discount Rate" for the Receivables to be sold by the Seller on any
day shall mean a fraction (expressed as a percentage) having (i) a numerator
equal to 12, multiplied by an amount equal to the accrued Carrying Costs for the
immediately preceding Calculation Period, and (ii) a denominator equal to the
aggregate Unpaid Balance of the Receivables as of the last day of the
immediately preceding Calculation Period.
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.
SECTION 3.1 Purchase Price Payments. (a) On the Closing Date and on the
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Business Day following each day on which any Receivables are purchased (or
deemed purchased) from the Seller by ARC pursuant to Article I, on the terms and
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subject to the conditions of this Agreement, ARC shall pay to the Seller the
Purchase Price for the Receivables and Related Assets purchased on such day by
ARC from the Seller by (i) making a cash payment (on the basis of the Purchase
Price owing to the Seller) to the Seller to the extent that ARC has cash
available to make the payment pursuant to Section 3.3 and (ii) if the Purchase
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Price to be paid to the Seller for the Receivables and Related Assets exceeds
the amount of any cash payment on such day to the Seller pursuant to clause (i),
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by automatically increasing the principal amount outstanding under the ARC Note
by the amount of the excess. In addition, on any Business Day ARC may prepay
the Purchase Price to be paid to the Seller for Receivables and Related Assets
generated on a subsequent Business Day. For purposes of the remaining
provisions of this section, the Purchase Price otherwise payable on any day by
ARC to the Seller shall be deemed to be reduced by cumulative unused amount of
such prepayments.
(b) On each Business Day, the "Noncomplying Receivables and Dilution
Adjustment" shall be equal to the difference (whether the difference is positive
or negative) between (i) the sum of (A) the Seller Dilution Adjustment, if any,
for the immediately preceding
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Business Day, as shown in the Daily Report for such day, plus (B) the Seller
Noncomplying Receivables Adjustment, if any, for the immediately preceding
Business Day, as shown in the Daily Report for such day, in the case of each of
clauses (A) and (B), as the amounts are determined pursuant to Section 3.5,
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minus (ii) the amount of any payments (if any) that ARC shall have received on
the immediately preceding Business Day on account of a Seller Noncomplying
Receivable that has been the subject of an earlier Seller Noncomplying
Receivables Adjustment. If the Noncomplying Receivables and Dilution Adjustment
is positive on any day, ARC shall reduce the Purchase Price payable to the
Seller on such day by the absolute value of the Noncomplying Receivables and
Dilution Adjustment. If instead the Noncomplying Receivables and Dilution
Adjustment for the Seller is negative on any day, ARC shall increase the
Purchase Price payable to the Seller on suc h day by the absolute value of the
Noncomplying Receivables and Dilution Adjustment.
(c) If a positive Noncomplying Receivables and Dilution Adjustment for the
Seller on any day exceeds the Purchase Price payable by ARC to the Seller on
such day, or if such day falls on or after the Purchase Termination Date, then,
if the Seller continues to hold the ARC Note, the principal amount of that ARC
Note shall be reduced automatically by the amount of the excess.
(d) If, on any day prior to the Purchase Termination Date, the principal
amount of the ARC Note is zero, then the amount of the excess of a positive
Noncomplying Receivables and Dilution Adjustment for the Seller on such day over
the Purchase Price payable by ARC to the Seller on such day (the "Purchase Price
Credit") shall be credited against the Purchase Price payable by ARC to the
Seller for subsequent Purchases of Receivables and Related Assets by ARC. If
any Purchase Price Credit for the Seller has not been fully applied on or prior
to the tenth Business Day (or mutually agreed upon earlier day) after the
creation of the Purchase Price Credit, then, on the Business Day that follows
the end of the ten Business Day (or shorter) period, the Seller shall pay to ARC
in cash the remaining unapplied amount of the Purchase Price Credit.
(e) If, on any day on or after the Purchase Termination Date, the
principal amount of the ARC Note has been reduced to zero and there is a
positive Noncomplying Receivables and Dilution Adjustment for the Seller for
such day, then the Seller shall pay to ARC in cash the amount of the
Noncomplying Receivables and Dilution Adjustment on the next succeeding Business
Day.
(f) If, on any day on or after the Purchase Termination Date, there is a
negative Noncomplying Receivables and Dilution Adjustment for the Seller for
such day, then ARC shall pay to the Seller in cash the amount of the
Noncomplying Receivables and Dilution Adjustment no later than the Final
Maturity Date, and the amount, until paid, shall bear interest at the rate of
interest publicly announced from time to time by the Trustee as its reference
rate, which interest shall also be paid no later than the Final Maturity Date.
page 10
SECTION 3.2 The ARC Note . (a) On the Closing Date, ARC will deliver to
-------------
the Seller a promissory note, substantially in the form of Exhibit A, payable
---------
to the order of the Seller (the promissory note, as the same may be amended,
supplemented, endorsed or otherwise modified from time to time, together with
any promissory note issued from time to time in substitution therefor or renewal
thereof in accordance with the Transaction Documents, being herein called the
"ARC Note"), that is subordinated to all Senior Interests now or hereafter
arising under or in connection with the Pooling Agreement. The ARC Note is
payable in full on the date that is twelve months after the date on which all
Investor Certificates and Purchased Interests have been repaid in full and the
Revolving Periods for all Investor Revolving Certificates and Purchased
Interests have terminated. The ARC Note bears interest at a rate per annum
equal to the rate publicly announced by the Trustee from time to time as its
"reference" rate, determined as of each Cut-Off Date. ARC may prepay all or
part of the outstanding balance of the ARC Note from time to time without any
premium or penalty, unless the prepayment would result in a default in ARC's
payment of any other amount required to be paid by it under any Transaction
Document; provided, however, that no Liquidation Event or Unmatured Liquidation
Event has occurred.
(b) The Seller (or its designee) shall hold the ARC Note for the
benefit of the Seller and shall make all appropriate recordkeeping entries with
respect to the ARC Note or otherwise to reflect the payments on and adjustments
of the ARC Note. The Servicer's books and records shall constitute rebuttable
presumptive evidence of the principal amount of and accrued interest on the ARC
Note at any time. The Seller hereby irrevocably authorizes the Servicer to mark
the ARC Note "CANCELLED" and return it to ARC upon the final payment thereof.
SECTION 3.3 Application of Collections and Other Funds. If, on any day,
------------------------------------------
ARC receives proceeds of transfers pursuant to the Pooling Agreement, ARC shall
apply the funds as follows:
(a) first, to pay its existing expenses and to set aside funds for the
payment of expenses that are then accrued (in each case to the extent such
expenses are permitted to exist under Section 7.02(m) of the Pooling
---------------
Agreement).
(b) second, to pay the Purchase Price pursuant to Section 3.1 for
-----------
Receivables and Related Assets purchased by ARC from the Seller on such day
(in the case of the Closing Date) or the next preceding Business Day, and
(c) third, in such order as ARC may elect, (A) to repay amounts owed
by ARC to the Seller under the ARC Note, provided, however, that no
Liquidation Event or Unmatured Liquidation Event has occurred,(B) to pay
amounts owed pursuant to Section 3.1(f), or (C) to declare and pay
--------------
dividends to the Seller to the extent permitted by law, so long as ARC
shall be in compliance with Section 7.02(o) of the Pooling Agreement after
giving effect to the dividends.
page 11
SECTION 3.4 Servicing of Receivables and Related Assets . Consistent with
--------------------------------------------
ARC's ownership of the Receivables and the Related Assets, as between the
parties to this Agreement, ARC shall have the sole right to service, administer
and collect the Receivables, to assign the right and to delegate the right to
others. Without limiting the generality of Section 10.11, the Seller hereby
-------------
acknowledges and agrees that ARC shall assign to the Trustee for the benefit of
the Certificateholders the rights and interests granted by the Seller to ARC
hereunder and agrees to cooperate fully with the Servicer and the Trustee in the
exercise of the rights. As more fully described in Section 7.4(b) and in the
--------------
Pooling Agreement, the Trustee may exercise the rights in the place of ARC (as
assignee or otherwise) only after the designation of a Servicer other than the
Seller pursuant to Section 10.02 of the Pooling Agreement.
SECTION 3.5 Adjustments for Noncomplying Receivables, Dilution and Cash
-----------------------------------------------------------
Discounts . (a) If at any time any of ARC, the Servicer, the Trustee or the
- - - ----------
Seller shall determine that any Receivable identified by the Servicer as an
Eligible Receivable on the date of Purchase thereof by ARC or the contribution
thereof to ARC was in fact a Seller Noncomplying Receivable on such date, or
that any of the representations and warranties made by the Seller in Section
-------
5.1(k) with respect to the Receivable was not true on such date, the Seller
- - - ------
shall be deemed to have received on the date of such determination a Collection
of the Receivable in an amount equal to the Unpaid Balance of the Receivable
(the sum of all such amounts for the Seller on any day being called the "Seller
Noncomplying Receivables Adjustment" for the Seller for such day), and the
Seller shall pay the amount of the Seller Noncomplying Receivables Adjustment to
ARC in the manner provided for in Section 3.1.
-----------
(b) If on any day the aggregate Unpaid Balance of the Receivables sold or
contributed to ARC on or before such date by the Seller is reduced in any manner
described in the definition of "Dilution" or on account of any Cash Discounts
(the total of the reductions being called the "Seller Dilution Adjustment" for
the Seller for such day), then the Seller shall be deemed to have received on
such day a Collection of Receivables in the amount of the Seller Dilution
Adjustment and the Seller shall pay the amount to ARC in the manner provided in
Section 3.1.
- - - -----------
SECTION 3.6 Payments and Computations, Etc . (a) All amounts to be paid
-------------------------------
by the Seller to ARC hereunder shall be paid in accordance with the terms hereof
no later than 2:00 p. m., New York City time, on the day when due in Dollars in
immediately available funds to an account that ARC shall from time to time
specify in writing. Payments received by ARC after such time shall be deemed to
have been received on the next Business Day. In the event that any payment
becomes due on a day that is not a Business Day, then the payment shall be made
on the next Business Day. The Seller shall, to the extent permitted by law, pay
to ARC, on demand, interest on all amounts not paid when due hereunder at 2% per
annum above the interest rate on the ARC Note in effect on the date the payment
was due; provided, however, that the interest rate shall not at any time exceed
the maximum rate
page 12
permitted by applicable law. All computations of interest payable hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.
(b) All amounts to be paid by ARC to the Seller hereunder shall be paid no
later than 2:00 p. m., New York City time, on the day when due in Dollars in
immediately available funds to an account that the Seller shall from time to
time specify in writing. Payments received by the Seller after such time shall
be deemed to have been received on the next Business Day. In the event that any
payment becomes due on a day that is not a Business Day, then such payment shall
be made on the next Business Day.
ARTICLE IV
CONDITIONS TO PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase. The initial
----------------------------------------
purchase hereunder is subject to the conditions precedent that (i) each of the
conditions precedent to the execution, delivery and effectiveness of each other
Transaction Document (other than a condition precedent in any other Transaction
Document relating to the effectiveness of this Agreement) shall have been
fulfilled to the satisfaction of ARC, and (ii) ARC shall have received (or in
the case of subsection (g) below, shall have delivered) each of the following,
--------------
on or before the Closing Date, each (unless otherwise indicated) dated the date
hereof or the Closing Date and each in form and substance satisfactory to ARC:
(a) Seller Assignment Certificates. A Seller Assignment
------------------------------
Certificate in the form of Exhibit C from the Seller, duly completed,
---------
executed and delivered by the Seller,
(b) Resolutions. A copy of the resolutions of the Board of
-----------
Directors of the Seller approving this Agreement and the other Transaction
Documents to be delivered by it hereunder and the transactions contemplated
hereby and thereby and addressing such other matters as may be required by
ARC, certified by its Secretary or Assistant Secretary, each as of a recent
date acceptable to ARC,
(c) Good Standing Certificate of the Seller; Certificates as to
-----------------------------------------------------------
Foreign Qualification of the Seller. A good standing certificate for the
-----------------------------------
Seller, issued by the Secretary of State of the jurisdiction of its
incorporation and of each state in which the Seller transacts business, is
required to be in good standing and where the failure to be in good
standing could materially and adversely affect the condition (financial or
otherwise), properties, business or results of operations of the Seller,
each dated as of a recent date,
page 13
(d) Incumbency Certificate. A certificate of the Secretary or
----------------------
Assistant Secretary of the Seller certifying, as of a recent date
reasonably acceptable to ARC, the names and true signatures of the officers
authorized on the Seller's behalf to sign the Transaction Documents to be
delivered by the Seller (on which certificate ARC, the Trustee and the
Servicer may conclusively rely until such time as ARC shall receive from
the Seller (with a copy to the Trustee and the Servicer), a revised
certificate meeting the requirements of this subsection),
(e) Other Transaction Documents. Original copies, executed by each
---------------------------
of the parties thereto in such reasonable number as shall be specified by
ARC, of each of the other Transaction Documents to be executed and
delivered in connection herewith,
(f) Opinions of Counsel. The opinion of Dechert Price & Rhoads,
-------------------
special counsel to the Seller, in form and substance satisfactory to ARC,
as to general corporate, Federal, Pennsylvania and New York tax and UCC
matters and true sale and non-consolidation,
(g) ARC Note. The ARC Note, executed by ARC, and
--------
(h) License Agreements. Duly executed and counterparts of (i) a
------------------
software license agreement between Seller and ARC, and (ii) an amendment to
any license agreement between Seller and any third party vendor adding ARC
as a licensee.
SECTION 4.2 Certification as to Representations and Warranties. The
--------------------------------------------------
Seller, by accepting the Purchase Price paid for each Purchase, shall be deemed
to have certified, with respect to the Receivables and Related Assets to be sold
by it on such day, that its representations and warranties contained in Article
-------
V (excluding, with respect to any day after the Closing Date, Section 5.1(i))
- - - - --------------
are true and correct on and as of such day, with the same effect as though made
on and as of such day.
SECTION 4.3 Effect of Payment of Purchase Price . Upon the payment of the
------------------------------------
Purchase Price (whether in cash or by an increase in the ARC Note pursuant to
Section 3.1) for any Purchase, title to the Receivables and the Related Assets
- - - -----------
included in the Purchase shall rest in ARC, whether or not the conditions
precedent to the Purchase were in fact satisfied; provided, however, that ARC
shall not be deemed to have waived any claim it may have under this Agreement
for the failure by the Seller in fact to satisfy any such condition precedent.
page 14
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of the Seller . In order to
---------------------------------------------
induce ARC to enter into this Agreement and to make purchases hereunder, the
Seller hereby makes the representations and warranties set forth in this section
at the times and to the extent set forth in Section 4.2.
-----------
(a) Organization and Good Standing. The Seller is a corporation duly
------------------------------
organized and validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full power and authority to own
its properties and to conduct its business as the properties presently are
owned and the business presently is conducted. The Seller had at all
relevant times, and now has, all necessary power, authority, and legal
right to own and sell the Receivables and the Related Assets.
(b) Due Qualification. The Seller is duly qualified to do business
-----------------
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals, in
all jurisdictions in which the ownership or lease of property or the
conduct of its business requires qualification, licenses or approvals and
where the failure so to qualify, to obtain the licenses and approvals or to
preserve and maintain the qualification, licenses or approvals would have a
substantial likelihood of having a Material Adverse Effect.
(c) Power and Authority; Due Authorization. The Seller has (i) all
--------------------------------------
necessary power and authority to (A) execute and deliver this Agreement and
the other Transaction Documents to which it is a party, (B) perform its
obligations under this Agreement and the other Transaction Documents to
which it is a party, and (C) sell and assign the Receivables and the
Related Assets on the terms and subject to the conditions herein and
therein provided and (ii) duly authorized by all necessary action the sale
and assignment and the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party and
the consummation of the transactions provided for in this Agreement and the
other Transaction Documents to which it is a party.
(d) Valid Sale; Binding Obligations. Each sale made by the Seller
-------------------------------
pursuant to this Agreement, and each contribution made to ARC pursuant to
the Subscription Agreement, shall constitute a valid sale (except in the
case of Contributed Receivables), transfer, and assignment of all of the
Seller's right, title and interest in, to and under the Receivables and the
Related Assets of the Seller to ARC that is perfected and of first priority
under the UCC and otherwise, enforceable against creditors of, and
purchasers from, the Seller and free and clear of any Adverse Claim (other
than any Permitted Adverse Claim or any Adverse Claim arising solely as a
page 15
result of any action taken by ARC hereunder or by the Trustee under the
Pooling Agreement); and this Agreement constitutes, and each other
Transaction Document to which the Seller is a party when duly executed and
delivered will constitute, a legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity, regardless of whether enforceability
is considered in a proceeding in equity or at law.
(e) No Conflict or Violation. The execution, delivery and
------------------------
performance of, and the consummation of the transactions contemplated by,
this Agreement and the other Transaction Documents to be signed by the
Seller and the fulfillment of the terms hereof and thereof will not (i)
conflict with, violate, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a default under, (A) its Certificate of Incorporation or Bylaws or
(B) any indenture, loan agreement, mortgage, deed of trust or other
material agreement or instrument to which the Seller is a party or by which
it or any of its properties is bound, (ii) result in the creation or
imposition of any Adverse Claim upon any of the Receivables or Related
Assets other than pursuant to this Agreement and the other Transaction
Documents, or (iii) conflict with or violate any federal, state, local or
foreign law or any decision, decree, order, rule or regulation applicable
to it or any of its properties of any court or of any federal, state, local
or foreign regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its properties, which
conflict, violation, breach, default or Adverse Claim, individually or in
the aggregate, would have a substantial likelihood of having a Material
Adverse Effect.
(f) Litigation and Other Proceedings. Except as described in
--------------------------------
Schedule 1, (i) there is no action, suit, proceeding or investigation
----------
pending or, to the best knowledge of the Seller, threatened against it
before any court, regulatory body, arbitrator, administrative agency or
other tribunal or governmental instrumentality and (ii) it is not subject
to any order, judgment, decree, injunction, stipulation or consent order of
or with any court or other government authority that, in the case of each
of clauses (i) and (ii), (A) asserts the invalidity of this Agreement or
----------- ----
any other Transaction Document, (B) seeks to prevent the sale of any
Receivables or Related Assets by the Seller to ARC, the issuance of the
applicable Seller Assignment Certificate or the consummation of any of the
transactions contemplated by this Agreement or any other Transaction
Document, (C) seeks any determination or ruling that would materially and
adversely affect the performance by the Seller of its obligations under
this Agreement or any other Transaction Document or the validity or
enforceability of this Agreement or any other Transaction Document, (D)
seeks to affect adversely the income tax attributes of the purchases
hereunder or the applicable Seller Assignment Certificate, in the case of
each of the foregoing Whether under the United States
page 16
Federal income tax system or any state income tax system, or (E)
individually or in the aggregate for all such actions, suits, proceedings
and investigations would have a substantial likelihood of having a Material
Adverse Effect.
(g) Government Approvals. All authorizations, consents, orders and
--------------------
approvals of, or other action by, any Governmental Authority that are
required to be obtained by the Seller, and all notices to and filings
(except, in respect of enforceability against a Federal Obligor, any
filings under the Assignment of Claims Act and any consents required by
states with respect to any Receivables arising from State and Local
Obligors so long as such Receivables are not reported as Eligible
Receivables), with any Governmental Authority that are required to be made
by it, in the case of each of the foregoing in connection with the
conveyance of Receivables and Related Assets or the due execution, delivery
and performance by the Seller of this Agreement, the Seller's Seller
Assignment Certificate or any other Transaction Document to which it is a
party and the consummation of the transactions contemplated by this
Agreement, have been obtained or made and are in full force and effect,
except where the failure to obtain or make any such authorization, consent,
order, approval, notice or filing, individually or in the aggregate for all
such failures, would not reasonably be expected to have a Material Adverse
Effect.
(h) Bulk Sales Act. No transaction contemplated by this Agreement
--------------
or any other Transaction Document requires compliance with, or will be
subject to avoidance under, any bulk sales act or similar law.
(i) Financial Condition. The Seller hereby represents that its
-------------------
consolidated balance sheets as at September 30, 1993, and the related
statements of income and shareholders' equity of the Seller and its
Consolidated Subsidiaries for the fiscal year then ended certified by Ernst
& Young, copies of which have been furnished to ARC and the Trustee, fairly
present in all material respects the consolidated financial position and
business of the Seller and its Consolidated Subsidiaries as at such date
and the consolidated results of the operations of the Seller and its
Consolidated Subsidiaries for the period ended on such date, all in
accordance with GAAP consistently applied throughout the periods reflected
therein, and, except as set forth in Schedule 4, since September 30, 1993
through the date hereof there has been no material adverse change in the
condition (financial or otherwise), business or operations of the Seller.
(j) Margin Regulations. No use of any funds obtained by the Seller
------------------
under this Agreement will conflict with or contravene any of Regulations G,
T, U and X promulgated by the Federal Reserve Board from time to time.
page 17
(k) Quality of Title.
----------------
(i) Immediately before each purchase to be made by ARC
hereunder and each contribution to be made under the Subscription Agreement
to ARC, each Receivable and Related Asset of the Seller that is then to be
transferred to ARC thereunder, and the related Contracts, shall be owned by
the Seller free and clear of any Adverse Claim (other than any Permitted
Adverse Claim or any Adverse Claim arising solely as the result of any
action taken by ARC hereunder or by the Trustee under the Pooling
Agreement); and the Seller shall have made all filings and shall have taken
all other action under applicable law in each relevant jurisdiction in
order to protect and perfect the ownership interest of ARC and its
successors in the Receivables and Related Assets against all creditors of,
and purchasers from, the Seller.
(ii) Whenever ARC makes a purchase hereunder or accepts a
contribution under the Subscription Agreement, it shall have acquired a
valid and perfected first priority ownership interest in each Transferred
Asset, free and clear of any Adverse Claim (other than any Permitted
Adverse Claim or any Adverse Claim arising solely as the result of any
action taken by ARC hereunder or by the Trustee under the Pooling
Agreement).
(iii) No effective financing statement or other instrument
similar in effect that covers all or part of any Receivable, any interest
therein or any Related Asset with respect thereto is on file in any
recording office except financing statements as to termination statements
or releases that are filed on the Closing Date or the day after the Closing
Date and (x) such as may be filed (A) in favor of the Seller in accordance
with the Contracts, (B) in favor of ARC pursuant to this Agreement or the
Subscription Agreement and (C) in favor of the Trustee, for the benefit of
the Certificateholders, in accordance with the Pooling Agreement and (y)
such as may have been identified to ARC prior to the Closing Date and
termination statements relating to which have been placed with LEXIS
Document Services for filing on the First Issuance Date or the first
Business Day thereafter. No effective financing statement or instrument
similar in effect relating to perfection that covers any inventory of the
Seller that might give rise to Receivables is on file in any recording
office except for (so long as the Intercreditor Agreement is in effect)
financing statements or instruments in favor of the Seller Agent.
(iv) No Purchase by ARC constitutes a fraudulent transfer or
fraudulent conveyance under the United States Bankruptcy Code or applicable
state bankruptcy or insolvency laws or is otherwise void or voidable or
subject to subordination under similar laws or principles or for any other
reason.
page 18
(v) The Purchase by ARC constitutes a true and valid sale of
the Receivables and Related Assets under applicable state law and true and
valid assignments and transfers for consideration (and not merely a pledge
of the Receivables and Related Assets for security purposes), enforceable
against the creditors of the Seller, and no Receivables or Related Assets
transferred to ARC hereunder or under the Subscription Agreement shall
constitute property of the Seller.
(l) Eligible Receivables. (i) On the date of each purchase of
--------------------
Receivables hereunder,each such Receivable,unless otherwise identified to
ARC and the Trustee by the Servicer in the Daily Report for such date, is
an eligable Receivable,and (ii) on the date of each Daily Report or
Settlement statement that identifies a Receivable as an Eligible
Receivable, such Receivable is an Eligable Receivable
(m) Accuracy of Information. All written information furnished on
-----------------------
and after the Closing Date by the Seller or any other AmeriSource Person to
ARC, the Servicer or the Trustee pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein
shall not contain any untrue statement of a material fact or omit to state
material facts necessary to make the statements made not misleading, in
each case on the date the statement was made and in light of the
circumstances under which the statements were made or the information was
furnished.
(n) Offices. The principal place of business and chief executive
-------
office of the Seller is located at the address set forth under the Seller's
signature hereto, and the offices where the Seller keeps all Records and
all Contracts, purchase orders and agreements related to the Receivables
and the Related Assets (and all original documents relating thereto) are
located at the addresses specified in Schedule 2 (or at such other
----------
locations, notified to the Servicerand the Trustee in accordance
with Section 6.1(f), in jurisdictions where all action required pursuant to
--------------
Section 7.3 has been taken and completed).
-----------
(o) Account Banks and Payment Instructions.The names and addresses of
--------------------------------------
all the banks, together with the account numbers of the accounts at the
banks, into which Collections are paid as of the Closing Date have been
accurately identified to ARC in a letter from the Seller to ARC dated the
Closing Date or have been specified in the notices as shall have been
delivered thereafter pursuant to Section 6.3(c). Each Account Bank has
executed and delivered an --------------
Account Agreement to ARC and the Trustee. Up to 5% of payments may, as a
convenience, be picked up by employees or agents of the Seller authorized
to accept payment for deliveries. Notwithstanding the foregoing, the Seller
has instructed all Obligors to submit all payments on the Receivables and
Related Assets directly to one of the Lockbox Accounts. Any
page 19
payments not made directly to the Account Banks will be forwarded to the
Account Banks within two Business Days.
(p) Subscription Agreement. Each of the representations and
----------------------
warranties made by the Seller in the Subscription Agreement will be true
and correct as of the date or dates made.
(q) Compliance with Applicable Laws. The Seller is in compliance
-------------------------------
with the requirements of all applicable laws, rules, regulations and orders
of all Governmental Authorities (federal, state, local or foreign, and
including environmental laws), a violation of any of which, individually or
in the aggregate for all such violations, would have a substantial
likelihood of having a Material Adverse Effect.
(r) Legal Names. Except as set forth in Schedule 3, since October
----------- ----------
31, 1989 the Seller has not been known by any legal name other than its
corporate name as of the date hereof, except to the extent permitted
otherwise pursuant to Section 6.3(e), nor has the Seller been the subject
--------------
of any merger or other corporate reorganization since October 31, 1989 that
resulted in a change of name, identity or corporate structure. The Seller
uses no trade names other than its actual corporate name and the trade
names set forth in Schedule 3.
(s) Investment Company Act. The Seller is not, and is not
----------------------
controlled by, an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended.
(t) Taxes. The Seller has filed or caused to be filed all tax
-----
returns and reports required by law to have been filed by it and has paid
all taxes, assessments and governmental charges thereby shown to be owing,
except any such taxes, assessments or charges (i) that are being diligently
contested in good faith by appropriate proceedings, (ii) for which adequate
reserves in accordance with GAAP shall have been set aside on its books and
(iii) with respect to which no Adverse Claim, except Permitted Adverse
Claims, has been imposed upon any Receivables or Related Assets.
SECTION 5.2 Representations and Warranties of ARC . From the date hereof
--------------------------------------
until the Purchase Termination Date, ARC hereby represents and warrants that
(a)(i) this Agreement has been duly executed and delivered by ARC and (ii)
constitutes the legal, valid and binding obligation of ARC, enforceable against
it in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether enforceability is considered in a proceeding in equity or
at law, and (b) the execution, delivery and performance of this Agreement does
not violate any applicable law or any agreement to which ARC is a party or by
which its properties are bound.
page 20
ARTICLE VI
GENERAL COVENANTS OF THE SELLER
SECTION 6.1 Affirmative Covenants . From the Closing Date until the first
----------------------
day following the Purchase Termination Date on which all Obligations of the
Seller shall have been finally and fully paid and performed and the Investor
Invested Amount shall have been reduced to zero, unless ARC shall otherwise give
its prior written consent, the Seller hereby agrees that it will perform the
covenants and agreements set forth in this section.
(a) Compliance with Laws, Etc. The Seller will comply in all
--------------------------
material respects with all applicable laws, rules, regulations, judgments,
decrees and orders (including those relating to the Receivables, the
Related Assets, the related Contracts of the Seller and any other
agreements related thereto), in each case to the extent the failure to
comply, individually or in the aggregate for all such failures, would have
a substantial likelihood of having a Material Adverse Effect.
(b) Preservation of Corporate Existence. The Seller will preserve
-----------------------------------
and maintain its corporate existence, rights, franchises and privileges in
the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises,
privileges and qualifications would have a substantial likelihood of having
a Material Adverse Effect.
(c) Receivables Reviews. The Seller shall, during regular business
-------------------
hours upon not less than five Business Days' prior notice, permit ARC and
its agents or representatives, at the expense of the Seller, (i) to examine
and make copies of and abstracts from, and to conduct accounting reviews
of, all Records in the possession or under the control of the Seller
relating to the Receivables or Related Assets generated by the Seller, and
(ii) to visit the offices and properties of the Seller for the purpose of
examining the materials described in clause (i) above, and to discuss
----------
matters relating to any Receivables or any Related Assets of the Seller or
the Seller's performance hereunder with any of the Authorized Officers of
the Seller or, with the prior consent of an Authorized Officer of the
Seller, with employees of the Seller having knowledge of such matters (the
examinations set forth in the foregoing clauses (i) and (ii) being herein
----------- ----
called a "Seller Receivables Review"). ARC and its agents or
representatives shall be entitled to conduct Seller Receivables Reviews
whenever ARC, in its reasonable judgment, deems it appropriate; provided,
that prior to the occurrence and continuance of a Liquidation Event, ARC
(or its agent or representative) shall give the Seller at least five
Business Days' prior notice of any Seller Receivables Review, and ARC shall
have the right to request a Seller Receivables Review not more than twice
in any calendar year.
page 21
(d) Keeping of Records and Books of Account. The Seller shall
---------------------------------------
maintain and implement administrative and operating procedures (including,
an ability to recreate records evidencing its Receivables and Related
Assets in the event of the destruction of the originals thereof), and shall
keep and maintain all documents, books, records and other information that,
in the reasonable determination of ARC and the Trustee, are necessary or
advisable in accordance with prudent industry practice and custom for
transactions of this type for the collection of all Receivables and the
Related Assets. Upon the reasonable request of ARC made at any time after
the occurrence and continuance of a Servicer Default, the Seller will
deliver copies of all books and records maintained pursuant to this
subsection to the Trustee. The Seller shall maintain at all times accurate
and complete books, records and accounts relating to the Receivables,
Related Assets and Contracts and all Collections thereon in which timely
entries shall be made. Such books and records shall be marked to indicate
the sales of all Receivables and Related Assets hereunder and shall include
(i) all payments received and all credits and extensions granted with
respect to the Receivables and (ii) the return, rejection, repossession, or
stoppage in transit of any merchandise, the sale of which has given rise to
a Receivable that has been purchased by ARC.
(e) Performance and Compliance with Receivables and Contracts. The
---------------------------------------------------------
Seller will, at its expense, timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it
under the Contracts of the Seller related to the Receivables and Related
Assets, the breach of which provisions, covenants or promises would have a
substantial likelihood of having a Material Adverse Effect.
(f) Location of Records and Offices. The Seller will keep its
-------------------------------
principal place of business and chief executive office, and the offices
where it keeps all Records related to the Receivables and the Related
Assets (and all original documents relating thereto), at the addresses
referred to in Schedule 2 or, upon not less than 30 days' prior written
----------
notice given by the Seller to ARC, the Trustee and the Applicable Rating
Agencies, at such other locations in jurisdictions where all action
required by Section 7.3 shall have been taken and completed.
-----------
(g) Credit and Collection Policies. The Seller will comply in all
------------------------------
material respects with its Credit and Collection Policy in regard to each
Receivable of the Seller and the Related Assets and the Contracts related
to each such Receivable, where the failure so to comply, individually or in
the aggregate for all such failures, would have a substantial likelihood of
having a Material Adverse Effect.
(h) Separate Corporate Existence of ARC. The Seller hereby
-----------------------------------
acknowledges that the Trustee, on behalf of the Trust, is entering into the
transactions contemplated by the Transaction Documents in reliance upon
ARC's identity as a legal entity
page 22
separate from the Seller and the other AmeriSource Persons. Therefore, from
and after the date hereof until the first day following the Purchase
Termination Date on which all Obligations of the Seller shall have been
fully paid and performed and the Investor Invested Amount shall have been
reduced to zero, the Seller will, and will cause each other AmeriSource
Person to, take all reasonable steps to continue their respective
identities as separate legal entities and to make it apparent to third
Persons that each is an entity with assets and liabilities distinct from
those of ARC and that ARC is not a division of the Servicer, the Seller or
any other Person.
(i) Payment Instructions to Obligors. The Seller will instruct all
--------------------------------
Obligors to submit all payments either (i) to one of the lockboxes
maintained at the Lockbox Banks for deposit in a Lockbox Account or to a
Concentration Account or (ii) directly to one of the Lockbox Accounts;
except to the extent otherwise permitted under Section 5.1(o).
--------------
(j) Segregation of Collections. The Seller shall use reasonable
--------------------------
efforts to minimize the deposit of any funds other than Collections into
any of the Lockbox Accounts and, to the extent that any such funds
nevertheless are deposited into any of the Lockbox Accounts, shall promptly
identify any such funds, or shall cause the funds to be so identified, to
ARC, the Servicer and the Trustee (following which notice, ARC shall cause
the Servicer to return all the funds to the Seller).
(k) Identification of Eligible Receivables. The Seller will (i)
--------------------------------------
establish and maintain such procedures as are necessary for determining no
less frequently than each Business Day whether each Receivable qualifies as
an Eligible Receivable, and for identifying, on any Business Day, all
Receivables to be sold on that date that are not Eligible Receivables, and
(ii) except as permitted in Section 3.05(c) of the Pooling Agreement,
notify ARC prior to the occurrence of a Purchase if a Receivable to be sold
hereunder will, to the Seller's knowledge, not be an Eligible Receivable as
of the date of Purchase.
(l) Accuracy of Information. All written information furnished on
-----------------------
and after the Closing Date by the Seller or any other AmeriSource Person to
ARC, the Servicer or the Trustee pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein
shall not contain any untrue statement of a material fact or omit to state
material facts necessary to make the statements made not misleading, in
each case on the date the statement was made and in light of the
circumstances under which the statements were made or the information was
furnished.
(m) Taxes. File or cause to be filed, and cause each Person with
-----
whom it shares consolidated tax liability to file, all Federal, state and
local tax returns that are required to be filed by it, except where the
failure to file such returns could not
page 23
reasonably be expected to have an adverse effect, and pay or cause to be
paid all taxes shown to be due and payable on taxes or assessments, the
validity of which are being contested in good faith by appropriate
proceedings and with respect to which the Seller shall have set aside
adequate reserves on its books in accordance with GAAP and which
proceedings could not reasonably be expected to have a Material Adverse
Effect.
SECTION 6.2 Reporting Requirements . From the Closing Date until the
-----------------------
first day following the Purchase Termination Date on which all Obligations of
the Seller shall have been finally and fully paid and performed and the Investor
Invested Amount shall have been reduced to zero, the Seller agrees that it will,
unless ARC and the Trustee shall otherwise give prior written consent, and (with
respect to the notices described below in subsections (c) and (d)) unless the
--------------- ---
Rating Agency Condition has beensatisfied, furnish to ARC and the Trustee and,
in the case of the notices described below in subsections (c), (d) and (f), to
the Applicable Rating --------------- --- ---
Agencies:
(a) Quarterly Financial Statements. Within 50 days after the end of
------------------------------
each of the first three fiscal quarters of each fiscal year of the Seller,
copies of the unaudited consolidated balance sheets of the Seller and its
Consolidated Subsidiaries as at the end of the fiscal quarter and the
related unaudited statements of earnings and cash flows, in each case for
the fiscal quarter and for the period from the beginning of the fiscal year
through the end of such fiscal quarter, prepared in accordance with GAAP
consistently applied throughout the periods reflected therein and certified
(subject to year end adjustments and the omission of footnotes) by the
chief financial officer or chief accounting officer of the Seller,
(b) Annual Financial Statements. As soon as possible and in any
---------------------------
event within 120 days after the end of each fiscal year of the Seller, a
copy of the consolidated balance sheet of the Seller and its Consolidated
Subsidiaries as at the end of the fiscal year and the related statements of
earnings, stockholders' equity and cash flows of the Seller and its
Consolidated Subsidiaries for the fiscal year, setting forth in each case
in comparative form the corresponding figures for the preceding fiscal year
and prepared in accordance with GAAP consistently applied throughout the
periods reflected therein, certified, without Impermissible Qualification,
by Ernst & Young (or such other independent certified public accountants of
a nationally recognized standing in the United States of America as shall
be selected by the Seller),
(c) Liquidation Events. As soon as possible, and in any event
------------------
within five Business Days after an Authorized Officer of the Seller has
obtained knowledge of the occurrence of any Liquidation Event or any
Unmatured Liquidation Event, a written statement of an Authorized Officer
of the Seller describing the event and the action that the Seller proposes
to take with respect thereto, in each case in reasonable detail,
page 24
(d) Material Adverse Effect. As soon as possible and in any event
-----------------------
within five Business Days after an Authorized Officer of the Seller has
knowledge thereof, written notice that describes in reasonable detail any
event or occurrence that, individually or in the aggregate for all such
events or occurrences, has had, or that would have a substantial likelihood
of having, a Material Adverse Effect,
(e) Proceedings. As soon as possible and in any event within five
-----------
Business Days after an Authorized Officer of the Seller has knowledge
thereof, written notice of (i) any litigation, investigation or proceeding
of the type described in Section 5.1(f) not previously disclosed to ARC and
--------------
(ii) any judgment,settlement or other final disposition with respect to any
such previously disclosed litigation, investigation or proceeding, and
(f) Other. Promptly, from time to time, (i) such other information,
-----
documents, records or reports respecting the Receivables or the Related
Assets or (ii) such other publicly available information respecting the
condition or operations, financial or otherwise, of the Seller, in each
case as ARC may from time to time reasonably request in order to protect
the interests of ARC, the Trustee or the Certificateholders under or as
contemplated by this Agreement.
SECTION 6.3 Negative Covenants . From the Closing Date until the first
-------------------
day following the Purchase Termination Date on which all Obligations of the
Seller shall have been finally and fully paid and performed and the Investor
Invested Amount shall have been reduced to zero, unless ARC shall otherwise give
its prior written consent, the Seller hereby agrees that it will perform the
covenants and agreements set forth in this section.
(a) Sales, Liens, Etc. Except as otherwise provided herein or in the
------------------
Pooling Agreement, the Seller will not (i)(A) sell, assign (by operation of
law or otherwise) or otherwise transfer to any Person, (B) pledge any
interest in, (C) grant, create, incur, assume or permit to exist any
Adverse Claim (other than Permitted Adverse Claims) to or in favor of any
Person upon or with respect to, or (D) cause to be filed any financing
statement or equivalent document relating to perfection with respect to any
Transferred Asset or any Contract related to any Receivable, or upon or
with respect to any lockbox or account to which any Collections of any such
Receivable or any Related Assets are sent or any interest therein, or (ii)
except with respect to the security interest in Purchase Price granted to
the Seller's senior lender, assign to any Person any right to receive
income from or in respect of any of the foregoing.
In the event that the Seller fails to keep any Transferred Assets free
and clear of any Adverse Claim (other than a Permitted Adverse Claim, any
Adverse Claims arising hereunder, and other Adverse Claims permitted by any
other Transaction Document), ARC may (without limiting its other rights
with respect to the Seller's breach of its obligations hereunder) make
reasonable expenditures necessary to release
page 25
page 25
the Adverse Claim. ARC shall be entitled to indemnification for any such
expenditures pursuant to the indemnification provisions of Article IX.
----------
Alternatively, ARC may deduct such expenditures as an offset to the
Purchase Price owed to the Seller hereunder.
The Seller will not pledge or grant any security interest in its
inventory, the ARC Note or the capital stock of ARC unless prior to any
pledge or grant the Seller, ARC, the Trustee and the person for whose
benefits the pledge or grant is being made have entered into an
Intercreditor Agreement.
(b) Extension or Amendment of Receivables; Change in Credit and
-----------------------------------------------------------
Collection Policy or Contracts. The Seller will not, (i) without the
------------------------------
prior written consent of ARC and the Trustee, which consent will not be
unreasonably withheld, extend, amend or otherwise modify the terms of any
Receivable or Contract in a manner that would have a Material Adverse
Effect on the Investor Certificateholders or the Purchasers or (ii) change
the terms and provisions of the Credit and Collection Policy in any
material respect unless (x) with respect to collection policies, the change
is made with the prior written approval of the Trustee, ARC and each
Purchaser Agent and the Rating Agency Condition is satisfied with respect
thereto, (y) with respect to collection procedures, the change is made with
prior written notice to the Trustee, ARC and each Purchaser Agent and no
Material Adverse Effect on any Series or Purchased Interest would result
and (z) with respect to accounting policies relating to Receivables that
have become Charged-Off Receivables, the change is made in accordance with
GAAP.
(c) Change in Payment Instructions to Obligors. The Seller will
------------------------------------------
not (i) add or terminate any bank as an Account Bank from those listed in
the letter referred to in Section 5.1(o) unless, prior to any such addition
--------------
or termination,
ARC, the Trustee and the Applicable Rating Agencies shall have received not
less than five Business Days' prior written notice of the addition or
termination and, not less than five Business Days prior to the effective
date of any such proposed addition or termination, ARC and the Trustee
shall have received (A) counterparts of the applicable type of Account
Agreement with each new Account Bank, duly executed by such new Account
Bank and all other parties thereto and (B) copies of all other agreements
and documents signed by the Account Bank and such other parties with
respect to any new Bank Account, all of which agreements and documents
shall be reasonably satisfactory in form and substance to ARC and the
Trustee, or (ii) make any change in its instructions to Obligors, given in
accordance with Section 5.1(o), regarding payments to be made to the Seller
--------------
or payments to be made to any Account Bank, other than changes in the
instructions that direct Obligors to make payments to another Bank Account
at such Account Bank or another Account Bank or to the Master Collection
Account.
page 26
(d) Mergers, Acquisitions, Sales, etc. Except for (i) mergers or
----------------------------------
consolidations in which the Seller is the surviving Person, (ii) mergers or
consolidations of a Subsidiary of the Seller into the Seller or (iii)
mergers or consolidations in which the surviving Person expressly assumes
the performance of this Agreement and the Rating Agency Condition shall
have been satisfied with respect to the consolidation or merger, the Seller
will not be a constituent corporation to any merger or consolidation. The
Seller will give the Applicable Rating Agencies and the Trustee notice of
any such permitted merger or consolidation promptly following completion
thereof. The Seller will not, directly or indirectly, transfer, assign,
convey or lease, whether in one transaction or in a series of transactions,
all or substantially all of its assets or sell or assign, with or without
recourse, any Receivables or Related Assets, in each case other than
pursuant to this Agreement, the Subscription Agreement or the Inventory
Credit Agreement.
(e) Change in Name. The Seller will not (i) change its corporate
--------------
name or (ii) change the name under or by which it does business in any
manner that would or may make any financing statement filed by the Seller
in accordance herewith seriously misleading within the meaning of Section9-
402(7) of an applicable enactment of the UCC, in each case unless the
Seller shall have given ARC, the Servicer, the Trustee and the Applicable
Rating Agencies 30 days' prior written notice thereof and unless, prior to
any change in name, the Seller shall have taken and completed all action
required by Section 7.3.
-----------
(f) Certificate of Incorporation. The Seller will not cause ARC to
----------------------------
amend Article 3,6,7,8 or 9 of its Certificate of Incorporation without the
Trustee's prior written consent, which consent will not be unreasonably
withheld or delayed.
(g) Amendments to Transaction Documents. The Seller will not amend
-----------------------------------
or otherwise modify or supplement any Transaction Document to which it is a
party unless (i) ARC shall have given its prior written consent to each
amendment, modification or supplement, which consent shall not be
unreasonably withheld or delayed, and (ii) the Rating Agency Condition
shall have been satisfied.
(h) Accounting for Purchases. The Seller shall prepare its financial
------------------------
statements in accordance with GAAP. The Seller shall not prepare any
financial statements that account for the transactions contemplated in this
Agreement in any manner other than as a sale of the Purchased Assets by the
Seller to ARC, or in any other respect account for or treat the
transactions contemplated in this Agreement (including but not limited to
accounting and, where taxes are not consolidated, for tax reporting
purposes) in any manner other than as a sale of the Purchased Assets by the
Seller to ARC.
page 27
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE TRANSFERRED ASSETS
SECTION 7.1 Rights of ARC. (a) Subject to Section 7.4(b), the Seller
------------- --------------
hereby authorizes ARC, the Servicer and/or their respective designees to take
any and all steps in the Seller's name and on behalf of the Seller that ARC, the
Servicer and/or their respective designees determine are reasonably necessary or
appropriate to collect all amounts due under any and all Transferred Assets,
including endorsing the name of the Seller on checks and other instruments
representing Collections and enforcing the Seller's rights under such
Transferred Assets.
(b) Except as set forth in Section 3.5 with respect to Seller Noncomplying
-----------
Receivables, ARC shall have no obligation to account for, to replace, to
substitute or to return any Purchased Asset to the Seller. ARC shall have no
obligation to account for, or to return Collections, or any interest or other
finance charge collected pursuant thereto, to the Seller, irrespective of
whether such Collections and charges are in excess of the Purchase Price for the
Purchased Assets.
(c) ARC shall have the unrestricted right to further assign, transfer,
deliver, hypothecate, subdivide or otherwise deal with the Transferred Assets,
and all of ARC's right, title and interest in, to and under this Agreement and
the Subscription Agreement, on whatever terms ARC shall determine, pursuant to
the Pooling Agreement or otherwise.
(d) ARC shall have the sole right to retain any gains or profits created
by buying, selling or holding the Transferred Assets and shall have the sole
risk of and responsibility for losses or damages created by such buying, selling
or holding.
SECTION 7.2 Responsibilities of the Seller . Anything herein to the
-------------------------------
contrary notwithstanding:
(a) The Seller agrees to deliver directly to the Servicer (for ARC's
account), within three Business Days after receipt thereof, any Collections
that it receives, in the form so received, and agrees that all such
Collections shall be deemed to be received in trust for ARC and shall be
maintained and segregated separate and apart from all other funds and
moneys of the Seller until delivery of such Collections to the Servicer.
(b) The Seller shall perform all of its obligations hereunder and
under the Contracts related to the Receivables and Related Assets to the
same extent as if the Receivables had not been sold hereunder, and the
exercise by ARC or its designee or assignee of ARC's rights hereunder or in
connection herewith shall not relieve the
page 28
Seller from any of its obligations under the Contracts or Related Assets
related to the Receivables.
(c) The Seller hereby grants to ARC an irrevocable power of attorney,
with full power of substitution, coupled with an interest, to take in the
name of the Seller all steps necessary or advisable to endorse, negotiate
or otherwise realize on any writing or other right of any kind held or
transmitted by the Seller or transmitted or received by ARC (whether or not
from the Seller) in connection with any Transferred Asset.
(d) To the extent that the Seller does not own the computer software
that the Seller uses to account for Receivables, the Seller shall use
reasonable efforts to provide ARC and the Trustee with such licenses,
sublicenses and/or assignments of contracts as ARC or the Trustee shall
require with regard to all services and computer hardware or software used
by the Seller that relate to the servicing of the Transferred Assets.
SECTION 7.3 Further Action Evidencing Purchases . The Seller agrees that
-----------------------------------
from time to time, at its expense, it will promptly, upon reasonable request,
execute and deliver all further instruments and documents, and take all further
action, in order to perfect, protect or more fully evidence the purchase by ARC
or contribution to ARC of the Receivables and the Related Assets under this
Agreement or the Subscription Agreement (as applicable), or to enable ARC to
exercise or enforce any of its rights under any Transaction Document. The
Seller further agrees that from time to time, at its expense, it will promptly,
upon request, take all action that ARC, the Servicer or the Trustee may
reasonably request in order to perfect, protect or more fully evidence the
purchase or contribution of the Receivables and the Related Assets or to enable
ARC or the Trustee (as the assignee of ARC) to exercise or enforce any of its
rights hereunder or under any other Transaction Document. Without limiting the
generality of the foregoing, upon the request of ARC, the Seller will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as ARC or the Trustee may reasonably determine to be necessary or
appropriate, and
(b) mark the master data processing records evidencing the
Receivables with the following legend:
"THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO
AMERISOURCE RECEIVABLES CORPORATION PURSUANT TO A
RECEIVABLES PURCHASE AGREEMENT, DATED AS OF DECEMBER 13,
1994, BETWEEN AMERISOURCE CORPORATION, AS SELLER, AND
AMERISOURCE RECEIVABLES CORPORATION, AS PURCHASER; AND
SUCH
page 29
RECEIVABLES HAVE BEEN TRANSFERRED TO THE AMERISOURCE
RECEIVABLES MASTER TRUST PURSUANT TO A POOLING AND
SERVICING AGREEMENT, DATED AS OF DECEMBER 13, 1994, AMONG
AMERISOURCE RECEIVABLES CORPORATION, AS TRANSFEROR,
AMERISOURCE CORPORATION, AS THE INITIAL SERVICER, AND
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE."
The Seller hereby authorizes ARC or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables and Related Assets of the
Seller, in each case whether now existing or hereafter generated by the Seller.
Except for material performance obligations of the Seller to any Obligor
hereunder or under any of the Contracts, if (i) the Seller fails to perform any
of its agreements or obligations under this Agreement and does not remedy the
failure within the applicable cure period, if any, and (ii) ARC in good faith
reasonably believes that the performance of such agreements and obligations is
necessary or appropriate to protect its interests under this Agreement, then ARC
or its designee may (but shall not be required to) perform, or cause performance
of, such agreement or obligation and the reasonable expenses of ARC or its
designee or assignee incurred in connection with such performance shall be
payable by the Seller as provided in Section 9.1.
-----------
SECTION 7.4 Collection of Receivables; Rights of ARC and Its Assignees .
----------------------------------------------------------
(a) The Seller hereby transfers to the Trustee (as transferee of ARC's interest
in the Transferred Assets) the ownership of, and the exclusive dominion and
control over, each of the Bank Accounts and all related lockboxes owned by the
Seller, and the Seller hereby agrees to take any further action that ARC or the
Trustee may reasonably request in order to effect or complete the transfer. The
Seller further agrees to use reasonable efforts to prevent funds other than
proceeds of the Transferred Assets from being deposited in any Bank Account.
(b) ARC may, at any time after a Liquidation Event or Servicer
Default, direct the Obligors of Receivables, or any of them, to pay all amounts
payable under any Transferred Asset directly to the Trustee or its designees.
Furthermore, the Seller shall, at the request of ARC and at the Seller's
expense, promptly give notice of the Trust's interest in the Receivables of the
Obligor and the Related Assets to each such Obligor and direct that payments be
made directly to the Trustee or its designee, which notice shall be acceptable
in form and substance to ARC. In addition, the Seller hereby authorizes ARC to
take any and all steps in the Seller's name and on its behalf that are necessary
or desirable, in the reasonable determination of ARC, to collect all amounts due
under any and all Transferred Assets, including endorsing the Seller's name on
checks and other instruments representing Collections and enforcing the
Transferred Assets and the Contracts related to the Receivables. The Trustee may
exercise any of the foregoing rights in the place of ARC (as
page 30
assignee or otherwise) at any time following the designation of a Servicer
other than the Seller pursuant to Section 10.02 of the Pooling Agreement.
(c) At any time when (i) a Liquidation Event shall have occurred and
remain continuing or (ii) a Servicer other than the Seller has been designated
pursuant to Section 10.02 of the Pooling Agreement, the Seller shall, at ARC's
request, assemble all of the Records that evidence the Receivables and Related
Assets originated by the Seller and the Contracts related to the Receivables, or
that are otherwise necessary or desirable to collect the Receivables or Related
Assets, and make the same available to ARC or the Trustee at a place selected by
the Trustee or its designee.
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination by the Seller. Prior to the Liquidation
-------------------------
Commencement Date, the Seller may terminate its agreement to sell Receivables
hereunder to ARC by giving ARC and the Trustee not less than five Business Days'
prior written notice of its election not to continue to sell Receivables to ARC.
The Trustee shall notify the Certificateholders of all Series within five
Business Days of receiving any notice. Upon receipt of a termination notice
from the Seller, ARC shall notify the holders of each Series of Fixed Principal
Certificates that it is electing to cause that Series to be prepaid in full and
shall cause each Series of Investor Revolving Certificates and Purchased
Interests to be repaid as early as is practicable. The sale of Receivables
under this Agreement will not cease until all prepayments and repayments have
been completed.
SECTION 8.2 Automatic Termination. The agreement of the Seller to sell
---------------------
Receivables hereunder, and the agreement of ARC to purchase Receivables from the
Seller hereunder, shall terminate automatically upon the Liquidation
Commencement Date (including without limitation a Liquidation Commencement Date
resulting from the Trustee's receipt of a Stop Date Notice); provided, however,
that if, at any time prior to the Liquidation Commencement Date, an Event of
Bankruptcy occurs as a result of a bankruptcy proceeding being filed against the
Seller, then on and after the date on which such bankruptcy proceeding is filed
until the dismissal of the proceeding ARC shall not purchase Receivables and
Related Purchased Assets from the Seller.
page 31
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Seller. Without limiting any other rights
-------------------------
that any RPA Indemnified Party (as defined below) may have hereunder or under
applicable law, the Seller agrees to indemnify ARC, each of its successors,
permitted transferees and assigns, and all officers, directors, shareholders,
controlling Persons, employees and agents of any of the foregoing (each of the
foregoing Persons being individually called a "RPA Indemnified Party"),
forthwith on demand, from and against any and all damages, losses, claims
(whether on account of settlements or otherwise), judgments, liabilities and
related reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) awarded against or incurred by any of them arising out of or as a
result of any of the following (all of the foregoing being collectively called
"RPA Indemnified Losses"):
(a) any representation or warranty made in writing by the Seller (or
any of its Authorized Officers) under any of the Transaction Documents, any
Settlement Statement, any Daily Report or any other information or report
delivered by the Seller or the Servicer with respect to the Seller or the
Receivables or Related Assets originated by the Seller, that contained any
untrue statement of a material fact or omitted to state material facts
necessary to make the statements not misleading when made,
(b) the failure by the Seller to comply with any applicable law, rule
or regulation with respect to any Receivable or any Related Asset or to
comply with any Contract related thereto, or the nonconformity of any
Receivable, the related Contract or any Related Assets with any such
applicable law, rule or regulation ,
(c) the failure to vest and maintain vested in ARC a first priority
perfected ownership interest in the Receivables, the Related Assets, the
related Collections and the proceeds of each of the foregoing, free and
clear of any Adverse Claim (other than an Adverse Claim created in favor of
ARC pursuant to this Agreement or in favor of the Trustee pursuant to the
Pooling Agreement), whether existing at the time of the sale of such
Receivable or at any time thereafter and without regard to whether such
Adverse Claim was a Permitted Adverse Claim,
(d) any failure of the Seller to perform its duties or obligations in
accordance with the provisions of the Transaction Documents,
(e) any products liability claim, personal injury or property damage
suit, environmental liability claim or any other claim or action by a party
other than ARC of whatever sort, whether sounding in tort, contract or any
other legal theory, arising
page 32
out of or in connection with the goods or services that are the subject of
any Transferred Assets with respect thereto or Collections thereof,
(f) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Transferred
Assets or Collections, whether at the time of any sale or at any subsequent
time,
(g) any dispute, claim, offset or defense (other than the discharge
in bankruptcy) of an Obligor to the payment of any Receivable or Related
Asset, or purported Receivable or Related Asset, including a defense based
on the Receivable's or the related Contract's not being a legal, valid and
binding obligation of the Obligor enforceable against it in accordance with
its terms, and
(h) any tax or governmental fee or charge (other than franchise taxes
and taxes on or measured by the net income of ARC or any of its assignees),
all interest and penalties thereon or with respect thereto, and all
reasonable out-of-pocket costs and expenses, including the reasonable fees
and expenses of counsel in defending against the same, that may arise by
reason of the purchase or ownership of the Receivables or any Related Asset
connected with any such Receivable s.
Notwithstanding the foregoing (and with respect to clause (ii) below, without
-----------
prejudice to the rights that ARC may have pursuant to the other provisions of
this Agreement or the provisions of any of the other Transaction Documents), in
no event shall any RPA Indemnified Party be indemnified for any RPA Indemnified
Losses (i) resulting from gross negligence or willful misconduct on the part of
the RPA Indemnified Party, (ii) to the extent the same includes losses in
respect of Receivables and reimbursement therefor that would constitute credit
recourse to the Seller for the amount of any Receivable or Related Asset not
paid by the related Obligor, (iii) resulting from the action or omission of the
Servicer (unless the Servicer is an AmeriSource Person), (iv) to the extent the
same are or result from lost profits, (v) to the extent the same are or result
from taxes on or measured by the net income of the RPA Indemnified Party and
(vi) to the extent the same constitute consequential, special or punitive
damages.
If for any reason the indemnification provided above in this section is
unavailable to a RPA Indemnified Party or is insufficient to hold a RPA
Indemnified Party harmless, then the Seller shall contribute to the maximum
amount payable or paid to the RPA Indemnified Party as a result of the loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the RPA Indemnified Party on the one hand
and the Seller on the other hand, but also the relative fault of the RPA
Indemnified Party (if any) and the Seller and any other relevant equitable
considerations.
page 33
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments; Waivers, Etc. (a) The provisions of this
------------------------
Agreement may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and signed by ARC and the Seller
(with respect to an amendment) or by ARC (with respect to a waiver or consent by
it) and, in the case of any amendment, modification or waiver, to the extent
provided in Section 7.02(k) of the Pooling Agreement, by the Trustee, and then
the waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. This Agreement shall not be amended unless
(i) ARC shall have delivered the proposed amendment to the Applicable Rating
Agencies at least ten Business Days (or such shorter period as shall be
acceptable to each of them) prior to the execution and delivery thereof and the
Rating Agency Condition has been satisfied with respect to such amendment, and
(ii) if the terms of the Intercreditor Agreement prohibit such amendment,
modification or waiver without the written consent of the Seller Agent, ARC and
the Trustee shall have received copies of such consent.
(b) No failure or delay on the part of ARC, any RPA Indemnified
Party, or the Trustee or any other third party beneficiary referred to in
Section 10.11(a) in exercising any power or right hereunder shall operate as a
- - - ----------------
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to or demand on the Seller in any case shall
entitle it to any notice or demand in similar or other circumstances. No waiver
or approval by ARC or the Trustee under this Agreement shall, except as may
otherwise be stated in the waiver or approval, be applicable to subsequent
transactions. No waiver or approval under this Agreement shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2 Notices, Etc. All notices and other communications provided
------------
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail, postage prepaid, by facsimile or by overnight courier, to the intended
party at the address or facsimile number of such party set forth under its name
on the signature pages hereof or at such other address or facsimile number as
shall be designated by the party in a written notice to the other parties hereto
given in accordance with this section. Copies of all notices and other
communications provided for hereunder shall be delivered to the Trustee and the
Applicable Rating Agencies at their respective addresses for notices set forth
in the Pooling Agreement. All notices and communications provided for hereunder
shall be effective, (a) if personally delivered, when received, (b) if sent by
certified mail, four Business Days after having been deposited in the mail,
postage prepaid and properly addressed, (c) if transmitted by facsimile, when
sent, receipt confirmed by telephone or electronic means and (d) if sent by
overnight courier, two
page 34
Business Days after having been given to the courier unless sooner received
by the addressee.
SECTION 10.3 Cumulative Remedies. The remedies herein provided are
-------------------
cumulative and not exclusive of any remedies provided by law. Without limiting
the foregoing, the Seller hereby authorizes ARC, at any time and from time to
time, to the fullest extent permitted by law, to set-off, against any
Obligations of the Seller to ARC that are then due and payable or that are not
then due and payable from the Seller to ARC but have then accrued, any and all
indebtedness or other obligations at any time owing to the Seller by ARC to or
for the credit or the account of the Seller or that are not then due and payable
from ARC to the Seller but have then accrued.
SECTION 10.4 Binding Effect; Assignability; Survival of Provisions. This
-----------------------------------------------------
Agreement shall be binding upon and inure to the benefit of ARC and the Seller
and their respective successors and permitted assigns. The Seller may not
assign any of its rights hereunder or any interest herein without the prior
written consent of ARC, the Trustee and the Applicable Rating Agencies. 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 first date following the Purchase Termination Date, but not later than
the date on which the Trust is terminated pursuant to Section 12.01 of the
Pooling Agreement, on which all Obligations of the Seller shall have been
finally and fully paid and performed or such other time as the parties hereto
shall agree and as to which the Trustee (at the direction of the Majority
Investors) shall have given its prior written consent, which consent shall not
be unreasonably withheld or delayed. The rights and remedies with respect to
any breach of any representation and warranty made by the Seller pursuant to
Article V and the indemnification and payment provisions of Article IX and
- - - --------- ----------
Section 10.6 shall be continuing and shall survive any termination of this
- - - ------------
Agreement.
SECTION 10.5 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF
ARC IN THE RECEIVABLES AND THE RELATED ASSETS ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 10.6 Costs, Expenses and Taxes. In addition to the obligations of
-------------------------
the Seller under Article IX, the Seller agrees to pay on demand:
----------
(a) all reasonable out-of-pocket and other costs and expenses in
connection with the enforcement of this Agreement, the applicable Seller
Assignment Certificate or the other Transaction Documents by ARC or any
successor in interest to ARC, and
page 35
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution and delivery, and the filing and
recording, of this Agreement or the other Transaction Documents, and agrees
to indemnify each RPA Indemnified Party against any liabilities with
respect to or resulting from any delay in paying or omission to pay the
taxes and fees.
SECTION 10.7 Submission to Jurisdiction. EACH PARTY HERETO HEREBY
--------------------------
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW
YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE TRANSACTION
DOCUMENTS, AND HEREBY (A) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF THE
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN THE STATE OR FEDERAL COURT,
(B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF THE ACTION OR PROCEEDING,
AND (C) IN THE CASE OF ARC, IRREVOCABLY APPOINTS PRENTICE-HALL CORPORATION
SYSTEM, INC. (THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 15
COLUMBUS CIRCLE, NEW YORK, NEW YORK 10023, UNITED STATES OF AMERICA, AS ITS
AGENT TO RECEIVE ON BEHALF OF IT AND ITS PROPERTY SERVICE OF COPIES OF THE
SUMMONS AND COMPLAINT AND ANY OTHER PROCESS THAT MAY BE SERVED IN ANY ACTION OR
PROCEEDING. THE SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF THE
PROCESS TO ARC IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE
ADDRESS, AND ARC HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO
ACCEPT THE SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE, EACH OF
ARC AND THE SELLER ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OF COPIES OF THE PROCESS TO
ARC OR THE SELLER (AS APPLICABLE) AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN
THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY HERETO TO
BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY OR ANY OF ITS PROPERTIES
IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 10.8 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT
--------------------
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THE TRANSACTION DOCUMENTS OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
page36
CONNECTION THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE PARTIES HERETO
OR ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THE TRANSACTION DOCUMENTS,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
SECTION 10.9 Integration. This Agreement and the other Transaction
-----------
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
SECTION 10.10 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which together shall constitute one and the same agreement.
SECTION 10.11 Acknowledgment and Consent. (a) The Seller acknowledges
--------------------------
that, contemporaneously herewith, ARC is selling, transferring, assigning,
setting over and otherwise conveying to the Trust all of ARC's right, title and
interest in, to and under the Transferred Assets, this Agreement and all of the
other Transaction Documents pursuant to Sections 2.01 and 2.04 of the Pooling
Agreement. The Seller hereby consents to the sale, transfer, assignment, set
over and conveyance to the Trust by ARC of all right, title and interest of ARC
in, to and under the Transferred Assets, this Agreement and the other
Transaction Documents, and all of ARC's rights, remedies, powers and privileges,
and all claims of ARC against the Seller, under or with respect to this
Agreement and the other Transaction Documents (whether arising pursuant to the
terms of this Agreement or otherwise available at law or in equity), including
(i) the right of ARC, at any time, to enforce this Agreement against the Seller
and the obligations of the Seller hereunder, (ii) the right to appoint a
successor to the Servicer at the times and upon the conditions set forth in the
Pooling Agreement, and (iii) the right, at any time, to give or withhold any and
all consents, requests, notices, directions, approvals, demands, extensions or
waivers under or with respect to this Agreement, any other Transaction Document
or the obligations in respect of the Seller thereunder to the same extent as ARC
may do. Each of the parties hereto acknowledges and agrees that the Trustee and
the Trust are third party beneficiaries of the rights of ARC arising hereunder
and under the other Transaction Documents to which the Seller is a party. The
Seller hereby acknowledges and agrees that it has no claim to or interest in any
of the Bank Accounts or the Trust Accounts.
(b) The Seller hereby agrees to execute all agreements, instruments and
documents, and to take all other action, that ARC or the Trustee reasonably
determines is necessary or appropriate to evidence its consent described in
subsection (a) above. To the extent that
- - - --------------
page 37
ARC, individually or through the Servicer, has granted or grants powers of
attorney to the Trustee under the Pooling Agreement, the Seller hereby grants a
corresponding power of attorney on the same terms to ARC. The Seller hereby
acknowledges and agrees that ARC, in all of its capacities, shall assign to the
Trustee for the benefit of the Certificateholders the powers of attorney and
other rights and interests granted by the Seller to ARC hereunder and agrees to
cooperate fully with the Trustee in the exercise of the rights.
SECTION 10.12 No Partnership or Joint Venture. Nothing contained in this
-------------------------------
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.
SECTION 10.13 No Proceedings. The Seller hereby agrees that it will not
--------------
institute against ARC or the Trust, or join any other Person in instituting
against ARC or the Trust, any insolvency proceeding (namely, any proceeding of
the type referred to in the definition of Event of Bankruptcy) so long as any
Investor Certificates issued by the Trust shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
Investor Certificates shall have been outstanding. The foregoing shall not
limit the right of the Seller to file any claim in or otherwise take any action
with respect to any insolvency proceeding that was instituted against ARC or the
Trust by any Person other than a Seller, the Seller or any other AmeriSource
Person.
SECTION 10.14 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then the
unenforceable covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement or the other Transaction Documents (as applicable) and shall in no way
affect the validity or enforceability of the other provisions of this Agreement
or any of the other Transaction Documents.
SECTION 10.15 Recourse to ARC. Except to the extent expressly provided
---------------
otherwise in the Transaction Documents, the obligations of ARC under the
Transaction Documents to which it is a party are solely the obligations of ARC,
and no recourse shall be had for payment of any fee payable by or other
obligation of or claim against ARC that arises out of any Transaction Document
to which ARC is a party against any director, officer or employee of ARC. The
provisions of this section shall survive the termination of this Agreement.
[Remainder of page intentionally left blank.]
page 38
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
AMERISOURCE CORPORATION,
as the Seller
By:______________________________
Title:__________________________
Address: 300 Chester Field Parkway
Malvern, Pennsylvania 19355
Attention: Kurt Hilzinger
Telephone: (610) 296-4480
Facsimile: (610) 993-9085
AMERISOURCE RECEIVABLES CORPORATION,
as the purchaser
By:_______________________________
Title:___________________________
Address: P.O. Box 1735
Southeastern,
Pennsylvania 19399-1735
Attention: Kurt Hilzinger
Telephone: (610) 296-4480
Facsimile: (610) 993-9085
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
On the __th day of December, 1994 before me personally came
____________________ to me known, who, being by me duly sworn, did depose and
say that he resides at ___________________; that he is a _____________________
of AmeriSource Corporation, a Delaware corporation, the corporation described in
and that executed the foregoing instrument; and that he signed his name thereto
by order of the board of directors of the corporation.
Given under my hand and notarial seal, this __th day of December, 1994.
________________________________
Notary Public
Type or
Print Name:_____________________
My commission expires:
- - - --------------------------
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
On the __th day of December, 1994 before me personally came ______________
to me known, who, being by me duly sworn, did depose and say that he resides at
_________________________; that he is the ______________ of AmeriSource
Receivables Corporation, a __________ corporation, the corporation described in
and that executed the foregoing instrument; and that he signed his name thereto
by order of the board of directors of the corporation.
Given under my hand and notarial seal, this __th day of December, 1994.
________________________________
Notary Public
Type or
Print Name:_____________________
My commission expires:
- - - -------------------------
EXHIBIT A
FORM OF ARC NOTE
----------------
New York, New York
December 13, 1994
FOR VALUE RECEIVED, the undersigned, AMERISOURCE RECEIVABLES CORPORATION, a
Delaware corporation ("ARC"), promises to pay to AMERISOURCE CORPORATION, a
Delaware corporation (the "Seller" and together with its successors and assigns,
the "Holder"), on the terms and subject to the conditions set forth in this
promissory note (this "Note") and in the Receivables Purchase Agreement of even
date herewith (the "Agreement") between ARC and the Seller, an amount equal to
the aggregate unpaid principal amount of all borrowings deemed to be made by ARC
from the Seller pursuant to Article III of the Agreement. Such amount, as shown
in the records of the Servicer, will be rebuttable presumptive evidence of the
principal amount and interest owing under this Note.
1. Purchase Agreement. This Note is the ARC Note described in, and is
------------------
subject to the terms and conditions set forth in, the Agreement. Reference is
hereby made to the Agreement for a statement of certain other rights and
obligations of ARC and the Seller.
2. Rules of Construction; Definitions. Certain rules of construction
----------------------------------
governing the interpretation of this Note are set forth in Appendix A to the
Agreement and, except as otherwise specifically provided herein, capitalized
terms used but not defined herein have the meanings ascribed to them in Appendix
A to the Agreement. In addition, as used herein, the following terms have the
following meanings:
"Bankruptcy Proceedings" means any dissolution, winding up,
liquidation, readjustment, reorganization or other similar event relating
to ARC, whether voluntary or involuntary, partial or complete, and whether
in bankruptcy, insolvency, receivership or other similar proceedings, or
upon an assignment for the benefit of creditors, or any other marshalling
of the assets and liabilities of ARC or any sale of all or substantially
all of the assets of ARC; provided, however, that none of the commencement
of the Liquidation Period, the allocation and distribution of Collections
and other amounts during the Liquidation Period in accordance with the
terms of the Pooling Agreement and the liquidation, dissolution and winding
up of ARC during the Liquidation Period in accordance with the Pooling
Agreement after the termination of the Pooling Agreement in accordance with
Section 12.01 thereof shall constitute a "Bankruptcy Proceeding," so long
as no bankruptcy, insolvency, receivership or other similar proceedings
shall have been commenced by or against ARC and be continuing.
page 1
"Final Maturity Date" means the date occurring one year and one
day after the Final Scheduled Payment Date of the latest maturing Series or
Purchased Interest from time to time outstanding.
"Highest Lawful Rate" has the meaning set forth in paragraph 9.
-----------
"Junior Liabilities" means all obligations of ARC to the Holder
under this Note.
"Reference Rate" means, with respect to any day occurring in a
Calculation Period, the rate of interest publicly announced from time to
time by Bankers Trust Company as its "prime rate" and in effect on the
first day of such Calculation Period, as determined by the Servicer.
"Senior Interests" means all obligations of ARC to the
Certificateholders under or in connection with the Transaction Documents,
whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, including without limitation interest or
other amounts due or to become due after an Event of Bankruptcy.
"Subordination Provisions" means, collectively, the provisions
of paragraph 7.
-----------
3. Interest. Subject to the Subordination Provisions, ARC promises to pay
--------
interest on the aggregate unpaid principal amount of this Note outstanding on
each day at an adjustable rate per annum equal to the Reference Rate in effect
on such day.
4. Interest Payment Dates. (a) Subject to the Subordination Provisions,
----------------------
ARC shall pay accrued interest on this Note on each Settlement Date and on the
Final Maturity Date. ARC also shall pay accrued interest on the principal amount
of each prepayment hereof on the last day of each calendar month.
(b) Notwithstanding the provisions of paragraph 4(a), in the event that on
--------------
the date an interest payment is due hereunder the amount of funds available
therefor pursuant to clause Eighth of Section 4.03(g) of the Pooling Agreement
is insufficient to pay any amount due pursuant to paragraph 4(a), then interest
--------------
shall be payable only to the extent that funds are available therefor in
accordance with Section 4.03(g) of the Pooling Agreement. All interest on this
Note that is not paid when due pursuant to this paragraph shall be payable on
the next date on which an interest payment on this Note is due and on which
funds are available therefor pursuant to clause Eighth of Section 4.03(g) of the
Pooling Agreement, and all such unpaid interest shall accrue interest at the
Reference Rate until paid in full.
5. Basis of Computation. Interest accrued hereunder shall be computed for
--------------------
the actual number of days elapsed on the basis of a 360-day year.
page 2
6. Principal Payment Dates. Subject to the Subordination Provisions, any
-----------------------
unpaid principal of this Note shall only become due and payable on the Final
Maturity Date. Subject to the Subordination Provisions, the principal amount of
and accrued interest on this Note may be prepaid on any Business Day without
premium or penalty; provided, that no prepayment shall be made by ARC to the
extent that such prepayment would result in a default in the payment of any
other amount required to be paid by ARC under any Transaction Document.
7. Subordination Provisions. ARC covenants and agrees, and the Holder, by
------------------------
its acceptance of this Note, likewise covenants and agrees, that the payment of
all Junior Liabilities is hereby expressly subordinated in right of payment to
the payment and performance of the Senior Interests to the extent and in the
manner set forth in this paragraph:
(a) In the event of any Bankruptcy Proceeding, the Senior Interests
shall first be paid and performed in full and in cash before the Holder
shall be entitled to receive and to retain any payment or distribution in
respect of the Junior Liabilities. In order to implement the foregoing: (i)
all payments and distributions of any kind or character in respect of the
Junior Liabilities to which the Holder would be entitled except for this
clause (a) shall be made directly to the Certificateholders, and (ii)
----------
if a Bankruptcy Proceeding has been commenced, the Holder shall promptly
file a claim or claims, in the form required in any Bankruptcy Proceedings,
for the full outstanding amount the Junior Liabilities, and shall use
commercially reasonable efforts to cause said claim or claims to be
approved and all payments and other distributions in respect thereof to be
made directly to the Certificateholders until the Senior Interests shall
have been paid and performed in full and in cash.
(b) In the event that the Holder receives any payment or other
distribution of any kind or character from ARC or from any other source
whatsoever, in payment of the Junior Liabilities, after the commencement of
any Bankruptcy Proceeding, such payment or other distribution shall be
received in trust for the Certificateholders and shall be turned over by
the Holder to the Certificateholders forthwith.
(c) Upon the final indefeasible payment in full and in cash of all
Senior Interests, the Holder shall be subrogated to the rights of the
Certificateholders to receive payments or distributions from ARC that are
applicable to the Senior Interests until the Junior Liabilities are paid in
ull.
(d) These Subordination Provisions are intended solely for the purpose
of defining the relative rights of the Holder, on the one hand, and the
Certificateholders on the other hand. Nothing contained in these
Subordination Provisions or elsewhere in this Note is intended to or shall
impair, as between ARC, its creditors (other than the Certificateholders)
and the Holder, ARC's obligation, which is unconditional and
page 3
absolute, to pay the Junior Liabilities as and when the same shall become
due and payable in accordance with the terms hereof and of the Agreement or
to affect the relative rights of the Holder and creditors of ARC (other
than the Certificateholders).
(e) The Holder shall not, until the Senior Interests have been
finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or collect, or
subordinate to any obligation of ARC (other than to the Senior Interests),
howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, or now or hereafter existing, or due or to become
due, the Junior Liabilities or any rights in respect hereof or (ii) convert
the Junior Liabilities into an equity interest in ARC, unless, in the case
of each of clauses (i) and (ii), the Holdershall have received the prior
----------- ----
written consent of the Certificateholders in each case.
(f) The Holder shall not, without the advance written consent of the
Certificateholders, commence, or join with any other Person in commencing,
any Bankruptcy Proceedings with respect to ARC until at least one year and
one day shall have passed after the Senior Interests shall have been
finally paid and performed in full and in cash; provided, however, that the
Holder shall at all times have the right to file any claim in or otherwise
take any action with respect to any insolvency proceeding instituted
against ARC by any Person other than the Holder, ARC or any other
AmeriSource Person (provided that no such action may be taken by the Holder
until such proceeding has continued undismissed, unstayed and in effect for
a period of 10 days).
(g) If, at any time, any payment (in whole or in part) made with
respect to any Senior Interest is rescinded or must be restored or returned
by a Certificateholder (whether in connection with any Bankruptcy
Proceedings or otherwise), these Subordination Provisions shall continue to
be effective or shall be reinstated, as the case may be, as though such
payment had not been made.
(h) Each of the Certificateholders may, from time to time, in its
sole discretion, without notice to the Holder, and without waiving any of
its rights under these Subordination Provisions, take any or all of the
following actions: (i) retain or obtain an interest in any property to
secure any of the Interests, (ii) retain or obtain the primary or secondary
obligations of any other obligor or obligors with respect to any of the
Senior Interests, (iii) extend or renew for one or more periods (whether or
not longer than the original period), alter, increase or exchange any of
the Senior Interests, or release or compromise any obligation of any nature
with respect to any of the Senior Interests, (iv) amend, supplement, amend
and restate, or otherwise modify any Transaction Document to which it is a
party, and (v) release its security interest in, or surrender, release or
permit any substitution or exchange for all or any part of any rights or
property securing any of the Senior Interests, or
page 4
extend or renew for one or more periods (whether or not longer than the
original period), or release, compromise, alter or exchange any obligations
of any nature of any obligor with respect to any such rights or property.
(i) The Holder hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Certificateholders, (ii) notice of
the existence, creation, non-payment or non-performance of all or any of
the Senior Interests, and (iii) all diligence in enforcement, collection or
protection of, or realization upon, the Senior Interests, or any thereof,
or any security therefor.
(j) These Subordination Provisions constitute a continuing offer from
ARC to all Persons who become the holders of, or who continue to hold,
Senior Interests, and these Subordination Provisions are made for the
benefit of the Certificateholders, and the Trustee may proceed to enforce
such provisions on behalf of each of such Persons.
8. General. No failure or delay on the part of the Holder in
-------
exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Note shall in any event be effective unless (a) the same shall
be in writing and signed and delivered by ARC and the Seller, and (b) all
consents required for such actions under the Transaction Documents shall have
been received by the appropriate Persons.
9. Limitation on Interest. Notwithstanding anything in this Note to the
----------------------
contrary, ARC shall never be required to pay unearned interest on any amount
outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder, at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law (such maximum rate being herein called the
"Highest Lawful Rate"). If the effective rate of interest that would otherwise
be payable under this Note would exceed the Highest Lawful Rate, or the Holder
shall receive any unearned interest or shall receive monies that are deemed to
constitute interest that would increase the effective rate of interest payable
by ARC under this Note to a rate in excess of the Highest Lawful Rate, then (a)
the amount of interest that would otherwise be payable by ARC under this Note
shall be reduced to the amount allowed by applicable law, and (b) any unearned
interest paid by ARC or any interest paid by ARC in excess of the Highest Lawful
Rate shall be refunded to ARC. Without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or
page 5
received by the Holder under this Note that are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate shall be made, to
the extent permitted by applicable usury laws (now or hereafter enacted), by
amortizing, prorating and spreading in equal parts during the actual period
during which any amount has been outstanding hereunder all interest at any time
contracted for, charged or received by the Seller in connection herewith. If at
any time and from time to time (i) the amount of interest payable to the Holder
on any date shall be computed at the Highest Lawful Rate pursuant to the
provisions of the foregoing sentence, and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to the
Holder would be less than the amount of interest payable to the Holder computed
at the Highest Lawful Rate, then the amount of interest payable to the Holder in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate until the total amount of interest payable
to the Holder shall equal the total amount of interest that would have been
payable to the Holder if the total amount of interest had been computed without
giving effect to the provisions of the foregoing sentence.
10 No Negotiation. This Note is not negotiable.
--------------
11 Governing Law. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
-------------
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
12 Security Interest. The Seller may grant a security interest in or
-----------------
otherwise pledge this Note as security, and any Person to whom such security
interest is granted or to whom this Note is pledged shall be bound by, and for
all purposes takes this Note subject to, the restrictions and other provisions
(including the Subordination Provisions) set forth herein.
13 Captions. Paragraph captions used in this Note are provided solely for
--------
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Note.
AMERISOURCE RECEIVABLES CORPORATION
By:_________________________________
Title:____________________________
page 6
EXHIBIT B
FORM OF
AMERISOURCE CERTIFICATE
-----------------------
page 7
EXHIBIT C
FORM OF
SELLER ASSIGNMENT CERTIFICATE
-----------------------------
Reference is made to the Receivables Purchase Agreement of even date
herewith (as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time, the "Agreement") between AMERISOURCE
CORPORATION (the "Seller") and AMERISOURCE RECEIVABLES CORPORATION ("ARC").
Unless otherwise defined herein, capitalized terms used herein have the meanings
provided in Appendix A to the Agreement.
The Seller hereby sells, transfers, assigns, sets over and conveys unto ARC
and its successors and assigns all right, title and interest of the Seller in,
to and under:
(a) each Receivable of the Seller (other than Contributed
Receivables) that existed and was owing to the Seller as at the closing of
the Seller's business on the Initial Cut-Off Date,
(b) each Receivable created by the Seller (other than Contributed
Receivables) that arises during the period from and including the closing
of the Seller's business on the Initial Cut-Off Date to but excluding the
Purchase Termination Date,
(c) all Related Security with respect to all Receivables (other than
Contributed Receivables) of the Seller,
(d) all proceeds of the foregoing, including all funds received by
any Person in payment of any amounts owed (including invoice prices,
finance charges, interest and all other charges, if any) in respect of any
Receivable described above (other than a Contributed Receivable) or Related
Security with respect to any such Receivable, or otherwise applied to repay
or discharge any such Receivable (including insurance payments that the
Seller or the Servicer applies in the ordinary course of its business to
amounts owed in respect of any such Receivable (it being understood that
property insurance covering inventory is not so applied and is not included
in this grant) and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any such Receivable) or other
collateral or property of any Obligor or any other party directly or
indirectly liable for payment of such Receivables), and
(e) all Records relating to any of the foregoing.
This Seller Assignment Certificate is made without recourse but on the
terms and subject to the conditions set forth in the Transaction Documents
to which the Seller is a
page 1
party. The Seller acknowledges and agrees that ARC is accepting this Seller
Assignment Certificate in reliance on the representations, warranties and
covenants of the Seller contained in the Transaction Documents to which the
Seller is a party.
THIS SELLER ASSIGNMENT CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE AGREEMENT AND THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
IN WITNESS WHEREOF, the undersigned has caused this Seller Assignment
Certificate to be duly executed and delivered by its duly Authorized Officer
this 13th day of December, 1994.
AMERISOURCE CORPORATION
By:_________________________________
Title:____________________________
page 2
SCHEDULE 1
to Purchase Agreement
LITIGATION AND OTHER PROCEEDINGS
--------------------------------
A. Seller is named as a defendant in the following L-Tryptophan lawsuit.
Seller believes it is entitled to full indemnification by its suppliers and
the manufacturer of L-Tryptophan with respect to this lawsuit:
1. Margaret M. O'Neill, et al. v. Showa Denko, K.K., et al., Court of
-------------------------------------------------------
Common Pleas, Cuyahoga County, Ohio, No. 91-218888-CV.
B. Seller is named as a defendant, along with six other wholesale distributors
and twenty-four pharmaceutical manufacturers, in 14 civil actions filed in
the United States District Court for the Southern District of New York. For
pretrial matters, these cases, along with thirty-four others (to which the
Company is not a party) have been transferred to the United States District
Court for the Northern District of Illinois. In general, these lawsuits all
claim that the manufacturer and wholesaler defendants have combined,
contracted and conspired to fix the prices charged to plaintiffs and class
members for prescription brand name pharmaceuticals. Specifically,
plaintiffs claim that m the defendants use "chargeback agreements" to give
some institutional pharmacies discounts that are not made available to
retail drug stores. Seller believes it has meritorious defenses to the
claims asserted in these lawsuits.
C. In connection with its examination of the consolidated Federal income tax
returns of Seller and its subsidiaries for the taxable years ended
September 30, 1987 through December 29, 1988 and of AmeriSource
Distribution Corporation and its subsidiaries (including Seller) for the
taxable years ended September 30, 1989 through September 30, 1991, the
Internal Revenue Service (the "IRS") has delivered to Seller certain
Notices of Proposed Adjustment reflecting proposed increases to the taxable
income of the consolidated groups for those periods.
The IRS has not yet delivered a Revenue Agent's Report and accompanying"30-
day letter" upon the conclusion of the examination pursuant to which the
taxpayers are permitted to file an administrative protest of any proposed
adjustments with the IRS Appeals Office. Seller expects to contest
substantially all of the proposed adjustments.
D. Seller has removed two underground storage tanks (the "USTs") at its
Charleston, South Carolina facility and is awaiting finalization by the
South Carolina Department of Health and Environmental Control on its
closure report. The USTs in South
Carolina are registered under the state's SUPERB program.
Seller retained General Engineering Laboratories ("GEL") to study its
Charleston, South Carolina property and to determine the extent of the
environmental problem existing at that site.
GEL completed its Subsurface Soil Investigation and issued a report dated
October 22, 1993, which identified elevated concentrations of lead in the
soil at the Charleston, South Carolina facility. Seller then retained RMT,
Inc. ("RMT") to perform a groundwater investigation at the facility. RMT
completed its Groundwater Investigation and issued a report dated July
1994, which found lead in unfiltered groundwater samples taken at the
facility. Seller submitted RMT's report to the South Carolina Department of
Health and Environmental Control ("SC DHEC").
As described in Seller's Form 10-Q for the Fiscal Quarter Ended June 30,
1994, Seller reserved $4.1 million during the third quarter of fiscal 1994
to cover future consulting, legal and remediation and ongoing monitoring
costs for the Charleston, South Carolina facility.
In September 1994, SC DHEC directed Seller to conduct additional
groundwater and soil investigations at the facility. In October 1994, RMT
submitted a proposed workplan to SC DHEC describing the additional
investigation activities that will be undertaken at the facility.
SCHEDULE 2
to Purchase Agreement
OFFICES OF THE SELLER WHERE
RECORDS ARE MAINTAINED
-------------------------------
AmeriSource Corporation AmeriSource-Louisville
300 Chester Field Parkway 244 E. Woodlawn
Malvern, PA 19355 Louisville, ky 40214
AmeriSource-Chattanooga AmeriSource-Lynchburg
300 Tallan Building 9221 Timberlake Road
Two Union Square Lynchburg, VA 24502
Chattanooga, TN 37402
AmeriSource-Paducah
322 North 3rd Street
Paducah, KY 42001
AmeriSource-Minneapolis
6810 Shady Oak Road
Eden Prairie, MN 55344
AmeriSource-Thorofare
400 Grove Road
Thorofare, NJ 08086
Rita-Ann Distributors
901 Curtain Avenue
Baltimore, MD 21218
AmeriSource-Columbus
1200 E. 5th Avenue
Columbus, OH 43219
AmeriSource- Toledo
3145 Nebraska
Toledo, OH 43607
SCHEDULE 3
to Purchase Agreement
LEGAL NAMES
-----------
AmeriSource Corporation
Alco Health Services Corporation
TRADE NAMES
-----------
1. AmeriSource Corporation
Malvern, PA
2. The Drug House
Harrisburg, PA
3. The Drug House
Thorofare, NJ
4. Family Independent Pharmacy
Columbus, OH
5. Family Pharmacy
Columbus, OH
6. The Kauffman-Lattimer Company
Louisville, KY
7. The Kauffman-Lattimer Company
Columbus, OH
8. Home Health Care
Sioux Falls, SD
9. Meyers & Company
Tiffin, OH
10. R A Distributors
Baltimore, MD
11. Rita-Ann Distributors
Baltimore, MD
12. Strother Drug Company
Lynchburg, VA
13. Alco Health Services Northeast
Thorofare, NJ
Harrisburg, PA
14. Alco Health Services Southeast
Chattanooga, TN
Johnson City, TN
Valdosta, GA
15. Alco Health Services West Central
Sioux Falls, SD
Council Bluffs, IA
Joplin, MO
Minneapolis, MN
16. Alco Health Services Mid Central
Columbus, OH
Louisville, KY
17. Alco Health Services North Central
Mishawaka, IN
Toledo, OH
Tiffin, OH
18. Alco Health Services South Central
Paducah, KY
19. Alco Health Services Atlantic Coast
Lynchburg, VA
20. Duff Brothers
Chattanooga, TN
21. Smith-Higgins Company
Johnson City, TN
22. Brown Drug Company
Sioux City, SD
Council Bluffs, IA
23. AmeriSource (Minnesota) Corporation
24. AmeriSource (New York)
25. AmeriSource (Indiana) Corporation
26. AmeriSource (Iowa) Corporation
27. AmeriSource (Services) Corporation
SCHEDULE 4
to Purchase Agreement
CHANGES IN FINANCIAL CONDITION
------------------------------
A. Write-off of Seller's remaining balance of goodwill of $179.8 million in
the third quarter of fiscal 1994, as described in Seller's Quarterly Report
on Form 10-Q for the fiscal quarter ended June 30, 1994.
B. Redemption of Existing Subordinated Notes, as described in Seller's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1994.
C. Exchange of $40,329,000 principal amount of New Subordinated Notes and
$101,000 cash for $40,329,000 principal amount of Existing Subordinated
Notes, as described in Seller's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1994. In addition, Seller paid certain
holders of Existing Subordinated Notes cash consideration of $520,000 in
exchange for such holders' agreement not to tender any of the Existing
Subordinated Notes or to exercise any other rights they might have with
respect to a consolidated net worth provision in the indenture for the
Existing Subordinated Notes, as described in Seller's Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30, 1994.
D. See Schedule 1 - Litigation and Other Proceedings.
----------
E. Effective October 1, 1993, Seller adopted Statement of Financial Accounting
Standards No. 106 "Employers' Accounting for Postretirement Benefits Other
Than Pensions" (Statement 106) and Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" (Statement 109). See
Seller's Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 1994 for a discussion.
F. As of the date hereof, Seller has commenced the redemption of all
outstanding Subordinated Notes which will be redeemed at the applicable
premium set forth in the Subordinated Notes.
G. Commencement of the transaction contemplated by the Original Seller Credit
Agreements.
APPENDIX A
[Same as Appendix A to Pooling Agreement]
APPENDIX A
DEFINITIONS
This is Appendix A to (a) the Purchase Agreement (as hereinafter defined)
----------
and (b) the Pooling Agreement (as hereinafter defined).
A. Defined Terms. As used in the Purchase Agreement, the Pooling
-------------
Agreement or any Supplement, as the case may be (unless the context requires a
different meaning), the following terms have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):
"Acceptable Guarantee Instrument" means (a) an irrevocable letter of credit
issued by a commercial bank having a short-term debt or certificate of deposit
rating of at least "A-1+" from S&P, which letter of credit shall be a "direct
pay" letter of credit, reasonably satisfactory in form and substance to the
Trustee, or (b) a surety bond issued by an insurance company having a claims
paying ability rating of at least "A-1+" from S&P; provided, that no letter of
credit or surety bond shall constitute an Acceptable Guarantee Instrument until
the Rating Agency Condition has been met with respect to the terms and
conditions of the letter of credit or surety bond, as the case may be.
"Account Agreements" means the Concentration Account Agreements and the
Lockbox Agreements, as they may be amended, supplemented, amended and restated
or otherwise modified from time to time in accordance with the Pooling
Agreement.
"Account Banks" means the Concentration Account Banks and the Lockbox
Banks.
"Accrual Reserve" means, on any day, the product of (a) the aggregate
amount of the accounting reserves or "contra" entries established by the Sellers
on their books and records as of such day in respect of the Sellers' expected
liability for Cash Discounts and (b) a factor which shall equal (i) prior to the
date referred to in the following sentence, 1.75 and (ii) on and after that
date, 0. The date for the change in the factor described in clause (b) above
----------
will be the date, falling not later than 60 days after the Closing Date, upon
which AmeriSource has (x) recalculated its Dilution statistics for each of the
twelve most recent Calculation Periods ending prior to such date to give effect
to the actual Cash Discounts taken during each such Calculation Period, (y)
recalculated the Dilution Ratios for each such Calculation Period accordingly
and (z) recalculated the then-current Dilution Reserve Ratio accordingly (and
given effect to such recalculation in a Daily Report).
"Accrued Carrying Costs" is defined in Section 4.03(a) of the Pooling
Agreement.
"Accumulation Account" is defined in Section 4.02(g) of the Pooling
Agreement.
"Accumulation Account Termination Date" is defined in Section 4.02(g) of
the Pooling Agreement.
"Accumulation Period" means, with respect to a Series of Investor
Certificates or Purchased Interests, the period commencing on the Scheduled
Accumulation Commencement Date that applies to that Series of Investor
Certificates and ending on the earlier of (a) the Liquidation Commencement Date,
(b) the Pay-Out Period Commencement Date and (c) the Expected Final Payment Date
for that Series.
"Accumulation Period Commencement Date" means, with respect to a Series of
Investor Certificates, the Scheduled Accumulation Commencement Date for the
Series of Investor Certificates.
"Adjusted Eligible Receivables" means, at any time, the excess of (a) the
then aggregate Unpaid Balance of all Eligible Receivables in the Trust over (b)
the Unapplied Cash held by the Trust.
"Advances" has the meaning assigned to that term in the Original Seller
Credit Agreement.
"Adverse Claim" means any claim of ownership interest or any mortgage, deed
of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other) or other security agreement of any kind or nature
whatsoever, including any conditional sale or other title retention agreement
and any financing lease having substantially the same economic effect as any of
the foregoing.
"Affected Receivables" means, with respect to a Look Back Period, Available
Receivables for each day during such Look Back Period.
"Affiliate" when used with respect to a Person means any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. As used in this definition, the term "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of a Person, whether through the ownership of such Person's voting
securities, by contract or otherwise, and the terms "affiliated," "controlling"
and "controlled" have meanings correlative to the term "control."
"Aged Receivables Ratio" means, as calculated in each Settlement Statement
as of the Cut-Off Date for the related Calculation Period, a fraction (expressed
as a percentage) having (a) a numerator that is the sum of (i) the aggregate
Unpaid Balance of Receivables that were past due 121 to 150 days, as determined
as of the Cut-Off Date for the most recently ended Calculation Period, plus (ii)
the aggregate Unpaid Balance of Receivables that were written off as
uncollectible during the most recently ended Calculation Period and that were
not more than 150 days past due as of that Cut-Off Date and (b) a denominator
that is the aggregate
page A-2
amount payable pursuant to invoices giving rise to Receivables that were
generated by the Seller during the Calculation Period that occurred five
Calculation Periods prior to the most recently ended Calculation Period, as
determined as of the Cut-Off Date for such prior Calculation Period.
"Agent" means, with respect to a Series of Revolving Certificates, the bank
or similar Person designated as the agent for the Revolving Purchasers in the
Series' Revolving Certificate Purchase Agreement.
"Aggregate Unpaid Balance" is defined in Section 2.1(b) of the Purchase
Agreement.
"Allocable Charged-Off Amount" is defined in Section 4.03(e) of the Pooling
Agreement.
"Allocable Daily Collections" means, with respect to any Series or
Purchased Interest on any day, an amount equal to the product of:
(a) a fraction, (i) the numerator of which is the Ratable Principal
Amount of the Series or Purchased Interest and (ii) the denominator of
which is the sum of the Ratable Principal Amounts of all then-outstanding
Investor Certificates, all then outstanding Purchased Interests and the ARC
Revolving Certificate, multiplied by
(b) the amount of collected funds on deposit in the Master Collection
Account on that day.
"Alternate Base Rate" shall be as stated in the Supplement pursuant to
which a Series of Certificates is offered.
"AmeriSource" means AmeriSource Corporation, a Delaware corporation, or its
successor in interest.
"AmeriSource Certificate" is defined in Section 1.2(e) of the Purchase
--------------
Agreement.
"AmeriSource Person" means AmeriSource and each of its Subsidiaries and
Affiliates other than ARC.
"Applicable Rating Agencies" means each of the nationally recognized
statistical rating agencies that, at the request of the Seller or ARC, has rated
any then-issued and outstanding Series or Class of Investor Certificates.
"Applicable Reserve Ratio" means, at any time, the greater of (a) the
Minimum Required Reserve Ratio and (b) the sum of the Required Reserve Ratios
then in effect.
page A-3
"Applicant" is defined in Section 6.07 of the Pooling Agreement.
"ARC" means AmeriSource Receivables Corporation, a Delaware corporation, or
its successor in interest.
"ARC Allocation Percentage" means, on any Settlement Date after the
Liquidation Commencement Date, a fraction with (a) a numerator that equals the
ARC Revolving Amount (after giving effect to any adjustments pursuant to the
Pooling Agreement on the Settlement Date), and (b) a denominator that equals the
Invested Amount, in each case calculated as of the Settlement Date.
"ARC Note" means the note defined in Section 3.2 of the Purchase Agreement,
substantially in the form of Exhibit A to the Purchase Agreement.
"ARC Revolving Amount" means, at any time, (a)(i) the ARC Revolving Initial
Amount, plus (ii) all additions made to the ARC Revolving Amount pursuant to
Section 4.03 of the Pooling Agreement, minus (iii) all reductions in the ARC
Revolving Amount made pursuant to Section 4.03 of the Pooling Agreement, minus
(b) the amount of all other principal payments made to ARC prior to such time in
respect of the ARC Revolving Certificate and any Allocable Charged-Off Amounts
(net of Net Recoveries) allocated to the ARC Revolving Certificate.
"ARC Revolving Certificate" means the Revolving Certificate, substantially
in the form of Exhibit G to the Pooling Agreement, that represents a right to
receive a variable principal amount, was issued to ARC on the First Issuance
Date (and any Revolving Certificate issued to ARC in replacement thereof or in
exchange or substitution therefor), does not bear interest and was executed by
ARC and authenticated by or on behalf of the Trustee.
"ARC Revolving Initial Amount" means $ , being the initial
------------
principal amount of the ARC Revolving Certificate on the Closing Date.
"Assignment of Claims Act" is defined in Section 2.03(E)(iii) of the
Pooling Agreement.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, The City of New York printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Authorized Officer" means, (a) with respect to ARC: Kurt J. Hilzinger,
Vice President, John A. Kurcik, Vice President, Teresa Ciccotelli, Secretary, R.
David Yost, Treasurer, Julie Frantz, Assistant Treasurer, (b) with respect to
the Seller: Kurt J. Hilzinger, Vice President Finance and Treasurer, John A.
Kurcik, Vice President, Controller
page A-4
and Assistant Treasurer, Teresa Ciccotelli, Vice President and Secretary, M.
Curtis Young, Corporate Asset Manager, Julie Frantz, Treasury Operations Manager
and (c) with respect to the Servicer: Kurt J. Hilzinger, Vice President Finance
and Treasurer, John A. Kurcik, Vice President, Controller and Assistant
Treasurer, Teresa Ciccotelli, Vice President and Secretary, M. Curtis Young,
Corporate Asset Manager, Julie Frantz, Treasury Operations Manager.
"Available Final Distribution Amount" means, with respect to any Series,
the amount that would be available in the Master Collection Account on the
Series Sale Date for the Series for distribution to the Certificateholders of
such Series.
"Available Receivables" has the meaning assigned to such term in Section
1.2(c) of the Purchase Agreement.
"Available Subordinated Amount" is defined in Section 4.03(e) of the
Pooling Agreement.
"Bank Accounts" means the Lockbox Accounts and the Concentration Accounts.
"Base Amount" is defined in Section 4.03(b) of the Pooling Agreement.
"Benchmark Percentage" shall be as stated in the definition of "Excess
Concentration Balances".
"Book-Entry Certificates" means certificates evidencing a beneficial
interest in the Investor Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 6.12 of
the Pooling Agreement; provided, however, that after the occurrence of a
condition whereupon book-entry registration and transfer are no longer permitted
and Definitive Certificates are to be issued to the Certificate Owners, such
certificates shall no longer be "Book-Entry Certificates".
"Borrowing Base" has the meaning assigned to such term in the Original
Seller Credit Agreement.
"Bridge Facility" means the transactions contemplated by the Supplement for
the Series 1994-1 Certificates, as in effect on the Closing Date.
"Business Day" means a day (other than a Saturday or Sunday) on which
commercial banks in New York, New York are not authorized or required to be
closed for business.
"Calculation Period" means each period commencing on the first day of a
Fiscal Month and ending on the last day of such Fiscal Month.
page A-5
"Carrying Cost Account" is defined in Section 4.02(b) of the Pooling
Agreement.
"Carrying Cost Reserve" is defined in Section 4.03(a) of the Pooling
Agreement.
"Carrying Costs" means, for any period, (a) Fixed Principal Yield, Investor
Revolving Yield and PI Yield for the period, (b) interest payable by ARC on the
ARC Note for the period (provided that this interest shall be included as
"Carrying Costs" only for purposes of determining the Purchase Price Percentage
pursuant to Section 2.2 of the Purchase Agreement), (c) the Servicing Fee for
the period in the applicable amount provided for in Section 3.04 of the Pooling
Agreement, (d) the operating expenses described in Section 7.02(m) of the
Pooling Agreement for the period, and (e) other fees, costs and expenses
incurred by ARC for the period and paid to third Persons who are not either
AmeriSource or any of its Affiliates and by the Trustee for the period in
connection with its duties under the Transaction Documents (in the case of the
Trustee, to the extent not included in the Servicing Fee).
"Cash Discounts" means the discount provided to certain of Seller's
customers for payment within the terms of the invoice expressed as a percentage
of the gross amount of the invoice.
"Cash Transfer" means, with respect to any day, the aggregate amount of
cash transferred by ARC to the Seller or its designee, whether in the form of
Purchase Price payments or prepayments, payments on the ARC Note, payments of
Servicing Fees, dividends, loans or otherwise.
"Certificate" means any one of the Fixed Principal Certificates, the
Revolving Certificates or the Residual Certificate.
"Certificate Calculation Amount" means the result of (a) the Fixed
Principal Calculation Amount plus (b) the Revolving Certificate Calculation
Amount minus (c) the amount of funds on deposit in the Set-Aside Account.
"Certificateholder" means the Person in whose name a Certificate is
registered in the Certificate Register.
"Certificate Invested Amount" means the sum of the Fixed Principal Invested
Amount, plus the Investor Revolving Invested Amount.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
page A-6
"Certificate Rate" means, with respect to any Certificate at any time, the
fixed or variable rate of interest per annum applicable to the Series of which
that Certificate is a part at such time, as the interest rate is calculated in
accordance with the Supplement pursuant to which the Series is issued.
"Certificate Register" means the register maintained pursuant to Section
6.03(a) of the Pooling Agreement, providing for the registration of the
Certificates and transfers and exchanges thereof.
"Charged-Off Amount" means, with respect to any Calculation Period, an
amount equal to (a) the amount of Receivables that became Charged-Off
Receivables during such Calculation Period, minus (b) the amount of Recoveries
received by the Servicer during such Calculation Period.
"Charged-Off Receivable" means any Receivable that, consistent with the
Credit and Collection Policy, has been or should have been charged-off as
uncollectible.
"Class" means, with respect to any Series, any class of Investor
Certificates of that Series.
"Class Allocation Percentage" means, with respect to any Class or Purchased
Interest on any Settlement Date after the Liquidation Commencement Date, a
fraction with (a) a numerator that equals the Class Invested Amount of that
Class or PI Invested Amount of that Purchased Interest, and (b) a denominator
that equals the sum of the Class Invested Amount or PI Invested Amount of each
Subordinated Class and Subordinated Purchased Interest (if the Class Allocation
Percentage is being calculated for a Subordinated Class or a Subordinated
Purchased Interest) or of each Senior Class and Senior Purchased Interest (if
the Class Allocation Percentage is being calculated for a Senior Class or a
Senior Purchased Interest).
"Class Invested Amount" means, with respect to any Class, the amount
calculated as the invested amount of that Class pursuant to the applicable
Supplement.
"Clearing Agency" means, with respect to any Book-Entry Certificate, any
Person designated as such by ARC, which person must be registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" is defined in Section 6.12(d) of the Pooling
Agreement.
"Closing Date" means December 13, 1994.
page A-7
"Collections" means all funds that are received by the Seller, ARC, the
Servicer or the Trustee from or on behalf of any Obligor in payment of any
amounts owed (including invoice prices, finance charges, interest and all other
charges, if any) in respect of any Receivable or Related Asset, or otherwise
applied to repay or discharge any Receivable (including insurance payments that
the Seller, ARC or the Servicer applies in the ordinary course of its business
to amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods that were the subject of such Receivable).
"Concentration Account" means any bank account that is created in
accordance with, and to perform the functions contemplated for Concentration
Accounts in, Section 3.03 of the Pooling Agreement.
"Concentration Account Agreement" means a letter agreement, substantially
in the form of Exhibit B to the Pooling Agreement (or such other form as is
reasonably acceptable to the Trustee), among ARC, the Seller, a Concentration
Account Bank and the Trustee that relates to one or more Concentration Accounts,
as it may be amended, supplemented, amended and restated or otherwise modified
from time to time.
"Concentration Account Banks" means any of the banks at which one or more
Concentration Accounts are maintained from time to time.
"Concentration Factor" means, as of any Cut-Off Date, the greatest of (a)
the "Benchmark Percentage" then in effect for purposes of clause (c) of the
----------
definition of Excess Concentration Balances, (b) two multiplied by the
"Benchmark Percentage" then in effect for purposes of clause (d) of that
----------
definition, and (c) four multiplied by the "Benchmark Percentage" then in effect
for purposes of clause (e) of that definition.
----------
"Confidential Information" is defined in Section 13.21 of the Pooling
Agreement.
"Confirmation Notice" means a written notice given by the Seller Agent to
the Trustee and the Servicer on a Business Day to the effect that the Seller
Parties waive any rights to Affected Receivables arising during the then current
Look Back Period, the receipt of which notice shall terminate such Look Back
Period; provided, that if the Trustee shall receive such notice on any day other
than a Business Day or later than 2:00 p. m., New York City time, on any
Business Day, such notice will be deemed to have been received on the next
Business Day.
"Consolidated Subsidiary" means any Subsidiary or any other Person, some or
all of the stock of which, or other equity interests in which, is owned
(directly or indirectly) by AmeriSource and the accounts of which would be
consolidated with those of AmeriSource in its consolidated financial statements
as of such time in accordance with GAAP. For the purposes of this definition,
the term "Consolidated Subsidiary" shall include ARC, unless otherwise specified
in a Transaction Document.
page A-8
"Contract" means a contract or other written agreement between the Seller
and any Person pursuant to or under which such Person shall be obligated to make
payments in respect of any Receivable or Related Asset to the Seller from time
to time.
"Contributed Receivables" means all right, title and interest of
AmeriSource in the Receivables (and Related Security in connection therewith)
contributed by AmeriSource to ARC.
"Controlled Accumulation Amount" means, with respect to a Series to which
it applies, for any Settlement Date during an Accumulation Period with respect
to such Series, the amount specified as the Controlled Accumulation Amount in
the related Supplement.
"Controlled Deposit Amount" means, with respect to any Series, for any
Settlement Date during an Accumulation Period, an amount equal to the sum of the
Controlled Accumulation Amount for such Settlement Date and the Deficit
Controlled Accumulation Amount, if any, for the immediately preceding Settlement
Date.
"Corporate Trust Office" means the principal office of the Trustee in
Buffalo, New York, at which at any particular time its corporate trust business
shall be principally administered.
"Credit and Collection Policy" means, with respect to the Seller, its
credit and collection policies and practices relating to the Contracts and
Receivables of the Seller that the Seller has provided to ARC and the Trustee
prior to the Closing Date, as such credit and collection policies may be
modified without violating Section 6.3(b) of the Purchase Agreement or Section
7.02(g) of the Pooling Agreement. Notwithstanding the foregoing, as applied to
any Successor Servicer, "Credit and Collection Policy" means the collection
policies and practices of the Successor Servicer with respect to receivables
like the Receivables.
"Credit Exposure", with respect to any Series of Investor Revolving
Certificates, is defined in the applicable Revolving Certificate Purchase
Agreement.
"Cut-Off Date" means the last day of any Calculation Period.
"Daily Report" is defined in Section 3.05(c) of the Pooling Agreement.
"Defeasance Account" is defined in Section 4.02(e) of the Pooling
Agreement.
"Defeasance Allocation Percentage" means, on any Business Day with respect
to any Series of Investor Certificates or Purchased Interest that is in an
Accumulation Period, a Pay-Out Period or a Prepayment Accumulation Period:
page A-9
(a) if no other Series of Investor Certificates or Purchased Interest
is in an Accumulation Period, a Pay-Out Period or a Prepayment Accumulation
Period on that Business Day, the Investor Allocation Percentage on that
Business Day, and
(b) if at least one other Series of Investor Certificates or
Purchased Interest is in an Accumulation Period, a Pay-Out Period or a
Prepayment Accumulation Period on that Business Day, the product of (i) the
Investor Allocation Percentage on that Business Day multiplied by (ii) a
fraction (A) the numerator of which is the Ratable Principal Amount of the
Series or Purchased Interest for which the Defeasance Allocation Percentage
is being calculated as of the Accumulation Period Commencement Date, Pay-
Out Period Commencement Date or Prepayment Accumulation Commencement Date
for that Series or Purchased Interest and (B) the denominator of which is
the sum of the Ratable Principal Amounts of each Series and each Purchased
Interest that is in an Accumulation Period, a Pay-Out Period or Prepayment
Accumulation Period, as of the Accumulation Period Commencement Date, Pay-
Out Period Commencement Date or Prepayment Accumulation Commencement Date
for each.
"Deficit Controlled Accumulation Amount" means, with respect to any Series,
(a) on the first Settlement Date with respect to an Accumulation Period, the
excess, if any, of the Controlled Accumulation Amount for such Settlement Date
over the amount distributed from the Defeasance Account as the Principal
Distribution Amount for such Settlement Date and (b) on each subsequent
Settlement Date with respect to an Accumulation Period, the excess, if any, of
the Controlled Deposit Amount for such subsequent Settlement Date over the
amount distributed from the Defeasance Account as the Principal Distribution
Amount for such subsequent Settlement Date.
"Definitive Certificates" means any Certificate other than a Book-Entry
Certificate.
"Depositary Regulation S Certification" is defined in Section 6.03(i) of
the Pooling Agreement.
"Determination Date" means, with respect to any Receivable, the Business
Day following its Origination Date.
"Dilution" means, with respect to any Receivable, the aggregate reduction
in the paid balance or Unpaid Balance of the Receivable on account of discounts,
incorrect billings, credits, rebates, allowances, chargebacks, returned or
repossessed goods, allowances for early payments and any other such reductions
granted in the ordinary course of business that are unrelated to the inability
of the Obligor to pay such Receivables, but excluding (prior to the date
referred to in the final sentence of the definition of "Accrual Reserve") any
amount representing Cash Discounts; provided, that for purposes of calculating
the Dilution Ratio for any Calculation Period, the aggregate amount of checks
written by the Seller to any Obligor
page A-10
on account of rebates during such Calculation Period shall also be included as
"Dilution"; provided, further that until the Report Date related to the December
1994 Cut-off Date, the aggregate amount of Dilution of the type referred to in
the preceding proviso with respect to each relevant Cut-off Date shall be deemed
to be $370,000.
"Dilution Horizon Variable" means, at any time, a fraction having (a) a
numerator equal to the sum of the aggregate amounts payable pursuant to invoices
generated by the Seller during the one Calculation Period ending on the most
recent Cut-Off Date (as calculated on that Cut-Off Date) and (b) a denominator
equal to the aggregate Unpaid Balance of all Eligible Receivables, as calculated
on the most recent Cut-Off Date.
"Dilution Ratio" means, as calculated in each Settlement Statement as of
the most recent Cut-Off Date, a fraction (expressed as a percentage) having (a)
a numerator equal to the aggregate amount of Dilution on the Receivables during
the Calculation Period ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated by the Seller during the preceding
Calculation Period (so that, for example, if the Calculation Period specified in
clause (a) corresponded to the March Fiscal Month, the Calculation Period in
- - - ----------
this clause (b) would be the one corresponding to the February Fiscal Month).
----------
"Dilution Reserve Ratio" means, as calculated in each Settlement Statement,
the result (expressed as a percentage), calculated as of the most recent Cut-Off
Date, equal to:
(a)(i) 1.75 multiplied by (ii) the average of the Dilution Ratios
during the period of 12 consecutive Calculation Periods ending on the most
recent Cut-Off Date, plus
(b)(i) the highest Dilution Ratio during the period of 12 consecutive
Calculation Periods ending on the most recent Cut-Off Date minus (ii) the
amount described in clause (a)(ii), multiplied by (iii) a fraction having a
--------------
numerator equal to the amount described in clause (b)(i) and a denominator
-------------
equal to the amount described in clause (a)(ii),
--------------
multiplied by:
(c) the Dilution Horizon Variable;
provided that the Dilution Reserve Ratio shall be recalculated on the 60th day
following the Closing Date (or earlier if the necessary recalculations are
completed prior to that date) to reflect the recalculations referred to in the
final sentence of the definition of "Accrual Reserve."
"Discount Rate" is defined in Section 2.2(d) of the Purchase Agreement.
page A-11
"Discount Rate Reserve" means, at any time, the positive excess (if any)
of:
(a) the accrued and unpaid Carrying Costs for the current Calculation
Period plus any additional Carrying Costs expected to accrue through the
end of the current Calculation Period, plus estimated Carrying Costs for
the longer of (i) the immediately following Calculation Period or (ii) a
period equal to 1.75 times the number of Turnover Days), over
(b) the balance in the Carrying Cost Account as of such time.
"Disposition" is defined in Section 9.03(a)(i) of the Pooling Agreement.
"Dollars" means dollars in lawful money of the United States of America.
"Eligible Institution" means, with respect to any Series, the Eligible
Institution specified in the related Supplement.
"Eligible Inventory" has the meaning assigned to that term in the Original
Seller Credit Agreement.
"Eligible Investments" means any of the following:
(a) deposit accounts that are established and maintained at a
financial institution, the short-term debt securities or certificates of
deposit of which have at the time of investment the highest short-term debt
or certificate of deposit rating (as the case may be) available from the
Applicable Rating Agencies, and that are held in the name of the Trustee in
trust for the benefit of the Certificateholders, subject to the exclusive
custody and control of the Trustee and for which the Trustee has sole
signature authority; provided, however, that this clause shall not apply to
the Lockbox Accounts or to the Trust Accounts,
(b) marketable obligations of the United States of America, the full
and timely payment of principal and interest on which is backed by the full
faith and credit of the United States of America, that have a maturity date
not later than the next succeeding Settlement Date,
(c) marketable obligations directly and fully guaranteed by the
United States of America, the full and timely payment of principal and
interest on which is backed by the full faith and credit of the United
States of America, that have a maturity date not later than the next
succeeding Settlement Date,
page A-12
(d) banker's acceptances, certificates of deposit and other interest-
bearing obligations denominated in Dollars (subject to the proviso at the
end of this definition),
(e) repurchase agreements (i) that are entered into with any
financial institution having the ratings referred to in clause (a) and (ii)
----------
that are secured by a perfected first priority security interest in an
obligation of the type described in clause (b) or (c); provided, however,
---------- ---
that such obligation may mature later than the next succeeding Settlement
Date if such bank is required to repurchase such obligation not later than
the next succeeding Settlement Date; and provided further, that (i) the
market value of the obligation with respect to which such bank has a
repurchase obligation, determined as of the date on which such obligation
is originally purchased, shall equal or exceed 102% of the repurchase price
to be paid by such bank and (ii) the Trustee or a custodian acting on its
behalf shall have possession of the instruments or documents evidencing
such obligations,
(f) guaranteed investment contracts entered into with any financial
institution, the short-term debt securities of which have the highest
short-term debt rating available from the Applicable Rating Agencies that,
in each case, have a maturity date not later than the next succeeding
Settlement Date,
(g) commercial paper (except for commercial paper issued by the
Seller or any Affiliate of the Seller) rated at the time of investment not
less than "A-1+" or the equivalent thereof by the Applicable Rating
Agencies and having a maturity date not later than the next succeeding
Settlement Date, and
(h) freely redeemable shares in open-end money market mutual funds
(including such mutual funds that are offered by the Person who is acting
as the Trustee or by any agent of such Person) that (i) maintain a constant
net-asset value and (ii) at the time of such investment have been rated not
less than "AAA\\m\\" or the equivalent thereof by S&P,
provided, however, that (A) the Trustee shall only acquire banker's acceptances
and certificates of deposit of, and enter into repurchase agreements with,
institutions whose short-term obligations have been rated not less than "A-1+"
or the equivalent thereof by the Applicable Rating Agencies and whose long-term
obligations have been rated not less than "AA-" by S&P and (B) the securities,
banker's acceptances, certificates of deposit, other obligations and repurchase
agreements described above shall only constitute "Eligible Investments" if and
to the extent that the Servicer is satisfied that the Trustee will have a
perfected security interest therein for the benefit of the Certificateholders.
"Eligible Obligor" means, at any time, an Obligor that satisfies the
following criteria:
page A-13
(a) it has a place of business located in the United States of
America or Puerto Rico or is otherwise subject to the jurisdiction of one
or more courts in the United States of America or Puerto Rico,
(b) it is not a direct or indirect Subsidiary of AmeriSource or any
other entity with respect to which AmeriSource or any of its Subsidiaries
owns, directly or indirectly, more than 50% of the entity's equity
interests,
(c) with respect to which no Event of Bankruptcy had occurred and was
continuing as of the end of the most recent Calculation Period and is
continuing; provided, however, that this clause shall not apply if a
bankruptcy court has approved the Obligor's payment of its obligations on
the Receivables,
(d) as of the end of the most recent Calculation Period, no more than
50% of all Receivables of the Obligor were (for reasons other than
disputes) aged more than 90 days past their respective due dates,
(e) as of the end of the most recent Calculation Period, none of the
past due Receivables of the Obligor included in the Receivables Pool were
evidenced by promissory notes,
(f) it is not an Obligor with whom the Seller has a "cash in advance"
or "cash on account" arrangement, it being understood that a "same-day
payment" arrangement will not constitute a "cash in advance" or "cash on
account" arrangement,
(g) if it is a State Obligor in the state of North Carolina, Arizona,
Connecticut, Georgia, Idaho, Nebraska or Virginia, then it shall only be an
Eligible Obligor to the extent that its consent to the assignment of the
accounts receivable that it then or thereafter owes to the Seller shall
have been received with respect to the transfers contemplated by the
Transaction Documents or, at the election of ARC, a favorable opinion of
counsel in that state to the effect that no consent is required shall have
been provided to the Trustee, and for which the Rating Agency Condition has
been satisfied, and
(h) if it is a State Obligor in the state of Maryland, Montana or
Utah, then it shall only be an Eligible Obligor to the extent that (i) the
Rating Agency Condition has been satisfied and (ii) the notice shall have
been given to the State Obligor with respect to the transfers contemplated
by the Transaction Documents.
"Eligible Receivable" means, at any time, a Receivable:
page A-14
(a) that arises from the sale of merchandise or services by the
Seller in the ordinary course of (i) AmeriSource or (ii) any additional
Seller that becomes a party to the Purchase Agreement pursuant to Section
1.7 thereof,
(b) that represents a bona fide obligation resulting from a sale of
goods that have been shipped or services that have been performed and is
due and payable not more than 120 days after the date on which the invoice
for services or merchandise, the sale of which gave rise to such
Receivable, is provided or delivered,
(c) that, as of the end of the previous Calculation Period, was not
aged more than 60 days past its original due date,
(d) that (i) if the perfection of ARC's and the Trust's interests
therein is governed by the laws of a jurisdiction where the UCC is in
force, constitutes an account or a general intangible for the payment of
money and not an instrument or chattel paper, as such terms are defined in
the UCC and (ii) if the perfection of ARC's and the Trust's interests
therein is governed by the law of any jurisdiction where the UCC is not in
force, the Seller of the Receivable has furnished to the Trustee an Opinion
of Counsel to the effect that the ownership interest of the Trust in the
Trust Assets and other rights with respect thereto are not significantly
less protected and favorable than such rights would be if secured by a
perfected security interest under the UCC,
(e) the Obligor of which is an Eligible Obligor,
(f) with regard to which both the representation and warranty of ARC
in Section 2.03(a)(ii) of the Pooling Agreement and the representation and
warranty of the relevant Seller in Section 5.1(k) of the Purchase Agreement
are true and correct,
(g) the transfer of which (including the sale of which by the
applicable Seller to ARC and the transfer of which by ARC to the Trust)
does not contravene or conflict with any law, rule or regulation or any
contractual or other restriction, limitation or encumbrance that applies to
the Seller, ARC or the Trust, and the sale, assignment or transfer of
which, and the granting of a security interest in which, does not require
the consent of the Obligor thereof or any other Person, other than any such
consent that has been obtained previously,
(h) that is denominated and payable only in Dollars in the United
States of America and is non-interest bearing; provided, however, that a
Receivable shall not be deemed to be interest-bearing solely as a result of
the Seller's imposition of an interest or other charge on any such
Receivable that remains unpaid after its scheduled due date; and provided
further, that, except for certain amounts included on
page A-15
the Closing Date, such interest charge or other charge shall not be
included in the Unpaid Balance of a Receivable for purposes of calculating
the Base Amount,
(i) that arises under a Contract that has been duly authorized and
that, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless
of whether such enforceability is considered in a proceeding in equity or
at law,
(j) that is not subject to any asserted reduction (including any
reduction on account of any offsetting account payable of ARC or the Seller
to an Obligor or funds of an Obligor held by ARC or the Seller),
cancellation, or refund or any dispute, offset, counterclaim, lien or
defense whatsoever (except, with respect to State Obligors, Local Obligors
or Federal Obligors, to the extent of the applicable Individual Group
Reserve or Federal Set Off Reserve); provided, however, that a Receivable
that is subject only in part to any of the foregoing shall be an Eligible
Receivable to the extent not subject to reduction, cancellation, refund,
dispute, offset, counterclaim, lien or other defense,
(k) that, together with the Contract related thereto, was created in
accordance with, and conforms in all material respects with, all applicable
laws, rules, regulations, orders, judgments, decrees and determinations of
all courts and other governmental authorities (whether Federal, state,
local or foreign and including usury laws),
(l) that satisfies all applicable requirements of the Credit and
Collection Policy of the Seller,
(m) that has not been compromised, adjusted, satisfied, subordinated,
rescinded or modified (including by extension of time or payment or the
granting of any discounts, allowances or credits), except as permitted by
Section 7.02(g) of the Pooling Agreement,
(n) if owed by a Restricted Federal Obligor or a State Obligor, for
which ARC shall have made the certification required by Section 3.06 of the
Pooling Agreement with respect to such Restricted Federal Obligor or State
Obligor as of the end of the most recent fiscal quarter of AmeriSource, and
page A-16
(o) if owed by a State Obligor or a Local Obligor in a Set Off Group,
the Rating Agency Condition shall have been satisfied with respect to the
State/Local Tax Period and Individual Group Reserves for such Set Off
Group.
"Eligible Servicer" means (a) AmeriSource, (b) the Trustee or (c) an entity
that, at the time of its appointment as Servicer, (i) is servicing a portfolio
of trade receivables, (ii) is legally qualified and has the capacity to service
the Receivables, (iii) has demonstrated the ability to service professionally
and competently a portfolio of trade receivables similar to the Receivables in
accordance with high standards of skill and care, (iv) is qualified to use the
software that is then being used to service the Receivables or obtains the right
to use or has its own software that is adequate to perform its duties under the
Pooling Agreement, and (v) is acceptable to the Applicable Rating Agencies as
evidenced by satisfaction of the Rating Agency Condition.
"End-of-the Day Seller Excess Borrowing Base" means, as of any day, the
amount (which may be a positive or negative number) by which:
(a) the Borrowing Base as set forth in the borrowing base certificate
then most recently required to be delivered to the Seller Agent pursuant to
the Original Seller Credit Agreement, exceeds
(b) the pro forma Seller Outstandings at the end of such day,
assuming that (i) the Seller Agent receives on such day any Segregated Cash
that would, if the Look Back Period ended on such day, be payable by the
Trust to ARC (and in turn by ARC to AmeriSource) and (ii) any Advance or
Letter of Credit requested by AmeriSource on such day has been funded or
issued (respectively),
provided, however, that if an Event of Default or Unmatured Event of Default
exists, the End-of-the-Day Seller Excess Borrowing Base shall be deemed to be
zero.
"Enhancement" means, with respect to any Series or Purchased Interest, any
surety bond, letter of credit, guaranteed rate agreement, maturity guaranty
facility, cash collateral account or guaranty, tax protection agreement,
interest rate swap or other contract or agreement for the benefit of
Certificateholders of the Series or Purchaser of the Purchased Interest. The
drawing on or payment of any Enhancement for the benefit of a Series or Class of
Investor Certificates shall not be available to the Investor Certificateholders
of any other Series or Class.
"Enhancement Provider" shall mean the Person providing any Enhancement,
other than any Certificateholders (including any Holder of the Residual
Certificate) the Certificates of which are subordinated to any Series or Class.
"Equalization Account" is defined in Section 4.02(c) of the Pooling
Agreement.
page A-17
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time, and any successor statute of similar
import, together with any regulations thereunder, in each case as in effect from
time to time. References to sections of ERISA also refer to any successor
sections.
"Estimated Base Amount" is defined in Section 3.05(c) of the Pooling
Agreement.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a
Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or any substantial part of its assets, or any similar
action with respect to such Person under any law (foreign or domestic)
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of (i) in the
case of any Person other than ARC, 60 days, and (ii) in the case of ARC,
ten days; or an order for relief in respect of such Person shall be entered
in an involuntary case under the federal bankruptcy laws or other similar
laws (foreign or domestic) now or hereafter in effect, or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or the like, for
such Person or any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall fail to, or admit
in writing its inability to, pay its debts generally as they become due.
"Event of Default" (a) when used in connection with the Original Seller
Credit Agreement, has the meaning assigned to that term in the Original Seller
Credit Agreement, and (b) otherwise, has the meaning assigned to that term in
the Replacement Credit Agreement.
"Excess Concentration Balances" means for any Obligor, the aggregate
outstanding balances of Eligible Receivables it owes that, expressed as a
percentage of the Adjusted Eligible Receivables, exceeds the following
percentages for the following Obligors:
(a) 100% for any Tier-1 Obligor,
page A-18
(b) 100% for (i) any Tier-2 Obligor or (ii) all Receivables owing
from any foreign Obligor, payment of which is fully supported by a direct
pay letter of credit that is (A) issued by a domestic banking institution
rated at least "A" by the Applicable Rating Agencies and (B) assigned to
the Trustee,
(c) 10% for any Tier-3 Obligor,
(d) 5% for any Tier-4 Obligor, and
(e) 2% for any Tier-5 Obligor; provided, however, with respect to the
two Obligors (other than State Obligors and Local Obligors) that represent
the two highest percentages of Adjusted Eligible Receivables in this
category, the percentage will be 3%,
(each of the percentages above being herein called a "Benchmark Percentage");
provided, that ARC may, by notice in any Settlement Statement (and after
satisfying the Rating Agency Condition) increase or decrease the Benchmark
Percentage. Any change to a Benchmark Percentage shall result in a
corresponding change to the Concentration Factor and hence in the Minimum
Required Reserve Ratio, as set forth in the definitions thereof.
"Excess Specified Obligor Balance" means, on any day, (a) the aggregate
amount of otherwise Eligible Receivables due from Specified Obligors minus (b)
3% of the Adjusted Eligible Receivables.
"Exchange Date" is defined in Section 6.12(c) of the Pooling Agreement.
"Expected Final Payment Date" means, with respect to any Series, the date
specified as the Expected Final Payment Date in the related Supplement.
"Federal Funds Rate" shall be as stated in the Supplement pursuant to which
a Series of Certificates is issued.
"Federal Obligor" means the United States of America or any department,
agency or instrumentality thereof; provided, that any such department, agency or
instrumentality may be recharacterized as other than a Federal Obligor if
AmeriSource shall have presented the Applicable Rating Agencies with evidence
that such Person is not entitled to set off for obligations owed to other
Federal Obligors and the Rating Agency Condition shall have been satisfied with
respect to such recharacterization.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any successor thereto or to the functions thereof.
"Federal Set Off Reserve" means:
page A-19
(a) on any day prior to the Settlement Date relating to the April,
1995 Cut-Off Date, it shall be $5,868,679; provided that if the Seller
shall not have made the Federal income tax payment owed by it on January
15, 1995 or March 15, 1995, the aggregate amount of the Seller's tax
liability accrued prior to that date will be added to the Federal Set Off
Reserve for purposes of this clause (a), and
----------
(b) on any day occurring thereafter, (i) the aggregate amount of
Federal income taxes and withholding taxes accrued by the Seller during the
calendar quarter ending prior to the most recent Settlement Date (the
"Benchmark Quarter's Federal Taxes") plus (ii) one-ninetieth of the
Benchmark Quarter's Federal Taxes for each day that has elapsed since the
last payment of Federal income taxes by the Seller plus (iii) the aggregate
amount of any Federal income taxes and withholding taxes accrued by the
Seller prior to the current calendar quarter that have not been paid;
provided, however, that in no event shall the Federal Set Off Reserve exceed the
aggregate Unpaid Balance of Eligible Receivables owed by Restricted Federal
Obligors.
"Final Maturity Date" is defined in the ARC Note.
"Final Scheduled Payment Date" is defined in Section 12.01(a) of the
Pooling Agreement.
"Financial Advisors" means the financial advisors denominated as such in a
Revolving Certificate Purchase Agreement.
"First Issuance Date" means the Closing Date.
"Fiscal Month" means a fiscal month of AmeriSource.
"Fixed Principal Calculation Amount" means, as of the opening of business
on any day, the Fixed Principal Invested Amount for all outstanding Series of
Fixed Principal Certificates.
"Fixed Principal Certificate" means any Certificate of any Series that is
not a Revolving Certificate or the Residual Certificate.
"Fixed Principal Initial Invested Amount" means (a) with respect to any
Series of Fixed Principal Certificates, its aggregate principal amount on the
Closing Date or the Subsequent Issuance Date (as applicable) for the Series, as
is stated in the Supplement pursuant to which it is issued and (b) with respect
to all Fixed Principal Certificates, the aggregate initial principal amount of
all then-issued and outstanding Fixed Principal Certificates.
page A-20
"Fixed Principal Interest" is defined in Section 4.01 of the Pooling
Agreement.
"Fixed Principal Invested Amount" means, at any time, (a) with respect to
any Series of Fixed Principal Certificates, an amount equal to (i) the Fixed
Principal Initial Invested Amount with respect to such Series minus (ii) the
aggregate amount of (x) principal payments made to the Holders of such Series of
Fixed Principal Certificates prior to such time in respect of such Series of
Fixed Principal Certificates, (y) all funds on deposit in the Principal Funding
Account and the Defeasance Account with respect thereto, and (z) any Investor
Allocable Charged-Off Amount (net of Investor Net Recoveries) with respect
thereto, and (b) with respect to all Series of Fixed Principal Certificates, the
sum of the amounts calculated pursuant to clause (a) with respect to each such
----------
Series.
"Fixed Principal Yield" means the scheduled interest payable in respect of
Fixed Principal Certificates as computed by reference to the applicable
Certificate Rate(s).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, as in effect from time to time.
"Governmental Authority" means the United States of America, any state or
other political subdivision thereof and any entity in the United States of
America or any applicable foreign jurisdiction that exercises executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" means any agreement, undertaking or arrangement by which any
Person guarantees, endorses, agrees to purchase or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
Indebtedness, obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
"Highest Bid" means the highest cash purchase offer for a Series received
by the Servicer pursuant to Section 12.01 of the Pooling Agreement.
"Holder" means the Person in whose name a Certificate is registered in the
Certificate Register or a Person who holds a Purchased Interest.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of AmeriSource, any qualification or exception to such opinion or certification
that is of a "going concern" or similar nature.
page A-21
"Indebtedness" of any Person means, without duplication:
(a) all of its obligations for borrowed money and all of such
Person's obligations evidenced by bonds, debentures, notes or other similar
instruments,
(b) all of its obligations as lessee under leases that have been or
should be, in accordance with GAAP, recorded as capitalized leases, and
(c) whether or not so included as liabilities in accordance with
GAAP, all of its obligations to pay the deferred purchase price of property
or services, and indebtedness (excluding prepaid interest thereon) secured
by an Adverse Claim on property owned or being purchased by it (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by it
or is limited in recourse.
For purposes of the Transaction Documents, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which it is a
general partner or a joint venturer.
"Indemnified Losses" is defined in Section 7.03(a) of the Pooling
Agreement.
"Indemnified Party" is defined in Section 7.03(a) of the Pooling Agreement.
"Independent Director" is defined in Section 7.02(n) of the Pooling
Agreement.
"Individual Group Reserve" means with respect to any Set Off Group on any
day, (a) 90 multiplied by the State/Local Tax Per Diem plus (b) an amount equal
to the State/Local Tax Per Diem for each day that has elapsed since the end of
the most recent State/Local Tax Period plus (iii) the aggregate amount of any
state/local income tax obligations accrued prior to the current State/Local Tax
Period that have not been paid; provided that if Servicer shall have elected to
exclude Receivables owed by all Obligors in a Set Off Group from the Eligible
Receivables on any day, the Individual Group Reserve for that Set Off Group on
such day shall be zero; and provided further, that the Individual Group Reserve
for any Set Off Group shall not exceed the aggregate Unpaid Balance of Eligible
Receivables owed by Obligors in such Set Off Group.
"Initial Cut-Off Date" means the Business Day immediately preceding the
Closing Date.
"Initial Invested Amount" means (a) with respect to any Fixed Principal
Certificate, the related Fixed Principal Initial Invested Amount, (b) with
respect to any Investor Revolving Principal Certificate, the related Investor
Revolving Initial Invested Amount and (c) with respect to any Purchased
Interest, the related PI Initial Invested Amount.
page A-22
"Intercreditor Agreement" means (a) during Phase I, an intercreditor
agreement substantially in the form of Exhibit O-1 to the Pooling Agreement
between the Seller Agent and the Trustee, and (b) during Phase II, an
intercreditor agreement substantially in the form of Exhibit O-2 of the Pooling
Agreement between the Seller Agent and the Trustee.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Inventory Advance Rate" means at any time the advance rate percentage then
applied to Eligible Inventory for purposes of calculating the Borrowing Base.
"Inventory Credit Agreement" means the Amended and Restated Credit
Agreement, and all exhibits thereto, dated as of December 13, 1994, among
AmeriSource, General Electric Capital Corporation, as Agent and Managing Agent,
Bankers Trust Company, as Issuing Lender and Managing Agent, certain Co-Agents
and certain Lenders, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with its terms.
"Invested Amount" means, at any time, (a) the Fixed Principal Invested
Amount at such time plus (b) the Revolving Certificate Invested Amount at such
time plus (c) the PI Invested Amount at such time.
"Investor Allocable Charged-Off Amount" is defined in Section 4.03(e) of
the Pooling Agreement.
"Investor Allocation Percentage" means, on any Business Day, a fraction
(expressed as a percentage) (a) the numerator of which is the sum of the Ratable
Principal Amounts of all outstanding Series of Investor Certificates and
Purchased Interests as of (i) in the case of a Series of Investor Certificates
or Purchased Interests that is in an Accumulation Period, Pay-Out Period or
Prepayment Accumulation Period, the applicable Accumulation Period Commencement
Date, Pay-Out Period Commencement Date or Prepayment Accumulation Commencement
Date and (ii) in the case of a Series of Investor Certificates or Purchased
Interest that is in a Revolving Period and is not in a Prepayment Accumulation
Period, that Business Day and (b) the denominator of which is the sum of the
numerator plus the Ratable Principal Amount of the ARC Revolving Certificate as
of that day.
"Investor Certificateholder" means the Person in whose name an Investor
Certificate is registered in the Certificate Register.
"Investor Certificates" means the Fixed Principal Certificates and the
Investor Revolving Certificates.
"Investor Exchange" is defined in Section 6.10(a) of the Pooling Agreement.
page A-23
"Investor Initial Invested Amount" means the sum of the Fixed Principal
Initial Invested Amount, the Investor Revolving Initial Invested Amount and the
PI Initial Invested Amount.
"Investor Invested Amount" means (a) the Fixed Principal Invested Amount
plus (b) the Investor Revolving Invested Amount plus (c) the PI Invested Amount.
"Investor Net Recoveries" is defined in Section 4.03(e) of the Pooling
Agreement.
"Investor Repayment Amount" means, at any time, the sum of (i) the
Certificate Calculation Amount, (ii) the PI Calculation Amount, plus (iii) the
aggregate amount of all other Obligations.
"Investor Revolving Certificate" means any Certificate of any Series that
is designated as a Series of Investor Revolving Certificates in the Supplement
pursuant to which the Series is issued.
"Investor Revolving Certificateholder" means the Person in whose name an
Investor Revolving Certificate is registered in the Certificate Register.
"Investor Revolving Certificate Rate" means, with respect to any Investor
Revolving Certificate, the rate of interest per annum applicable to the Investor
Revolving Certificate at such time, as the interest rate is calculated in
accordance with the Supplement pursuant to which the Series is issued.
"Investor Revolving Initial Invested Amount" means (a) with respect to any
Series of Investor Revolving Certificates, its aggregate principal amount on the
Closing Date or any Subsequent Issuance Date (as applicable) for such Series, as
is stated in the Supplement pursuant to which it is issued and (b) with respect
to all then-issued and outstanding Investor Revolving Certificates, the
aggregate initial principal amount of all Investor Revolving Certificates.
"Investor Revolving Invested Amount" means, at any time:
(a) with respect to any Series of Investor Revolving Certificates,
(i)(A) the Investor Revolving Initial Invested Amount with respect to such
Series plus (B) all additions made to the Investor Revolving Invested
Amount with respect to such Series pursuant to Section 4.03 of the Pooling
Agreement plus (C) all additions to the principal amount of Investor
Revolving Certificates of such Series made pursuant to Section 6.11 of the
Pooling Agreement, minus (ii)(A) all reductions in the Investor Revolving
Invested Amount with respect to Investor Revolving Certificates of such
Series made pursuant to Section 4.03 of the Pooling Agreement plus (B) the
aggregate amount of all other principal payments made to the Holders of
such Series prior to
page A-24
such time in respect of such Series plus (C) the aggregate amount of all
funds on deposit in the Principal Funding Account and the Defeasance
Account with respect thereto plus (D) any Investor Allocable Charged-Off
Amounts (net of Investor Net Recoveries) allocated to such Series, and
(b) with respect to all Series of Investor Revolving Certificates,
the sum of the amounts calculated pursuant to clause (a) with respect to
----------
each such Series.
"Investor Revolving Yield" means scheduled interest payable in respect of
the Investor Revolving Certificates at the applicable Investor Revolving
Certificate Rate(s).
"Involuntary Adverse Claim" means a lien in favor of the Internal Revenue
Service or the PBGC on any Trust Assets.
"Lead Placement Agent" means the Person designated as such by ARC in
connection with the issuance of any Certificates.
"Letter of Credit" has the meaning assigned to that term in the Original
Seller Credit Agreement.
"Letter of Credit Obligations" has the meaning assigned to that term in the
Original Seller Credit Agreement.
"Letter of Representations" means the agreement among ARC, the Trustee and
the applicable Clearing Agency, with respect to any Book-Entry Certificates, as
the same may be amended, supplemented, restated or otherwise modified from time
to time.
"Liquidation Commencement Date" means the earlier to occur of (a) the
Scheduled Liquidation Commencement Date and (b) the date on or following a
Liquidation Event that is the Liquidation Commencement Date by operation of
Section 9.01 of the Pooling Agreement.
"Liquidation Event" is defined in Section 9.01 of the Pooling Agreement.
"Liquidation Period" means the period commencing on the Liquidation
Commencement Date.
"Local Obligor" means any county, municipal or other local government or
any department, agency or instrumentality thereof.
"Lockbox Accounts" means the bank accounts, maintained at those certain
locations described in Schedule 2 to the Pooling Agreement, into which
Collections from Receivables are deposited, and any bank account that is
hereafter created in accordance with, and to
page A-25
perform the functions contemplated for "Lockbox Accounts" in, Section 3.03 of
the Pooling Agreement.
"Lockbox Agreement" means any of the letter agreements delivered in
connection with the Pooling Agreement and any other letter agreement,
substantially in the form of Exhibit A to the Pooling Agreement (or such other
form as is reasonably acceptable to the Trustee), among a Lockbox Bank, the
Seller, the Servicer and the Trustee that relates to one or more Lockbox
Accounts, as they may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Lockbox Bank" means any of the banks at which one or more Lockbox Accounts
are maintained from time to time.
"Look Back Period" has the meaning assigned to such term in Section 1.2(e)
of the Purchase Agreement.
"Loss Discount" is defined in Section 2.2(b) of the Purchase Agreement.
"Loss Reserve Ratio" means, as calculated in each Settlement Statement, the
result (expressed as a percentage) equal to (a) two multiplied by (b) the
highest average of the Aged Receivables Ratio for any three consecutive
Calculation Periods that occurred during the preceding 12 consecutive
Calculation Periods ending on the most recent Cut-Off Date multiplied by (c) a
fraction having (i) a numerator equal to the sum of the aggregate amounts
payable pursuant to invoices giving rise to Receivables generated by the Seller
during the three Calculation Periods preceding or ending on the most recent Cut-
Off Date, and (ii) a denominator equal to the Adjusted Eligible Receivables, as
determined on the most recent Cut-Off Date, multiplied by (d) the Payment Term
Variable as of the most recent Cut-Off Date.
"Loss to Liquidation Ratio" means, as calculated in each Settlement
Statement, a fraction (a) the numerator of which is the aggregate Unpaid Balance
of Receivables (net of recoveries) that were written off as uncollectible or
(without duplication) converted into promissory notes during the three preceding
Calculation Periods in accordance with the Credit and Collection Policy of the
Seller, and (b) the denominator of which is the aggregate amount of Collections
on the Receivables received during the three Calculation Periods.
"Majority Investors" means Holders of Investor Certificates and Purchasers
holding Purchased Interests that collectively evidence more than 50% of the
Investor Invested Amount.
"Mark-Up Percentage" means 2.5%.
page A-26
"Master Collection Account" is defined in the Section 4.02(b) of the
Pooling Agreement.
"Material Adverse Effect" means, with respect to any AmeriSource Person and
to any event or circumstance and at any time, a material adverse effect on (a)
the ability of that Person to perform its obligations under any Transaction
Document or (b) the validity, enforceability or collectibility of any
Receivables, Related Assets or Contracts that, individually or in the aggregate,
represent or evidence a right to payment in excess of 5% of the aggregate Unpaid
Balance of the Receivables at such time.
"Maximum Bridge Funding" means the aggregate Stated Amounts of Investor
Revolving Certificates issued pursuant to the Bridge Facility.
"Maximum Take Out Funding" means (a) the aggregate principal amounts of
Fixed Principal Certificates issued pursuant to the Take Out Facility plus (b)
the aggregate Stated Amounts of Investor Revolving Certificates or Purchased
Interests issued pursuant to the Take Out Facility.
"Member Organization" is defined in Section 6.12(c) of the Pooling
Agreement.
"Minimum Required Reserve Ratio" means the sum, as of any Cut-Off Date, of:
(a) the Concentration Factor for the Cut-Off Date, plus
(b) the average of the Dilution Ratios for the twelve preceding
Collection Periods ending on the Cut-Off Date, multiplied by the Dilution
Horizon Variable for the Cut-Off Date,
provided, that in no event shall the Minimum Required Reserve Ratio be less than
14%.
"Minimum Return" means, with respect to the Receivables sold or contributed
on any day by the Seller to ARC, (a) the Inventory Advance Rate multiplied by
(b) one minus the sum of the Mark-Up Percentage and the Returned Goods
Percentage multiplied by (c) the aggregate Unpaid Balance of such Receivables;
provided, that the Minimum Return shall in no event exceed 70% of the aggregate
Unpaid Balance of such Receivables.
"Net Eligible Receivables" means, at any time, (a) the Adjusted Eligible
Receivables minus (b) the then aggregate amount of all Excess Concentration
Balances with respect to all Obligors minus (c) the then Accrual Reserve, minus
(d) the Federal Set Off Reserve, minus (e) the State/Local Set Off Reserve,
minus (f) the Excess Specified Obligor Balance.
page A-27
"Net Recoveries" means, with respect to any Calculation Period, an amount
equal to (a) the amount of Recoveries received in such Calculation Period minus
(b) the amount of Receivables that became Charged-Off Receivables in such
Calculation Period.
"New Issuance" is defined in Section 6.10(a) of the Pooling Agreement.
"Noncomplying Receivables and Dilution Adjustment" is defined in Section
3.1(b) of the Purchase Agreement.
"Notes Receivable" means any right to payment of Seller recorded by it in
its books and records as a receivable that is not a Receivable.
"Obligations" means (a) all obligations of ARC, the Seller and a Servicer
to the Trustee, the Trust, any other Indemnified Party, the Investor
Certificateholders and their respective successors, permitted transferees and
assigns, arising under or in connection with the Transaction Documents, and (b)
all obligations of a Seller to ARC, any other RPA Indemnified Party and their
respective successors, transferees and assigns, arising under or in connection
with the Transaction Documents, in each case howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due.
"Obligor" means a Person obligated to make payments on a Receivable.
"Officer's Certificate" means, unless otherwise specified in the Pooling
Agreement or in any Supplement, a certificate signed by an Authorized Officer of
ARC or the initial Servicer, as the case may be, or, in the case of a Successor
Servicer, a certificate signed by the President, any Vice President or the
financial controller (or an officer holding an office with equivalent or more
senior responsibilities) of such Successor Servicer, that, in the case of any of
the foregoing, is delivered to the Trustee.
"144A Book-Entry Certificate" is defined in Section 6.12(b) of the Pooling
Agreement.
"Opinion of Counsel" means a written opinion of counsel, who shall be
reasonably acceptable to the Trustee.
"Original Intercreditor Mechanics" shall mean Sections 1.2 and 8.2 of the
Purchase Agreement and Exhibits O-I and O-II to the Pooling Agreement.
------------ ----
"Original Obligations" means all obligations of the Seller under the
Original Seller Credit Agreement, other than contingent obligations which have
not been identified in a notice to the Seller on the date on which all
commitments of the Seller Parties thereunder have terminated and all Advances
and Letter of Credit Obligations have been paid.
page A-28
"Original Seller Credit Agreement" means:
(a) the Inventory Credit Agreement, or
(b) any agreement entered into by AmeriSource to refinance any other
Original Seller Credit Agreement; provided, that (i) parties to such
agreement shall have executed and delivered to the Trustee, for the benefit
of the Trustee, the Investor Certificateholders and the Purchasers, an
intercreditor agreement substantially in the form of Exhibit O-1 of the
Pooling Agreement and such other consents, releases and other documents as
the parties to the Original Seller Credit Agreement shall have executed for
the benefit of the Trustee, and (ii) the Seller shall have elected, by
written notice to the Trustee, to classify such agreement as the Original
Seller Credit Agreement, as the same may be amended, modified or restated
from time to time.
"Original Stop Date Conditions" shall exist when (a) there is a Shortfall
and the End-of-the-Day Excess Borrowing Base does not equal or exceed zero, or
(b) any other Event of Default shall have occurred and be continuing.
"Origination Date" means, with respect to a Receivable, the date on which
such Receivable is originated.
"Owner Regulation S Certification" is defined in Section 6.03(i) of the
Pooling Agreement.
"Paired Series" means, collectively, each Series that has been paired with
a prefunded Series and such prefunded Series.
"Paying Agent" means any paying agent appointed pursuant to Section 6.06 of
the Pooling Agreement and shall initially be the Trustee.
"Payment Term Variable" means, as calculated in each Settlement Statement
as of the most recently ended Cut-Off Date, (a) 1.0, if the weighted average of
the number of days after the original invoice date on which Receivables will
become due and payable (the "Payment Days") is not more than 39 days, (b) 1.167,
if the weighted average of the Payment Days is 40 to 49 days, (c) 1.333, if the
weighted average of the Payment Days is 50 to 59 days or (d) 1.500 if the
weighted average of the Payment Days is 60 to 69 days; provided, however, that,
if the weighted average of the Payment Days exceeds 69 days, the Payment Term
Variable shall be determined by calculating the sum of (x) 1.500, and (y) 0.125
for each ten-day increment by which the weighted average Payment Days exceeds 69
days, it being understood that the same number shall apply for all weighted
average Payment Days that fall within a ten-day range. For purposes of the
foregoing, the weighted average of the Payment Days, if not a whole number, will
be rounded to the nearest whole number (with 0.5 being rounded up).
page A-29
"Pay-Out Event" means, with respect to any Series of Investor Certificates,
any event defined as such in the Supplement pursuant to which the Series was
issued.
"Pay-Out Period" means, with respect to any Series of Investor
Certificates, the period commencing on the Pay-Out Period Commencement Date that
applies to the Series of Investor Certificates and ending on the date on which
all such Series of Investor Certificates shall have been paid in full.
"Pay-Out Period Commencement Date" means, with respect to any Series of
Investor Certificates, the date on which a Pay-Out Event for the Series occurs.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Adverse Claims" means, at any time, one or more involuntary
Adverse Claims; provided, that (a) the aggregate amount secured by all such
Adverse Claims does not exceed $2,000,000, (b) AmeriSource, the Sellers and/or
ARC (as applicable) shall be maintaining reserves against such amount in
accordance with GAAP, and (c) AmeriSource, the Sellers and/or ARC (as
applicable) shall be contesting such Adverse Claims in good faith and by
appropriate proceedings.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.
"Phase I" means the period from the Closing Date until all Original
Obligations have been paid in full and all commitments of the Seller Parties to
lend or issue letters of credit thereunder have been terminated.
"Phase II" means the period following the end of Phase I.
"PI Agreement" means, with respect to any Purchased Interest, an agreement
or agreements executed and delivered in connection with the sale of the
Purchased Interest, all amendments thereof and supplements thereto, and the
Parallel Purchase Commitment (as defined in the PI Agreement), if any, entered
into in connection therewith.
"PI Calculation Amount" means, as of the opening of business on any day,
the PI Invested Amount in the aggregate for all Purchased Interests as of the
opening of business on such day.
"PI Initial Invested Amount" means (a) with respect to any Purchased
Interest, its aggregate principal amount on the date of the first purchase made
pursuant to the related PI Agreement and (b) with respect to all
then-outstanding Purchased Interests, the sum of the amounts calculated pursuant
to clause (a) with respect to each.
- - - ----------
page A-30
"PI Invested Amount" means, at any time:
(a) with respect to any Purchased Interest, an amount equal to the
difference between (i) the sum of (A) the PI Initial Invested Amount with
respect to such Purchased Interest plus (B) all additions made to the PI
Invested Amount with respect to such Purchased Interest pursuant to Section
4.03 of the Pooling Agreement minus (ii) the sum of (A) all reductions in
the PI Invested Amount with respect to such Purchased Interest made
pursuant to Section 4.03 of the Pooling Agreement, (B) the aggregate amount
of all other principal payments made to the Purchaser of such Purchased
Interest prior to such time in respect of such Purchased Interest, (C) the
aggregate amount of all funds on deposit in the Principal Funding Account,
the Defeasance Account and the Purchaser Account with respect thereto, and
(D) the amount of any Investor Allocable Charged-Off Amounts (net of
Investor Net Recoveries) allocated to such Purchased Interest, and
(b) with respect to all Purchased Interests, an amount equal to the
sum of the amounts calculated pursuant to clause (a) with respect to each
----------
Purchased Interest.
"PI Rate" means, with respect to any Purchased Interest at any time, the
fixed or variable rate of interest per annum applicable to that Purchased
Interest at such time, as such interest rate is calculated in accordance with
the applicable PI Agreement.
"PI Yield" means scheduled yield payable in respect of the Purchased
Interests at the applicable PI Rates.
"Pooling Agreement" means the Pooling and Servicing Agreement, dated as of
December 13, 1994, among ARC, as transferor, AmeriSource, as initial Servicer,
and the Trustee, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with its terms.
"Prepayment Accumulation Commencement Date" means, with respect to any
Series, the date specified in any notice of optional prepayment given by ARC to
the Trustee pursuant to the Supplement relating to the Series.
"Prepayment Accumulation Period" means the period commencing on the
Prepayment Accumulation Commencement Date and ending on the earlier to occur of
(a) the Liquidation Commencement Date, (b) the Pay-Out Period Commencement Date,
and (c) the date on which the full amount to be prepaid, plus the applicable
Prepayment Premium, shall have been accumulated in the Defeasance Account.
"Prepayment Premium" means, with respect to each Series, the amount
specified in its Supplement.
page A-31
"Principal Accumulation Amount" means, with respect to any Series or
Purchased Interest, for any Settlement Date occurring during the Accumulation
Period, the sum of the amounts set aside in the Defeasance Account with respect
to that Series or Purchased Interest during the preceding Calculation Period,
and the amount so set aside on each Business Day during the Accumulation Period
(until the portion of the Invested Amount allocable to such Series or Purchased
Interest has been provided for in full) will equal the product of (a) the
Defeasance Allocation Percentage for that Series or Purchased Interest and (b)
the balance of Collections available in the Master Collection Account, after
making any required transfers to the Carrying Cost Account.
"Principal Distribution Amount" means (a) for any Settlement Date occurring
after the Calculation Period in which the Liquidation Period commences, with
respect to any Class of Investor Certificates or Purchased Interest, the product
of (i) the balance of Collections in the Master Collection Account that were
deposited therein prior to the end of the preceding Calculation Period remaining
after application thereof as provided in clause First of Section 4.03(h) of the
Pooling Agreement (and, in the case of any Subordinated Class or Subordinated
Purchased Interest, after application thereof to the repayment in full of all
Senior Classes and Senior Purchased Interests) and (ii) the Class Allocation
Percentage of such Class or Purchased Interest, and (b) for any Settlement Date
occurring after the Calculation Period in which a Pay-Out Period commences, with
respect to any Series of Investor Certificates or Purchased Interest, an amount
equal to the amount calculated in the same manner as the Principal Accumulation
Amount with respect to a Settlement Date in the Accumulation Period.
"Principal Funding Account" is defined in Section 4.02(e) of the Pooling
Agreement.
"Process Agent" is defined in Section 10.7 of the Purchase Agreement.
"Program" means the transactions contemplated in the Transaction Documents.
"Publication Date" is defined in Section 9.03(a) of the Pooling Agreement.
"Purchase" means each purchase of Receivables and Related Assets by ARC
from the Seller under the Purchase Agreement.
"Purchase Agreement" means the Receivables Purchase Agreement, dated as of
December 13, 1994, between the Seller and ARC, as it may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with its terms and with the Pooling Agreement.
"Purchased Assets" is defined in Section 1.1 of the Purchase Agreement.
page A-32
"Purchased Interest" means a fluctuating undivided ownership interest in
the Trust Assets, purchased pursuant to the PI Agreement related thereto, that
shall include the right to receive, to the extent necessary to make required
payments to Purchasers at the time and in the amounts specified in the related
PI Agreement, the portion of Collections allocable to such Purchased Interest
pursuant to the Pooling Agreement and the PI Agreement, funds on deposit in the
Master Collection Account allocable to the Purchased Interest pursuant to the
Pooling Agreement and the PI Agreement, funds on deposit in any related
Purchaser Account and funds available pursuant to any related Enhancement.
"Purchase Discount Reserve Ratio" is defined in Section 2.2(c) of the
Purchase Agreement.
"Purchased Receivables" is defined in Section 1.1 of the Purchase
Agreement.
"Purchase Price" is defined in Section 2.1(b) of the Purchase Agreement.
"Purchase Price Credit" is defined in Section 3.1(d) of the Purchase
Agreement.
"Purchase Price Percentage" is defined in Section 2.2(a) of the Purchase
Agreement.
"Purchase Termination Date" means the earlier to occur of (a) the date
specified by the Seller pursuant to Section 8.1 of the Purchase Agreement and
(b) any event referred to in Section 8.2 of the Purchase Agreement.
"Purchaser" means a purchaser, or any owner by permitted assignment, of a
Purchased Interest.
"Purchaser Account" means any deposit, trust, escrow or similar account
maintained exclusively for the benefit of any Purchaser and not for the benefit
of ARC or any Investor Certificateholder, as specified in any PI Agreement,
which account shall not be a Trust Asset.
"Purchaser Agent" means, with respect to each Purchased Interest, the agent
who shall act on behalf of all the related Purchasers and who shall be specified
as such in the related PI Agreement.
"Ratable Principal Amount" means, as to any Series or Class of Investor
Certificates, any Purchased Interest or the ARC Revolving Certificate, the
outstanding principal amount thereof, except that:
(a) if so provided in the Supplement pursuant to which a Series or
Class of Investor Certificates is issued, the Ratable Principal Amount of
that Series or Class may be greater or less than its outstanding principal
amount,
page A-33
(b) if so provided in the PI Agreement relating to a Purchased
Interest, the Ratable Principal Amount of that Purchased Interest may be
greater or lesser than its outstanding principal amount, and
(c) if so provided in any Supplement or PI Agreement, the Ratable
Principal Amount of the ARC Revolving Certificate may be greater or less
than its outstanding principal amount.
"Rating Agency Condition" means, with respect to any action, that the
Applicable Rating Agency has notified the Servicer and the Trustee in writing
that such action will not result in a reduction or withdrawal of the rating of
any outstanding Series or Class with respect to which it is an Applicable Rating
Agency.
"Receivable" means any right of the Seller to payment from or on behalf of
an Obligor (other than any of the Seller's Subsidiaries or Affiliates)
satisfying the requirement set out in clause (a) of the definition of "Eligible
----------
Obligor," whether constituting an account,
chattel paper, instrument, general intangible or otherwise, arising from the
sale of goods or services by the Seller and includes the right to payment of any
interest or finance charges and other obligations of the Obligor with respect
thereto; provided, however, that until such time (and only until such time) as
the Seller notifies ARC of the discontinuation of sales of Receivables described
in Section 1.8 of the Purchase Agreement, receivables of the Seller shall,
whether or not described above, be "Receivables" (but not "Eligible
Receivables").
"Receivables Pool" means at any time all then outstanding Receivables.
"Records" means all Contracts, purchase orders, invoices and other
agreements, documents, books, records and other media for the storage of
information (including tapes, disks, punch cards, computer programs and
databases and related property) maintained by ARC, the Seller or the Servicer
with respect to the Purchased Assets, the Trust Assets and/or the related
Obligors.
"Recoveries" means all Collections received by the Trust in respect of any
Charged-Off Receivable held by the Trust.
"Regulation S Book-Entry Certificate" is defined in Section 6.12(c) of the
Pooling Agreement.
"Regulation S Temporary Book-Entry Certificate" is defined in Section
6.12(c) of the Pooling Agreement.
"Related Assets" is defined in Section 1.1 of the Purchase Agreement.
page A-34
"Related Contributed Assets" is defined in Section 2(c) of the Subscription
Agreement.
"Related Purchased Assets" is defined in Section 1.1 of the Purchase
Agreement.
"Related Security" means, with respect to any Receivable, (a) all of the
Seller's right, title and interest in and to the goods, if any, relating to the
sale that gave rise to the Receivable, excluding any Returned Goods, (b) all
other security interests or liens and property subject thereto from time to time
purporting to secure payment of the Receivable, whether pursuant to the Contract
related to the Receivable or otherwise, and (c) all letters of credit,
guarantees and other agreements or arrangements of whatever character from time
to time supporting or securing payment of the Receivable whether pursuant to the
Contract related to the Receivable or otherwise.
"Related Transferred Assets" is defined in Section 2.01(a) of the Pooling
Agreement.
"Replacement Seller Credit Agreement" means any agreement (other than an
agreement referred to in clause (b) of the definition of Original Seller Credit
----------
Agreement) entered into by AmeriSource to refinance the Original Seller Credit
Agreement; provided, that (i) the parties to such agreement shall have executed
and delivered to the Trustee, for the benefit of the Trustee, the Investor
Certificateholders and the Purchasers, an intercreditor agreement substantially
in the form of Exhibit O-2 to the Pooling Agreement and such other consents,
releases and other documents as the parties to the Original Seller Credit
Agreement shall have executed for the benefit of the Trustee, and (ii) the
Seller shall have elected, by written notice to the Trustee, to classify such
Agreement as the Replacement Seller Credit Agreement, as the same may be
amended, modified or restated from time to time.
"Replacement Stop Date Conditions" shall exist when (a) any Event of
Default shall have occurred and be continuing, and (b) any Unmatured Event of
Default shall have occurred and be continuing; provided, that such Unmatured
Event of Default relates to (i) failure of the Seller to make a payment of
principal or interest when due, or (ii) the value or enforceability of the
collateral for the Replacement Seller Credit Agreement.
"Report Date" means the Business Day that is three Business Days prior to a
Settlement Date.
"Required Investors" means Holders of Investor Certificates that evidence
at least 66-2/3% of the Investor Invested Amount.
"Required Reserve Ratios" means, as calculated in each Settlement
Statement, (a) the Loss Reserve Ratio and (b) the Dilution Reserve Ratio.
page A-35
"Required Reserves" means, at any time, (a) the Net Eligible Receivables
multiplied by (b) the Applicable Reserve Ratio.
"Required Series Holders" means, at any time, (a) with respect to any
action to be taken by Holders of any Series of Fixed Principal Certificates,
Holders of the Series of Fixed Principal Certificates that evidence at least 66-
2/3% of the Fixed Principal Invested Amount with respect to such Series of Fixed
Principal Certificates, and (b) with respect to any action to be taken by
Holders of any Series of Investor Revolving Certificates, Holders of the Series
of Investor Revolving Certificates that evidence at least 66-2/3% of the
aggregate Stated Amount of the Series of Investor Revolving Certificates.
"Requisite Lenders" has the meaning assigned to that term in the Original
Seller Credit Agreement.
"Residual Certificate" means the Certificate, executed by ARC and
authenticated by or on behalf of the Trustee, that is substantially in the form
of Exhibit H to the Pooling Agreement.
"Residual Interest" is defined in Section 4.01 of the Pooling Agreement.
"Responsible Officer" means, when used with respect to the Trustee, (a) any
officer within the Corporate Trust Office (or any successor group of the
Trustee), including any vice president, assistant vice president or any officer
or assistant trust officer of the Trustee customarily performing functions
similar to those performed by the persons who hold the office of vice president,
assistant vice president, or assistant secretary and (b) any other officer
within the Corporate Trust Office with direct responsibility for the
administration of the Pooling Agreement or to whom any corporate trust matter is
referred at the Trustee's Corporate Trust Office because of his knowledge of and
familiarity with the particular subject.
"Restricted Federal Obligor" means any Federal Obligor other than an
Unrestricted Federal Obligor.
"Returned Goods" means all right, title and interest of the Seller or its
assigns in and to goods and/or merchandise, the sale of which gave rise to
Receivables that have been returned to, repossessed by or foreclosed on by
AmeriSource (as Seller or Servicer).
"Returned Goods Percentage" means 1%.
"Revolving Certificate Calculation Amount" means, as of the opening of
business on any day, the Revolving Certificate Invested Amount.
"Revolving Certificate Interest" is defined in Section 4.01 of the Pooling
Agreement.
page A-36
"Revolving Certificate Invested Amount" means, at any time, an amount equal
to the sum of (a) the ARC Revolving Amount at such time, plus (b) the Investor
Revolving Invested Amount at such time.
"Revolving Certificate Purchase Agreement" means, for a Series of Investor
Revolving Certificates, the agreement in which, with the Series' Supplement, the
terms and provisions applicable to the Series are set out.
"Revolving Certificates" means the Investor Revolving Certificates and the
ARC Revolving Certificate.
"Revolving Period" means, with respect to each Series, the period before
the commencement of the earliest of the Liquidation Period or any applicable
Accumulation Period, Pay-Out Period or Prepayment Accumulation Period.
"RPA Indemnified Losses" is defined in Section 9.1 of the Purchase
Agreement.
"RPA Indemnified Party" is defined in Section 9.1 of the Purchase
Agreement.
"Sale Date" means, with respect to any Series and unless otherwise
specified in the applicable Supplement, the first anniversary of the day on
which the Revolving Period for the Series ends.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Scheduled Accumulation Commencement Date" means, with respect to a Series
to which it applies, the date specified as such in the Supplement pursuant to
which the Series is issued.
"Scheduled Liquidation Commencement Date" means the date that is 18 months
after the Pay-Out Period Commencement Date for the latest maturing Series of
Investor Certificates.
"Scheduled Pay-Out Commencement Date" means, with respect to any Series of
Revolving Certificates, the date specified as such in the Supplement pursuant to
which the Series of Revolving Certificates is issued.
"Securities Act" means the Securities Act of 1933, as it may be amended
from time to time.
"Segregated Cash" means, as of any day in a Look Back Period, the excess
(if any) of (a) the aggregate amount of funds then on deposit in the
Equalization Account, over (b) the aggregate amount of funds that would be
required to be on deposit in the Equalization
page A-37
Account on such day to cause the sum of (i) the Certificate Calculation Amount
plus (ii) the PI Calculation Amount minus (iii) funds then on deposit in the
Equalization Account to equal the Base Amount.
"Seller" means AmeriSource; provided, however, that such term also shall
include any Subsidiary of AmeriSource that becomes a party to the Purchase
Agreement pursuant to Section 1.7 thereof and shall exclude any Person that is
terminated as a Seller pursuant to Section 1.8 thereof.
"Seller Adjustment" is defined in Section 4.03(d) of the Pooling Agreement.
"Seller Agent" means (a) General Electric Capital Corporation, as
Administrative Agent and Managing Agent under the Original Seller Credit
Agreement, and any successor thereto in such capacity, and (b) any agent under a
Replacement Seller Credit Agreement.
"Seller Assignment Certificate" means an assignment by the Seller,
substantially in the form of Exhibit B to the Purchase Agreement, evidencing
ARC's ownership of the Receivables (excluding the Contributed Receivables) and
Related Assets generated by the Seller, as it may be amended, supplemented,
amended and restated or otherwise modified from time to time in accordance with
the Purchase Agreement.
"Seller Change Event" is defined in Section 3.05(e) of the Pooling
Agreement.
"Seller Credit Agreement" shall mean the Original Seller Credit Agreement
or the Replacement Seller Credit Agreement, whichever is in effect.
"Seller Dilution Adjustment" is defined in Section 3.5(b) of the Purchase
Agreement.
"Seller Noncomplying Receivable" means a Receivable that does not meet the
criteria set forth in the definition of Eligible Receivables (after excluding
(a) the criteria contained in clause (c) of such definition and (b) the criteria
----------
contained in clause (d) or (e) of the definition of Eligible Obligor).
---------- ---
"Seller Noncomplying Receivables Adjustment" is defined in Section 3.5(a)
of the Purchase Agreement.
"Seller Outstandings" means the sum of the outstanding principal amount of
the Advances plus the outstanding face amount of the Letter of Credit
Obligations.
"Seller Parties" shall mean the parties to the Seller Credit Agreement
(other than AmeriSource).
"Seller Receivables Review" is defined in Section 6.1(c) of the Purchase
Agreement.
page A-38
"Seller Transaction Documents" means the Purchase Agreement, the Seller
Assignment Certificates, the Subscription Agreement and the Account Agreements.
"Senior Class" means any Class of Investor Certificates that is identified
as a "Senior Class" in the applicable Supplement.
"Senior Interest" is defined in the ARC Note.
"Senior Purchased Interest" means any Purchased Interest that is identified
as a "Senior Purchased Interest" in the applicable PI Agreement.
"Series" means any Series of Investor Certificates issued pursuant to
Section 6.10 of the Pooling Agreement.
"Series Sale Date" means, with respect to any Series, the date specified as
the Sale Date for the Series in the related Supplement.
"Servicer" means at any time the Person then authorized pursuant to Article
III of the Pooling Agreement to service, administer and collect Receivables and
Related Transferred Assets.
"Servicer Default" is defined in Section 10.01 of the Pooling Agreement.
"Service Transfer" is defined in Section 10.02(b) of the Pooling Agreement.
"Servicing Fee" is defined in Section 3.04 of the Pooling Agreement.
"Set-Aside Account" is defined in Section 4.02(f) of the Pooling Agreement.
"Set Off Group" means, initially, with respect to each state, all State and
Local Obligors arising for such state; provided, however, that, with respect to
any state, if the Rating Agency Condition has been satisfied after AmeriSource
shall have provided the Applicable Rating Agencies with information to the
effect that: (a) the State Obligors in that state could not set off taxes owed
by AmeriSource to such State Obligors against Receivables owed by Local Obligors
in that state to AmeriSource, and (b) the Local Obligors in that state could not
set off taxes owed by AmeriSource to such Local Obligors against Receivables
owed by State Obligors in that state to AmeriSource, then AmeriSource could
elect to create several separate Set Off Groups for that state, one of which
would contain all of such State Obligors and each other of which would contain a
Local Obligor; and, provided further, that an Unrestricted State/Local Obligor
need not be included in any Set Off Group.
"Settlement Date" means, with respect to any Calculation Period, the 24th
Business Day following the Cut-Off Date for such Calculation Period.
page A-39
"Settlement Statement" is defined in Section 3.05(d) of the Pooling
Agreement.
"Specified Obligor" means State Obligors in Kentucky, Louisiana, Nevada and
Vermont, and State and Local Obligors in Alabama.
"Shortfall" is defined in Section 1.2(c) of the Purchase Agreement.
"State/Local Set Off Reserve means, on any day, the aggregate amount of the
Individual Group Reserves for all Set Off Groups.
"State/Local Tax Per Diem" means, for any Set Off Group, (a) the amount of
state and local tax obligations of the Seller to Obligors in such Set Off Group
accrued during the calendar quarter ending prior to the most recent Settlement
Date, whether remitted to the applicable State and Local Obligor quarterly,
monthly or otherwise, divided by (b) 90.
"State/Local Tax Period" means, for any Set Off Group, the period selected
by AmeriSource, subject to satisfaction of the Rating Agency Condition.
"State Obligor" means any state or any department, agency or
instrumentality thereof.
"Stated Amount" means, as to any Investor Revolving Certificate or
Purchased Interest, the maximum principal amount that may be required to be
funded by the Holder of such Investor Revolving Certificate or Purchaser, as
applicable, as determined pursuant to the applicable Supplement or PI Agreement.
"Stop Date Conditions" mean (a) during the term of the Original Seller
Credit Agreement (and until all Original Obligations are paid in full), the
Original Stop Date Conditions, and (b) thereafter, the Replacement Stop Date
Conditions.
"Stop Date Notice" means a written notice given by the Seller Agent to the
Trustee and the Servicer on a Business Day, to the effect that (a) the Stop Date
Conditions have occurred and are continuing, and (b) under the Seller Credit
Agreement, the Seller Agent has instructed the Seller to stop selling
Receivables to ARC under the Purchase Agreement; provided, that if the Trustee
shall receive such notice later than 11:15 a. m., New York City time, on any
day, such notice shall be deemed to have been received on the next Business Day.
"Subordinated Class" means any Class of Investor Certificates that is
identified as a "Subordinated Class" in the applicable Supplement.
"Subordinated Purchased Interest" means any Purchased Interest that is
identified as a "Subordinated Purchased Interest" in the applicable PI
Agreement.
page A-40
"Subscription Agreement" means the Subscription and Stockholder Agreement,
dated as of December 13, 1994, between the Seller and ARC, as it may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with the Purchase Agreement and the Pooling Agreement.
"Subsequent Issuance" is defined in Section 6.10(a) of the Pooling
Agreement.
"Subsequent Issuance Date" is defined in Section 6.10(b) of the Pooling
Agreement.
"Subsequent Issuance Investor Certificates" is defined in Section 6.02(b)
of the Pooling Agreement.
"Subsequent Issuance Notice" is defined in Section 6.10(b) of the Pooling
Agreement.
"Sub-Servicer" is defined in Section 3.01(b) of the Pooling Agreement.
"Subsidiary" means, with respect to any Person, any corporation of which
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person.
"Successor Servicer" is defined in Section 10.02(a) of the Pooling
Agreement.
"Supplement" means each Supplement (including any related documents, such
as a Revolving Certificate Purchase Agreement) executed by ARC, the Servicer and
the Trustee on each Subsequent Issuance Date, into each of which agreements the
terms and provisions of the Pooling Agreement shall be incorporated by reference
and in each of which the terms and provisions applicable to the Series of
Certificates to be issued thereby shall be set out, as it may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with its terms and with the Pooling Agreement.
"Syndication Documents" means the documents prepared in connection with the
syndication of the Bridge Facility, as identified in one or more letter
agreements between ARC and the initial purchaser of Investor Certificates issued
under the Bridge Facility.
"Take Out Facility" means the transactions contemplated by the Program
Documents, as amended, modified or supplemented (including any amendments,
modifications or supplements implemented by means of Supplements and PI
Agreements) in order to refinance or (as contemplated by Section 10.12 of the
Revolving Certificate Purchase Agreement included in the Bridge Facility)
restructure the Bridge Facility.
page A-41
"Tax Opinion" means, with respect to any action, an Opinion of Counsel to
the effect that, for Federal and Pennsylvania and New York state income and
franchise tax purposes, (a) such action will not adversely affect the
characterization of the Investor Certificates of any outstanding Series or Class
as debt, (b) following such action the Trust will not be treated as an
association (or publicly traded partnership) taxable as a corporation and (c) in
the case of the original issuance of any Series or Class of Investor
Certificates, the Investor Certificates of the new Series will properly be
characterized as debt or partnership interests.
"Terminating Seller" is defined in Section 1.8(a) of the Purchase
Agreement.
"Termination Notice" is defined in Section 10.01 of the Pooling Agreement.
"Tier-1 Obligor" means any Obligor that has (a) a commercial paper rating
from the Applicable Rating Agencies of at least "A-1+" (or its equivalent) or
(b) a senior actual or implied debt rating from the Applicable Rating Agencies
of at least "AAA" (or its equivalent).
"Tier-2 Obligor" means any Obligor (other than a Tier-1 Obligor) that has
(a) a commercial paper rating from the Applicable Rating Agencies of at least
"A-1" (or its equivalent) or (b) a senior actual or implied debt rating from the
Applicable Rating Agencies of at least "A+" (or its equivalent).
"Tier-3 Obligor" means any Obligor (other than a Tier-1 Obligor or a Tier-2
Obligor) that has (a) a commercial paper rating from the Applicable Rating
Agencies of at least "A-2" (or its equivalent) or (b) a senior actual or implied
debt rating from the Applicable Rating Agencies of at least "BBB+" (or its
equivalent).
"Tier-4 Obligor" means any Obligor (other than a Tier-1 Obligor, a Tier-2
Obligor or a Tier-3 Obligor) that has (a) a commercial paper rating from the
Applicable Rating Agencies of at least "A-3" (or its equivalent) or (b) a senior
actual or implied debt rating from the Applicable Rating Agencies of at least
"BBB-" (or its equivalent).
"Tier-5 Obligor" means any Obligor other than a Tier-1 Obligor, a Tier-2
Obligor, a Tier-3 Obligor or a Tier-4 Obligor.
"Transaction Documents" means the Purchase Agreement, the Pooling
Agreement, each Supplement and each PI Agreement.
"Transfer Agent and Registrar" means any transfer agent and registrar
appointed pursuant to Section 6.03(a) of the Pooling Agreement and shall
initially be the Trustee.
"Transfer Value" is defined in Section 1.2(c) of the Purchase Agreement.
page A-42
"Transferee Regulation S Certification" is defined in Section 6.03(i) of
the Pooling Agreement.
"Transferred Assets" is defined in Section 1.1 of the Purchase Agreement.
"Trust" means the AmeriSource Receivables Master Trust created by the
Pooling Agreement.
"Trust Accounts" means the accounts described in Sections 4.02(b), (c),
(e), (f) and (g) of the Pooling Agreement and any accounts required to be
established pursuant to any Supplement that are designated as Trust Accounts in
that Supplement.
"Trust Assets" is defined in Section 2.01(a) of the Pooling Agreement.
"Trustee" means Manufacturers and Traders Trust Company, in its capacity as
trustee on behalf of the Trust, or its successor-in-interest, or any successor
trustee appointed as provided in the Pooling Agreement.
"Turnover Days" means, at any time, the product of (a) the sum of the
beginning and ending Unpaid Balances of Receivables during the immediately
preceding Calculation Period divided by two, multiplied by (b) 30, divided by
the aggregate amount payable pursuant to invoices giving rise to Receivables
that were generated during the Calculation Period.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction or jurisdictions.
"Unapplied Cash" means, at any time, cash received by the Trustee but not
then identified by the Servicer as Collections on a particular Receivable.
"Unfunded Certificate" is defined in Section 6.10(a) of the Pooling
Agreement.
"Unmatured Event of Default" means an event or condition that, with the
giving of notice or lapse of time or both, would constitute an Event of Default.
"Unmatured Liquidation Event" means any event that, with the giving of
notice or lapse of time, or both, would become a Liquidation Event.
"Unpaid Balance" of any Receivable means at any time the unpaid amount
thereof as shown in the books of the Servicer at such time.
"Unrestricted Book-Entry Certificate" is defined in Section 6.12(c) of the
Pooling Agreement.
page A-43
"Unrestricted Federal Obligor" means a Federal Obligor that has waived in
writing its right to set off (a) amounts owed by the Seller to it against (b)
Receivables owed by it to the Seller; provided, however, that if such waiver
shall only apply to certain Receivables, such Federal Obligor shall be an
Unrestricted Federal Obligor only to the extent of such Receivables.
"Unrestricted State/Local Obligor" means a State Obligor or Local Obligor
that has waived, or is otherwise not entitled to exercise, any right to withhold
payments on Receivables owed by it on account of setoff; provided that evidence
of such waiver or lack of entitlement shall have been presented to the
Applicable Rating Agencies and the Rating Agency Condition shall have been
satisfied with respect to classification of such Obligor as an Unrestricted
State/Local Obligor.
"Variable Amount" is defined in Section 4.03(c) of the Pooling Agreement.
B. Other Terms. All accounting terms not specifically defined herein
-----------
shall be construed in accordance with United States generally accepted
accounting principles. To the extent that the definitions of accounting terms
in any Transaction Document are inconsistent with the meanings of such terms
under generally accepted accounting principles or regulatory accounting
principles, the definitions contained in such Transaction Document shall
control. All terms used in Article 9 of the UCC in the State of New York, and
not specifically defined herein, are used herein as defined in such Article 9.
As used in the Transaction Documents, the term "including" means "including
without limitation," and other forms of the verb "to include" have correlative
meanings. All references to any Person shall include such Person's permitted
successors.
C. Computation of Time Periods. Unless otherwise stated in the Purchase
---------------------------
Agreement or the Pooling Agreement, as the case may be, in the computation of a
period of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each means "to but
excluding".
D. Reference; Captions. The words "hereof", "herein" and "hereunder" and
-------------------
words of similar import when used in any Transaction Document shall refer to
such Transaction Document as a whole and not to any particular provision of such
Transaction Document; and references to "Section", "subsection", "Schedule" and
"Exhibit" in any Transaction Document are references to Sections, subsections,
Schedules and Exhibits in or to such Transaction Document unless otherwise
specified in such Transaction Document. The various captions (including the
tables of contents) in each Transaction Document are provided solely for
convenience of reference and shall not affect the meaning or interpretation of
any Transaction Document.
page A-44