Warner Bros. Discovery (WBD) 10-Q2022 Q2 Quarterly report

Third Amended and Restated Receivables Purchase Agreement

Dated as of July 5, 2022

    (ii)    the Persons from time to time party hereto as Purchasers and as Group Agents;

    (v)    PNC Capital Markets LLC, a Pennsylvania limited liability company, as Structuring Agent and as Sustainability Agent.

Preliminary Statements

The Seller has acquired, and will acquire from time to time, Receivables from certain Originators pursuant to the Purchase and Sale Agreement. The Seller desires to sell certain of the Receivables to the Purchasers and, in connection therewith, has requested that the Purchasers make Investments from time to time, on the terms, and subject to the conditions set forth herein.

In consideration of the mutual agreements, provisions and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Article I

Definitions

Article II

Terms of the Purchases and Investments

    (i)    the Aggregate Capital would exceed the Facility Limit at such time;

    (iii)    if such Purchaser is a Committed Purchaser, the aggregate outstanding Capital of such Committed Purchaser would exceed its Commitment; or

    (iv)    the Aggregate Capital would exceed the Capital Coverage Amount at such time.

    (a)    Commitment Fees (as defined in the Fee Letter) shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Purchaser and each other Purchaser in the same Group.

Article III

Seller Guaranty

    (i)    all Unsold Receivables;

    (ii)    all Related Security with respect to such Unsold Receivables;

    (iii)    all Collections with respect to such Unsold Receivables;

    (iv)    the Lock-Boxes and Collection Accounts, other than the Excluded Collection Accounts and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing such Lock-Boxes and Collection Accounts other than the Excluded Collection Accounts and amounts on deposit therein;

    (v)    all rights (but none of the obligations) of the Seller under the Purchase and Sale Agreement;

    (vi)    all other personal and fixture property or assets of the Seller of every kind and nature including, without limitation, all goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes), documents, accounts, chattel paper (whether tangible or electronic), deposit accounts, securities accounts, securities entitlements, letter-of-credit rights, commercial tort claims, securities and all other investment property, supporting obligations, money, any other contract rights or rights to the payment of money, insurance claims and proceeds, and all general intangibles (including all payment intangibles) (each as defined in the UCC);

    (vii) the Pledged Investment Account and all Permitted Investments contained therein, the Pledged Deposit Account, and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing the Pledged Investment Account and the Pledged Deposit Account; and

(viii)    all proceeds of, and all amounts received or receivable under any or all of, the foregoing;

Article IV

Settlement Procedures and Payment Provisions

    (x)    prior to the occurrence of the Termination Date, to the extent that a Capital Coverage Deficit exists on such date, to the Administrative Agent, for the account of each Purchaser (ratably, based on the aggregate outstanding Capital of each Purchaser at such time) for the return of a portion of the outstanding Aggregate Capital at such time, in an aggregate amount equal to the amount necessary to reduce the Capital Coverage Deficit to zero ($0);

    (y)    on and after the occurrence of the Termination Date, to the Administrative Agent, for the account of each Purchaser (ratably, based on the aggregate outstanding Capital of each Purchaser at such time) for the return in full of the aggregate outstanding Capital of such Purchaser at such time; or

payment of all other Seller Obligations then due and owing by the Seller to the Purchaser Parties, the Affected Persons and the Seller Indemnified Parties; and

    (i)    if on any day the Outstanding Balance of any Pool Receivable is reduced or adjusted as a result of any defective, rejected, returned, repossessed or foreclosed goods, licenses or services, or any revision, cancellation, allowance, rebate, credit memo, discount or other adjustment made by the Seller, any Originator, the Servicer or any Affiliate of the Servicer, or any setoff, counterclaim or dispute between the Seller, any Originator, the Servicer or any Affiliate of the Servicer and an Obligor, the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in the amount of such reduction or adjustment and shall pay any and all such amounts in respect thereof on the next Settlement Date, or after the occurrence and during the continuance of an

    (iv)    if and to the extent the Administrative Agent, any Purchaser Party, any Affected Person or any Seller Indemnified Party shall be required for any reason to pay over to an Obligor (or any trustee, receiver, custodian or similar official in any Insolvency Proceeding) any amount received by it hereunder, such amount shall be deemed not to have been so received by such Person but rather to have been retained by the Seller and, accordingly, such Person shall have a claim against the Seller for such amount, payable when and to the extent that any distribution from or on behalf of such Obligor is made in respect thereof.

Article V

Increased Costs; Funding Losses; Taxes; Illegality and
Back-Up Security Interest

    (i)    impose, modify or deem applicable any reserve, special deposit, liquidity, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Affected Person (except any such reserve requirements reflected in the Term SOFR Rate or Daily Simple SOFR);

    (iii)    impose on any Affected Person any other condition, cost or expense (other than Taxes) (A) affecting the Sold Assets, the Seller Collateral, this Agreement, any other Transaction Document, any Program Support Agreement, any Capital or any participation therein or (B) affecting its obligations or rights to make Investments or fund or maintain Capital;

    (ii)    Without limiting the generality of the foregoing:

    (A)    an Affected Person that is a U.S. Person shall deliver to the Seller and the Administrative Agent from time to time upon the reasonable request of the Seller or the Administrative Agent, executed originals of Internal Revenue Service Form W-9 certifying that such Affected Person is exempt from U.S. federal backup withholding tax;

    (B)    any Affected Person that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Seller and the Administrative Agent (in such number of copies as shall be requested by the Affected Person) from time to time upon the reasonable request of the Seller or the Administrative Agent, whichever of the following is applicable:

    (C)    any Affected Person that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Seller and the Administrative Agent (in such number of copies as shall be requested by the recipient), from time to time upon the reasonable request of the Seller or the Administrative Agent, executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Seller or the Administrative Agent to determine the withholding or deduction required to be made.

Article VI

Conditions to Effectiveness and Investments

    (b)    the Servicer shall have delivered to the Administrative Agent and each Group Agent all Information Packages required to be delivered hereunder;

    (d)    on the date of such Investment the following statements shall be true and correct (and upon the occurrence of such Investment, the Seller and the Servicer shall be deemed to have represented and warranted that such statements are then true and correct):

    (ii)    no Event of Termination or Unmatured Event of Termination has occurred and is continuing, and no Event of Termination or Unmatured Event of Termination would result from such Investment;

    (iii)    no Capital Coverage Deficit exists or would exist after giving effect to such Investment;

    (iv)    the Termination Date has not occurred; and

    (v)    after giving effect to such Investment, the Aggregate Capital shall be equal to or greater than an amount that is equal to the lesser of (a) sixty-six and sixty-seven hundredths percent (66.67%) of the Facility Limit at such time and (b) the Capital Coverage Amount at such time.

    (b)    on the date of such Release the following statements shall be true and correct (and upon the occurrence of such Release, the Seller and the Servicer shall be deemed to have represented and warranted that such statements are then true and correct):

and as of such date unless such representations and warranties by their terms refer to an earlier date, in which case they shall be true and correct in all material respects (except such representations that are qualified by materiality, which shall be correct in all respects) on and as of such earlier date;

    (ii)    no Event of Termination or Unmatured Event of Termination has occurred and is continuing, and no Event of Termination or Unmatured Event of Termination would result from such Release;

    (iii)    no Capital Coverage Deficit exists or would exist after giving effect to such Release;

    (iv)    the Aggregate Capital shall be equal to or greater than an amount that is equal to the lesser of (A) sixty-six and sixty-seven hundredths percent (66.67%) of the Facility Limit at such time and (B) the Capital Coverage Amount at such time; and

    (v)    the Termination Date has not occurred.

Article VII

Representations and Warranties

obtained all necessary licenses and approvals in all jurisdictions in which the conduct of its business requires such qualification, licenses or approvals, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

does not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

    (i)    This Agreement creates a valid and continuing ownership or security interest (as defined in the applicable UCC) in the Seller’s right, title and interest in, to and under the Sold Assets and Seller Collateral which (A) ownership or security interest has been perfected and is enforceable against creditors of and purchasers from the Seller and (B) will be free of all Adverse Claims in such Sold Assets and Seller Collateral other than Permitted Liens.

    (ii)    Prior to the sale of, or grant of security interest in, the Sold Assets and Seller Collateral hereunder, the Seller owns and has good and marketable title to such Sold Assets and Seller Collateral free and clear of any Adverse Claim of any Person other than Permitted Liens. After giving effect to the sale of, or grant of security interest in, the Sold Assets and Seller Collateral hereunder, the Administrative Agent owns or has a first priority perfected security interest in the Sold Assets and Seller Collateral free and clear of any Adverse Claim of any Person other than Permitted Liens.

    (iii)    All appropriate financing statements, financing statement amendments and continuation statements have been filed in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect (and continue the perfection of) the Seller’s sale of, and/or grant of a security interest in, the Sold Assets and Seller Collateral (solely to the extent perfection may be achieved by filing a financing statement under the UCC) to the Administrative Agent pursuant to this Agreement.

    (iv)    Other than the security interest granted to the Administrative Agent pursuant to this Agreement, the Seller has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Sold Assets or Seller Collateral except as permitted by this Agreement and the other Transaction

Documents. The Seller has not authorized the filing of and is not aware of any financing statements filed against the Seller that include a description of collateral covering the Sold Assets or Seller Collateral other than any financing statement (i) in favor of the Administrative Agent or (ii) that has been terminated.

financial affairs of the Seller and (ii) made in the ordinary course of business or financial affairs of the Seller.

Stock Exchange or designated as a NASDAQ National Market Security listed on the NASDAQ stock exchange and is excluded on that basis from the definition of “Legal Entity Customer” as defined in the Beneficial Ownership Regulation.

Notwithstanding any other provision of this Agreement or any other Transaction Document, the representations and warranties contained in this Section shall be continuing and remain in full force and effect until the Final Payout Date.

the transactions contemplated by this Agreement and the other Transaction Documents and the fulfillment of the terms of this Agreement and the other Transaction Documents by the Servicer will not (i) conflict with, result in any breach of any of the terms or provisions of, or constitute (with or without notice or lapse of time or both) a default under, the organizational documents of the Servicer or any indenture, sale agreement, credit agreement, loan agreement, security agreement, mortgage, deed of trust or other agreement or instrument to which the Servicer is a party or by which it or any of its property is bound except where such conflict, breach or default could not reasonably be expected to have a Material Adverse Effect, or (ii) conflict with or violate any Applicable Law, except to the extent that any such conflict, breach, default, Adverse Claim or violation could not reasonably be expected to have a Material Adverse Effect.

the same were furnished to the Administrative Agent or such other Purchaser Party, and does not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

Notwithstanding any other provision of this Agreement or any other Transaction Document, the representations and warranties contained in this Section shall be continuing and remain in full force and effect until the Final Payout Date.

Article VIII

Covenants

or exception or (y) a qualification as to the scope of the audit) to the effect that such consolidated financial statements present fairly in all material respects, in accordance with GAAP, the financial condition of Parent and its consolidated Subsidiaries as of the dates indicated and the results of their operations for the periods indicated.

Obligor shall receive any change in payment instructions with respect to Pool Receivable(s) from a Person other than the Servicer or the Administrative Agent.

transfer any funds not representing Collections on Pool Receivables and other Sold Assets and Seller Collateral, deposited into any Collection Account other than an Excluded Collection Account to the appropriate Person entitled to such funds within two (2) Business Days of such deposit. The Seller will not, and will not permit the Servicer, any Originator or any other Person to commingle Collections or other funds to which the Administrative Agent, any Group Agent or any other Secured Party is entitled, with any other funds except as set forth herein.

of the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed).

release, or any amendment that deletes the name of a debtor or excludes any Sold Assets or Seller Collateral, of any such financing statements filed in connection with the Transaction Documents, without the prior written consent of the Administrative Agent.

    (ii)    The Seller authorizes the Administrative Agent to file financing statements, continuation statements and amendments thereto and assignments thereof, relating to the Receivables, the Related Security, the related Contracts, Collections with respect thereto and the other Sold Assets and Seller Collateral without the signature of the Seller. A photocopy or other reproduction of this Agreement shall be sufficient as a financing statement where permitted by law.

    (iii)    The Seller shall at all times be organized under the laws of the State of Delaware and shall not take any action to change its jurisdiction of organization.

    (iv)    The Seller shall not make any change in the Seller’s name, organization type, jurisdiction of formation or location or make any other change requiring an amendment of any UCC financing statements unless (x) the Seller shall have provided at least thirty (30) days (or such shorter period of time as the Administrative Agent may agree) prior written notice to the Administrative Agent and the Majority Group Agents, (y) the Seller, at its own expense, shall have taken all action necessary or appropriate to perfect or maintain the perfection of the security interest under this Agreement (including, without limitation, the filing of all financing statements and the taking of such other action as the Administrative Agent may request in connection with such change or relocation) and (z) if requested by the Administrative Agent, the Seller shall cause to be delivered to the Administrative Agent, an opinion, in form and substance satisfactory to the Administrative Agent as to such UCC perfection and priority matters as the Administrative Agent may request at such time.

with any Person, or in any country or territory that, at the time of such funding is, or whose government is, the subject of Sanctions or in any manner that would result in the violation of any Sanctions applicable to Seller or, to the knowledge of such Seller, any other party hereto.

neither (x) an Event of Termination has occurred and is continuing and (y) the Parent credit rating for long-term, unsecured and unsubordinated indebtedness or deposit obligations is not below BBB- by S&P or Baa3 by Moody’s, each Monthly Settlement Date; (B) at any time that the Parent credit rating for long-term, unsecured and unsubordinated indebtedness or deposit obligations is downgraded to below BBB- by S&P or Baa3 by Moody’s but prior to the occurrence and continuance of an Event of Termination, five (5) Business Days after receipt thereof; or (C) following the occurrence and continuance of an Event of Termination, one (1) Business Day after receipt thereof. The Seller shall not and shall cause the related Excluded Collection Account Owner not to permit any other Person to have any Adverse Claim, obtain any rights or direct any action with respect to any Excluded Collection Account.

interim report with respect to the Pool Receivables containing such information as the Administrative Agent may reasonably request.

credit rating for long-term, unsecured and unsubordinated indebtedness or deposit obligations is not below BBB- by S&P or Baa3 by Moody’s, each Monthly Settlement Date; (ii) at any time that the Parent credit rating for long-term, unsecured and unsubordinated indebtedness or deposit obligations is downgraded to below BBB- by S&P or Baa3 by Moody’s but prior to the occurrence and continuance of an Event of Termination, five (5) Business Days after receipt thereof; or (iii) following the occurrence and continuance of an Event of Termination, one (1) Business Day after receipt thereof. The Servicer shall not and shall cause the related Excluded Collection Account Owner not to permit any other Person to have any Adverse Claim, obtain any rights or direct any action with respect to any Excluded Collection Account.

partner, officer, employee or associate, or any relative of the foregoing, of any member of the Parent Group (as hereinafter defined) (other than his or her service as an Independent Director of the Seller or an independent director of any other bankruptcy-remote special purpose entity formed for the sole purpose of securitizing, or facilitating the securitization of, financial assets of any member or members of the Parent Group), (ii) is not a customer or supplier of any member of the Parent Group (other than his or her service as an Independent Director of the Seller or an independent director of any other bankruptcy-remote special purpose entity formed for the sole purpose of securitizing, or facilitating the securitization of, financial assets of any member or members of the Parent Group), (iii) is not any member of the immediate family of a person described in (i) or (ii) above, and (iv) has (x) prior experience as an independent director for a corporation or limited liability company whose organizational or charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities. For purposes of this clause (c), “Parent Group” shall mean (i) the Parent, the Servicer, the Performance Guarantor, and each Originator, (ii) each person that directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more of the membership interests in the Parent, (iii) each person that controls, is controlled by or is under common control with the Parent and (iv) each of such person’s officers, directors, managers, joint venturers and partners. For the purposes of this definition, “control” of a person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise. A person shall be deemed to be an “associate” of (A) a corporation or organization of which such person is an officer, director, partner or manager or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities, (B) any trust or other estate in which such person serves as trustee or in a similar capacity and (C) any relative or spouse of a person described in clause (A) or (B) of this sentence, or any relative of such spouse.

The Seller shall (A) give written notice to the Administrative Agent of the election or appointment, or proposed election or appointment, of a new Independent Director of the Seller, which notice shall be given not later than ten (10) Business Days prior to the date such appointment or election would be effective (except when such election or appointment is necessary to fill a vacancy caused by the death, disability, or incapacity of the existing Independent Director, or the failure of such Independent Director to satisfy the criteria for an Independent Director set forth in this clause (c), in which case the Seller shall provide written notice of such election or appointment within one (1) Business Day) and (B) with any such written notice, certify to the Administrative Agent that the Independent Director satisfies the criteria for an Independent Director set forth in this clause (c).

The Seller’s Limited Liability Company Agreement shall provide that: (A) the Seller’s board of directors shall not approve, or take any other action to cause the filing of, a voluntary bankruptcy petition with respect to the Seller unless the Independent Director shall approve the taking of such action in writing before the taking of such action and (B) such provision and each other provision requiring an Independent Director cannot be amended without the prior written consent of the Independent Director.

The Independent Director shall not at any time serve as a trustee in bankruptcy for the Seller, the Parent, the Performance Guarantor, any Originator, the Servicer or any of their respective Affiliates.

and any Affiliates thereof. Any Person that renders or otherwise furnishes services to the Seller will be compensated by the Seller at market rates for such services it renders or otherwise furnishes to the Seller. Neither the Seller on the one hand, nor the Servicer, the Parent, the Performance Guarantor, any Originator or any Affiliate thereof, on the other hand, will be or will hold itself out to be responsible for the debts of the other or the decisions or actions respecting the daily business and affairs of the other. The Seller, the Servicer, the Parent, the Performance Guarantor, the Originators and their respective Affiliates will immediately correct any known misrepresentation with respect to the foregoing, and they will not operate or purport to operate as an integrated single economic unit with respect to each other or in their dealing with any other entity.

Article IX

Administration and Collection of Receivables

practicable, return to the Seller all amounts that it receives from such Obligors to the extent such amounts do not constitute Collections.

    (iii)    the Administrative Agent may notify the Collection Account Banks that the Seller, and the Servicer will no longer have any access to the Collection Accounts;

    (iv)    the Administrative Agent may (or, at the direction of the Majority Group Agents shall) replace the Person then acting as Servicer; and

    (v)    the Administrative Agent may collect any amounts due from (A) an Originator under the Purchase and Sale Agreement or (B) the Performance Guarantor under the Performance Guaranty.

For the avoidance of doubt, the foregoing rights and remedies of the Administrative Agent upon an Event of Termination are in addition to and not exclusive of the rights and remedies contained herein and under the other Transaction Documents.

Article X

Events of Termination

    (c)    the Seller or the Servicer shall fail to deliver an Information Package pursuant to this Agreement, and such failure shall remain unremedied for three (3) Business Days after written notice of such failure has been given to the Seller or the Servicer;

    (d)    this Agreement or any security interest granted pursuant to this Agreement or any other Transaction Document shall for any reason cease to create, or for any reason cease to be, a valid and enforceable first priority perfected security interest in favor of the Administrative Agent with respect to the Pool Receivables or any of the other Sold Assets or Seller Collateral, free and clear of any Adverse Claim other than Permitted Liens;

    (e)    the Seller, any Originator, the Performance Guarantor or the Servicer shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any Insolvency Proceeding shall be instituted by or against the Seller, any Originator, the Performance Guarantor or the Servicer and, in the case of any such proceeding instituted against such Person (but not instituted by such Person), either such proceeding shall remain undismissed or unstayed for a period of sixty (60) consecutive days, or any of the actions sought in such proceeding (including the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Seller, any Originator, the Performance Guarantor or the Servicer shall take any corporate or organizational action to authorize any of the actions set forth above in this paragraph;

    (f)    (i) the average for three consecutive Fiscal Months of:

    (g)    a Change in Control shall occur;

    (h)    a Capital Coverage Deficit shall occur, and shall not have been cured within three (3) Business Days;

    (i)    (i) the Seller shall fail to pay any principal of or premium or interest on any Debt when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement, mortgage, indenture or instrument relating to such Debt (whether or not such failure shall have been waived under the related agreement); (ii) any Originator, the Performance Guarantor or the Servicer, or any of their respective Subsidiaries, individually or in the aggregate, shall fail to pay any principal of or premium or interest on any of its Debt under the Parent Senior Credit Agreement (whether or not funded) or any other Debt that is outstanding in a principal amount of at least $1,000,000,000 in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand

    (j)    the Performance Guarantor shall fail to perform any of its material obligations under the Performance Guaranty;

    (l)    there shall have occurred any event which materially adversely impairs, in the reasonable discretion of Administrative Agent, the collectability of the Pool Receivables generally or any material portion thereof and such event or events either individually or in the aggregate would reasonably be expected to result in a Material Adverse Effect;

    (m)    either (i) the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Code with regard to any assets of the Seller, any Originator or the Parent or (ii) the PBGC shall, or shall indicate its intention to, file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the assets of the Seller, the Servicer, any Originator or the Parent with respect to liabilities in the aggregate in excess of $400,000,000;

    (n)    the Parent or any ERISA Affiliate shall fail to satisfy minimum funding requirements under Section 412 of the Internal Revenue Code or Section 302 of ERISA to any Plan, or apply for a waiver of such requirements, and such failure could reasonably be expected to subject the Parent or any of its Subsidiaries to any liabilities in the aggregate in excess of $1,000,000,000;

    (o)    [reserved];

    (p)    a Purchase and Sale Termination Event shall occur under the Purchase and Sale Agreement;

    (r)    any material provision of this Agreement or any other Transaction Document shall cease to be in full force and effect or any of the Seller, any Originator, the Performance Guarantor or the Servicer (or any of their respective Affiliates) shall so state in writing; or

    (s)    one or more judgments or decrees shall be entered against the Seller, any Originator, the Performance Guarantor or the Servicer, or any Affiliate of any of the foregoing involving in the aggregate a liability (not paid or to the extent not covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of 30 consecutive days, and the aggregate amount of all such judgments equals or exceeds $250,000,000 (or solely with respect to the Seller, $15,775);

Article XI

The Administrative Agent

Article XII

The Group Agents

Article XIII

Indemnification

    (i)    any Pool Receivable which the Seller or the Servicer includes as an Eligible Receivable as part of the Net Receivables Pool Balance but which is not an Eligible Receivable at such time;

    (ii)    any representation, warranty or statement made or deemed made by the Seller (or any of its respective officers) under or in connection with this Agreement, any of the other Transaction Documents, any Information Package or any other information or report delivered by or on behalf of the Seller pursuant hereto which shall have been untrue or incorrect in any material respect when made or deemed made;

    (iii)    the failure by the Seller to materially comply with any Applicable Law with respect to any Pool Receivable or the related Contract; or the failure of any Pool Receivable or the related Contract to conform to any such Applicable Law;

    (iv)    the failure to vest in the Administrative Agent a first priority perfected ownership or security interest in all or any portion of the Sold Assets or Seller Collateral,

in each case free and clear of any Adverse Claim (other than to the extent resulting from the affirmative action of the Administrative Agent) other than Permitted Liens;

    (v)    the failure to have filed, or any delay in filing, financing statements, financing statement amendments, continuation statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other Applicable Laws with respect to any Pool Receivable, any other Sold Assets or any Seller Collateral, whether at the time of any Investment or at any subsequent time;

    (vi)    any dispute, claim or defense (other than discharge in bankruptcy) of an Obligor to the payment of any Pool Receivable (including, without limitation, a defense based on such Pool Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from or relating to collection activities with respect to such Pool Receivable;

    (vii)    any failure of the Seller to perform any of its duties or obligations in accordance with the provisions hereof and of each other Transaction Document related to Pool Receivables or to timely and fully comply with the Credit and Collection Policy in regard to each Pool Receivable;

    (viii)    the commingling of Collections of Pool Receivables at any time with other funds;

    (ix)    any investigation, litigation or proceeding (actual or threatened) related to this Agreement or any other Transaction Document or the use of proceeds of any Investments or in respect of any Pool Receivable, any other Sold Assets or any Seller Collateral or any related Contract;

    (x)    any failure of the Seller to comply with its covenants, obligations and agreements contained in this Agreement or any other Transaction Document;

    (xi)    any setoff with respect to any Pool Receivable;

    (xii)    any claim brought by any Person other than a Seller Indemnified Party arising from any activity by the Seller or any Affiliate of the Seller in servicing, administering or collecting any Pool Receivable;

    (xiii)    the failure by the Seller to pay when due any material taxes, including, without limitation, material sales, excise or personal property taxes;

    (xv)    any failure of a Collection Account Bank to comply with the terms of the applicable Account Control Agreement, the termination by a Collection Account Bank of any Account Control Agreement or any amounts (including in respect of any indemnity) payable by the Administrative Agent to a Collection Account Bank under any Account Control Agreement;

    (xvi)    any claim resulting from the sale of goods or the rendering of services related to such Pool Receivable or the furnishing or failure to furnish any such goods or services or other similar claim or defense not arising from the financial inability of any Obligor to pay undisputed indebtedness;

    (xvii)    any action taken by the Administrative Agent as attorney-in-fact for the Seller, any Originator or the Servicer pursuant to this Agreement or any other Transaction Document using the same degree of skill and attention that the Administrative Agent exercises when acting for its own account;

    (xviii)    the failure or delay to provide any Obligor with an invoice or other evidence of indebtedness;

    (xix)    the use of proceeds of any Investment; or

    (xx)    any reduction in Capital as a result of the distribution of Collections if all or a portion of such distributions shall thereafter be rescinded or otherwise must be returned for any reason.

    (i)    any Pool Receivable which the Servicer includes as an Eligible Receivable as part of the Net Receivables Pool Balance but which is not an Eligible Receivable at such time;

    (ii)    any representation, warranty or statement made or deemed made by the Servicer (or any of its respective officers) under or in connection with this Agreement, any of the other Transaction Documents, any Information Package or any other information or report delivered by or on behalf of the Servicer pursuant hereto which shall have been untrue or incorrect in any material respect when made or deemed made;

    (iii)    the failure by the Servicer to materially comply with any Applicable Law with respect to any Pool Receivable or the related Contract; or the failure of any Pool Receivable or the related Contract to conform to any such Applicable Law;

    (iv)    the commingling of Collections of Pool Receivables at any time with other funds;

    (v)    the failure or delay to provide any Obligor with an invoice or other evidence of indebtedness; or

    (vi)    any failure of the Servicer to comply with its covenants, obligations and agreements contained in this Agreement or any other Transaction Document;

Article XIV

Miscellaneous

    (i)    change (directly or indirectly) the definitions of, Capital Coverage Deficit, Eligible Receivable, Facility Limit, Seller Obligation Final Due Date or Net Receivables Pool Balance contained in this Agreement, or change the calculation of the Capital Coverage Amount;

    (ii)    reduce the amount of Capital or Yield that is payable hereunder or delay any scheduled date for payment thereof;

    (iii)    change any Event of Termination;

    (v)    release the Performance Guarantor from any of its obligations under the Performance Guaranty or terminate the Performance Guaranty;

    (ii)    each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement;

    (iii)    the amount being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance Agreement with respect to such assignment) shall in no event be less than the lesser of (x) $5,000,000 and (y) all of the assigning Committed Purchaser’s Commitment; and

    (iv)    the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance Agreement.

Upon such execution, delivery, acceptance and recording from and after the effective date specified in such Assignment and Acceptance Agreement, (x) the assignee thereunder shall be a party to this Agreement, and to the extent that rights and obligations under this Agreement have been assigned to it pursuant to such Assignment and Acceptance Agreement, have the rights and obligations of a Committed Purchaser hereunder and (y) the assigning Committed Purchaser shall, to the extent that rights and obligations have been assigned by it pursuant to such Assignment and Acceptance Agreement, relinquish such rights and be released from such obligations under this Agreement (and, in the case of an Assignment and Acceptance Agreement covering all or the remaining portion of an assigning Committed Purchaser’s rights and obligations under this Agreement, such Committed Purchaser shall cease to be a party hereto).

    (i)    such Committed Purchaser’s obligations under this Agreement (including, without limitation, its Commitment to the Seller hereunder) shall remain unchanged, and

    (ii)    such Committed Purchaser shall remain solely responsible to the other parties to this Agreement for the performance of such obligations.

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.

     Title: Managing Director

Form of Investment Request

Re:    Investment Request

This letter constitutes an Investment Request pursuant to Section 2.02(a) of the Agreement. The Seller hereby request an Investment of Capital in the aggregate amount of [$_______] to be made on [_____, 202_] (of which $[___] of Capital will be funded by the PNC Group and $[___] of Capital will be funded by the [___] Group. Such Capital should be deposited to [Account number], at [Name, Address and ABA Number of Bank]. After giving effect to such Investment, the Aggregate Capital will be [$_______].

The Seller hereby represents and warrants as of the date hereof, and after giving effect to such Investment, as follows:

    (i)    the representations and warranties of the Seller and the Servicer contained in Sections 7.01 and 7.02 of the Agreement are true and correct in all material respects on and as of the date of such Investment as though made on and as of such date unless such representations and warranties by their terms refer to an earlier date, in which case they shall be true and correct in all material respects on and as of such earlier date;

    (ii)    no Event of Termination or Unmatured Event of Termination has occurred and is continuing, and no Event of Termination or Unmatured Event of Termination would result from such Investment;

    (iii)    no Capital Coverage Deficit exists or would exist after giving effect to such Investment;

    (iv)    the Aggregate Capital will be equal to or greater than an amount that is equal to the lesser of (a) sixty-six and sixty-seven hundredths percent (66.67%) of the Facility Limit at such time and (b) the Capital Coverage Amount at such time;

    (v)    the Termination Date has not occurred; and

    (vi)    the Sold Receivables are identified on the Schedule of Sold Receivables attached hereto.

In Witness Whereof, the undersigned has executed this letter by its duly authorized officer as of the date first above written.

Form of Reduction Notice

[Letterhead of Seller]

Re:    Reduction Notice

This letter constitutes a Reduction Notice pursuant to Section 2.02(d) of the Agreement. The Seller hereby notifies the Administrative Agent and the Purchasers that it shall reduce the outstanding Capital of the Purchasers [in the [__________] Group] in the amount of [$_______] to be made on [_____, 20_]. After giving effect to such reduction, the [outstanding Capital of the Purchasers in the [__________] Group will be [$_______]] and the Aggregate Capital will be [$_______].

The Seller hereby represents and warrants as of the date hereof, and after giving effect to such reduction, as follows:

    (i)    the representations and warranties of the Seller and the Servicer contained in Sections 7.01 and 7.02 of the Agreement are true and correct in all material respects on and as of the date of such reduction as though made on and as of such date unless such representations and warranties by their terms refer to an earlier date, in which case they shall be true and correct in all material respects on and as of such earlier date;

    (ii)    no Event of Termination or Unmatured Event of Termination has occurred and is continuing, and no Event of Termination or Unmatured Event of Termination would result from such reduction;

    (iii)    no Capital Coverage Deficit exists or would exist after giving effect to such reduction; and

    (iv)    the Termination Date has not occurred.

In Witness Whereof, the undersigned has executed this letter by its duly authorized officer as of the date first above written.

[Form of Assignment and Acceptance Agreement]

Dated as of ___________, 20__

Effective Date of this Assignment and Acceptance Agreement: [__________]

[Form of Assumption Agreement]

Background

Now, Therefore, the parties hereto hereby agree as follows:

The Seller hereby represents and warrants to the [________] Purchasers and the [_________] Group Agent as of the date hereof, as follows:

    (i)    the representations and warranties of the Seller contained in Section 7.01 of the Receivables Purchase Agreement are true and correct on and as of such date as though made on and as of such date;

    (ii)    no Event of Termination or Unmatured Event of Termination has occurred and is continuing, or would result from the assumption contemplated hereby; and

In Witness Whereof, the parties hereto have executed this Agreement by their duly authorized officers as of the date first above written.

[Reserved]

[Reserved]

Form of Information Package

(Attached)

Form of Compliance Certificate

The Undersigned Hereby Certifies That:

    1.    I am the duly elected ________________of the Servicer.

    2.    I have reviewed the terms of the Agreement and each of the other Transaction Documents and I have made, or have caused to be made under my supervision, a detailed review of the transactions and condition of the Seller during the accounting period covered by the attached financial statements.

    3.    The examinations described in paragraph 2 above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Event of Termination or an Unmatured Event of Termination, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate[, except as set forth in paragraph 5 below].

    4.    Schedule I attached hereto sets forth financial statements of the Parent and its Subsidiaries for the period referenced on such Schedule I.

    [5.    Described below are the exceptions, if any, to paragraph 3 above by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Seller has taken, is taking, or proposes to take with respect to each such condition or event:]

The foregoing certifications are made and delivered this ______ day of ___________________, 20___.

This schedule relates to the month ended: __________________.

Restatement Effective Date
Closing Memorandum

(Attached)

Exhibit K

Reserved

Exhibit L

Defined Terms

    (a)    the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent or its Affiliate as its “reference rate” or “prime rate”, as applicable (such “reference rate” or “prime rate” is set by the Administrative Agent or its Affiliate based upon various factors, including such Person’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate, and is not necessarily the lowest rate charged to any customer); and

    (b)    0.50% per annum above the latest Federal Funds Rate in effect on such day;

    (a)     Performance Guarantor ceases to own, directly or indirectly, 100% of the issued and outstanding Capital Stock and all other equity interests of the Seller free and clear of all Adverse Claims;

    (b)    Performance Guarantor ceases to own, directly or indirectly, 100% of the issued and outstanding Capital Stock, membership interests or other equity interests of any Originator free and clear of all Adverse Claims;

    (c)    [reserved]

    (d)    any Subordinated Note shall at any time cease to be owned by an Originator, free and clear of all Adverse Claims; or

    (e)    with respect to Performance Guarantor, any Person or two or more Persons acting in concert shall have acquired beneficial ownership (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Stock of the Performance Guarantor (or other securities convertible into such Voting Stock) representing more than 50% of the combined voting power of all Voting Stock of the Performance Guarantor.

    (a)    as to which any payment, or part thereof, remains unpaid for (x) with respect to all Receivables other than Warner Receivables, 121 days or more from the original due date for such payment or 151 days or more after the original invoice date for such payment (or such lesser amount of days as may be approved in writing by the Seller and the Administrative Agent (with notice of such approval delivered to the Group Agents) with respect to any Receivables originated by any specific Originator), or (y) with respect to Warner Receivables, 211 days or more after the original invoice date for such payment (or such lesser amount of days as may be approved in writing by the Seller and the Administrative Agent (with notice of such approval delivered to the Group Agents) with respect to any Receivables originated by any specific Originator);

    (b)    as to which an Insolvency Proceeding shall have occurred with respect to the Obligor thereof or any other Person obligated thereon or owning any Related Security with respect thereto; or

    (c)    that has been written off in the applicable Originator’s or the Seller’s books as uncollectible consistent with the Credit and Collection Policy;

    (a)    the Obligor of which is: (i) either a U.S. Obligor or an Eligible Foreign Obligor; (ii) not the target or subject of any Sanctions; (iii) not a consolidated Affiliate of the Seller, the Servicer, the Parent or any Originator; (iv) not a natural person; and (v) not the Obligor with respect to which more than 50% of the aggregate Outstanding Balance of all of such Obligor’s Pool Receivables consist of Defaulted Receivables or Delinquent Receivables;

    (c)    that is denominated and payable only in Dollars or an Eligible Foreign Currency and the Obligor with respect to which has been instructed to remit Collections in respect thereof directly to a Lock-Box or Collection Account in the United States of America or Canada;

    (d)    that does not have a due date which is more than 90 days after the original invoice date of such Receivable;

    (e)    that (i) arises under a Contract for the sale or licensing of goods or services entered into on an arm’s length basis in the ordinary course of the applicable Originator’s business and (ii) does not constitute a loan or other similar financial accommodation being provided by the applicable Originator;

    (f)    that arises under a duly authorized Contract that (i) is in full force and effect, and (ii) is a legal, valid and binding obligation of the related Obligor, enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium 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;

    (g)    that has been transferred by an Originator to the Seller pursuant to the Purchase and Sale Agreement with respect to which transfer all conditions precedent under the Purchase and Sale Agreement have been met or explicitly waived in writing by the Administrative Agent;

    (h)    that, together with the Contract related thereto, conforms in all material respects with all Applicable Laws (including any applicable laws relating to usury, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy);

    (i)    with respect to which all consents, licenses, approvals or authorizations of, or registrations or declarations with or notices to, any Governmental Authority or other Person required to be obtained, effected or given by an Originator in connection with the creation of such Receivable, the execution, delivery and performance by such Originator of the related Contract or the assignment thereof under the Purchase and Sale Agreement have been duly obtained, effected or given and are in full force and effect;

    (k)    that satisfies all applicable requirements of the Credit and Collection Policy;

    (m)    in which the Seller owns good and marketable title, free and clear of any Adverse Claims other than Permitted Liens, and that is freely assignable (including without any consent of the related Obligor or any Governmental Authority), and the payments thereon are free and clear of any, or increased to account for any applicable, withholding Taxes;

    (o)    that (x) constitutes an “account” or “general intangible” (as defined in the UCC), (y) is not evidenced by instruments or chattel paper and (z) does not constitute, or arise from the sale of, as-extracted collateral (as defined in the UCC);

    (p)    with respect to which there are no unapplied payments that have been excluded from the Seller’s accounts receivable aging reports but that remains unapplied as of the end of the month in which such payments were received;

    (s)    which (i) does not arise from a sale of accounts made as part of a sale of a business or constitute an assignment for the purpose of collection only, (ii) is not a

transfer of a single account made in whole or partial satisfaction of a preexisting indebtedness or an assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract and (iii) is not a transfer of an interest in or an assignment of a claim under a policy of insurance;

    (t)    which does not relate to the sale of any consigned goods or finished goods which have incorporated any consigned goods into such finished goods;

    (u)    for which the related Originator has recognized the related revenue on its financial books and records in accordance with GAAP;

    (w)    that, if such Receivable is an Unbilled Receivable, is an Eligible Unbilled Receivable;

    (x)    is not an Excluded Receivable; and

    (a)    direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the U.S. (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the U.S.), in each case maturing within one year from the date of acquisition thereof;

    (b)    investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

    (c)    investments in certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the U.S. or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

    (d)    fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and

    (e)    money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

    (a)    all of the Seller’s and each Originator’s interest in any goods (including Returned Goods), and documentation of title evidencing the shipment or storage of any goods (including Returned Goods), the sale of which gave rise to such Receivable;

    (b)    all instruments and chattel paper that may evidence such Receivable;

    (c)    all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all UCC financing statements or similar filings relating thereto;

    (d)    solely to the extent applicable necessary to irrevocably collect and enjoy the benefits of such Receivable, all of the Seller’s and each Originator’s rights, interests and claims under the related Contracts and all supporting obligations, guaranties, indemnities, letters of credit (including any letter-of-credit rights), insurance and other agreements (including the related Contract) or arrangements of whatever character from

time to time supporting or securing payment of such Receivable or otherwise relating to such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, subject, in each case, to any applicable terms of such Contract that may adversely impact the sale or assignment of such Contract (as opposed to the sale of the assignment of the Receivables or other proceeds arising thereunder);

    (e)    all rights, remedies, powers, privileges, title and interest (but not obligations) in and to each Lock-Box and all Collection Accounts, into which any Collections or other proceeds with respect to such Receivables may be deposited, and any related investment property acquired with any such Collections or other proceeds (as such term is defined in the applicable UCC);

    (f)    all of the Seller’s rights, interests and claims under the Purchase and Sale Agreement and the other Transaction Documents to the extent applicable; and

    (g)    all Collections and other proceeds (as defined in the UCC) of any of the foregoing;

1.50 x DSO x (BR + the Servicing Fee Rate)

360

where:

BR        =    the Base Rate at such time; and

DSO    =    the Days’ Sales Outstanding for the most recently ended Fiscal Month.

Lock-Boxes, Collection Accounts and Collection Account Banks

Notice Addresses

Initial Schedule of Sold Receivables