Discount Receivables Clause Samples
The Discount Receivables clause defines the terms under which a party may sell or assign its right to receive payments at a discounted value before the payments are actually due. Typically, this clause outlines the process for calculating the discounted amount, the conditions under which receivables can be sold, and any required notifications or consents. Its core practical function is to provide liquidity to the party holding the receivables by allowing them to access funds earlier, while also clarifying the rights and obligations of all parties involved in the transaction.
Discount Receivables. (a) The Transferor shall have the option to designate at any time and from time to time a fixed percentage or percentages, which may be a fixed percentage or a variable percentage based on a formula (the “Yield Factor”), currently zero, of all or any specified portion of Gross Principal Receivables outstanding that have been designated for inclusion in Asset Pool One on any date of determination and subsequently created to be treated as Discount Receivables and included as Finance Charge Receivables. Subject to the conditions specified below, the Transferor may, without notice to or the consent of any Noteholder whose Notes are secured by Asset Pool One, from time to time, increase, reduce or eliminate the Yield Factor on or after such initial date of determination and any other specified date (each, a “Discount Option Date”). The Transferor shall provide 30 days prior written notice of any such change in a Yield Factor with respect to Asset Pool One and the related Discount Option Date to the Servicer, the Owner Trustee, the Indenture Trustee, the Collateral Agent and any Note Rating Agency and such change in the Yield Factor shall become effective on such Discount Option Date unless such designation, in the reasonable belief of the Transferor, would cause an Early Amortization Event or Event of Default with respect to any Series, Class or Tranche of Notes to occur, or an event which, with notice or lapse of time or both, would constitute an Early Amortization Event or Event of Default with respect to any Series, Class or Tranche of Notes. Accordingly, on each Discount Option Date after a change in Yield Factor, the Transferor shall apply the new Yield Factor to all or the portion of the Gross Principal Receivables outstanding that have been designated for inclusion in Asset Pool One which are to be treated as Discount Receivables.
(b) After the Discount Option Date, Discount Receivables Collections with respect to Receivables designated for inclusion in Asset Pool One shall be treated as Finance Charge Collections to be allocated to Asset Pool One.
Discount Receivables. (a) In the event the Transferor, pursuant to the Transfer and Servicing Agreement, opts to designate at any time and from time to time the Yield Factor of all or any specified portion of Gross Principal Receivables outstanding in Asset Pool One on any date of determination and subsequently created to be treated as Discount Receivables and included in Finance Charge Receivables, such designation shall be applicable under this Asset Pool One Supplement and each Indenture Supplement. Subject to the conditions specified in the Transfer and Servicing Agreement, the Yield Factor may, without notice to or the consent of any Noteholder in Asset Pool One, from time to time, be increased, reduced or eliminated on or after such Discount Option Date; provided, however, that on each Discount Option Date after a change in Yield Factor, the Transferor shall apply the new Yield Factor to all or the portion of the Gross Principal Receivables outstanding in Asset Pool One which are to be treated as Discount Receivables.
(b) After the Discount Option Date, Discount Receivables Collections with respect to Asset Pool One Receivables shall be treated as Asset Pool One Finance Charge Collections.
Discount Receivables. (a) The Transferor shall designate a fixed percentage (the "Yield Factor") of all Receivables outstanding on any date of determination, other than Periodic Finance Charges, Annual Membership Fees, Cash Advance Fees, Late Fees, overlimit fees, return check fees and similar fees and other charges and Receivables in Defaulted Accounts, to be treated as Finance Charge Receivables ("Discount Receivables"). The Yield Factor initially and through March 31, 2002 shall equal 1.3% and on and after April 1, 2002 shall equal zero or such other percentage as may be determined pursuant to subclause (c) hereof; provided, however, for purposes of determining the Investor Percentages and Transferor Percentages for the April 2002 Monthly Period, the Yield Factor as of March 31, 2002 shall be deemed to be equal to zero.
(b) The Transferor, in accordance with Section 4.03, shall (i) deposit, or cause to be deposited, into the Collection Account in immediately available funds an amount equal to the product of (a) the Aggregate Investor Percentages for all Series with respect to Finance Charge Receivables and (b) the aggregate amount of the Discount Receivable Collections processed on such day and (ii) pay to the Holder of the Exchangeable Transferor Certificate an amount equal to the product of (a) the Transferor Percentage and (b) the aggregate amount of such Discount Receivable Collections. The deposit made by the Transferor into the Collection Account under the preceding sentence shall be considered a payment of such Discount Receivables and shall be applied as Finance Charge Receivables in accordance with Article IV.
(c) The Transferor shall have the option to increase or decrease the Yield Factor to an amount not greater than 4%. The Transferor shall provide to the Servicer, the Trustee, any Enhancement Provider and the Rating Agency 30 days' prior written notice of such designation, and such designation shall become effective on the date designated therein (i) unless such designation in the reasonable belief of the Transferor would cause a Pay Out Event to occur, or an event which, with notice or the lapse of time or both, would constitute a Pay Out Event and (ii) only if each Rating Agency shall have delivered a letter to the Transferor and the Trustee confirming that its then current rating of the Investor Certificates of any Series then outstanding will not be reduced or withdrawn as a result of such designation. [End of Article II]