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EXHIBIT 10.2
THIRD AMENDMENT TO
RECEIVABLES PURCHASE AGREEMENT
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This Third Amendment to Receivables Purchase Agreement, dated as of March
31, 2000 (this "Amendment"), is among D&K RECEIVABLES CORPORATION, a Delaware
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corporation ("Seller"), D&K HEALTHCARE RESOURCES, INC., a Delaware
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corporation ("Parent"), BLUE KEEL FUNDING, LLC, a Delaware limited liability
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company ("Purchaser"), and FLEET NATIONAL BANK, a national banking
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association, as administrator for Purchaser (in such capacity, the
"Administrator").
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BACKGROUND
1. Seller, Parent, Purchaser and the Administrator are parties to that
certain Receivables Purchase Agreement, dated as of August 7, 1998, as
amended by the First Amendment to Receivables Purchase Agreement, dated as of
December 17, 1998, and by the Second Amendment to Receivables Purchase
Agreement, dated as of June 1, 1999 (the "Receivables Purchase Agreement").
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2. The parties hereto desire to amend the Receivables Purchase Agreement
in certain respects as set forth herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used in this Amendment and
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not otherwise defined herein shall have the meanings assigned thereto in the
Receivables Purchase Agreement.
SECTION 2. Purchase Limit. Section 1.01 of the Receivables Purchase
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Agreement is hereby amended by deleting the number "$60,000,000" where it
appears in clause (a) thereof and substituting therefor the number
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"$75,000,000".
SECTION 3. Weekly Settlement Date; Weekly Servicer Reports. Section
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1.02(a) of the Receivables Purchase Agreement is hereby amended by deleting
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the second sentence thereof in its entirety and substituting therefor the
following:
Each such notice of a proposed Purchase shall be substantially in the
form of Exhibit 1.02(a) (each a "Purchase Notice"), and shall specify the
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desired amount and date of such Purchase, which shall be a Weekly
Settlement Date.
Section 2.04 of the Receivables Purchase Agreement is hereby amended by
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(i) deleting the phrase "Settlement Period" where it appears in clause (iii)
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thereof and substituting therefor the phrase "Earned Discount Period" and
(ii) deleting the phrase "Settlement Period" where it appears in clause (iv)
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thereof and substituting therefor the word "period".
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Section 3.01 of the Receivables Purchase Agreement is hereby amended by
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deleting the phrase "with respect to each Settlement Period" where it appears
in the lead-in clause thereof. Section 3.01(a) of the Receivables Purchase
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Agreement is hereby amended by (i) adding the phrase "the earlier of the
second Weekly Settlement Date to occur after each Cut-Off Date and"
immediately after the phrase "On or before" in the first line thereof, (ii)
deleting the word "each" where it appears before the phrase "Cut-Off Date" in
the third line thereof and substituting therefor the word "such" and (iii)
adding a new sentence at the end thereof as follows:
On or before the date that is two Business Days immediately preceding each
Weekly Settlement Date (each, a "Weekly Reporting Date"), Servicer shall
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deliver to the Administrator a report containing the information
described in Exhibit 3.01(b) for the period from Wednesday of the
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immediately preceding week to the Business Day immediately preceding such
Weekly Reporting Date (each, a "Weekly Servicer Report").
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Exhibit 3.01(b) attached to this Amendment is hereby added as an exhibit
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to the Receivables Purchase Agreement.
Section 3.01(b) of the Receivables Purchase Agreement is hereby amended
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by (i) adding the word "Weekly" immediately prior to the phrase "Reporting
Date" where it appears in the second line thereof, (ii) deleting the text of
clause (i) thereof and substituting therefor the following: "the amount of
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Earned Discount that will have accrued in respect of the Capital allocated to
the Earned Discount Period ending on the Weekly Settlement Date immediately
following such Weekly Reporting Date", (iii) adding the phrase "if such
Weekly Reporting Date relates to a Monthly Settlement Date," at the beginning
of clause (ii) thereof and (iv) adding the word "Monthly" immediately prior
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to the phrase "Settlement Date" where it appears in clause (ii) thereof.
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Sections 3.01(c) and (d) of the Receivables Purchase Agreement are hereby
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deleted in their entirety, and the following shall be substituted therefor:
(c) Settlement Date Procedure - Reinvestment Period. On each Weekly
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Settlement Date, the Servicer shall distribute from Collections set aside
pursuant to Sections 1.03(a)(i) through (iii) during the Settlement
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Period in which such Weekly Settlement Date occurs (to the extent not
previously distributed pursuant to this Section 3.01(c)) the following
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amounts in the following order:
(1) to the Administrator, an amount equal to the Earned
Discount accrued during the Earned Discount Period ending on such
Weekly Settlement Date on the portion of the Capital allocated to
such Earned Discount Period, plus any previously accrued Earned
Discount not paid on any prior Weekly Settlement Date that remains
unpaid, which amount shall be distributed by the
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Administrator to the Purchaser for application to such Earned
Discount;
(2) if such Weekly Settlement Date is also a Monthly Settlement
Date, to the Administrator, an amount equal to the Program Fee and
Commitment Fee accrued during the Settlement Period ending on such
Monthly Settlement Date, plus any previously accrued amounts
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described in this clause (2) not paid on any prior Monthly Settlement
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Date that remain unpaid;
(3) if such Weekly Settlement Date is also a Monthly Settlement
Date, to the Servicer, if the Servicer is not Parent, an amount equal
to the Purchaser's Share of the Servicer's Fee accrued during the
Settlement Period ending on such Monthly Settlement Date, plus any
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previously accrued Purchaser's Share of the Servicer's Fee not paid
on a prior Monthly Settlement Date that remains unpaid;
(4) to the Administrator, all other amounts (other than
Capital) then due under this Agreement to the Administrator, the
Purchaser, the Affected Parties or the Indemnified Parties;
(5) to the Administrator, an amount equal to the Excess Amount,
if any, which amount shall be distributed by the Administrator to the
Purchaser for application to the Capital;
(6) if such Weekly Settlement Date is also a Monthly Settlement
Date, to the Servicer, if the Servicer is Parent, an amount equal to
the Purchaser's Share of the Servicer's Fee accrued during the
Settlement Period ending on such Monthly Settlement Date, plus any
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previously accrued Purchaser's Share of the Servicer's Fee not paid
on a prior Monthly Settlement Date that remains unpaid; and
(7) if such Weekly Settlement Date is also a Monthly Settlement
Date, to the Seller, any remaining amounts.
(d) Settlement Date Procedure - Liquidation Period. On each Weekly
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Settlement Date during the Liquidation Period, the Servicer shall
distribute from Purchaser's Share of Collections received or deemed
received pursuant to Section 3.02 during the Settlement Period in which
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such Weekly Settlement Date occurs (to the extent not previously
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distributed pursuant to this Section 3.01(d)), the following amounts in
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the following order:
(1) to the Administrator, an amount equal to the Earned
Discount accrued during the Earned Discount Period ending on such
Weekly Settlement Date on the portion of the Capital allocated to
such Earned Discount Period, plus any previously accrued Earned
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Discount not paid on any prior Weekly Settlement Date that remains
unpaid, which amount shall be distributed by the Administrator to the
Purchaser for application to such Earned Discount;
(2) if such Weekly Settlement Date is also a Monthly Settlement
Date, to the Administrator, an amount equal to the Program Fee and
Commitment Fee accrued during the Settlement Period ending on such
Monthly Settlement Date, plus any previously accrued Program Fee and
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Commitment Fee not paid on a prior Monthly Settlement Date that
remain unpaid;
(3) if such Weekly Settlement Date is also a Monthly Settlement
Date, to the Servicer, if the Servicer is not Parent, an amount equal
to the Purchaser's Share of the Servicer's Fee accrued during the
Settlement Period ending on such Monthly Settlement Date, plus any
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previously accrued Purchaser's Share of the Servicer's Fee not paid
on a prior Monthly Settlement Date that remains unpaid;
(4) to the Administrator, an amount equal to the remaining
Purchaser's Share of Collections until the Capital is reduced to
zero, which amount shall be distributed by the Administrator to the
Purchaser for application to the Capital;
(5) to the Administrator, all other amounts (other than
Capital) then due under this Agreement to the Administrator, the
Purchaser, the Affected Parties or the Indemnified Parties;
(6) if such Weekly Settlement Date is also a Monthly Settlement
Date, to the Servicer, if the Servicer is Parent, an amount equal to
the Purchaser's Share of the Servicer's Fee accrued during the
Settlement Period ending on such Monthly Settlement Date, plus any
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previously accrued Purchaser's Share of the Servicer's Fee not paid
on a prior Monthly Settlement Date that remains unpaid; and
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(7) if such Weekly Settlement Date is also a Monthly Settlement
Date, to the Seller, any remaining amounts.
Section 3.02(b) of the Receivables Purchase Agreement is hereby amended
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by adding the word "Weekly" immediately before the phrase "Settlement Date"
where it appears in clause (iii) thereof.
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Section 4.03 of the Receivables Purchase Agreement is hereby amended by
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(i) deleting the phrase "Settlement Period" where it appears in clause (i)
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thereof and substituting therefor the phrase "Earned Discount Period" and
(ii) deleting the phrase "within thirty days of written notice" where it
appears in the first sentence thereof and substituting therefor the phrase
"upon demand".
Section 5.02(a) of the Receivables Purchase Agreement is hereby amended
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by deleting the phrase "Servicer Report with respect to the immediately
preceding calendar month" where it appears therein and substituting therefor
the phrase "Weekly Servicer Report with respect to the period from Wednesday
of the immediately preceding week to the Business Day immediately preceding
the related Weekly Reporting Date".
Section 6.01(1) and 6.02(i) of the Receivables Purchase Agreement are
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hereby amended by adding the phrase ", Weekly Servicer Report" immediately
after the phrase "Servicer Report" where it appears in the first line
thereof.
Section 10.01(b) of the Receivables Purchase Agreement is hereby amended
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by adding the phrase ", Weekly Servicer Report" after the phrase "Daily
Report" where it appears therein. Section 10.01(i) of the Receivables
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Purchase Agreement is hereby amended by adding the word "Weekly" immediately
prior to the phrase "Settlement Date" where it appears therein. Section
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13.01(b) of the Receivables Purchase Agreement is hereby amended by adding
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the phrase ", any Weekly Servicer Report, any Daily Report" after the phrase
"Servicer Report" where it appears in clause (i) thereof.
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SECTION 4. Cost of Funds Rate; Definitions. The definition of "Earned
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Discount Rate" that appears in Appendix A to the Receivables Purchase
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Agreement is hereby amended by deleting the word "LIBOR" where it appears in
clause (b) thereof and substituting therefor the phrase "Cost of Funds Rate".
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The definition of "Cost of Funds Rate" that appears in Appendix A to the
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Receivables Purchase Agreement is hereby deleted in its entirety, and the
following is hereby substituted therefor:
"Cost of Funds Rate" means for any Earned Discount Period or portion
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thereof the sum of (i) the rate equivalent to the rate (or if more than
one rate, the weighted average of rates) at which Commercial Paper Notes
having a term equal to such Earned Discount Period and to be issued to
fund or maintain the Capital allocated by the Administrator to such
Earned
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Discount Period may be sold by any placement agent or commercial
paper dealer selected by the Administrator or a Conduit Facilitator;
provided, however, if the rate (or rates) as agreed between any such
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agent or dealer and the Purchaser or a Conduit Facilitator with regard to
any Earned Discount Period is a discount rate or (rates), the "Cost of
Funds Rate" for such Earned Discount Period shall be the rate (if more
than one rate, the weighted average of the rates) resulting from
converting such discount rate (or rates) to an interest-bearing
equivalent rate (or rates) per annum, plus (ii) without duplication, the
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commissions and charges related to such Commercial Paper Notes, converted
to an interest-bearing equivalent rate per annum.
Appendix A to the Receivables Purchase Agreement is hereby amended by
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adding the following definitions in appropriate alphabetical order:
"Conduit Facilitator" means any entity that issues Commercial Paper Notes
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the proceeds of which are loaned to Purchaser to fund its investments in
accounts receivables or other financial assets.
"Earned Discount Period" means a period from, and including, a Weekly
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Settlement Date to, but excluding, the Weekly Settlement Date that occurs
four weeks thereafter.
"Monthly Settlement Date" means the first Weekly Settlement Date to occur
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on or after the Reporting Date for each calendar month.
"Weekly Reporting Date" is defined in Section 3.01(a).
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"Weekly Servicer Report" is defined in Section 3.01(a).
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"Weekly Settlement Date" means each Friday, or, if such day is not a
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Business Day, the next succeeding Business Day.
The definitions of "LIBOR" and "Settlement Date" that appear in Appendix A
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are hereby deleted in their entirety. The definition of "Settlement
Period" that appears in Appendix A to the Receivables Purchase Agreement is
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hereby amended by inserting the word "Monthly" before the phrase "Settlement
Date" each time that such phrase appears in clause (ii) thereof.
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The definitions of "Earned Discount", "Earned Discount Rate", "Eurodollar
Rate (Reserve Adjusted)" and "Liquidation Fee" that appear in Appendix A are
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hereby amended by deleting the phrase "Settlement Period" each time it
appears therein and substituting therefor the phrase "Earned Discount
Period".
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Notwithstanding the foregoing amendments, Earned Discount with respect to
the Capital outstanding on the date hereof shall continue to accrue at the
rate set forth in the Receivables Purchase Agreement before giving effect to
this Amendment until the next Settlement Date (as defined in the Receivables
Purchase Agreement before giving effect to this Amendment).
SECTION 5. Excluded Obligor. Receivables owed by Appalachian Regional
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Healthcare shall not be Eligible Receivables, and shall be excluded for
purposes of calculating the Sales-Based Dilution Ratio, Default Ratio and
Delinquency Ratio.
SECTION 6. Special Concentration Limit. Schedule A to the Receivables
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Purchase Agreement is hereby amended by (i) deleting ARH and (ii) adding a
new Obligor as follows:
Walgreens A1/P1 25.00%
SECTION 7. Financial Covenant. Section 7.01(k) of the Receivables
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Purchase Agreement is hereby deleted in its entirety and the following is
substituted therefor:
"(k) Financial Covenant. Parent will maintain at all times during the
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period specified below a Capital Base in an amount not less than the
amount shown below for the period corresponding thereto (excluding any
purchases by Parent of its own stock made between May 20, 1999 and June
1, 2000 pursuant to a consent letter from Fleet Capital Corporation dated
May 20, 1999):
Period Amounts
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June 1, 1999 through December 30, 1999 $ 1,480,000
December 31, 1999 through June 29, 2000 $ 3,000,000
June 30, 2000 through June 29, 2001 $10,000,000
June 30, 2001 and thereafter $20,000,000"
SECTION 8. Representations and Warranties. Each of Parent and Seller
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hereby represents and warrants that, after giving effect to this Amendment,
(i) the representations and warranties contained in Article VI of the
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Receivables Purchase Agreement are true and correct on and as of the date
hereof and shall be deemed to have been made on such date (except that any
such representation or warranty that is expressly stated as being made only
as of a specified earlier date shall be true and correct in all material
respects as of such earlier date) and (ii) no Liquidation Event or Unmatured
Liquidation Event has occurred and is continuing.
SECTION 9. Effectiveness. This Amendment shall become effective upon
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the receipt by the Administrator of (i) copies of this Amendment duly
executed by Seller and Parent, (ii) the fee required to be paid in connection
herewith as set forth in the fee letter dated as of the date hereof with the
Administrator and (iii) a certificate of the Secretary or Assistant Secretary
of each of Seller and Parent certifying (A) that the certificate of
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incorporation and by-laws of such Person previously delivered to the
Administrator have not been amended, except as set forth in such
certificate, or revoked, (B) that attached thereto are resolutions of its
Board of Directors approving this Amendment and (C) the names and true
signatures of the officers authorized on its behalf to execute and deliver
this Amendment.
SECTION 10. Miscellaneous. The Receivables Purchase Agreement , as
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amended hereby, remains in full force and effect. Any reference to the
Receivables Purchase Agreement from and after the date hereof shall be deemed
to refer to the Receivables Purchase Agreement as amended hereby. This
Amendment may be executed in counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken together shall
constitute one and the same agreement. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York. Seller,
on demand, shall pay, or reimburse the Administrator for, all of the costs
and expenses, including legal fees and disbursements, incurred by the
Administrator or Purchaser in connection with this Amendment.
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IN WITNESS WHEREOF, each of the undersigned has caused this Amendment to
be executed and delivered by its duly authorized officer as of the date first
above written.
D&K RECEIVABLES CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Senior Vice President & CFO
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D&K HEALTHCARE RESOURCES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Senior Vice President & CFO
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BLUE KEEL FUNDING, LLC, as Purchaser
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FLEET NATIONAL BANK, as the Administrator
By: /s/Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
Title: Vice President
