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EXHIBIT 10.18
RIDER NO. 5
TO
VENDOR PROGRAM AGREEMENT
DATED AS OF OCTOBER 10, 1991
BETWEEN
GENERAL ELECTRIC CAPITAL CORPORATION ("GE CAPITAL")
AND
PYXIS CORPORATION ("PYXIS")
THIS RIDER is hereby incorporated into and made a part of the above
referenced Vendor Program Agreement, as amended from time to time (the
"Agreement") and is subject to all applicable terms and provisions of the
Agreement. Capitalized terms used and not defined herein shall have the meanings
set forth in the Agreement.
WHEREAS, PYXIS was merged into a wholly-owned subsidiary of Cardinal
Health, Inc. ("CARDINAL"), located at 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxx 00000
pursuant to an Agreement and Plan of Merger, dated February 7, 1996.
WHEREAS, PYXIS has requested that CARDINAL be made a party to the
Agreement.
WHEREAS, PYXIS and CARDINAL have requested that the Agreement be
modified, inter alia, to permit PYXIS to administer both the Owned Accounts and
the Serviced Accounts (as such terms are defined in Section I of Rider No. 3 to
the Agreement) upon PYXIS' attainment of certain performance standards with
respect to the administration of the Owned and Serviced Accounts and to ensure
that GE CAPITAL is afforded the opportunity to finance a specified number of
additional Rental Agreements from January 1, 1997 through March 10, 1999 (the
"Term").
WHEREAS, GE CAPITAL has agreed to modify the Agreement to accommodate
PYXIS' and CARDINAL's requests in the manner set forth below.
NOW THEREFORE, for the consideration set forth herein and in the
Agreement, GE CAPITAL, PYXIS and CARDINAL hereby agree as follows:
A. FINANCING COMMITMENT.
(1) PYXIS and CARDINAL hereby agree that PYXIS shall on a quarterly
basis during the Term offer financing rights to GE CAPITAL for the requisite
number of Rental Agreements, which meet the criteria established pursuant to
Sections (A3) through A(7) below, which shall provide GE CAPITAL with an annual
aggregate of Eighty Million Dollars ($80,000,000) in new fundings during 1997
and 1998 and an aggregate of Fifteen Million Five Hundred Thousand Dollars
($15,500,000) in new fundings during the period from January 1, 1999 through
March 10, 1999. Without limiting the generality of the foregoing, PYXIS shall
use its reasonable efforts to offer financing rights to GE CAPITAL for an
aggregate of Twenty Million Dollars ($20,000,000) in new fundings each calendar
quarter during 1997 and 1998 and an aggregate of Fifteen Million Five Hundred
Thousand Dollars ($15,500,000) in new fundings during the period from January 1,
1999 through March 10, 1999 (each quarterly portfolio of Rental Agreements
offered to GE CAPITAL for financing pursuant to this Section A(1) being
hereinafter referred to as a "Quarterly New Portfolio"). The aggregate dollar
amount of the new fundings described in the preceding two sentences shall be
calculated on the basis of the net present value of the remaining payments due
over the remaining term of such Rental Agreements discounted at the applicable
Standard Rate described in Section C below and shall exclude any accounts
currently on GE CAPITAL's books
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which are refinanced by GE CAPITAL. To the extent that any Rental Agreement
contained in and financed as a part of a Quarterly New Portfolio is subsequently
terminated as a result of an upgrading of Equipment or any other event which
PYXIS and the applicable Customer mutually agree upon, PYXIS, shall (a) pay GE
CAPITAL all accrued payments which are due and unpaid under such terminated
Rental Agreement and (b) offer GE CAPITAL the right to finance another Rental
Agreement having (i) a credit rating classification equal to or better than the
credit rating classification of the terminated Rental Agreement as mutually
determined by PYXIS and GE CAPITAL as of the date of the termination of such
Rental Agreement, (ii) a funding amount equal to or greater than the net present
value of the remaining payments to be made under the terminated Rental Agreement
at the time of termination discounted to present value at the applicable
Standard Rate, (iii) a Standard Rate equal to the Standard Rate of the
terminated Rental Agreement, and (iv) a term equal to or greater than the
remaining term of the terminated Rental Agreement at the time of termination.
(2) The Rental Agreements to be financed by GE CAPITAL pursuant to
Section A(1) will typically have payment terms of forty-eight (48) and sixty
(60) months, although GE CAPITAL may consider other payment terms on a
transaction-by-transaction basis.
(3) PYXIS shall provide GE CAPITAL with all information available to
PYXIS and reasonably requested by GE CAPITAL to enable GE CAPITAL to verify that
PYXIS has correctly classified the related Customer in the credit rating
category of A, B, C or D described below.
(4) Prospective Customers shall include, without limitation, hospitals
having one hundred (100) or more beds and well-established alternate care
facilities. GE CAPITAL and PYXIS shall mutually establish credit rating
classifications of A, B, C and D for prospective Customers. PYXIS shall apply
such guidelines to the classification of each Customer. The credit rating
classifications shall be used to establish the quality of each Quarterly New
Portfolio and to establish the applicable Loss Pool Credit for each Quarterly
New Portfolio. Each Rental Agreement financed by GE CAPITAL pursuant to Section
A(1) (a "New Portfolio Rental Agreement") shall be given a numerical rating
based on its credit rating classification, with New Portfolio Rental Agreements
which are classified as "A" rated credits being given a 4, New Portfolio Rental
Agreements which are classified as "B" rated credits being given a 3, New
Portfolio Rental Agreements which are classified as "C" rated credits being
given a 2, and New Portfolio Rental Agreements which are classified as "D" rated
credits being given a 1.
(5) PYXIS shall provide the credit rating classifications to GE CAPITAL
at the same time as the applicable Rental Agreements are offered to GE CAPITAL
for financing, provided that GE CAPITAL shall receive all such credit rating
classifications at least twenty (20) business days prior to the financing of any
Quarterly New Portfolio by GE CAPITAL. GE CAPITAL shall then review the credit
rating classifications to independently determine its assessment of the credit
rating classification assigned to each Customer. In the event that GE CAPITAL
determines in its reasonable discretion that PYXIS has not correctly classified
a Customer's credit rating, GE CAPITAL shall notify PYXIS in writing within ten
(10) business days after its receipt of the credit rating classifications from
PYXIS. If PYXIS cannot demonstrate to GE CAPITAL's satisfaction that the credit
rating assigned to such Customer was in fact correct within five (5) business
days after PYXIS' receipt of GE CAPITAL's notification, PYXIS shall reclassify
such Customer based upon GE CAPITAL's assessment and shall notify GE CAPITAL in
writing of the reclassification.
(6) PYXIS shall be required to provide a mix of credit rating
classifications in each Quarterly New Portfolio which results in each Quarterly
New Portfolio having a minimum weighted average numerical score (based on the
aggregate dollar amounts of the New Portfolio Rental Agreements contained in
such Quarterly New Portfolio) of 2.9. The weighted average numerical score of
each Quarterly New Portfolio shall be determined by performing the following
calculation for each New Portfolio Rental Agreement contained therein and adding
the resulting values together: divide the dollar amount of each New Portfolio
Rental Agreement by the aggregate dollar amount of the applicable Quarterly New
Portfolio and multiply the resulting value by the numerical rating of one (1)
through (4)
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assigned to such New Portfolio Rental Agreement. GE CAPITAL shall notify PYXIS
in writing within ten (10) business days after its receipt of the credit rating
classifications from PYXIS of its determination of the weighted average
numerical score of the applicable Quarterly New Portfolio. If the weighted
average numerical score of such Quarterly New Portfolio as determined by GE
CAPITAL in its reasonable discretion is below the minimum requirement of 2.9,
PYXIS shall substitute New Portfolio Rental Agreements to bring the weighted
average numerical score of such Quarterly New Portfolio up to the minimum
requirement of 2.9 prior to the financing of such Quarterly New Portfolio.
(7) A Rental Agreement shall be considered eligible for financing by GE
CAPITAL pursuant to Section A(1) provided: (a) the classification of the
prospective Customer when taken together with the classification of the other
New Portfolio Rental Agreements satisfies the requirements regarding the minimum
weighted average numerical score of the Quarterly New Portfolio set forth in
Section A(6) above, (b) the Customer is not in bankruptcy or otherwise
insolvent, (c) an event which constitutes a default under such Rental Agreement
has not occurred other than (i) the Customer's failure to make up to the first
three (3) monthly rental payments due under such Rental Agreement arising solely
from the failure of PYXIS or GE CAPITAL to xxxx the Customer under such Rental
Agreement or (ii) an event of default which GE CAPITAL is willing to waive, (d)
there is no known legal action pending with respect to such Rental Agreement or
the related Customer which involves PYXIS or otherwise impacts the Customer's
ability to pay or perform its obligations under such Rental Agreement, (e) there
are no legally binding agreements between PYXIS and the Customer or other
restrictions that would prohibit such Rental Agreement from being financed by GE
CAPITAL or would otherwise limit or encumber GE CAPITAL's security interest in
the related Equipment or its rights to receive all payments thereunder, (f) the
Rental Agreement has not been written-off or deemed uncollectible by the parties
prior to its financing by GE CAPITAL, and (g) the net present value of the
remaining payments due under any Rental Agreement which is classified as an "A"
or "B" rated credit does not exceed the greater of (i) ten percent (10%) of the
net present value of the remaining payments due under all New Portfolio Rental
Agreements contained in the applicable Quarterly New Portfolio or (ii) Two
Million Dollars ($2,000,000) and the net present value of the remaining payments
due under any Rental Agreement which is classified as a "C" or "D" rated credit
does not exceed the greater of (i) two and one-half percent (2.5%) of the net
present value of the remaining payments due under all New Portfolio Rental
Agreements contained in the applicable Quarterly New Portfolio or (ii) Five
Hundred Thousand Dollars ($500,000).
B. NOTIFICATION OF ASSIGNMENT. The Final Document Package for each New
Portfolio Rental Agreement shall include the sole original copy of such New
Portfolio Rental Agreement and shall be held by PYXIS as agent for GE CAPITAL
until such time as GE CAPITAL has received the aggregate rental payments which
were offered to GE CAPITAL for financing with respect to such New Portfolio
Rental Agreement pursuant to Section A(1) or such New Portfolio Rental Agreement
is terminated pursuant to Section A(1). The sole original copy of such New
Portfolio Rental Agreement shall be stamped on the first page of text and on
each signature page with the caption: "All right and interest of Pyxis
Corporation in and to the payments to be made by the Customer hereunder with
respect to the Equipment marked with an asterisk have been assigned to Pyxis
Financial Services in consideration of Pyxis Financial Services providing
certain funding to Pyxis Corporation and Pyxis Corporation has granted Pyxis
Financial Services a security interest in such Equipment." At such time as PYXIS
takes over the servicing of a New Portfolio Rental Agreement, Pyxis Financial
Services and PYXIS shall jointly direct the applicable Customer to make all
future rental payments to PYXIS notwithstanding any previous notification of
assignment.
C. STANDARD RATES.
(1) The Standard Rates used to calculate the financing proceeds for all
New Portfolio Rental Agreements shall be comprised of the applicable Transaction
Rate and the Termination Fee Spread (each of which are hereinafter defined). GE
CAPITAL shall advise PYXIS on the first business day of each calendar month of
the current Standard Rates. The Standard Rates quoted to PYXIS on a monthly
basis
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shall extend from the fifth (5th) day of each calendar month through the fourth
(4th) day of the following calendar month, except as otherwise provided in the
following sentence. The Standard Rate for a New Portfolio Rental Agreement which
replaces a terminated New Portfolio Rental Agreement pursuant to Section A(1)
shall be the same as the Standard Rate of the terminated New Portfolio Rental
Agreement.
(2) The Standard Rates shall be determined in the following manner. GE
CAPITAL shall on a monthly basis calculate the Transaction Rates which shall be
based on a blend of Treasury Bills ("Treasury") and London Interbank Offered
Rates ("Libor"), as published in THE WALL STREET JOURNAL on the last business
day of the preceding calendar month. The Transaction Rate for a forty-eight (48)
month New Portfolio Rental Agreement shall be equal to a financing spread of
fifty (50) basis points over the following blended rate: (a) twenty-two percent
(22%) of a one year Libor, plus (b) twenty-three percent (23%) of a two year
Treasury, plus (c) twenty-six percent (26%) of a three year Treasury, plus (d)
twenty-nine percent (29%) of a four year Treasury. The Transaction Rate for a
sixty (60) month New Portfolio Rental Agreement shall be equal to a financing
spread of fifty (50) basis points over the following blended rate: (a) sixteen
percent (16%) of a one year Libor, plus (b) eighteen percent (18%) of a two year
Treasury, plus (c) nineteen percent (19%) of a three year Treasury, plus (d)
twenty-two percent (22%) of a four year Treasury, plus (e) twenty-five percent
(25%) of a five year Treasury. A termination fee spread of two hundred forty
(240) basis points (the "Termination Fee Spread") shall then be added to the
applicable Transaction Rate for the purpose of calculating the Standard Rate.
(3) GE CAPITAL shall have no obligation to calculate the financing
proceeds of any New Portfolio Rental Agreement at a rate other than the then
current Standard Rate as described above.
D. FUNDING. GE CAPITAL will fund PYXIS on a quarterly basis for all New
Portfolio Rental Agreements financed by GE CAPITAL during such calendar quarter
via wire transfer to an account designated by PYXIS. Such funding will take
place on the earlier of the third business day after GE CAPITAL's receipt of a
written request by PYXIS or the last business day of such calendar quarter.
E. NEW PORTFOLIO LOSS POOL ACCOUNT AND REMARKETING.
(1) Commencing on the effective date of this Rider, GE CAPITAL and
PYXIS shall, for accounting purposes only, establish a new Loss Pool Account
(the "Quarterly New Portfolio Loss Pool Account") for all New Portfolio Rental
Agreements in each Quarterly New Portfolio.
(2) The establishment of each Quarterly New Portfolio Loss Pool Account
shall not impact the annual Loss Pool Accounts established pursuant to Rider No.
2 to the Agreement which shall remain in full force and effect and shall govern
the disposition of all Rental Agreements subject thereto.
(3) Simultaneously with the payment of the financing proceeds for any
Quarterly New Portfolio, GE CAPITAL shall record in the applicable Quarterly New
Portfolio Loss Pool Account an amount equal to the applicable loss pool credit
(the "Quarterly New Portfolio Loss Pool Credit"), which shall be determined in
accordance with Section E(4) below. GE CAPITAL shall on a quarterly basis give
PYXIS written notice of adjustments to each Quarterly New Portfolio Loss Pool
Account and each Quarterly New Portfolio Loss Pool Balance.
(4) Each Quarterly New Portfolio Loss Pool Credit shall be determined
by calculating the weighted average numerical score of the applicable Quarterly
New Portfolio and multiplying the applicable percentage set forth on Exhibit A
attached hereto for such weighted average numerical score by the dollar amount
of the New Portfolio Rental Agreements (a) funded by GE CAPITAL during the
applicable calendar quarter and (b) substituted for terminated New Portfolio
Rental Agreements pursuant to Section A(1) during the applicable calendar
quarter. GE CAPITAL shall notify PYXIS in writing of each Quarterly New
Portfolio Loss Pool Credit prior to the financing of the applicable Quarterly
New Portfolio.
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(5) Upon the occurrence of a Rental Agreement Default under any New
Portfolio Rental Agreement or any Owned Account administered by GE CAPITAL which
arises directly from the applicable Customer's insolvency, inability to pay
debts as they mature, failure to operate as a going concern, filing under Title
11 of the United States Code or any successor or similar federal or state
statute, assignment for the benefit of creditors, appointment of a receiver,
dissolution or change in a material portion of its stock or asset ownership (a
"Credit Related Default"), GE CAPITAL shall give PYXIS written notice thereof
and of the applicable Rental Agreement Default Amount. Upon the occurrence of a
Credit Related Default under any New Portfolio Rental Agreement or any Owned
Account administered by PYXIS, PYXIS shall give GE CAPITAL written notice
thereof and of the applicable Rental Agreement Default Amount. Within ten (10)
days of receipt of such notice, PYXIS shall (i) pay GE CAPITAL such Rental
Agreement Default Amount, but not more than the applicable Quarterly New
Portfolio Loss Pool Balance or applicable Loss Pool Balance and (ii) give GE
CAPITAL written notice of the Estimated Remarketing Proceeds of the Equipment
governed by such New Portfolio Rental Agreement or Owned Account, provided that
the amount of the Estimated Remarketing Proceeds may be established by GE
CAPITAL if written notice thereof is not provided by PYXIS in a timely manner.
(6) Upon receipt of the applicable Rental Agreement Default Amount (or
if the applicable Quarterly New Portfolio Loss Pool Balance or applicable Loss
Pool Balance is less than the applicable Rental Agreement Default Amount, upon
receipt of the applicable Quarterly New Portfolio Loss Pool Balance or
applicable Loss Pool Balance), GE CAPITAL shall (i) subtract an amount equal to
the applicable Rental Agreement Default Amount from the applicable Quarterly New
Portfolio Loss Pool Balance or applicable Loss Pool Balance (or if the
applicable Quarterly New Portfolio Loss Pool Balance or the applicable Loss Pool
Balance is less than such Rental Agreement Default Amount, shall reduce the
applicable Quarterly New Portfolio Loss Pool Balance or the applicable Loss Pool
Balance to zero) and (ii) add an amount equal to the Estimated Remarketing
Proceeds to the applicable Quarterly New Portfolio Loss Pool Balance or the
applicable Loss Pool Balance. PYXIS shall make the Equipment legally available
and proceed to remarket the Equipment in accordance with Section 12 of the
Agreement and the remarketing proceeds actually received by PYXIS shall be
distributed in accordance with Section 12 of the Agreement; provided that any
excess referred to in Section 12(b)(iii) of the Agreement shall be retained by
PYXIS. GE CAPITAL's reimbursement to PYXIS for out-of-pocket costs, including
sales commissions, incurred in connection with PYXIS' de-installation, removal,
appraisal, refurbishing, storage (including insurance during storage) and
disposition of the Equipment shall not exceed twenty percent (20%) of the
Estimated Remarketing Proceeds for each piece of Equipment without GE CAPITAL's
prior written approval. GE CAPITAL will adjust the applicable Quarterly New
Portfolio Loss Pool Balance or the applicable Loss Pool Balance if the
remarketing proceeds actually received by PYXIS are more than ten percent (10%)
higher or lower than the Estimated Remarketing Proceeds.
(7) In the event that the applicable Rental Agreement Default Amount is
greater than the sum of the applicable Quarterly New Portfolio Loss Pool Balance
or the applicable Loss Pool Balance and the remarketing proceeds related to such
New Portfolio Rental Agreement or Owned Account which are retained by GE CAPITAL
pursuant to Section 12 of the Agreement, GE CAPITAL shall be entitled to receive
any future collections in regard of such New Portfolio Rental Agreement or Owned
Account, up to an amount equal to GE CAPITAL's full recovery of the applicable
Rental Agreement Default Amount, and any remaining sums received with respect to
such New Portfolio Rental Agreement or Owned Account shall be retained by PYXIS.
(8) Upon the occurrence of a Rental Agreement Default under any New
Portfolio Rental Agreement or Owned Account administered by GE CAPITAL which
does not constitute a Credit Related Default, GE CAPITAL shall give PYXIS
written notice thereof and of the applicable Rental Agreement Default Amount.
Upon the occurrence of a Rental Agreement Default under any New Portfolio Rental
Agreement or Owned Account administered by PYXIS which does not constitute a
Credit Related Default, PYXIS shall give GE CAPITAL written notice thereof and
of the applicable Rental Agreement Default Amount. Within ten (10) days of
receipt of such notice, PYXIS, at its option, shall elect either to (i) pay to
GE CAPITAL the periodic payments described in Section I(3) for up to a total of
six (6) cure payments
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or (ii) pay GE CAPITAL the applicable Rental Agreement Default Amount. Any
payments made by PYXIS pursuant to this Section E(8) shall be made without
regard to, and shall not reduce or otherwise impact, the applicable Quarterly
New Portfolio Loss Pool Account or the applicable Loss Pool Account.
(9) Provided that GE CAPITAL has received from PYXIS the applicable
Rental Agreement Default Amount, GE CAPITAL shall transfer and assign all of its
rights under and interest in such New Portfolio Rental Agreement or Owned
Account and the Equipment governed thereby to PYXIS on an AS-IS WHERE-IS basis,
without recourse or warranty.
F. PYXIS ADMINISTRATION OF NEW PORTFOLIO RENTAL AGREEMENTS AND NEW
SERVICED ACCOUNTS.
(1) GE CAPITAL shall perform the account administration for all New
Portfolio Rental Agreements as well as all existing Owned Accounts, all existing
Serviced Accounts administered by GE CAPITAL as of April 1, 1997 (the "Existing
Serviced Accounts") and all new Serviced Accounts referred to GE CAPITAL by
PYXIS on or after April 1, 1997 (the "New Serviced Accounts"), in accordance
with the terms and conditions of Section I(i) of Rider No. 3 to the Agreement,
until the occurrence of the events specified in Sections F(2), F(3) , G(1) and
H(1) respectively. In consideration of PYXIS' agreement to make the payment
described in Section F(4), GE CAPITAL agrees not to charge the Service Rate
described in Section I(iii) of Rider No. 3 with respect to its administration of
the New Portfolio Rental Agreements. To the extent that GE CAPITAL has charged
or does charge the Service Rate described in Section I(iii) of Rider No. 3 with
respect to its administration of the New Portfolio Rental Agreements, GE CAPITAL
agrees to make an adjustment to the financing proceeds paid or payable to PYXIS
and to pay such adjusted amount within three (3) business days of receipt of
notice from PYXIS requesting such adjustment. In consideration of GE CAPITAL's
agreement to administer the New Serviced Accounts, until PYXIS is able to
commence servicing such accounts pursuant to this Section F, PYXIS agrees to pay
GE CAPITAL in arrears a prorata monthly portion of the total Service Rate
payment for each New Serviced Account which shall be calculated as follows. The
total Service Rate payment for each New Serviced Account shall be equal to the
net present value of the payments to be made by the applicable Customer under
such New Serviced Account discounted at the applicable Standard Rate, less the
net present value of the payments to be made by the applicable Customer under
such New Serviced Account discounted at the applicable Standard Rate less two
hundred and fifty (250) basis points. Commencing on the fifth business day of
May 1997 and continuing on the fifth business day of each month thereafter until
PYXIS has assumed the account administration of such New Serviced Accounts,
PYXIS shall pay a prorata monthly portion of the total Service Rate payment for
each New Serviced Account, with each prorata monthly payment representing (i)
one thirty-sixth of the total Service Rate payment for a New Serviced Account
having a term of thirty-six (36) months, (ii) one forty-eighth of the total
Service Rate payment for a New Serviced Account having a term of forty-eight
(48) months, and (iii) one sixtieth of the total Service Rate payment for a New
Serviced Account having a term of sixty (60) months. PYXIS's obligation to make
any further prorata monthly Service Rate payments shall cease on the date on
which PYXIS commences servicing such New Serviced Accounts. In the event PYXIS
commences servicing such New Serviced Accounts on a day other than the last day
of a month, the amount to be paid by PYXIS to GE CAPITAL shall be adjusted to an
amount equal to the prorata monthly portion of the total Service Rate payment
described above multiplied by a fraction the numerator of which shall be the
number of days that transpire in the month prior to PYXIS' commencement of
servicing such New Serviced Accounts and the denominator of which shall be the
number of days in such month.
(2) PYXIS shall develop sufficient capabilities to service the New
Portfolio Rental Agreements in accordance with servicing standards to be
mutually developed by PYXIS and GE CAPITAL; provided, however, it is understood
and agreed that such servicing standards shall be comparable to the current
standards used by GE CAPITAL in servicing the Owned Accounts and Existing
Serviced Accounts. Said servicing standards shall include, but not be limited
to, state-of-the-art information systems, customized invoicing capabilities,
asset management capabilities, risk management audit procedures and superior
customer service support. In connection therewith, PYXIS shall be required
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to effectively (i) credit review, approve or decline, classify by credit rating
category and communicate to GE CAPITAL the appropriate designations (and any
relevant related information) with respect to each Customer under a proposed New
Portfolio Rental Agreement, (ii) establish appropriate systems for account
administration, (iii) book each New Portfolio Rental Agreement, (iv) invoice and
perform collection activities for each New Portfolio Rental Agreement, (v)
process payments received under each New Portfolio Rental Agreement, (vi)
establish appropriate systems to track each Quarterly New Portfolio by Customer
and by Equipment, (vii) provide superior Customer service support, (viii)
provide the customized monthly reports requested by GE CAPITAL with respect to
each Quarterly New Portfolio described in greater detail in Exhibit B annexed
hereto, and (ix) provide overall account management. The measurements for
satisfactory performance of each of the aforementioned services shall be set
forth in Exhibit B annexed hereto.
(3) PYXIS has determined that it will have developed by July 1, 1997
sufficient capabilities to service the New Portfolio Rental Agreements and New
Serviced Accounts in accordance with Section F(2) and Exhibit B, and by
execution of this Agreement, PYXIS hereby notifies GE CAPITAL of its election to
commence servicing on July 1, 1997 the New Serviced Accounts and all New
Portfolio Rental Agreements financed by GE CAPITAL on and after July 1, 1997
(the "Post July 1 New Portfolio Rental Agreements").
(4) In consideration of GE CAPITAL's agreement not to charge a Service
Rate with respect to its administration of any New Portfolio Rental Agreement,
PYXIS hereby covenants and agrees to pay to GE CAPITAL the amount of One Million
Nine Hundred Seven Thousand Eight Hundred and Eighty Dollars ($1,907,880) (the
"Rate Differential Fee"). The Rate Differential Fee will be paid in installments
as provided in Exhibit C attached hereto.
(5) In the event that GE CAPITAL performs the account administration
for any Post July 1 New Portfolio Rental Agreement on or after July 1, 1997,
PYXIS shall also pay to GE CAPITAL an amount equal to Three Hundred Seventeen
Thousand Nine Hundred and Eighty Dollars ($317,980) for every full month in
which GE CAPITAL continues to service the Post July 1 New Portfolio Rental
Agreements. In the event PYXIS commences servicing the Post July 1 New Portfolio
Rental Agreements on a day other than the last day of a month, the amount to be
paid by PYXIS to GE CAPITAL shall be adjusted to an amount equal to $317,980
multiplied by a fraction the numerator of which shall be the number of days that
transpire in the month prior to PYXIS' commencement of servicing the Post July 1
New Portfolio Rental Agreements and the denominator which shall be the number of
days in such month. During 1997, one-half of each monthly payment of $317,980
(or a prorata portion thereof, if applicable) will be paid on the fifth business
day after the last day of the applicable month. The remaining one-half of each
monthly payment to be made by PYXIS during 1997 (the "Monthly Payment Pool")
will be paid during the period in which the account administration for the Post
July 1 New Portfolio Rental Agreements is being transitioned from GE CAPITAL to
PYXIS. Commencing on the fifth business day after July 31, 1997 and continuing
on the fifth business day after the last day of each month thereafter until
PYXIS has assumed the account administration of the Post July 1 New Portfolio
Rental Agreements, a portion of the Monthly Payment Pool will be paid to GE
CAPITAL in an amount determined by multiplying the total amount of the Monthly
Payment Pool by a fraction the numerator of which shall be the total number of
New Portfolio Rental Agreements (including the Post July 1 New Portfolio Rental
Agreements), Serviced Accounts and Owned Accounts being administered by PYXIS as
of the last day of the month preceding the payment and the denominator of which
shall be the total number of New Portfolio Rental Agreements (including the Post
July 1 New Portfolio Rental Agreements), Serviced Accounts and Owned Accounts
being administered by PYXIS as of the last day of the month preceding the
payment, plus the total number of remaining New Portfolio Rental Agreements
(including the Post July 1 New Portfolio Rental Agreements), Serviced Accounts
and Owned Accounts being administered by GE CAPITAL as of the last day of the
month preceding the payment, and then subtracting from the product of such
multiplication the aggregate amount of previous payments made to GE CAPITAL from
the Monthly Payment Pool. Any undisbursed portion of the Monthly Payment Pool
will be paid to GE CAPITAL no later than December 31, 1997, regardless of
whether or not PYXIS has commenced
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servicing the Post July 1 New Portfolio Rental Agreements by December 31, 1997.
In the event that PYXIS does not commence servicing the Post July 1 New
Portfolio Rental Agreements by December 31, 1997, PYXIS shall commence paying GE
CAPITAL a lump sum payment of Three Hundred Seventeen Thousand Nine Hundred and
Eighty Dollars ($317,980) for every full month thereafter in which GE CAPITAL
continues to service the Post July 1 New Portfolio Rental Agreements. Such
payments will be made on the fifth business day after the last day of the
applicable month. In the event PYXIS commences servicing the Post July 1 New
Portfolio Rental Agreements on a day other than the first day of the month, the
amount to be paid by PYXIS shall be prorated in the manner described in the
second sentence of this Section F(5).
G. PYXIS ADMINISTRATION OF EXISTING SERVICED ACCOUNTS.
(1) PYXIS has determined that it will have developed by July 25, 1997
sufficient capabilities to service the Existing Serviced Accounts in accordance
with Section F(2) and Exhibit B, and by execution of this Agreement, PYXIS
hereby notifies GE CAPITAL of its election to commence servicing all Existing
Serviced Accounts on and after July 25, 1997.
(2) Within fifteen (15) business days following the date on which PYXIS
commences servicing the Existing Serviced Accounts, GE CAPITAL shall remit to
PYXIS any unamortized Service Rate payments, calculated on the basis of a loan
amortization method, which were made by PYXIS pursuant to Sections I(ii) and
I(iii) of Rider No. 3 with respect to the Existing Serviced Accounts.
H. PYXIS ADMINISTRATION OF ALL OTHER OWNED ACCOUNTS.
(1) Provided that PYXIS has commenced servicing the Post July 1 New
Portfolio Rental Agreements and the Serviced Accounts in accordance with
Sections F(2), G(1) and Exhibit B, PYXIS shall be entitled to deliver a ninety
(90) day written notice to GE CAPITAL of its election to commence servicing all
additional Owned Accounts and New Portfolio Rental Agreements after the
effective date of such written notice.
I. TRANSITION OF ACCOUNT ADMINISTRATION.
(1) In order to effect a smooth transition in account administration
from GE CAPITAL to PYXIS, the parties agree to comply with the delivery and
response time periods set forth in the Conversion Plan (identified and defined
in Exhibit D attached hereto). It is understood and agreed that the ability of
PYXIS to complete the transition is contingent upon the timely performance of GE
CAPITAL in accordance with the Conversion Plan and any delay by GE CAPITAL in
providing the information to PYXIS in accordance with the Conversion Plan may
result in corresponding delays in the complete payment of (i) the Conversion
Support Pool (identified and defined in Exhibit C attached hereto) and (ii) all
amounts, if any, owed by PYXIS to GE CAPITAL pursuant to Section F(5) of this
Rider No. 5. Accordingly, if it is determined by the Management Committee
pursuant to Section G(vii) of Rider No. 3 that GE CAPITAL failed to timely
perform any of its responsibilities or to provide any information to PYXIS which
is required under the Conversion Plan for reasons other than PYXIS's failure to
timely perform its responsibilities or to provide information to GE CAPITAL
which is required under the Conversion Plan, then PYXIS' obligation to remit the
Conversion Support Pool payments or the monthly payments described in Section
F(5) of this Agreement shall be stayed until such time as GE CAPITAL furnishes
the service or information required under the Conversion Plan. If it is
determined by the Management Committee pursuant to Section G(vii) of Rider No. 3
that GE CAPITAL's inability to perform any of its responsibilities or to provide
any information to PYXIS which is required under the Conversion Plan resulted
from PYXIS's failure to timely perform its responsibilities or to provide
information which is required under the Conversion Plan, then the preceding
sentence shall not apply and payments shall be made by PYXIS to GE CAPITAL in
accordance with the terms of Exhibit C and Section F(5). In addition, the
parties agree, in such event, to work diligently to correct any basis for delay
in the performance of the Conversion Plan. GE CAPITAL shall dedicate sufficient
personnel to assist
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with the transition in account administration and shall provide monthly updates
of the service history of each account scheduled to be transferred until the
transition of such accounts. The Relationship Managers appointed pursuant to
Section F of Rider No. 3 to the Agreement shall be responsible for managing the
smooth transition in account administration from GE CAPITAL to PYXIS.
(2) In providing account administration services for the Owned Accounts
and the New Portfolio Rental Agreements, PYXIS shall perform in a
non-discriminatory manner, utilizing the same state of the art practices and
procedures as are used in administering its own portfolio of accounts. Without
limiting the generality of the foregoing, PYXIS' practices and procedures shall
not deviate from the servicing standards described in Section F(2) and Exhibit
B.
(3) In connection with providing account administration services for
the Owned Accounts and the New Portfolio Rental Agreements, PYXIS will remit to
the appropriate taxing authority all sales, use or property taxes which may
apply to the related rental of the Equipment and which are assessed or imposed
on or after the date PYXIS assumes responsibility for such account
administration, and will, upon request, provide GE CAPITAL in connection with
the funding or administration of such Owned Accounts and New Portfolio Rental
Agreements with proof of such payment as promptly as possible. PYXIS agrees to
release GE CAPITAL from tax administration liability for all sales or use taxes
which may apply to the related rental of the Equipment and which are assessed or
imposed on or after the date PYXIS assumes responsibility for such account
administration. PYXIS hereby agrees to indemnify GE CAPITAL against all losses,
claims or liabilities (including interest and penalties) which result from the
failure on PYXIS' part on or after the date PYXIS assumes the account
administration services for such Owned Accounts and New Portfolio Rental
Agreements to timely remit such taxes to the appropriate taxing authority on or
after the date PYXIS assumes account administration service for the Owned
Accounts and the New Portfolio Rental Agreements. GE CAPITAL will, upon request,
provide proof of timely remittance of all such sales or use taxes which apply to
the related rental of the Equipment which were due for the period prior to the
assumption of account administration by PYXIS.
(4) In consideration of GE CAPITAL's agreement to allow PYXIS to
administer the Owned Accounts and the New Portfolio Rental Agreements, PYXIS
agrees to remit to GE CAPITAL, when and as due, all monthly payments due under
any Owned Accounts being administered by PYXIS and any New Portfolio Rental
Agreements being administered by PYXIS (other than payments related to service
agreements GE CAPITAL did not finance) WHETHER OR NOT ACTUALLY COLLECTED BY
PYXIS, unless the failure to collect such payments results directly from a
Credit Related Default. If a Customer's failure to make a monthly payment under
an Owned Account or a New Portfolio Rental Agreement results from an agreement
between PYXIS and such Customer that such payment may be deferred until the
occurrence of a particular event (as described in Section 3(c) of Rider No. 4 to
the Agreement), then the related payments made by PYXIS pursuant to this Section
I(4) shall be deemed to be cure payments for purposes of Section 3(c) of Rider
No. 4 to the Agreement and shall be subject to the terms and conditions thereof.
(5) Notwithstanding anything herein to the contrary, if at the time
PYXIS commences servicing the Post July 1 New Portfolio Rental Agreements and
New Serviced Accounts, any Customer under the Post July 1 New Portfolio Rental
Agreements or New Serviced Accounts is also a Customer under any other New
Portfolio Rental Agreement, any Existing Serviced Account or any Owned Account,
then PYXIS, at its option, shall also have the right to commence servicing the
New Portfolio Rental Agreement, Existing Serviced Account and/or Owned Account
of such Customer at the same time as it commences servicing the Post July 1 New
Portfolio Rental Agreements or New Serviced Accounts of such Customer. Likewise,
if at the time PYXIS commences servicing the Existing Serviced Accounts, any
Customer under the Existing Serviced Accounts is also a Customer under any New
Portfolio Rental Agreement or any Owned Account, then PYXIS, at its option,
shall also have the right to commence servicing the New Portfolio Rental
Agreement or Owned Account of such Customer at the same time as it commences
servicing the Existing Serviced Accounts of such Customer. In consideration of
GE CAPITAL's agreement to allow PYXIS to begin servicing any additional New
Portfolio Rental Agreements or Owned Accounts at the same time as it commences
servicing the Post July 1 New Portfolio Rental
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Agreements, the New Serviced Accounts and/or the Existing Serviced Accounts of
the same Customer, PYXIS agrees to remit to GE CAPITAL, when and as due, all
monthly payments due under any such New Portfolio Rental Agreements or Owned
Accounts being administered by PYXIS (other than payments related to service
agreements GE CAPITAL did not finance) WHETHER OR NOT ACTUALLY COLLECTED BY
PYXIS, unless the failure to collect such payments results directly from a
Credit Related Default.
(6) GE CAPITAL shall use its best efforts to provide to PYXIS the
original copies of the Rental Agreements which comprise the Owned Accounts, the
New Portfolio Rental Agreements (including the Post July 1 New Portfolio Rental
Agreements), and the Serviced Accounts on or prior to the date PYXIS commences
administering each such account. The original copies of the Rental Agreements
which comprise each Owned Account and each New Portfolio Rental Agreement
(including each Post July 1 New Portfolio Rental Agreement) which GE CAPITAL
provides to PYXIS shall be stamped by GE CAPITAL on the first page of text and
on each signature page with the caption: "All right and interest of Pyxis
Corporation in and to the payments to be made by the Customer hereunder have
been assigned to Pyxis Financial Services in consideration of Pyxis Financial
Services providing certain funding to Pyxis Corporation and Pyxis Corporation
has granted Pyxis Financial Services a security interest in such Equipment."
(J) AUDITS.
(1) During the Term GE CAPITAL shall have the right, on a quarterly
basis, upon forty-eight (48) hours advance written notice to PYXIS, to conduct
an audit of PYXIS' account administration processes. Any such audit shall
include a review of all Owned Accounts and New Portfolio Rental Agreements to
determine whether PYXIS has performed in compliance with the predetermined
standards described in Section F(2) and Exhibit B. Such audit shall include, but
not be limited to, the credit rating classifications and the numerical scoring
of the New Portfolio Rental Agreements collection activity, cash application,
defaults and delinquencies, and repossession and remarketing activity.
(2) GE CAPITAL shall conduct the audits in a professional manner, with
the objective, where possible, of causing the least amount of disruption to the
day-to-day operations of PYXIS. Any information reviewed by GE CAPITAL while
conducting such audits shall be kept confidential by GE CAPITAL and shall be
disclosed by GE CAPITAL to third parties only if required by applicable law.
(K) TERMINATION. In the event that either CARDINAL's credit rating
falls below BBB, as defined by Standard & Poors, or PYXIS' account
administration falls below the mutually agreed upon predetermined standards
described in Section F(2) and Exhibit B, and PYXIS fails to correct any
deficiencies in its account administration within thirty (30) business days
following receipt of written notice from GE CAPITAL identifying such
deficiencies, GE CAPITAL shall have the right to take either of the following
actions. GE CAPITAL may, upon ten (10) business days written notice, assume the
administration of all Owned Accounts and New Portfolio Rental Agreements
(including the Post July 1 New Portfolio Rental Agreements). Should GE CAPITAL
elect this option, PYXIS shall remit to GE CAPITAL a service fee for each Post
July 1 New Portfolio Rental Agreement in an amount to be mutually agreed upon by
PYXIS and GE CAPITAL. GE CAPITAL may also elect, upon ten (10) business days
written notice, to terminate the Agreement. Should GE CAPITAL elect this option,
PYXIS shall remit to GE CAPITAL on the termination date a termination fee (the
"Termination Fee") equal to (a) the Aggregate Portfolio Net Book Value (as
hereinafter defined), plus (b) the net present value of the remainder of the
monthly payment amounts that would be due under the New Portfolio Rental
Agreements PYXIS is committed to provide to GE CAPITAL pursuant to Section A
discounted at a rate equal to the Transaction Rate for a sixty (60) month New
Portfolio Rental Agreement, less the net present value of the remainder of the
monthly payment amounts that would be due under the New Portfolio Rental
Agreements PYXIS is committed to provide to GE CAPITAL pursuant to Section A
discounted at a rate equal to the sum of (i) the Transaction Rate for a sixty
(60) month New Portfolio Rental Agreement and
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(ii) two hundred and ninety (290) basis points. The Aggregate Portfolio Net Book
Value shall mean (i) the aggregate amount due and owing under all Owned Accounts
and all New Portfolio Rental Agreements financed by GE CAPITAL as of the
termination date, less payments made by PYXIS to GE CAPITAL pursuant to Sections
I(4) and I(5) hereof and Section 3(c) of Rider No. 4 to the Agreement, including
interest on the unpaid balance, and (ii) all remaining scheduled payments under
such Owned Accounts and New Portfolio Rental Agreements, discounted to present
value at the applicable Standard Rate. Upon receipt of the Termination Fee, GE
CAPITAL shall transfer to PYXIS, on an AS-IS WHERE-IS basis without recourse or
warranty, all of its rights under and interest in the Owned Accounts and the New
Portfolio Rental Agreements and the Equipment subject thereto.
L. TRADEMARKS.
(1) During any period in which GE CAPITAL performs account
administration for any Owned Accounts, New Portfolio Rental Agreements or
Serviced Accounts, PYXIS shall permit GE CAPITAL to use certain trademarks of
PYXIS and the assumed business or trade name "PYXIS Financial Services" in
connection with such account administration. Any use of such trademarks or of
PYXIS' name in connection with such account administration shall be subject to
PYXIS' policy for sharing intellectual property rights. GE CAPITAL acknowledges
the ownership of such trademarks in PYXIS and the value of the goodwill
associated therewith and agrees that it will do nothing inconsistent with such
ownership. GE CAPITAL acknowledges PYXIS's right to dictate the nature and
quality of GE CAPITAL's use of such trademarks and agrees to comply with any
instructions received from PYXIS with respect to the use and application of such
trademarks.
(2) During the period in which GE CAPITAL continues to administer any
Owned Account, New Portfolio Rental Agreement or Serviced Account, PYXIS shall
not grant any other party any rights to register under the assumed business name
"PYXIS Financial Services". Upon the expiration of the last Owned Account, New
Portfolio Rental Agreement or Serviced Account which is administered by GE
CAPITAL, GE CAPITAL shall terminate its registration and use of the assumed
business name PYXIS Financial Services. During the period in which both PYXIS
and GE CAPITAL may be administering Rental Agreements under the name "PYXIS
Financial Services", each party agrees that it shall not take any action which
might jeopardize the other party's good standing or ability to administer Rental
Agreements under said name.
M. EXCLUSIVITY.
(1) In the event that prior to the expiration of the Term, PYXIS shall
elect to outsource the account administration of any Serviced Accounts, PYXIS
shall notify GE CAPITAL of such event and shall offer GE CAPITAL the right of
first refusal to administer the Serviced Accounts for which PYXIS proposes to
outsource the account administration
(2) Prior to the expiration of the Term, in the event that in any given
calendar quarter the product resulting from the multiplication of (i) the
aggregate dollar amount of the Rental Agreements PYXIS elects to finance with a
third party having a term which is greater than thirty-six (36) months entered
into by PYXIS during such calendar quarter by (ii) .5 exceeds $20,000,000 (the
"Excess Amount"), then GE CAPITAL shall have the right of first refusal to
finance a portion of such Rental Agreements totaling the Excess Amount.
(3) In the event that GE CAPITAL does not notify PYXIS in writing of
its decision to administer any such Serviced Accounts, as described in Section
M(1) above, or to finance any such Rental Agreements, as described in Section
M(2) above, within fifteen (15) business days of receipt of PYXIS' offer or if
GE CAPITAL does not offer PYXIS equivalent pricing, terms and conditions as
PYXIS has been quoted in writing by a third party (with a copy of such written
quote to be provided to, and subject to verification by, GE CAPITAL), PYXIS may
outsource the administration of such Serviced Accounts, as
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described in Section M(1) above, or finance such Rental Agreements, as described
in Section M(2) above, with a third party.
N. PARTIES TO THIS AGREEMENT. PYXIS, CARDINAL and GE CAPITAL agree that
the obligations of PYXIS described in the Agreement are joint and several
obligations of PYXIS and CARDINAL. In the event that PYXIS fails to perform any
of its obligations under the Agreement, GE CAPITAL may demand performance by
CARDINAL who waives notice of default by PYXIS and any requirement that GE
CAPITAL be required to first proceed against PYXIS or exhaust any collateral or
security of PYXIS before requiring CARDINAL to perform any of the obligations of
PYXIS under the Agreement.
O. NO FURTHER AMENDMENTS. Except as specifically amended herein, all
other provisions of the Agreement and the obligations of the parties pursuant
thereto shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Rider No. 5 to be
executed by their duly authorized representatives as of the dates set forth
below.
PYXIS CORPORATION GENERAL ELECTRIC CAPITAL CORPORATION
By: By:
---------------------------- ------------------------------------
Title: Title:
------------------------- ---------------------------------
Date: Date:
-------------------------- ----------------------------------
CARDINAL HEALTH, INC.
By:
----------------------------
Title:
-------------------------
Date:
--------------------------
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EXHIBIT A
Averaging Method: A=4; B=3; C=2; D=1
------------------------------------------------------ -----------------------------------------------------
Quarterly New Portfolio Weighted Average Numerical
Score Greater than or Equal to Loss Pool Credit
------------------------------------------------------ -----------------------------------------------------
3.4 2.5%
------------------------------------------------------ -----------------------------------------------------
3.3 5.0%
------------------------------------------------------ -----------------------------------------------------
3.2 7.5%
------------------------------------------------------ -----------------------------------------------------
3.1 10.0%
------------------------------------------------------ -----------------------------------------------------
3.0 12.5%
------------------------------------------------------ -----------------------------------------------------
2.9* 15.0%
------------------------------------------------------ -----------------------------------------------------
*Minimum
Credit Criteria
Credit Ratings of A-D Will Be Assigned to PYXIS Customers Based on Ratings
Guidelines and Credit Criteria Mutually Established by GE CAPITAL and PYXIS
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EXHIBIT B
Invoicing
---------
- PYXIS shall invoice and perform collections activities for each payment
obligation as it becomes due under the applicable Owned Account and New
Portfolio Rental Agreement.
- Each Owned Account and New Portfolio Rental Agreement will be invoiced no
later than thirty (30) days prior to the due date of any financed payment
obligation.
- PYXIS has the option to send late notice invoices via regular mail, fifteen
(15) days after the due date of the respective payment obligation for any
Owned Account or New Portfolio Rental Agreement.
- PYXIS has the option to send delinquent notices via regular mail if a
payment obligation for any Owned Account or New Portfolio Rental Agreement
is thirty (30) days past due.
- PYXIS is required to send default notices via certified mail for any Owned
Account or New Portfolio Rental Agreement it chooses to default.
- PYXIS is required to send copies of all default notices to GE CAPITAL for
any Owned Account or New Portfolio Rental Agreement.
Collection
----------
- PYXIS will use reasonable efforts to make collection calls in intervals of
ten (10) days for a payment obligation under any Owned Account or New
Portfolio Rental Agreement that is more than thirty (30) days past its
scheduled due date.
- PYXIS will document each collection call for any Owned Account or New
Portfolio Rental Agreement and classify it as either administrative or
collection issue.
- Collection calls may be made on a more frequent basis than referenced above
with respect to any payment obligation for any Owned Account or New
Portfolio Rental Agreement that is more than forty-five (45) days past its
scheduled due date to ensure that promises for payment are adhered to.
Processing and Remittance
-------------------------
- Payments received by PYXIS with respect to each payment obligation under a
New Portfolio Rental Agreement or an Owned Account will be promptly
remitted to an electronic lockbox which shall be accessible only to PYXIS
or CARDINAL.
- PYXIS will identify all payments deposited into such electronic lockbox for
an Owned Account or New Portfolio Rental Agreement by Customer name,
invoice number, account number, dollar amount received and other
identifying traits used by PYXIS.
Aging and Delinquency Reports
-----------------------------
- PYXIS will provide GE CAPITAL with periodic aging reports regarding all New
Portfolio Rental Agreements and all Owned Accounts on not less than a
monthly basis which shall describe past due payment obligations by Customer
name, amount past due, gross payments outstanding ,and the net book
balance. For each Quarterly New Portfolio, PYXIS will identify each
Customer with the date of the funding and/or an assigned New Quarterly
Portfolio number. For Owned Accounts, PYXIS will reference GE CAPITAL's
account schedule numbers and/or an assigned Loss Pool Account number.
- PYXIS will provide GE CAPITAL with periodic delinquency reports regarding
all New Portfolio Rental Agreements and all Owned Accounts on not less than
a monthly basis which shall contain collection comments for those payment
obligations that are sixty one (61) days or more past due.
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Reports and Data Tapes Regarding New Portfolio Rental Agreements and Owned
--------------------------------------------------------------------------
Accounts
--------
- On the fifth business day of each calendar quarter, PYXIS shall deliver to
GE CAPITAL a list of all New Portfolio Rental Agreements, identified by
schedule number, funded by GE CAPITAL during the preceding calendar quarter
or substituted for terminated New Portfolio Rental Agreements under Section
A(1), together with the make, model, and serial numbers of all Equipment
subject to such New Portfolio Rental Agreements in which GE CAPITAL has
been granted a security interest.
- On the fifth business day of each calendar quarter, PYXIS shall provide GE
CAPITAL with an electronic data tape on servicing history for all Owned
Accounts and all New Portfolio Rental Agreements (including all Post July 1
New Portfolio Rental Agreements) which PYXIS has commenced administering.
Customer Service Support
------------------------
- All invoices of payment obligations under New Portfolio Rental Agreements
and Owned Accounts will include a customer service telephone number which
shall be staffed by PYXIS personnel.
- PYXIS personnel will be on hand during normal business hours for all
incoming Customer inquiries.
- Customer inquiries to PYXIS which are made after PYXIS close of business
will be recorded electronically and return calls will be made within forty
eight (48) hours after receipt.
- PYXIS will diligently pursue all Customer disputes and will use its
reasonable efforts to resolve all Customer disputes which might reasonably
be expected to impact any payment obligations under a New Portfolio Rental
Agreement or an Owned Account.
- PYXIS will notify GE CAPITAL in writing of any change in Equipment location
under a New Portfolio Rental Agreement or an Owned Account within three (3)
business days of receipt by PYXIS in-house servicing personnel.
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EXHIBIT C
---------
In order to insure the support of GE CAPITAL during the transition of
the account administration for the New Portfolio Rental Agreements and Serviced
Accounts, the Rate Differential Fee will be paid in installments upon the
achievement of certain milestones as follows:
1. $953,940 will be paid within five (5) business days following
receipt by PYXIS from GE CAPITAL of a copy of Rider No. 5 to
Vendor Program Agreement executed by GE CAPITAL, PYXIS and
Cardinal.
2. $453,940 (the "Conversion Support Pool") will be paid during the
period the account administration for the Serviced Accounts is
being transitioned from GE CAPITAL to PYXIS. Commencing on the
fifth business day after July 31, 1997 and continuing on the fifth
business day after the last day of each month thereafter until
PYXIS has assumed the account administration of all Serviced
Accounts, a portion of the Conversion Support Pool will be paid to
GE CAPITAL in an amount determined by multiplying $453,940 by a
fraction the numerator of which shall be the total number of New
Portfolio Rental Agreements (including without limitation Post
July 1 New Portfolio Rental Agreements), Serviced Accounts and
Owned Accounts being administered by PYXIS as of the last day of
the month preceding the payment and the denominator of which shall
be the total number of New Portfolio Rental Agreements (including
without limitation Post July 1 New Portfolio Rental Agreements),
Serviced Accounts and Owned Accounts being administered by PYXIS
as of the last day of the month preceding the payment, plus the
total number of remaining New Portfolio Rental Agreements
(including without limitation Post July 1 New Portfolio Rental
Agreements), Serviced Accounts and Owned Accounts being
administered by GE CAPITAL as of the last day of the month
preceding the payment, and then subtracting from the product of
such multiplication the aggregate amount of previous payments made
to GE CAPITAL from the Conversion Support Pool.
3. $500,000, plus any undisbursed portion of the Conversion Support
Pool, will be paid upon the earlier of the following: (a) within
five (5) business days after PYXIS has assumed the account
administration of all Serviced Accounts or (b) December 31, 1997;
provided, however, if PYXIS has not assumed the account
administration of all Serviced Accounts on account of delays by GE
CAPITAL in meeting the Conversion Plan set forth on Exhibit D
which were not caused by PYXIS's failure to timely perform its
responsibilities or to provide required information to GE CAPITAL
under the Conversion Plan, then the remaining amounts shall be
paid upon completion of 3(a) above.
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EXHIBIT D
---------
Conversion Plan
---------------
A. DATE SPECIFIC:
1. April 15.
---------
A) GE CAPITAL to provide identifiable data by position and
description contained in the electronic file ("file structure
layouts") for data needed by PYXIS for the conversion and for any
data fields that are coded, GE CAPITAL will provide definitions of
the valid codes.
(i) GE CAPITAL to provide the above information on 15 preliminary
records for Serviced Accounts submitted by PYXIS.
(ii)PYXIS to remit to GE CAPITAL any additional fields requested
or additional information required within 30 days of receipt of
the information supplied by GE CAPITAL in (i) above.
B) GE CAPITAL to provide copies of the accounts receivable aging
report twice monthly (first and fifteenth of the month).
C) GE CAPITAL to provide copies of all invoices sent monthly through
conversion date.
2. May 15.
-------
A) GE CAPITAL to provide, in computer readable format ("electronic
format"), the complete account administration history of each
Serviced Account for the prior six months in the same format as
1(A) above.
B) PYXIS to identify all Serviced Accounts with remaining balances
that differ on the books of GE CAPITAL and PYXIS. GE CAPITAL and
PYXIS to mutually work together to reconcile the amounts.
3. June 15.
--------
A) GE CAPITAL and PYXIS to agree upon timetable in which the
remaining balances are in agreement between GE CAPITAL and PYXIS
for the Serviced Accounts.
4. July 15.
--------
A) PYXIS to adhere to servicing standard requirements pursuant to
Exhibit B in order to commence servicing Owned Accounts.
B) PYXIS to provide a sample of file structure layouts to GE CAPITAL
on servicing experience in the same electronic format as GE
CAPITAL has provided to PYXIS above. Upon PYXIS' commencement of
servicing such accounts, PYXIS will provide to GE CAPITAL such
file structure layouts on a quarterly basis or more frequently if
requested.
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5. September 15.
-------------
A) GE CAPITAL and PYXIS to agree upon timetable in which the
remaining net investment balances are in agreement between GE
CAPITAL and PYXIS for the Owned Accounts.
6. October 15.
-----------
A) GE CAPITAL to provide in electronic format the complete service
history of each Owned Account for the prior six months.
B. GENERAL PLAN:
-------------
1. In the event that payments are made to GE CAPITAL after the conversion
date:
(i) GE CAPITAL to provide on a weekly basis, all cash payments
received on conversion accounts.
(ii) PYXIS to request from GE CAPITAL back-up information on an
exception basis to help in cash applications.
(iii) After conversion of the Owned Accounts, GE CAPITAL to forward all
payments to the PYXIS-owned lockbox.
2. PYXIS will not re-invoice for payments that have already been invoiced
by GE CAPITAL. PYXIS will be required to send notices to all converted
accounts notifying customers of the new mailing address and lockbox
locations.
3. After April 1, GE CAPITAL will provide an updated copy of its trend
report twice a month within five business days.
4. GE CAPITAL will respond within 24 hours (within a business week) to a
conversion request. GE CAPITAL and PYXIS will mutually agree upon a
plan of resolution to such request.
5. GE CAPITAL will provide on a monthly basis, unless PYXIS advises
otherwise, copies of all invoices sent out for the previous month. GE
CAPITAL will continue to provide these copies until PYXIS has commenced
servicing all accounts.
6. GE CAPITAL will forward all calls received by its toll-free number from
a converted account within 24 hours of receipt by GE CAPITAL.
7. All written correspondence on a converted account will be forwarded to
PYXIS within three business days of receipt by GE CAPITAL in Danbury.
8. Within ten business days of GE CAPITAL's monthly close, PYXIS will
provide GE CAPITAL with a list of accounts it wishes to convert for
that month. GE CAPITAL will provide PYXIS with its customer files
(including originals, if any) including all customer correspondence. GE
CAPITAL and PYXIS will convert those listed accounts on the weekend of
GE CAPITAL's monthly fiscal close.
9. GE CAPITAL will provide a data transfer of all data of each converted
account on the weekend of GE CAPITAL's respective monthly close.
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