McKesson 2005 Annual Report Download - page 283

“Credit and Collection Policy” means Seller’s credit and collection policies and practices relating to Contracts and Receivables
existing on the date hereof and summarized in Exhibit VIII hereto, as modified from time to time in accordance with this Agreement.
“Deemed Collections” means the aggregate of all amounts Seller shall have been deemed to have received as a Collection of a
Receivable. Seller shall be deemed to have received a Collection in full of a Receivable if at any time (i) the Outstanding Balance of any such
Receivable is either (x) reduced as a result of any defective or rejected goods or services, any discount or any adjustment or otherwise by Seller
(other than cash Collections on account of the Receivables) or (y) reduced or canceled as a result of a setoff in respect of any claim by any
Person (whether such claim arises out of the same or a related transaction or an unrelated transaction) or (ii) any of the representations or
warranties in Article IV are no longer true with respect to such Receivable.
“Defaulted Receivable ” means a Receivable: (i) as to which the Obligor thereof has taken any action, or suffered any event to occur,
of the type described in Section 8.1(d) (as if references to Seller Party therein refer to such Obligor); (ii) which, consistent with the Credit and
Collection Policy, would be written off Seller’s books as uncollectible, (iii) which has been identified by Seller as uncollectible in accordance
with the Credit and Collection Policy or (iv) as to which any payment, or part thereof, remains unpaid for ninety (90) days or more from the
original due date for such payment.
“Default Fee” means with respect to any amount due and payable by Seller in respect of any Aggregate Unpaids, an amount equal to
the greater of (i) $1000 and (ii) interest on any such unpaid Aggregate Unpaids at a rate per annum equal to 2% above the Base Rate.
“Default Proxy Ratio ” means, as of the last day of any Collection Period, a fraction (calculated as a percentage) equal to (i) the
aggregate gross debit Outstanding Balance of all Receivables (without duplication) which remain unpaid for more than sixty (60) but less than
ninety-one (91) or more days from the original due date at any time during the Collection Period then ending plus the aggregate Outstanding
Balance of all Receivables (without duplication) which, consistent with the Credit and Collection Policy, were or should have been written off
the Seller’s books as uncollectible and are less than ninety (90) days old during such period plus the aggregate Outstanding Balance of all
Receivables (without duplication) with respect to which the related Obligors are subject to a proceeding of the type described in Section 8.1(d)
but which have not yet been written off the Seller’s books as uncollectible, divided by (ii) the aggregate Outstanding Balance of all Receivables
generated during the Collection Period which ended three (3) Collection Periods prior to such last day.
“Delinquency Ratio” means, as of the last day of any Collection Period, a fraction (calculated as a percentage) equal to (i) the
aggregate Outstanding Balance of all Receivables that were Delinquent Receivables at such time and as of the last day of the two (2) preceding
Collection Periods by (ii) the sum of the aggregate Outstanding Balance of all Receivables as of the last day of each of such three
(3) Collection Periods.
“Delinquent Receivable ” means a Receivable as to which any payment, or part thereof, remains unpaid for sixty (60) days or more
from the original due date for such payment.
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