Exhibit 10.10
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AMENDED AND RESTATED
SERVICING AGREEMENT
Among
LFI RECEIVABLES CORPORATION,
LFI SERVICING CORPORATION,
as Master Servicer,
the Servicers Party Hereto
and
THE CHASE MANHATTAN BANK,
as Trustee
Dated as of February 4, 1997
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TOC for Amended and Restated Servicing Agreement
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Definitions...................................... 2
SECTION 1.02. Other Definitional Provisions.................... 2
ARTICLE II
Administration and Servicing of Receivables
SECTION 2.01. Appointment of Master Servicer,
Servicers...................................... 4
SECTION 2.02. Servicing Procedures............................. 5
SECTION 2.03. Collections...................................... 8
SECTION 2.04. Reconciliation of Deposits....................... 10
SECTION 2.05. Servicing Compensation........................... 10
ARTICLE III
Representations and Warranties of the
Master Servicer and the Servicers
SECTION 3.01. Organization; Powers............................. 12
SECTION 3.02. Authorization; No Conflict....................... 12
SECTION 3.03. Enforceability................................... 13
SECTION 3.04. Governmental Approvals........................... 13
SECTION 3.05. Litigation; Compliance with Laws................. 14
SECTION 3.06. Agreements....................................... 14
SECTION 3.07. No Servicer Default.............................. 15
SECTION 3.08. Servicing Ability................................ 15
SECTION 3.09. Location of Records.............................. 15
SECTION 3.10. Insurance........................................ 15
TOC for Amended and Restated Servicing Agreement 2
ARTICLE IV
Covenants of the Master Servicer
and the Servicers
SECTION 4.01. Delivery of Daily Reports........................ 15
SECTION 4.02. Delivery of Monthly Settlement
Statement...................................... 16
SECTION 4.03. Delivery of Annual Master Servicer's and
Servicers' Certificates........................ 17
SECTION 4.04. Delivery of Independent Public
Accountants' Servicing Reports................. 18
SECTION 4.05. Extension, Amendment and Adjustment of
Receivables; Amendment of Policies............. 18
SECTION 4.06. Protection of Holders' Rights.................... 19
SECTION 4.07. Security Interest................................ 20
SECTION 4.08. Location of Records.............................. 20
SECTION 4.09 Visitation Rights................................ 20
SECTION 4.10. Lockbox Agreement; Lockbox Accounts.............. 21
SECTION 4.11. Delivery of Financial Statements................. 22
SECTION 4.12. Notices.......................................... 24
SECTION 4.13. Insurance........................................ 24
ARTICLE V
Other Matters Relating to the Master Servicer
and the Servicers
SECTION 5.01. Merger, Consolidation, etc....................... 25
SECTION 5.02. Indemnification of the Trust and the
Trustee........................................ 26
SECTION 5.03. Master Servicer and Servicers Not to
Resign......................................... 27
SECTION 5.04. Access to Certain Documentation and
Information Regarding the
Receivables.................................... 27
TOC for Amended and Restated Servicing Agreement 3
ARTICLE VI
Servicer Defaults; Servicer Termination
SECTION 6.01. Servicer Defaults................................ 28
SECTION 6.02. Trustee to Act; Appointment of
Successor...................................... 35
SECTION 6.03. Waiver of Past Defaults.......................... 38
SECTION 6.04. Other Servicer Terminations...................... 38
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01. Amendment........................................ 39
SECTION 7.02. Termination...................................... 39
SECTION 7.03. Governing Law.................................... 40
SECTION 7.04. Addition of Servicers............................ 40
SECTION 7.05. Notices.......................................... 40
SECTION 7.06. Counterparts..................................... 40
SECTION 7.07. Third-Party Beneficiaries........................ 41
SECTION 7.08. Merger and Integration........................... 41
SECTION 7.09. Headings......................................... 41
SECTION 7.10. No Set-Off....................................... 41
SECTION 7.11. No Bankruptcy Petition........................... 41
Exhibit A Form of Annual Servicer's Certificate
Exhibit B Form of Agreed Upon Procedures
Exhibit C Insurance Requirements
AMENDED AND RESTATED SERVICING AGREEMENT, dated as
of February 4, 1997 (this "Agreement") among LFI
RECEIVABLES CORPORATION, a Delaware corporation (the
"Company"), LFI SERVICING CORPORATION, a Delaware
corporation, as the master servicer (the "Master
Servicer"), the servicers party hereto (the "Servicers")
and THE CHASE MANHATTAN BANK, not in its individual
capacity, but solely as trustee (in such capacity, the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Company, the Sellers and the Servicers have entered
into an Amended and Restated Receivables Sale Agreement, dated as of the date
hereof (the "Receivables Sale Agreement");
WHEREAS, pursuant to the Receivables Sale Agreement, the Sellers
sell to the Company, and the Company purchases from the Sellers, all the
Sellers' right, title and interest in, to and under the Receivables and other
Receivable Assets (as defined in the Receivables Sale Agreement);
WHEREAS, the parties hereto entered into that certain Servicing
Agreement, dated as of August 5, 1996 (the "Original Servicing Agreement") in
order to provide for the servicing of the Receivables;
WHEREAS, the parties wish to amend and restate the Original
Servicing Agreement so as to amend various provisions of the Original Servicing
Agreement; and
Amended and Restated Servicing Agreement 2
WHEREAS, the Original Servicing Agreement shall be replaced in whole
by this Amended and Restated Servicing Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Unless otherwise defined herein,
capitalized terms that are used herein shall have the meanings assigned to such
terms in the Pooling Agreement and each Supplement thereto.
SECTION 1.02. Other Definitional Provisions. (a) All terms defined
in this Agreement (directly or by incorporation by reference pursuant to Section
1.01) shall have the defined meanings when used in any certificates or other
document made or delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined herein
(directly or by incorporation by reference pursuant to Section 1.01) and
accounting terms partly defined herein (directly or by incorporation by
reference pursuant to Section 1.01), to the extent not defined, shall have the
respective meanings given to them under GAAP. To the extent that the definitions
of accounting terms herein are inconsistent with the meanings of such terms
under GAAP, the definitions contained herein shall control.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any
Amended and Restated Servicing Agreement 3
particular provision of this Agreement, and Section, subsection, Schedule and
Exhibit references contained in this Agreement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement unless otherwise
specified.
(d) The definitions contained herein are applicable to the singular
as well as the plural forms of such terms and to the masculine, the feminine and
the neuter genders of such terms.
(e) Where reference is made in this Agreement to the principal
amount of Receivables, such reference shall, unless explicitly stated otherwise,
be deemed a reference to the Principal Amount of such Receivables.
(f) Any reference herein or in any other Transaction Document to a
provision of the Internal Revenue Code or ERISA shall be deemed to be also a
reference to any successor provision thereto.
(g) Any reference herein to a Schedule or Exhibit to this Agreement
shall be deemed to be a reference to such Schedule or Exhibit as it may be
amended, modified or supplemented from time to time to the extent that such
Schedule or Exhibit may be amended, modified or supplemented (or any term or
provision of any Transaction Document may be amended that would have the effect
of amending, modifying or supplementing information contained in such Schedule
or Exhibit) in compliance with the terms of the Transaction Documents.
(h) Any reference in this Agreement to any representation, warranty
or covenant "deemed" to have been made is intended to encompass only
representations, warranties or covenants that are expressly stated to be
repeated on or as of dates following the execution and delivery of this
Agreement, and no such reference shall be interpreted as a reference to any
implicit, inferred, tacit
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or otherwise unexpressed representation, warranty or covenant.
(i) The words "include", "includes" or "including" shall be
interpreted as if followed, in each case, by the phrase "without limitation".
ARTICLE II
Administration and Servicing of Receivables
SECTION 2.01. Appointment of Master Servicer, Servicers. The Company
hereby appoints LFI Servicing Corporation and the Servicers to act as, and LFI
Servicing Corporation and the Servicers hereby accept their respective
appointments and agree to act as, Master Servicer and Servicers, respectively,
under the Pooling and Servicing Agreements and the Investor Certificateholders,
by their acceptance of the Investor Certificates, consent to LFI Servicing
Corporation and the Servicers acting as Master Servicer and Servicers,
respectively. Each Servicer shall have responsibility for the management of the
servicing and receipt of collections in respect of each Receivable originated by
itself as a Seller and/or by one or more of its Affiliates as Seller(s) as
identified on Schedule 1 to the Receivables Sale Agreement (such Servicer is
sometimes referred to as the "Responsible Servicer" with respect to any
Receivable that it is responsible for servicing hereunder and such a Receivable
is sometimes referred to herein as a "Serviced Receivable" with respect to the
Servicer that is responsible for servicing such Receivable hereunder). Each
Servicer shall have the authority to make any management decisions relating to
each Serviced Receivable to the extent such authority is granted to such
Servicer under any Pooling and Servicing Agreement. LFI Servicing Corporation,
in its role as Master Servicer, shall coordinate the servicing of all
Receivables by all Servicers. The Company, the Trustee and the Holders shall
treat LFI Servicing Corporation and the Servicers as Master
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Servicer and Servicers, respectively, and may conclusively rely on the
instructions, notices and reports of LFI Servicing Corporation and the Servicers
as Master Servicer and Servicers, respectively, for so long as LFI Servicing
Corporation and the Servicers continue in their appointments as Master Servicer
and Servicers, respectively.
SECTION 2.02. Servicing Procedures. (a) Each Servicer shall manage
the servicing and administration of its Serviced Receivables, the collection of
payments due under such Serviced Receivables and charging off of any such
Serviced Receivables as uncollectible, all in accordance with its Policies and
the terms of the Pooling and Servicing Agreements. Each Servicer shall have full
power and authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration that it may deem necessary or desirable, but subject to the terms
of this Agreement and the other Transaction Documents. Without limiting the
generality of the foregoing and subject to Section 6.01, each Servicer or its
designee, with respect to its Serviced Receivables, and the Master Servicer or
its designee, with respect to all Receivables, is hereby authorized and
empowered (i) to execute and deliver, on behalf of the Trust for the benefit of
the Holders, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, and,
after the delinquency of any such Receivable and to the extent permitted under
and in compliance with applicable Requirements of Law, to commence enforcement
proceedings with respect to such Receivable and (ii) to make any filings,
reports, notices, applications, registrations with, and to seek any consents or
authorizations from the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable to
comply with any Federal or state securities or reporting requirements or laws.
(b) Without limiting the generality of the foregoing and subject to
Section 6.01, the Master Servicer
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or its designee is hereby authorized and empowered to give written direction to
the Trustee with respect to withdrawals from, and payments to, the Collection
Account in accordance with the Daily Report and as otherwise specified in the
Pooling and Servicing Agreements.
(c) Each Servicer shall, at its cost and expense and as agent for
the Company and the Trust, use its best efforts to collect, consistent with its
past practices, as and when the same becomes due, the amount owing on each
Serviced Receivable. No Servicer shall make any material change in its
administrative, servicing and collection systems that deviates from its
Policies, except as expressly permitted by the terms of any applicable Pooling
and Servicing Agreement and after giving written notice to the Trustee. In the
event of default under any Receivable, the Responsible Servicer shall have the
power and authority, on behalf of the Company and the Trust, for the benefit of
the Holders, to take such action in respect of such Receivable as such
Responsible Servicer may deem advisable. In the enforcement or collection of any
Receivable, the Responsible Servicer shall be entitled to xxx thereon in (i) its
own name or (ii) if, but only if, the Company consents in writing (which consent
shall not be unreasonably withheld), as agent for the Company. In no event shall
any Servicer be entitled to take any action that would make the Company, the
Trustee, any Agent or any Holder a party to any litigation without the express
prior written consent of such Person.
(d) Without limiting the generality of the foregoing and subject to
Section 6.01, each Servicer is hereby authorized and empowered to delegate any
or all of its servicing, collection, enforcement and administrative duties
hereunder with respect to the Serviced Receivables to a Person who agrees to
conduct such duties in accordance with such Servicer's Policies; provided,
however, that such Servicer shall give prior written notice to the Company, the
Trustee, each Agent and the Rating Agencies of any such delegation relating to a
material duty prior to such delegation being effective, such Servicer shall have
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received notice that the Rating Agency Condition shall be satisfied after giving
effect to such delegation and the consent of the Company, the Trustee and each
Agent to such delegation shall have been obtained. No delegation of duties by
any Servicer permitted hereunder shall relieve such Servicer of its liability
and responsibility with respect to such duties.
(e) Except as provided in any Pooling and Servicing Agreement, no
Servicer or any Successor Servicer shall be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Serviced
Receivables transferred to the Company (and, subsequently, to the Trust) from
the procedures, offices, employees and accounts used by such Servicer or such
Successor Servicer, as the case may be, in connection with servicing other
receivables.
(f) Each Servicer shall maintain fidelity bond or other coverage
insuring against losses through wrongdoing of its officers and employees who are
involved in the servicing of the Serviced Receivables, including depositor's
forgery, in an amount and breadth of coverage satisfactory to the Rating
Agencies and each Agent. Each Servicer shall, upon reasonable prior notice, and
as often as may reasonably be requested by any Agent, provide evidence to such
Agent of such coverage.
(g) Each Servicer shall comply with and perform its servicing
obligations with respect to the Serviced Receivables in accordance with the
contracts, if any, relating to the Serviced Receivables and its Policies.
(h) No Servicer shall take any action to cause any Serviced
Receivable not evidenced by any "instrument" (as defined in the UCC as in effect
in the State of New York) upon origination to become evidenced by an instrument
and no Servicer shall take any action to cause any interest in any Receivable to
be evidenced by any title documents in bearer form, except in connection with
its
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enforcement or collection of a Serviced Receivable, in which event such Servicer
shall deliver such instrument or title documents to the Trustee as soon as
reasonably practicable, but in no event more than five days after execution
thereof; provided that any origination of Receivables by any Servicer, in its
capacity as a Seller, in compliance with applicable Pooling and Servicing
Agreements shall not constitute a breach of this subsection 2.02(h).
SECTION 2.03. Collections. (a) Each Servicer shall have instructed
all Obligors to make all payments in respect of the Serviced Receivables to a
Lockbox or a Lockbox Account. Each of the Company and each Servicer represents,
warrants and agrees that all Collections shall be collected, processed and
deposited by it pursuant to, and in accordance with the terms of, the Pooling
and Servicing Agreements. Without limiting the generality of the foregoing, each
Servicer shall comply with the provisions of subsection 3.01(d) of the Pooling
Agreement as to remittance of funds available in any Lockbox Account. In the
event that any payments in respect of any Receivable are made directly to a
Servicer (including any employees thereof or independent contractors employed
thereby), such Servicer shall, within two Business Days of receipt thereof,
deliver (which may be via regular mail) or deposit such amounts to a Lockbox, a
Lockbox Account or the Collection Account and, prior to forwarding such amounts,
such Servicer shall hold such payments in trust as custodian for the Company and
the Trustee.
(b) Each Lockbox Agreement shall provide that the Lockbox Processor
thereunder is irrevocably directed, and such Lockbox Processor irrevocably
agrees, (i) to deposit funds received in the Lockbox directly into the Lockbox
Account and (ii) to transfer all available funds on deposit in the Lockbox
Account within one Business Day of the Business Day Received to the Trustee for
deposit in the Collection Account. Each Lockbox Agreement shall be substantially
in the form specified in the Pooling Agreement, subject to modifications thereof
as provided in
Amended and Restated Servicing Agreement 9
the Pooling Agreement and applicable Supplements. Prior to any resignation of
the Lockbox Processor or termination of the Lockbox Processor by the Company or
the Trustee with respect to any Receivables, each Servicer hereby agrees (to the
extent that it is a Responsible Servicer with respect to such Receivables) to
obtain a replacement Lockbox Processor. Upon satisfaction of the Rating Agency
Condition and the consent of the Trustee (which shall not be unreasonably
withheld), a Servicer may enter into any amendments or modifications of a
Lockbox Agreement that the Servicer reasonably deems necessary to conform such
Lockbox Agreement to the cash management system of the Company or the
Responsible Servicer(s).
(c) The Trustee shall administer amounts on deposit in the
Collection Account in accordance with the terms of the Pooling and Servicing
Agreements. Each of the Company, the Master Servicer and each Servicer
acknowledges and agrees that (i) it shall not have any right to withdraw any
funds on deposit in the Collection Account or any Lockbox Account and (ii) all
amounts deposited in the Collection Account or any Lockbox Account shall be
under the sole dominion and control of the Trustee (subject to the Master
Servicer's or Servicers' rights to direct the application of any such amounts as
provided by the terms of any Pooling and Servicing Agreement).
(d) As soon as practicable, but in any event not later than the
Business Day following the date that a Servicer identifies any of the collected
funds received in the Collection Account as funds that do not constitute
Collections on account of the Receivables, such moneys that do not constitute
such Collections shall be remitted to the Master Servicer and then by the Master
Servicer to the appropriate Seller.
(e) Unless otherwise required by law or unless an Obligor designates
that a payment be applied to a specific Receivable, all Collections received
from an Obligor shall be applied to the oldest Receivables of such Obligor.
Amended and Restated Servicing Agreement 10
SECTION 2.04. Reconciliation of Deposits. If in respect of
Collections on account of a Receivable the Responsible Servicer deposits into
the Collection Account (a) a check that is not honored for any reason or (b) an
amount that is less than or more than the actual amount of such Collections,
such Servicer shall, in lieu of making a reconciling withdrawal or deposit, as
the case may be, adjust the amount subsequently deposited into such Collection
Account to reflect such dishonored check or mistake. Any Receivable in respect
of which a dishonored check is received shall be deemed not to have been paid;
provided, that no adjustments made pursuant to this Section 2.04 shall change
any amount previously reported pursuant to Section 4.02.
SECTION 2.05. Servicing Compensation. (a) As full compensation for
the Servicers' servicing activities hereunder and reimbursement for their
expenses as set forth in subsection 2.05(b), the Master Servicer, on behalf of
the Servicers, shall be entitled to receive on each Distribution Date, for the
preceding Settlement Period prior to the termination of the Trust pursuant to
Section 9.01 of the Pooling Agreement, a servicing fee (the "Servicing Fee").
The Servicing Fee shall be an amount equal to (i) the product of (A) the
Servicing Fee Percentage and (B) the average aggregate Principal Amount of the
Receivables in the Trust for such Settlement Period and (C) the number of days
in such Settlement Period, divided by (ii) 360. Except as otherwise set forth in
the related Supplement, the share of the Servicing Fee allocable to each
Outstanding Series for any Settlement Period shall be an amount equal to the
product of (i) the Servicing Fee for such Settlement Period and (ii) a fraction
(expressed as a percentage) (A) the numerator of which is the daily average
Invested Amount for such Settlement Period with respect to such Outstanding
Series and (B) the denominator of which is the daily average Aggregate Invested
Amount for such Settlement Period (with respect to any such Series, the "Monthly
Servicing Fee"); provided, however, that if on any day a Seller or any Affiliate
thereof is acting as a Servicer and an Early
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Amortization Event has occurred and is continuing with respect to any
Outstanding Series, the portion of the Monthly Servicing Fee payable to a Seller
or an Affiliate thereof with respect to such Outstanding Series shall be
deferred until all amounts due under the Investor Certificates of such
Outstanding Series have been paid in full. The Servicing Fee shall be payable to
the Master Servicer, on behalf of the Servicers, solely pursuant to the terms
of, and to the extent amounts are available for payment under, Article III of
the Pooling Agreement.
(b) The Company hereby directs the Master Servicer and each Servicer
to pay amounts due to the Trustee pursuant to Section 8.05 of the Pooling
Agreement and the reasonable fees and disbursements of independent accountants,
and all other reasonable fees and expenses of the Trust (including counsel fees,
if any) not expressly stated herein to be for the account of the Holders;
provided however, that in no event shall the Master Servicer, any Servicer or
the Trustee be liable for any Federal, state or local income or franchise tax,
or any interest or penalties with respect thereto, assessed on the Trust or the
Holders except in accordance with Section 5.02 and as otherwise expressly
provided herein. Notwithstanding anything to the contrary herein or in any other
Pooling and Servicing Agreement, in the event that the Master Servicer or any
Servicer fails to pay any amount due to the Trustee pursuant to Section 8.05 of
the Pooling Agreement, or following the commencement and continuation of an
Early Amortization Period, the Trustee shall be entitled, in addition to any
other rights it may have under law and under the Pooling Agreement, to receive
directly such amounts owing to it under the Pooling and Servicing Agreements
from, and in the same order of priority as, the Servicing Fee before payment to
the Master Servicer, for the benefit of the Servicers, of any portion thereof;
provided, that in the event any Servicer shall have elected to waive its rights
to payment of its portion of the Servicing Fee or the Servicing Fee is deferred
pursuant to subsection 2.05(a), the Trustee shall nonetheless be entitled to
receive such amounts from
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payments that would ordinarily be applied to the payment of the Servicing Fee,
in the same order of priority as though such portion of the Servicing Fee were
payable. Each Servicer shall be required to pay expenses for its own account,
and shall not be entitled to any payment therefor other than its portion of the
Servicing Fee. Nothing contained herein shall be construed to limit the
obligation of the Master Servicer, each Servicer or the Company to pay any
amounts due the Trustee pursuant to Section 8.05 of the Pooling Agreement.
ARTICLE III
Representations and Warranties of the
Master Servicer and the Servicers
As of (a) the date hereof and (b) each Issuance Date, each of the
Master Servicer and each Servicer hereby makes the following representations and
warranties to each of the other parties hereto:
SECTION 3.01. Organization; Powers. It (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (iii) is qualified to do business in, and is in good
standing in, every jurisdiction where the nature of its business so requires,
except where the failure so to qualify could not reasonably be expected to
result in a Servicer Material Adverse Effect and (iv) has the corporate power
and authority to execute, deliver and perform its obligations under each of the
Transaction Documents and each other agreement or instrument contemplated hereby
to which it is or will be a party.
SECTION 3.02. Authorization; No Conflict. The execution, delivery
and performance by it of each of the Transaction Documents that it is a party to
and the other
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transactions contemplated hereby and thereby (collectively, the "Transactions")
(i) have been duly authorized by all requisite corporate and, if required,
stockholder action and (ii) will not (A) violate (1) any Requirement of Law or
(2) any provision of any Contractual Obligation to which it or any Subsidiary is
a party or by which any of them or any of their property is or may be bound, (B)
be in conflict with, result in a breach of or constitute (alone or with notice
or lapse of time or both) a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any
obligation under any such Contractual Obligation, except where any such
conflict, violation, breach or default referred to in clause (A) or (B),
individually or in the aggregate, could not reasonably be expected to have a
Servicer Material Adverse Effect, or (C) result in the creation or imposition of
any Lien upon or with respect to any property or assets now owned or hereafter
acquired by it or any Subsidiary (other than any Lien created hereunder or
contemplated or permitted hereby).
SECTION 3.03. Enforceability. This Agreement has been duly executed
and delivered by it and constitutes, and each other Transaction Document to
which it is a party when executed and delivered by it will constitute, its
legal, valid and binding obligation enforceable against it in accordance with
such document's terms, subject (a) as to enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights generally, from time to time in
effect and (b) to general principals of equity (whether enforcement is sought by
a proceeding in equity or at law).
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(i) the filing of Uniform Commercial Code financing statements and (ii) such as
have been made or obtained and
Amended and Restated Servicing Agreement 14
are in full force and effect; provided, however, that with respect to
Receivables owing by Government Obligors, any failure by it to comply with the
United States Federal Nonassignment Act (Public Contracts), 41 U.S.C. ss. 15, or
Assignment of Claims Act, 31 U.S.C. ss. 3727, or with any similar legislation of
any State shall not constitute a breach of this Section 3.04.
SECTION 3.05. Litigation; Compliance with Laws. (i) There are no
actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to its knowledge, threatened against or
affecting it or any Subsidiary or any business, property or rights of any such
Person (A) that involve any Transaction Document or the Transactions or (B) as
to which there is a reasonable possibility of an adverse determination and that,
if adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Servicer Material Adverse Effect.
(ii) Neither it nor any Subsidiary is in default with respect to any
judgment, writ, injunction, decree or order of any Governmental Authority, where
such violation or default could reasonably be expected to result in a Servicer
Material Adverse Effect.
SECTION 3.06. Agreements. (i) Neither it nor any Subsidiary is a
party to any agreement or instrument or subject to any corporate restriction
that has resulted or could reasonably be expected to result in a Servicer
Material Adverse Effect.
(ii) Neither it nor any Subsidiary is in default in any manner under
any provision of any Contractual Obligation to which it is a party or by which
it or any of its properties or assets are bound, where such default could
reasonably be expected to result in a Servicer Material Adverse Effect.
Amended and Restated Servicing Agreement 15
SECTION 3.07. No Servicer Default. No Servicer Default or Potential
Servicer Default has occurred and is continuing.
SECTION 3.08. Servicing Ability. As of the related Issuance Date,
there has not been since the date of this Agreement any adverse change in its
ability to perform its obligations as Master Servicer or Servicer, as
applicable, under any Transaction Document to which it is a party.
SECTION 3.09. Location of Records. The office at which it keeps its
records concerning any Receivables either (i) is located at the address set
forth for it on Schedule 1 to the Receivables Sale Agreement or (ii) has been
notified to the Company and the Trustee in accordance with the provisions of
Section 4.08. Its chief executive office is located at such location and such
office is the place where it is "located" for the purposes of Section
9-103(3)(d) of the UCC as in effect in the State of New York.
SECTION 3.10. Insurance. Each Servicer has fidelity bond or other
coverage in full force and effect insuring against losses through wrongdoing of
its officers and employees who are involved in the servicing of Receivables,
including coverage of depositor's forgery, in an amount at least equal to and
with breadth of coverage at least as comprehensive as the coverage indicated on
Exhibit C and with the insurers indicated on Exhibit C.
ARTICLE IV
Covenants of the Master Servicer and the Servicers
SECTION 4.01. Delivery of Daily Reports. Unless otherwise specified
in the Supplement with respect to any Series, for each Business Day (the
"Reported Day") and with respect to each Outstanding Series, the Master Servicer
shall submit to the Company, the Trustee and the relevant
Amended and Restated Servicing Agreement 16
Agent no later than 1:30 p.m., New York City time, on the next Business Day
following each Reported Day, a written report substantially in the form attached
to the related Supplement for each such Series (the "Daily Report") setting
forth for the Reported Day total Collections on the Receivables, the amount of
Collections attributable to previously identified Ineligible Receivables for
which an Adjustment Payment and a Seller Adjustment Payment have been made
pursuant to the Pooling Agreement and the Receivables Sale Agreement,
respectively (which are payable by the appropriate Seller in accordance with
subsection 2.06(a) of the Receivables Sale Agreement), the amount of Receivables
originated, the amount of Ineligible Receivables (if any) identified on the
Reported Day, and such other information as the Company, the Trustee or such
Agent may reasonably request. The Daily Report may be delivered in an electronic
format mutually agreed upon by the Master Servicer and the Trustee, or pending
such agreement, by facsimile. By delivery of a Daily Report, the Master Servicer
shall be deemed to have made a representation and warranty that all information
set forth therein is true and correct in all material respects.
SECTION 4.02. Delivery of Monthly Settlement Statement. Unless
otherwise specified in the Supplement with respect to any Outstanding Series,
the Master Servicer hereby covenants and agrees that it shall deliver to the
Company, the Trustee, the relevant Agent and each Rating Agency by 11:00 a.m.,
New York City time, on each Settlement Report Date, a certificate of a
Responsible Officer of the Master Servicer substantially in the form attached to
the related Supplement for each such Outstanding Series (a "Monthly Settlement
Statement") setting forth, as of the last day of the Settlement Period most
recently ended and for such Settlement Period, (a) the information described in
the form of such Monthly Settlement Statement with such changes as may be agreed
to by the Master Servicer, the Company, the Trustee and the relevant Agent (if
any) and subject to satisfaction of the Rating Agency Condition and (b) such
other information as the Trustee or the relevant
Amended and Restated Servicing Agreement 17
Agent may reasonably request. Such certificate shall include a certification by
a Responsible Officer of the Master Servicer that, to such Responsible Officer's
knowledge, the information contained therein is true and correct in all material
respects and each of the Master Servicer and each Servicer has performed all of
its respective obligations in all material respects under each Transaction
Document to which it is a party throughout such preceding Settlement Period (or,
if there has been a default in the performance of any such obligation,
specifying each such default known to such Responsible Officer and the nature
and status thereof). A copy of each Monthly Settlement Statement may be obtained
by any Holder by a request in writing to the Trustee addressed to the Corporate
Trust Office.
SECTION 4.03. Delivery of Annual Master Servicer's and Servicers'
Certificates. Each of the Master Servicer and each Servicer shall deliver to the
Company, the Trustee, each Agent and each Rating Agency, a certificate of a
Responsible Officer of the Master Servicer or such Servicer, as applicable,
substantially in the form of Exhibit A hereto, certifying that:
(a) a review of its activities during the preceding calendar year
and of its performance under each Transaction Document was made under the
supervision of such Responsible Officer;
(b) to such Responsible Officer's knowledge, based on such review,
it has performed its obligations in all material respects under each
Transaction Document throughout the period covered by such certificate
(or, if there has been a material default in the performance of any such
obligation, specifying each such default known to such Responsible Officer
and the nature and status thereof); and
(c) in the case of the certificate of a Responsible Officer of the
Master Servicer, each Daily
Amended and Restated Servicing Agreement 18
Report and Monthly Settlement Statement was accurate and correct in all
material respects.
Such certificate shall be delivered by the Master Servicer and each Servicer
within 90 days after the end of each calendar year commencing with the year
ending December 31, 1997. A copy of each such certificate may be obtained by any
Holder by a request in writing to the Trustee addressed to the Corporate Trust
Office.
SECTION 4.04. Delivery of Independent Public Accountants' Servicing
Reports. Each of the Master Servicer and each Servicer shall cause Independent
Public Accountants to furnish to the Company, the Trustee, each Agent and each
Rating Agency within 120 days following the last day of each of its fiscal years
a letter to the effect that such firm has performed certain agreed-upon
procedures (as set forth in Exhibit B hereto) relating to it and its performance
hereunder during the preceding fiscal year and describing such accountants'
findings with respect to such procedures. A copy of such report may be obtained
by any Holder by a request in writing to the Trustee addressed to the Corporate
Trust Office.
SECTION 4.05. Extension, Amendment and Adjustment of Receivables;
Amendment of Policies. (a) Each Servicer hereby covenants and agrees with the
Company and the Trustee that it shall not extend, rescind, cancel, amend or
otherwise modify, or attempt or purport to extend, rescind, cancel, amend or
otherwise modify, the terms of, or grant any Dilution Adjustment to, any
Serviced Receivable, or otherwise take any action that is intended to cause or
permit a Serviced Receivable that is an Eligible Receivable to cease to be an
Eligible Receivable, except in any such case (i) in accordance with the terms of
its Policies, (ii) as required by any Requirement of Law or (iii) in the case of
any Dilution Adjustments, upon the payment by or on behalf of the appropriate
Seller of a Seller Adjustment Payment pursuant to Section 2.05 of the
Receivables Sale Agreement. Any Dilution Adjustment authorized to be made
Amended and Restated Servicing Agreement 19
pursuant to the preceding sentence shall result in the reduction, on the
Business Day on which such Dilution Adjustment arises or is identified, in the
aggregate Principal Amount of Receivables and if as a result of such a reduction
the Aggregate Target Receivables Amount exceeds the Aggregate Receivables
Amount, the Company (in addition to the obligations of the Sellers under the
Receivables Sale Agreement in respect of such Dilution Adjustment) shall be
required to pay into the Series Principal Collection Sub- subaccount with
respect to each Outstanding Series in immediately available funds, within one
Business Day of such determination, the pro rata share for such Series of the
amount (the "Cash Dilution Payment") by which the Aggregate Target Receivables
Amount exceeds the Aggregate Receivables Amount.
(b) No Servicer shall change or modify its Policies in any material
respect, except (i) if such change or modification is necessary under any
Requirement of Law or (ii) if the Rating Agency Condition is satisfied with
respect thereto. Each Servicer shall provide notice to the Company, the Trustee,
each Agent and each Rating Agency of any change or modification of its Policies;
provided, however, that if any change or modification, other than a change or
modification permitted pursuant to clause (i) above, would be reasonably likely
to have a Material Adverse Effect on the interests of the Investor
Certificateholders of a Series that is not rated by a Rating Agency, the consent
of the applicable Agent (or if none, as specified in the related Supplement)
shall be required to effect such change or modification.
SECTION 4.06. Protection of Holders' Rights. Each Servicer hereby
agrees with the Company and the Trustee that it shall take no action, nor
intentionally omit to take any action, that could reasonably be expected to
adversely impair the rights, remedies or interests of the Holders under the
Transaction Documents in respect of the Serviced Receivables or any Related
Property nor shall it reschedule, revise or defer payments due on any Serviced
Receivable
Amended and Restated Servicing Agreement 20
except in accordance with its Policies or Section 4.05 above.
SECTION 4.07. Security Interest. Each Servicer hereby covenants and
agrees that it shall not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on, any Serviced
Receivable, whether now existing or hereafter created, or any interest therein,
and each Servicer shall defend the right, title and interest of the Company and
the Trust in, to and under any Serviced Receivable, whether now existing or
hereafter created, against all claims of third parties claiming through or under
such Servicer or the Company; provided, however, that nothing in this Section
4.07 shall prevent or be deemed to prohibit a Servicer from suffering to exist
upon any of the Serviced Receivables any Permitted Liens described in clause (i)
or (ii) of the definition thereof.
SECTION 4.08. Location of Records. Each of the Master Servicer and
each Servicer hereby covenants and agrees that it (a) shall not move its chief
executive office or any of the offices where it keeps its records with respect
to any Receivables outside of the location specified in respect thereof on
Schedule 1 to the Receivables Sale Agreement, in any such case, without giving
30 days prior written notice to the Company, the Trustee, each Agent and the
Rating Agencies and (b) shall promptly take all actions (including any filings
under the UCC) required or reasonably necessary in order to continue the valid
and enforceable interest of the Company and the Trust in all Receivables.
SECTION 4.09. Visitation Rights. (a) Each of the Master Servicer and
each Servicer shall, at any reasonable time during normal business hours on any
Business Day and from time to time, upon reasonable prior notice, and as often
as may reasonably be requested, subject to its security and confidentiality
requirements, (i) permit the Company, the Trustee, any Agent or any of their
respective agents or representatives, (A) to examine and make copies of
Amended and Restated Servicing Agreement 21
and abstracts from its records, books of account and documents (including
computer tapes and disks) relating to the Receivables or the Serviced
Receivables, as the case may be, and (B) following the termination of its
appointment as Master Servicer or Servicer, as the case may be, to be present at
its offices and properties to administer and control the Collection of the
Receivables or the Serviced Receivables, as the case may be, and to allow the
Trustee access to documents, instruments and other records (including the
documents, instruments and other records required to be transferred to a
successor pursuant to Section 6.01 upon a Master Service Transfer or Service
Transfer, as the case may be), equipment and personnel that are necessary to
enable a Successor Master Servicer to continue master servicing operations or a
Successor Servicer to continue servicing operations, as the case may be, in
accordance with the terms of the Transaction Documents and (ii) permit the
Company, the Trustee, any Agent or any of their respective agents or
representatives to visit its properties to discuss its affairs, finances and
accounts relating to the Receivables or the Serviced Receivables, as the case
may be, or its performance hereunder or under any of the other Transaction
Documents to which it is a party with any of its officers or directors and with
its Independent Public Accountants; provided, that the Company, the Trustee or
the Agent, as the case may be, shall notify it prior to any contact with such
accountants and shall give it the opportunity to participate in such
discussions.
(b) Each of the Master Servicer and each Servicer shall provide the
Trustee with such other information as the Trustee may reasonably request in
connection with the fulfillment of the Trustee's obligations under any Pooling
and Servicing Agreement.
SECTION 4.10. Lockbox Agreement; Lockbox Accounts. The Master
Servicer and each Servicer shall (a) maintain, and keep in full force and
effect, each Lockbox Agreement to which it is a party, except to the extent
otherwise permitted under the terms of the
Amended and Restated Servicing Agreement 22
Transaction Documents, and (b) take all reasonable actions necessary to ensure
that each related Lockbox Account shall be free and clear of, and defend each
such Lockbox Account against, any writ, order, stay, judgment, warrant of
attachment or execution or similar process; provided, however, that upon
satisfaction of the Rating Agency Condition and the consent of the Trustee
(which shall not be unreasonably withheld), the Company may enter into any
amendments to or modifications of a Lockbox Agreement that the Company
reasonably deems necessary to conform such Lockbox Agreement to the cash
management system of the Company or the Responsible Servicer(s).
SECTION 4.11. Delivery of Financial Statements. The Master Servicer
shall furnish to the Company, the Trustee, each Agent and the Rating Agencies:
(a) within 90 days after the end of each fiscal year, Furnishings
International Inc.'s consolidated balance sheet and related statements of
income, stockholders' equity and cash flows showing the consolidated
financial condition of Furnishings International Inc. and its consolidated
subsidiaries as of the close of such fiscal year and the consolidated
results of its operations and the operations of such subsidiaries during
such year (and showing, on a comparative basis, the figures for the
previous year), all audited by Ernst & Young LLP, Coopers and Xxxxxxx LLP
or other independent public accountants of recognized national standing
acceptable to the Required Lenders (as defined in the Credit Agreement)
and accompanied by an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such consolidated
financial statements fairly present in all material respects the financial
condition and results of operations of Furnishings International Inc. and
its consolidated subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;
Amended and Restated Servicing Agreement 23
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, Furnishings International Inc.'s unaudited
consolidated balance sheet and related statements of income, stockholders'
equity and cash flows showing the consolidated financial condition of
Furnishings International Inc. and its consolidated subsidiaries as of the
close of such fiscal quarter and the consolidated results of its
operations and the operations of such subsidiaries during such fiscal
quarter and the then elapsed portion of the fiscal year (and showing, on a
comparative basis, such information as of and for the corresponding dates
and periods of the preceding fiscal year), all certified by a Financial
Officer (as defined in the Credit Agreement) of Furnishings International
Inc. as fairly presenting in all material respects the consolidated
financial condition and results of operations of Furnishings International
Inc. and its consolidated subsidiaries on a consolidated basis in
accordance with GAAP (except for the absence of footnote disclosure)
consistently applied, subject to year-end audit adjustments;
(c) within 30 days after the end of each month (other than the last
month of any fiscal quarter), Furnishings International Inc.'s unaudited
consolidated balance sheet and related statements of income, stockholders'
equity and cash flows, showing the consolidated financial condition of
Furnishings International Inc. and its consolidated subsidiaries as of the
close of such month and the consolidated results of its operations and the
operations of such subsidiaries during such month and the then-elapsed
portion of the fiscal year;
(d) concurrently with any delivery of financial statements under
sub-paragraph (a) or (b) above, a certificate of the Financial Officer
certifying such statements;
Amended and Restated Servicing Agreement 24
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Furnishings International Inc., any Servicer or any Subsidiary with the
Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any
national securities exchange, or distributed to its shareholders
generally, as the case may be; and
(f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of Furnishings
International Inc., any Servicer or any Subsidiary, or compliance with the
terms of any Transaction Document, in each case as the Agent or any Holder
may reasonably request.
SECTION 4.12. Notices. Each of the Master Servicer and each Servicer
shall furnish to the Company, the Trustee, each Agent and each Rating Agency,
promptly upon obtaining knowledge of the occurrence of any Purchase Termination
Event, Potential Purchase Termination Event, Early Amortization Event, Potential
Early Amortization Event or Servicer Default, written notice thereof.
SECTION 4.13. Insurance. Each Servicer hereby covenants and agrees
that it shall maintain in full force and effect fidelity bond or other coverage
insuring against losses through wrongdoing of its officers and employees who are
involved in the servicing of Receivables, including coverage of depositor's
forgery, in an amount at least equal to and with breadth of coverage at least as
comprehensive as the coverage indicated on Exhibit C and with insurers having a
claims-paying ability substantially comparable to the insurers indicated on
Exhibit C.
Amended and Restated Servicing Agreement 25
ARTICLE V
Other Matters Relating to the
Master Servicer and the Servicers
SECTION 5.01. Merger, Consolidation, etc. Neither the Master
Servicer nor any Servicer shall enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or make any material change in its present method
of conducting business, or convey, sell, transfer, lease, assign or otherwise
dispose of, all or substantially all of its property, business or assets other
than the assignments and transfers contemplated hereby; provided that the Master
Servicer or any Servicer may merge into or consolidate with any other
corporation or convey, sell or transfer its property, business or assets
substantially as an entirety to another Person, if:
(a) the corporation into which it is merged or the corporation
formed by such consolidation or the Person that acquires by conveyance,
sale or transfer its property, business or assets substantially as an
entirety shall be a corporation organized and existing under the laws of
the United States of America or any State or the District of Columbia,
and, if it is not the surviving entity, such corporation shall assume,
without the execution or filing of any paper or any further act on the
part of any of the parties hereto, the performance of every one of its
covenants and obligations hereunder; and
(b) it has delivered to the Trustee an officer's certificate
executed by a Vice President or other senior officer and an Opinion of
Counsel addressed to the Trust and the Trustee each stating that such
consolidation, merger, conveyance or transfer complies with this Section
5.01 and an officer's certificate executed by a Vice President or other
senior officer stating that all conditions precedent herein provided
Amended and Restated Servicing Agreement 26
for relating to such transaction have been complied with.
SECTION 5.02. Indemnification of the Trust and the Trustee. (a) Each
of the Master Servicer and the Servicer hereby agrees to indemnify and hold
harmless the Company, the Trustee for the benefit of the Holders and the Trustee
and their respective directors, officers, agents and employees (an "Indemnified
Person") from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of, or relating to, its activities pursuant to any Pooling
and Servicing Agreement to which it is a party, including but not limited to any
judgment, award, settlement, reasonable attorneys' fees and other reasonable
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that neither the Master
Servicer nor any Servicer shall indemnify any Indemnified Person for any
liability, cost or expense of such Indemnified Person (i) arising solely from a
default by an Obligor with respect to any Receivable (except that
indemnification shall be made to the extent that such default arises out of its
failure to perform its duties or obligations under this Agreement), or (ii) to
the extent that such liability, cost or expense arises from the gross
negligence, bad faith or wilful misconduct of such Indemnified Person (or any of
its respective directors, officers, agents or employees). The provisions of this
indemnity shall run directly to, and be enforceable by, an injured party and
shall survive the termination of the Agreement or the resignation of the Master
Servicer or Servicer, as the case may be.
(b) In addition to and without giving effect to any limitations set
forth in subsection (a) above, each Servicer shall indemnify and hold harmless
each Indemnified Person from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of a breach by such Servicer of any
covenant contained in subsections 2.02(g) or 2.02(h) or Sections 4.05, 4.06 or
4.07 that
Amended and Restated Servicing Agreement 27
adversely affects the interest of the Company or the Holders under the
Transaction Documents with respect to any Serviced Receivable (an
"Indemnification Event"), in an amount equal to the outstanding Principal Amount
at such time of such Receivable. Payment shall occur on or prior to the 30th
Business Day after the day such Indemnification Event becomes known to such
Servicer unless such Indemnification Event shall have been cured on or before
such day.
SECTION 5.03. Master Servicer and Servicers Not to Resign. Neither
the Master Servicer nor any Servicer shall resign from the obligations and
duties hereby imposed on it except upon determination that (a) the performance
of its duties hereunder is no longer permissible under applicable law, and (b)
there is no reasonable course of action that it could take to make the
performance of its duties hereunder permissible under applicable law. Any such
determination permitting the resignation of the Master Servicer or any Servicer
shall be evidenced as to clause (a) above by an Opinion of Counsel to such
effect delivered to the Company, the Trustee and each Agent. No such resignation
shall become effective until a Successor Master Servicer or Successor Servicer,
as the case may be, or the Trustee shall have assumed the responsibilities and
obligations of the Master Servicer or such Servicer in accordance with Section
6.02. The Trustee, the Company, each Agent and each Rating Agency (and, in the
case of the resignation of any Servicer, the Master Servicer) shall be notified
of such resignation by the resigning Person.
SECTION 5.04. Access to Certain Documentation and Information
Regarding the Receivables. Each Servicer shall hold in trust for the Company and
the Trustee at the office of such Servicer such computer programs, books of
account and other records as are reasonably necessary to enable the Trustee to
determine at any time the status of the Serviced Receivables and all collections
and payments in respect thereof (including, without limitation, an ability to
recreate records evidencing the Serviced Receivables in the event of the
destruction of the originals thereof).
Amended and Restated Servicing Agreement 28
ARTICLE VI
Servicer Defaults;
Servicer Termination
SECTION 6.01. Servicer Defaults. If any one of the following events
(a "Servicer Default") shall occur and be continuing with respect to the Master
Servicer or one or more Servicers, as the case may be:
(a) failure by the Master Servicer to deliver, within two Business
Days of the earlier date set forth below in clause (i) or (ii), any Daily
Report or, within three Business Days of the earlier date set forth below
in clause (i) or (ii), any Monthly Settlement Statement conforming in all
material respects to the requirement of Section 4.01 or 4.02, as the case
may be, in each case, after the earlier to occur of (i) the date upon
which a Responsible Officer of the Master Servicer obtains knowledge of
such failure or (ii) the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer by the Company or the Trustee, or to the Company, the Master
Servicer and the Trustee from holders of Investor Certificates evidencing
25% or more of the Aggregate Invested Amount or by any Agent;
(b) failure by the Master Servicer or any Servicer to pay any amount
required to be paid by it under any Pooling and Servicing Agreement on or
before the date occurring five Business Days after the earlier to occur of
(i) the date upon which a Responsible Officer of the Master Servicer or
such Servicer obtains knowledge of such failure or (ii) the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given (A) (I) in the case of a failure on the part of the Master
Servicer, to the Master Servicer or (II) in the case of a failure on the
part of any Servicer, to the Master Servicer or such
Amended and Restated Servicing Agreement 29
Servicer, by the Company or the Trustee, or (B) to the Company, to the
Trustee and (I) in the case of a failure on the part of the Master
Servicer, to the Master Servicer or (II) in the case of a failure on the
part of any Servicer, to the Master Servicer or such Servicer by holders
of Investor Certificates evidencing 25% or more of the Aggregate Invested
Amount or by any Agent;
(c) failure on the part of the Master Servicer or any Servicer duly
to observe or to perform any other of its covenants or agreements set
forth in any Pooling and Servicing Agreement that has an adverse effect on
the holders of any Outstanding Series and that continues unremedied until
30 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given (A) (I) in the case of a
failure on the part of the Master Servicer, to the Master Servicer or (II)
in the case of a failure on the part of any Servicer, to the Master
Servicer or such Servicer, by the Company or the Trustee, or (B) to the
Company, to the Trustee and (I) in the case of a failure on the part of
the Master Servicer, to the Master Servicer or (II) in the case of a
failure on the part of any Servicer, to the Master Servicer or such
Servicer by holders of Investor Certificates evidencing 25% or more of the
Aggregate Invested Amount or by any Agent; provided, that no Servicer
Default shall be deemed to occur under this subsection with respect to a
failure on the part of any Servicer if such Servicer shall have complied
with the provisions of Section 5.02(b) with respect thereto;
(d) any representation, warranty or certification made by the Master
Servicer or any Servicer in any Pooling and Servicing Agreement or in any
certificate delivered pursuant thereto shall prove to have been incorrect
in any material respect when made or deemed made, which incorrectness has
an adverse effect on the holders of any Outstanding Series and which
adverse
Amended and Restated Servicing Agreement 30
effect continues unremedied until 30 days after the date on which written
notice thereof, requiring the same to be remedied, shall have been given
(A) (I) in the case of a failure on the part of the Master Servicer, to
the Master Servicer or (II) in the case of a failure on the part of any
Servicer, to the Master Servicer or such Servicer, by the Company or the
Trustee, or (B) to the Company, to the Trustee and (I) in the case of a
failure on the part of the Master Servicer, to the Master Servicer or (II)
in the case of a failure on the part of any Servicer, to the Master
Servicer or such Servicer by holders of Investor Certificates evidencing
25% or more of the Aggregate Invested Amount or by any Agent; provided,
that no Servicer Default shall be deemed to occur under this subsection
with respect to a failure on the part of any Servicer if such Servicer
shall have complied with the provisions of Section 5.02(b) with respect
thereto;
(e)(i) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Master Servicer or any
Servicer in an involuntary case under any Applicable Insolvency Law, which
decree or order is not stayed, or any other similar relief shall be
granted under any applicable Federal or state law and shall not be stayed;
(ii) an involuntary case is commenced against the Master Servicer or any
Servicer under any Applicable Insolvency Law, a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the Master Servicer or any Servicer, or over all or a
substantial part of the property of the Master Servicer or any Servicer
shall have been entered, an interim receiver, trustee or other custodian
of the Master Servicer or any Servicer for all or a substantial part of
the property of the Master Servicer or such Servicer is involuntarily
appointed or a warrant of attachment, execution or similar process is
issued against any substantial part
Amended and Restated Servicing Agreement 31
of the property of the Master Servicer or any Servicer, and the
continuance of any such events in this clause (ii) for 60 days unless
dismissed, bonded or discharged; (iii) the Master Servicer or any Servicer
shall at its request have a decree or an order for relief entered with
respect to it, commence a voluntary case under the Bankruptcy Code or any
Applicable Insolvency Law, consent to the entry of a decree or an order
for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or consent to the
appointment of or taking possession by a receiver, trustee or other
custodian of all or a substantial part of its property; (iv) the making by
the Master Servicer or any Servicer of any general assignment for the
benefit of creditors; (v) the inability or failure of the Master Servicer
or any Servicer generally to pay its debts as such debts become due; or
(vi) the Board of Directors of the Master Servicer or any Servicer adopts
any resolution or otherwise authorizes action to approve any of the
foregoing; or
(f) there shall have occurred and be continuing a Purchase
Termination Event under the Receivables Sale Agreement affecting any
Serviced Receivables of such Servicer;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied or waived, the Company (with the consent of the
Trustee) may, the Company at the direction of the Trustee shall, and the Company
and the Trustee shall, at the written direction of the holders of Investor
Certificates evidencing more than 50% of the Aggregate Invested Amount voting as
a single class, by notice then given in writing to the Master Servicer, to each
Rating Agency and, if the Servicer Default relates to a default on the part of
any Servicer, to such Servicer (a "Termination Notice"), terminate all or any
part of the rights and obligations of the Master Servicer or such Servicer, as
the case may be, under the Pooling and
Amended and Restated Servicing Agreement 32
Servicing Agreements. Notwithstanding anything to the contrary in this Section
6.01, a delay in or failure of performance referred to under clause (b) above
for a period of 10 Business Days after the applicable grace period or a delay in
or failure of performance referred to under clauses (a), (c) or (d) above for a
period of 30 Business Days after the applicable grace period shall not
constitute a Servicer Default, if such delay or failure could not have been
prevented by the exercise of reasonable diligence by the Master Servicer or such
Servicer and such delay or failure was caused by a Force Majeure Delay. After
receipt by the Master Servicer or a Servicer of a Termination Notice, and on the
date that a Successor Master Servicer or Successor Servicer, as the case may be,
shall have been appointed by the Company and the Trustee pursuant to Section
6.02, all authority and power of the Master Servicer or such Servicer, as the
case may be, under any Pooling and Servicing Agreement to the extent specified
in such Termination Notice shall pass to and be vested in the Successor Master
Servicer (a "Master Service Transfer") or a Successor Servicer (a "Service
Transfer"), as the case may be; and, without limitation, the Trustee is hereby
directed, authorized and empowered (upon the failure of the Master Servicer or
such Servicer to cooperate) to execute and deliver, on behalf of the Master
Servicer or such Servicer, as attorney-in-fact or otherwise, all documents and
other instruments upon the failure of the Master Servicer or such Servicer to
execute or to deliver such documents or instruments, and to do and to accomplish
all other acts or things necessary or appropriate to effect the purposes of such
Master Service Transfer or Service Transfer and the Trustee shall incur no
liability in connection with effecting such Master Service Transfer or Service
Transfer. Each of the Master Servicer and each Servicer agrees to cooperate with
the Company and the Trustee and such Successor Master Servicer or Successor
Servicer, as the case may be, in effecting the termination of the
responsibilities and rights of the Master Servicer or such Servicer to conduct
its duties hereunder, including, without limitation, the transfer to Successor
Master Servicer or Successor Servicer, as the case may be, of all
Amended and Restated Servicing Agreement 33
authority of the Master Servicer to coordinate the servicing of all Receivables
or all authority of such Servicer to service the Serviced Receivables, as the
case may be, provided for under the Pooling and Servicing Agreements (including
in the case of such Servicer, without limitation, all authority over all
Collections that shall on the date of transfer be held by such Servicer for
deposit, or that have been deposited by such Servicer, in the Collection
Account, or that shall thereafter be received with respect to the Serviced
Receivables), and in assisting the Successor Master Servicer or Successor
Servicer, as the case may be. Upon a Master Service Transfer, the terminated
Master Servicer shall promptly (x) assemble all of its documents, instruments
and other records (including credit files, licenses (to the extent
transferable), rights, copies of all relevant computer programs and any
necessary licenses (to the extent transferable) for the use thereof, related
material, computer tapes, disks, cassettes and data) that (i) evidence or record
Receivables sold and assigned to the Trust and (ii) are otherwise necessary to
enable a Successor Master Servicer to coordinate servicing of all such
Receivables and to prepare and deliver Daily Reports and Monthly Settlement
Statements, with or without the participation of the terminated Master Servicer
and (y) deliver or license (to the extent transferable) the use of all of the
foregoing documents, instruments and other records to such Successor Master
Servicer at a place designated by such Successor Master Servicer. Upon any
Service Transfer, the terminated Servicer shall promptly (x) assemble all of its
documents, instruments and other records (including credit files, licenses (to
the extent transferable), rights, copies of all relevant computer programs and
any necessary licenses (to the extent transferable) for the use thereof, related
material, computer tapes, disks, cassettes and data) that (i) evidence or will
evidence or record Receivables sold and assigned to the Trust and (ii) are
otherwise necessary to enable a Successor Servicer to effect the immediate
Collection of such Receivables, with or without the participation of the
applicable Seller or such Servicer and (y) deliver or
Amended and Restated Servicing Agreement 34
license (to the extent transferable) the use of all of the foregoing documents,
instruments and other records to such Successor Servicer at a place designated
by such Successor Servicer. In recognition of any terminated Servicer's need to
have access to any such documents, instruments and other records that may be
transferred to a Successor Servicer hereunder, whether as a result of its
continuing responsibility as a servicer of accounts receivable that are not sold
and assigned to the Trust or otherwise, such Successor Servicer shall provide to
such terminated Servicer reasonable access to such documents, instruments and
other records transferred by such terminated Servicer to it in connection with
any activity arising in the ordinary course of such terminated Servicer's
business; provided that such terminated Servicer shall not disrupt or otherwise
interfere with the Successor Servicer's use of and access to such documents,
instruments and other records. To the extent that compliance with this Section
6.01 shall require the terminated Master Servicer or any terminated Servicer to
disclose to the Successor Master Servicer or Successor Servicer information of
any kind that the terminated Master Servicer or such terminated Servicer
reasonably deems to be confidential, the Successor Master Servicer or Successor
Servicer, as the case may be, shall be required to enter into such customary
licensing and confidentiality agreements as the terminated Master Servicer or
such terminated Servicer shall reasonably deem necessary to protect its
interests. All costs and expenses incurred by the terminated Master Servicer or
any terminated Servicer, the Successor Master Servicer or any Successor Servicer
and the Trustee in connection with any Master Service Transfer or Service
Transfer shall be for the account of the terminated Master Servicer or
terminated Servicer, as the case may be, and to the extent any costs or expenses
incurred by the Trustee are not so paid, the Trustee shall be entitled to be
paid such items from amounts that would otherwise be distributable to the
Company under Article III of the Pooling Agreement.
Amended and Restated Servicing Agreement 35
SECTION 6.02. Trustee To Act; Appointment of Successor. (a) On and
after (i) the receipt by a Servicer of a Termination Notice pursuant to Section
6.01 or (ii) the date on which a Servicer notifies the Trustee, the Master
Servicer, the Company and each Rating Agency in writing of its resignation
pursuant to Section 5.03 (the "Resignation Notice"), such Servicer shall
continue to perform all servicing functions under the Pooling and Servicing
Agreements until the earlier of (i) the date on which a Successor Servicer
accepts its appointment and (ii) 60 days after the delivery of such Termination
Notice or Resignation Notice, as the case may be. Upon the receipt by the Master
Servicer of a Termination Notice or Resignation Notice with respect to any
Servicer, the Master Servicer shall, without any action on the part of the
Company, the Trustee or any other Person, be deemed appointed as successor
servicer (a "Successor Servicer") with respect to the Serviced Receivables. The
Master Servicer shall accept its appointment as Successor Servicer by a written
assumption in a form acceptable to the Trustee and the Company, unless the
Master Servicer is unable to act as Servicer for the Serviced Receivables for
the reasons set forth in Section 5.03. If the Master Servicer is unable to act
as Servicer for the Serviced Receivables, the Master Servicer shall promptly
deliver a Resignation Notice and Opinion of Counsel to the Company and the
Trustee in the same manner as if the Master Servicer were resigning as Servicer
under Section 5.03, but such Resignation Notice from the Master Servicer shall
not have the effect of postponing the beginning of the 60-day period referred to
in the first sentence of this subsection 6.01(a). The Trustee and the Company,
or the Company (with the consent of the Trustee) shall, as promptly as
reasonably possible after the receipt of a Resignation Notice from the Master
Servicer in accordance with the preceding sentence, appoint an Eligible
Successor Servicer and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Trustee and the Company.
Amended and Restated Servicing Agreement 36
(b) On and after (i) the receipt by the Master Servicer of a
Termination Notice pursuant to Section 6.01 or (ii) the date on which the Master
Servicer delivers a Resignation Notice to the Trustee, the Company and each
Rating Agency notifying them of its resignation pursuant to Section 5.03, the
Master Servicer shall continue to perform all of its functions under the Pooling
and Servicing Agreements until the earlier of (i) the date on which a Successor
Master Servicer accepts its appointment and (ii) 60 days after the delivery of
such Termination Notice or Resignation Notice, as the case may be. The Trustee
and the Company, or the Company (with the consent of the Trustee) shall, as
promptly as reasonably possible after the receipt of a Resignation Notice from
the Master Servicer, appoint an Eligible Successor Servicer as successor Master
Servicer (the "Successor Master Servicer")and such Successor Master Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Trustee and the Company.
(c) In the event that a Successor Master Servicer or Successor
Servicer has not been appointed or has not accepted its appointment at the time
when the Master Servicer or a Servicer ceases to act as Master Servicer or
Servicer, as the case may be, the Trustee without further action shall be
appointed Successor Master Servicer or Successor Servicer, as the case may be;
provided, that the Trustee shall only be responsible for the duties and
liabilities of Successor Master Servicer or such Successor Servicer that are
consistent with an orderly collection and liquidation of the Receivables and
other Trust Assets in the manner contemplated for such liquidations in Section
7.02 of the Pooling Agreement. The Trustee shall not be liable for any action
taken or not taken in effecting such liquidations of Receivables so long as such
liquidations are conducted in a commercially reasonable manner and on
commercially reasonable terms. The Trustee may delegate any of its master
servicing or servicing obligations to an affiliate or agent in accordance with
subsection 2.02(d). Notwithstanding the above, the Trustee shall, if the Trustee
is legally
Amended and Restated Servicing Agreement 37
unable so to act, petition a court of competent jurisdiction to appoint any
Person qualifying as an Eligible Successor Servicer as the Successor Master
Servicer or a Successor Servicer hereunder. The Master Servicer shall
immediately give notice to each Rating Agency of the appointment of any
Successor Master Servicer or Successor Servicer.
(d) Upon its appointment, the Successor Master Servicer or Successor
Servicer shall be the successor in all respects to the Master Servicer or the
Servicer to which it is successor with respect to master servicing or servicing
functions, as the case may be, under the Pooling and Servicing Agreements (with
such changes as are agreed to between such Successor Master Servicer or
Successor Servicer, as the case may be, and either the Company (with the consent
of the Rating Agencies) or the Company and the Trustee) and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Master Servicer or such Servicer, as the case may be, by the terms and
provisions hereof, and all references in any Pooling and Servicing Agreement to
the Master Servicer or such Servicer, as the case may be, shall be deemed to
refer to such Successor Master Servicer or such Successor Servicer, as the case
may be. The Successor Master Servicer or such Successor Servicer shall not be
liable for, and the replaced Master Servicer or Servicer, as the case may be,
shall indemnify the Successor Master Servicer or such Successor Servicer, as the
case may be, against costs incurred by the Successor Master Servicer or
Successor Servicer as a result of, any acts or omissions of such replaced Master
Servicer or Servicer or any events or occurrences occurring prior to the
Successor Master Servicer's or Successor Servicer's acceptance of its
appointment as Successor Master Servicer or Successor Servicer. Any Successor
Servicer shall manage the servicing and administration of the Serviced
Receivables in accordance with the Policies of the replaced Servicer and the
terms of the Pooling and Servicing Agreements.
(e) If the Master Servicer becomes a Successor Servicer, the Master
Servicer shall receive the same
Amended and Restated Servicing Agreement 38
servicing compensation in respect of the Serviced Receivables as the replaced
Servicer. If the Master Servicer is unable to act as Successor Servicer, the
Company and the Trustee shall review any bids obtained from Eligible Successor
Servicers and the Company and the Trustee, or the Company (with the consent of
the Trustee) may appoint any Eligible Successor Servicer submitting such a bid
as a Successor Servicer for servicing compensation not in excess of the portion
of the Servicing Fee previously payable to the replaced Servicer.
SECTION 6.03. Waiver of Past Defaults. Holders of Investor
Certificates evidencing more than 50% of the Aggregate Invested Amount may waive
any continuing default by the Master Servicer, any Servicer or the Company in
the performance of its respective obligations hereunder and its consequences,
except a default in the failure to make any required deposits or payments in
respect of any Series of Investor Certificates, which shall require a waiver by
the holders of all of the affected Investor Certificates. Upon any such waiver
of a past default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of the Pooling
and Servicing Agreements. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereon except to the extent expressly so
waived. Either the Company, the Master Servicer or such Servicer shall provide
notice to each Rating Agency of any such waiver.
SECTION 6.04. Other Servicer Terminations. The Company shall
terminate all of the rights and obligations of any Servicer of Receivables
originated by any Seller that is terminated pursuant to Section 9.13 of the
Receivables Sale Agreement, but only with respect to Receivables originated by
such terminated Seller after such termination. Any such Servicer shall remain
bound hereunder (unless terminated hereunder otherwise than pursuant to this
Section 6.04) to perform all of its obligations as a Servicer with respect to
all Receivables originated by such Seller and sold to the Company (and sold by
the Company to the Trust) before such
Amended and Restated Servicing Agreement 39
termination of such Seller under the Receivables Sale Agreement.
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01. Amendment. This Agreement may only be amended,
supplemented or otherwise modified from time to time if such amendment,
supplement or modification is effected in accordance with the provisions of
Section 10.01 of the Pooling Agreement.
SECTION 7.02. Termination. (a) The respective obligations and
responsibilities of the parties hereto shall terminate on the Trust Termination
Date (unless such obligations or responsibilities are expressly stated to
survive the termination of this Agreement).
(b) All authority and power granted to the Master Servicer and any
Servicer under any Pooling and Servicing Agreement shall automatically cease and
terminate on the Trust Termination Date, and shall pass to and be vested in the
Company and, without limitation, the Company is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer or any Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of rights from and after the Trust Termination Date.
The Master Servicer and each Servicer shall cooperate with the Company in
effecting the termination of its responsibilities and rights to conduct master
servicing or servicing, as the case may be, of the Receivables. The Master
Servicer and each Servicer shall transfer all of its records relating to the
Receivables to the Company in such form as the Company may reasonably request
and shall transfer all other records, correspondence and documents to the
Company in the manner and at such times as the Company shall reasonably request.
Amended and Restated Servicing Agreement 40
To the extent that compliance with this subsection 7.02(b) shall require the
Master Servicer or any Servicer to disclose to the Company information of any
kind that the Master Servicer or such Servicer deems to be confidential, the
Company shall be required to enter into such customary licensing and
confidentiality agreements as the Master Servicer or such Servicer, as the case
may be, shall reasonably deem necessary to protect its interests.
SECTION 7.03. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ANY CONFLICTS OF LAWS PRINCIPLES.
SECTION 7.04. Addition of Servicers. Subject to the terms and
conditions hereof, from time to time one or more wholly owned, direct or
indirect, Subsidiaries of Furnishings International Inc. that have been approved
as additional Sellers pursuant to the Pooling Agreement and any Supplement shall
become additional Servicers parties hereto upon (a) execution by each such
Subsidiary of an Additional Seller/Servicer Supplement and (b) satisfaction of
all conditions precedent set forth in Section 3.05 of the Receivables Sale
Agreement to such Subsidiary becoming an additional Seller.
SECTION 7.05. Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as set forth in Section 10.05 of the Pooling Agreement or
Section 9.09 of the Receivables Sale Agreement, or to such other address as may
be hereafter notified by the respective parties hereto.
SECTION 7.06. Counterparts. This Agreement may be executed in two or
more counterparts (and by different
Amended and Restated Servicing Agreement 41
parties on separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 7.07. Third-Party Beneficiaries. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and the
Certificateholders and their respective successors and permitted assigns. Except
as provided in this Article VII, no other person shall have any right or
obligation hereunder.
SECTION 7.08. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
SECTION 7.09. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 7.10. No Set-Off. Except as expressly provided in this
Agreement, each of the Master Servicer and each Servicer agrees that it shall
have no right of set-off or banker's lien against, and no right to otherwise
deduct from, any funds held in the Collection Account for any amount owed to it
by the Company, the Trust, the Trustee or any Certificateholder.
SECTION 7.11. No Bankruptcy Petition. Each of the Master Servicer
and each Servicer hereby covenants and agrees that, prior to the date which is
one year and one day after the Trust Termination Date, it shall not institute
against, or join any other Person in instituting against,
Amended and Restated Servicing Agreement 42
the Company any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any Federal or state
bankruptcy or similar law.
Amended and Restated Servicing Agreement 43
IN WITNESS WHEREOF, the Company, the Master Servicer, each Servicer
and the Trustee have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
LFI RECEIVABLES CORPORATION,
by___________________________________
Name:
Title:
LFI SERVICING CORPORATION,
Master Servicer,
by___________________________________
Name:
Title:
AMETEX FABRICS, INC.,
Servicer,
by___________________________________
Name:
Title:
THE BERKLINE CORPORATION,
Servicer,
by___________________________________
Name:
Title:
Amended and Restated Servicing Agreement 44
DREXEL HERITAGE
FURNISHINGS INC.,
Servicer,
by___________________________________
Name:
Title:
FURNISHINGS
INTERNATIONAL INC.,
Servicer,
by___________________________________
Name:
Title:
HENREDON FURNITURE
INDUSTRIES, INC.,
Servicer,
by___________________________________
Name:
Title:
LA BARGE, INC.,
Servicer,
by___________________________________
Name:
Title:
Amended and Restated Servicing Agreement 45
LEXINGTON FURNITURE
INDUSTRIES, INC.,
Servicer,
by___________________________________
Name:
Title:
XXXXXXXX-XXXXX, INC.,
Servicer,
by___________________________________
Name:
Title:
XXXXXX XXXXX FABRICS, INC.,
Servicer,
by___________________________________
Name:
Title:
UNIVERSAL FURNITURE
INDUSTRIES, INC.,
Servicer,
by___________________________________
Name:
Title:
Amended and Restated Servicing Agreement 46
THE CHASE MANHATTAN BANK, not
in its individual capacity but
solely as Trustee,
by___________________________________
Name:
Title:
