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NOTE PURCHASE AGREEMENT
among
THE PARTIES SET FORTH ON
THE SIGNATURE PAGES HEREOF
as Purchasers
and
X.X. XXXXXXXXX RECEIVABLES III LLC
as Issuer
$60,506,718 7.2 % STRUCTURED SETTLEMENT-BACKED NOTES, SERIES 1997-A
Dated as of September 30, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................................1
SECTION 1.01 Certain Defined Terms......................................1
SECTION 1.02 Other Definitional Provisions..............................2
ARTICLE II PURCHASE AND SALE.................................................3
SECTION 2.01 Purchase and Sale of the Notes.............................3
ARTICLE III CONDITIONS PRECEDENT TO OBLIGATION OF THE PURCHASERS..............3
SECTION 3.01 Conditions.................................................3
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE ISSUER......................5
SECTION 4.01 Reaffirmation..............................................6
SECTION 4.02 Authority, etc.............................................6
SECTION 4.03 Series 1997A Notes.........................................6
SECTION 4.04 Investment Company Act.....................................6
SECTION 4.05 Offering of Notes..........................................7
SECTION 4.06 Full Disclosure............................................7
SECTION 4.07 The Company; The Seller; Issuer Membership.................7
SECTION 4.08 CUSIP No.; Brokerage Fees..................................7
ARTICLE V REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER..................7
SECTION 5.01 Representations and Warranties.............................7
ARTICLE VI INDEMNIFICATION..................................................12
SECTION 6.01 Indemnification by the Issuer.............................12
ARTICLE VII MISCELLANEOUS....................................................12
SECTION 7.01 Amendments; etc...........................................12
SECTION 7.02 Notices...................................................13
SECTION 7.03 No Waiver; Remedies.......................................13
SECTION 7.04 Governing Law.............................................13
SECTION 7.05 No Proceedings............................................13
SECTION 7.06 WAIVER OF RIGHT TO JURY TRIAL.............................13
SECTION 7.07 Binding Effect............................................13
SECTION 7.08 Execution in Counterparts.................................13
SECTION 7.09 Survival..................................................14
SECTION 7.10 Limitations on Liability..................................14
EXHIBIT A -- Form of Order
EXHIBIT B -- Trustee Account Information
EXHIBIT C -- List of Closing Documents
NOTE PURCHASE AGREEMENT (this "Agreement") dated as of September 30,
1997, among THE PERSONS SET FORTH ON THE SIGNATURE PAGES HERETO AS PURCHASERS
(each a "Purchaser" and collectively the "Purchasers"), X.X. XXXXXXXXX
RECEIVABLES III LLC, a Delaware limited liability company (the "Issuer"), and
PNC BANK, NATIONAL ASSOCIATION, a national banking association, not individually
but solely in its capacity as trustee under the Indenture referred to below (in
such capacity, the "Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer has authorized and executed, and the Trustee has
authenticated, the Notes in accordance with an Order; and
WHEREAS, subject to the terms and conditions of this Agreement and
the Series Supplement and pursuant to such Order, the Issuer desires to sell to
the Purchasers, and the Purchasers desire to purchase from the Issuer, Notes as
hereafter provided;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. Capitalized terms used herein
(including in the preamble and recitals hereof) without definition shall have
the meanings set forth, or incorporated by reference, in the Series Supplement
or the Indenture, as applicable. Additionally, the following terms shall have
the following meanings:
"Closing" has the meaning specified in Section 2.01(a) hereof.
"Closing Date" has the meaning specified in Section 2.01(a) hereof.
"Commitment" means, as to any Purchaser, the several obligations of
such Purchaser to purchase Notes in an Aggregate Principal Balance equal to the
amount set forth opposite such Purchaser's name on the signature pages hereto.
"Company" means X.X. Xxxxxxxxx S.S.C. Limited Partnership, a
Delaware limited partnership.
"Indemnified Losses" has the meaning specified in Section 7.01
hereof.
"Indemnified Party" has the meaning specified in Section 7.01
hereof.
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"Indenture" means the Master Trust Indenture and Security Agreement,
dated as of September 30, 1997, among X.X. Xxxxxxxxx Receivables III LLC, as the
Issuer, X.X. Xxxxxxxxx & Company, Inc., as the Initial Master Servicer, and PNC
Bank, National Association, as Trustee, as the same may be amended, restated,
modified or otherwise supplemented from time to time.
"Notes" has the meaning specified in Section 2.01(b) hereof.
"PPM" has the meaning specified in Section 4.06 hereof.
"Preliminary PPM" has the meaning specified in Section 4.06 hereof.
"Purchase Price" has the meaning specified in Section 2.01(b)
hereof.
"Purchaser Group" means the group of Purchasers set forth underneath
such heading on the signature pages hereto.
"Seller" means X.X. Xxxxxxxxx Receivables II LLC, a Delaware limited
liability company.
"Series Supplement" means the Series 1997-A Supplement to the
Indenture, dated as of September 30, 1997, among the Issuer, the Master Servicer
and the Trustee, as the same may be amended, restated, modified or otherwise
supplemented from time to time.
SECTION 1.02 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate 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 in Section
1.01, and accounting terms partially defined in Section 1.01 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms herein are inconsistent with the meanings of such terms under United
States generally accepted accounting principles, 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 particular provision of this Agreement; and Section,
subsection, Schedule, Exhibit and Appendix references contained in this
Agreement are references to Sections, subsections, Schedules, Exhibits and the
Appendix in or to this Agreement unless otherwise specified.
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ARTICLE II
PURCHASE AND SALE
SECTION 2.01 Purchase and Sale of the Notes. (a) The closing (the
"Closing") of the purchase and sale of the Notes shall take place at 11:00 a.m.
New York time at the offices of Sidley & Austin, Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, on September 30, 1997, or if the conditions to closing
set forth in Article III of this Agreement shall not have been satisfied or
waived by such date, as soon as practicable after such conditions shall have
been satisfied or waived, or at such other time (not later than October 8, 1997
unless agreed to by all parties hereto), date and place as the parties shall
agree upon (the date of the Closing being referred to herein as the "Closing
Date").
(b) On the Closing Date, pursuant to an Order (a copy of which is
attached hereto as Exhibit A), the Issuer shall issue, sell, transfer and
deliver to each Purchaser, and each Purchaser severally agrees to purchase on
the Closing Date, Series 1997-A Notes (collectively, the "Notes") for a purchase
price ("Purchase Price") equal with respect to each Purchaser, to such
Purchaser's Commitment. Without limiting any other provision of this Agreement,
the obligation of each Purchaser to purchase the Notes on the Closing Date is
subject to the satisfaction of the conditions precedent set forth in Article III
hereof.
(c) The Purchase Price for each Note shall be payable in full at
Closing and shall be made in immediately available funds in U.S. Dollars to the
account of the Trustee specified in Exhibit B hereto.
(d) On the Closing Date, the Issuer will deliver to each Purchaser a
Note, dated the Closing Date, in the name of each such Purchaser and in an
original Principal Balance equal to the Purchase Price paid by such Purchaser
therefor, duly authenticated by the Trustee in accordance with the provisions of
the Indenture against delivery by such Purchaser to the Issuer of the Purchase
Price for such Purchaser's respective Notes in accordance with clause (c) above.
ARTICLE III
CONDITIONS PRECEDENT TO
OBLIGATION OF THE PURCHASERS
SECTION 3.01 Conditions. The obligation of any Purchaser to purchase
and pay for the Notes on the Closing Date is subject to the satisfaction at the
time of the Closing of the following conditions:
(a) Documents. Each of the documents on Exhibit C attached hereto
has been duly authorized, executed and delivered by the signatories thereto
(other than the Purchasers) and copies thereof (in form and substance
satisfactory to the Purchasers) have been delivered to the Trustee.
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(b) Performance of Obligations. All the terms, covenants, agreements
and conditions of the Indenture, the Series Supplement, the Seller Purchase
Agreement, the Issuer Purchase Agreement, the Revolving Credit Agreement, the
Intercreditor Agreement and this Agreement to be complied with and performed by
the Company, the Seller, the Issuer, and the Master Servicer for Series 1997-A
at or before the Closing shall have been complied with and performed in all
respects.
(c) Representations and Warranties. (i) Each of the representations
and warranties of the Issuer and the Master Servicer for Series 1997-A made in
the Indenture, the Series Supplement, the Issuer Purchase Agreement, the
Intercreditor Agreement and this Agreement shall be true and correct in all
material respects as of the time of the Closing (except to the extent they
expressly relate to an earlier or later time), and (ii) each of the
representations and warranties of the Seller made in the Seller Purchase
Agreement, the Revolving Credit Agreement and the Intercreditor Agreement shall
be true and correct in all material respects as of the time of the Closing
(except to the extent they expressly relate to an earlier or later time).
(d) No Event of Default. On the Closing Date and after giving effect
to the purchase of Notes contemplated herein, no Event of Default, Potential
Event of Default, or Series Event of Default (or any event or condition which
with the giving of notice or passage of time, or both, would constitute a Series
Event of Default) with respect to any Series shall have occurred and be
continuing at Closing or would result from the transactions contemplated under
the Operative Documents.
(e) Effectiveness of Operative Documents. The Operative Documents
with respect to Series 1997-A, including, without limitation, the Indenture, the
Series Supplement and the Intercreditor Agreement, shall become effective
pursuant to their terms.
(f) Documentation for Purchasers. Each Purchaser shall have received
an original signed copy of each certificate required to be delivered to the
Trustee or the Placement Agent in accordance with Section 5.01(a), (b) and (c)
of the Series Supplement.
(g) Opinions. Each Purchaser shall have received a signed copy of
each opinion of counsel delivered on the Closing Date in connection with the
Indenture and the Series Supplement.
(h) Rating of Notes. Each Purchaser shall have received written
notice from the Rating Agencies that the Notes shall have been rated by Duff &
Xxxxxx and Xxxxx'x A and A2, respectively.
(i) No Change in Financial Markets. There shall have not occurred at
any time on or after the date hereof any of the following: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange; (ii) a general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; (iii) the outbreak or
material escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war; or (iv) any
other change in national or international
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financial, political or economic conditions or currency exchange rates or
exchange controls, but with respect to any such event specified in clause (iii)
or (iv) only if such event makes it impracticable to proceed with the offering
or the delivery of the Notes on the terms and in the manner contemplated hereby.
(j) Legal Investment. At the Closing Date, (i) the Notes to be
purchased by each Purchaser will be a legal investment for such Purchaser under
the laws of each jurisdiction to which such Purchaser may be subject, without
resort to any so-called basket provision of said laws such as Section 1405(a)(8)
of the New York Insurance Law, (ii) the purchase of and payment for said Notes
by each Purchaser will not violate any applicable law or governmental regulation
and shall not subject such Purchaser to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or regulation and
(iii) each Purchaser shall have received such certificates or other evidence as
such Purchaser may reasonably request supporting the foregoing.
(k) Other Purchasers. As to any Purchaser, each other Purchaser
shall have purchased and made payment for the aggregate principal amount of the
Notes to be purchased by such other Purchaser pursuant hereto.
(l) Other Documents. Each Purchaser shall have received such other
information, documents, certificates and opinions as any Purchaser or special
counsel may reasonably request, all in form and substance reasonably
satisfactory to the Person requesting the same.
(m) Conditions under Series Supplement. All conditions to issuance
of the Notes in Article V of the Series Supplement shall have been satisfied.
If any condition specified in this Article III shall not have been
satisfied when and as required in this Agreement, any Purchaser may, by notice
to the Issuer at any time prior to the Closing Date, terminate such Purchaser's
obligation to purchase the Notes pursuant to this Agreement. Notice of such
termination shall be given to the Issuer in writing or by telephone promptly
confirmed in writing. Forthwith upon receipt of any such termination notice, the
Issuer shall give each other Purchaser written notice thereof.
Upon the purchase and payment by the Purchasers of the Notes, each
of the conditions set forth in this Section 3.01 shall be irrevocably deemed to
have been satisfied, provided that nothing in this paragraph will constitute a
waiver of any remedies the Purchasers may have it such conditions were in fact
not so satisfied on the date and purchase of such Notes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
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As of the Closing Date, the Issuer hereby makes the following
representations and warranties to the Purchasers and the Trustee, on which the
Purchasers and the Trustee shall rely in purchasing the Notes.
SECTION 4.01 Reaffirmation. The Issuer hereby remakes and reaffirms
to the Purchasers and the Trustee the representations and warranties of the
Issuer set forth in Section 2.03 of the Indenture and, with respect to the
Series 1997-A Receivables, in Section 3.03 of the Series Supplement, and hereby
represents and warrants that such representations and warranties are true and
correct in all material respects as of the date hereof (unless such
representations and warranties specifically refer to an earlier or later date).
SECTION 4.02 Authority, etc. (a) The execution, delivery and
performance by the Issuer of this Agreement, and the consummation of the
transactions herein contemplated will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any Lien, charge or encumbrance upon any of the
property or assets of the Issuer or any of its Affiliates pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement or Organizational
Documents or other agreement (excluding this Agreement) or instrument to which
it or any of its Affiliates is bound or to which any of its property or assets
is subject, nor will such action result in any violation of any Requirement of
Law applicable to the Issuer, except, in each case, where such conflict, breach,
default, creation or imposition of any Lien or violation does not have, and
could not reasonably be expected to have, a Material Adverse Effect.
(b) All approvals, authorizations or consents of any Person or of
any Governmental Authority required to be obtained by the Issuer in connection
with the execution and delivery of this Agreement by the Issuer or the
consummation by the Issuer of the transactions contemplated hereby have been
obtained.
(c) This Agreement has been duly authorized, executed and delivered
by the Issuer and this Agreement is the valid and legally binding obligation of
the Issuer, enforceable against the Issuer in accordance with its terms, subject
as to enforcement of bankruptcy, receivership, conservatorship, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general principles of equity.
SECTION 4.03 Series 1997-A Notes. The Issuer is authorized to
execute and deliver, and has duly and validly authorized and instructed the
Trustee to authenticate and deliver the Notes in accordance with the terms of
the Indenture and the Series Supplement. The Notes, when executed and
authenticated by the Trustee in accordance with the terms of the Indenture and
the Series Supplement and, in the case of the Notes delivered to the Purchasers
and paid for by the Purchasers in accordance with this Agreement, will be duly
and validly issued and outstanding, and will be entitled to the benefits of the
Indenture and the Series Supplement.
SECTION 4.04 Investment Company Act. As of the Closing Date,
assuming the accuracy of the representations and warranties of the Purchasers in
Section 6.01(f) hereof, the Issuer the is not, nor would the issuance of the
Notes pursuant to the terms hereof and of the
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Indenture and Series Supplement cause the Issuer to become, an "investment
company" or controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.05 Offering of Notes. Assuming all of the representations
and warranties of each Purchaser in Article VI hereof and in any other
certificate delivered by the Purchaser on the Closing Date are true and correct
in all material respects, the offer and sale of the Series 1997-A Notes pursuant
to the terms hereof and of the Indenture and Series Supplement are not required
to be registered under Section 5 of the Act pursuant to Section 4(2) of the Act.
SECTION 4.06 Full Disclosure. All written factual information
heretofore furnished by the Issuer to the Trustee and the Purchasers (including,
without limitation, the Confidential Private Placement Memorandum dated
September 28, 1997 (the "PPM") but specifically excluding any earlier draft of
the PPM including the Preliminary Confidential Placement Memorandum,
("Preliminary PPM") dated August 29, 1997) for the purposes of or in connection
with this Agreement and the offer and sale of the Notes was true and correct in
all material respects and did not fail to state any material fact or statement
which would make any such information materially misleading in light of the
circumstances in which any such disclosure was made, in either case, on the date
as of which such information was stated or certified and remains true and
correct in all material respects as of the time of Closing.
SECTION 4.07 The Company; The Seller; Issuer Membership. To the best
of Issuer's knowledge after due inquiry, each of the Company and the Seller is
and will be solvent and able to pay its debts as they come due, and has and will
have adequate capital. On the date hereof the Issuer's sole members are (i) the
Seller, (ii) Xxxxxx X. Xxxxx and (iii) Xxxxx X. Xxxxx
SECTION 4.08 CUSIP No.; Brokerage Fees. The Corporate CUSIP Number
for the Notes is 466156 AA4. In marketing, distributing and selling the Notes,
the Issuer has not used the services of any broker, dealer, underwriter or
placement agent other than ING Baring (U.S.) Securities, Inc. ("ING Barings")
and no sales commissions, underwriting fees or other similar amounts are payable
to any Person other than ING Barings, as Placement Agent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
SECTION 5.01 Representations and Warranties. Each Purchaser hereby
represents and warrants to each of the Trustee, the Issuer, the Placement Agent,
and the Master Servicer that, as of the Closing Date:
(a) (i) it has made its own independent evaluation of the risks and
merits of purchasing the Notes and has had the opportunity to ask questions and
to obtain such information as it has deemed appropriate to make an informed
investment decision regarding the Notes and
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(ii) it has not relied on the Preliminary PPM (or any earlier version) or any of
the information contained therein in making its investment decision regarding
the Notes.
(b) The Purchaser is an "accredited investor" as defined in Rule 501
(a)(1) or (3) of Regulation D (an "Institutional Accredited Investor")
promulgated by the Securities and Exchange Commission (the "Commission") under
the Act, has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment in the Notes
and is aware that it may be required to, and is able to, bear the economic risk
of such investment for an indefinite period of time.
(c) The Purchaser understands that the Notes have not been and will
not be registered under the Act, and have not and will not be registered or
qualified under any applicable "Blue Sky" law, and that the offering and sale of
the Notes has not been reviewed by, passed on or submitted to any federal or
state agency or commission, securities exchange or other regulatory body. The
Purchaser further understands that the Notes may not be offered, sold,
transferred, pledged, hypothecated or otherwise disposed of except as permitted
herein and under the Indenture and the Series Supplement.
(d) The Purchaser is acquiring the Notes for its own account, for
investment, and without a view to any distribution, resale or other transfer
thereof except as contemplated in the following provisions.
(i) The Purchaser will not resell or otherwise transfer any of the Notes
unless (x) such resale or transfer is made to a person who is a
Qualified Purchaser and (ii) such resale or transfer is made:
(A) in the United States of America to Institutional Accredited
Investors (or, in the case of any such sale to an Affiliated
Entity or the Company or an Affiliate thereof, to an
Accredited Investor) in a transaction exempt from the
registration requirements of the Act and to whom such sale or
transfer is being made pursuant to an available exemption from
the registration requirements of applicable state securities
laws, in any case, upon delivery to the Trustee and the Issuer
(or any designated agent of either of the foregoing) of an
Investor Letter and, if requested by the Trustee and/or the
Issuer, an opinion (which may be an opinion of in-house
counsel) confirming the availability of such exemptions to any
such sale or transfer, in form and substance reasonably
satisfactory to the Trustee and/or the Issuer, as the case may
be;
(B) in the United States of America to a transferee that such
Purchaser reasonably believes is a Qualified Institutional
Buyer purchasing such Notes for its own account or for the
account of another Person that is a Qualified Institutional
Buyer in a transaction exempt from the registration
requirements of the Act pursuant to Rule 144A thereunder, and
which transferee is aware that the proposed sale or transfer
is being made in
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reliance on Rule 144A under the Act and to whom such sale or
transfer is being made pursuant to an available exemption from
the registration requirements of applicable state securities
laws, in any case, upon delivery to the Trustee and/or the
Issuer (or any designated agent of either of the foregoing) of
an Investor Letter and, if requested by the Trustee and/or the
Issuer, an opinion (which may be an opinion of in-house
counsel) confirming the availability of such exemptions to any
such sale or transfer, in form and substance reasonably
satisfactory to the Trustee and/or the Issuer, as the case may
be; or
(C) in the United States of America to a transferee to whom such
sale or transfer is being made in reliance on Rule 144 under
the Act and to whom such sale or transfer is being made
pursuant to an available exemption from the registration
requirements of applicable state securities laws, in any case,
upon delivery to the Trustee and the Issuer (or any designated
agent of either of the foregoing) of an Investor Letter and,
if requested by the Trustee and/or the Issuer, an opinion
(which may be an opinion of in-house counsel) confirming the
availability of such exemptions to any such sale or transfer,
in form and substance reasonably satisfactory to the Trustee
and/or the Issuer, as the case may be, and
(ii) The Note Registrar and Transfer Agent shall have received, prior to
the date of any such proposed sale or transfer, a written instrument
of sale executed by transferring Noteholder and the Trustee.
(iii) The Notes shall bear a legend regarding the restrictions on transfer
as set forth herein which shall be substantially to the following
effect:
"THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY ACCEPTING
THIS NOTE, AGREES THAT THE SECURITIES REPRESENTED BY THIS NOTE MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE ACT AND OTHER APPLICABLE LAWS AND ONLY (I) TO A
PERSON WHO IS A "QUALIFIED PURCHASER" AS DEFINED IN SECTION 2(a)(51)
OF THE INVESTMENT COMPANY ACT OF 1940, AND (II):
(A) IN THE UNITED STATES OF AMERICA TO AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(1) OR (3) OF REGULATION D PROMULGATED
BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT
("REGULATION D") (OR, IN THE CASE OF A SALE TO X. X. XXXXXXXXX
& COMPANY, INC. (THE "COMPANY") OR ANY OF ITS DIRECT AND
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INDIRECT SUBSIDIARIES AND AFFILIATES, OR TO X.X. XXXXXXXXX
S.S.C. LIMITED PARTNERSHIP (THE "PARTNERSHIP") OR AN AFFILIATE
THEREOF, TO AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)
OF REGULATION D) IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND TO WHOM SUCH SALE OR TRANSFER IS
BEING MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS,
IN ANY CASE, UPON DELIVERY TO PNC BANK, NATIONAL ASSOCIATION
OR ANY SUCCESSOR (THE "TRUSTEE") AND THE ISSUER (OR ANY
DESIGNATED AGENT OF EITHER OF THE FOREGOING) OF AN INVESTOR
LETTER AND, IF REQUESTED BY THE TRUSTEE AND/OR THE ISSUER, AN
OPINION (WHICH MAY BE AN OPINION OF IN-HOUSE COUNSEL
CONFIRMING THE AVAILABILITY OF SUCH EXEMPTIONS TO ANY SUCH
SALE OR TRANSFER, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE TRUSTEE AND/OR THE ISSUER, AS THE CASE MAY
BE;
(B) IN THE UNITED STATES OF AMERICA TO A TRANSFEREE THAT SUCH
PURCHASER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" WITHIN THE MEANING OF RULE 144A UNDER THE ACT (A
"QUALIFIED INSTITUTIONAL BUYER") PURCHASING SUCH NOTES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER PERSON THAT IS A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A
THEREUNDER, AND WHICH TRANSFEREE IS AWARE THAT THE PROPOSED
SALE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER
THE ACT AND TO WHOM SUCH SALE OR TRANSFER IS BEING MADE
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS, IN ANY CASE,
UPON DELIVERY TO THE TRUSTEE AND THE ISSUER (OR ANY DESIGNATED
AGENT OF EITHER OF THE FOREGOING) OF AN INVESTOR LETTER AND,
IF REQUESTED BY THE TRUSTEE AND/OR THE ISSUER, AN OPINION
(WHICH MAY BE AN OPINION OF IN-HOUSE COUNSEL CONFIRMING THE
AVAILABILITY OF SUCH EXEMPTIONS TO ANY SUCH SALE OR TRANSFER,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE TRUSTEE
AND/OR THE ISSUER, AS THE CASE MAY BE; OR
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(C) IN THE UNITED STATES OF AMERICA TO A TRANSFEREE TO WHOM SUCH
SALE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144 UNDER
THE ACT AND TO WHOM SUCH SALE OR TRANSFER IS BEING MADE
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS, IN ANY CASE,
UPON DELIVERY TO THE TRUSTEE AND THE ISSUER (OR ANY DESIGNATED
AGENT OF EITHER OF THE FOREGOING) OF AN INVESTOR LETTER AND,
IF REQUESTED BY THE TRUSTEE AND/OR THE ISSUER, AN OPINION
(WHICH MAY BE AN OPINION OF IN-HOUSE COUNSEL) CONFIRMING THE
AVAILABILITY OF SUCH EXEMPTIONS TO ANY SUCH SALE OR TRANSFER,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE TRUSTEE
AND/OR THE ISSUER, AS THE CASE MAY BE.
(iv) The Purchaser will not sell, transfer or otherwise convey Notes to
any Person in respect of which the purchase or holding thereof would
constitute a "prohibited transaction" under ERISA or Section 4975 of
the Internal Revenue Code and each prospective purchaser shall be
deemed to represent and warrant that it is not such a Person prior
to its purchase of any Notes and to the extent any such
representation and warranty is incorrect such sale shall be
rescinded and deemed not to have occurred).
(v) Each Purchaser will notify any prospective purchaser, pledgee or
other transferee of any Notes from such Purchaser of the transfer
restrictions referred to in this Section 6.01(h).
It is hereby understood and agreed that the disposition of the Notes
shall remain solely within the control of the Noteholders.
(e) The Purchaser hereby represents and warrants that either (x) the
acquisition, holding and/or continued ownership of the Notes by the Purchaser
(or transferee, as the case may be) will not result in a "prohibited
transaction" under, and as defined in, ERISA or Section 4975 of the Internal
Revenue Code or (y), such Purchaser (a) is an insurance company and the source
of funds is an "insurance company general account," as such term is defined in
the Department of Labor Prohibited Transaction Class Exemption 95-60 (issued
July 12, 1995) ("PTCE 95-60") and as of the date of this Agreement there is no
"employee benefit plan" with respect to which the aggregate amount of such
general account's reserves and liabilities for the contracts held by or on
behalf of such "employee benefit plan" and all other "employee benefit plans"
maintained by the same employer (and affiliates thereof as defined in Section
V(a)(1) of PTCE 95-60) or by the same employee organization (in each case
determined in accordance with the provisions of PTCE 95-60) exceeds 10% of the
total reserves and liabilities of such general account (as determined under PTCE
95-60) (exclusive of separate account liabilities) plus surplus as set forth in
the National Association of Insurance Commissioners Annual Statement filed with
the state of
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domicile of such Purchaser and (b) has no reason to believe that the other
requirements of PTCE 95-60 have not been satisfied.
(f) The Purchaser hereby represents and warrants and covenants that
it is a "Qualified Purchaser" as defined in Section 2(a)(51) of the Investment
Company Act.
ARTICLE VI
INDEMNIFICATION
SECTION 6.01 Indemnification by the Issuer. Without limiting any
other rights which the Purchaser may have hereunder or under applicable law, but
without duplication, the Issuer hereby agrees to indemnify the Purchaser and the
Trustee and each such Person's permitted successors and assigns and all
officers, directors, trustees, agents and employees of the foregoing (each of
the foregoing Persons being individually referred to herein as an "Indemnified
Party") from and against any and all damages, losses, claims, judgments,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements, awarded against or incurred by any Indemnified Party relating
to or resulting from or in connection with a breach of Issuer's representations
hereunder or the failure by the Issuer to comply with (i) any term, provision or
covenant contained in this Agreement, the Indenture or the Series Supplement, or
(ii) any agreement executed in connection therewith or with any applicable law,
rule or regulation with respect thereto (all of the foregoing losses being
called the "Indemnified Losses").
Any Indemnified Losses payable by the Issuer under this Section 7.01
shall be payable solely from Available Issuer Funds and be paid by the Issuer to
the Purchaser within five (5) Business Days following the Purchaser's written
demand therefor, setting forth in reasonable detail the basis for such demand.
The agreements of the Issuer contained in this Section 7.01 shall survive the
Closing Date. In addition, in no event shall Indemnified Losses include any
consequential, special or punitive damages. Nothing in this Section 7.01 shall
require the Issuer to pay Indemnified Amounts if after payment thereof the
Issuer would be insolvent or fail to maintain a net worth sufficient to carry on
its business as then being conducted and pay its debts as they generally become
due. The provisions of this Section 7.01 shall survive the termination of this
Agreement.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Amendments; etc. No amendment or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed by the Issuer, the Trustee and each affected
Purchaser, and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
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SECTION 7.02 Notices. Except as provided below, all communications
and notices provided for hereunder shall be in writing (excluding telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address set forth below its name on the signature pages
hereto or at such other address as such party may hereafter specify in writing
for the purposes of notice to such party. Each such notice or other communi
cation shall be effective (i) if given by mail, three (3) Business Days
following such posting, postage prepaid, U.S. certified or registered, (ii) if
given by overnight courier, one (1) Business Day after deposit thereof with a
national overnight courier service, or (iii) if given by any other means, when
received at the address specified on the signature pages hereof.
SECTION 7.03 No Waiver; Remedies. No failure on the part of any
party hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
SECTION 7.05 No Proceedings. Each of the Issuer, the Trustee and
each Purchaser, by entering into this Agreement, covenant and agree that they
will not at any time institute against, or join any other Person in instituting
against, the Issuer any bankruptcy, reorganization, arrangement, insolvency, or
liquidation or other similar proceedings under any federal or state bankruptcy,
insolvency or other similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar Person for the Issuer or any
substantial portion of their respective assets until, in each case, one year and
one day after the Collection Date of the last outstanding Series.
SECTION 7.06 WAIVER OF RIGHT TO JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING (WHETHER IN
CONTRACT OR IN TORT) ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH, THE
TRANSACTIONS CONTEMPLATED HEREIN AND/OR IN THE INDENTURE OR THE SERIES
SUPPLEMENT AND FOR ANY COUNTERCLAIM RELATING THERETO.
SECTION 7.07 Binding Effect. This Agreement shall be binding upon,
and shall inure to the benefit of, each of the parties hereto and each of their
respective successors and assigns.
SECTION 7.08 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
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SECTION 7.09 Survival. All representations, warranties, covenants,
guaranties and indemnifications contained in this Agreement and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the sale and transfer of the Notes.
SECTION 7.10 Limitations on Liability. (a) Notwithstanding any
provision to the contrary in this Agreement, indemnification payments and other
amounts described herein as payable by the Issuer hereunder, whether following
demand, within a specified time period or otherwise shall only be payable from
Available Issuer Funds (and, as a result, may be payable from any allocable
Pledged Asset only if, to the extent that, and after such Pledged Asset shall
have been distributed to the Issuer in accordance with the terms of the
Indenture and the Series Supplement). Unless and until Available Issuer Funds
become available to pay any such amount, such amount shall not be due and
payable until a year and a day after the Collection Date for the last then
outstanding Series.
(b) None of the members, managers, officers, employees, agents,
stockholders, holders of limited liability company interests, officers or
directors of or in the Issuer or any such holders, past, present or future,
shall be under any liability to the Trustee, the Purchasers or any other Person
for any action taken or for refraining from the taking of any action in such
capacities or otherwise pursuant to this Agreement or for any obligation or
covenant under this Agreement, it being understood that, with respect to the
Issuer, this Agreement and the obligations created thereunder and hereunder
shall be, to the fullest extent permitted under applicable law, solely the
limited liability company obligations of the Issuer. The Issuer and any member,
manager, officer, employee, agent, stockholder, holder of limited liability
company interest, officer or director of or in the Issuer, may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person (other than the Issuer or any Affiliate thereof) respecting any
matters arising hereunder.
* * * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
ISSUER: X. X. XXXXXXXXX RECEIVABLES III LLC
By: X.X. Xxxxxxxxx Receivables II LLC, as Designated
Manager
By: X.X. Xxxxxxxxx S.S.C. Limited Partnership, as
Designated Manager
By: X.X. Xxxxxxxxx Structured Settlement Funding
Corporation, its General Partner
By:
-----------------------------
Name: Xxxx Xxxxxxx
Title: Chairman
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
PURCHASER GROUP #1
THE PRINCIPAL FINANCIAL GROUP
PURCHASER A PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
Aggregate Principal
Balance of Note
$25,281,510 By:
-------------------------------------
Name:
Title:
Principal Mutual Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attn: Investment Department-Securities
PURCHASER GROUP #2
LINCOLN INVESTMENT MANAGEMENT, INC.
PURCHASER B THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
Aggregate Principal By: Lincoln Investment Management, Inc.,
Balance of Note Its Attorney-In-Fact
$7,000,000
By:
-------------------------------------
Name:
Title:
Lincoln Investment Management, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Investments/Private Placements
PURCHASER C THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
Aggregate Principal By: Lincoln Investment Management, Inc.,
Balance of Note Its Attorney-In-Fact
$968,906
By:
-------------------------------------
Name:
Title:
Lincoln Investment Management, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Investments/Private Placements
PURCHASER D THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
Aggregate Principal By: Lincoln Investment Management, Inc.,
Balance of Note Its Attorney-In-Fact
$2,300,000
By:
-------------------------------------
Name:
Title:
Lincoln Investment Management, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Investments/Private Placements
PURCHASER E THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
Aggregate Principal By: Lincoln Investment Management, Inc.,
Balance of Note Its Attorney-In-Fact
$2,300,000
By:
-------------------------------------
Name:
Title:
Lincoln Investment Management, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Investments/Private Placements
PURCHASER F FIRST PENN-PACIFIC LIFE INSURANCE
COMPANY
Aggregate Principal By: Lincoln Investment Management, Inc.,
Balance of Note Its Attorney-In-Fact
$2,600,000
By:
-------------------------------------
Name:
Title:
Lincoln Investment Management, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Investments/Private Placements
PURCHASER GROUP #3
THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK
PURCHASER G THE MUTUAL LIFE INSURANCE
COMPANY OF NEW YORK
Aggregate Principal
Balance of Note
$15,000,000 By:
------------------------------------
Name:
Title:
The Chase Manhattan Bank
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Incoming Processing, J.Piperto,
13th Floor
PURCHASER GROUP #4
GENERAL AMERICAN/CONNING
PURCHASER H COVA FINANCIAL SERVICES LIFE
INSURANCE COMPANY
Aggregate Principal
Balance of Note
$4,500,000 By:
------------------------------------
Name:
Title:
Conning Asset Management
X.X. Xxx 000
Xx. Xxxxx, XX 00000
Attention: Investment Accounting
with copies to:
COVA Financial Services Life Insurance Co.
c/o The Northern Trust Company
X.X. Xxx 00000
Xxxxxxx, XX 00000
PURCHASER I COVA FINANCIAL LIFE INSURANCE
COMPANY
Aggregate Principal
Balance of Note
$556,302 By:
------------------------------------
Name:
Title:
Conning Asset Management
X.X. Xxx 000
Xx. Xxxxx, XX 00000
Attention: Investment Accounting
with copies to:
COVA Financial Services Life Insurance Co.
c/o The Northern Trust Company
X.X. Xxx 00000
Xxxxxxx, XX 00000
EXHIBIT A
[FORM OF ORDER]
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EXHIBIT B
TRUSTEE ACCOUNT INFORMATION
PNC Bank, Wilmington Delaware
ABA # 000000000
Credit A/C Name Trust Funds
Credit A/C 0000000000
Attn: Xxxx Xxxxxxxxxx
X.X. Xxxxxxxxx 00-X
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XXXXXXX X
LIST OF CLOSING DOCUMENTS
Attached
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