INTERCREDITOR AND CONCENTRATION ACCOUNT ADMINISTRATION AGREEMENT
Exhibit (k)(12)
INTERCREDITOR AND CONCENTRATION ACCOUNT
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT
THIS INTERCREDITOR AND CONCENTRATION ACCOUNT ADMINISTRATION AGREEMENT, dated as of July 27,
2005 (such agreement, as amended, modified, waived, supplemented or restated from time to time,
this “Agreement”), is by and among:
(1) U.S. BANK NATIONAL ASSOCIATION, a national banking association (together with its
successors and assigns, “U.S. Bank”), not in its individual capacity but solely as the
concentration account bank (in such capacity, the “Concentration Account Bank”);
(2) XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking association (together with its
successors and assigns, “Xxxxx Fargo”) not in its individual capacity but solely as the
account custodian under this Agreement (in such capacity, the “Account Custodian”);
(3) PATRIOT CAPITAL FUNDING, INC., a Delaware corporation (“Patriot”), in each of the
following capacities: (i) as the originator under each Securitization (as defined below) and on its
own behalf in its individual capacity (in such capacities, the “Originator”); (ii) as the
original servicer under each Securitization (in such capacity, the “Original Servicer”);
and (iii) as the concentration account servicer under this Agreement (in such capacity, the
“Concentration Account Servicer”); and
(4) Each of the parties that from time to time executes and delivers a joinder agreement in
the form of Schedule A hereto as trustee or securitization agent, as applicable, under each
Securitization (each, a “Securitization Agent”).
RECITALS
WHEREAS, the Originator and its affiliates may from time to time enter into one or more
securitization, financing or repurchase transactions (each, a “Securitization”) pursuant to
which the Originator or one of its affiliates will sell or otherwise transfer to a special purpose
entity or entities identified on a joinder in the form of Schedule A hereto (each, a
“Securitization SPE”) certain loans and related security related to such Securitization
(the specified loans and related security sold or otherwise transferred to a Securitization SPE as
part of a Securitization are referred to herein collectively as “Securitization Assets”,
and the agreements, instruments or documents executed in connection therewith, as any of the same
may be amended, supplemented, waived, modified or restated from time to time, are referred to
collectively herein as the “Securitization Documents”) and pursuant to which such
Securitization SPE shall: either (i) further transfer the related Securitization Assets to another
Securitization SPE, which will in turn grant a security interest to the applicable Securitization
Agent, for the benefit of certain parties to the Securitization Documents; or (ii) grant a security
interest to the applicable Securitization Agent, for the benefit of certain parties to the
Securitization Documents;
WHEREAS, the Originator has instructed certain of its obligors to remit payments in respect of
loans (collectively, “Remittances”) directly by wire transfer in immediately available
funds or otherwise into an account with the Concentration Account Bank in the name of Patriot,
as
Original Servicer, as set forth in Section 3 hereof, some of which Remittances may relate
to the Securitization Assets and some of which may relate to none of the Securitization Assets, but
constitute Remittances with respect to other loans and related security of the Originator,
including other loans and related security in which affiliates or other assignees of the Originator
may have an interest (such other loans and related security, collectively “Other Assets”);
and
WHEREAS, the Originator, the Original Servicer and each Securitization Agent, for the benefit
of the related Securitization SPE or Securitization SPEs and the related secured parties under the
related Securitization Documents, as the case may be, desire to appoint the Account Custodian, as
their agent and custodian, to exercise dominion and control over, and, to the extent set forth
herein, to direct the disposition of, the Remittances solely for purposes of continuing the
perfection and priority of their respective interests, with respect to the Securitization
Remittances and the Other Remittances (each as defined below), as applicable, in accordance with
the terms of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. Regarding Liens and Interests.
(a) No Securitization Agent shall have or assert, and each Securitization Agent hereby
disclaims and agrees not to assert, any right, title or interest in or to any Securitization Assets
in which a security interest or ownership interest has not been granted to it pursuant to the
related Securitization Documents or in or to any Other Assets, including Other Remittances relating
thereto; provided, however, that no Securitization Agent disclaims its rights under
Section 1(c) or 2(c) below, or any rights it may have as a beneficiary of the
security interest in the Concentration Account, referred to in Section 3 below.
(b) Neither the Original Servicer nor the Originator shall have or assert, and each hereby
disclaims and agrees not to assert, any right, title or interest in or to any Securitization
Assets, including Remittances relating thereto.
(c) Nothing herein shall be deemed to waive any rights of any Securitization Agent in the
event of any transfer or other disposition of any Securitization Assets in violation of the
agreements relating thereto or to preclude the exercise by any Securitization Agent of rights and
remedies provided for under the Securitization Documents including without limitation (and if and
to the extent so provided therein or thereby) notification to obligors related to the applicable
Securitization Assets directing payments be made to an account other than the Concentration Account
or to a lockbox, it being understood that this Agreement addresses only Remittances which are
contained in or on deposit in the Concentration Account.
(d) In exercising any of its rights or remedies under the Securitization Documents with
respect to any right, title and interest of the Original Servicer or the Originator as lessee,
licensee or otherwise in and to any computer hardware and software or related intellectual
property, each Securitization Agent, the Original Servicer and the Originator agrees that it
shall not take any action that would materially impair the rights or ability of the other parties
to use such property in connection with the transactions contemplated under the Securitization
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Documents or under this Agreement or in connection with the ownership of the Other Assets by the
Originator. The parties acknowledge that such property may be necessary to or useful in the
servicing, administration and collection of the Securitization Assets and the Other Assets and
agree to cooperate in good faith such that the respective interests of any Securitization Agent,
the Original Servicer and the Originator therein, and with respect thereto, shall be protected and
preserved.
Section 2. Separation of Collateral.
(a) Each Securitization Agent hereby agrees promptly to transfer and return to, or in
accordance with the directions of, any other Securitization Agent, the Originator or the Original
Servicer (as applicable), at such account or other place as such other Securitization Agent, the
Originator or the Original Servicer (as applicable) may instruct in writing, any funds or other
property that are received by such Securitization Agent and that are identifiable by such
Securitization Agent, using reasonable efforts, as not constituting its Securitization Assets but
instead constituting: (i) Securitization Assets in which it has not been granted an ownership or
security interest under the applicable Securitization Documents; or (ii) Other Assets. For
purposes of maintaining the perfection of such other Securitization Agent’s interest therein, each
such other Securitization Agent hereby appoints such Securitization Agent as its agent in respect
of such funds and other property; provided that such Securitization Agent’s sole duty as
such agent shall be to hold such funds or other property in trust for the benefit of such other
Securitization Agent and to transfer such funds or other property to or at the direction of such
other Securitization Agent as aforesaid.
(b) Each of the Originator and the Original Servicer hereby agrees promptly to transfer and
return to, or in accordance with the written directions of, the applicable Securitization Agent, at
such account or other place as the applicable Securitization Agent may instruct, any funds or other
property that are received by either Originator or the Original Servicer and that are identifiable
by either Originator or the Original Servicer, using reasonable efforts, as not constituting Other
Assets but instead constituting Securitization Assets. Each applicable Securitization Agent hereby
appoints the Originator and the Original Servicer as its agent in respect of such funds and other
property; provided that the Originator’s and the Original Servicer’s sole duty as such
agent shall be to hold such funds or other property for the benefit of the applicable
Securitization Agent and to transfer such funds or other property to or at the direction of the
applicable Securitization Agent as aforesaid.
(c) Each Securitization Agent hereby acknowledges that certain related records and other files
(including, without limitation, electronic files), documentation, software and similar assets may
constitute a portion of the Securitization Assets and/or the Other Assets. Each of the parties
hereto agrees to cooperate in good faith such that the respective interests of each Securitization
Agent and the Originator in such assets shall be protected and preserved, and, without limiting the
obligations of the Originator, the Original Servicer and each Securitization SPE, each
Securitization Agent, the Original Servicer and the Originator agrees to permit each other
reasonable access to such assets (to the extent they shall be in the possession or control of
such party) as shall be necessary or desirable to manage and realize on the Securitization
Assets or the Other Assets, as the case may be. Except as otherwise provided in the immediately
preceding sentence, in the event that any of the Securitization Assets or the Other Assets become
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commingled, then the Originator, the Original Servicer and each Securitization Agent shall, in good
faith, cooperate with each other to separate the Securitization Assets and the Other Assets, as
applicable.
(d) The out-of-pocket costs and expenses incurred by the parties hereto to effect any
separation and/or sharing (including without limitation reasonable fees and expenses of auditors
and attorneys) required by this Section 2 shall be borne by the Original Servicer.
Section 3. The Concentration Account.
(a) Appointment of Concentration Account Bank. The Account Custodian, each Securitization
Agent and the Originator and Original Servicer hereby appoints the Concentration Account Bank as
depositary with respect to the applicable Securitization Remittances and the Other Remittances
which are received by the Concentration Account Bank for deposit to the Concentration Account, and
the Concentration Account Bank hereby agrees to act as such and to accept and hold such
Remittances, for each such party as their interests may appear, on the terms and conditions set
forth herein.
(b) Appointment of Account Custodian. Each Securitization Agent and the Originator and
Original Servicer hereby appoints the Account Custodian as their agent and custodian: (i) to
exercise dominion and control over the Securitization Remittances and the Other Remittances for the
benefit of the secured parties under the respective Securitization Documents (as their interests
may appear therein) or the Originator, as the case may be; and (ii) for purposes of continuing the
perfection and priority of its respective interests, with respect to the Securitization Remittances
and the Other Remittances, and the Account Custodian hereby agrees to act as such with respect to
the Remittances, for each such party as their interests may appear, on the terms and conditions set
forth herein.
(c) Direction to Obligors. Each of the Originator and the Original Servicer hereby confirms
that it has instructed all obligors with respect to any Securitization Assets to remit all
Securitization Remittances (as defined herein) to a single omnibus collection account (Account No.
743028-701) maintained by the Concentration Account Bank (the “Concentration Account”): (i)
to which the Originator and the Original Servicer, as applicable, will instruct all such obligors
paying by ACH or wire transfer to authorize transfer; and (ii) into which the Originator and the
Original Servicer, as applicable, will deposit all Securitization Remittances (as defined herein)
made by check or other remittance item.
(d) Establishment of Concentration Account. The Originator, the Original Servicer and the
Concentration Account Bank confirm to each Securitization Agent that the Concentration Account has
been established with the Concentration Account Bank as a segregated demand deposit account in the
name of Patriot, as Original Servicer. The Original Servicer and each Securitization Agent hereby
appoints the Account Custodian as its true and lawful attorney, with full power of substitution,
for the purpose of making any transfers of funds on deposit in the Concentration Account, which
appointment is coupled with an interest and is irrevocable. The
parties hereto acknowledge and agree that funds withdrawn from the Concentration Account from
time to time may be transferred only to the appropriate collection account specified in Section
3(f) below. Prior to distribution in accordance with the terms of this Agreement, the
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funds on
deposit from time to time in the Concentration Account will be retained in the Concentration
Account and remain uninvested. The parties to this Agreement agree that the Concentration Account
is a “deposit account” within the meaning of Article 9 of the Uniform Commercial Code of New York
(the “UCC”). The Concentration Account Bank shall treat the Account Custodian as the
Concentration Account Bank’s sole “customer” (within the meaning of Section 4-104 of the UCC) with
respect to such deposit account. Each of the Originator and the Concentration Account Bank
represents and warrants to the other parties hereto that the Concentration Account: (i) is not
evidenced by an “instrument” (as such term is defined in the UCC); and (ii) does not constitute a
“securities account” or contain “securities” or “investment property” (as such terms are defined in
the UCC).
(e) Designation of Concentration Account Servicer. The Original Servicer is hereby designated
as the initial Concentration Account Servicer. The Original Servicer confirms to each of the
parties hereto that all actions of the Original Servicer taken hereunder with respect to
Remittances received in the Concentration Account shall be solely in one of the following
capacities: (i) in its capacity as initial Concentration Account Servicer and not in its individual
capacity; (ii) in its capacity as servicer under each Securitization and in accordance with the
applicable Securitization Documents with respect to the Securitization Remittances and not in its
individual capacity; or (iii) in its individual capacity with respect to the Other Remittances.
(f) Disbursement of Funds from the Concentration Account. Except as otherwise expressly
provided herein, none of the Originator, the Original Servicer nor any Securitization Agent will
have any check writing or other authority to issue payment orders against the Concentration
Account. Except as otherwise expressly provided herein, only the Concentration Account Servicer
(or a Successor Concentration Account Servicer, if applicable) on behalf of the Account Custodian,
or the Account Custodian (after receipt of notice of a “servicer default,” “termination event” or
similar event described in Section 3.1(i) below, sometimes jointly with each Securitization
Agent, and after a Removal Event and prior to the appointment of a Successor Concentration Account
Servicer), shall have authority to deliver the disbursement instructions identifying Remittances
held in the Concentration Account as Securitization Remittances or Other Remittances and directing
that transfers be made by the Concentration Account Bank from the Concentration Account to: (i) the
collection account specified in the written instructions to the Concentration Account Servicer (or
a Successor Concentration Account Servicer (as defined below), if applicable) with a copy to the
Account Custodian, or solely to the Account Custodian (after receipt of notice of a “servicer
default,” “termination event” or similar event described in Section 3.1(i) below, and after
a Removal Event and prior to the appointment of a Successor Concentration Account Servicer)
received from the applicable Securitization Agent with respect to the Securitization Remittances
(each, a “Securitization Collection Account”); or (ii) the account specified in the written
instructions received by the Concentration Account Servicer (or a Successor Concentration Account
Servicer, if applicable) with a copy to the Account Custodian, or solely to the Account Custodian
(after receipt of notice of a “servicer default,” “termination event” or similar event described in
Section 3.1(i) below and after a Removal Event and prior to the appointment of a Successor
Concentration Account Servicer) from the Originator with respect to the Other Remittances, except
nothing herein shall
limit the right of any Securitization Agent to re-direct the payment of proceeds of its
Securitization Remittances to another account pursuant to its Securitization Documents. The
Concentration Account Servicer (or any Successor Concentration Account Servicer, if
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applicable)
shall (within two Business Days of receipt of the associated remittance details) determine and
identify which Remittances received in the Concentration Account represent proceeds of
Securitization Assets (“Securitization Remittances”) or proceeds of Other Assets
(“Other Remittances”) (Securitization Remittances and Other Remittances each constituting,
for purposes of this Agreement, a “Category” of Remittance). In addition, the
Concentration Account Servicer (or a Successor Concentration Account Servicer, if applicable) shall
determine whether any amounts in the Concentration Account do not constitute Remittances with
respect to loans of one of the two Categories referred to above, but have nonetheless been paid or
deposited thereto by an obligor of a loan in error. The Concentration Account Servicer (or any
Successor Concentration Account Servicer, if applicable) will, on each Business Day, deliver
written transfer instructions to the Concentration Account Bank, each Securitization Agent and the
Original Servicer providing for the transfer of all Remittances on deposit in the Concentration
Account to the respective collection accounts identified in such instructions and the Concentration
Account Bank will make such transfers on each Business Day subject to its receipt of timely written
instructions; provided that any such instructions received after 3:00 p.m. (New York City time) on
any Business Day will be deemed received on the next Business Day. Neither the Concentration
Account Bank nor the Account Custodian shall have any obligation or responsibility to make inquiry
or in any way attest to, determine or verify the accuracy of any such written instructions or
allocations, nor shall the Concentration Account Bank or the Account Custodian have any duty or
obligation in this regard other than to comply with such instructions by effecting funds transfers
in accordance with such instructions. As used herein “Business Day” shall mean any day
other than a Saturday or a Sunday on which banks are not required or authorized to be closed in Xxx
Xxxx, Xxx Xxxx, Xxxxxxx, Xxxxxxxx or Boston, Massachusetts. Upon request by any Securitization
Agent, the Concentration Account Servicer shall provide on any Business Day to such Securitization
Agent detailed written information setting forth: (i) the interests of the applicable parties in
all Remittances credited to the Concentration Account; and (ii) the appropriate distribution of
such Remittances in accordance with such interests.
(g) [Reserved.]
(h) Disputed Amounts. In the event that the Account Custodian receives a notice from any
Securitization Agent, the Original Servicer or the Originator challenging the correctness of any
disbursements or related Remittances (the “Disputed Amounts”), the Account Custodian shall
require such disputing party to resolve such dispute by obtaining the written agreement of the
other disputing parties as to the proper allocation of the Disputed Amounts and, in connection with
any such dispute, each of the parties hereto agrees to cooperate with each other party hereto to
resolve the dispute, and each disputing party agrees that its written agreement shall not be
unreasonably withheld. In the event the disputing parties cannot resolve such dispute amongst
themselves by written agreement, the Account Custodian shall, at the equal expense of such
disputing parties, select an independent public accounting firm (who may also render other services
to the Account Custodian) to determine the proper allocation of the Disputed Amounts and shall, in
the meantime, assume (and shall have no liability to any person with respect to reliance on such
assumption) that information supplied by the Concentration
Account Servicer (or Successor Concentration Account Servicer (as defined below), if
applicable) is correct if the dispute is between Securitization Agents and shall require Disputed
Amounts remain in the Concentration Account pending resolution of the dispute if the dispute is
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between one or more Securitization Agents and the Originator. Each party hereto specifically
acknowledges that it shall have no right to impede the administration of the Concentration Account
as a whole, but has rights only with respect to the Securitization Remittances or Other Remittances
related to that party.
(i) Exclusive Dominion and Control. The Originator, the Original Servicer, each
Securitization Agent and the Concentration Account Bank each hereby agree and acknowledge that the
Concentration Account and all funds on deposit therein shall be under the exclusive dominion and
control of the Account Custodian for the benefit of each Securitization Agent and the Originator as
their interests may appear, and the Concentration Account Bank agrees that it will honor
instructions of the Account Custodian with respect to the transfer or disposition of funds on
deposit in the Concentration Account, without the further consent of the Originator, the
Securitization SPE or any other Person. Prior to receipt by the Account Custodian of a notice from
a Securitization Agent that a “servicer default,” “termination event” or similar event has occurred
and is continuing under the relevant Securitization Documents, the Account Custodian hereby directs
the Concentration Account Servicer, on behalf of the Account Custodian, to provide instructions to
the Concentration Account Bank to effect all distributions from the Concentration Account on behalf
of the Account Custodian for the benefit of each Securitization Agent and the Originator and in
accordance with this Agreement. Upon receipt by the Account Custodian of a notice from a
Securitization Agent that a “servicer default,” “termination event” or similar event has occurred
and is continuing under the relevant Securitization Documents, the Account Custodian shall promptly
notify the other parties to this Agreement in writing and shall notify the Concentration Account
Bank to cease taking instructions from the Concentration Account Servicer and to disburse funds
solely in accordance with the joint written instructions of the Account Custodian and each
Securitization Agent, without the further consent of the Originator, the Concentration Account
Servicer, any Securitization SPE, or any other Person. The Concentration Account Bank agrees that,
upon receipt of such notice from the Account Custodian, it shall no longer follow any instructions
from the Collection Account Servicer, or any other Person, except such joint written instructions
of the Account Custodian and each Securitization Agent, with respect to transfers of funds on
deposit in the Concentration Account unless and until the Account Custodian either (i) provides a
subsequent notice in writing acknowledged by each Securitization Agent that the Account Custodian
or the Concentration Account Servicer, on behalf of the Account Custodian, is again permitted to
issue such instructions or (ii) provides a notice in writing acknowledged by each Securitization
Agent of the appointment of a Successor Concentration Account Servicer. Following receipt by the
Account Custodian of a notice from a Securitization Agent that a “servicer default,” “termination
event” or similar event has occurred and is continuing under the relevant Securitization Documents,
the Concentration Account Servicer shall provide on each Business Day to the Account Custodian and
each Securitization Agent detailed written information setting forth: (i) the interests of the
applicable parties in all Remittances credited to the Concentration Account; and (ii) the
appropriate distribution of such Remittances in accordance with such interests.
(j) Removal of Concentration Account Servicer. Each of the parties hereto hereby agrees that
the occurrence of any of the following shall constitute a removal event (each a “Removal
Event”):
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| (1) | if the Original Servicer is terminated or has resigned its role as servicer under any of the Securitization Documents, or | ||
| (2) | if the funds on deposit in the Concentration Account become subject to any seizure, freeze application, or enforcement of any security interest adverse to the interests of each Securitization Agent, |
then in any such case this Agreement shall continue to remain in full force and effect and a
successor concentration account servicer to the Original Servicer as Concentration Account Servicer
hereunder shall be appointed by delivery of joint written notice from each Securitization Agent to
the Account Custodian (with a copy to the Concentration Account Bank, the Original Servicer and
each other party hereto) identifying such successor concentration account servicer (which successor
concentration account servicer may be U.S. Bank or Xxxxx Fargo but shall not otherwise be a
Securitization Agent hereunder), together with such successor concentration account servicer’s
written acceptance of such appointment, and such successor concentration account servicer (being
referred to herein as the “Successor Concentration Account Servicer”) shall thereupon
succeed to all rights, benefits, duties and obligations of the Original Servicer in its capacity as
Concentration Account Servicer hereunder, to the extent the same relate to the giving of
disbursement instructions above. Each Securitization Agent agrees to consult in good faith as to
the appointment of a mutually acceptable Successor Concentration Account Servicer in the event of
the occurrence of a Removal Event. Upon receipt of such written notice and acceptance, the Account
Custodian shall notify the Concentration Account Bank to make disbursements of funds from the
Concentration Account pursuant to the provisions of this Agreement only pursuant to written
disbursement instructions delivered by such Successor Concentration Account Servicer, rather than
the Concentration Account Servicer.
(k) Replacement of Concentration Account Bank and Account Custodian. Each of the parties
hereto hereby agrees that if either the Concentration Account Bank’s short-term debt rating or the
Account Custodian’s short-term debt rating is reduced below “A-1” by Standard & Poor’s, a division
of The McGraw Hill Companies, Inc. or “P-1” by Xxxxx’x Investors Service, Inc., then in any such
case this Agreement shall continue to remain in full force and effect and a successor Concentration
Account Bank or Account Custodian, as the case may be, shall be appointed by delivery of joint
written notice from each Securitization Agent pursuant to and in accordance with the provisions of
Section 3(n) hereof.
(l) Resignation of Concentration Account Bank and Account Custodian; Fees. Neither the
Concentration Account Bank nor the Account Custodian shall resign or cease to perform its duties
and obligations as Concentration Account Bank and Account Custodian hereunder, unless the
performance of its duties and obligations hereunder would constitute a violation of applicable law.
The Original Servicer agrees to pay, on a timely basis, to the Account Custodian and the
Concentration Account Bank all usual and customary service charges, transfer fees and account
maintenance fees in connection with its services hereunder and agrees to pay to the Account
Custodian and the Concentration Account Bank, upon receipt of
Account Custodian’s and Concentration Account Bank’s invoice, all reasonable out-of-pocket
costs, expenses and attorneys’ fees incurred by the Account Custodian and the Concentration Account
Bank in connection with the enforcement of this Agreement and any instrument or agreement required
hereunder, including but not limited to any such costs, expenses and fees
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arising out of the
resolution of any conflict, dispute, motion regarding entitlement to rights or rights of action, or
other action to enforce the Account Custodian’s and the Concentration Account Bank’s rights in a
case arising under Xxxxx 00, Xxxxxx Xxxxxx Code. The Original Servicer agrees to pay the Account
Custodian and the Concentration Account Bank, upon receipt of the Account Custodian’s and the
Concentration Account Bank’s invoice, all costs, expenses and attorneys’ fees incurred by the
Concentration Account Bank in the preparation and administration of this Agreement (including any
amendments hereto or instruments or agreements required hereunder).
(m) No Set-Off; Subordination. Each of the Account Custodian and the Concentration Account
Bank agrees that it shall not exercise any right of set-off against Securitization Remittances in
the Concentration Account and hereby subordinates for the benefit of each Securitization Agent, as
their interests may appear, all security interests, encumbrances, claims and rights of set-off it
may have, now or in the future, against the Concentration Account or any Securitization Remittances
in the Concentration Account.
(n) Removal of Account Custodian or Concentration Account Bank. Each of the Account Custodian
and the Concentration Account Bank may be removed upon at least 30 days’ joint written notice (the
“Successor Notice Period”) from each Securitization Agent to the Account Custodian or the
Concentration Account Bank, as applicable; provided that no such removal shall be effective
until a successor Account Custodian to the Account Custodian or a successor Concentration Account
Bank to the Concentration Account Bank, as applicable, shall be appointed by delivery of joint
written notice from each Securitization Agent to the Account Custodian or the Concentration Account
Bank identifying such successor, together with such successor Account Custodian’s or Concentration
Account Bank’s written acceptance of such appointment, any such successor Account Custodian (being
referred to herein as the “Successor Account Custodian”) and any such successor
Concentration Account Bank (being referred to herein as the “Successor Concentration Account
Bank”) shall thereupon succeed to all rights, benefits, duties and obligations of the Account
Custodian or the Concentration Account Bank, as applicable, under this Agreement. In the event no
Account Custodian or Successor Concentration Account Bank (as applicable) has been appointed prior
to the expiration of the Successor Notice Period, each Securitization Agent shall give to the
Account Custodian or the Concentration Account Bank (as applicable) at least 30 days’ joint written
notice prior to the appointment and acceptance of its successor becoming effective. Each
Securitization Agent agrees to consult in good faith as to the appointment of a mutually acceptable
Successor Account Custodian and Successor Concentration Account Bank, as applicable, in the event
of the removal of the Account Custodian or the Concentration Account Bank.
(o) Delays in Making Funds Transfers. The parties understand that a funds transfer may be
delayed or not made if (a) the transfer would cause the Concentration Account Bank to exceed any
limitation on its intra-day net funds position established in accordance with Federal Reserve or
other regulatory guidelines or to violate any other Federal Reserve or other regulatory risk
control program, or (b) the funds transfer would otherwise cause the Concentration Account
Bank to violate any applicable law or regulation. If a funds transfer cannot be made or will
be delayed, the Concentration Account Bank will notify the Original Servicer and each
Securitization Agent by telephone.
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(p) Reliance on Identifying Numbers. If the Concentration Account Servicer indicates a name
and an identifying number for the Concentration Account Bank of the person or entity to receive
funds transfers out of the Accounts, the parties understand and agree that the Concentration
Account Bank may rely on the number the Concentration Account Servicer indicates even if that
number identifies a bank different from the bank the Concentration Account Servicer named. If the
Concentration Account Servicers indicate a name and an account number for the person or entity to
receive funds transfers out of the Accounts, the parties understand and agree that the
Concentration Account Bank may rely on the account number the Concentration Account Servicer
indicates even if that account number is not the account number for the person or entity who is to
receive the transfers.
(q) Bankruptcy Notice; Legal Process. The Concentration Account Bank will comply with any
legal process, legal notice or court order it receives if the Concentration Account Bank determines
in its sole discretion that the legal process, legal notice or court order is legally binding on
it. If at any time: (a) the Originator or any Affiliate thereof becomes subject to a voluntary or
involuntary bankruptcy, reorganization, receivership or similar proceeding, or (b) the
Concentration Account Bank is served with legal process which it in good faith believes prohibits
the disbursement of the funds deposited in the Concentration Account, then the Concentration
Account Bank shall have the right (i) to place a hold on the funds in the Concentration Account
until such time as it receives an appropriate court order or other assurance reasonably
satisfactory to the Concentration Account Bank as to the disposition of the funds in the
Concentration Account, or (ii) to commence, at the Concentration Account Bank’s expense, an
interpleader action in any competent federal or state court, and otherwise to take no further
action except in accordance with joint written instructions of the Account Custodian and each
Securitization Agent or in accordance with the final order of a competent court, served upon the
Concentration Account Bank.
Section 4. Security Interest in Concentration Account.
The parties hereto acknowledge that, except with respect to the Other Remittances, each
Securitization SPE, as applicable, has granted a present and continuing security interest in all
their right, title and interest in the Concentration Account, and the proceeds thereof, in favor of
each Securitization Agent (as applicable), to the extent of their interests under the respective
Securitization Documents (including on behalf of other secured parties thereunder) to secure its
obligations thereunder.
Section 5. Notice Matters.
All notices and other communications hereunder or in connection herewith shall be in writing
(including facsimile communication) and shall be personally delivered or sent by certified mail,
postage prepaid, by facsimile or by FedEx, UPS or other nationally recognized overnight delivery
service, to the intended party at the address or facsimile number of such party set forth on
Exhibit A hereto or in a joinder agreement or at such other address or facsimile
number as shall be designated by such party in a written notice to the other parties hereto
given in accordance with this paragraph. If notice is sent by facsimile, an originally executed
notice will be sent by overnight courier as a follow-up. All notices and communications hereunder or
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in connection herewith shall be effective only upon receipt. Facsimile transmissions shall be
deemed received upon receipt of verbal confirmation of the receipt of such facsimile.
Section 6. Authorization; Binding Effect; Survival.
Each of the parties hereto confirms that it is authorized to execute, deliver and perform this
Agreement. This Agreement shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Except as provided in the preceding sentence, the
provisions of this Agreement may not be relied upon by any third party for any purpose.
Section 7. Integration.
This Agreement contains a final and complete integration of all prior expressions by the
parties hereto with respect to the intercreditor matters set forth herein and shall together
constitute the entire agreement between the parties hereto with respect to such matters,
superseding all prior oral or written understandings.
Section 8. Limitation of Liability; Force Majeure.
(i) The Account Custodian, the Concentration Account Bank and any Successor Concentration
Account Servicer (as applicable) may conclusively rely on and shall be fully protected in acting
upon any certificate, instrument, opinion, notice, letter, facsimile document or other document
delivered to it and that in good faith it reasonably believes to be genuine and that has been
signed by the proper party or parties.
(ii) The Account Custodian, the Concentration Account Bank and any Successor Concentration
Account Servicer (as applicable) may consult counsel satisfactory to it and the advice or opinion
of such counsel shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(iii) The Account Custodian, the Concentration Account Bank and any Successor Concentration
Account Servicer (as applicable) shall not be liable to the parties hereto for any expense, claim,
loss, damage or cost arising out of or relating to its performance under this Agreement, for any
error of judgment, or for any act done or step taken or omitted by it, in good faith, or for any
mistakes of fact or law, or for anything that it may do or refrain from doing in connection
herewith except in the case of its willful misconduct or grossly negligent performance or omission
of its duties.
(iv) The Account Custodian, the Concentration Account Bank and any Successor Concentration
Account Servicer (as applicable) shall not be obligated to take any legal action hereunder that
might in its judgment involve any expense or liability unless it has been furnished with an
indemnity reasonably satisfactory to it. Nothing contained in this Agreement shall create any
agency, fiduciary, joint venture or partnership relationship between the Concentration Account Bank
and any other party hereto.
(v) The Account Custodian, the Concentration Account Bank and any Successor Concentration
Account Servicer (as applicable) shall have no duties or responsibilities except
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such duties and
responsibilities as are specifically set forth in this Agreement and no covenants or obligations
shall be implied in this Agreement against the Account Custodian and the Concentration Account Bank
(as applicable). The Concentration Account Bank is not bound by any provisions contained in any
document executed between any other parties to this Agreement and to which the Concentration
Account Bank is not a party, even if provided with a copy of that document.
(vi) The Account Custodian, the Concentration Account Bank and any Successor Concentration
Account Servicer (as applicable) shall not be required to expend or risk its own funds in the
performance of its duties hereunder.
(vii) In no event shall the Account Custodian, the Concentration Account Bank and any
Successor Concentration Account Servicer (as applicable) be liable for incidental, special,
indirect or consequential damages, including but not limited to lost profits.
(viii) A delay in or failure of performance by the Account Custodian, the Concentration
Account Bank or any Successor Concentration Account Servicer (as applicable) under this Agreement
will be excused and shall not constitute a default hereunder or otherwise give rise to any
liability of the Account Custodian or the Concentration Account Bank if such delay or failure could
not be prevented by the exercise of reasonable diligence by the Account Custodian, the
Concentration Account Bank or any Successor Concentration Account Servicer (as applicable) and such
delay or failure was caused by circumstances beyond the Account Custodian’s, the Concentration
Account Bank’s or any Successor Concentration Account Servicer’s reasonable control, including but
not limited to legal constraint, emergency conditions, action or inaction of governmental, civil or
military authority, fire, strike, lockout or other labor dispute, war, riot, theft, flood,
earthquake or other natural disaster, breakdown of public or private or common carrier
communications or transmission facilities, equipment failure, or act, negligence or default of all
other parties hereto.
Section 9. Amendments.
No amendment or supplement to or modification of this Agreement and no waiver of or consent to
departure from any of the provisions of this Agreement shall be effective unless such amendment,
modification, waiver or consent is in writing and signed by all of the parties hereto (in the case
of an amendment) (except that any change to the Concentration Account Bank’s customary charges are
subject to change upon 30 days’ prior written notice to the Original Servicer) or by the party
against which enforcement of such waiver or consent is sought (in the case of any waiver or
consent) and any such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
Section 10. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK. REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, FOR
PURPOSES OF THE UCC, NEW YORK SHALL BE DEEMED TO BE THE “BANK’S JURISDICTION” (WITHIN THE
MEANING OF SECTION 9-304 OF THE UCC).
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Section 11. Waiver of Jury Trial.
EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING
OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH PARTY FURTHER (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT EACH OTHER PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE WAIVER AND CERTIFICATIONS CONTAINED IN THIS SECTION 11.
Section 12. Headings.
Captions and section headings are used in this Agreement for convenience of reference only and
shall not affect the meaning or interpretation of any provision hereof.
Section 13. Counterparts.
This Agreement may be executed in any number of counterparts (including by facsimile) and by
the 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.
Section 14. Termination.
In the event that all obligations secured by the Securitization Assets with respect to a
Securitization Agent shall have been paid in full and the related Securitization Documents and
liens created thereunder shall have been terminated or released, then the applicable Securitization
Agent shall promptly notify the other parties hereto and such Securitization Agent shall no longer
have any rights or obligations hereunder. The Concentration Account Bank may terminate this
Agreement upon 90 days’ prior written notice to the Account Custodian, the Originator, the Original
Servicer and each Securitization Agent; provided that no such resignation shall be
effective until a Successor Concentration Account Bank has been appointed as described in
Section 3(n). Termination of this Agreement shall not affect the duties or
responsibilities of any party hereto arising out of transactions occurring prior to termination.
Section 15. Effectiveness of Provisions Relating to Securitization.
Notwithstanding anything to the contrary contained herein, the provisions of this Agreement
relating to Securitizations, the Securitization Assets, and Securitization Agents shall not become
operative with respect to any Securitization until the applicable Securitization Agent shall have
executed and delivered to each of the parties hereto an executed counterpart of the
joinder agreement attached hereto as Schedule A agreeing to be bound by all the
applicable terms and conditions hereof.
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Section 16. Indemnification.
The Original Servicer hereby agrees to indemnify and hold harmless the Account Custodian, the
Concentration Account Bank, any Successor Concentration Account Servicer and each Securitization
Agent and each director, officer, employee, agent and affiliate thereof (collectively, the
“Indemnified Parties”) from and against any and all losses, liabilities (including
liabilities for penalties), claims, demands, actions, suits, judgments, out–of–pocket costs and
expenses (including legal fees and expenses) (collectively, the “Indemnified Amounts”)
arising out of or resulting from the execution, performance and enforcement of this Agreement,
except for Indemnified Amounts arising out of or resulting from the negligence, willful misconduct
or bad faith of the applicable Indemnified Party or representing recourse for uncollectible Assets.
The obligations of the Original Servicer under this Section 16 shall survive the
termination of this Agreement and/or the earlier termination or resignation of an Indemnified
Party.
Section 17. Other Transactions.
Nothing herein shall limit, restrict or impair the Concentration Account Bank in any other
transaction or relationship with the any other party hereto in such capacity and this Agreement
applies to the Concentration Account Bank solely in its capacity as Concentration Account Bank.
Section 18. No Proceedings. Each of the Parties hereto hereby agrees not to institute
or join any other person or entity in instituting, any suit pursuant to Xxxxx 00, Xxxxxx Xxxxxx
Code, or any similar suit or proceeding under then applicable state or federal law providing for
the relief of debtors or the protection of creditors, against any Securitization SPE prior to the
date which is one year and one day after payment of all obligations of any Securitization SPE to
all applicable Securitization Agents (and the parties for which it is acting as trustee or agent,
as applicable) are paid in full. This section shall survive any termination of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Concentration Account Bank | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
| XXXXX FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Account Custodian |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
| PATRIOT CAPITAL FUNDING, INC., as Originator, Original Servicer and Concentration Account Servicer | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
