Exhibit 10.3
EXECUTION COPY
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USS RECEIVABLES COMPANY, LTD.,
as Company,
UNITED STATIONERS FINANCIAL SERVICES LLC,
as Servicer,
UNITED STATIONERS SUPPLY CO.,
as Support Provider,
and
THE CHASE MANHATTAN BANK,
as Trustee
AMENDED AND RESTATED SERVICING AGREEMENT
Dated as of May 1, 2001
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
1.1 Definitions..................................................................2
1.2 Other Definitional Provisions................................................3
ARTICLE II ADMINISTRATION AND SERVICING OF RECEIVABLES
2.1 Appointment of Servicer......................................................4
2.2 Servicing Procedures.........................................................4
2.3 Collections..................................................................6
2.4 Reserved.....................................................................9
2.5 Servicing Compensation.......................................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SERVICER
AND THE SUPPORT PROVIDER
3.1 Corporate Existence - Compliance with Law...................................11
3.2 Corporate Power: Authorization..............................................11
3.3 Enforceability..............................................................12
3.4 No Legal Bar................................................................12
3.5 No Material Litigation......................................................12
3.6 No Default..................................................................12
3.7 Servicing Ability...........................................................12
3.8 Location of Records.........................................................13
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ARTICLE IV COVENANTS OF THE SERVICER
4.1 Delivery of Required Reports................................................13
4.2 Delivery of Monthly Settlement Statement....................................13
4.3 Delivery of Quarterly Servicer's Certificate................................14
4.4 Delivery of Independent Public Accountants' Servicing Reports...............14
4.5 No Guarantee or Assumption of Company's Liabilities.........................15
4.6 Extension, Amendment and Adjustment of Receivables, Amendment of and
Compliance with Policies........................................................15
4.7 Protection of Investor Certificateholders' Rights...........................16
4.8 Security Interest...........................................................16
4.9 Location of Records.........................................................16
4.10 Visitation Rights..........................................................16
4.11 Lockbox Agreement: Lockbox Accounts........................................17
4.12 Delivery of Financial Statements...........................................17
4.13 Notices....................................................................18
4.14 Application of Proceeds....................................................18
ARTICLE V OTHER MATTERS RELATING TO THE SERVICER AND THE
SUPPORT PROVIDER
5.1 Merger, Consolidation, etc..................................................19
5.2 Indemnification of the Trust and the Trustee................................20
5.3 Servicer Not to Resign......................................................21
5.4 Access to Certain Documentation and Information Regarding the Receivables...21
5.5 Performance Support Obligation of Support Provider..........................22
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ARTICLE VI SERVICER DEFAULTS
6.1 Servicer Default............................................................25
6.2 Trustee to Act; Appointment of Successor....................................30
6.3 Waiver of Past Defaults.....................................................31
ARTICLE VII MISCELLANEOUS PROVISIONS
7.1 Amendment...................................................................32
7.2 Termination.................................................................32
7.3 Notices.....................................................................32
7.4 Counterparts................................................................32
7.5 Third-Party Beneficiaries...................................................32
7.6 Merger and Integration......................................................32
7.7 Headings....................................................................33
7.8 No Set-Off..................................................................33
7.9 No Bankruptcy Petition......................................................33
7.10 Consequential Damages......................................................33
7.11 Governing Law..............................................................33
EXHIBITS
Exhibit A Form of Quarterly Servicer's Certificate
Exhibit B Form of Agreed Upon Procedures
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AMENDED AND RESTATED
SERVICING AGREEMENT
AMENDED AND RESTATED
SERVICING AGREEMENT, dated as of
May 1, 2001 (as amended, supplemented or otherwise modified and in effect from
time to time, this "AGREEMENT") among USS RECEIVABLES COMPANY, LTD., a
Cayman Islands limited liability company (the "COMPANY"); UNITED STATIONERS
FINANCIAL SERVICES LLC, an Illinois limited liability company, as servicer
("USFS", and in such capacity as servicer, the "SERVICER");
UNITED STATIONERS
SUPPLY CO., an Illinois corporation, as support provider ("USSC", and in such
capacity as support provider, the "SUPPORT PROVIDER"), and The Chase Manhattan
Bank, a
New York banking corporation, not in its individual capacity, but solely
as trustee (in such capacity, the "TRUSTEE").
WITNESSETH:
WHEREAS, USFS and the Sellers have entered into an Amended and
Restated Receivables Sale Agreement, dated as of the date hereof (as further
amended, supplemented or otherwise modified from time to time, the "RECEIVABLES
SALE AGREEMENT");
WHEREAS, pursuant to the Receivables Sale Agreement, the Sellers
sell to USFS, and USFS purchases from the Sellers, all of the Sellers' right,
title and interest in, to and under the Receivables now existing or hereafter
created and in the rights of the Seller in, to and under all Related Property
related thereto;
WHEREAS, the Company and USFS have entered into a Receivables
Sale Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the "USFS RECEIVABLES SALE AGREEMENT");
WHEREAS, pursuant to the USFS Receivables Sale Agreement, USFS
sells to the Company, and the Company purchases from USFS, all of the USFS's
right, title and interest in, to and under the Receivables now existing or
hereafter created and in the rights of USFS in, to and under all Related
Property related thereto;
WHEREAS, the Company in turn has transferred the Receivables now
existing or hereafter created and the rights of the Company in, to and under all
Related Property related thereto to a master trust pursuant to an Amended and
Restated Pooling Agreement (as further amended, supplemented or otherwise
modified from time to time, the "POOLING AGREEMENT"), among the Company, the
Servicer and the Trustee; and
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WHEREAS, the Company, USSC, as servicer, and the Trustee have
entered into a
Servicing Agreement dated as of April 3, 1998 (the "ORIGINAL
AGREEMENT");
WHEREAS, USFS is a separate, wholly-owned subsidiary of USSC;
WHEREAS, the parties to such Original Agreement desire to amend
and restate the Original Agreement for the purpose of substituting USFS for USSC
as Servicer and having USSC act as Support Provider;
WHEREAS, by executing and delivering (i) the Second Amended and
Restated Series 1998-1 Supplement, dated as of the date hereof, among the
Company, the Servicer, Chase, as Funding Agent, Trustee, Securities Intermediary
and APA Bank, and Park Avenue Receivables Corporation, as Initial Purchaser, or
(ii) the Amended and Restated Series 2000-2 Supplement, dated as of the date
hereof, among the Company, the Servicer, Chase, as Trustee and Securities
Intermediary, Market Street Funding Corporation, as Committed Purchaser, and
PNC Bank, National Association, as Administrator, as applicable, the Investor
Certificateholders consent to the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS Unless otherwise defined herein, capitalized
terms which are used herein shall have the meanings assigned to such terms in
Section 1.1 of the Pooling Agreement and each Supplement thereto, including,
without limitation, the Second Amended and Restated Series 1998-1 Supplement,
dated as of the date hereof (as further amended, supplemented, or otherwise
modified and in effect from time to time, the "SERIES 1998-1 SUPPLEMENT") among
the Company, the Servicer, The Chase Manhattan Bank, as Funding Agent, Trustee,
and APA Bank, and Park Avenue Receivables Corporation, as Initial Purchaser and
the Amended and Restated Series 2000-2 Supplement, dated as of the date hereof
(as further amended, supplemented or otherwise modified from time to time, the
"SERIES 2000-2 SUPPLEMENT") among the Company, the Servicer, The Chase Manhattan
Bank, as Trustee and Securities Intermediary, Market Street Funding Corporation,
as Committed Purchase, and PNC Bank, National Association, as Administrator.
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1.2 OTHER DEFINITIONAL PROVISIONS (a) All terms defined herein or
in the Pooling Agreement shall have their 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 1.1 of the Pooling Agreement, and accounting terms partly defined in
Section 1.1 of the Pooling Agreement to the extent not defined, shall have the
respective meanings given to them under GAAP. To the extent that the definitions
of accounting terms herein are inconsistent with the meanings of such terms
under GAAP, the definitions contained herein shall control.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references contained in this agreement are
references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(d) The definitions contained in Section 1.1 of the
Agreement are applicable to the singular as well as the plural forms of such
terms and to the masculine, the feminine and the neuter genders of such terms.
(e) Where reference is made in this Agreement or the Pooling
Agreement to the principal amount of Receivables, such reference shall, unless
explicitly stated otherwise, be deemed a reference to the Principal Amount of
such Receivables.
(f) Any reference herein or in any other Transaction
Document to a provision of the Internal Revenue Code or ERISA shall be deemed a
reference to any successor provision thereto.
(g) All references herein to any agreement or instrument
shall be deemed references to such agreement or instrument as amended,
supplemented or otherwise modified from time to time unless there are any
restrictions herein on the amendment, supplementation or modification of such
agreement or instrument.
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ARTICLE II
ADMINISTRATION AND SERVICING
OF RECEIVABLES
2.1 APPOINTMENT OF SERVICER USFS hereby agrees to act as the
Servicer under the Pooling Agreement and this Agreement, the Company and the
Trustee hereby consent to USFS acting as the Servicer, and the Investor
Certificateholders by their acceptance of the Certificates consent to USFS's
acting as the Servicer. In such capacity, the Servicer will have responsibility
for the management of the servicing and receipt of Collections in respect of the
Receivables and will have the authority to make any management decisions
relating to the Receivables to the extent such authority is necessary or
desirable and not inconsistent with the authority granted to the Servicer under
any Pooling and
Servicing Agreement. The Company, the Trustee and the Investor
Certificateholders shall treat USFS as the Servicer and may conclusively rely on
the instructions, notices and reports of USFS as Servicer for so long as USFS is
the Servicer.
2.2 SERVICING PROCEDURES (a) The Servicer shall, subject to the
directions, if any, of the Company, manage the servicing and administration of
the Receivables, the collection of payments due under the Receivables and the
charging off of any Receivables as uncollectible, all in accordance with all
Requirements of Law, the Policies and all the terms and provisions of the
Pooling and
Servicing Agreements. The Servicer shall have full power and
authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable, but at all times
subject to the terms of this Agreement and the other Transaction Documents. The
Servicer shall exercise the same care and apply the same policies with respect
to the collection of the Receivables that it would exercise and apply if it
owned such Receivables, all with reasonable care and diligence and otherwise in
accordance with the foregoing requirements. Without limiting the generality of
the foregoing and subject to Section 6.1, the Servicer or its designee is hereby
authorized and empowered (i) to give direction to the Trustee with respect to
withdrawals from, and payments to, the Collection Account and/or the Collection
Concentration Account in accordance with the Required Reports and as otherwise
specified in the Pooling and
Servicing Agreements, (ii) to execute and deliver,
on behalf of the Trust for the benefit of the Investor Certificateholders, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Receivables and, after the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable Requirements of Law, to
commence enforcement proceedings with respect to such Receivables and (iii) to
make any filings, refilings, reports, notices, applications and registrations
with, and to seek any consents or authorizations from,
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the SEC and any state securities authority on behalf of the Trust as may be
necessary or advisable to comply with any federal or state securities or
reporting requirements or laws.
(b) The Servicer will, at its cost and expense and as agent
for the Company, the Trust and the Investor Certificateholders, use its best
efforts to collect, consistent with its past practices and in accordance with
all Requirements of Law and Policies, as and when the same becomes due, the
amount owing on each Receivable. The Servicer will not make any material changes
that deviate from the Policies in its administrative, servicing and collection
systems except (i) as expressly permitted by the terms of any Pooling and
Servicing Agreement and (ii) after giving written notice to the Trustee and the
Rating Agencies of any such material change and receiving such parties' written
consent thereto. In the event of default under any Receivable, the Servicer
shall have the power and authority, on behalf of the Company and the Trust for
the benefit of the Investor Certificateholders, to take such action in respect
of such Receivable as the Servicer may deem advisable. In the enforcement or
collection of any Receivable, the Servicer shall be entitled to xxx thereon (i)
in its own name or (ii) if, but only if, the Company consents in writing (which
consent shall not be unreasonably withheld or delayed), as agent for the
Company. In no event shall the Servicer be entitled to take any action which
would make the Company, the Trustee or the Investor Certificateholders a party
to any litigation without the express prior written consent of such Person.
(c) Without limiting the generality of the foregoing and
subject to Section 6.2, the Servicer is hereby authorized and empowered to
delegate any or all of its servicing, collection, enforcement and administrative
duties hereunder with respect to the Receivables to a Person who agrees to
conduct such duties in accordance with the Policies. The Servicer shall notify
the Company, the Trustee and any Rating Agency of the appointment of a designee
as provided for herein; PROVIDED, HOWEVER, that, in the event that such
delegation would reasonably be expected to adversely affect the ability of the
Trustee or the Servicer to perform its obligations in the manner contemplated by
any Pooling and
Servicing Agreement, or otherwise to have a material adverse
effect upon the Receivables taken as a whole, the Servicer shall give prior
written notice to the Company, the Trustee, each Agent and the Rating Agencies
of any such delegation, and prior to such delegation's being effective, the
Servicer shall have received notice that the Rating Agency Condition shall be
satisfied after giving effect to such delegation and shall have obtained the
consent of the Company and each Agent to such delegation. No delegation of
duties by the Servicer permitted hereunder will relieve the Servicer of its
liability and responsibility with respect to such duties. Any agreement for the
delegation of such duties shall be deemed to be between the parties to such
agreement alone and the Trustee and holders of Investor Certificates shall not
be deemed parties thereto and
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shall have no obligations, duties or liabilities with respect to any party to
whom such duties are delegated.
(d) Except as provided in any Pooling and
Servicing
Agreement, neither the Servicer nor any Successor Servicer shall be obligated to
use servicing procedures, offices, employees or accounts for servicing the
Receivables transferred to the Company and, subsequently, to the Trust, which
are separate from the procedures, offices, employees and accounts used by the
Servicer or such Successor Servicer, as the case may be, in connection with
servicing other receivables.
(e) The Servicer shall maintain reasonable and customary
fidelity bond coverage insuring against losses through wrongdoing of its
officers and employees who are involved in the servicing of the Receivables,
including, without limitation, depositor's forgery.
(f) The Servicer shall comply with and perform its servicing
obligations with respect to the Receivables in accordance with the contracts, if
any, relating to the Receivables and the Policies, except insofar as any failure
to so comply or perform would not reasonably be expected to have a Material
Adverse Effect with respect to the Servicer.
(g) The Servicer shall take no action to cause any
Receivable to be evidenced by any "instrument" (other than an instrument which
constitutes or together with a security agreement constitutes "chattel paper"
(each as defined in the UCC as in effect in any state in which the Company's
USFS's or the applicable Seller's chief executive office or books and records
relating to such Receivable are located)) or any title in bearer form except in
connection with its enforcement or collection of a Defaulted Receivable, in
which event the Servicer shall deliver such instrument to the Trustee as soon as
reasonably practicable but in no event more than five days after the execution
thereof. The Servicer shall hold any chattel paper evidencing a Receivable as
custodian for the Trustee.
2.3 COLLECTIONS (a) As of the Closing Date, (i) Lockboxes and
Lockbox Accounts shall have been established in the name of the Company, and
assigned to the Trustee for the benefit of the Holders pursuant to the Pooling
Agreement; (ii) the Trustee has established the Collection Account in the name
of the Trust for the benefit of the Holders and the Collection Concentration
Account in the name of the Company, pursuant to the Pooling Agreement; and
(iii) the Servicer shall have instructed all Obligors to make all payments in
respect of the Receivables to a Lockbox (except to the extent that the servicer
of the Receivables, prior to such date, in the normal course of its business and
consistent with its practices, has permitted Obligors to remit payments to a
Collector), and such instructions thereafter
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shall continue to be in full force and effect. The Servicer is hereby authorized
to collect payments in accordance with the foregoing sentence. Any payments
collected by a Collector shall be deposited into a Lockbox Account within one
Business Day following receipt thereof; PROVIDED that on any business day all
Collectors may hold in the aggregate up to $150,000, provided that in all events
such payments shall be deposited within three Business Days following receipt
thereof. All Collections received in a Lockbox shall, within one Business Day of
receipt thereof, be deposited in a Lockbox Account. All immediately available
funds deposited in a Lockbox Account shall be transferred by the relevant
Lockbox Processor within one Business Day of receipt thereof to the Collection
Concentration Account or, in the event of a Potential Early Amortization Event
or Early Amortization Event, to the Collection Account. Except as permitted in
the first sentence of this subsection 2.3(a), in the event that any payments in
respect of the Receivables are made directly to the Support Provider or Servicer
(including, without limitation, any employees thereof or independent contractors
employed thereby), the Support Provider or the Servicer, as applicable, shall,
within one Business Day of receipt thereof, forward such amounts to a Lockbox
(including by depositing instruments evidencing any such amounts into any such
Lockbox Account) and, prior to forwarding such amounts, the Support Provider or
the Servicer, as applicable, shall hold such payments in trust as custodian for
the Trustee. Each of the Company and the Servicer represents, warrants and
agrees that all Collections shall be collected, processed and deposited by it
pursuant to, and in accordance with the terms of, the Pooling and Servicing
Agreements.
(a) Each Lockbox Agreement shall provide that the Lockbox
Processor thereunder is irrevocably directed, and such Lockbox Processor
irrevocably agrees, to (i) deposit funds received in the Lockbox directly into
the Lockbox Account and (ii) transfer immediately available funds on deposit in
the Lockbox Account within one Business Day of receipt thereof to the Trustee
for deposit in the Collection Concentration Account or, in the event of a
Potential Early Amortization Event or Early Amortization Event, to the
Collection Account. Each Lockbox Agreement shall be substantially in the form of
Exhibit A to the Pooling Agreement or in such form as the Lockbox Processor
party thereto employs in the ordinary course of its business for transactions of
a type similar to the one contemplated by this Agreement, and which form shall
be reasonably acceptable to the Trustee. A new Lockbox Account may be designated
from time to time by the Company and the Servicer; PROVIDED that the Lockbox
Processor chosen to maintain such new Lockbox Account shall have entered into a
Lockbox Agreement with the Company, the Servicer and the Trustee prior to any
funds being deposited into such Lockbox Account. The Company or the Servicer
shall notify each Rating Agency of the designation of a new Lockbox Account.
Prior to any resignation of the Lockbox Processor or termination of the Lockbox
Processor by the Company or the Trustee, the Servicer hereby agrees to obtain a
replacement Lockbox Processor, the unsecured
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and uncollateralized obligations of which (or of its holding company parent) are
rated in one of the three highest long-term or short-term rating categories by
each Rating Agency rating such replacement Lockbox Processor, to serve under a
Lockbox Agreement which is reasonably acceptable to the Trustee.
(b) The Trustee shall administer amounts on deposit in the
Collection Account, and the Servicer, on behalf of the Trust, shall administer
amounts on deposit in the Lockbox Accounts, in each case in accordance with the
terms of the Pooling and Servicing Agreements. Each of the Company and the
Servicer acknowledges and agrees that (i) it shall not have any right to
withdraw any funds on deposit in the Collection Account or any Lockbox Account,
(ii) all amounts deposited in the Collection Account or any Lockbox Account
shall be under the sole dominion and control of the Trustee (subject to the
Servicer's right to direct the application of such amounts as provided by the
terms of any Pooling and Servicing Agreement), (iii) with respect to the
Eligible Investments, the Trustee shall be entitled to exercise the rights that
comprise such financial assets and to exercise the ordinary rights of an
entitlement holder, and (iv) the securities account into which Eligible
Investments may be held or credited shall be an account of the Trustee and not
the Company or the Servicer, but if, despite such intent, the securities account
is determined to be an account of the Company or the Servicer then the
securities intermediary shall comply with entitlement orders originated by the
Trustee without further consent by the Company or the Servicer.
(c) As soon as practicable but in any event not later than
the Business Day following the date that the Servicer determines, identifies and
certifies in writing to the Trustee that any of the collected funds received in
any of the Lockboxes, the Lockbox Accounts, the Collection Concentration Account
or the Collection Account do not constitute Collections on account of the
Receivables, such monies which do not constitute such Collections shall be
remitted to the applicable Seller to the extent such determination and
identification is reasonably satisfactory to the Trustee.
(d) All collections received or deposited in the Collection
Account as "Collections" shall be deemed, for purposes of the Transaction
Documents, to have been received or deposited as of the Business Day Received
(as defined in the immediately succeeding sentence). As used herein, the term
"BUSINESS DAY RECEIVED" shall mean (i) if funds are deposited in the Collection
Account by 3:00 p.m.,
New York City time, such day of deposit and (ii) if funds
are deposited in the Collection Account after 3:00 p.m.,
New York City time, the
Business Day next following such day of deposit.
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(e) Unless otherwise required by law or unless an Obligor
designates that a payment be applied to a specific Receivable, all Collections
received from an Obligor shall be applied to the oldest Receivables of such
Obligor.
(f) The Servicer, following notification that collections of
any receivable or other intangible owed to any Seller which is not a Receivable
have been deposited in error into any Lockbox Account, shall segregate all such
collections or, if such collections have been deposited into the Collection
Concentration Account or the Collection Account, shall segregate such
collections for transfer to such Seller. Promptly after such misapplied
collections have been identified in writing to the Trustee, the Trustee shall
transfer and turn over all such collections to such Seller.
2.4 RESERVED.
2.5 SERVICING COMPENSATION (a) As full compensation for its
servicing activities hereunder and reimbursement for its expenses as set forth
in subsection (b) the Servicer shall be entitled to receive on each Distribution
Date for the preceding Settlement Period prior to the termination of the Trust
pursuant to Section 9.1 of the Pooling Agreement a servicing fee (the "SERVICING
FEE"). The Servicing Fee shall be an amount equal to (i) the product of (A) the
Servicing Fee Percentage and (B) the average aggregate Principal Amount of the
Receivables in the Trust for the Settlement Period immediately preceding such
Settlement Period (or, if such later Settlement Period is the initial Settlement
Period, the average aggregate Principal Amount of the Receivables in the Trust
in April 2001) and (C) the number of days in such Settlement Period, DIVIDED BY
(ii) 360 (or, with respect to a particular Outstanding Series, as shall be
provided in the related Supplement). Except as otherwise set forth in the
related Supplement, the share of the Servicing Fee allocable to each Outstanding
Series for any Settlement Period shall be an amount equal to the product of
(i) the Servicing Fee for such Settlement Period and (ii) a fraction (expressed
as a percentage) (A) the numerator of which is the daily average Invested Amount
for such Settlement Period with respect to such Series and (B) the denominator
of which is the daily average Aggregate Invested Amount for such Settlement
Period (with respect to any such Series, the "MONTHLY SERVICING FEE"); PROVIDED,
HOWEVER, that if on any day USFS or any Affiliate thereof is acting as the
Servicer and an Early Amortization Event has occurred and is continuing with
respect to any Outstanding Series, payment of the Monthly Servicing Fee with
respect to such Series shall be deferred until all amounts due under the
Investor Certificates of such Series have been paid in full. The Servicing Fee
shall be payable to the Servicer solely pursuant to the terms of, and to the
extent amounts are available for payment under, Article III of the Pooling
Agreement.
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(b) The Company hereby directs the Servicer, and the
Servicer hereby agrees, to pay amounts due to the Trustee pursuant to Section
8.5 of the Pooling Agreement and the reasonable fees and disbursements of
independent accountants and counsel, including the Trustee's reasonable
out-of-pocket expenses relating to the Trustee's inspections, if any, of the
Servicer's servicing facility in connection with the Trustee's role as potential
Successor Servicer, which inspections shall occur not more frequently than once
per calendar year, and all other out-of-pocket fees and expenses of the Trust
(including reasonable counsel fees, if any) not expressly stated herein to be
for the account of the Investor Certificateholders; PROVIDED, HOWEVER, that in
no event shall the Servicer be liable for any federal, state or local income or
franchise tax, or any interest or penalties with respect thereto, assessed on
the Trust, the Trustee or the Investor Certificateholders except in accordance
with Section 5.2 and as otherwise expressly provided herein. Notwithstanding
anything to the contrary herein or in any other Pooling and Servicing Agreement,
in the event that the Servicer fails to pay any amount due to the Trustee
pursuant to Section 8.5 of the Pooling Agreement, or following the commencement
and continuance of an Early Amortization Period, the Trustee shall be entitled,
in addition to any other rights it may have under law and under the Pooling
Agreement, to receive directly such amounts owing to it under the Pooling and
Servicing Agreements from, and in the same order of priority as, the Servicing
Fee before payment to the Servicer of any portion thereof, PROVIDED, that in the
event the Servicer shall have elected to waive its rights to payment of the
Servicing Fee or the Servicing Fee is deferred pursuant to subsection 2.5(a),
the Trustee shall nonetheless be entitled to receive such amounts from payments
which would ordinarily be applied to the payment of the Servicing Fee, in the
same order of priority as though such Servicing Fee were payable. The Servicer
shall be required to pay expenses for its own account, and, with respect to the
Receivables in the Trust, shall not be entitled to any payment therefor other
than the Servicing Fee. Nothing contained herein shall be construed to limit the
obligation of the Servicer or the Company to pay any amounts due the Trustee
pursuant to Section 8.5 of the Pooling Agreement or pursuant to the terms of any
applicable Supplement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SERVICER AND THE SUPPORT PROVIDER
As of (a) the date hereof and (b) each Issuance Date, each of the
Servicer and the Support Provider (unless otherwise indicated below) hereby
makes the following representations and warranties with respect to itself to
each of the other parties hereto:
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3.1 CORPORATE EXISTENCE - COMPLIANCE WITH LAW It (i) is a
corporation or limited liability company, as the case may be, duly organized or
formed, validly existing and in good standing under the laws of the jurisdiction
of its organization or formation as the case may be, (ii) has all requisite
power and authority, and all legal right, to own and operate its properties, to
lease the properties it operates as lessee and to conduct its business as now
conducted, (iii) is duly qualified as a foreign corporation or limited liability
company, as the case may be, to do business and in good standing (or is exempt
from such requirements) under the laws of each jurisdiction in which the
ownership of its assets or the conduct of its business, including without
limitation the servicing of Receivables as required by this Agreement requires
such qualification, or in which the failure to so qualify would reasonably be
expected to have a Material Adverse Effect, and (iv) is in compliance with all
Requirements of Law.
3.2 CORPORATE POWER: AUTHORIZATION It has the requisite power and
authority, and the legal right, to execute, deliver and perform this Agreement
and the other Transaction Documents to which it is a party and has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party. No consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement and the other Transaction Documents to which it is a party by or
against the Servicer or Support Provider, as the case may be, other than
(i) those consents which have duly been obtained or made and are in full force
and effect on the Initial Closing Date, the date hereof, or the relevant
Issuance Date, as the case may be, (ii) any filings of UCC- 1 financing
statements necessary to perfect USFS's, the Company's or the Trust's interest in
the Receivables and the Related Property, (iii) those that may be required under
state securities or "blue sky" laws in connection with the offering or sale of
Certificates and (iv) any such consent, authorization, filing, notice or other
act, the absence of which would not be reasonably likely to have a Material
Adverse Effect with respect to the Servicer or the Support Provider, as the case
may be. This Agreement and each other Transaction Document to which it is a
party have been duly executed and delivered on behalf of the Servicer or the
Support Provider, as the case may be.
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3.3 ENFORCEABILITY This Agreement and each other Transaction
Document to which the Servicer or the Support Provider, as the case may be, is a
party constitute the legal, valid and binding obligation of such party
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights generally and except as
such enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
3.4 NO LEGAL BAR The execution, delivery and performance of this
Agreement and each other Transaction Document to which it is a party will not
violate any Requirement of Law or Contractual Obligation of the Servicer (other
than any violation which would not be reasonably likely to have a Material
Adverse Effect with respect to the Servicer or the Support Provider, as
applicable), and will not result in, or require, the creation or imposition of
any Lien (other than Permitted Liens) on any of its properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation.
3.5 NO MATERIAL LITIGATION (a) There are no actions, suits,
investigations or proceedings at law or in equity or by or before any
arbitrator, court or Governmental Authority now pending or, to the knowledge of
the Servicer or the Support Provider, as applicable, threatened against or
affecting it or any of its properties, revenues or rights which (i) involve this
Agreement, any of the other Transaction Documents to which it is a party or any
of the transactions contemplated hereby or thereby or (ii) if adversely
determined, could individually or in the aggregate, result in a Material Adverse
Effect with respect to the Servicer or the Support Provider, as applicable.
(b) The Servicer or the Support Provider, as the case may
be, is not in default under or with respect to any Requirement of Law where such
default would be reasonably likely to have a Material Adverse Effect with
respect to the Servicer or the Support Provider, as applicable.
3.6 NO DEFAULT The Servicer or the Support Provider, as the case
may be, is not in default under or with respect to any of its Contractual
Obligations in any respect which would be reasonably likely to have a Material
Adverse Effect with respect to the Servicer or the Support Provider, as
applicable. No Servicer Default or Potential Servicer Default has occurred and
is continuing with respect to the Servicer.
3.7 SERVICING ABILITY With respect to the Servicer, as of the
related Issuance Date, there has not been since the date of this Agreement any
material adverse change in the ability of the Servicer to perform its
obligations as Servicer
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under any Transaction Document. With respect to the Support Provider, as of any
Issuance Date subsequent to the date of this Agreement, there has not been since
the date of this Agreement any material adverse change in the ability of the
Support Provider to perform its obligations as Support Provider under this
Agreement.
3.8 LOCATION OF RECORDS With respect to the Servicer, the offices
at which the Servicer keeps its records concerning the Receivables serviced by
it either (i) are located at the addresses set forth on Schedule II to the
applicable Receivables Sale Agreement or (ii) have been notified to the Company
and the Trustee in accordance with the provisions of Section 4.9. With respect
to the Servicer, the Servicer's place of business or chief executive office if
the Servicer has more than one place of business is located at one of such
locations.
ARTICLE IV
COVENANTS OF THE SERVICER
4.1 DELIVERY OF REQUIRED REPORTS In the event that (i) a Purchase
Termination Event or a Potential Purchase Termination Event has occurred under
the Receivables Sale Agreements or (ii) an Early Amortization Event or a
Potential Early Amortization Event has occurred under the Pooling Agreement or
any Supplement thereto, for each Business Day or other specified period
(a "REPORTED PERIOD") and with respect to each Outstanding Series, the Servicer
shall submit to the Trustee and the relevant Agent, if any, no later than
1:00 p.m.,
New York City time, on the second Business Day following the end of
each Reported Period, a written report substantially in a form reasonably
acceptable to the Trustee (the "REQUIRED REPORT") setting forth for the Reported
Period total Collections, Receivables and Eligible Receivables created, and such
other information as the Trustee or such Agent may reasonably request and shall
deliver a copy of such report to the Company and to the Sellers under the
Receivables Sale Agreement. The Required Report may be delivered in an
electronic format mutually agreed upon by the Servicer and the Trustee, or
pending such agreement, by facsimile. By delivery of a Required Report, the
Servicer shall be deemed to have made a representation and warranty that all
information set forth therein is true and correct in all material respects.
4.2 DELIVERY OF MONTHLY SETTLEMENT STATEMENT Unless otherwise
specified in the Supplement with respect to any Outstanding Series, the Servicer
hereby covenants and agrees that it shall deliver to the Trustee, each Agent and
each Rating Agency by 11:00 a.m.,
New York City time, on each Settlement Report
Date, a certificate of a Responsible Officer of the Servicer substantially in
the form attached to the related Supplement of each such Series (a "MONTHLY
SETTLEMENT
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STATEMENT") setting forth, as of the last day of the Settlement Period most
recently ended and for such Settlement Period, (a) the information described in
the form of such Monthly Settlement Statement, with such changes as may be
agreed to by the Servicer and the Trustee, subject to satisfaction of the Rating
Agency Condition (unless a Responsible Officer of the Servicer certifies that
such changes could not reasonably be expected to have a materially adverse
effect on the interests of the Trust or the Investor Certificateholders for the
applicable Series under the Transaction Documents). The delivery of such
certificate shall constitute a certification by the Servicer that, to the best
knowledge of such Responsible Officer of the Servicer, the information contained
therein is true and correct in all material respects and the Servicer has
performed in all material respects all of its obligations under each Transaction
Document throughout such preceding Settlement Period (or, if there has been a
material default in the performance of any such obligation, specifying each such
default known to such officer and the nature and status thereof). A copy of each
Monthly Settlement Statement may be obtained by any Investor Certificateholder
upon a request in writing to the Trustee addressed to the Corporate Trust
Office.
4.3 DELIVERY OF QUARTERLY SERVICER'S CERTIFICATE The Servicer
agrees that it shall deliver to the Trustee, each Agent and each Rating Agency,
a certificate of a Responsible Officer of the Servicer, substantially in the
form of Exhibit A hereto, stating that:
(a) a review of the activities of each of the Company and
the Servicer during the preceding calendar quarter and of its performance under
each Transaction Document was made under the supervision of such Responsible
Officer; and
(b) to the best of such Responsible Officer's knowledge,
based on such review, (i) each of the Company and the Servicer has performed in
all material respects its obligations under each Transaction Document throughout
the period covered by such certificate (or, if there has been a material default
in the performance of any such obligation, specifying each such default known to
such Responsible Officer and the nature and status thereof) and (ii) each
Required Report and Monthly Settlement Statement delivered during such period
was accurate and correct in all material respects, except as specified in such
certificate.
Such certificate shall be delivered by the Servicer within 45 days after the end
of each calendar quarter commencing with the quarter ending on or about
June 30, 2001. A copy of such certificate may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
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4.4 DELIVERY OF INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORTS
The Servicer shall cause Independent Public Accountants to furnish to the
Company, the Trustee and each Rating Agency within 90 days following the last
day of each fiscal year of the Servicer (commencing with the fiscal year ending
on or about December 31, 2001) a letter to the effect that such firm has
performed certain agreed upon procedures (as set forth in Exhibit B hereto)
relating to the Servicer with respect to the Receivables and each such Person's
performance hereunder during the preceding fiscal year and describing such
firm's findings with respect to such procedures. A copy of such report may be
obtained by any Investor Certificateholder upon a request in writing to the
Trustee addressed to the Corporate Trust Office.
4.5 NO GUARANTEE OR ASSUMPTION OF COMPANY'S LIABILITIES The
Servicer hereby covenants and agrees that it will not guarantee or assume the
obligations or liabilities of the Company under the Pooling and Servicing
Agreements, or any other obligations or liabilities of the Company, in an
aggregate amount exceeding $25,000 at any one time outstanding, it being
understood that a shareholder's capital contribution is not such a guarantee or
assumption.
4.6 EXTENSION, AMENDMENT AND ADJUSTMENT OF RECEIVABLES, AMENDMENT
OF AND COMPLIANCE WITH POLICIES (a) The Servicer hereby covenants and agrees
with the Trustee that it shall not extend, rescind, cancel, amend or otherwise
modify, or attempt or purport to extend, rescind, cancel, amend or otherwise
modify, the terms of, or grant any Dilution Adjustment to, any Receivable, or
otherwise take any action which is intended to cause or permit an Eligible
Receivable to cease to be an Eligible Receivable, except in any such case (i) in
accordance with the terms of the Policies, (ii) as required by any Requirement
of Law or (iii) in the case of any Dilution Adjustments (whether or not
permitted by any other clause of this sentence), upon the payment by or on
behalf of the applicable Seller or USFS of a Seller Adjustment Payment pursuant
to Section 2.05 of the Receivables Sale Agreement or the USFS Receivables Sale
Agreement, as the case may be. Any Dilution Adjustment authorized to be made
pursuant to the preceding sentence shall result in the reduction, on the
Business Day on which such Dilution Adjustment arises or is identified, in the
aggregate Principal Amount of Receivables used to calculate the Aggregate
Receivables Amount. If, as a result of such a reduction, the Aggregate
Receivables Amount is less than the Aggregate Target Receivables Amount, the
Company (in addition to the obligations of the applicable Seller and USFS under
the applicable Receivables Sale Agreement in respect of such Dilution
Adjustment) shall be required to pay into the Series Principal Collection
Sub-subaccount with respect to each Outstanding Series in immediately available
funds within one Business Day of such determination such Series PRO RATA share
of the amount (the "CASH DILUTION PAYMENT") by which the Aggregate Target
Receivables Amount exceeds the Aggregate Receivables Amount.
15
(b) The Servicer shall not make or permit to be made any
change or modification to the Policies in any material respect, except (i) if
such changes or modifications are necessary under any Requirement of Law,
(ii) if such changes or modifications would not reasonably be expected to have a
Material Adverse Effect with respect to the Servicer or (iii) if the Rating
Agency Condition is satisfied with respect thereto. The Servicer shall provide
notice to the Company, the Trustee and each Rating Agency of any modification of
the Policies.
(c) The Servicer shall perform its obligations in accordance
with and comply in all material respects with the Policies.
4.7 PROTECTION OF INVESTOR CERTIFICATEHOLDERS' RIGHTS The
Servicer hereby agrees with the Trustee that it shall take no action, nor
intentionally omit to take any action, which could reasonably be expected to
materially adversely impair the rights, remedies or interests of the Investor
Certificateholders under the Transaction Documents in respect of the
Receivables, nor shall it reschedule, revise or defer payments due on any
Receivable except in accordance with the Policies or Section 4.6 above.
4.8 SECURITY INTEREST The Servicer hereby covenants and agrees
that it shall not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on, any Receivable sold
and assigned to the Company or the Trust, whether now existing or hereafter
created, or any interest therein, and the Servicer shall defend the right, title
and interest of the Company and the Trust in, to and under any Receivable sold
and assigned to the Company or the Trust, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Servicer or the Company; provided, HOWEVER, that nothing in this Section 4.8
shall prevent or be deemed to prohibit the Servicer from suffering to exist upon
any of the Receivables any Permitted Liens.
4.9 LOCATION OF RECORDS The Servicer hereby covenants and agrees
that it (a) shall not move its chief executive office or any of the offices
where it keeps its records with respect to the Receivables outside of the
location specified in respect thereof on Schedule II to the Receivables Sale
Agreement or the USFS Receivables Sale Agreement, as applicable, in any such
case, without giving 15 days' prior written notice to the Company, the Trustee
and the Rating Agencies and (b) shall promptly take all actions reasonably
required (including but not limited to all filings and other acts necessary or
reasonably requested by the Trustee as being advisable under the UCC) in order
to continue the valid and enforceable interest of the Trust in all Receivables
now owned or hereafter created.
4.10 VISITATION RIGHTS (a) The Servicer shall, at any reasonable
time during normal business hours on any Business Day and from time to time,
upon
16
reasonable prior notice, according to the Servicer's normal security and
confidentiality requirements, permit (i) the Company, the Trustee, any Agent or
any of their respective agents or representatives (A) to examine and make copies
of and abstracts from the records, books of account and documents (including
computer tapes and disks) of the Servicer relating to the Receivables and
(B) following the termination of the appointment of the Servicer, to be present
at the offices and properties of the Servicer to administer and control the
collection of the Receivables and (ii) the Company, the Trustee, any Agent or
any of their respective agents or representatives to visit the properties of the
Servicer to discuss the affairs, finances and accounts of the Servicer relating
to the Receivables or the Servicer's performance hereunder or under any of the
other Transaction Documents to which it is a party with any of its officers or
directors and with its independent certified public accountants; PROVIDED that
the Company, the Trustee or such Agent, as the case may be, shall notify the
Servicer prior to any contact with such accountants and shall give the Servicer
the opportunity to participate in such discussions.
(b) The Servicer shall provide the Trustee with such other
information as the Trustee may reasonably request in connection with the
fulfillment of the Trustee's obligations under any Pooling and Servicing
Agreement.
4.11 LOCKBOX AGREEMENT: LOCKBOX ACCOUNTS The Servicer shall
(a) maintain, and keep in full force and effect, each Lockbox Agreement, except
to the extent otherwise permitted under the terms of the Transaction Documents,
and (b) ensure that each related Lockbox Account shall be free and clear of, and
defend each such Lockbox Account against, any writ, order, stay, judgment,
warrant of attachment or execution or similar process.
4.12 DELIVERY OF FINANCIAL STATEMENTS The Servicer shall furnish
to Trustee and the Rating Agencies:
(a) as soon as available, but in any event not later than
125 days after the end of each fiscal year of United Stationers Inc., and so
long as USFS is the Servicer, a copy of the audited consolidated balance sheets
of United Stationers Inc. as at the end of such fiscal year and the related
consolidated statements of operations, shareholders' equity and cash flows of
United Stationers Inc. for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year and accompanied by the
opinion of Ernst & Young LLP or another nationally-recognized independent public
accounting firm, which report shall state that such consolidated financial
statements present fairly the financial position and results of operations and
changes in cash flow for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years. Such opinion shall not be qualified or
limited because of a restricted or limited examination by
17
such accountant of any material portion of United Stationers Inc. or any of its
Subsidiaries' records; and
(b) as soon as practicable, but in any event not later than
50 days after the end of the first three fiscal quarters of each fiscal year, a
copy of the condensed unaudited consolidated balance sheets of United Stationers
Inc., USFS and the Sellers as at the end of such quarter and the related
condensed unaudited consolidated statements of operations, shareholders' equity
and cash flows of United Stationers Inc., USFS and the Sellers for such fiscal
quarter, and for the elapsed portion of the fiscal year then ended, certified by
an appropriate Responsible Officer as being complete and correct in all material
respects and fairly presenting the financial position and the results of
operations of United Stationers Inc., USFS and the Sellers, setting forth in
each case in comparative form the figures as of and for the corresponding dates
and periods in the previous fiscal year.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods, subject to normal year-end adjustments (except as approved by such
accountants or officer, as the case may be, and disclosed therein and except
that such financial statements shall not include any footnote disclosure as may
be required by GAAP).
4.13 NOTICES The Servicer shall furnish to the Company, the
Trustee and each Rating Agency, promptly upon a Responsible Officer of the
Servicer obtaining knowledge of the occurrence of any Purchase Termination
Event, Potential Purchase Termination Event (each as defined in the Receivables
Sale Agreement), Early Amortization Event, Potential Early Amortization Event,
Servicer Default or Potential Servicer Default, written notice thereof.
4.14 APPLICATION OF PROCEEDS So long as Section 2.10 of that
certain Third Amended and Restated Credit Agreement dated as of June 29, 2000
(as amended, supplemented or otherwise modified and in effect from time to time,
the "CREDIT Agreement"), by and among USSC, as borrower, United Stationers Inc.,
as guarantor, The Chase Manhattan Bank, as administrative agent, and Chase
Securities Inc., as arranger, shall be in effect and shall not have been waived
in writing pursuant to the applicable waiver provisions of such Credit
Agreement, and so long as Section 1016 of that certain Indenture dated as of
May 3, 1995 (as amended, supplemented or otherwise modified and in effect from
time to time, the "INDENTURE"), among USSC, United Stationers Inc., and The Bank
of
New York, as trustee, shall be in effect and shall not have been waived in
writing pursuant to the applicable waiver provisions of such Indenture, the
Servicer shall comply in all respects with the requirements of such Section 2.10
and Section 1016.
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ARTICLE V
OTHER MATTERS RELATING TO THE SERVICER AND THE SUPPORT
PROVIDER
5.1 MERGER, CONSOLIDATION, ETC. (a) The Servicer shall not
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
the Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Servicer substantially as an
entirety shall be a Person organized and existing under the laws of the
United States of America or any State thereof or the District of Columbia,
and, if the Servicer is not the surviving entity, such Person shall assume,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto (except as may be required in the context of
an acquisition by conveyance or transfer of the properties and assets of
the Servicer substantially as an entirety to such other Person), the
performance of every covenant and obligation of the Servicer hereunder; and
(ii) the Servicer has delivered to the Trustee an
officer's certificate executed by a Vice President or more senior officer
and an Opinion of Counsel addressed to the Trust and the Trustee, each
stating (i) that such consolidation, merger, conveyance or transfer
complies with this Section 5.1 and (ii) that all conditions precedent
herein provided for relating to such transaction have been complied with;
PROVIDED that such Opinion of Counsel, in the case of clause (ii) above,
may, to the extent that such opinion concerns questions of fact, rely on
such officer's certificate with respect to such questions of fact.
(b) The Support Provider covenants and agrees that, until
this Agreement is terminated pursuant to Section 7.2, the Support Provider will
continue to be the direct or indirect beneficial owner of a majority of the
issued and outstanding capital stock of the Servicer. The Support Provider shall
not enter into any transaction or merger whereby it is not the surviving entity,
nor shall it sell all or substantially all of its assets to another Person
unless it has given prior written notice thereof to the Company and the Trustee
and each of the Company and the Trustee (subject to Section 8.14 of the Pooling
Agreement) consents in writing.
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5.2 INDEMNIFICATION OF THE TRUST AND THE TRUSTEE (a) The Servicer
hereby agrees to indemnify and hold harmless the Trust and the Trustee, for the
benefit of the Investor Certificateholders and the Trustee and its directors,
officers, agents and employees (each of the foregoing, an "INDEMNIFIED PERSON"),
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of any acts, omissions or alleged acts or omissions arising
out of, or relating to, activities of the Servicer pursuant to the Pooling and
Servicing Agreements, including but not limited to any judgment, award,
settlement, reasonable attorneys' fees and other reasonable costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim; PROVIDED that the Servicer shall not so indemnify any
Indemnified Person for any such loss, liability, damage, injury, cost or expense
of such Indemnified Person (i) arising solely from a default by an Obligor with
respect to any Receivable (other than arising out of (A) any discharge, claim,
offset or defense (other than discharge in bankruptcy of the Obligor) of the
Obligor to the payment of any Purchased Receivable arising from the actions of
the Servicer (including, without limitation, a defense based on such Purchased
Receivable's not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms) or (B) a failure by the
Servicer to perform its duties or obligations under this Agreement), or (ii) to
the extent that such liability, cost or expense arises from the gross
negligence, bad faith or willful misconduct of such Indemnified Person or any
other Indemnified Person (or any of their respective directors, officers, agents
or employees); PROVIDED, HOWEVER, that to the extent a determination of gross
negligence, bad faith or willful misconduct is made after the payment of any
amounts related thereto, the Servicer shall be repaid any amounts reimbursed
under the preceding clause that, due to such determination, it should not have
paid. The provisions of this indemnity shall run directly to, and be enforceable
by, an injured party and shall survive the termination of this Agreement and the
resignation or removal of the Servicer.
(b) In addition, the Servicer agrees to pay, indemnify and
hold each Indemnified Person harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind or nature whatsoever which may
at any time be imposed on, incurred by or asserted against such Indemnified
Person in any way relating to or arising out of the Servicer's breach of any
covenant contained in subsections 2.2(f), 2.2(g), 4.6, 4.7 or 4.8 with respect
to any Receivable which materially and adversely affects the interest of the
Trust, the parties hereto or the Investor Certificateholders pursuant to the
Transaction Documents in any Receivable or the collectibility of any Receivable
(an "INDEMNIFICATION EVENT").
(c) The Servicer shall indemnify the relevant Indemnified
Person for such affected Receivable pursuant to subsection 5.2(b) by depositing
into the Collection Account in immediately available funds no later than the
next
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Settlement Report Date occurring at least 30 days after receipt by the Servicer
of written notice of an Indemnification Event given by the applicable Seller,
the Company or the Trustee or upon a Responsible Officer of the Servicer
obtaining knowledge of an Indemnification Event, an amount equal to the
outstanding Principal Amount of such Receivable (the "SERVICER INDEMNIFICATION
AMOUNT"). Upon each such indemnification by the Servicer, the Trust shall
automatically and without further action be deemed to transfer, assign, and set
over, and otherwise convey to the Servicer, without recourse, representation or
warranty, all right, title and interest of the Trust in and to such Receivable,
all monies due or to become due with respect thereto and all proceeds thereof;
and such Receivable shall be treated by the Trust as collected in full as of the
date on which it was transferred. The Trustee shall execute such documents and
instruments of transfer or assignment and take such other actions as shall be
reasonably requested by the Servicer to effect the conveyance of any Receivable
pursuant to this subsection. The obligation of the Servicer to indemnify the
Trust for any such Receivables shall constitute the sole remedy respecting any
breach of the covenants set forth in subsections 2.2(f), 2.2(g), 4.6, 4.7 or 4.8
with respect to such Receivables available to Investor Certificateholders;
PROVIDED, HOWEVER, that the Servicer shall, in addition, indemnify each
Indemnified Person against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.
5.3 SERVICER NOT TO RESIGN The Servicer shall not resign from the
obligations and duties hereby imposed on it except (a) upon determination that
(i) the performance of its duties hereunder is no longer permissible under
applicable law and (ii) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder permissible under
applicable law or (b) if the Servicer is terminated as Servicer pursuant to
Section 6.1. Any such determination permitting the resignation of the Servicer
shall be evidenced as to clause (a)(i) above by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until a Successor Servicer or the Trustee shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 6.2.
The Trustee, the Company and each Rating Agency shall be notified of such
resignation in writing.
5.4 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
RECEIVABLES The Servicer will hold in trust for the Trustee at their respective
offices such computer programs, books of account and other records as are
reasonably necessary to enable the Trustee to determine at any time the status
of the Receivables and all collections and payments in respect thereof
(including, without limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof).
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5.5 PERFORMANCE SUPPORT OBLIGATION OF SUPPORT PROVIDER. (a) The
Support Provider hereby unconditionally and irrevocably guarantees for the
benefit of each of the Company and the Trustee, on behalf of the Investor
Certificateholders, the due and punctual performance and observance by the
Servicer and its respective successors and assigns (except for any successor and
assign which is not wholly owned by USSC) of all of the terms, covenants,
conditions, agreements, undertakings and obligations on the part of the Servicer
to be performed or observed under the Transaction Documents (all such terms,
covenants, conditions, agreements, undertakings and obligations on the part of
the Servicer to be performed or observed being collectively called the
"OBLIGATIONS"). In the event that the Servicer shall fail in any manner
whatsoever, to perform or observe any of the Obligations when the same shall be
required to be performed or observed (after giving effect to any grace period
applicable thereto), then the Support Provider will itself duly and punctually
perform and observe or cause to be duly and punctually performed or observed,
the Obligations, and it shall not be a condition to the accrual of the
obligation of the Support Provider hereunder to perform or observe any
Obligation (or to cause the same to be performed or observed) that the Company
or the Trustee, for the benefit of the Holders, shall have first made any
request of or demand upon or given any notice to the Support Provider or to the
Servicer or its respective successors and assigns or have initiated any action
or proceeding against the Support Provider or the Servicer or any of their
respective successors and assigns in respect thereof. Either the Company or the
Trustee may proceed to enforce the obligations of the Support Provider under
this subsection 5.5(a) without first pursuing or exhausting any right or remedy
which any Investor Certificateholder, the Trustee, the Company, USFS (in its
capacity as purchaser under the Receivables Sale Agreement and as seller under
the USFS Receivables Sale Agreement), the Sellers or the Funding Agent may have
against the Servicer, any other Person, the Receivables or any other property.
The Trustee, on behalf of the Investor Certificateholders, hereby acknowledges
that the Obligations shall not create recourse against the Servicer or the
Support Provider for the payment of any Receivable which is uncollectible for
credit-related reasons.
(b) The Support Provider agrees that its obligations under
this Agreement shall be unconditional, irrespective of (i) the validity,
enforceability, avoidance, subordination, discharge, or disaffirmance by any
Person (including a trustee in bankruptcy) of the Obligations, any Receivable,
the Receivables Sale Agreements or any other Transaction Document, (ii) the
absence of any attempt to collect any Receivables from the Obligor related
thereto or any guarantor thereof, or to collect the Obligations from the
Servicer or any other Person, (iii) the waiver, consent, extension, forbearance
or granting of any indulgence by any of the Investor Certificateholder, the
Trustee, the Company, USFS (in its capacity as purchaser under the Receivables
Sale Agreement and as seller under the USFS Receivables Sale Agreement), or the
Funding Agent with respect to any provision of any
22
instrument evidencing the Obligations (including, but not limited to, the
Receivables Sale Agreements or any Receivable), (iv) any change of the time,
manner or place of performance of, or in any other term of any of the
Obligations or any Receivable, including without limitation, any amendment to or
modification of the Receivables Sale Agreements, the Pooling Agreement and any
Supplement, (v) any law, regulation or order of any jurisdiction affecting any
term of any of the Obligations, any Receivable, or rights of any Investor
Certificateholder, the Trustee, the Company, USFS (in its capacity as purchaser
under the Receivables Sale Agreement and as seller under the USFS Receivables
Sale Agreement), the Sellers or the Funding Agent with respect thereto, (vi) the
failure by any of the Trustee, the Company, USFS (in its capacity as purchaser
under the Receivables Sale Agreement and as seller under the USFS Receivables
Sale Agreement) or the any of the Sellers to take any steps to perfect and
maintain perfected its respective interest in any Receivable or other property
acquired by USFS (in its capacity as purchaser under the Receivables Sale
Agreement) from the Sellers, by the Company from USFS (in its capacity as seller
under the USFS Receivables Sale Agreement), or assigned to the Trust by the
Company, or in any security or collateral related to the Obligations, (vii) any
exchange or release of any Receivable or other property acquired by USFS (in its
capacity as purchaser under the Receivables Sale Agreement) from the Sellers, by
the Company from USFS (in its capacity as seller under the USFS Receivables Sale
Agreement), or assigned to the Trust by the Company, (viii) any failure to
obtain any authorization or approval from or other action by or to notify or
file with, any Governmental Authority or regulatory body required in connection
with the performance of the obligations hereunder by the Support Provider or
(ix) any impossibility or impracticability of performance, illegality, FORCE
MAJEURE, any act of government, or other circumstances which might constitute a
default available to, or a discharge of the Servicer or the Support Provider, or
any other circumstance, event or happening whatsoever whether foreseen or
unforeseen and whether similar to or dissimilar to anything referred to above.
The Support Provider further agrees that its obligations under this Agreement
shall not be limited by any valuation, estimation or disallowance made in
connection with any proceedings involving the Servicer filed under the
Bankruptcy Code, whether pursuant to Section 502 of the Bankruptcy Code or any
other Section thereof. The Support Provider further agrees that none of the
Investor Certificateholders, the Trustee, the Company, USFS (in its capacity as
purchaser under the Receivables Sale Agreement and as seller under the USFS
Receivables Sale Agreement) and the Funding Agent shall be under any obligation
to xxxxxxxx any assets in favor of or against or in payment of any or all of the
Obligations. The Support Provider further agrees that, to the extent that the
Servicer makes a payment or payments to any of the Trustee, the Funding Agent,
the Company, USFS (in its capacity as purchaser under the Receivables Sale
Agreement and seller under the USFS Receivables Sale Agreement) or the Sellers
and such payment or payments (or any part thereof) are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to the Servicer, its
23
estate, trustee or receiver or any other party, including, without limitation,
the Support Provider, under any bankruptcy law, state or federal law, common law
or equitable cause, then to the extent of such payment or repayment, the
Obligations or part thereof which had been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the date
such initial payment, reduction or satisfaction occurred. The Support Provider
waives all set-offs and counterclaims and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor and notices of acceptance of this Agreement. The Support Provider's
obligations under this Agreement shall not be limited if any of the Investor
Certificateholders, the Trustee, the Funding Agent, the Company, USFS (in its
capacity as purchaser under the Receivables Sale Agreement and seller under the
USFS Receivables Sale Agreement) or the Sellers are precluded for any reason
(including without limitation, the application of the automatic stay under
Section 362 of the Bankruptcy Code) from enforcing or exercising any right or
remedy with respect to the Obligations, and the Support Provider shall pay to
Trustee, the Funding Agent, the Company, USFS (in its capacity as purchaser
under the Receivables Sale Agreement and seller under the USFS Receivables Sale
Agreement) or the Sellers, as the case may be, upon demand, the amount of the
Obligations that would otherwise have been due and payable had such rights and
remedies been permitted to be exercised.
(c) The Support Provider agrees that its obligations under
this Agreement shall be unconditional and irrevocable. In the event that under
applicable law (notwithstanding the Support Provider's agreement regarding the
irrevocable nature of its obligations hereunder) the Support Provider shall have
the right to revoke this Agreement, this Agreement shall continue in full force
and effect until a written revocation hereof specifically referring hereto,
signed by the Support Provider is actually received by the Company and the
Trustee. Any such revocation shall not affect the right of any of the Company or
the Trustee, for the benefit of the Holders, to enforce their respective rights
under this Agreement with respect to (i) any Obligation (including any
Obligation that is contingent or unmeasured) which arose on or prior to the date
the aforementioned revocation was received by the Company and the Trustee or
(ii) any Receivable which was a Receivable on the date the aforementioned
revocation was received by the Company and the Trustee. If any of the Investor
Certificateholders, the Trustee or the Company takes other action in reliance on
this Agreement after any such revocation by the Support Provider but prior to
the receipt by the Company and the Trustee of said written notice, the rights of
the Investor Certificateholders, the Trustee and the Company with respect
thereto shall be the same as if such revocation had not occurred. Without
limiting the foregoing, this Agreement may not be revoked at any time on or
after an Early Termination.
24
(d) The Support Provider hereby waives promptness,
diligence, notice of acceptance, notice of default by the Servicer, notice of
the incurrence of any Obligation and any other notice with respect to any of the
Obligations and this Agreement, the Receivables Sale Agreements, and any other
Transaction Document and any requirement that the Investor Certificateholders,
the Trustee, the Funding Agent or the Company, USFS (in its capacity as
purchaser under the Receivables Sale Agreement and seller under the USFS
Receivables Sale Agreement) or the Sellers exhaust any right or take any action
against the Servicer, any other Person or any property. The Support Provider
warrants to the Investor Certificateholders, the Trustee and the Company that it
has adequate means to obtain from the Servicer on a continuing basis, all
information then known to the Servicer concerning the financial condition of the
Servicer and the collectibility of the Receivables, and that it is not relying
on the Investor Certificateholders, the Trustee or the Company to provide such
information either now or in the future.
(e) The Support Provider will not exercise or assert any
rights which it may acquire by way of subrogation under this Agreement unless
and until all of the Obligations shall have been observed and performed in full
and this Agreement shall have terminated in accordance with Section 7.2 hereof.
If any payment shall be made to the Support Provider on account of any
subrogation rights at any time prior to the occurrence of the events described
in the preceding sentence, each and every amount so paid will be held in trust
for the benefit of the Investor Certificateholders, the Trustee, the Funding
Agent, the Company, USFS (in its capacity as purchaser under the Receivables
Sale Agreement and seller under the USFS Receivables Sale Agreement) and the
Sellers, and forthwith be paid to the Holders, the Trustee, the Funding Agent,
the Company, USFS (in its capacity as purchaser under the Receivables Sale
Agreement and seller under the USFS Receivables Sale Agreement) and the Sellers,
as applicable, to be credited and applied to the Obligations to the extent then
unsatisfied, in accordance with the terms of the Receivables Sale Agreements,
the Pooling Agreement, any Supplement or any document delivered in connection
therewith.
ARTICLE VI
SERVICER DEFAULTS
6.1 SERVICER DEFAULT. If, with respect to the Servicer, any one
of the following events (a "SERVICER DEFAULT") shall occur and be continuing:
(a) failure by the Servicer to deliver, within two Business
Days of the earlier date set forth below in clause (i) or (ii), any Required
Report or, within three Business Days of the earlier date set forth below in
clause (i) or (ii), any
25
Monthly Settlement Statement, in each case conforming in all material respects
to the requirements of Section 4.1 or 4.2, as the case may be, after the earlier
to occur of, in each case, (i) the date upon which a Responsible Officer of the
Servicer obtains knowledge of the Servicer's failure to deliver such a
conforming Required Report or Monthly Settlement Statement when due under
Section 4.1 or 4.2 and (ii) the date on which written notice of the Servicer's
failure to deliver such a conforming Required Report or Monthly Settlement
Statement when due under Section 4.1 or 4.2, requiring the same to be remedied,
shall have been given to the Servicer by the Company or the Trustee, or to the
Company, the Servicer and the Trustee by holders of Investor Certificates
evidencing 25 % or more of the Aggregate Invested Amount or by any Agent;
(b) failure by the Servicer to pay any amount required to be
paid by it under the Agreement or to give any direction with respect to the
allocation or transfer of funds under any Pooling and Servicing Agreement, in
each case on or before the date occurring five Business Days after the earlier
to occur of (i) the date upon which a Responsible Officer of the Servicer
obtains knowledge of such failure and (ii) the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Company or the Trustee, or to the Company, the Servicer and the
Trustee by holders of Investor Certificates evidencing 25 % or more of the
Aggregate Invested Amount or by any Agent;
(c) failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in any Pooling and Servicing Agreement, which failure has a
Material Adverse Effect on the holders of any Outstanding Series or on the
collectibility of the Receivables as a whole and which Material Adverse Effect
continues unremedied for 30 days after the earlier to occur of (i) the date upon
which a Responsible Officer of the Servicer obtains knowledge of such failure or
(ii) the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Company and the Servicer by the Trustee,
or to the Company, the Servicer and the Trustee by holders of Investor
Certificates evidencing 25 % or more of the Aggregate Invested Amount or by any
Agent; PROVIDED that no Servicer Default shall be deemed to occur under this
subsection (c) if the Servicer shall have complied with the provisions of
subsections 5.2(b) and (c) with respect thereto;
(d) any representation, warranty or certification made by
the Servicer in any Pooling and Servicing Agreement or in any certificate
delivered pursuant thereto shall prove to have been incorrect in any material
respect when made or deemed made, which incorrectness has a Material Adverse
Effect on the holders of any Outstanding Series or on the collectibility of the
Receivables as a whole and which Material Adverse Effect continues unremedied
for 30 days after the earlier to occur of (i) the date upon which a Responsible
Officer of the Servicer
26
obtains knowledge of such failure or (ii) the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Company and the Servicer by the Trustee, or to the Company, the Servicer and the
Trustee by holders of Investor Certificates evidencing 25 % or more of the
Aggregate Invested Amount or by any Agent; PROVIDED that no Servicer Default
shall be deemed to occur under this subsection (d) if the Servicer shall have
complied with the provisions of subsections 5.2(b) and (c) with respect thereto;
(e) (i) the Servicer shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or the Servicer shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Servicer any case, proceeding or other action of a nature referred to in clause
(i) above which remains undismissed, undischarged or unbonded for a period of
60 days or an order for relief, decree, adjudication or appointment shall occur;
or (iii) there shall be commenced against the Servicer any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 such days from
the entry thereof, or (iv) the Servicer shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clauses (i), (ii), or (iii) above; or (v) the Servicer shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or
(f) there shall have occurred and be continuing a Purchase
Termination Event under the Receivables Sale Agreement, except for a Purchase
Termination Event described in Section 6.01(b) of the Receivables Sale
Agreement;
(g) there shall have occurred one of the Early Amortization
Events described in Sections 7.1(a) or 7.1(d) of the Pooling Agreement;
(h) the Servicer shall have ceased to be a directly or
indirectly wholly-owned Subsidiary of United Stationers Inc.;
(i) the Servicer or the Support Provider shall assert in
writing that any of this Agreement, the Pooling Agreement, any Supplement
thereto,
27
or the Receivables Sale Agreement shall cease, for any reason, to be in full
force and effect;
(j) the Servicer shall assert that the Trust ceases to have
a valid and perfected first priority undivided ownership or security interest in
the Trust Assets (subject to no other Liens other than Permitted Liens described
in clauses (i) and (iv) of the definition thereof or as otherwise specified in
the Agreement or herein);
(k) there shall have been filed against the Servicer (i) a
notice of federal tax Lien from the Internal Revenue Service, (ii) a notice of
Lien from the PBGC under Section 412(n) of the Internal Revenue Code or Section
302(f) of ERISA for a failure to make a required installment or other payment to
a plan to which either of such sections applies or (iii) a notice of any other
Lien the existence of which could reasonably be expected to have a material
adverse effect on the business, operations or financial condition of such
Person, and, in each case, 40 days shall have elapsed without such notice having
been effectively withdrawn or such Lien having been released or discharged; or
(l) any action, suit, investigation or proceeding at law or
in equity (including, without limitation, injunctions, writs or restraining
orders) shall be brought or commenced or filed by or before any arbitrator,
court or Governmental Authority against the Servicer or any properties, revenues
or rights thereof which could reasonably be expected to have a Material Adverse
Effect with respect to the Trust or any Certificateholder; then, in the event of
any Servicer Default, so long as the Servicer Default shall not have been
remedied (or waived in accordance with the terms of the Transaction Documents),
the Trustee may, and at the written direction of the holders of Investor
Certificates evidencing more than 50% of the Aggregate Invested Amount voting as
a single class, the Trustee shall, by notice then given in writing to the
Servicer, each Agent and each Rating Agency (a "TERMINATION NOTICE"), terminate
all or any part of the rights and obligations of the Servicer as Servicer under
the Pooling and Servicing Agreements. Notwithstanding anything to the contrary
in this Section 6.1, a delay in or failure of performance referred to under
clause (b) above for a period of 10 Business Days after the applicable grace
period or a delay in or failure of performance referred to under clauses
(a), (c) or (d) above for a period of 30 Business Days after the applicable
grace period shall not constitute a Servicer Default, if such delay or failure
could not have been prevented by the exercise of reasonable diligence by the
Servicer and such delay or failure was caused by a Force Majeure Delay. After
receipt by the Servicer of a Termination Notice, and on the date that a
Successor Servicer shall have been appointed by the Trustee pursuant to
Section 6.2, all authority and power of the Servicer under any Pooling and
Servicing Agreement to the extent specified in such Termination Notice shall
pass to and be vested in a Successor Servicer (a "SERVICE TRANSFER") and,
without
28
limitation, the Trustee is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such Service Transfer. The Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder,
including, without limitation, the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under the
Pooling and Servicing Agreements, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by a the Servicer, in the Collection
Account, or which shall thereafter be received with respect to the Receivables,
and in assisting the Successor Servicer. Upon a Service Transfer, the Servicer
shall promptly (x) assemble all of its documents, instruments and other records
(including credit files, licenses, rights, copies of all relevant computer
programs and any necessary licenses for the use thereof, related material,
computer tapes, disks, cassettes and data) that (i) evidence or will evidence or
record Receivables sold and assigned to the Trust and (ii) are otherwise
necessary or desirable to enable a Successor Servicer to effect the immediate
Collection of such Receivables, with or without the participation of the
applicable Seller and the Servicer and (y) deliver or license the use of all of
the foregoing documents, instruments and other records to the Successor Servicer
at a place designated thereby. In recognition of the Servicer's need to have
access to any such documents, instruments and other records which may be
transferred to such Successor Servicer hereunder, whether as a result of its
continuing responsibility as a servicer of accounts receivable which are not
sold and assigned to the Trust or otherwise, such Successor Servicer shall
provide to the Servicer reasonable access to such documents, instruments and
other records transferred by the Servicer to it in connection with any activity
arising in the ordinary course of the Servicer's business at any reasonable time
during normal business hours on any Business Day and from time to time, upon
reasonable prior notice, according to such Successor Servicer's normal security
and confidentiality requirements; PROVIDED that the Servicer shall not disrupt
or otherwise interfere with the Successor Servicer's use of and access to such
documents, instruments and other records. To the extent that compliance with
this Section 6.1 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interest. All costs and expenses incurred by the
defaulting Servicer, the Successor Servicer and the Trustee in connection with
any Service Transfer shall be for the account of such defaulting Servicer.
29
6.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR (a) On and after
(i) the receipt by the Servicer of a Termination Notice pursuant to Section 6.1
or (ii) the date on which the Servicer notifies the Trustee, the Company, each
Agent and each Rating Agency in writing of its resignation pursuant to Section
5.3 (the "RESIGNATION NOTICE"), the Servicer shall continue to perform all
servicing functions under the Pooling and Servicing Agreements until the earlier
of (x) the date on which a Successor Servicer is appointed and (y) 60 days after
the delivery of such Termination Notice or Resignation Notice, as the case may
be. The Trustee shall, as promptly as reasonably possible after the giving of or
receipt of a Termination Notice or Resignation Notice, as the case may be,
appoint an Eligible Successor Servicer as successor servicer (the "SUCCESSOR
SERVICER"). The Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Trustee.
(b) Reserved.
(c) Upon its appointment, the Successor Servicer shall be
the successor in all respects to the Servicer to which it is successor with
respect to servicing functions under the Pooling and Servicing Agreements (with
such changes as are agreed to between such Successor Servicer and the Trustee)
and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof, and
all references in any Pooling and Servicing Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. The Successor Servicer shall manage
the servicing and administration of the Receivables, the collection of payments
due under the Receivables and the charging off of any Receivables as
uncollectible, with reasonable care, using that degree of skill and attention
that is the customary and usual standard of practice of prudent receivables
servicers with respect to all comparable receivables serviced for itself or
others. The Successor Servicer shall not be liable for, and the Servicer shall
indemnify the Successor Servicer against costs incurred by the Successor
Servicer as a result of, any acts or omissions of the Servicer or any events or
occurrences occurring prior to the Successor Servicer's acceptance of its
appointment as Successor Servicer.
(d) The Company and the Trustee will review any bids
obtained from Eligible Successor Servicers and the Company and the Trustee, or
the Company (with the consent of the Trustee), may appoint any Eligible
Successor Servicer submitting such a bid as a Successor Servicer for servicing
compensation not in excess of the Servicing Fee.
(e) All authority and power granted to the Successor
Servicer under any Pooling and Servicing Agreement shall automatically cease and
terminate on the Trust Termination Date, and shall pass to and be vested in the
30
Company and, without limitation, the Company is hereby authorized and empowered
to execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact
or otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights from and after the Trust Termination Date. The
Successor Servicer agrees to cooperate with the Company in effecting the
termination of the responsibilities and rights of the Successor Servicer to
conduct servicing on the Receivables. The Successor Servicer shall transfer all
of its records relating to the Receivables to the Company in such form as the
Company may reasonably request and shall transfer all other records,
correspondence and documents to the Company in the manner and at such times as
the Company shall reasonably request. To the extent that compliance with this
Section 6.2 shall require the Successor Servicer to disclose to the Company
information of any kind which the Successor Servicer deems to be confidential,
the Company shall be required to enter into such customary licensing and
confidentiality agreements as the Successor Servicer and the Company shall
reasonably agree are reasonable and necessary to protect the Successor
Servicer's interests.
6.3 WAIVER OF PAST DEFAULTS Holders of Investor Certificates
evidencing more than 50% of the Aggregate Invested Amount may waive any
continuing default by the Servicer or the Company in the performance of their
respective obligations hereunder and its consequences, except a default in the
failure to make any required deposits or payments in respect of any Series of
Certificates, which shall require a waiver by the holders of all of the affected
Investor Certificates. Upon any such waiver of a past default, such default
shall cease to exist, and any default arising therefrom shall be deemed to have
been remedied for every purpose of the Pooling and Servicing Agreements. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived. Either the Company
or the Servicer shall provide notice to each Rating Agency of any such waiver.
31
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 AMENDMENT This Agreement may only be amended, supplemented or
otherwise modified from time to time if such amendment, supplement or
modification is effected in accordance with the provisions of Section 10.1 of
the Pooling Agreement and, with respect only to subsections 5.2(a) and (b) and
Section 5.5 hereof, receives the consent of USSC.
7.2 TERMINATION The respective obligations and responsibilities
of the parties hereto shall terminate on the Trust Termination Date (unless such
obligations or responsibilities are expressly stated to survive the termination
of this Agreement).
7.3 NOTICES All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of facsimile notice,
when received, addressed as set forth in Section 10.4 of the Pooling Agreement,
or to such other address as may be hereafter notified by the respective parties
hereto.
7.4 COUNTERPARTS This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.
7.5 THIRD-PARTY BENEFICIARIES This Agreement will inure to the
benefit of and be binding upon the parties hereto and the Investor
Certificateholders and their respective successors and permitted assigns. Except
as otherwise provided in this Article VII, no other person will have any right
or obligation hereunder.
7.6 MERGER AND INTEGRATION Except as specifically stated
otherwise herein, this Agreement and the other Transaction Documents set forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement
and the other Transaction Documents. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.
32
7.7 HEADINGS The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
7.8 NO SET-OFF Except as expressly provided in this Agreement or
any other Transaction Document, the Servicer agrees that it shall have no right
of set-off or banker's lien against, and no right to otherwise deduct from, any
funds held in the Collection Account for any amount owed to it by the Company,
the Trust, the Trustee or any Investor Certificateholder.
7.9 NO BANKRUPTCY PETITION The Servicer hereby covenants and
agrees that, prior to the date which is one year and one day after the Trust
Termination Date, it will not institute against, or join any other Person in
instituting against, the Company any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any federal or
state bankruptcy or similar law.
7.10 CONSEQUENTIAL DAMAGES In no event shall The Chase Manhattan
Bank, in its capacity as Successor Servicer (if applicable), be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including, but not limited to, lost profits), even if it has been advised of
the likelihood of such loss or damage and regardless of the form of action.
7.11 GOVERNING LAW THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK AND THE RIGHTS,
OBLIGATIONS AND REMEDIES OF EACH OF THE PARTIES HERETO SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
33
IN WITNESS WHEREOF, the Company, the Servicer, the Support Provider and the
Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
USS RECEIVABLES COMPANY, LTD.
By:
--------------------------
Name:
Title:
UNITED STATIONERS FINANCIAL
SERVICES LLC,
as Servicer
By:
--------------------------
Name:
Title:
UNITED STATIONERS SUPPLY CO.,
as Support Provider
By:
--------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
not in its individual
capacity, but solely as
Trustee
By:
--------------------------
Name:
Title:
EXHIBIT A
TO SERVICING AGREEMENT
FORM OF QUARTERLY SERVICER'S CERTIFICATE
(As required to be delivered within 45 days after
the end of each calendar quarter of the Servicer
pursuant to Section 4.3 of the
Servicing Agreement referred to below)
UNITED STATIONERS FINANCIAL SERVICES LLC
------------------------------------------
UNITED STATIONERS RECEIVABLES MASTER TRUST
------------------------------------------
The undersigned, a duly authorized representative of UNITED STATIONERS
FINANCIAL SERVICES LLC, as Servicer (the "Servicer") pursuant to (a) the Amended
and Restated Pooling Agreement, dated as of May 1, 2001(as further amended,
supplemented or otherwise modified from time to time, the "POOLING AGREEMENT"),
by and among USS Receivables Company, Ltd., (the "COMPANY"), the Servicer and
The Chase Manhattan Bank, as Trustee and as Securities Intermediary (the
"TRUSTEE") and (b) the Amended and Restated Servicing Agreement, dated as of
May 1, 2001 (as further amended, supplemented or otherwise modified from time to
time, the "SERVICING AGREEMENT"), by and among the Company, the Servicer,
United
Stationers Supply Co., as Support Provider, and the Trustee, does hereby
certify, on behalf of the Servicer and the Company and not individually, that:
1. United Stationers Financial Services LLC is, as of the date hereof, the
Servicer under the Pooling Agreement and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling Agreement and
Servicing Agreement to execute and deliver this Certificate to the Trustee.
3. A review of the activities of the Company and the Servicer during the
calendar quarter ended ___________, ____ and of its performance under each
Transaction Document was conducted under my supervision.
4. Based on such review, to the best of my knowledge, each of the Company
and the Servicer has performed in all material respects all of its obligations
under each Transaction Document and no material default in the performance of
such obligations has occurred or is continuing except as set forth in
paragraph 5 below.
5. The following is a description of all material defaults in the
performance of the Servicer or the Company under the provisions of the
Transaction Documents known to us to have been made during the calendar quarter
ended ___________, _____, which sets forth in detail (i) the nature of each such
default, (ii) the action taken by the Servicer and/or the Company, if any, to
remedy each such default and (iii) the current status of each default:
[If applicable, insert "None."]
6. The following is a description of each material inaccuracy known to us
to exist in any Required Report and/or Monthly Settlement Statement during the
calendar quarter ended _________, _______:
[If applicable, insert "None."]
Capitalized terms used in this certificate have the meanings ascribed to
them in the Pooling Agreement(s) and Servicing Agreement(s).
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this
day of ______________
By:
---------------------
Name:
Title:
EXHIBIT B TO
SERVICING AGREEMENT
FORM OF AGREED UPON PROCEDURES
(See attached Report of Independent Accounts)
