PURCHASE AND CONTRIBUTION AGREEMENT
(ISSUER PURCHASE AGREEMENT)
Dated as of September 30, 1997
between
X. X. XXXXXXXXX RECEIVABLES II LLC
as the Seller
and
X. X. XXXXXXXXX RECEIVABLES III LLC
as the Purchaser
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS
1.01. Certain Definitions.............................................................2
1.02. Accounting Terms................................................................6
1.03. Other Terms.....................................................................7
1.04. Computation of Time Periods.....................................................7
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
2.01. Purchases of Receivables; Agreement to Purchase.................................7
2.02. Payment for the Purchases.......................................................9
2.03. Payments and Computations, Etc.................................................10
2.04. Transfer of Records to the Purchaser...........................................10
ARTICLE III
CONDITIONS PRECEDENT
3.01. Conditions Precedent to Agreement..............................................11
3.02. Conditions Precedent to Ongoing Purchases......................................13
3.03. Effect of Payment of Purchase Price and/or Contribution........................13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Seller...................................13
4.02. Representations and Warranties of the Seller Relating to the Receivables.......16
4.03. Representations and Warranties of the Purchaser................................17
ARTICLE V
GENERAL COVENANTS OF THE SELLER
5.01. Affirmative Covenants of the Seller............................................17
5.02. Negative Covenants of the Seller...............................................21
-i-
ARTICLE VI
ADMINISTRATION AND COLLECTION
6.01. Collection of Receivables......................................................24
6.02. Servicing of Receivables.......................................................25
6.03. Responsibilities of the Seller.................................................25
6.04. Further Action Evidencing Purchases............................................26
ARTICLE VII
INDEMNIFICATION
7.01. Indemnities by the Seller......................................................26
ARTICLE VIII
MISCELLANEOUS
8.01. Waivers; Amendments............................................................28
8.02. Notices........................................................................29
8.03. Effectiveness; Binding Effect; Assignability...................................29
8.04. GOVERNING LAW; WAIVER OF JURY TRIAL............................................30
8.05. Costs and Expenses.............................................................30
8.06. Execution in Counterparts; Severability........................................30
8.07. Purchase Termination...........................................................31
8.08. No Proceedings.................................................................31
8.09. Entire Agreement...............................................................31
8.10. Limitations on Liability.......................................................31
-ii-
EXHIBITS AND SCHEDULES
----------------------
Exhibit A - [Reserved]
Exhibit B - Form of Seller Transfer Report
Exhibit C - List of Closing Documents
Schedule I - Addresses and Locations of Books and Records of the Seller
Schedule II - ERISA Matters
Schedule III - Lock-Box Banks; Lock-Box Accounts; Lock-Box Numbers;
Deposit Account Banks; Deposit Account Numbers
-iii-
PURCHASE AND CONTRIBUTION AGREEMENT
(Issuer Purchase Agreement)
Dated as of September 30, 1997
This PURCHASE AND CONTRIBUTION AGREEMENT (the "Agreement"), dated as of
September 30, 1997, is made by and between X.X. XXXXXXXXX RECEIVABLES II LLC, a
Delaware limited liability company (the "Seller"), and X.X. XXXXXXXXX
RECEIVABLES III LLC, a Delaware limited liability company (the "Purchaser").
WITNESSETH:
WHEREAS, the Company has purchased, and from time to time hereafter may
purchase, Settlements (or portions thereof) from various "Claimants" (as defined
in the Indenture) pursuant to various "Settlement Agreements" (as defined in the
Indenture) between the Company and each such Claimant;
WHEREAS, the Seller has purchased, and from time to time hereafter may
purchase, Settlements (or portions thereof) from the Company pursuant to the
Seller Purchase Agreement (as defined below);
WHEREAS, the Seller may from time to time desire to sell,
transfer or otherwise convey to the Purchaser, and the Purchaser may from time
to time desire to purchase or otherwise acquire or accept from the Seller, all
of the Seller's right, title and interest in the Receivables relating to certain
such "Settlements" (as defined in the Indenture (or portions thereof) now owned
or hereafter acquired by the Seller, in each case, on the terms and conditions
provided herein; and
WHEREAS, in order to finance purchases of Receivables and the Related
Assets relating thereto, the Purchaser has entered into that certain Master
Trust Indenture and Security Agreement, dated as of September 30, 1997 (as
amended, restated, supplemented (including by way of any "Supplement" (as
defined in the Indenture) thereto) or otherwise modified from time to time, the
"Indenture") among the Purchaser, X.X. Xxxxxxxxx & Company, Inc. ("Wentworth"),
as the initial "Master Servicer" thereunder, and PNC Bank, National Association,
as trustee (in such capacity, the "Trustee"), pursuant to which the Purchaser
from time to time may issue notes secured by specified Receivables and the
Related Assets related thereto;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
-1-
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Definitions. Capitalized terms used and not
otherwise defined herein shall have the meanings specified in the Indenture. In
addition, for all purposes of this Agreement, as used in this Agreement
(including in the recitals hereto), the following terms shall have the following
meanings:
"Aggregate Discounted Receivables Balance" means, for purposes of this
Agreement with respect to any designated group of Receivables, at any time, the
sum at such time of the respective Discounted Receivables Balances of such
Receivables.
"Applicable Discount Rate" shall mean, with respect to any Receivable,
the "Discount Rate" specified in the Designated Supplement to which such
Receivable shall be allocated as described in the applicable Seller Transfer
Report.
"Business Day" shall mean any day other than a Saturday or Sunday or
any other day on which national banking associations or state banking
institutions in New York, New York or Philadelphia, Pennsylvania are authorized
or obligated by law, executive order or governmental decree to be closed;
provided, however, that as it relates to any specific Series, the term "Business
Day" may have such other meaning, if any, as may be specified in the related
Supplement.
"Closing Date" shall mean September 30, 1997.
"Collateral Trustee" means the Person acting in such capacity under the
Intercreditor Agreement.
"Collections" shall mean all cash payments by or on behalf of the
Obligors (including, without limitation, pursuant to any "Annuity Contract" (as
defined in the Indenture)) in respect of the Receivables or the Related Property
relating thereto, whether in the form of cash, checks, wire transfers,
electronic transfers or any other form of cash payment (including, without
limitation, from the Seller in connection with any repurchase of any such
Receivables from the Purchaser pursuant hereto).
"Collection Date" means that date following the Purchase Termination
Date upon which the Aggregate Discounted Receivables Balance of the Receivables
transferred to the Purchaser hereunder has been reduced to zero.
"Company" means X.X. Xxxxxxxxx S.S.C. Limited Partnership, a Delaware
limited partnership.
-2-
"Contributed Assets" has the meaning assigned to it in Section 2.01(a).
"Cut-Off Date" means, with respect to any Receivable described in any
Seller Transfer Report, the date on which the Discounted Receivables Balance
thereof was calculated for purposes of computing the Purchase Price under
Section 2.02(b).
"Discounted Receivables Balance" means, at any time with respect to any
Receivable, the sum of (i) the discounted present values of the remaining
"Scheduled Payments" (as defined in the Indenture) due under such Receivable at
such time discounted at the Purchase Discount Rate and (ii) the principal amount
of any past due Scheduled Payments outstanding on such Receivable at such time.
"Designated Supplement" has the meaning, with respect to any
Receivable, as is specified in the definition of "Eligible Receivable" below.
"Eligible Receivable" means, with respect to this Agreement, a
Receivable which, as of the date of its sale or conveyance to the Purchaser by
the Seller hereunder, would constitute an "Eligible Receivable" under and
pursuant to the Supplement for the "Series" (as defined in the Indenture) to
which such Receivable is to be allocated and for which such Receivable will be a
"Series Receivable" (as defined in the Indenture); it being agreed that each
Seller Transfer Report shall designate the Supplement to which such Receivable
shall be so allocated (such Supplement so designated with respect to any such
Receivable being the "Designated Supplement" for such Receivable).
"Governmental Authority" shall mean any country or nation, any
political subdivision of such country or nation, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government of any country or nation or political subdivision
thereof.
"Intercreditor Agreement" shall mean that certain Amended and Restated
Collateral Trust and Intercreditor Agreement, dated as of September 30, 1997,
among ING (U.S.) Capital Corporation, as contractual representative (the
"Agent") for the benefit of the financial institutions from time to time parties
to the Revolving Credit Facility (the "Lenders") and as a Lender, PNC Bank,
National Association, as servicing agent (the "Servicing Agent") and as a
Lender, the Trustee, PNC Bank, National Association, as Collateral Trustee, the
Company, the Seller, the Purchaser, the Master Servicer, X.X. Xxxxxxxxx
Receivables I LLC, as the Seller under the Pooling and Servicing Agreement, X.X.
Xxxxxxxxx & Company, Inc., as initial Master Servicer under the Pooling and
Servicing Agreement, and PNC Bank, National Association, as Trustee under the
Pooling and Servicing Agreement (as the same may be amended, restated,
supplemented or otherwise modified from time to time).
"Material Adverse Effect" shall mean, with respect to any Person, the
occurrence or existence of any event or condition which has a material adverse
effect (v) on such Person's
-3-
ability to perform under the Operative Documents, (w) on the businesses,
properties or condition (financial or otherwise) of such Person, (x) on the
ability of the Purchaser or any of its designees and/or assigns to enforce this
Agreement or any of the other Operative Documents, (y) on the rights of the
Purchaser or any of its designees and/or assigns in the Purchased Assets.
"Noncomplying Receivable" means any Receivable which, as of the date of
origination thereof, did not meet the criteria for an Eligible Receivable as of
such date.
"Permitted Liens" shall mean with respect to any Receivable or the
Related Asset relating thereto which are sold, transferred, contributed or
otherwise conveyed to the Purchaser hereunder, "Liens" (as defined in the
Indenture) created under the "Operative Documents" (as defined in the Indenture)
(x) in favor of the Seller (and assigned to the Trustee) or the Trustee, in
either case, as against the Company, (y) in favor of the Purchaser (and assigned
to the Trustee) or the Trustee, in either case, as against the Seller and (z) in
favor of the Trustee as against the Purchaser.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Authority or any other entity of similar nature.
"Pooling and Servicing Agreement" shall mean that certain Pooling and
Servicing Agreement, dated as of June 13, 1997 (as amended, restated,
supplemented (including by way of any "Supplement" (as defined in the Pooling
and Servicing Agreement thereto) or otherwise modified from time to time among
X.X. Xxxxxxxxx Receivables I LLC, as Seller, X.X. Xxxxxxxxx & Company, Inc., as
Master Servicer, and PNC Bank, National Association, as trustee for SSC Master
Trust I (the "Trust").
"Purchase" means, on any Purchase Date, the sale, assignment,
contribution, transfer and/or other conveyance of any Receivable from the Seller
to the Purchaser for which the Purchase Price has not been previously paid and
which have not previously been sold, assigned, contributed, transferred or
otherwise conveyed to the Purchaser by the Seller, in either case, in accordance
with the terms of Sections 2.01 and 2.02 hereof; and "Purchased" means the past
tense of Purchase.
"Purchase Date" means, with respect to any Receivable, the
date such Receivable is Purchased by the Purchaser.
"Purchase Discount Rate" means, with respect to any Receivable, a per
annum rate equal to the Applicable Discount Rate for such Receivable, which rate
shall be specified in the Seller Transfer Report; it being understood and agreed
that such rate may be determined as a weighted average which may apply to all
Receivables being Purchased on any given Purchase Date.
-4-
"Purchase Price" has the meaning specified in Section 2.02(b) hereof.
"Purchase Termination Date" means the earliest to occur of (i) the date
upon which the Seller shall cease to sell Receivables to the Purchaser in
accordance with the provisions of Section 8.07 of this Agreement, (ii) the date
upon which the ability of the Seller to permit Purchases hereunder has been
terminated (and cannot be reinstated) pursuant to Section 2.01(c), and (iii) or
the date upon which the Seller breaches its repurchase or substitution
obligation as set forth in Section 5.02(b).
"Purchase Yield" means, with respect to any Receivable, the per annum
discount rate, as calculated by the Seller on the date the Settlement underlying
such Receivable was originally purchased by the Seller from the Claimant, at
which the present value of all "Scheduled Payments" (as defined in the
Indenture) (or portions thereof) to be received by the Seller equals the sum of
the purchase price paid by the Seller to the Claimant therefor plus the
estimated closing costs and commissions incurred by the Seller and directly
allocated to such Receivable in accordance with the Seller's customary past
business practices.
"Purchased Assets" shall mean all Receivables and Related Assets
purchased hereunder pursuant to Section 2.01.
"Receivable" shall mean those Scheduled Payments (or portions thereof)
due to a Claimant under a Settlement Agreement and the rights to which Scheduled
Payments (or such portion thereof) have heretofore been or which are hereafter
transferred by such Claimant to the Company pursuant to a Settlement Purchase
Agreement and by the Company to the Seller pursuant to the Seller Purchase
Agreement and by the Seller to the Purchaser pursuant to this Agreement, whether
such Scheduled Payments (or such portions thereof) constitute accounts, general
intangibles, investment property, chattel paper, instruments, documents,
securities, cash, or any other kind of property.
"Related Assets" has the meaning specified in Section 2.01(a) hereof.
"Related Property" means with respect to any Receivable: all of the
Seller's rights, title, interests, remedies, powers and privileges (a) under the
Settlement Purchase Agreement pursuant to which such Receivable was purchased by
the Company, under the Seller Purchase Agreement pursuant to which such
Receivable was purchased or otherwise acquired by the Seller and under the
related "Power of Attorney" (as defined in the Indenture), (b) all security
interests or liens and property subject thereto from time to time purporting to
secure payment of such Receivable, if any, whether pursuant to the Settlement
Purchase Agreement related to such Receivable or otherwise, (c) under the
"Back-up Servicing Agreement" (as defined in the Indenture), (d) all "Lock-Box
Accounts" (as defined in the Indenture), lock-boxes and other bank accounts, in
each case, into which (but only to the extent of) any "Collections" (as defined
in the Indenture) are deposited or concentrated; all monies and other items of
payment therein (but only to the extent relating to the Receivables); and
"Eligible Investments" (as defined in the Indenture)
-5-
purchased with any of the foregoing funds and any investment income thereon, (e)
all "Life Insurance Contracts" (as defined in the Indenture) relating to any
"Non-Guaranteed Settlements" (as defined in the Indenture) or "Commutable
Settlements" (as defined in the Indenture) included as a Receivable, (f) any
interest rate hedging instruments or agreements entered into by the Seller in
respect of any such Receivable, (g) any other agreements or arrangements of
whatever character (including guaranties, letters of credit, annuity contracts
(including, "Qualified Annuity Contracts" (as defined in the Indenture)) or
other credit support) from time to time supporting or securing payment of such
Receivable whether pursuant to any related Settlement Agreement, "Qualified
Assignment" (as defined in the Indenture), Qualified Annuity Contract,
Settlement Purchase Agreement or any other agreement related to such Receivable
or otherwise, (h) all "UCC" (as defined in the Indenture) financing statements
filed by the Seller against the Claimants under such Receivable; and (j) all
"Records" (as defined in the Indenture) and all other instruments and rights
relating to such Receivable.
"Revolving Credit Facility" means that certain Amended and Restated
Credit Agreement, dated as of February 11, 1997 (as the same may be amended
restated, supplemented or otherwise modified from time to time) and all
documents, instruments and agreements executed and/or delivered in connection
therewith.
"Seller Purchase Agreement" means that certain Purchase and
Contribution Agreement, dated as of September 30, 1997, by and among the Company
and the Seller (as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Seller Transfer Report" means a report to be delivered by the Seller
to the Purchaser and accepted by the Purchaser on each Purchase Date setting
forth for each such Receivable so Purchased, the file number by which the Seller
can identify the Claimant, the present and future values of the assigned
Scheduled Payments, the "Annuity Provider" (as defined in the Indenture), if
any, the Purchase Discount Rate thereof, and the Designated Supplement under
which such Receivable is intended to be an Eligible Receivable.
"Series Specific Lock-Box Account" has the meaning specified in Section
6.01(a) hereof.
"Subsequent Issuances" means any issuance of new "Notes" (as defined in
the Indenture) on any date after the Closing Date.
"Transferred Assets" has the meaning specified in Section 2.01(a).
"U.S. Dollars" or "Dollars" means dollars of the United States of
America.
SECTION 1.02. Accounting Terms. Under this Agreement, all accounting
terms not specifically defined herein shall be interpreted, all accounting
determinations made, and all financial statements prepared, in accordance with
GAAP.
-6-
SECTION 1.03. Other Terms. All other undefined terms contained in this
Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or defined therein. The
words "herein," "hereof," and "hereunder" and other words of similar import
refer to this Agreement as a whole, including the exhibits and schedules hereto,
as the same may from time to time be amended or supplemented and not to any
particular section, subsection, or clause contained in this Agreement, and all
references to Sections, Exhibits and Schedules shall mean, unless the context
clearly indicates otherwise, the Sections hereof and the Exhibits and Schedules
attached hereto, the terms of which Exhibits and Schedules are hereby
incorporated into this Agreement. Whenever appropriate, in the context, terms
used herein in the singular also include the plural, and vice versa.
SECTION 1.04. Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding", and the word "within" means "from and excluding a
specified date and to and including a later specified date."
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Purchases of Receivables; Agreement to Purchase. (a)
Subject to the terms and conditions hereinafter set forth (including the
conditions set forth in Article III), at any time prior to the Purchase
Termination Date (provided such Purchases are permitted pursuant to Section
2.01(d) hereof) upon at least one Business Days' prior notice by the Seller to
the Purchaser, the Purchaser shall purchase from the Seller, and the Seller
shall sell, transfer, assign and otherwise convey to the Purchaser all of the
Seller's right, title and interest in the Receivables described on the Seller
Transfer Reports from time to time delivered by the Seller to the Purchaser on
or prior to the proposed respective Purchase Dates therefor (as such dates shall
be specified in such notices), in each case together with all of the Related
Property relating to such Receivables and all Collections with respect to and
other proceeds of such Receivables and Related Property received on or after the
applicable Cut-Off Date (such Related Property, Collections and Proceeds,
collectively, the "Related Assets"); it being agreed that the first such
Purchase Date shall be on the Closing Date (and the execution and delivery of
this Agreement shall suffice as notice thereof by the Seller for purposes of
this Agreement). On any Purchase Date on which the Seller and Purchaser agree to
effect a sale or transfer of Receivables preceding the Purchase Termination
Date, the Purchaser shall pay for the Purchases described in the preceding
sentence no later than 5:00 p.m. (New York time) on such Purchase Date by making
available to the Seller the payment of the Purchase Price in the manner required
under Section 2.02. To the extent that any such Receivables and Related Assets
shall have been or are to be contributed to the Purchaser's capital at or prior
to such time in accordance with Section 2.02, the
-7-
Purchaser shall increase the Seller's aggregate investment in the Purchaser
accordingly in accordance with Delaware law. Prior to paying the Purchase Price
hereunder, the Purchaser may request of the Seller, and the Seller shall
deliver, such approvals, opinions, information, reports or documents as the
Purchaser may reasonably request. As used in this Agreement, (i) the term
"Purchased Assets" shall mean all Receivables which are paid for through cash
under this Agreement and all Related Assets relating thereto, (ii) the term
"Contributed Assets" shall mean all Receivables which are contributed to the
Purchaser's capital and all Related Assets relating thereto and (iii) the term
"Transferred Assets" shall mean, collectively, all Purchased Assets and all
Contributed Assets.
(b) It is the intention of the parties hereto that (i) each Purchase of
Receivables and the associated Related Assets made hereunder shall constitute a
"sale" from the Seller to the Purchaser and (ii) each contribution of
Receivables and the associated Related Assets made hereunder shall constitute an
absolute assignment or transfer from the Seller to the Purchaser, in each case,
under applicable state law and Federal bankruptcy law, which sales or absolute
transfers are, in each case, absolute and irrevocable and provide the Purchaser
with all indicia and rights of ownership of the Receivables and such Related
Assets. Neither the Seller nor the Purchaser intends the transactions
contemplated hereunder to be, or for any purpose to be characterized as, loans
from the Purchaser to the Seller secured by such property. Except for certain
indemnities pursuant to Section 7.01, each sale or contribution of Receivables
and the associated Related Assets by the Seller to the Purchaser is made without
recourse to the Seller; provided, however, that (i) the Seller shall be liable
to the Purchaser for all representations, warranties and covenants made by the
Seller pursuant to the terms of this Agreement, and (ii) such sale or absolute
transfer does not constitute and is not intended to result in an assumption by
the Purchaser or any assignee thereof of any obligation of the Seller or any
other person to any Claimant, Obligor, or any other Person in connection with
the Receivables, the Related Assets and/or the related Settlement Purchase
Agreements, or any other obligations of the Seller thereunder or in connection
therewith, other than to return (or provide for the return of) any Scheduled
Payments (or any portion thereof) not covered under the Settlement Purchase
Agreement and not sold or transferred to the Purchaser hereunder back to such
Claimant (it being understood and agreed that the Master Servicer and/or the
Collateral Trustee shall remit or cause to be remitted all amounts in respect of
"Split Payments" (as defined in the Indenture) in accordance with Section
5.01(f)). In view of the intention of the parties hereto that the Purchases of
Receivables and the associated Related Assets made hereunder shall constitute
sales or absolute transfers of such Receivables and such Related Assets rather
than a loan secured by such Receivables and such Related Assets, the Seller
agrees to note on its financial statements and in its books and records that
such Receivables and the associated Related Assets have been sold or transferred
to the Purchaser and to respond to any inquiries made by third parties as to the
ownership of such Receivables and such Related Assets so sold or transferred
that such Receivables and such Related Assets have been sold or transferred to
the Purchaser.
(c) Notwithstanding any other provision of this Agreement to the
contrary, the Purchaser shall not Purchase from the Seller nor shall the Seller
sell or contribute to the
-8-
Purchaser any Receivable from and after the time of any bankruptcy filing by or
against the Seller or the Purchaser, provided, however, that should any such
bankruptcy or insolvency proceeding instituted against the Seller (as
distinguished from by the Seller) be withdrawn or dismissed prior to the
occurrence of an "Event of Default" under the Indenture, then the Purchaser
shall be entitled to resume Purchasing Receivables from the Seller after the
withdrawal or dismissal of such filing or proceeding.
(d) If, notwithstanding the provisions of the immediately preceding
clause (b), a court of competent jurisdiction were to hold that any Purchase of
Receivables hereunder does not constitute a valid sale or transfer of the
affected Receivables and the Related Assets as set forth above but instead
constitutes a loan in the amount of the Purchase Price or otherwise of such
Receivables, then this Agreement shall be deemed a present grant of a security
interest (within the meaning of Articles 8 and 9 of the UCC as in effect in all
applicable jurisdictions) in favor of the Purchaser in all of the Seller's
rights, title and interest in, to and under the Transferred Assets to secure
such loan in the amount of the Purchase Price (together with interest thereon to
be computed at the Purchase Discount Rate) effective upon each such Purchase,
and the Seller hereby grants such a security interest to the Purchaser in the
Transferred Assets which are the subject of such Purchase, and this Agreement
shall constitute a security agreement within the meaning of Article 8 and
Article 9 of the UCC of all applicable jurisdictions.
SECTION 2.02. Payment for the Purchases. (a) Except as otherwise
provided below in this Section 2.02, the Purchase Price for the Receivables sold
by the Seller under this Agreement shall be payable in full in cash by the
Purchaser to the Seller, in each case on the Purchase Date relating to such
Purchase; provided, to the extent that the Purchaser has insufficient funds to
pay the Purchase Price for any Receivables to be purchased by it on any date, if
the Seller so consents, such remaining portion of the Receivables of the Seller
for which the Purchase Price has not been received in cash shall be contributed
to the capital of the Purchaser by the Seller; provided, further, however, that
with respect to the Purchase made on the Closing Date, an amount not exceeding
$1,000,000 of the Purchase Price due on the Closing Date shall be paid by the
issuance of equity in the Purchaser to the Seller pursuant to the terms of the
organizational documents of the Purchaser.
(b) On each Purchase Date with respect to any Receivables being sold on
such date, the Seller shall deliver to the Purchaser a Seller Transfer Report in
the form of that attached hereto as Exhibit B. The Purchaser, if it agrees to
purchase all such Receivables set forth on such report, shall signify its
acceptance thereof by signing such report and returning a copy, as accepted, to
the Seller on such date, together with payment of the aggregate Purchase Price
for such Receivables, by no later than 5:00 p.m. (New York time) on such date.
To the extent that the Purchaser disputes any of the information in such report
with respect to any Receivable described therein, the Seller and the Purchaser
shall reconcile such report as promptly as possible and if unable to reconcile
and agree on the content of such report prior to 4:30 p.m. (New York time) on
the proposed Purchase Date therefor, the Seller and the Purchaser shall exclude
any Receivables therefrom until such report is acceptable to both parties (and
such excluded
-9-
Receivables shall be deemed not sold on such date). The aggregate Purchase Price
(as hereinafter defined) payable on any Purchase Date shall be calculated to
equal the sum of the respective Purchase Prices of the new Receivables noted on
such Seller Transfer Report. The "Purchase Price" for any Receivable shall be
equal to the Discounted Receivables Balance of such Receivable on such date as
calculated without giving effect to any past due Scheduled Payments thereon
which are outstanding on such date.
(c) On each Business Day, to the extent that the Purchaser receives
proceeds from any "Subsequent Issuances" (as defined in the Indenture) or
otherwise has any other "Available Seller Funds" (as defined in the Indenture),
then the Purchaser shall remit such funds to the Seller to pay the Purchase
Price for any Receivables Purchased from the Seller on such Business Day to the
extent it is a Purchase Date.
(d) Unless and until the Purchase Termination Date has occurred, if,
after giving effect to all allocations of cash provided for in Section 2.02(c),
the Purchase Price payable by the Purchaser to the Seller on any Business Day is
not paid in full, then the Seller shall, unless it has otherwise notified the
Purchaser and the Trustee in writing to the contrary, be deemed to have
contributed to the Purchaser's capital Receivables having a Purchase Price equal
to the otherwise unpaid portion of the total Purchase Price owed to the Seller
on such day.
SECTION 2.03. Payments and Computations, Etc. All amounts to be paid by
the Seller to the Purchaser hereunder shall be paid in accordance with the terms
hereof no later than 1:00 P.M. (New York time) on the day when due in Dollars in
immediately available funds to the "Master Collection Account" (as defined in
the Indenture). All amounts to be paid by the Purchaser to the Seller hereunder
shall be paid in accordance with the terms hereof no later than 5:00 P.M. (New
York time) to such account as may be specified therefor by the Seller from time
to time by notice to the Purchaser. Payments received by the Purchaser or the
Seller after such times shall be deemed to have been received on the next
Business Day. In the event that any payment becomes due on a day which is not a
Business Day, then such payment shall be made on the next succeeding Business
Day. The Seller and the Master Servicer (if an "Affiliated Entity" (as defined
in the Indenture)) shall, to the extent permitted by law, pay to the Purchaser,
on demand, interest on all amounts not paid when due hereunder (whether owing by
the Seller individually or as Master Servicer) at 2% per annum above the per
annum rate designated by PNC Bank, National Association as its "prime rate" for
commercial borrowers (such rate not necessarily being the lowest rate offered by
such bank) as in effect on the date such payment was due; provided, however,
that such interest rate shall not at any time exceed the maximum rate permitted
by applicable law. All computations of interest payable hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
SECTION 2.04. Transfer of Records to the Purchaser. (a) In connection
with the Purchases of Receivables hereunder, the Seller hereby sells, transfers,
assigns and otherwise conveys to the Purchaser all of the Seller's right and
title to and interest in the Records relating to
-10-
all Receivables included in the Transferred Assets, without the need for any
further in connection with any Purchase. In connection with such transfer, the
Seller hereby represents and warrants that the Seller and/or Wentworth either
itself owns, or has taken such action as may be necessary (including, without
limitation, obtaining any necessary consents from licensors or other Persons) to
provide the Master Servicers, the "Back-up Servicer" (as defined in the
Indenture), the Trustee and any "Successor Servicer" (as defined in the
Indenture) with such licenses, sublicenses and/or assignments of contracts as
the Master Servicers, the Trustee or any Successor Servicer shall from time to
time require for its use of all services and computer hardware or software that
relate to the servicing of the Receivables or the other Purchased Assets. The
Seller hereby grants the Master Servicer, the Back-up Servicer, the Trustee and
each Successor Servicer an irrevocable license (with respect to the services,
and computer hardware and software that it owns) or sublicense (with respect to
all other such services, hardware and software) to use such services, hardware
or software in connection with the servicing, collection and monitoring of the
Receivables (subject to reasonable confidentiality restrictions and restrictions
limiting such use to the collection, servicing and monitoring of the
Receivables, which restrictions have already been established with respect to
the Back-up Servicer and, with respect to any other Person other than the
Back-up Servicer, shall be determined at such time as such Person is charged
with the servicing of the Receivables). As of the Closing Date, all such
computer software and hardware is currently owned by Seller and/or Wentworth and
is licensed to the Back-up Servicer irrevocably until the termination of the
Back-up Servicing Agreement. From and after the Closing Date, the Seller or
Wentworth, as applicable, shall deliver to the Trustee a copy of each consent
(or evidence that such consent is not required) from all necessary parties with
respect to any such services, hardware or software prior to the date the Seller
or Wentworth enters into any license to use such service or software to service,
monitor and collect any Receivables. The license granted hereby shall be
irrevocable, and shall terminate on the Business Day following the Collection
Date.
(b) The Seller shall take such action requested by the Purchaser (or
its assignees) or any Master Servicer (including any successor Master Servicer
appointed in accordance with the Indenture), from time to time hereafter, that
may be reasonably necessary or appropriate to ensure that the Purchaser (and its
assignees, including, without limitation, the Trustee, the Collateral Trustee
and the Noteholders) has an enforceable ownership or security interest, as
applicable, in the Records relating to the Receivables purchased from the Seller
hereunder.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to Agreement. This Agreement is
subject to the conditions precedent that (i) each of the conditions precedent to
the execution, delivery and effectiveness of each other Operative Document
(other than a condition precedent in any such
-11-
other Operative Document relating to the effectiveness of this Agreement) shall
have been fulfilled, and (ii) the Purchaser shall have received each of the
following, on or before the Closing Date, each (unless otherwise indicated)
dated as of the Closing Date or such other recent date acceptable to the
Purchaser and each in form and substance satisfactory to the Purchaser:
1. Resolutions. A copy of the resolutions of the Board of Directors of
the general partner of the Company, in its capacity as manager of the
Seller, certified by its Secretary or Assistant Secretary, approving for
and on behalf of the Seller this Agreement and the other Operative
Documents to be delivered by it hereunder and the transactions contemplated
hereby and thereby and addressing such other matters as may be reasonably
required by the Purchaser;
2. Good Standing Certificates of the Seller; Certificates as to Foreign
Qualification of the Seller. Good standing or qualification certificates
for the Seller issued by the Secretaries of State of Delaware and
Pennsylvania and of any other state in which the Seller transacts business
and is required to be in good standing;
3. Incumbency Certificate. A certificate of the Secretary or Assistant
Secretary of the general partner of the Company, in its capacity as manager
of the Seller, certifying the names and true signatures of the officers
authorized on the general partner's behalf to sign this Purchase Agreement
for and on behalf of the Seller and the other Operative Documents to be
delivered by the Seller hereunder (on which certificate the Purchaser, the
Trustee, the Agent and the Master Servicers may conclusively rely until
such time as the Purchaser shall receive from the Seller (with a copy to
the Trustee, each Master Servicer and the Agent), a revised certificate
meeting the requirements of this subsection (3);
4. Other Operative Documents. Original copies, executed by each of the
parties thereto in such reasonable number as shall be specified by the
Purchaser, of each of the other Operative Documents to be executed and
delivered in connection herewith;
5. Release of Liens under the Revolving Credit Facility. With respect
to the Receivables to be Purchased on or after the Closing Date, the
Intercreditor Agreement shall provide for the release upon the Purchase
thereof pursuant hereto of all Liens previously granted by the Seller or
the Company under the Revolving Credit Facility or otherwise with respect
to such Receivables and Related Assets;
6. Opinions of Counsel. The following opinions of counsel, each in form
and substance satisfactory to the Purchaser as to (i) general corporate and
UCC matters, (ii) true sale and non-consolidation, (iii) federal and
Delaware income tax matters, (iv) assignability and priority of the
Receivables, (v) federal securities law issues, and (vi) enforceability of
Powers of Attorney; and
-12-
7. Other Documents. Such other documents as are set forth on the List
of Closing Documents attached hereto as Exhibit C.
SECTION 3.02. Conditions Precedent to Ongoing Purchases. The obligation
of the Purchaser on any Purchase Date to accept and pay the Purchase Price for
the transfers of Receivables under this Agreement is subject to the conditions
precedent that the representations and warranties contained in Article IV are
true and correct in all material respects as of such Business Day. The Seller,
by accepting the Purchase Price paid for each Purchase of Receivables and
Related Assets hereunder (including by way of increase in the equity interest of
the Seller in the Purchaser), shall be deemed to have certified, with respect to
the Receivables and the Related Assets paid for on such day, that its
representations and warranties contained in Article IV are true and correct on
and as of such day, with the same effect as though made on and as of such day.
SECTION 3.03. Effect of Payment of Purchase Price and/or Contribution.
Upon the payment of the Purchase Price for any Purchase, (whether in cash or by
the contribution of any Receivables and Related Assets by the Seller to the
capital of the Purchaser pursuant to Section 2.02(a)), title to the Receivables
and the Related Assets included in such Purchase shall vest in the Purchaser.
Upon the purchase and payment by the Purchaser of the Purchase Price for any
Purchase, each of the conditions set forth in Section 3.02 shall be irrevocably
deemed to have been satisfied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller. The Seller
hereby represents and warrants that as of the Closing Date and (except for
representations and warranties which relate to a specific date only) and on each
"Transfer Date" (as defined in the Indenture) thereafter until the Purchase
Termination Date:
(a) Organization and Good Standing. The Seller is a limited liability
company, duly organized, validly existing and in good standing under the laws of
the State of Delaware and has full power and authority to own its properties and
conduct its business as presently owned or conducted, and to execute, deliver
and perform its obligations under this Agreement, the Settlement Purchase
Agreements, and each of the other Operative Documents to which it is a party.
(b) Due Qualification. The Seller is duly qualified to do business and
is in good standing as a foreign limited liability company, and has obtained all
necessary licenses and approvals, in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals would have, or could reasonably
be expected to have a Material Adverse Effect.
-13-
(c) Due Authorization; Conflicts. The execution, delivery and
performance by the Seller of this Agreement, the Settlement Purchase Agreements
and each of the other Operative Documents to which it is a party are within the
Seller's powers, have been duly authorized by all necessary partnership action,
and do not contravene (i) the Seller's Limited Liability Company Agreement, (ii)
any law, rule, regulation, order, decree or contractual restriction binding on,
or affecting, the Seller and the violation of which would have, or could
reasonably be expected to have, a Material Adverse Effect, or (iii) any
agreement, contract, indenture, mortgage, or other instrument, document or
agreement to which the Seller or any of its assets are subject or may be
effected and the violation of which would have, or could reasonably be expected
to have, a Material Adverse Effect.
(d) Consents. No authorization or approval or other action by, and no
notice to or registration of or filing with, any Governmental Authority or other
regulatory body is required to be made by the Seller for the due execution,
delivery and performance by the Seller, or to insure the legality, validity,
binding effect or enforceability of, this Agreement, the Settlement Purchase
Agreements or any of the other Operative Documents to which it is a party,
except for the filing of UCC financing statements against the Seller in respect
of the transactions contemplated herein, all of which that need to be filed to
perfect the interest of the Purchaser in the Purchased Assets (as comprised as
of the date of the making or remaking of this representation and warranty) have
been so made.
(e) Enforceability. This Agreement, the Settlement Purchase Agreements
or any of the other Operative Documents to which it is a party is and will be
the legal, valid and binding obligation of the Seller enforceable against the
Seller in accordance with its respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
or general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(f) Proceedings. There are no judgments or other judicial or
administrative orders outstanding against the Seller nor is there any pending
or, to the best of the Seller's knowledge, threatened action or proceeding
affecting the Seller before any court, governmental agency or arbitrator, which
would have, or could reasonably be expected to have, a Material Adverse Effect.
(g) Compliance with Laws, Etc. The Seller is not in violation of any
law, rule, regulation, order, writ, judgment, decree, determination or award
applicable to it or any of its properties or any indenture, lease, loan or other
agreement to which it is a party or by which it or its assets may be bound or
affected, the violation of which, in any of the foregoing cases, would have, or
could reasonably be expected to have, a Material Adverse Effect.
(h) Locations. The principal place of business and chief executive
office of the Seller are located at the address of the Seller set forth on the
signature page hereof, and the
-14-
offices where the Seller keeps all of its records relating to the Receivables
are located at the addresses set forth on Schedule I hereto, or, in each case,
at such other locations notified to the Purchaser, the Trustee and each Master
Servicer, and the Agent, in jurisdictions with respect to which all applicable
actions required by Section 5.02(f) hereof have been taken and completed.
(i) Lock-Box Banks. The names and addresses of all the "Lock-Box Banks"
(as defined in the Indenture), and the account numbers of all "Lock-Box
Accounts" (as defined in the Indenture) and related lock-boxes maintained at
such Lock-Box Banks, are in each case specified in Schedule III hereto or have
been notified to the Purchaser, the Trustee and the Collateral Trustee and with
respect to which all action required to be taken pursuant to Section 5.02(h) has
been taken. The Lock-Box Banks are the only institutions holding any Lock-Box
Accounts or lock-boxes for the receipt of Scheduled Payments in respect of the
Receivables. All Annuity Providers have been directed to make payments on the
Annuity Contracts relating to the Receivables to a Lock-Box Account (or a
related lock-box) covered by a "Lock-Box Notice" (as defined in the Indenture),
and such instructions are in full force and effect.
(j) Financial Statements. The annual audited financial statements of
the Company for the fiscal year ended December 31, 1996, and the unaudited
quarterly financial statements of the Company for the fiscal quarter ended June
30, 1997, copies of which have been provided to the Purchaser, the Trustee and
the Agent, present fairly the financial condition of the Company as of such
date.
(k) Accuracy of Information. Each certificate, information, exhibit,
financial statement, document, book, record, report or disclosure furnished by
the Seller to the Purchaser, the Trustee, any Master Servicer or the Agent is
accurate in all material respects and contains no untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading.
(l) Investment Company Act Matters. The Seller is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act.
(m) Title to Property. The Seller, with respect to any Receivables
immediately prior to the Purchase thereof by the Purchaser hereunder, had good,
indefeasible, and merchantable title to and ownership of such Receivables, free
and clear of all Liens.
(n) Tradenames. The Seller has no tradenames, fictitious names, assumed
names or "doing business as" names and since its incorporation, the Seller (i)
has not been the subject of any merger or other corporate reorganization that
resulted in a change of name, identity or corporate structure or (ii) had any
other name.
-15-
(o) Solvency. After giving effect to each Purchase of Transferred
Assets hereunder, the Seller is and will be solvent and able to pay its debts as
they come due, and has and will have adequate capital.
(p) Valid Transfer. This Agreement constitutes a valid sale, transfer
and assignment, or, in the case of Contributed Assets, a valid transfer and
assignment, to the Purchaser of all right, title and interest of the Seller in
and to the Receivables now or hereafter Purchased hereunder and in and to all
other Transferred Assets and the proceeds thereof free and clear of any Lien,
other than any Permitted Lien or, if a court of competent jurisdiction were to
hold that any Purchase of Receivables hereunder does not constitute a valid sale
or absolute transfer of the affected Receivables and the Related Assets as set
forth herein but instead constitutes a loan in the amount of the Purchase Price
of such Receivables, constitutes a valid grant to the Purchaser of a "security
interest" (as defined in the UCC of the jurisdiction the law of which governs
the perfection of the interest in the Receivables and other Purchased Assets or
Contributed Assets created hereunder), which is and shall be a first priority
perfected security interest to secure such loan in the amount of the Purchase
Price, free and clear of any Lien (other than any Permitted Lien) in all right,
title and interest of the Seller in and to the Receivables now or hereafter
Purchased by the Purchaser pursuant hereto and in and to all other Transferred
Assets and the proceeds thereof which will be enforceable by the Purchaser (and
its assignees or pledgees) upon such creation of such security interest.
(q) Originator Receivables. The Purchaser has given reasonably
equivalent value to the Seller in consideration for the Purchase by the
Purchaser from the Seller of the Receivables and Related Property pursuant
hereto, and no such transfer has been made for or on account of an antecedent
debt owed by the Seller to the Purchaser.
SECTION 4.02. Representations and Warranties of the Seller Relating to
the Receivables. The Seller hereby represents and warrants to the Purchaser,
with respect to each Receivable Purchased by the Purchaser pursuant hereto,
that:
(a) On the Purchase Date therefor the representations and warranties
set forth in the Designated Supplement relating to such Receivable (identified
in the applicable Seller Transfer Report delivered by the Seller on such
Purchase Date) under the heading of "Representations and Warranties of the
Issuer Relating to the Series Pledged Assets" or other similar heading or
otherwise relating specifically to the Receivables with respect to (and
allocated to or serving as collateral under) such Designated Supplement, shall
be true and correct in all material respects (and such representations and
warranties shall be deemed incorporated herein by this reference hereto).
(b) From and after the Closing Date, the Credit Policy Manual shall
provide that, upon the receipt of payment of less than the full amount of any
Scheduled Payments in respect of any Receivable in respect of which there is a
concurrent obligation of the Seller to remit a Split Payment to the Claimant
thereon, such Scheduled Payment shall be remitted to the Seller and the
-16-
applicable Claimant pro rata based on the relative percentages of the full
amount of such Scheduled Payment which each would be entitled to received (had
the full payment been received) in accordance with the terms of the applicable
Settlement Purchase Agreement.
The representations and warranties made pursuant to this Section 4.02
on the date of any Purchase of Receivables by the Purchaser shall survive such
Purchase.
SECTION 4.03. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants that as of the Closing Date and (except for
representations and warranties which relate to a specific date only) as of each
Purchase Date:
(a) Corporate Existence and Power. The Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted. The
Purchaser is duly qualified to do business in, and is in good standing in, every
other jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good standing would
not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Purchaser of this Agreement and the
other Operative Documents to which it is a party (i) are within the Purchaser's
limited liability company powers, (ii) have been duly authorized by all
necessary limited liability company action, (iii) require no action by or in
respect of, or filing with, any Governmental Authority or official thereof, or
(iv) do not contravene, or constitute a default under, any provision of
applicable law, rule or regulation or of the Purchaser's organizational
documents or of any agreement, judgment, injunction, order, writ, decree or
other instrument binding upon the Purchaser the contravention of which, in any
of the foregoing cases would have, or could reasonably be expected to have, a
material adverse effect on the Purchaser's ability to perform hereunder or on
the enforceability hereof.
(c) Binding Effect. Each of this Agreement constitutes the legal, valid
and binding obligation of the Purchaser, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditor generally or general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
ARTICLE V
GENERAL COVENANTS OF THE SELLER
-17-
SECTION 5.01. Affirmative Covenants of the Seller. At all times from
the date hereof to the Collection Date, Seller will, unless the Purchaser shall
otherwise consent in writing:
(a) Compliance with Law. The Seller will comply in all material
respects with all Requirements of Law applicable to the Transferred Assets.
(b) Preservation of Existence. The Seller will preserve and maintain
its existence, rights, franchises and privileges as a limited liability company
(or other legal entity, provided the Seller shall have complied with the
requirements of Section 5.02(f)) in the jurisdiction of its organization, and
qualify and remain qualified in good standing as a foreign business entity in
each jurisdiction where the failure to maintain such qualification would have,
or could reasonably be expected to have, a Material Adverse Effect.
(c) Inspection of Books and Records. The Purchaser, the Agent, their
respective assigns (or designated representative thereof) and independent
accountants appointed by, or other agents of, any of the foregoing, shall have
the right, upon reasonable prior written notice to the Seller, to visit the
Seller, to discuss the affairs, finances and accounts of the Seller with, and to
be advised as to the same by, its officers, and to examine the books of account
and records of the Seller, and to make or be provided with copies and extracts
therefrom, all at such reasonable times and intervals (but not more than once in
any six month period) and to such reasonable extent during regular business
hours as the Purchaser, the Agent, their respective assigns (or designated
representative thereof) or such accountants or agents appointed by any of the
foregoing, as applicable, may desire.
(d) Keeping of Records and Books of Account. (i) The Seller itself or
through its agents will keep proper books of record and account, which shall be
maintained or caused to be maintained by the Seller and shall be separate and
apart from those of any Affiliate of the Seller, in which full and correct
entries shall be made of all financial transactions and the assets and business
of the Seller in accordance with generally accepted accounting principles
consistently applied, and (ii) maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing the Receivables in the event of the destruction of the
originals thereof) and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit the daily
identification of all Collections of and adjustments to each existing
Receivable).
(e) Location of Records. The Seller will keep its principal place of
business and chief executive office at the address of the Seller referred to in
Section 4.01(h) and shall keep the other offices where it keeps the books,
records and documents regarding the Transferred Assets at the addresses of the
Seller referred to on Schedule I, or in either case, upon 30 days' prior written
notice to the Purchaser, the Trustee and each Master Servicer and the Agent, at
any other location within the United States with respect to which all applicable
action required by Section 5.02(f) hereof shall have been taken and completed.
-18-
(f) Seller Purchase Agreement and Settlement Purchase Agreements. (i)
The Seller will at its expense timely perform and comply in all material
respects with all provisions, covenants and other promises required to be
observed by it under the Seller Purchase Agreement, maintain the Seller Purchase
Agreement in full force and effect, enforce the Seller Purchase Agreement in
accordance with its respective terms, and, at the request of the Purchaser, the
Trustee, or any applicable Master Servicer, make to the Company such reasonable
demands and requests for information and reports or for action as, the Trustee,
or any applicable Master Servicer may request to the extent that the Seller is
entitled to do the same thereunder; it being agreed however that with respect to
the obligations of the Seller to remit Split Payments to the Company pursuant to
the Seller Purchase Agreement relating to the Purchased Assets, such obligation
shall hereafter be performed by the Master Servicer and/or the Collateral
Trustee, in each case, under and pursuant to the Indenture.
(ii) The Seller, pursuant to its rights under the Seller Purchase
Agreement, shall cause the Company, at its expense, to timely perform and comply
in all material respects with all provisions, covenants and other promises
required to be observed by the Company under each Settlement Purchase Agreement,
maintain each Settlement Purchase Agreement in full force and effect, enforce
each Settlement Purchase Agreement in accordance with its respective terms, and,
at the request of the Purchaser, the Trustee or any applicable Master Servicer,
make to the Claimant such reasonable demands and requests for information and
reports or for action as the Purchaser, the Trustee, or any applicable Master
Servicer may request to the extent that the Seller is entitled to do the same
thereunder; it being agreed however that with respect to the obligations of the
Seller to remit Split Payments to the Claimant pursuant to the Settlement
Purchase Agreements relating to the Purchased Assets, such obligation shall
hereafter be performed by the Master Servicer and/or the Collateral Trustee, in
each case, under and pursuant to the Indenture.
(g) Payment of Taxes, Etc. The Seller will pay promptly when due all
material taxes, assessments and governmental charges or levies imposed upon it
in respect of the Purchased Assets, or in respect of its income or profits
therefrom, and any and all material claims of any kind (including, without
limitation, claims for labor, materials and supplies) in respect of the
Transferred Assets, except where such tax, assessment, charge or levy is being
contested in good faith and by proper proceedings and adequate reserve have been
set up and are being maintained in respect thereof on the Seller's books and
records.
(h) Collections. In the event that the Seller or any other Affiliated
Entity receives any Collections, the Seller agrees to hold, or cause such
Affiliated Entity to hold, all such Collections in trust and to deposit such
Collections to a Lock-Box Account or the Master Collection Account, in each
case, as soon as practicable, but in no event later than two Business Days after
its receipt thereof.
(i) Fidelity Insurance. The Seller shall (or shall cause the
Company to) maintain, at its or the Company's own expense, a fidelity insurance
policy, with broad coverage with responsible companies on all officers,
employees or other persons acting on behalf of the Seller
-19-
or the Company in any capacity with regard to the Receivables in handling
documents and papers related thereto. Any such fidelity insurance shall protect
and insure the Seller against losses, including forgery, theft, embezzlement,
and fraud, and shall be maintained in an amount of at least $10,000,000 or such
lower amount as the Purchaser or any of its assigns may in their commercially
reasonable credit judgment designate to the Seller from time to time. No
provision of this Section 5.01(i) requiring such fidelity insurance shall
diminish or relieve the Seller from its duties and obligations as set forth in
this Agreement or any of the other Operative Documents. The Seller shall be
deemed to have complied with this provision if one of its respective Affiliates
has such fidelity policy coverage and, by the terms of such fidelity policy, the
coverage afforded thereunder extends to the Seller. Upon the request of the
Purchaser or any of its assigns, the Seller shall cause to be delivered to the
Purchaser or such assigns, as applicable, a certification evidencing coverage
under such fidelity policy. Any such insurance policy shall contain a provision
or endorsement providing that such policy may not be canceled or modified in a
materially adverse manner without ten (10) days' prior written notice to the
Purchaser and such assigns.
(j) Protection of Right, Title and Interest to Purchaser and Assignees.
(i) The Seller shall cause all financing statements and continuation
statements and any other necessary documents covering the Purchaser's and
the Purchaser's assignees' right, title and interest in and to the
Transferred Assets to be promptly recorded, registered and filed, and at
all times to be kept recorded, registered and filed, all in such manner and
in such places as may be required by law to preserve and protect fully the
right, title and interest of the Purchaser and its assignees in and to all
such Transferred Assets. The Seller shall cooperate fully with the Master
Servicers and Agent and take such actions as any such Person shall
reasonably request, in order to carry out the objectives of this Agreement
and the other Operative Documents.
(ii) Within 30 days after the Seller makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with the terms of this Agreement
seriously misleading within the meaning of Section 9-402(7) (or any
comparable provision) of the UCC as in effect in the jurisdiction the law
of which governs the perfection of the interest in the Purchased Assets
created hereunder, the Seller shall give the Purchaser, the Agent and the
Trustee notice of such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of the
Purchaser's and its Assignees' interest in the Transferred Assets and the
proceeds thereof.
(iii) Notwithstanding anything contained herein to the contrary, the
Seller shall not be required to file assignments in favor of itself or the
Purchaser or the Trustee, respectively, with respect to the UCC financing
statements filed by the Company against each of the Claimants in connection
with the respective Settlement Purchase Agreements, but the Seller hereby
covenants to file continuation statements thereof as and when
-20-
necessary to maintain the effectiveness of such statements; it being
understood and agreed that the Seller shall not have any duty to monitor
the continued effectiveness of the financing statements originally filed
against such Claimants (other than with respect to the lapse thereof due to
time).
(k) Corporate Separateness. The Seller shall at all times deal with the
Purchaser in a manner consistent with Section 2.06(m) of the Indenture.
(l) Accounting For Purchases and Contributions. The Seller shall treat
all Purchases hereunder by the Purchaser, and contributions hereunder to the
Purchaser, as sales and/or absolute transfers thereof for all tax, accounting
and other purposes.
SECTION 5.02. Negative Covenants of the Seller. From the date hereof
until the Collection Date, without the written consent of the Purchaser:
(a) No Liens. The Seller will not sell, pledge, assign or transfer to
any Person, or grant, create, incur, assume or suffer to exist any Lien (other
than a Permitted Lien) on, any Transferred Asset, whether now existing or
hereafter created, or any interest therein, and the Seller shall defend the
right, title and interest of the Purchaser in and to the Transferred Assets,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Seller.
(b) Extension or Amendment of Receivables; Repurchase Obligations. The
Seller will not extend, amend or otherwise modify (or consent to any such
extension, amendment or modification of) the terms of any Receivable or rescind
or cancel, or permit the rescission or cancellation of, any Receivable, except
as ordered by a court of competent jurisdiction or other Governmental Authority.
To the extent that any representation or warranty of the Seller with
respect to any Receivable constituting a Transferred Asset under Section 4.02 or
set forth in any certificates delivered by or on behalf of the Seller or the
Company as the Seller's predecessor-in-interest in connection with any Purchase
or in connection with any opinions of counsel delivered on any Purchase Date was
incorrect when made or remade or deemed made or remade (it being agreed that the
incorrectness of any such representation or warranty, and the substitution or
repurchase obligation of the Seller pursuant to this clause (b) resulting
therefrom, shall in each case, be determined without giving effect to any
limitation on the "knowledge," "best of knowledge" or other similar limitation
on the knowledge of the Seller contained in any such representation or
warranty), the Seller shall, within five Business Days after learning thereof,
either (X) convey to the Purchaser in exchange for the affected Receivable, one
or more additional Receivables to be described on a Seller Transfer Report
delivered to the Purchaser and having a Discounted Receivables Balance (as
calculated without giving effect to any past due Scheduled Payments thereon
which are outstanding on such date) approximately equal to, but not less than,
the Discounted Receivables Balance of the Receivable being so replaced (as
calculated by treating
-21-
any past-due Scheduled Payments then due as if such Scheduled Payments were due
on the date of such calculation) or (Y) in the event the Seller lacks sufficient
Receivables to substitute or replace the affected Receivables, repurchase in
cash delivered to the Purchaser as aforesaid, in an amount equal to the
Discounted Receivables Balance (as calculated by treating any past-due Scheduled
Payments then due as if such Scheduled Payments were due on the date of such
calculation) of such affected Receivable at such time, whereupon the Receivable
being replaced or repurchased shall cease to be a "Receivable" hereunder.
(c) Change in Credit Policy Manual. The Seller will not make, or
consent or fail to object to, any change in the "Credit Policy Manual" (as
defined in the Indenture) which change could be reasonably likely to materially
impair or delay the collectibility of any Receivable or result in a
deterioration in the creditworthiness of the Obligors generally.
(d) Deposits to Lock-Box Accounts or the Master Collection Account. The
Seller will not deposit or otherwise credit, or cause to be so deposited or
credited, or consent or fail to object to any such deposit or credit, to any
Lock-Box Account or the Master Collection Account of cash proceeds other than
Collections of Receivables and other Transferred Assets; provided that to the
extent any such other amounts are so deposited on any date, it shall not
constitute a breach hereunder if such other funds are identified and are removed
from such account within two Business Days after such amounts were so deposited
in such account.
(e) Receivables Not To Be Evidenced by Promissory Notes. The Seller
will take no action to cause any Receivable to be evidenced by any "instrument"
(as defined in the UCC of the jurisdiction the law of which governs the
perfection of the interest in such Receivable created hereunder), except in
connection with its enforcement, in which event the Seller shall deliver such
instrument to the Collateral Trustee, for the benefit of the Person entitled
thereto or secured thereby in accordance with the Intercreditor Agreement.
(f) Change in Name. The Seller will not (i) make any change to its
name, principal place of business, partnership structure or location of books
and records or use any tradenames, fictitious names, assumed names or "doing
business as" names unless, at least 30 days prior to the effective date of any
such name change, change in principal place of business, change in partnership
structure, change in location of its books and records, or change in trade or
fictitious names, the Seller notifies the Purchaser, the Trustee and each Master
Servicer thereof and delivers to the Trustee and the Purchaser such financing
statements (Forms UCC-1 and UCC-3) executed by the Seller which the Purchaser or
the Trustee may reasonably request to reflect such name change, location change,
change in partnership structure or fictitious name change or use, together with
such other documents and instruments that the Purchaser or the Trustee may
reasonably request in connection therewith and has taken all other steps to
ensure that the Purchaser, and the Trustee continue to have a first priority,
perfected ownership or security interest in the Transferred Assets, or (ii)
change its jurisdiction of organization unless the Purchaser and the Trustee
shall have received from the Seller (A) written notice of such change at least
10 days prior to the effective date thereof, and (B) prior to the effective date
thereof if the
-22-
Purchaser shall so request, an Opinion of Counsel, in form and substance
reasonably satisfactory to the Purchaser and the Trustee, as to such
organization and the Seller's valid existence and good standing and as to the
matters referred to in the first sentence of Section 4.01(a).
(g) Merger. The Seller shall not consolidate with or merge into any
other Person or convey or transfer its properties and assets substantially as an
entirety to any Person unless:
(i) (X) the Person formed by such consolidation or into which the
Seller is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Seller substantially as an entirety shall be,
if the Seller is not the surviving entity, a corporation, limited
partnership or limited liability company organized and existing under the
laws of the United States of America or any State or the District of
Columbia, and such entity shall have expressly assumed, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Purchaser and the Trustee the performance of
every covenant and obligation of the Seller hereunder and (Y) the Seller
shall have delivered to the Purchaser and the Trustee an Officer's
Certificate and an Opinion of Counsel each in form reasonably satisfactory
to the Purchaser and the Trustee and stating that such consolidation,
merger, conveyance or transfer complies with this Section 5.02(g) and that
all conditions precedent herein provided for relating to such transaction
have been complied with;
(ii) each "Rating Agency" (as defined in the Indenture) rating
any Series shall have notified the Purchaser and the Trustee, in writing,
that such merger or consolidation or conveyance or transfer, as the case
may be, will not result in a reduction or withdrawal of the rating of any
such outstanding Series or "Class" (as defined in the Indenture) of such
Series; and
(iii) the corporation, limited partnership or limited liability
company formed by such consolidation or into which the Seller is merged or
which acquires by conveyance or transfer the properties and assets of the
Seller substantially as an entirety shall have all licenses and approvals
to perform its obligations hereunder and under the other Operative
Documents to which the Seller is a party, except to the extent the failure
to have any such license would not have, and could not reasonably be
expected to have, a material adverse effect on its ability to perform the
obligations of the Seller hereunder and/or any such other Operative
Document.
(h) Change in Lock-Box Accounts and Instructions to Obligors. The
Seller will not add or terminate any institution as a Lock-Box Bank or terminate
or substitute any Lock-Box Account or any related lock-box from those listed in
Schedule III hereto, except as otherwise permitted hereunder or unless the
Purchaser, the Trustee and the Collateral Trustee shall have received notice of
such addition, termination or change and executed copies of Lock-Box Notices
covering any such new Lock-Box Bank, Lock-Box Account or any new lock-box
relating thereto. The Seller will not instruct any Obligor to remit Collections
to any Person, address or account
-23-
other than a Lock-Box Account or the related lock-box to which the underlying
Receivables or Transferred Assets relates.
(i) Ownership of Seller. The number of individuals and entities (other
than Flow-Through Entities (as such term is defined below)) that are beneficial
owners of a direct interest in the Seller, plus the number of individuals and
entities (other than Flow-Through Entities) that are beneficial owners of an
indirect ownership in the Seller through one or more Flow Through Entities,
other than the Company or any successor thereto, will never exceed ten. As used
herein, "Flow-Through Entity" shall mean an entity that, for federal income tax
purposes, is a partnership, a grantor trust, an S corporation or other entity
which is not treated for such purposes as a separate entity.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Collection of Receivables. (a) The Seller and the
Purchaser each hereby acknowledges and agrees that (i) the Collateral Trustee
has the exclusive ownership, dominion and control of any and all Lock-Boxes and
Lock-Box Accounts, other than any Lock-Box and/or Lock-Box Account into which
only Collections with respect to one particular Series are deposited (any such
Series-specific Lock-Box and Lock-Box Account being a "Series Specific Lock-Box"
and "Series Specific Lock-Box Account", respectively) and (ii) the Trustee has
the exclusive ownership and control of each Series Specific Lock-Box and Series
Specific Lock-Box Account and in either case, the Seller hereby agrees to take
any further action necessary or that the Trustee, the Collateral Trustee, the
Agent or the Purchaser may reasonably request to evidence and/or effect such
ownership and control. Unless instructed otherwise by the Collateral Trustee or
the Trustee, as applicable, pursuant to either such Person's authority under the
Intercreditor Agreement and the Indenture, each Lock-Box Bank shall be
instructed to remit, on a daily basis, via overnight or same day transfer, all
amounts deposited in its Lock-Box Accounts to the Master Collection Account in
accordance with the terms of a Lock-Box Notice substantially in the form of
Exhibit B to the Indenture. The Master Servicer (or any successor Master
Servicer (including the Back-Up Servicer) appointed for any such Master
Servicer) and the Seller, pursuant to each Daily Report shall advise the
Purchaser daily of the amount of Collections received into the Master Collection
Account on such day with respect to the Receivables and the allocations thereof
as among the Series, the Split Payments, and the Revolving Credit Facility. If
the Seller or its agents or representatives shall at any time receive any cash,
checks or other instruments constituting Collections, such recipient shall
segregate such payment and hold such payment in trust for and in a manner
acceptable to the Purchaser and shall, promptly upon receipt (and in any event
within one Business Day following receipt), remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer, to a
Lock-Box Account or Series Specific Lock-Box Account, as the case may be, or the
-24-
Master Collection Account. The Seller hereby authorizes the Purchaser (and its
designees and assigns), and gives each of the Purchaser, such designees and/or
such assigns its irrevocable power of attorney, with full power of substitution,
which authorization shall be coupled with an interest, to take any and all steps
in the Seller's name and on behalf of the Seller, which steps are necessary or
desirable, in the reasonable determination of the Purchaser, such designees
and/or such assigns, to collect all amounts due under the Transferred Assets,
including, without limitation, endorsing the Seller's name on checks and other
instruments representing Collections and enforcing such Receivables and the
related Settlement Purchase Agreements.
(b) The Purchaser shall, following notification that collections of any
receivable or other intangible owed to the Seller, which is not a Transferred
Asset, have been deposited into the Lock-Box Accounts or Series Specific
Lock-Box Accounts, as the case may be, segregate all such collections and, after
such misapplied collections have been reasonably identified to the Purchaser,
the Purchaser shall turn over to the Seller, as applicable, all such collections
less all reasonable and appropriate out-of-pocket costs and expenses, if any,
incurred by the Purchaser in collecting such receivables.
SECTION 6.02. Servicing of Receivables. (a) From and after the Purchase
of any Receivable by the Purchaser from the Seller, the Purchaser (or its
designees or assignees) shall have the sole right to service, administer and
monitor the Receivables and the Seller shall cease to have any rights whatsoever
in connection with such Receivables constituting Transferred Assets. In
connection therewith, the Seller shall deliver all books and records relating to
the Receivables to the Purchaser (or its agent or assign as so designated by the
Purchaser) promptly after the Purchase thereof by the Purchaser, and shall take
such other action as shall be reasonably requested by the Purchaser (or its
agents or assigns) to further evidence such assignment or to assist in the
servicing, monitoring, collecting and administering the Receivables sold
hereunder.
(b) Grant of Power of Attorney. The Seller hereby authorizes the
Purchaser (and its designees and assigns), and gives each of the Purchaser and
such designees and/or assigns its irrevocable power of attorney, with full power
of substitution, which authorization shall be coupled with an interest, to take
any and all steps in the Seller's name and on behalf of the Seller, which steps
are necessary or desirable in the reasonable determination of the Purchaser,
such designees and/or assigns to endorse, negotiate, deposit or otherwise
realize on any Receivable or any writing of any kind in connection with any
Receivable or Transferred Asset.
SECTION 6.03. Responsibilities of the Seller. Anything herein to the
contrary notwithstanding:
(a) Subject to the allocation of the obligations in respect of Split
Payments pursuant to Section 5.01(f), the Seller shall cause the Company to
perform all of its obligations under the Settlement Purchase Agreements related
to the Receivables sold or contributed by it hereunder with the same standard of
care as it would exercise for assets maintained for its own
-25-
account, and the exercise by the Purchaser (or any of its assignees) of its
respective rights hereunder shall not relieve the Seller or the Company from
such obligations.
(b) The Purchaser and its assignees shall have no obligation or
liability with respect to any Receivable or related Settlement Purchase
Agreement or with respect to the Seller Purchase Agreement, nor shall the
Purchaser or any such assignee be obligated to perform any of the obligations of
the Seller thereunder.
(c) The Seller shall, upon the request of the Purchaser (or its agents
or assigns) deliver to the Purchaser, such agents and/or assigns, as directed,
all Records that evidence or relate to the Receivables and other Purchased
Assets or Contributed Assets conveyed to the Purchaser under this Agreement.
SECTION 6.04. Further Action Evidencing Purchases. (a) The Seller
agrees that at any time and from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action that may be reasonably necessary to perfect, protect or more fully
evidence the Purchaser's and its assignees' respective interests in the
Transferred Assets, or to enable the Purchaser and/or such assignees (or any
agent or designee of any of the foregoing) to exercise or enforce any of their
respective rights hereunder. Without limiting the generality of the foregoing,
the Seller will (i) execute and file such financing or continuation statements,
or amendments thereto or assignments thereof, and such other instruments and
notices, as may be necessary or appropriate or as the Purchaser or its assignees
may reasonably request, and (ii) xxxx its master data processing records
evidencing such Receivables and related Settlement Purchase Agreements with a
legend indicating that such assets have been sold or transferred to the
Purchaser, and (iii) indicate on its financial statements that its Receivables
have been sold or transferred to the Purchaser pursuant to this Agreement.
(b) If the Seller fails to perform any of its agreements or obligations
under this Agreement, following expiration of any applicable cure period, the
Purchaser (or any assignee thereof) may (but shall not be required to) perform,
or cause performance of, such agreement or obligation, and the reasonable
expenses of the Purchaser (or any such assignee) incurred in connection
therewith shall be payable by the Seller upon the Purchaser's (or any such
assignee's) written demand therefor (which demand shall itemize such expenses in
reasonable detail).
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Indemnities by the Seller. Without limiting any other
rights which the Purchaser may have hereunder or under applicable law, but
without duplication, the Seller hereby agrees to indemnify the Purchaser and its
permitted successors and assigns and all officers, directors, agents and
employees of the foregoing (each of the foregoing Persons being
-26-
individually referred to herein as an "Indemnified Party") from and against any
and all damages, losses, claims, judgments, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements, awarded
against or incurred by any Indemnified Party relating to or resulting from or in
connection with any of the following (collectively, the "Indemnified Losses",
and each an "Indemnified Loss"), other than any such Indemnified Loss (x)
constituting recourse for Receivables which are uncollectible for credit reasons
or (y) which arise solely from the gross negligence or willful misconduct of the
affected Indemnified Party:
(i) the sale or transfer of any Noncomplying Receivable to the
Purchaser pursuant hereto;
(ii) reliance on any representation or warranty made in writing
by the Seller (or any of its officers) under or in connection with this
Agreement, any Seller Transfer Report or any "Monthly Report" (as defined
in the Indenture), or reliance on any other information or report delivered
by the Seller or by the Master Servicer with respect to the Seller (to the
extent based on information provided by the Seller) pursuant hereto, which
shall have been false, incorrect or materially misleading in any respect
when made (it being agreed that the incorrectness of any such
representation or warranty or the determination that any such
representation or warranty was materially misleading, and the obligations
of the Seller pursuant to this clause (ii) resulting therefrom, shall in
each case, be determined without giving effect to any limitation on the
"knowledge," "best of knowledge" or other similar limitation on the
knowledge of the Seller contained in any such representation or warranty);
(iii) the failure by the Seller to comply with any term,
provision or covenant contained in this Agreement, or any agreement
executed in connection with this Agreement or with any applicable law, rule
or regulation with respect to any Receivable, the related Settlement
Purchase Agreement or the "Related Security" (as defined in the Indenture),
or the nonconformity of any Receivable, the related Settlement Purchase
Agreement or the Related Security with any such applicable law, rule or
regulation;
(iv) the failure to vest and maintain vested in the Purchaser or
to transfer to the Purchaser, legal and equitable title to, and first
priority perfected ownership of, the Receivables and other Transferred
Assets which are, or are purported to be, sold or otherwise transferred by
the Seller hereunder, free and clear of any Lien (other than Liens created
in favor of the Purchaser hereunder and Liens created under the other
Operative Documents);
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Receivables and other Transferred
-27-
Assets which are, or are purported to be, sold or otherwise transferred by
the Seller hereunder, whether at the time of any Purchase or at any
subsequent time;
(vi) the failure by the Seller to be duly qualified to do
business, to be in good standing or to have filed appropriate fictitious or
assumed name registration documents in any jurisdiction;
(vii) the failure of the Seller to pay when due any sales taxes
or other governmental fees or charges imposed in connection with the
transfer of the Purchased Assets hereunder;
(viii) the failure of the Seller or any of its agents, employees
or representatives to remit to the Purchaser, Collections of Transferred
Assets remitted to the Seller or any such agent, employees or
representatives in accordance with the terms hereof;
(ix) the assignment by a Claimant, the Company or the Seller
under a Settlement Agreement of the rights to Scheduled Payments (or any
portion thereof) under a Settlement Purchase Agreement in contravention of
an anti-assignment provision in such Settlement Agreement that prohibits
the transfer of the rights to such Scheduled Payments (or any such
thereof); and
(x) any Indemnified Loss arising under a Receivable, the
Settlement Agreement underlying which was not the subject of a Qualified
Assignment, to the extent such Indemnified Loss would not have been
incurred had such Settlement Agreement been the subject of a Qualified
Assignment (without regard to whether there may have been a different
Annuity Provider had there been a Qualified Assignment and disregarding any
rights against any Person which would have been an Assignee had there been
a Qualified Assignment).
Any Indemnified Amounts payable under this Section 7.01 shall, be paid by the
Seller to the Purchaser within five (5) Business Days following the Purchaser's
written demand therefor, setting forth in reasonable detail the basis for such
demand. The agreements of the Seller contained in this Section 7.01 shall
survive the Collection Date. In addition, in no event shall Indemnified Losses
include any consequential, special or punitive damages. The provisions of this
Section 7.01 shall survive the termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
-28-
SECTION 8.01. Waivers; Amendments. No failure or delay on the part of
the Purchaser or the Seller (or any assignee thereof) in exercising any power,
right or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or remedy preclude
any other further exercise thereof or the exercise of any other power, right or
remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any provision of this
Agreement may be amended if, but only if, (a) such amendment is in writing and
is consented to by the Seller, the Purchaser and the Trustee and (b) the Trustee
shall have received from each Rating Agency confirmation that such amendment
will not result in the downgrading or withdrawal of the then current ratings of
any Series.
SECTION 8.02. Notices. Except as provided below, all communications and
notices provided for hereunder shall be in writing and shall be given to the
other party at its address set forth below its name on the signature pages
hereto or at such other address as such party may hereafter specify for the
purposes of notice to such party. Each such notice or other communication shall
be effective (i) if given by mail, three (3) Business Days following such
posting, postage prepaid, U.S. certified or registered, (ii) if given by
overnight courier, one (1) Business Day after deposit thereof with a national
overnight courier service, or (iii) if given by any other means, when received
at the address specified on the signature pages hereof.
SECTION 8.03. Effectiveness; Binding Effect; Assignability. (a) This
Agreement shall become effective on the Closing Date and shall, from and after
such date, be binding upon and inure to the benefit of the Seller and the
Purchaser and their respective successors and permitted assigns. The Seller may
not assign any of its rights or delegate any of its duties hereunder without the
prior written consent of the Purchaser and the Trustee. No provision of this
Agreement shall in any manner restrict the ability of the Purchaser (or the
Trustee or any Noteholder as assignees of the Purchaser) to assign, participate,
grant security interests in, or otherwise transfer any of their rights or
remedies hereunder.
(b) Without limiting the foregoing, the Seller hereby acknowledges
that, contemporaneously herewith, the Purchaser is granting, assigning,
transferring and conveying to the Trustee, for its benefit and for the benefit
of the "Noteholders" (as defined in the Indenture), and the foregoing's
assignees, under the Indenture, a security interest in all of the Purchaser's
right and title to and interest in, among other things, the Transferred Assets
and this Agreement to the extent relating to any "Pledged Assets" (as defined in
the Indenture), including all of the Purchaser's rights, remedies, powers and
privileges, and all claims of the Purchaser against the Seller, under or with
respect to this Agreement (whether arising pursuant to the terms of this
Agreement or otherwise available at law or in equity), including (i) the right
of the Purchaser and the obligations of the Seller hereunder and (ii) the right,
at any time, to give or withhold consents, requests, notices, directions,
approvals, demands, extensions or waivers under or with respect to this
Agreement or the obligations in respect of the Seller hereunder to the same
extent as the Purchaser may do. The Seller hereby consents to such grant,
transfer, assignment and
-29-
conveyance to the Trustee and acknowledges and agrees that the Trustee, as the
holder of a security interest for the benefit of the Noteholders and each of its
assignees, shall be a third party beneficiary of the rights of the Purchaser
arising hereunder.
(c) The Seller hereby agrees to execute all agreements, instruments and
documents, and to take all other action, that the Purchaser or the Trustee
reasonably determines is necessary or appropriate to evidence the assignments
described in clause (b) immediately above. To the extent that the Purchaser has
granted or grants powers of attorney to the Trustee under the Indenture, the
Seller hereby grants a corresponding power of attorney on the same terms to the
Purchaser. The Seller hereby acknowledges and agrees that the Purchaser, in all
of its capacities, shall assign to the Trustee for the benefit of the
Noteholders, and each of its assignees, such powers of attorney and other rights
and interests granted by the Seller to the Purchaser hereunder and agrees to
cooperate fully with the Trustee in the exercise of such rights.
(d) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the Collection Date; provided, however, that (i)
the indemnification and payment provisions of Article VII and Section 8.05 and
(ii) the provisions of Sections 8.08 and 8.10, shall, in each case, be
continuing and shall survive any termination of this Agreement.
SECTION 8.04. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE.
(b) EACH OF THE SELLER AND THE PURCHASER HEREBY WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE BETWEEN EITHER OF THEM ARISING OUT OF, CONNECTED WITH,
RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH
THIS AGREEMENT OR THE OTHER OPERATIVE DOCUMENTS.
SECTION 8.05. Costs and Expenses. In addition to the rights of
indemnification under Article VII hereof, the Seller agrees to pay the Purchaser
(and its agents' and assignees') within 30 days after demand all reasonable
out-of-pocket costs and expenses (including without limitation, reasonable
counsel fees and expenses) in connection with the enforcement of the covenants,
agreements, liabilities and obligations of the Seller under this Agreement.
SECTION 8.06. Execution in Counterparts; Severability. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the
-30-
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 8.07. Purchase Termination. (a) The agreements of the Seller to
sell Receivables hereunder may be terminated at any time by the Seller by giving
written notice thereof to the Purchaser and the Trustee of the Seller's election
to terminate this Agreement, in which event the Purchase Termination Date shall
thereafter occur on the date specified therefor by the Seller in such notice,
but in any event not less than 60 days after the Trustee's receipt of such
notice.
(b) Notwithstanding any such termination described under paragraph (a)
above, all other provisions of this Agreement shall remain in full force and
effect as provided in Section 8.03.
SECTION 8.08. No Proceedings. The Seller hereby agrees that it will not
institute against the Purchaser, or join any other Person in instituting against
the Purchaser, any proceeding of the type referred to in the definition of
"Insolvency Event" in the Indenture, so long as there shall not have elapsed one
year plus one day since the last day on which any amounts owing under the Notes
of the last outstanding Series shall have been indefeasibly paid in full in
cash. The foregoing shall limit the rights of the Seller under any and all
agreements it may have with the Purchaser but shall not limit the right of the
Seller to file any claim in or otherwise take any action with respect to any
insolvency proceeding that was instituted against the Purchaser by any Person
other than the Seller or any Affiliate thereof. The provisions of this Section
8.08 shall survive the termination of this Agreement.
SECTION 8.09. Entire Agreement. This Agreement, together with the other
Operative Documents, including the exhibits and schedules hereto and thereto,
contains a final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof, superseding all previous oral statements and other writings with respect
thereto.
SECTION 8.10. Limitations on Liability. None of the members, managers,
partners, officers, employees, agents, shareholders, directors or holders of
limited liability company interests of or in (x) the Purchaser or the Seller or
(y) the members of the Seller, past, present or future, shall be under any
liability to the Seller or the Purchaser, respectively, any of their successors
or assigns, or any other Person for any action taken or for refraining from the
taking of any action in such capacities or otherwise pursuant to this Agreement
or for any obligation or covenant under this Agreement, it being understood that
this Agreement and the obligations created hereunder shall be, to the fullest
extent permitted under applicable law, solely the limited liability company
obligation of the Seller and the Purchaser, respectively. The Seller, the
Purchaser and any member, manager, partner, officer, employee, agent,
shareholder, director
-31-
or holder of a limited liability company interest of or in (x) the Seller or the
Purchaser and (y) any members of the Seller, may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
(other than the Seller or any Affiliate thereof) respecting any matters arising
hereunder.
-32-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
X. X. XXXXXXXXX RECEIVABLES II LLC
By: X.X. Xxxxxxxxx S.S.C. Limited Partnership,
its manager
By: X.X. Xxxxxxxxx Structured Settlement
Funding Corporation, its General Partner
By: __________________________________________
Name:
Title:
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention:____________________
Telecopy No.: (000) 000-0000
X. X. XXXXXXXXX RECEIVABLES III LLC
By: X.X. Xxxxxxxxx Receivables II LLC,
its manager
By: X.X. Xxxxxxxxx S.S.C. Limited Partnership,
its manager
By: X.X. Xxxxxxxxx Structured Settlement
Funding Corporation, its General Partner
By: __________________________________________
Name:
Title:
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention:____________________
Telecopy No.: (000) 000-0000
