[COVER PAGE AND TABLE OF CONTENTS AT END OF DOCUMENT]
POOLING AND SERVICING AGREEMENT, dated as of
March 31, 1997, among ZENITH FINANCE CORPORATION, as
Transferor, ZENITH ELECTRONICS CORPORATION, as Servicer, and
BANKERS TRUST COMPANY, a New York banking corporation, as
Trustee.
In consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties, the Holders
and the Enhancement Providers to the extent provided herein:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Whenever used in this
Agreement, the following words and phrases shall have the following
meanings, and the definitions of such terms are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms. Capitalized terms not
otherwise defined in this Agreement have the same meanings as specified in
the related Supplement.
"Act" means the Securities Act of 1933, as amended from
time to time.
"Additional Originator" has the meaning specified in Section
2.07(a).
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes
of this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of Voting Stock, by contract or otherwise.
"Aggregate Holders' Interest" has the meaning specified in
Section 4.01(a).
"Agreement" means this Pooling and Servicing Agreement,
as the same may from time to time be amended, supplemented or otherwise
modified, including, with respect to any Series, the related Supplement.
"Amortization Date" means, with respect to any Series, the
amortization date specified in the related Supplement.
"Amortization Period" means, with respect to any Series,
unless otherwise specified in the related Supplement, the period beginning
on the related Amortization Date and ending upon the payment in full to
the Investor Certificateholders of such Series of the Invested Amount with
respect to such Series, all accrued and unpaid interest thereon and all other
amounts owed to the Investor Certificateholders under any Transaction
Document.
"Beneficiary" means, as of any date of determination, any of
the Trustee, the then holders of the Investor Certificates, the Program
Agent and any Enhancement Provider.
"Business Day" means (a) a day of the year on which banks
are not required or authorized by law to close in New York City or the city
in which the Corporate Trust Office is located, (b) with respect to non-
financial reporting requirements of the Servicer or the Transferor, any day
on which the Servicer or the Transferor is not closed, (c) if during any
applicable interest period an interest rate or certificate rate is calculated
by reference to a eurodollar rate, a day on which dealings are carried on in
the London interbank market and (d) any other day specified in a Supplement
as a "Business Day".
"Certificate" means any Investor Certificate or the
Transferor Certificate.
"Certificate Purchase Agreement" means, with respect to
any Series, a certificate purchase agreement, executed and delivered in
connection with the original issuance of the Investor Certificates of such
Series pursuant to Article VI, and all amendments, supplements and other
modifications from time to time thereto.
"Certificate Rate" means, with respect to any Series, the
certificate rate specified therefor in the related Supplement.
"Certificate Register" has the meaning specified in Section
6.03(a).
"Change in Tax Law" means any amendment to, or change
in, the laws (or any regulations thereunder) of the United States of America
or any political subdivision or taxing authority thereof or therein affecting
taxation or any amendment to, or change in, an interpretation or
application of, such laws or regulations by any legislative body, court,
governmental agency or regulatory authority (including the enactment of
any legislation and the publication of any judicial decision or regulatory
determination).
"Collection Account" has the meaning specified in
Section 4.02(b).
"Collection Account Bank" has the meaning specified in
Section 4.02(b).
"Collection Account Letter" has the meaning specified in
Section 4.02(b).
"Collection Period" means a Statistical Month (or, in the
case of the Statistical Month in which the Closing Date occurs, the portion
of such Statistical Month following the Closing Date). When used in
respect of any Distribution Date, the term "Collection Period" refers to the
full Collection Period immediately preceding such Distribution Date.
"Collections" means (a) all payments by or on behalf of the
Obligors deposited to any Collection Account or the Concentration
Account, or received by the Servicer, in respect of Receivables in whatever
form and (b) all interest and other investment earnings (net of losses and
investment expenses) on Collections (including funds on deposit in the
Cure Accounts) as a result of the investment thereof pursuant to Section
4.02(a).
"Concentration Account" has the meaning specified in
Section 4.02(a).
"Concentration Account Bank" shall initially be Bankers
Trust Company and has the meaning specified in Section 4.02(a).
"Confidential Information" means any written information
delivered or made available by or on behalf of Zenith (or its Affiliates or
Subsidiaries), the Servicer or the Transferor to any Person in connection
with or pursuant to this Agreement or the transactions contemplated
hereby which is proprietary in nature and clearly marked or identified in
writing as being confidential information on the cover page thereof or in
any other conspicuous manner, other than information (i) which was
publicly known, or otherwise known to such Person (other than from any
party to a Transaction Document or any other Person not entitled to
disclose the same free of any confidentiality requirements), at the time of
disclosure or (ii) which subsequently becomes publicly known through no
act or omission by such Person.
"Consolidated Tangible Net Worth" means, with respect to
any Person, at any time, (i) total consolidated tangible assets of such
Person and its subsidiaries, minus (ii) total consolidated liabilities of such
Person and its subsidiaries
"Contract" means an agreement between an Originator and
an Obligor, containing terms pursuant to or under which such Obligor shall
be obligated to pay from time to time for merchandise, insurance or
services (other than royalty payments arising under a license of intellectual
property).
"Controlled Affiliate" means, as to any Person, any other
Person that, directly or indirectly, is controlled by such Person. For
purposes of this definition, the term "controlled" with respect to a Person
means the possession, direct or indirect, of the power either (a) to vote
more than 50% of the Voting Stock of such Person or (b) to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Corporate Trust Office" has the meaning specified in
Section 11.16.
"Credit Agreement" means the Credit Agreement dated as
of March 31, 1997 among Zenith, the lenders party thereto, Citibank, N.A.
as issuing bank and Citicorp North America, Inc. as agent, as amended,
supplemented, modified, restated, replaced or refinanced from time to time.
"Credit Policy Manual" means those credit and collection
policies and practices of the Servicer described in the credit policy and
procedures manual, substantially in the form of Exhibit H hereto, in effect
on the date hereof relating to Receivables, as the same may be amended or
modified from time to time in compliance with Section 3.04(j).
"Cure Account" with respect to any Series has the meaning
specified in the related Supplement, and "Cure Accounts" shall refer to all
the Cure Accounts established for outstanding Series in accordance with
the terms of the related Supplements.
"Cure Funds" means Collections which, from time to time,
are deposited by the Transferor into a Cure Account.
"Cure Period" means, if the Transferor has elected to begin
depositing Cure Funds into the Cure Accounts, the period beginning on
and including a Pool Non-compliance Date and ending on but excluding the
earlier of (a) the first date thereafter on which the Net Receivables Balance
equals or exceeds the Required Net Receivables Balance and (b) the fifth
consecutive Business Day following the occurrence of such Pool Non--
compliance Date.
"Daily Report" means an Officer's Certificate of the Servicer
substantially in the form of Exhibit E hereto.
"Defaulted Receivable" means a Receivable (i) as to which
an Insolvency Event has occurred with respect to the Obligor thereof, (ii)
as to which any payment, or part thereof, remains unpaid by the Obligor
thereof for 61 (or, after the Report Delivery, 91) days or more from the
original due date for such payment (iii) which, consistent with the Credit
Policy Manual, would be or has been written off as uncollectible or (iv)
which is subject to any dispute, offset, counterclaim or defense whatsoever
asserted (except the discharge in bankruptcy of the Obligor thereof).
"Deposit Date" means each Business Day on which any
Collections are deposited in the Concentration Account.
"Designated Obligor" means, at any time, each Obligor,
provided, however, that any Obligor shall cease to be a Designated Obligor
upon three Business Days' notice by any Program Agent to the Transferor
that such Program Agent has determined, in its reasonable credit judgment,
that such Obligor shall not be considered a Designated Obligor.
"Determination Date" means, with respect to any
Distribution Date, the third Business Day preceding such Distribution Date.
"Determination Date Certificate" means, with respect to any
Determination Date and any Series, a report prepared by an officer of the
Servicer for such Determination Date as of the end of the most recently
completed Statistical Month, substantially in the form set forth in the
related Supplement.
"Diluted Receivable" means that portion (and only that
portion) of any Receivable which is reduced or cancelled as a result of (i)
any failure by any Originator to deliver any merchandise or provide any
services or otherwise to perform under the underlying Contract or invoice,
(ii) any change in the terms of, or cancellation of, a Contract or invoice or
any other adjustment by the Servicer which reduces the amount payable by
the Obligor on the related Receivable or (iii) any set-off by an Obligor in
respect of any claim by such Obligor as to amounts owed by it on the
related Receivable; provided that Diluted Receivables are calculated
assuming that all chargebacks are resolved in the Obligor's favor and do not
include contractual adjustments to the amount payable by an Obligor that
are eliminated from the Receivables balance sold to the Trust through a
reduction in the Purchase Price for the related Receivable.
"Discount Amount" means, with respect to any Series, the
amount set forth in the related Supplement.
"Distribution Date" means, with respect to any Collection
Period, the twenty-first day of the calendar month immediately following
such Collection Period, or, if such day is not a Business Day, the next
succeeding Business Day or such other day as set forth in the Supplement
for any Series.
"Early Amortization Event" has the meaning specified in
Section 9.01 and, with respect to any Series, shall also mean any Early
Amortization Event specified in the related Supplement.
"Early Amortization Period" means, with respect to any
Series, unless otherwise specified in the related Supplement, the period
beginning at the close of business on the Business Day immediately
preceding the day on which an Early Amortization Event is deemed to have
occurred, and ending upon the Termination Date with respect to such
Series.
"Eligible Institution" means a depository institution
organized under the laws of the United States of America or any state
thereof, or the District of Columbia (or any domestic branch of a foreign
bank authorized under any such laws), (a) whose senior long-term
unsecured debt obligations are rated at least (i) if S&P is a Rating Agency,
A- or better, and (ii) if Xxxxx'x is a Rating Agency, A3 or better, and (b)
which is subject to regulation regarding fiduciary funds on deposit
substantially similar to 12 C.F.R. Section 9.10(b) and (c) which has a
combined capital and surplus of at least $500,000,000.
"Eligible Investments" means book-entry securities entered
on the books of the registrar of such securities and held in the name or on
behalf of the Trustee, negotiable instruments or securities represented by
instruments in bearer or registered form (registered in the name of the
Trustee or its nominee) which evidence:
(a) readily marketable direct obligations of the
Government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full faith
and credit of the United States;
(b) insured demand deposits, time deposits or
certificates of deposit (having original maturities which mature no
later than the Business Day prior to the next Distribution Date) of
any commercial bank that (i) is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper
rated at the time of the Trust's investment or contractual
commitment to invest therein, as described in clause (d), (iii) is
organized under the laws of the United States or any state thereof
and (iv) has combined capital and surplus of at least $500,000,000;
(c) repurchase obligations with a term of not more than
ten days for underlying securities of the types described in clauses
(a) and (b) above entered into with any bank of the type described
in clause (b) above;
(d) commercial paper (having original maturities of no
more than 270 days) having, at the time of the Trust's investment or
contractual commitment to invest therein, the highest short-term
rating from each Rating Agency;
(e) investments in no-load money market funds having a
rating from each rating agency rating such fund in its highest
investment category (including such funds for which the Trustee or
any of its Affiliates is investment manager or advisor).
"Eligible Receivable" means, at any time, each Receivable
(or, with respect to clause (b) below, the portion thereof) satisfying the
following criteria:
(a) as to which the Transferor or the Trust has good and
marketable title thereto free and clear from any and all Liens except
Permitted Liens, and which has been the subject of either a valid
transfer and assignment from the Transferor to the Trust of all the
Transferor's right, title and interest therein (and in the proceeds
thereof), or the grant of a first priority perfected "security interest"
(within the meaning of the UCC of the State of New York and of
the jurisdiction the law of which governs the perfection of the
interest in such Receivable created hereunder) therein (and in the
proceeds thereof);
(b) which is not a Defaulted Receivable or the portion
of a Receivable constituting a Diluted Receivable;
(c) which arose in the ordinary course of business of any
Originator and is an account receivable representing all or part of
the sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act, the
Obligor of which is primarily liable with respect thereto;
(d) which is an "account" and is not evidenced by an
"instrument" or "chattel paper" (in each case within the meaning of
Section 9-106 of the UCC of the State of New York and of the
jurisdiction the law of which governs the perfection of the interest
in such Receivable created hereunder);
(e) the transfer of which constitutes a "current
transaction" within the meaning of Section 3(a)(3) of the Act;
(f) which is denominated and payable only in U.S.
Dollars to a location within the United States of America;
(g) which arises under a Contract which, together with
such Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the Obligor of such Receivable
enforceable against such Obligor in accordance with its terms
(except as such enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally, and except as such
enforceability may be limited by general principles of equity,
whether considered in a suit at law or in equity) and the full
principal amount of which is not subject to any dispute, offset,
counterclaim or defense whatsoever (except the discharge in
bankruptcy of such Obligor);
(h) which, together with the Contract related thereto,
was created in compliance with and does not contravene any
applicable Requirement of Law and with respect to which no party
to the Contract related thereto is in violation of any such
Requirement of Law, in each case except where the non-
compliance, contravention or violation of which could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect;
(i) which satisfies all applicable requirements of the
Credit Policy Manual in all material respects;
(j) with respect to which all consents, licenses,
approvals or authorizations of, or registrations or declarations with,
any Governmental Authority required to be obtained, effected or
given in connection with the creation of such Receivable have been
duly obtained, effected or given and are in full force and effect,
except where the failure to do so could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect;
(k) which is not subject to any provision prohibiting the
transfer or assignment by any Originator of such payment
obligation;
(l) which, according to the Contract related thereto, is
required to be paid in full within 180 days after the original invoice
date therefor;
(m) (i) the Obligor of which Receivable is a resident of a
Listed OECD Country, (ii) the Originator to whom such Receivable
is owed is entitled to obtain the entire principal balance of such
Receivable, upon the due date or default in payment thereof, by
drawing under an irrevocable letter of credit in favor of such
Originator that has been (A) issued by a commercial bank organized
under the laws of the United States of America or any political
subdivision thereof (a "US Bank") or any country in Western
Europe that is a member of the OECD (an "OECD Bank") and (B)
except for such a letter of credit issued by a US Bank, confirmed by
a US Bank or a branch located in the United States of America of
an OECD Bank or (iii) the Obligor of which Receivable is a
resident of the United States of America or Canada;
(n) the Obligor of which is not Zenith, a Subsidiary of
Zenith or a Governmental Authority;
(o) the Obligor of which, at the time of the Transfer of
such Receivable to the Trust, is a Designated Obligor;
(p) the Obligor of which has been directed to remit
payments with respect thereto to a Lock Box or a Collection
Account; and
(q) no more than 20% of the Receivables of the related
Obligor and its Affiliates constitute Defaulted Receivables.
"Eligible Servicer" means Zenith, Citibank, N.A., the
Trustee, the Parent (to the extent requested by the Program Agent), or
another entity which, at the time of its appointment as Servicer, (a) is
servicing a portfolio of trade receivables and has demonstrated the ability
to service professionally and competently
a portfolio of similar trade receivables with reasonable standards of skill
and care, (b) is legally qualified and has the capacity to service the
Receivables and (c) has been approved by each Program Agent.
"Enhancement" means, with respect to any Series, any letter
of credit, surety bond, cash collateral account, spread account, guaranteed
rate agreement, maturity liquidity facility, tax protection agreement,
interest rate swap agreement or other similar arrangement for the benefit of
the Holders of such Series.
"Enhancement Agreement" means any agreement,
instrument or document governing the terms of any Enhancement of any
Series or pursuant to which any Enhancement of any Series is issued or
outstanding, as the same may from time to time be amended, supplemented
or otherwise modified.
"Enhancement Provider" means, for any Series, the Person,
if any, identified as such in the applicable Supplement.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, any successor statute, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of
Title IV of ERISA is a member of the controlled group of the Transferor,
or under common control with the Transferor, within the meaning of
Section 414 of the Internal Revenue Code and the regulations promulgated
thereunder.
"Fee Letter" means, for each Series, that certain letter
entered into by the Transferor and the Program Agent for such Series
regarding fees payable with respect to such Series, as such letter may from
time to time be amended, supplemented or otherwise modified.
"Financial Officer" means, with respect to any Person, the
chief financial officer, treasurer, controller or other officer or member of
management of such Person with significant responsibility for the financial
affairs of such Person.
"Floating Allocation Percentage" means, with respect to
each Series, the floating allocation percentage specified in the related
Supplement.
"GAAP" means United States generally accepted
accounting principles.
"Government Receivable" means a Receivable with respect
to which the Obligor is a Governmental Authority.
"Governmental Authority" means any country or nation, any
political subdivision, state or municipality of such country or nation, and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of any country or nation or political subdivision
thereof.
"Holder" means an Investor Certificateholder or the Person
in whose name the Transferor Certificate is registered in the Certificate
Register.
"Holders' Interest" has the meaning specified in Section
4.01(a).
"Indebtedness" of any Person, at any time, means without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services, (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all obligations of such Person
created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (e) all
obligations of such Person as lessee under any lease of any property which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of such Person, (f) all obligations, contingent or
otherwise, of such Person under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any capital stock of
or other ownership or profit interest in such Person or any other Person or
any warrants, rights or options to acquire such capital stock, valued, in the
case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends,
(h) all Indebtedness of others referred to in clauses (a) through (g) above
or clause (i) below guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness,
(ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase
or sell services, primarily for the purpose of enabling the debtor to make
payment of such Indebtedness or to assure the holder of such Indebtedness
against loss, (iii) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services irrespective
of whether such property is received or such services are rendered) or
(iv) otherwise to assure a creditor against loss, and (i) all Indebtedness
referred to in clauses (a) through (g) above of another Person secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness.
"Indemnified Amounts" has the meaning specified in Section
7.03.
"Indemnified Party" has the meaning specified in Section
7.03.
"Independent Public Accountants" means any of (a) Xxxxxx
Xxxxxxxx & Co., (b) Deloitte & Touche LLP, (c) Coopers & Xxxxxxx, (d)
Ernst & Young, (e) KPMG Peat Marwick and (f) Price Waterhouse or any
of their respective successors so long as such successor is one of the six
largest United States accounting firms; provided that such firm is
independent with respect to the Servicer within the meaning of the Act.
"Initial Invested Amount" means, with respect to any Series
and for any date, an amount equal to the initial invested amount specified in
the related Supplement.
"Initial Issuance Date" means, with respect to any Series,
the "Closing Date" specified in the related Supplement.
"Insolvency Event" means, with respect to any Person, any
of the following: (i) such Person shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against such Person seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 60 days or
any of the relief sought in such proceeding (including the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
another similar official for, it or for any substantial part of its property)
shall be granted; or (ii) such Person shall take any corporate, partnership,
trust or similar action to authorize any of the actions set forth in clause (i)
above.
"Intercreditor Agreement" means the agreement among
Citicorp North America, Inc. as Program Agent, Zenith Finance
Corporation, a Delaware corporation, as Purchaser and Transferor, Zenith
as Borrower (as defined in the Credit Agreement), Originator and Servicer,
Zenith Microcircuits as Originator, Bankers Trust Company as Trustee and
Citicorp North America, Inc. as Bank Agent (as defined therein), dated as
of the date hereof, as the same may from time to time be amended,
supplemented or otherwise modified.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended from time to time.
"Invested Amount" means, with respect to any Series and
for any date, an amount equal to the invested amount specified in the
related Supplement.
"Investment Company Act" means the Investment Company
Act of 1940, as amended from time to time.
"Investor Certificate" means any certificate executed by the
Transferor and authenticated by or on behalf of the Trustee, in substantially
the form attached to the related Supplement, other than the Transferor
Certificate.
"Investor Certificateholder" means the Person in whose
name an Investor Certificate is registered in the Certificate Register.
"Investor Collections" means, with respect to each Series,
investor collections for such Series specified in the related Supplement.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Knowledge" (and the related term "Know") means, with
respect to a Person's knowledge, the actual knowledge of a Responsible
Official of such Person.
"Letter of Credit" means the irrevocable letter of credit
issued by Citibank, N.A. in substantially the form of Exhibit D to the
Certificate Purchase Agreement with respect to Series 1997-1.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other),
preference, participation interest, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever resulting in an
encumbrance against real or personal property of a Person, including any
conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing and
the filing of any financing statement under the UCC or comparable law of
any jurisdiction to evidence any of the foregoing.
"Listed OECD Country" means any country that is a
member of the OECD on the date hereof, excluding the following: the
United States of America, Canada, The Netherlands, Denmark, Norway,
Finland and Sweden.
"Lock Box" has the meaning specified in Section 4.02(b).
"Lock Box Letter" has the meaning specified in Section
4.02(b).
"Loss and Dilution Reserve" means, with respect to any
Series, the amount set forth in the related Supplement as the loss and
dilution reserve for such Series.
"Majority in Interest" means the Holders of Certificates
evidencing 51% or more of the Aggregate Holders' Interest or, if in respect
of any Series, the Holders of Certificates evidencing 51% or more of the
aggregate Holders' Interest in such Series or in relation to any Series which
has an Enhancement as otherwise specified in the Supplement related to
such Series.
"Material Adverse Effect" means a material adverse effect
on (a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Transferor, Zenith, Zenith and
its Subsidiaries taken as a whole or the Parent, (b) the rights and remedies
of any Beneficiary under any Transaction Document, (c) the interests of
any Beneficiary in the Trust Assets, (d) the collectibility of any Receivable
or (e) the ability of the Servicer, the Transferor, Zenith, any Originator or
the Parent to perform its obligations under any Transaction Document to
which it is or is to be a party.
"Moody's" means Xxxxx'x Investors Service, Inc., or its
successor.
"Multiemployer Plan" means a "multiemployer plan", as
defined in Section 4001(a)(3) of ERISA, to which the Transferor or any
ERISA Affiliate is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a "single employer plan",
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Transferor or any ERISA Affiliate and at least one Person
other than the Transferor and the ERISA Affiliates or (b) was so
maintained and in respect of which the Transferor or any ERISA Affiliate
could have liability under Section 4064 or 4069 of ERISA in the event such
plan has been or were to be terminated.
"Net Receivables Balance" means at any time the
Outstanding Balance of all Receivables then included in the Trust Assets
which are then Eligible Receivables (whether or not any such Receivable
was an Eligible Receivable when acquired or thereafter) reduced, without
duplication, by the sum of (i) the aggregate amount by which the then
Outstanding Balance of all such Eligible Receivables of any Obligor and its
Affiliates taken together exceeds the sum of (x) the product of (A) the
Obligor Concentration Limit, or, if applicable, the Special Obligor
Concentration Limit, for such Obligor and (B) the Outstanding Balance of
all Receivables included in the Trust Assets plus (y) if applicable, the
Special Obligor Concentration Limit Adjustment, (ii) the aggregate amount
by which the then Outstanding Balance of all such Eligible Receivables of
all Obligors, and their Affiliates, resident in Canada taken together exceeds
the product of (A) 10% and (B) the Outstanding Balance of all Receivables
included in the Trust Assets, (iii) the aggregate amount by which the then
Outstanding Balance of all such Eligible Receivables of all Obligors, and
their Affiliates, resident in any Listed OECD Country taken together
exceeds the product of (A) 5% and (B) the Outstanding Balance of all
Receivables included in the Trust Assets, (iv) the aggregate amount by
which the then Outstanding Balance of all such Eligible Receivables of all
Obligors, and their Affiliates, resident in any location other than the United
States of America and those listed in the immediately preceding clauses (ii)
and (iii) taken together exceeds the product of (A) 10% and (B) the
Outstanding Balance of all Receivables included in the Trust Assets, (v) the
aggregate amount by which the then Outstanding Balance of all
Receivables of any Obligor and its Affiliates exceeds $50,000,000 and
(vi) the aggregate amount by which (1) the then Outstanding Balance of
Eligible Receivables on which payment is due 90 days or more after the
original invoice date therefor taken together minus the Unapplied Cash
Portion exceeds (2) the product of (A) 20% and (B) the Outstanding
Balance of all Receivables included in the Trust Assets.
"Obligor" means each Person who is obligated to make
payments pursuant to a Contract, including any guarantor of such Person's
obligations.
"Obligor Concentration Limit" means, on any date with
respect to any Obligor (other than any Obligor subject to a Special Obligor
Concentration Limit), 3% or such different percentage as shall be selected
by the Transferor and approved by each Program Agent; provided that the
Rating Agency Condition shall have first been satisfied with respect to such
different percentage, provided further that in the case of an Obligor with
any Affiliate that is also an Obligor, the Obligor Concentration Limit shall
be applicable as if such Obligor and such Affiliate were one Obligor.
"OECD" means the Organization for Economic
Cooperation and Development.
"Officer's Certificate" means, unless otherwise specified in
this Agreement, a certificate signed by a Financial Officer of the Transferor,
Servicer or any Successor Servicer, or any Responsible Official of the
Trustee in the event the Trustee is acting as Successor Servicer, as the case
may be, and delivered to the Trustee, each Rating Agency and each
Enhancement Provider.
"Opinion of Counsel" means a written opinion of counsel,
who may be counsel for, or an employee of, the Person providing the
opinion and who shall be reasonably acceptable to the Trustee.
"Originator" means Zenith, Zenith Microcircuits and any
other Person or division of any Person designated from time to time as an
Originator pursuant to the terms of Section 2.07 and any Receivables
Purchase Agreement.
"Other Taxes" has the meaning specified in any Supplement
or any Certificate Purchase Agreement.
"Outstanding Balance" of any Receivable or designated
class of Receivables at any time shall mean the then outstanding principal
balance thereof, whether or not written-off as uncollectible, converted to
an "instrument" or transferred to a "suspense" account and whether or not
payment thereon has been deferred.
"Parent" means LG Electronics Inc., a corporation
organized under the laws of Korea.
"Parent Undertaking Agreement" means the agreement
between the Parent and the Trustee, dated as of the date hereof, governing
the terms and conditions upon which Parent shall undertake the
performance of certain nonpayment obligations of each Originator, the
Transferor and the Servicer (so long as Zenith or any of its Affiliates is
Servicer), as the same may from time to time be amended, supplemented or
otherwise modified.
"Partial Amortization Period" shall mean a period beginning
on and including either (i) a Pool Non-compliance Date or (ii) if a Cure
Period shall have commenced on such Pool Non-compliance Date and shall
not have ended pursuant to clause (a) of the definition of "Cure Period",
the fifth Business Day following such Pool Non-compliance Date and
ending on but excluding the earlier of (a) the first date thereafter on which
the Net Receivables Balance equals or exceeds the Required Net
Receivables Balance and (b) the fifth consecutive Business Day following
such beginning.
"PBGC" means the Pension Benefit Guaranty Corporation
(or any successor).
"Permitted Liens" means (a) unperfected Liens for taxes,
assessments or charges of any governmental authority for amounts not yet
due or which are being contested in good faith by appropriate proceedings
and for which adequate reserves or other appropriate provisions are being
maintained, (b) statutory Liens of landlords, carriers, warehousemen,
mechanics and materialmen incurred in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves or other
appropriate provisions are being maintained, (c) Liens of a collecting bank
under Section 4-208 of the UCC, (d) Liens consisting of any right of offset,
or statutory bankers' lien on the Collection Accounts and (e) Liens created
under the Transaction Documents and under the Security Documents (as
defined in the Credit Agreement), except that Liens of the types described
in clauses (a) and (b) above shall be Permitted Liens only until such time as
any enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced.
"Person" means any individual, corporation, trust (including
a business trust), partnership, limited liability company, joint venture,
association, joint-stock company, unincorporated organization,
Governmental Authority or any other entity.
"Plan" means a Single Employer Plan or Multiple Employer
Plan.
"Plan Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event has
been waived by the PBGC, or (ii) the requirements of subsection (1) of
Section 4043(b) of ERISA are met with respect to a contributing sponsor,
as defined in Section 4001(a)(13) or ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such Plan within
the following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any Plan of
a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of
ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of operations at
a facility of the Transferor or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by the
Transferor or any ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g)
the adoption of an amendment to a Plan requiring the provision of security
to such Plan pursuant to Section 307 of ERISA; or (h) the institution by
the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"Pool Non-compliance Date" means any day on which the
Net Receivables Balance falls below the Required Net Receivables Balance.
"Principal Terms" means, with respect to any Series: (a) the
name or designation; (b) the initial principal amount (or method for
calculating such amount); (c) the Certificate Rate (or method for the
determination thereof); (d) the payment date or dates and the date or dates
from which interest shall accrue; (e) the method for allocating Collections
to Investor Certificateholders of such Series; (f) the designation of any
Series Accounts and the terms governing the operation of any such Series
Accounts; (g) the issuer and terms of any form of Enhancement with
respect thereto; (h) the terms, if any, on which the Investor Certificates of
such Series may be exchanged for Investor Certificates of another Series,
repurchased or redeemed by the Transferor or remarketed to other
investors; (i) the Series Servicing Fee and the Series Trustee's Fee; and (j)
the Amortization Date and the Termination Date for such Series.
"Program Agent" means any Person designated as a
program agent in any Supplement.
"Purchase Price" means, with respect to any Receivable, the
purchase price therefor specified in each Receivables Purchase Agreement
applicable to such Receivable.
"Rating Agency" means each such nationally recognized
statistical rating organization which has rated any Series of Certificates at
the request of the Transferor.
"Rating Agency Condition" means, with respect to any
specified action, that each Rating Agency, upon the written request of the
Transferor, the Servicer or the Trustee, shall have notified all of such
parties in writing that such action in and of itself will not result in a
reduction or withdrawal of the rating of any outstanding Series with
respect to which it is a Rating Agency and, in relation to a Series with
respect to which an Enhancement is in effect, the Enhancement Provider
has given its prior written consent thereto.
"Receivable" means an account receivable or other
indebtedness shown on the records of any Originator as of the Transfer
Date, and as of each date from time to time thereafter, arising from the sale
or delivery of merchandise or insurance or providing of services by any
Originator (whether constituting an account, contract right, chattel paper,
instrument, general intangible or otherwise) and including all monies due or
to become due (whether as payment of purchase price, interest, finance
charges or otherwise) and all Collections and other amounts received or
receivable from time to time with respect to such indebtedness and all
proceeds (including all cash collections and all "proceeds" as defined in the
UCC of the State of New York and of the jurisdiction the law of which
governs the perfection of all rights, titles, interests, remedies, powers and
privileges purported to be transferred by or pursuant to this Agreement)
thereof, including all amounts on deposit in any Collection Accounts, and
"Receivables" shall mean all such Receivables. For the avoidance of doubt,
a Receivable does not include royalty payments (or the obligation to make
such royalty payments) arising under a license of intellectual property.
"Receivables Purchase Agreement" means each of the
agreements between an Originator, as seller, and the Transferor, as
purchaser, which govern terms and conditions upon which the Transferor
shall have acquired and shall acquire the Receivables transferred to the
Trust, as the same may from time to time be amended, supplemented or
otherwise modified.
"Record Date" means, with respect to any Distribution
Date, the last day of the preceding calendar month.
"Related Security" means with respect to any Transferor
Receivable (i) all of the Transferor's interest in the merchandise (including
returned merchandise), if any, relating to the sale which gave rise to such
Receivable; (ii) all other Liens and property subject to such Liens from time
to time purporting to secure payment of such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise, together with all
financing statements signed by an Obligor describing any collateral securing
such Receivable; and (iii) all guarantees, letters of credit, insurance and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable, whether pursuant to
the Contract related to such Receivable or otherwise.
"Removed Originator" has the meaning specified in Section
2.07(b).
"Report Delivery" shall mean the delivery by Zenith to the
Program Agent of a report containing a history of Receivables with respect
to which payment is due 91 to 120 days after the original invoice date
therefor, covering at least 15 consecutive Statistical Months and otherwise
in form and substance satisfactory to the Program Agent.
"Required Net Receivables Balance" means, as of any day
of determination, the sum of (i) the aggregate of the Loss and Dilution
Reserves for all outstanding Series, plus (ii) the aggregate of the Yield/Fee
Reserves for all outstanding Series plus (iii) the aggregate of all Invested
Amounts for all outstanding Series (computed as if reduced by (A) the
aggregate amount of Cure Funds held in the Cure Account for each Series
and (B) the cumulative amount of funds held at such time in the
Concentration Account as all or a portion of the Trust Partial Amortization
Amount allocable to each such Series).
"Requirement of Law" means any law, treaty, rule or
regulation, or final determination of an arbitrator or Governmental
Authority, and, when used with respect to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents
of such Person.
"Responsible Official" means, (i) when used with respect to
the Trustee, any officer within the Corporate Trust Office of the Trustee
including any Managing Director, Vice-President, Assistant Vice-President,
Secretary, Assistant Secretary, Treasurer, Assistant Treasurer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers,
respectively, or to whom any matter is referred because of such officer's
knowledge of and familiarity with the particular subject, and (ii) when used
with respect to the Transferor, the Servicer or Zenith, any President, Vice-
President, Assistant Vice-President, Secretary, Assistant Secretary,
Treasurer, Assistant Treasurer or any other of its officers or employees
involved in the day to day operation or supervision of the performance of
the Transaction Documents.
"Revolving Period" means, with respect to any Series, the
period specified as such in the related Supplement.
"S&P" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., or its successor.
"Series" means any series of Investor Certificates.
"Series Account" means any deposit, trust, escrow, reserve
or similar account maintained for the benefit of the Investor
Certificateholders of any Series, as specified in any Supplement.
"Series Allocation Percentage" means, with respect to any
Series, the percentage equivalent of a fraction, the numerator of which is
the sum of (a) the Invested Amount for such Series (computed as if
reduced by (A) the amount of Cure Funds held in the Cure Account for
such Series and (B) the cumulative amount of funds held at such time in the
Concentration Account allocated to the portion of the Trust Partial
Amortization Amount allocable to such Series) plus (b) the Yield/Fee
Reserve for such Series, plus (c) the Loss and Dilution Reserve for such
Series, and the denominator of which is the aggregate of the amounts
specified in clauses (a), (b) and (c) for all outstanding Series.
"Series Servicing Fee" means, with respect to any Series,
the amount of the servicing fee specified in the applicable Supplement.
"Series Trustee's Fee" means, with respect to any Series, the
amount of the Trustee's fee specified in the applicable Supplement.
"Service Transfer" has the meaning specified in Section
10.01.
"Servicer" initially means Zenith and, after any Service
Transfer, the Successor Servicer.
"Servicer Default" has the meaning specified in Section
10.01.
"Servicing Fee" has the meaning specified in Section
3.02(a).
"Single Employer Plan" means a "single employer plan", as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Transferor or any ERISA Affiliate or (b) was so
maintained and in respect of which the Transferor or any ERISA Affiliate
could have liability under Section 4069 of ERISA in the event such plan
has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person
on a particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability
to pay such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Special Obligor Concentration Limit" means, on any date,
with respect to Sears, Circuit City and Lowes, each as Obligors, 4.5% or
such different percentage as shall be selected by the Transferor and
approved by each Program Agent; provided that the Rating Agency
Condition shall have first been satisfied with respect to such different
percentage; and provided further that in the case of such an Obligor with
any Affiliate that is also such an Obligor, the Special Obligor Concentration
Limit shall be applicable as if such Obligor and such Affiliate were one
Obligor.
"Special Obligor Concentration Limit Adjustment" means,
with respect to Sears, $29,813,480 and, with respect to Circuit City,
$27,709,480; provided that in the case of such an Obligor with any Affiliate
that is also such an Obligor, the Special Obligor Concentration Limit
Adjustment shall be applicable as if such Obligor and such Affiliate were
one Obligor.
"Statistical Month" has the meaning specified in Section
3.04(p), or, absent the identification referred to in such Section, a calendar
month.
"Subordinated Note" means any note issued pursuant to a
Receivables Purchase Agreement which evidences a loan for the excess, if
any, of the Purchase Price over the actual payment therefor, which loan is
deemed to be made by the Originator of the Receivables to the Transferor.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or estate of which
(or in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of Directors
of such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting power
upon the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Successor Servicer" has the meaning specified in Section
10.02(a).
"Supplement" means, with respect to any Series, a
supplement to this Agreement, executed and delivered in connection with
the original issuance of the Investor Certificates of such Series pursuant to
Article VI, and all amendments, supplements and other modifications from
time to time to such supplement or this Agreement.
"Supplemental Certificate" has the meaning specified in
Section 6.08(c).
"Taxes" has the meaning specified in any Supplement or any
Certificate Purchase Agreement.
"Tax Opinion" means, with respect to any action, an
Opinion of Counsel who is not an employee of the Servicer or any Affiliate
of the Servicer to the effect that, for Federal income tax purposes and for
New York and Illinois (and any other State where substantial servicing
activities in respect of Receivables or Trust administration activities are
conducted by the Transferor or the Servicer if there is a substantial change
from present servicing or administration activities) state income and
franchise tax purposes, (a) such action will not adversely affect the
characterization of the Investor Certificates of any outstanding Series as
debt of the Transferor, (b) such action will not cause a taxable event to any
Investor Certificateholder, (c) following such action the Trust should not
be treated as an association (or publicly traded partnership) taxable as a
corporation, and (d) in the case of the original issuance of Certificates and
the issuance of any new Series of Investor Certificates pursuant to Section
6.08, the Investor Certificates should properly be characterized as either
debt of the Transferor, or if not debt, as an interest in a partnership and not
in an association (or a publicly traded partnership) taxable as a corporation.
"Termination Date" means, with respect to any Series, the
termination date specified in the related Supplement.
"Termination Event" has the meaning specified in any
Receivables Purchase Agreement.
"Termination Notice" has the meaning specified in Section
10.01.
"Transaction Documents" means the collective reference to
this Agreement, each Supplement, each Certificate, each Receivables
Purchase Agreement, each Enhancement Agreement, the Parent
Undertaking Agreement, the Intercreditor Agreement, each Certificate
Purchase Agreement, the Letter of Credit, the Zenith Undertaking
Agreement and the Fee Letter for each Series and the other agreements and
instruments executed or to be executed in connection with any of the
foregoing.
"Transfer" has the meaning specified in Section 2.01(a), it
being understood that the date of Transfer of any Receivable or other Trust
Asset shall be (i) for each Receivable and Trust Asset in existence on the
Transfer Date, the Transfer Date and (ii) for each other Receivable and
Trust Asset, the date on which such Receivable or other Trust Asset shall
be created or otherwise arise and, in the case of such Receivable, be
acquired by the Transferor under the applicable Receivables Purchase
Agreement.
"Transfer Agent and Registrar" has the meaning specified in
Section 6.03(a).
"Transfer Date" means April 1, 1997, the initial date of
Transfer of Receivables into the Trust.
"Transferor" means Zenith Finance Corporation, a Delaware
corporation.
"Transferor Certificate" means the certificate executed by
the Transferor and authenticated by or on behalf of the Trustee, in
substantially the form of Exhibit A hereto.
"Transferor Interest" has the meaning specified in Section
4.01(a).
"Transferor Percentage" means at any time 100% minus the
aggregate of the Floating Allocation Percentages of all outstanding Series
at such time.
"Transferor Receivable" means a Receivable acquired by the
Transferor pursuant to a Receivables Purchase Agreement.
"Transferor's Account" means the special account
designated under the account name "Zenith Finance Corporation", under
the dominion and control of the Transferor, for deposits by the Servicer
pursuant to the applicable Supplement, maintained at Citibank, N.A. in
New York, New York or such other account at such other bank, under the
dominion and control of the Transferor, as the Transferor may designate
for such purpose from time to time.
"Trust" means the Zenith Trade Receivables Master Trust
created by this Agreement, the corpus of which shall consist of the Trust
Assets.
"Trust Assets" has the meaning specified in Section 2.01(a).
"Trust Invested Amount" means, at any time, the sum of the
Invested Amounts for all outstanding Series at such time.
"Trust Partial Amortization Amount" means, with respect to
any date of determination during a Partial Amortization Period, the amount
by which the Net Receivables Balance is less than the Required Net
Receivables Balance.
"Trustee" means Bankers Trust Company, a New York
banking corporation, not in its individual capacity but solely in its capacity
as trustee on behalf of the Trust, or its successor in interest, or any
successor trustee appointed as herein provided.
"Trustee's Account" with respect to each Series, has the
meaning specified in the related Supplement.
"Trustee's Fee" has the meaning specified in Section
11.05(a).
"UCC" shall mean the Uniform Commercial Code, as
amended from time to time, as in effect in any applicable or specified
jurisdiction.
"Unapplied Cash Portion" means as of any date that portion
of unapplied cash reflected on the books of the Servicer as of such date
multiplied by a percentage equal to the percentage of such unapplied cash
which over a historical period (acceptable to the Program Agent) was
allocated to (i) with respect to clause (vi) of the definition of "Net
Receivables Balance", Eligible Receivables on which payment is due 90
days or more after the original invoice date therefor or (ii) with respect to
clause (A) of the definition of "Default Ratio" in the Series 1997-1
Supplement, any Defaulted Receivable which remains unpaid by the
Obligor thereof for more than 90 (or, after the Report Delivery, 120) days
from the original due date for such payment.
"Undivided Fractional Interest" with respect to each Series
has the meaning specified in the related Supplement.
"U.S. Dollars" means the lawful currency of the United
States of America.
"Voting Stock" means capital stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even
if the right so to vote has been suspended by the happening of such a
contingency.
"Yield/Fee Reserve" shall mean, with respect to each Series,
the amount set forth in the related Supplement as the yield/fee reserve for
such Series.
"Zenith" means Zenith Electronics Corporation, a Delaware
corporation.
"Zenith Microcircuits" means Zenith Microcircuits
Corporation, a Delaware corporation.
"Zenith Undertaking Agreement" means the agreement
between Zenith and the Trustee, dated as of the date hereof, governing the
terms and conditions upon which Zenith shall undertake the performance of
all of the obligations of each other Originator, as the same may from time
to time be amended, supplemented or otherwise modified.
SECTION 1.02. Other Definitional Provisions. (a) All
accounting terms not defined in this Agreement, and accounting terms
partly defined in this Agreement to the extent not completely defined, shall
have the respective meanings given to them under GAAP or regulatory
accounting principles, as applicable and in effect from time to time. To the
extent that the definitions of accounting terms herein are inconsistent with
the meanings of such terms under GAAP or regulatory accounting
principles, the definitions contained herein shall control.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement; Section, Schedule and Exhibit references contained in this
Agreement are references to Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified; and the term "including" means
"including without limitation".
SECTION 1.03. Computation of Time Periods. Unless
otherwise stated in this Agreement, in the computation of a period of time
from a specified date to a later specified date, the word "from" shall mean
"from and including" and the words "to" and "until" shall mean "to but
excluding".
ARTICLE II
TRANSFER OF RECEIVABLES
SECTION 2.01. Transfer of Receivables. (a) By
execution of this Agreement, the Transferor does hereby transfer, assign,
set-over and otherwise convey without recourse, except as expressly
provided herein (the making of such transfer, assignment, set-over and
conveyance being a "Transfer", and so to transfer, assign, set-over and
otherwise convey being to "Transfer"), to the Trust for the benefit of the
Beneficiaries:
(i) all of the Transferor's right, title and interest in, to
and under all Transferor Receivables existing at the close of
business on the Transfer Date and thereafter created from time to
time, and conveyed to the Transferor under the Receivables
Purchase Agreements from time to time, until the termination of the
Revolving Period of the last outstanding Series, and all monies due
or to become due and all Collections in respect of such Transferor
Receivables and other amounts received or receivable from time to
time with respect to such Transferor Receivables and all proceeds
(including "proceeds" as defined in the UCC of the State of New
York and of the jurisdiction the law of which governs the perfection
of the interest in the Transferor Receivables transferred hereunder)
thereof;
(ii) all of the Transferor's rights, remedies, powers and
privileges under the Receivables Purchase Agreements existing at
the close of business on the Transfer Date and thereafter created
from time to time; and
(iii) all of the Transferor's right, title and interest in, to
and under the Related Security.
Such property described in the preceding sentence, together with all monies
from time to time on deposit in, and all Eligible Investments and other
securities, instruments and other investments purchased from funds on
deposit in, the Concentration Account, the Collection Accounts and any
Series Account, and any Enhancement issued with respect to any Series
(the drawing on or payment of such Enhancement not being available to
Holders of any other Series) and all of the Transferor's rights, remedies,
powers, and privileges under the Receivables Purchase Agreements shall
constitute the assets of the Trust (collectively the "Trust Assets").
The foregoing Transfer does not constitute and is not
intended to result in an assumption by the Trust, the Trustee or any Holder
of any obligation of the Servicer, Zenith, the Transferor or any other
Person in connection with the Receivables or under any Receivables
Purchase Agreement or under any agreement or instrument relating
thereto, including any obligation to any Obligor. The foregoing Transfer to
the Trust is and shall be made to the Trustee, on behalf of the Trust, and
each reference in this Agreement to such Transfer shall be construed
accordingly.
The Trustee shall be under no obligation whatsoever to file
any such financing statements, documents, amendments, assignments or
continuation statements or to make any other filing under the UCC in
connection with such Transfer or to monitor the status of the perfection
evidenced by such filings.
(b) The Trustee agrees to use its best efforts, and shall
cause its agents or representatives to use their best efforts, to hold in
confidence all Confidential Information; provided that nothing herein shall
prevent the Trustee from delivering copies of any financial statements and
other documents constituting Confidential Information, or disclosing any
other Confidential Information, (i) to a Successor Servicer or as required
by a Requirement of Law applicable to the Trustee, (ii) as required in the
performance of the Trustee's duties hereunder, (iii) as required in enforcing
the rights of the Holders hereunder, (iv) to each Enhancement Provider,
(v) as provided in any Supplement or (vi) to any affiliate, independent or
internal auditor, agent, employee or attorney of the Trustee having a need
to know the same, provided that the Trustee advises such recipient of the
confidential nature of the information being disclosed and each such
recipient agrees to be bound by the terms of this Section. The Trustee will
allow the Transferor to inspect the Trustee's security and confidentiality
arrangements upon prior written notice from time to time during normal
business hours and agrees to provide reasonable advance notice to the
Transferor of any permitted disclosure. The Trustee shall provide
reasonable prior written notice to the Transferor whenever any disclosure
not otherwise permitted by this Section 2.01(b) is to be made.
SECTION 2.02. Acceptance by Trustee. (a) There is
hereby created the Zenith Trade Receivables Master Trust. The Trustee
hereby acknowledges its acceptance on behalf of the Trust of all right, title
and interest in and to the Trust Assets now existing and hereafter created
and transferred to the Trust pursuant to Section 2.01 and the Trustee
declares that it shall maintain such right, title and interest upon the trust
herein set forth for the benefit of all Beneficiaries.
(b) The Trustee shall have no power to create, assume
or incur indebtedness or other liabilities in the name of the Trust or to
transfer or place Liens on Trust Assets other than as contemplated in this
Agreement.
(c) The Trustee is hereby authorized and directed to
execute and deliver to the other parties thereto each Transaction Document
to which the Trustee is a party.
SECTION 2.03. Representations and Warranties of the
Transferor Relating to the Transferor. The Transferor hereby represents
and warrants to the Trustee for the benefit of the Trust (i) as of the date
hereof, (ii) by accepting on the Transfer Date the proceeds of such
Transfer, as of the Transfer Date, (iii) with respect to any Series, as of the
date of the related Supplement and the related Initial Issuance Date, and
(iv) by accepting on each date during the Revolving Period for any Series
the proceeds of each Transfer of Receivables, as of such date, that:
(a) Due Organization, Qualification and Authorization.
The Transferor (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed, except where the failure to do so could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect and (iii) has all requisite corporate power
and authority (including all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted, except where the failure to do so could not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect
(b) Corporate Powers and No Conflicts. The execution,
delivery and performance by the Transferor of the Transaction
Documents to which it is or is to be a party, the consummation of
the transactions contemplated hereby and the making of each
Transfer, are within the Transferor's corporate powers, have been
duly authorized by all necessary corporate action, and do not
(i) contravene the Transferor's charter or bylaws, (ii) violate any
Requirement of Law, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting the Transferor or any of its properties or (iv) except for
the Liens created under the Transaction Documents, result in or
require the creation or imposition of any Lien upon or with respect
to any of the properties of the Transferor. The Transferor is not in
violation of any Requirement of Law or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease
or other instrument, the violation or breach of which could have a
Material Adverse Effect.
(c) Government Authorization and Approval. No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery or
performance by the Transferor of any of the Transaction
Documents to which it is or is to be a party, any Transfer or the
consummation of the other transactions contemplated hereby or
thereby, (ii) the grant by the Transferor of the Liens granted by it
pursuant to the Transaction Documents, (iii) the perfection or
maintenance of the Liens created by the Transaction Documents
(including the first priority nature thereof) or (iv) the exercise by
the Trustee of its rights under the Transaction Documents or the
remedies granted under the Transaction Documents, except for (A)
the financing statements and other documents required to have been
filed on or prior to the Transfer Date pursuant to Section 2.05(i),
all of which have already been duly filed and are in full force and
effect, (B) the filing from time to time of any amendments,
assignments, continuation statements or other documents which
may become required pursuant to Section 2.05(i) and (C) any
properly completed and executed UCC-3 termination statements
which shall have been delivered to the Program Agent on or before
the Transfer Date.
(d) Enforceability. Each Transaction Document to
which the Transferor is or is to be a party constitutes a legal, valid
and binding obligation of the Transferor enforceable against the
Transferor in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and except as such enforceability may be limited by
general principles of equity, whether considered in a suit at law or
in equity). Each Transaction Document is in full force and effect,
and is not subject, as to the Transferor, to any specific dispute,
offset, counterclaim or defense of the Transferor.
(e) No Litigation. There is no action, suit,
investigation, litigation or proceeding affecting the Transferor,
pending or threatened before any Governmental Authority or
arbitrator that (i) could have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of any
Transaction Document or the consummation of the transactions
contemplated hereby.
(f) Liens on Properties. Except for Permitted Liens,
and except for Liens that will be terminated prior to the Transfer
Date, there are no Liens of any nature whatsoever on any
Receivable. The Transferor is not a party to any contract,
agreement, lease or instrument (other than this Agreement or as
contemplated by this Agreement) the performance of which, either
unconditionally or upon the happening of an event, will result in or
require the creation of any Lien on any Receivable, or otherwise
result in a violation of this Agreement.
(g) Contractual Obligations. (i) The Transferor is not a
party to any indenture, loan or credit agreement or any lease or
other agreement or instrument, or subject to any Requirement of
Law, that would have an adverse effect on the ability of the
Transferor to carry out its obligations under this Agreement or any
Transaction Documents to which it is a party, and (ii) neither the
Transferor nor, to the best Knowledge of the Transferor, any other
party is in default in any respect under or with respect to the
Receivables Purchase Agreements or any other contract,
agreement, lease or instrument to which the Transferor is a party.
(h) Investment Company Act. The Transferor is not an
"investment company", or an "affiliated person" of, or "promoter"
or "principal underwriter" for, or a company controlled by, an
"investment company", within the meaning of and as such terms are
defined in the Investment Company Act.
(i) Locations. The chief place of business and chief
executive office of the Transferor, and the office where the
Transferor keeps the originals of its books, records and documents
regarding the Receivables and the other Trust Assets of the
Transferor are located at the address of the Transferor specified in
Section 13.03. The Transferor maintains no other business
locations.
(j) Tradenames. The legal name of the Transferor is as
set forth on the signature page of this Agreement and the
Transferor has no tradenames, fictitious names, assumed names or
"doing business as" names.
(k) Subsidiaries. The Transferor has no Subsidiaries.
(l) Accuracy of Information. Each certificate,
information, exhibit, financial statement, document, book, record or
report furnished by a Responsible Official of the Transferor to the
Trustee, any Enhancement Provider or the Servicer in connection
with this Agreement is accurate in all material respects as of its date
and no such document contains any misstatement of material fact.
(m) Solvency. The Transferor is Solvent and will be
Solvent after giving effect to the transactions contemplated by the
Transaction Documents.
(n) Compliance. The Transferor has complied, and will
comply on each Initial Issuance Date, with each Requirement of
Law with respect to all Receivables transferred to the Trust
hereunder and the Contracts related thereto and with respect to its
business or properties, in each case except where the failure to do
so could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(o) Taxes. The Transferor has filed all tax returns
(federal, state and local) which it reasonably believes are required to
be filed and has paid or made adequate provision for the payment of
all taxes, assessments and other governmental charges due from the
Transferor or is contesting any such tax, assessment or other
governmental charge in good faith through appropriate proceedings
as to which adequate reserves are being maintained and no Lien
with respect thereto has attached to its property and become
enforceable against its other creditors. The Transferor knows of no
reasonable basis for any additional tax assessment for any year for
which adequate reserves have not been established.
(p) Use of Proceeds. No proceeds of the issuance of
any Certificate will be used by the Transferor to acquire any
security in a transaction that is subject to Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended, or to purchase or
carry any margin security in violation of any applicable law or
regulation.
(q) Collection Accounts. The Collection Account
Banks are the only institutions holding Collection Accounts for the
receipt of payments from Lock Boxes in respect of Receivables
(subject to such changes as may be made from time to time in
accordance with Section 4.02(b)), and all Obligors, and only such
Obligors, have been instructed or, upon the creation of Receivables,
will be instructed to make payments only to Collection Accounts
and such instructions have not been modified or revoked by the
Transferor and such instructions that have been given are in full
force and effect.
(r) Early Amortization Event. As of the Initial Issuance
Date for any Series, no event or condition has occurred and is
continuing that is, or with the giving of notice, the passage of time
or both would constitute, an Early Amortization Event.
(s) ERISA. No Plan has any accumulated funding
deficiency, as defined in Section 302(a) of ERISA, whether or not
waived. The Transferor and each ERISA Affiliate has timely made
all contributions required to be made by it to any Plan, except
where a failure to contribute could not reasonably be expected to
give rise to a Lien under Section 302(f) of ERISA. No Plan Event
with respect to any Plan has occurred or could reasonably be
expected to occur that could result, directly or indirectly, in any
Lien being imposed on the property of the Transferor. Neither the
Transferor nor any ERISA Affiliate has incurred, or could
reasonably be expected to incur, withdrawal liability to, or liability
in connection with, the reorganization, termination or insolvency of
any Multiemployer Plan which liability could reasonably be
expected to have a Material Adverse Effect.
(t) Fraudulent Conveyance. The Transferor is not
entering into the transactions contemplated hereby with the intent
of hindering, delaying or defrauding any creditor.
(u) Limited Purpose. The Transferor engages in no
activities other than those contemplated by the Transaction
Documents.
(v) Certificates. Each Certificate, when executed and
authenticated by the Trustee in accordance with the terms of
Section 6.01 and delivered to and paid for by the Investor
Certificateholder pursuant to the related Supplement, will be validly
issued and outstanding and entitled to the benefits of this
Agreement and the related Supplement.
The representations and warranties set forth in this Section
2.03 shall survive the Transfer of the Receivables to the Trust and the
issuance of the Certificates, and shall cease and be of no effect upon the
indefeasible repayment in full of the Invested Amount of the last
outstanding Series and all other obligations of the Transferor hereunder.
Upon discovery by the Transferor, the Servicer or a Responsible Official of
the Trustee of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written
notice to the other parties and to any Enhancement Provider. The
Trustee's obligations in respect of any such breach are limited as provided
in Section 11.02(g).
SECTION 2.04. Representations and Warranties of the
Transferor Relating to the Trust Assets. The Transferor hereby represents
and warrants to the Trustee for the benefit of the Trust (i) as of the date
hereof, (ii) by accepting on the Transfer Date the proceeds of such
Transfer, as of the Transfer Date and (iii) except for the representation and
warranty contained in subparagraph (i), by accepting on each date during
the Revolving Period for any Series the proceeds of each Transfer of
Receivables, as of such date, that:
(a) Valid Transfer. Each of the Receivables Purchase
Agreements creates a valid sale, transfer and assignment to the
Transferor of, and, subject to the interest of the Trust hereunder,
the Transferor is the legal and beneficial owner of, all right, title and
interest of the Originators in and to the Receivables and Related
Security now existing and hereafter created during each Revolving
Period and the proceeds thereof. This Agreement constitutes either
(i) a valid transfer and assignment to the Trust of all right, title and
interest of the Transferor in and to the Receivables now existing
and hereafter created and purchased by the Transferor pursuant to
the Receivables Purchase Agreements, and in and to all other Trust
Assets and the proceeds thereof and such funds as are deposited
pursuant to this Agreement from time to time in the Concentration
Account, the Collection Accounts and any Series Account, or (ii) a
valid grant to the Trust of a first priority perfected security interest
in all right, title and interest of the Transferor in and to the
Receivables now existing and hereafter created and purchased by
the Transferor pursuant to the Receivables Purchase Agreements,
and in and to all other Trust Assets and the proceeds thereof which,
in the case of existing Receivables and the other existing Trust
Assets and the proceeds thereof, is enforceable by the Trustee upon
execution and delivery of this Agreement, and which, in the case of
the Receivables and all other Trust Assets hereafter created and the
proceeds thereof, will be enforceable by the Trustee upon such
creation. Upon the filing of the appropriate financing statements,
the Trust shall have a first priority perfected ownership or security
interest in those Trust Assets and the proceeds thereof in which a
security interest may be perfected by filing appropriate financing
statements. The Transferor has caused the Servicer to clearly and
unambiguously xxxx all its computer records and all its microfiche
storage files, if any, in a manner reasonably calculated to indicate
the Trust's interest in the Trust Assets and shall cause the Servicer
to maintain such records in a manner such that the Trust's perfected
first priority interest in the Receivables shall not be adversely
affected.
(b) No Claim or Interest. Except for Permitted Liens
and as otherwise provided in this Agreement or any applicable
Supplement, neither the Transferor nor any Person claiming
through or under the Transferor has any claim to or interest in the
Concentration Account, the Collection Accounts or any Series
Account. Each Receivable and the Collections with respect thereto
and all other Trust Assets have been or will be transferred to the
Trust free and clear of any Lien or interest of any other Person
(other than Permitted Liens and disputes with Obligors in the
ordinary course of business or in connection with an Insolvency
Event of the related Obligor) not holding through the Trust.
(c) Outstanding Balance; Net Receivables Balance. As
of the Initial Issuance Date for any Series, the Net Receivables
Balance is at least equal to the Required Net Receivables Balance.
(d) Eligibility. (i) Each Receivable was purchased in
accordance with the terms of a Receivables Purchase Agreement
and (ii) each Receivable that was classified as an "Eligible
Receivable" by the Transferor in any document or report delivered
hereunder satisfied, at the time of such classification, the
requirements of eligibility contained in the definition of Eligible
Receivable except where, after giving effect to all improper
classifications, no Pool Non-compliance Date shall have occurred.
(e) Investment Company Act, Etc. Each Transfer of
Receivables to the Trust hereunder constitutes a purchase or other
acquisition of notes, drafts, acceptances, open accounts receivable
or other obligations representing part or all of the sales price of
merchandise, insurance or services within the meaning of
Section 3(c)(5) of the Investment Company Act. The acquisition
by the Trust of each Receivable constitutes a "current transaction"
within the meaning of Section 3(a)(3) of the Act.
(f) Collection Accounts and Lock Boxes. The
Collection Account Banks are the only institutions holding
Collection Accounts for the receipt of payments from Lock Boxes
in respect of Receivables and all Obligors, and only such Obligors,
have been instructed or, upon the creation of Receivables owed by
them, will be instructed to make payments only to Collection
Accounts and Lock Boxes and such instructions have not been
modified or revoked by the Transferor and such instructions that
have been given are in full force and effect.
(g) No Rescission. No Contract giving rise to any
Receivable transferred hereunder has been amended, satisfied,
subordinated or rescinded, except as disclosed in writing to the
Trustee on or before the Transfer of such Receivable or as
otherwise permitted hereunder. Subsequent to such transfer no
such Receivable has, except as permitted hereunder, been
compromised, adjusted, extended, satisfied, subordinated, rescinded
or modified.
(h) No Payment. The Transferor has no Knowledge of
any fact which would lead it to reasonably expect that, when billed,
any Receivable transferred hereunder would not be paid in
accordance with its terms when due.
(i) Offering of Certificates. Neither the Transferor nor
any agent acting on its behalf has, directly or indirectly, offered any
Certificate or any similar security of the Transferor for sale to, or
solicited any offer to buy any Certificate or any similar security of
the Transferor from, or otherwise approached or negotiated with
respect thereto, with any Person which, and neither the Transferor
nor any agent acting on its behalf has taken or will take any action
which, would subject the issuance or sale of any Certificate to the
provisions of Section 5 of the Act or to the qualification provisions
of any securities or blue sky law of any applicable jurisdiction.
The representations and warranties set forth in this Section
2.04 shall survive the Transfer of the Receivables to the Trust and the
issuance of the Certificates, and shall cease and be of no effect upon the
indefeasible repayment in full of the Invested Amount of the last
outstanding Series and all other obligations of the Transferor hereunder.
Upon discovery by the Transferor, the Servicer or the Trustee of a breach
of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other
parties and to each Enhancement Provider, if any. The Trustee's
obligations in respect of any such breach are limited as provided in
Section 11.02(g).
SECTION 2.05. Affirmative Covenants of the Transferor.
The Transferor hereby covenants and agrees that, until termination of the
Trust:
(a) Compliance with Law. The Transferor shall duly
satisfy all obligations on its part to be fulfilled under or in
connection with the Receivables, will maintain in effect all
qualifications required under Requirements of Law in order to
properly purchase and convey the Receivables and other Trust
Assets to the Trust and will comply in all respects with all
Requirements of Law applicable to the Transferor, its business and
properties and the Trust Assets, in each case where the failure to do
so would, individually or in the aggregate, have a Material Adverse
Effect.
(b) Preservation of Legal Existence. The Transferor
will preserve and maintain its existence, legal structure, legal name,
and, except where the failure to do so could not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect, its rights (charter and statutory), franchises,
permits, licenses, approvals and privileges in the jurisdiction of its
formation, and qualify and remain qualified in each jurisdiction
where the failure to maintain such qualification could have a
Material Adverse Effect.
(c) Keeping of Records and Books of Account. The
Transferor will (i) keep proper books of record and account, which
shall be maintained or caused to be maintained by the Transferor
and shall be separate and apart from those of any Affiliate of the
Transferor, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Transferor
in accordance with GAAP consistently applied, (ii) maintain and
implement administrative and operating procedures (including the
ability to recreate records evidencing the Receivables in the event of
the destruction of the originals thereof) and (iii) keep and maintain
all documents, books, records and other information necessary or
reasonably advisable for the collection of all Receivables (including
records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable).
The Transferor shall provide to the Trustee access to the
documentation regarding the Receivables in such cases where the
Trustee requires such access in connection with the enforcement of
the rights of Holders or is required by applicable statutes or
regulations to review such documentation, such access being
afforded without charge and at the sole cost of the Transferor but
only (i) upon reasonable written request, (ii) during normal business
hours, (iii) subject to the Transferor's normal security and
confidentiality procedures and (iv) at reasonably accessible offices
in the continental United States designated by the Transferor.
(d) Maintenance of Separate Directors. The Transferor
will maintain at least two independent directors who are not
officers, directors, shareholders or employees of (i) Zenith or the
Transferor or (ii) any Affiliate of Zenith or the Transferor, or a
parent, child, spouse or sibling of any such Person; provided,
however, that if either such independent director dies or resigns, the
Transferor shall have 30 Business Days to replace that Person with
another independent director. The Transferor will not, without the
consent of the two independent directors, so long as there shall not
have elapsed one year and one day after the termination of the
Trust, institute against the Trust or the Transferor any proceeding
of the type referred to in the definition of "Insolvency Event".
(e) Payment of Taxes, Etc. The Transferor will pay
promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or any Trust Asset, or in respect
of its income or profits therefrom, and any and all claims of any
kind, except that no such amount need be paid if (i) such
nonpayment could not reasonably be expected to subject any
Beneficiary to civil or criminal penalty or liability or involve any risk
of the sale, forfeiture or loss of any of the property, rights or
interests covered under any Transaction Document and (ii) the
charge or levy is being contested in good faith through appropriate
proceedings as to which adequate reserves are being maintained and
no Lien with respect thereto has attached to its property and
become enforceable against its creditors.
(f) Reporting Requirements. The Transferor will:
(i) within one Business Day after a Responsible
Official of the Transferor obtains knowledge of the
occurrence of any Early Amortization Event, the
commencement of a Partial Amortization Period or Cure
Period or any event which, with the giving of notice or lapse
of time or both, would constitute an Early Amortization
Event, notify the Trustee and the Parent of such occurrence;
(ii) as soon as possible and in any event (A)
within three Business Days after a Responsible Official of
the Transferor obtains knowledge of the occurrence of any
Early Amortization Event, the commencement of a Partial
Amortization Period or Cure Period, or any event which,
with the giving of notice or lapse of time or both, would
constitute an Early Amortization Event, furnish to the
Trustee, each Rating Agency and each Enhancement
Provider the written statement of a Financial Officer of the
Transferor setting forth details of such Early Amortization
Event, the commencement of such Partial Amortization
Period or Cure Period or such event and the action which
the Transferor has taken and proposes to take with respect
thereto, and (B) within three Business Days after a
Responsible Official of the Transferor makes a
determination that any other event, development or
information is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect, give written
notice thereof to the Trustee, the Parent, each Rating
Agency and each Enhancement Provider;
(iii) promptly, from time to time, furnish to the
Trustee such other information, documents, records or
reports regarding the Receivables, the other Trust Assets or
the condition or operations, financial or otherwise, of the
Transferor as the Trustee may from time to time reasonably
request;
(iv) within thirty (30) (or, after the last Statistical
Month in each calendar year, forty-five (45)) days after the
end of each Statistical Month in each calendar year, deliver
to the Trustee, each Rating Agency and each Enhancement
Provider the balance sheet of the Transferor as at the end of
such period and the related statement of income and cash
flow of the Transferor for such Statistical Month and for the
period from the beginning of the then current calendar year
to the end of such Statistical Month, and for the
corresponding period during the previous calendar year, and
a comparison of the statement of the year to date earnings
and cash flow to the corresponding statement for the
corresponding period from the previous calendar year, if
applicable, certified by a Financial Officer of the Transferor
as fairly presenting the financial position of the Transferor
as at the date indicated and the results of its operations and
cash flow for the period indicated in accordance with
GAAP, subject to normal year end adjustments;
(v) within ninety (90) days after the end of each
calendar year deliver to the Trustee and each Rating Agency
audited financial statements of the Transferor, including
therein a balance sheet of the Transferor as at the end of
such calendar year and statements of income and cash flow
of the Transferor for each calendar year, reported on by
Independent Public Accountants and accompanied by their
related audit letter, which report and letter shall be
unqualified as to scope (or, if qualified, only as to non-
material matters) and shall state that such financial
statements fairly present the financial position of the
Transferor as at the dates indicated in conformity with
GAAP applied on a basis consistent with prior years, if
applicable (except for changes with which such independent
certified public accountants shall concur and which shall
have been disclosed in the notes to the financial statements),
and that the examination by such accountants in connection
with such financial statements has been made in accordance
with generally accepted auditing standards; and
(vi) as soon as possible and in any event within
30 days after a Responsible Official of the Transferor
obtains Knowledge that one of the following events has
occurred or is reasonably expected to occur: (i) the
occurrence of any Plan Event with respect to any Plan or (ii)
the withdrawal by the Transferor or any of its ERISA
Affiliates from, or the termination, reorganization or
insolvency of, any Multiemployer Plan which could
reasonably be expected to have a Material Adverse Effect.
(g) Receivables Purchase Agreements. The Transferor
will at its expense timely perform and comply with all provisions,
covenants and other promises required to be observed by it under
the Receivables Purchase Agreements, maintain the Receivables
Purchase Agreements in full force and effect, enforce its rights
under the Receivables Purchase Agreements substantially in
accordance with the terms thereof and comply with its obligations
under all contracts and invoices giving rise to Receivables. The
Transferor shall, within one Business Day after a Responsible
Official obtains knowledge of the occurrence of any Termination
Event or any event which, with the giving of notice or lapse of time
or both, would constitute a Termination Event, notify the Trustee in
writing of such occurrence. The Transferor shall promptly furnish
to the Trustee copies of any notices, reports or certificates given or
delivered to the Transferor under the Receivables Purchase
Agreements.
(h) UCC Opinion. The Transferor shall deliver to the
Trustee within 90 days after the end of each calendar year,
beginning with the calendar year ending on or about December 31,
1998, an Opinion of Counsel to the Transferor (who may be
counsel employed by an Affiliate of the Transferor), dated as of a
date during such 90-day period, substantially to the effect that, in
the opinion of such counsel, either (A) such action has been taken
as is necessary to continue the perfection of the interests of the
Trustee in and to the Receivables conveyed hereby and the other
Trust Assets conveyed hereunder (to the same extent as such
interest was perfected on the Transfer Date with respect to the
Receivables and other Trust Assets then owned by the Transferor)
and reciting the details of such action or referring to prior Opinions
of Counsel in which such details are given or (B) no such action is
necessary to continue the perfection of such interests.
(i) Further Assurances. (A) The Transferor agrees that
from time to time, at its own expense, the Transferor will promptly
execute and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, or that the
Trustee may reasonably request, in order to perfect and protect any
pledge, assignment or security interest granted or purported to be
granted hereby or to enable the Trustee to exercise and enforce its
rights and remedies hereunder with respect to any Receivable and
the Trust Assets. Without limiting the generality of the foregoing,
the Transferor will: (i) xxxx its master data processing and
computer records in a manner reasonably calculated to indicate that
the Trust Assets have been sold, in the case of any Originator, to
the Transferor in accordance with the Receivables Purchase
Agreements and have been transferred, in the case of the
Transferor, to the Trust in accordance with the Transaction
Documents for the benefit of the Beneficiaries; (ii) if any Trust
Assets shall be evidenced by a promissory note, other instrument or
chattel paper, deliver and pledge to the Trustee hereunder such
note, instrument or chattel paper duly indorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Trustee; and (iii) execute and file such
financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable,
or as the Trustee may reasonably request, in order to perfect and
preserve the valid and perfected first priority ownership or security
interest granted or purported to be granted under any Transaction
Document.
(B) The Transferor hereby authorizes the Trustee to file
one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Trust Assets without the
signature of the Transferor where permitted by law. A photocopy
or other reproduction of any Transaction Document or any
financing statement covering the Trust Assets or any part thereof
shall be sufficient as a financing statement where permitted by law.
(C) The Transferor will furnish to the Trustee from time
to time statements and schedules further identifying and describing
the Trust Assets and such other reports in connection with the
Trust Assets as the Trustee may reasonably request, all in
reasonable detail.
(D) The Transferor shall, from time to time, execute and
deliver to the Obligors any bills, statements and letters or other
writings necessary to carry out the terms and provisions of any
Transaction Document and to facilitate the collection of the
Receivables in a manner consistent with the Credit Policy Manual.
SECTION 2.06. Negative Covenants of the Transferor.
The Transferor hereby further covenants that, unless it shall have received
the written consent of a Majority in Interest of each outstanding Series and
the Rating Agency Condition shall have been satisfied, until termination of
the Trust:
(a) No Liens. Except for Permitted Liens and the
Transfer hereunder the Transferor will not sell, pledge, assign or
transfer any Receivable or any interest therein or any other Trust
Asset to any other Person, or grant, create, incur, assume or suffer
to exist any Lien on, any Trust Asset or any other property or asset
of the Transferor (other than the Transferor Certificate, any
Supplemental Certificate and funds deposited to the Transferor's
Account pursuant to the applicable Supplement or the Transferor
Certificate), whether now existing or hereafter created, or any
interest therein, and the Transferor shall defend the right, title and
interest of the Trust in and to the Trust Assets, whether now
existing or hereafter created, against all claims of third parties
claiming through or under the Transferor.
(b) Activities of the Transferor. The Transferor will not
engage in, enter into or be a party to any business, activity or
transaction of any kind other than the businesses, activities and
transactions contemplated and authorized for it by the Transaction
Documents or incidental to its ability to carry out its obligations
under such agreements.
(c) Indebtedness. Except for the Subordinated Notes,
the Transferor will not create, incur or assume any Indebtedness
(other than Indebtedness related to operating expenses incurred in
the performance of or incidental to its obligations under this
Agreement which shall not exceed $150,000 per annum) or sell or
transfer any Receivable to a trust or other Person which issues
securities in respect of any such Receivables, other than as
contemplated by the Transaction Documents.
(d) Guarantees. Except as provided herein, the
Transferor will not become or remain liable, directly or indirectly, in
connection with any Indebtedness or other liability of any other
Person, whether by guarantee, endorsement (other than
endorsements of negotiable instruments for deposit or collection in
the ordinary course of business), agreement to purchase or
repurchase, agreement to supply or advance funds, or otherwise.
(e) Investments. The Transferor will not make or suffer
to exist any loans or advances to, or extend any credit to, or make
any investments (by way of transfer of property, contributions to
capital, purchase of stock or securities or evidences of
indebtedness, acquisition of the business or assets, or otherwise) in,
any of its Affiliates or any other Person except for (i) purchases of
Receivables pursuant to the terms of the Receivables Purchase
Agreements, (ii) investments in Eligible Investments in accordance
with the terms of this Agreement and (iii) holding the Transferor
Certificate.
(f) Extension or Amendment of Receivables. Except
for consents or failures to object by the Transferor to actions of the
Servicer permitted by Section 3.01(c), the Transferor will not
extend, amend or otherwise modify (or consent or fail to object to
any such extension, amendment or modification by the Servicer),
the terms of any Receivable, or amend, modify or waive (or consent
or fail to object to any such amendment, modification or waiver by
the Servicer) any payment term or condition of any invoice related
thereto (other than as provided in the Credit Policy Manual). The
Transferor will not 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.
(g) Change in Legal Name. The Transferor will not
(i) make any change to its legal name, identity or business structure
in any manner or chief executive office (including the address
thereof) or use any trade names, fictitious names, assumed names or
"doing business as" names or (ii) change its jurisdiction of
organization unless, prior to the effective date of any such name
change, change in chief executive office, use or change of
jurisdiction, the Transferor delivers to the Trustee (A) written
notice of such change at least 30 days prior to the effective date
thereof, (B) such financing statements (Forms UCC-1 and UCC-3)
executed by the Transferor required to reflect such name change,
change in chief executive office, use or change of jurisdiction,
together with such other documents and instruments required in
connection therewith to maintain the continued perfection of the
interests of the Trustee in the Trust Assets and (C) prior to the
effective date thereof, an Opinion of Counsel, in form and
substance satisfactory to the Trustee, as to the Transferor's due
organization, valid existence and good standing and the continued
perfection of the interests of the Trustee in and to the Receivables
and other Trust Assets conveyed hereby (to the same extent as such
interest was perfected on the Transfer Date with respect to the
Receivables then owned by the Transferor). Furthermore, the
Transferor shall give 30 days prior written notice to the Trustee of
any change in the location of the office where it keeps the books,
records and documents regarding the Receivables and the other
Trust Assets from the address of the Transferor referred to in
Section 13.03.
(h) Receivables Purchase Agreements. The Transferor
will not (i) cancel or terminate the Receivables Purchase
Agreements or consent to or accept any cancellation or termination
thereof, (ii) amend or otherwise modify any term or condition of the
Receivables Purchase Agreements or give any consent, waiver or
approval thereunder, (iii) waive any default under or breach of the
Receivables Purchase Agreements or (iv) take any other action
under the Receivables Purchase Agreements not contemplated or
required by the terms thereof.
(i) Organization. The Transferor will not amend any
provision of its certificate of incorporation or bylaws relating to or
affecting (i) voting rights of, actions by, appointment of, criteria for
or qualifications of any independent director or (ii) the requirement
that the Transferor maintain at all times two independent directors,
including Articles Third, Fifth, Seventh, Tenth, Eleventh, Twelfth
and Thirteenth of such certificate of incorporation, and Sections 1,
7 and 10 of Article III and Section 1 of Article VII of such bylaws.
(j) Maintenance of Separate Existence. The Transferor
will not (i) fail to do all things necessary to maintain its existence as
a corporation separate and apart from the Servicer, Zenith, any
Affiliate of Zenith, and any Affiliate of the Transferor including
conducting business correspondence in its own name and
maintaining appropriate and separate books, records and financial
statements; (ii) except as provided under any Transaction
Document, suffer any limitation on the authority of its own
directors and officers to conduct its business and affairs in
accordance with their independent business judgment, or authorize
or suffer any Person other than its own directors and officers to act
on its behalf with respect to matters (other than matters customarily
delegated to others under powers of attorney) for which a
corporation's own directors and officers would customarily be
responsible; (iii) fail to (A) maintain or cause to be maintained by an
agent of the Transferor under the Transferor's control physical
possession of all its books and records, (B) maintain capitalization
adequate for the conduct of its business, (C) account for and
manage its liabilities separately from those of any other Person,
including payment of all payroll and other administrative expenses
and taxes from its own assets, (D) segregate and identify separately
all of its money and assets from those of any other Person
(including, but not limited to, maintaining separate bank accounts in
its own name), and (E) maintain offices through which its business
is conducted separate from those of the Servicer, Zenith, any
Affiliate of Zenith and any Affiliate of the Transferor (which offices
may be leased or sub-leased from any such Person, provided that,
to the extent that the Transferor and any of its Affiliates have
offices in the same location, there shall be a fair and appropriate
allocation of overhead costs and expenses among them, and each
such entity shall bear its fair share of such costs and expenses and
each such office shall be conspicuously identified as the office of
such entity); (iv) commingle its money or other assets with those of
the Servicer, Zenith, any Affiliate of Zenith or any Affiliate of the
Transferor, or use its funds for other than the Transferor's uses;
(v) fail to (A) maintain its books, financial statements, accounting
records and other business documents and records separate from
those of the Servicer, Zenith and each other Person, (B) act solely
in its legal name and through its own authorized officers and
agents, (C) make investments directly or by brokers engaged and
paid by the Transferor or its agents (provided that if any such agent
is an Affiliate of the Transferor it shall be compensated at a fair
market rate for its services), (D) separately manage its liabilities
from those of the Servicer, Zenith or any Affiliate of Zenith and pay
its own liabilities, including all administrative expenses, from its
own separate assets (provided that, to the extent the employees of
the Transferor participate in pension, insurance and other benefit
plans of Zenith or any Affiliate thereof, the Transferor will
reimburse Zenith or such Affiliate, as the case may be, for an
appropriate share of the costs thereof), (E) pay from its assets all
obligations and indebtedness of any kind incurred by it and
(F) abide by all corporate legal formalities, including the
maintenance of current corporate records; (vi) assume the liabilities
of the Servicer, Zenith or any Affiliate of Zenith; (vii) guarantee the
liabilities of the Servicer, Zenith or any Affiliate of Zenith; (viii) be
involved in the day-to-day management of the Servicer or Zenith;
(ix) act as agent of the Servicer, Zenith or any Affiliate of Zenith or
allow the Servicer, Zenith or any Affiliate of Zenith to act as its
agent (other than as Servicer hereunder or pursuant to a contract
on terms no less favorable to the Transferor than it would have
obtained in a similar contract with a Person not an Affiliate of the
Transferor); (x) make any advances to the Servicer, Zenith or any
Affiliate of Zenith; (xi) have insufficient officers and personnel to
conduct its business and operations; (xii) enter into business
transactions with any of its Affiliates unless the terms are not more
or less favorable to the Transferor than terms and conditions
available at the time to the Transferor for comparable transactions
with unaffiliated persons and a majority of the board of directors of
the Transferor including each director who is an independent
director approve the transaction; (xiii) if the Transferor is included
within the consolidated financial statements of Zenith or any
Affiliate thereof, fail to disclose in a note in the financial reports
required to be delivered quarterly and annually the existence of the
Transferor as a separate legal entity and the participation of the
Transferor in the transactions contemplated by the Transaction
Documents; (xiv) fail to establish investment guidelines and criteria
by a majority of the board of directors including at least two
directors who are independent directors; or (xv) conduct its affairs
in a manner at any time inconsistent with the assumptions set forth
in the opinions delivered pursuant to Article IV of each Certificate
Purchase Agreement.
(k) Ownership; Merger. The Transferor will not (i) sell
any shares of any class of its capital stock to any Person (other than
Zenith or any of its Affiliates that are Subsidiaries of Zenith), or
enter into any transaction of merger or consolidation, or convey or
otherwise dispose of all or substantially all of its assets (except as
contemplated herein), or (ii) terminate, liquidate or dissolve itself
(or suffer any termination, liquidation or dissolution), or (iii)
acquire or be acquired by any Person.
(l) Transfer of Transferor Certificate. The Transferor
agrees that, without the prior written consent of the Majority in
Interest, it shall not transfer the Transferor Certificate to any Person
or surrender the Transferor Certificate for the issuance of a
Supplemental Certificate and new Transferor Certificate pursuant to
Section 6.08(c) hereof.
SECTION 2.07. Addition and Removal of Originators. (a)
At any time following the Transfer Date, the Transferor may designate any
Affiliate of Zenith as an Originator (an "Additional Originator"); provided
that the following conditions are satisfied: (A) either (i) the average of the
aggregate Outstanding Balance of all Receivables generated by such
Additional Originator as of the last day of each of the immediately
preceding twelve months does not exceed 5% of the average of the
aggregate Outstanding Balance of Eligible Receivables owned by the Trust
as of the last day of each of such twelve months or (ii) the Rating Agency
Condition shall have been satisfied, (B) such Additional Originator shall be
subject to the provisions of the Parent Undertaking Agreement and shall
become a party to such Transaction Documents as the Trustee shall
reasonably request and (C) Zenith shall guarantee all obligations of such
Additional Originator pursuant to the Transaction Documents pursuant to a
guaranty acceptable in form and substance to the Majority in Interest of
each outstanding Series.
(b) The Transferor may cause any Originator to no
longer be designated as an Originator (being a "Removed Originator"), and
the Transferor shall cease purchasing Receivables from such Removed
Originator, provided that (i) the average of the aggregate Outstanding
Balance of Receivables generated by such Removed Originator as of the
last day of each of the immediately preceding twelve months does not
exceed 5% of the average of the aggregate Outstanding Balance of Eligible
Receivables owned by the Trust as of the last day of each of such twelve
months, (ii) the Transferor provides timely written notice of such change in
designation to each Rating Agency, (iii) the Rating Agency Condition shall
have been satisfied and (iv) the Transferor shall have delivered to the
Trustee and any Enhancement Provider an Officer's Certificate stating that
the Transferor reasonably believes that the removal of such Removed
Originator will not result in the occurrence of an Early Amortization Event.
(c) Notwithstanding anything in this Section 2.07 to the
contrary, a consent by the Majority in Interest of each outstanding Series to
changes in the foregoing subsections (a) and (b) hereof shall be effective
only if (i) the Rating Agency Condition shall be satisfied and (ii) written
notice thereof shall have been given to the Trustee.
SECTION 2.08. Deemed Collections for Dilution. If on
any day the Outstanding Balance of a Receivable included in the Trust
Assets is either (a) reduced as a result of any defective, rejected or returned
merchandise, insurance or services, any cash discount or rebate, or any
adjustment by the Originator therefor or by the Transferor or (b) reduced
or cancelled as a result of a setoff in respect of any claim by the Obligor
thereof against the Originator therefor or the Transferor (whether such
claim arises out of the same or a related transaction or an unrelated
transaction), then the Transferor shall be deemed to have received on such
day a Collection of such Receivable in the amount of such reduction or
cancellation. If Collections are reduced as a result of an Obligor failing to
pay any Receivable free and clear of, and without deduction for, any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, then the Transferor
shall be deemed to have received on such day an additional Collection of
such Receivable in the amount of such reduction. The Transferor will
deposit, or cause the Originator for such Receivable to deposit, all such
deemed Collections into a Collection Account within two Business Days
following the Business Day on which such Collections are deemed to have
been received.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Acceptance of Appointment and Other
Matters Relating to the Servicer. (a) Zenith agrees to act as the Servicer
for the benefit of the Beneficiaries under this Agreement (subject to Article
X) and the Holders by their acceptance of the Certificates consent to
Zenith so acting as Servicer.
(b) The Servicer shall (subject to Article X) enforce its
respective rights and interests in, to and under the Receivables and the
other Trust Assets on behalf of the Trust. The Servicer shall service,
administer and collect the Receivables and, in connection therewith, the
Servicer shall take or cause to be taken all such actions as may be
necessary or advisable to collect each Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable
care and diligence, and in accordance with the Credit Policy Manual;
provided, however, that in the event the Trustee is acting as Servicer
hereunder, it shall service the Receivables in accordance with customary
industry standards in effect from time to time.
(c) Provided that no Early Amortization Event or
Servicer Default shall have occurred and be continuing, and no Partial
Amortization Period shall have commenced and be continuing, the Servicer
may, in accordance with the Credit Policy Manual, extend the maturity,
adjust the Outstanding Balance, or otherwise modify the terms of any
Defaulted Receivable or amend, modify or waive any payment term or
condition of any invoice related thereto, all as it may determine to be
appropriate to maximize Collections thereof; provided that, for all purposes
hereunder, any such Receivable shall remain a "Defaulted Receivable" in
the amount of its Outstanding Balance (without giving effect to any such
extension, adjustment, amendment, modification or waiver) until paid in
full. The Servicer will not extend, amend or otherwise modify the terms of
any Receivable, or amend, modify or waive any payment term or condition
of any invoice related thereto (other than as provided in the Credit Policy
Manual or herein) if the effect of such amendment, modification or waiver
would impair the collectibility or delay the payment of any then existing
Receivable beyond 90 days from the date of the invoice.
(d) The Servicer shall have full power and authority,
acting alone or through any party properly designated by it hereunder, to
do any and all things in connection with such servicing and administration
which it may deem necessary or desirable, subject to the terms and
conditions of this Agreement and the applicable Supplement. Without
limiting the generality of the foregoing and subject to Section 10.01 and
any limitations provided in any Supplement, the Servicer or its designee is
hereby authorized and empowered (i) to instruct the Trustee to make
withdrawals and payments from the Concentration Account, subject to the
limitations set forth in Section 4.02(a) and as otherwise set forth in this
Agreement, (ii) to instruct the Trustee to make withdrawals and payments
from the Series Accounts, subject to the limitations set forth in the related
Supplement and as otherwise set forth in this Agreement, (iii) to instruct
the Trustee to take any action required or permitted under any
Enhancement, (iv) to make any filings, reports, notices, applications and
registrations with, and to seek any consents or authorizations from, the
Securities and Exchange Commission and any state securities authority on
behalf of the Trust as may be necessary or advisable to comply with any
federal or state securities laws or reporting requirements, and (v) only
(A) with the prior consent of a Majority in Interest of each outstanding
Series and (B) upon satisfaction of the Rating Agency Condition, to
subcontract with any other Person (at the Servicer's expense) for servicing,
administering or collecting the Receivables; provided that such Person shall
not become Servicer hereunder and the Servicer shall remain liable for the
performance of the duties and obligations of the Servicer pursuant to the
terms hereof. The Trustee shall execute any documents furnished by the
Servicer which are necessary or appropriate to enable the Servicer to carry
out its servicing administrative duties hereunder and acceptable in form and
substance to the Trustee. The Trustee shall, upon the written request of
the Servicer, furnish the Servicer with any documents then in the Trustee's
possession which are necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
(e) The Servicer shall not, and no Successor Servicer
shall be obligated to, use servicing procedures, offices, employees or
accounts for servicing the Receivables which differ in any material respect
from the procedures, offices, employees and accounts used by the Servicer
or such Successor Servicer, as the case may be, in connection with
servicing other trade receivables or its business in general.
(f) The relationship of the Servicer (and of any
Successor Servicer under this Agreement) to the Trustee under this
Agreement is intended by the parties to be that of an independent
contractor to or with the Trust and shall not be construed to be that of a
joint venturer, partner, or agent, such that the acts of the Servicer (or any
Successor Servicer) are in any way vicariously attributable to the Trustee in
its individual capacity prior to such time as the Trustee may serve as
Servicer pursuant to the provisions of Article X.
SECTION 3.02. Servicing Compensation; Servicer's
Expenses. (a) Compensation. As full compensation for its servicing
activities hereunder, the Servicer shall be entitled to receive a monthly
servicing fee (the "Servicing Fee") for each Collection Period (or portion
thereof) from the Initial Issuance Date for each Series until the termination
of the Amortization Period, payable in arrears on the Distribution Date
with respect to such Collection Period (or portion thereof), in an amount
equal to the aggregate of the Series Servicing Fees specified in the
Supplements. The Servicing Fee shall be payable only from Investor
Collections pursuant to, and subject to the priority of payment set forth in,
the Supplements.
(b) Expenses. The Servicer's expenses include the
Trustee's Fee (to the extent not paid from Collections) and all documented
reasonable expenses and liabilities (other than any liability of the Trust with
respect to any amount payable solely out of Collections or any personal
liability of the Trust to repay the Certificates) of the Trust not expressly
stated herein to be for the account of the Holders, including reasonable
expenses related to enforcement of the Receivables and the other amounts
due to the Trustee pursuant to Section 11.05, the reasonable fees and
disbursements of the Independent Public Accountants in connection with
the Transaction Documents, and other reasonable fees and documented
expenses including but not limited to the costs of filing UCC continuation
statements; provided that in no event shall the Servicer be liable for any
federal, state, foreign or local income or franchise tax, or any other tax
imposed on or measured by reference to income, or any interest, penalty or
addition to tax with respect thereto or arising from a failure to comply
therewith, assessed on the Trust, the Trustee or the Holders except as
expressly provided in Section 8.04. Such expenses shall be payable, first,
by the Servicer out of the Servicing Fee, second, to the extent not paid by
the Servicer, by the Transferor for its own account, and third, to the extent
the Transferor shall fail to pay any of such expenses, by the Servicer for its
own account, and the Servicer shall not be entitled to any payment for any
such expenses other than the Servicing Fee and reimbursement from the
Transferor. In addition, to the extent not paid from the Servicing Fee, the
Transferor shall pay for its own account, and, if the Transferor fails to do
so, the Servicer will pay, all fees and expenses incurred by or on behalf of
the Servicer in connection with its servicing activities hereunder (including
expenses related to enforcement of the Receivables and the costs of a
Service Transfer) or otherwise in connection herewith (including the fees
and expenses set forth above), and the Servicer will not be entitled to any
fee or other payment from, or claim on, any of the Trust Assets (other than
the Servicing Fee and reimbursement from the Transferor). The
Transferor's and Servicer's covenant to pay the expenses and disbursements
provided in this Section 3.02(b) shall survive the termination of the Trust.
SECTION 3.03. Representations and Warranties of the
Servicer. Zenith, as initial Servicer, hereby represents and warrants, and
each Successor Servicer (except for the Trustee in such capacity) by
acceptance of its appointment hereunder shall represent and warrant, (i) in
the case of the initial Servicer (x) as of the date hereof and as of the
Transfer Date, (y) with respect to any Series, as of the date of the related
Supplement and the related Initial Issuance Date and (z) as of the date of
acceptance by the Transferor during the Revolving Period for any Series of
the proceeds of each Transfer of Receivables, as of such date or (ii) in the
case of any Successor Servicer, (x) as of the date of such appointment and
(y) with respect to any Series issued after such date, as of the date of the
related Supplement and the related Initial Issuance Date, in each case
unless otherwise stated in such Supplement:
(a) Due Organization, Qualification and Authorization.
The Servicer (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed, except where the failure to do so could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect and (iii) has all requisite corporate power
and authority (including all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted, except where the failure to do so could not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(b) Corporate Powers and No Conflicts. The execution,
delivery and performance by the Servicer of the Transaction
Documents to which it is or is to be a party, the consummation of
the transactions contemplated hereby and the making of each
Transfer, are within the Servicer's corporate powers, have been
duly authorized by all necessary corporate action, and do not
(i) contravene the Servicer's charter or bylaws, (ii) violate any
Requirement of Law, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting the Servicer or any of its properties or (iv) except for the
Liens created under the Transaction Documents, result in or require
the creation or imposition of any Lien upon or with respect to any
of the properties of the Servicer. The Servicer is not in violation of
any Requirement of Law or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could have a Material
Adverse Effect.
(c) Government Authorization and Approval. No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other third party is required with respect to the Servicer for (i) the
due execution, delivery or performance by the Servicer of any of
the Transaction Documents to which it is or is to be a party, any
Transfer or the consummation of the other transactions
contemplated hereby, or (ii) the exercise by the Servicer of its rights
under the Transaction Documents or its remedies granted under the
Transaction Documents.
(d) Enforceability. Each Transaction Document to
which the Servicer is or is to be a party constitutes a legal, valid and
binding obligation of the Servicer enforceable against the Servicer
in accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and except as such enforceability may be limited by
general principles of equity, whether considered in a suit at law or
in equity).
(e) No Litigation. There is no action, suit,
investigation, litigation or proceeding affecting the Servicer,
pending or threatened before any Governmental Authority or
arbitrator that (i) could have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of any
Transaction Document or the consummation of the transactions
contemplated hereby.
(f) Lock Boxes, Collection Accounts and the
Concentration Account. Specified on Schedule 3.03(f) hereto (as
amended by the Servicer from time to time in accordance with
Section 4.02(b)) are (i) the Lock Box numbers, (ii) the names,
addresses and ABA numbers of all the Collection Account Banks,
together with the account numbers of the Collection Accounts and
the name of a contact person at each Collection Account Bank and
(iii) the name, address and ABA number of the Concentration
Account Bank, together with the account number and the name of a
contact person for the Concentration Account.
(g) Payment Instructions. The Servicer has notified the
Obligor on each Receivable to make payments on such Receivable
to either one of the Lock Boxes or one of the Collection Accounts.
(h) Periodic Reports and Determination Date
Certificates. Each Daily Report and Determination Date Certificate
delivered by the Servicer pursuant to this Agreement shall be true
and correct in all material respects as of the date such report or
certificate is delivered.
(i) Servicer Default. No Servicer Default has occurred
and is continuing.
(j) Early Amortization Event. No Early Amortization
Event has occurred and is continuing.
The representations and warranties set forth in this
Section 3.03 shall survive the Transfer of the Receivables to the Trust and
the issuance of the Certificates, and shall cease and be of no effect upon the
indefeasible repayment in full of the Invested Amount of the last
outstanding Series and all other obligations of the Transferor hereunder.
Upon a discovery by the Transferor, the Servicer or the Trustee of a breach
of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other
parties and to each Enhancement Provider, if any. The Trustee's
obligations in respect of any such breach are limited as provided in
Section 11.02(g).
SECTION 3.04. Covenants of the Servicer. The Servicer
hereby covenants and agrees that, until termination of the Trust:
(a) Change in Accounts. The Servicer will not (i) make
any changes to Schedule 3.03(f) hereto or (ii) amend any
instruction to any Obligor or any Collection Account Bank with
respect to any Lock Box or Collection Account or (iii) terminate or
substitute any Cure Account, in any case (A) except as otherwise
required or permitted pursuant to Section 4.02 or the applicable
Supplement and (B) unless the Trustee shall have received written
notice of such change, amendment, termination or substitution and,
if applicable, executed copies of Collection Account Letters with
each new Collection Account Bank or Lock Box Letters with each
new Person holding a Lock Box.
(b) Collections. (i) In the event that the Servicer
receives any Collections, the Servicer agrees to hold all such
Collections in trust and to mail such Collections to a Lock Box or
deposit such Collections to the appropriate Collection Account as
soon as practicable, but in no event later than two Business Days
after receipt thereof.
(ii) In the event that any Affiliate of the Servicer
receives any Collections, the Servicer agrees to cause such Affiliate
to hold all such Collections in trust and to cause such Affiliate to
mail such Collections to a Lock Box or deposit such Collections to
the appropriate Collection Account as soon as practicable, but in no
event later than five Business Days after receipt thereof.
(c) Compliance with Requirement of Law. The Servicer
will (i) duly satisfy all obligations on its part to be fulfilled under or
in connection with each Receivable in accordance with the Credit
Policy Manual, (ii) maintain in effect all qualifications required
under any Requirement of Law in order to service properly each
Receivable in accordance with the Credit Policy Manual and the
Transaction Documents, except where the failure to do so could
not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect, and (iii) comply with all other
Requirements of Law in connection with servicing each Receivable,
except where the failure to do so could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(d) Extension or Amendment of Receivables. The
Servicer will not extend, amend or otherwise modify (or consent or
fail to object to any such extension, amendment or modification by
the Transferor), except as permitted in Section 3.01(c), the terms of
any Receivable, or amend, modify or waive (or consent or fail to
object to any such amendment, modification or waiver by the
Transferor) any payment term or condition of any invoice related
thereto (other than as provided in the Credit Policy Manual) if the
effect of such amendment, modification or waiver would impair the
collectibility or delay the payment of any then existing Receivable
beyond 90 days from the date of the invoice; except that the
Servicer may extend, amend or otherwise modify the date of
payment of any Receivable beyond 90 days from the date of invoice
if such extension, amendment or modification is reasonably
calculated to enhance the collectibility of such Receivable. The
Servicer will not 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.
Notwithstanding the foregoing provisions of this Section 3.04(d),
each of the Servicer and the Transferor may extend, amend, modify,
cancel or rescind (and the Servicer need not object to any such
action by the Transferor) any Diluted Receivable in connection with
a valid dispute; provided, however, that such amendment,
modification, cancellation or rescission shall not have a material
adverse effect on the interests of any Beneficiary.
(e) Protection of Holders' Rights. The Servicer will
take no action which would impair the rights of any Beneficiary in
any Receivable or Trust Asset, except as provided in this
Agreement.
(f) Deposits to Concentration Account, any Collection
Account or any Series Account. The Servicer 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 known to it, cash or
cash proceeds other than Collections to the Concentration Account,
any Collection Account or any Series Account.
(g) Receivables Not to Be Evidenced by Promissory
Notes. The Servicer 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 Transferor shall deliver such
instrument to the Trustee as soon as reasonably practicable but in
no event more than three Business Days after execution thereof.
(h) Reporting Requirements. The Servicer will:
(i) within one Business Day after a Responsible
Official of the Servicer obtains knowledge of the occurrence
of a Servicer Default or an Early Amortization Event, or the
commencement of a Partial Amortization Period or Cure
Period, or any event which, with the giving of notice or
lapse of time or both, would constitute a Servicer Default or
Early Amortization Event, notify the Trustee and, so long as
Zenith or any of its Affiliates is the Servicer, the Parent of
such occurrence;
(ii) as soon as possible and in any event within
three Business Days after a Responsible Official of the
Servicer obtains knowledge of the occurrence of a Servicer
Default or any Early Amortization Event, or the
commencement of a Partial Amortization Period or Cure
Period, or any event which, with the giving of notice or
lapse of time or both, would constitute a Servicer Default or
an Early Amortization Event, furnish to the Trustee and to
each Enhancement Provider and, so long as Zenith or any of
its Affiliates is the Servicer, the Parent the written statement
of a Financial Officer of the Servicer setting forth details of
such Servicer Default or Early Amortization Event, the
commencement of such Partial Amortization Period or Cure
Period or such event and the action which the Servicer has
taken and proposes to take with respect thereto;
(iii) as soon as possible and in any event within
three Business Days after a Responsible Official of the
Servicer makes a determination that any other event,
development or information is reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect, give
written notice thereof to the Trustee, each Rating Agency
and each Enhancement Provider and, so long as Zenith or
any of its Affiliates is the Servicer, the Parent;
(iv) promptly, from time to time, furnish to the
Trustee and each Enhancement Provider such other
information, documents, records or reports regarding the
Receivables, the other Trust Assets or the condition or
operations, financial or otherwise, of the Servicer as the
Trustee and each Enhancement Provider may from time to
time reasonably request;
(v) within thirty (30) (or, after the last Statistical
Month in each calendar year, forty-five (45)) days after the
end of each Statistical Month in each calendar year, deliver
to the Trustee, each Rating Agency and each Enhancement
Provider the consolidated balance sheets of the Servicer and
its Subsidiaries as at the end of such period and the related
consolidated statements of income and cash flow of the
Servicer and its Subsidiaries for such Statistical Month and
for the period from the beginning of the then current
calendar year to the end of such Statistical Month, and for
the corresponding period during the previous calendar year,
and a comparison of the statement of the year to date
earnings and cash flow to the corresponding statement for
the corresponding period from the previous calendar year,
and the most recently prepared forecasted consolidated
balance sheet and consolidated statement of earnings and
cash flow of the Servicer and its Subsidiaries for and as of
the end of such calendar year, certified by a Financial
Officer of the Servicer as fairly presenting the consolidated
financial position of the Servicer and its Subsidiaries as at
the dates indicated and the results of their operations and
cash flow for the periods indicated in accordance with
GAAP, subject to normal year end adjustments; and
(vi) within ninety (90) days after the end of each
calendar year deliver to the Trustee, each Rating Agency
and each Enhancement Provider audited consolidated
financial statements of the Servicer and its Subsidiaries,
including therein a consolidated balance sheet of the
Servicer and its Subsidiaries as at the end of such calendar
year and consolidated statements of income and cash flow
of the Servicer and its Subsidiaries for such calendar year,
reported on by Independent Public Accountants and
accompanied by their related audit letter, which report and
letter shall be unqualified as to scope and shall state that
such financial statements fairly present the consolidated
position of the Servicer and its Subsidiaries as at the dates
indicated in conformity with GAAP applied on a basis
consistent with prior years and that the examination by such
accountants in connection with such consolidated financial
statements has been made in accordance with generally
accepted auditing standards.
The Servicer shall provide to the Trustee access to the
documentation regarding the Receivables in such cases where the
Trustee requires such access in connection with the enforcement of
the rights of Holders or is required by applicable statute or
regulations to review such documentation, such access being
afforded without charge and at the sole cost and expense of the
Servicer but only (i) upon reasonable written request, (ii) during
normal business hours, (iii) subject to the Servicer's normal security
and confidentiality procedures and (iv) at reasonably accessible
offices in the continental United States designated by the Servicer.
(i) Further Assurances. (A) The Servicer agrees that
from time to time, at its own expense, the Servicer will promptly
execute and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, or that the
Trustee may reasonably request, in order to perfect and protect any
pledge, assignment or security interest granted or purported to be
granted hereby or to enable the Trustee to exercise and enforce its
rights and remedies hereunder with respect to any Receivable and
the Trust Assets. Without limiting the generality of the foregoing,
the Servicer will: (i) xxxx its computer records in a manner
reasonably calculated to indicate that the Trust Assets have been
conveyed, in the case of any Originator, to the Transferor in
accordance with the Receivables Purchase Agreements and, in the
case of the Transferor, to the Trust in accordance with the
Transaction Documents for the benefit of the Beneficiaries; and
(ii) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments, or notices, or
deliver to the Trustee such other documents, as may be necessary
or desirable, or as the Trustee may reasonably request, in order to
perfect and preserve the valid and perfected first priority ownership
or security interest granted or purported to be granted under any
Transaction Document.
(B) The Servicer hereby authorizes the Trustee to file
one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Trust Assets without the
signature of the Servicer where permitted by law. A photocopy or
other reproduction of any Transaction Document or any financing
statement covering the Trust Assets or any part thereof shall be
sufficient as a financing statement where permitted by law.
(C) The Servicer will furnish to the Trustee from time to
time statements and schedules further identifying and describing the
Trust Assets and such other reports in connection with the Trust
Assets as the Trustee may reasonably request, all in reasonable
detail.
(D) The Servicer shall, from time to time, execute and
deliver to the Obligors any bills, statements and letters or other
writings necessary to carry out the terms and provisions of any
Transaction Document and to facilitate the collection of the
Receivables in a manner consistent with the Credit Policy Manual.
(j) Change the Credit Policy Manual. The Servicer
shall comply with and perform its servicing obligations with respect
to the Receivables in accordance with the Credit Policy Manual,
except insofar as any failure to so comply or perform would not
materially adversely affect the Holders. Subject to compliance with
all Requirements of Law, the Transferor or the Servicer, as
applicable, may change the terms and provisions of the Credit
Policy Manual; provided, however, that (i) with respect to a
material change of collection policies, the Rating Agency Condition
is satisfied with respect thereto and (ii) with respect to a change of
collection procedures, no material adverse effect on any Series
would result.
(k) Notification of Obligors. The Servicer will notify
the Obligor on each Receivable purchased by the Trust on or after
the Transfer Date to make payments on such Receivable to a Lock
Box or one of the Collection Accounts.
(l) Modification of Systems. The Servicer agrees,
promptly after the replacement or any material modification of any
computer, automation or other operating systems (in respect of
hardware or software) used to provide the Servicer's services as
Servicer or to make any calculations or reports hereunder, to give
written notice of any such replacement or modification to the
Trustee.
(m) Servicer Business Days. No later than December 1
of each year, the Servicer shall furnish the Trustee with a list of
days other than Saturday and Sunday, on which the Servicer shall
be closed during the immediately succeeding calendar year, except
that with respect to the calendar year 1997, the Servicer shall
furnish such list to the Trustee on or before the Transfer Date.
(n) Keeping of Records and Books of Account. The
Servicer shall maintain and implement administrative and operating
procedures (including the ability to recreate records evidencing the
Receivables in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, microfiche, computer
records and other information necessary or reasonably advisable for
the collection of all the Receivables. Such documents, books,
microfiche, and computer records shall reflect all customary facts
giving rise to the Receivables, all payments and credits with respect
thereto, and the computer records shall be clearly marked to show
the interests of the Trust in the Receivables. The Servicer shall
hold on behalf of the Trust (to the extent of its interest therein) any
document evidencing or securing a Receivable and any Contract
related to such Receivable and necessary to the servicing of such
Receivable and the collection thereof in accordance with the terms
of this Agreement. Such holding by the Servicer shall be in trust
and shall be deemed to be the holding thereof by the Trustee for
purposes of perfecting the Trust's rights therein as provided in the
UCC.
(o) Maintenance of Insurance. The Servicer shall use its
best efforts to maintain with a responsible company, and at its own
expense, its current commercial crime insurance (including
commercial fraud insurance) as is commercially available at a cost
that is not generally regarded as excessive by industry standards,
with coverage on all officers, employees or other Persons acting in
any capacity requiring such Persons to handle funds, money,
documents or papers relating to the Receivables.
(p) Statistical Months. Prior to the commencement of
each calendar year, the Servicer shall identify to the Trustee in
writing each four to five week period approximating one month
(corresponding to the "statistical months" used by the Servicer) for
such calendar year, provided the last day of the last such period in
any calendar year shall be December 31 (each such period being a
"Statistical Month").
Notwithstanding anything herein to the contrary and in accordance with
Section 3.01(b), if the Trustee is acting as Successor Servicer hereunder it
will not be bound to follow the Credit Policy Manual but shall service the
Receivables in accordance with customary industry standards in effect from
time to time.
SECTION 3.05. Reports and Records for the Trustee. (a)
Periodic Records. On each Business Day, the Servicer shall provide by
telecopy to the Trustee, and upon request to any Enhancement Provider,
the Daily Report and, to the extent not covered in the Daily Report, a
record setting forth (x) the Collections in respect of the Receivables
processed by the Servicer on the immediately preceding Business Day, (y)
the amount of Eligible Receivables as of the close of business on the
immediately preceding Business Day and (z) the Floating Allocation
Percentage for each Series at the close of business on the immediately
preceding Business Day; except that to the extent the information required
to be included in such Daily Report or record is not available on such
Business Day, such information shall be determined as of the most recent
date on which such information is available, but in no event prior to the
most recent Determination Date.
(b) Determination Date Certificate. On or before each
Determination Date with respect to each outstanding Series, the Servicer
shall deliver by telecopy to the Trustee, each Rating Agency and each
Enhancement Provider and the Trustee shall deliver to each Investor
Certificateholder a Determination Date Certificate for such Determination
Date.
SECTION 3.06. Annual Certificate of Servicer. On or
before April 30 of each calendar year, beginning with April 30, 1998, the
Servicer shall deliver to the Trustee, each Rating Agency and each
Enhancement Provider an Officer's Certificate, executed by the chief
financial officer of the Servicer, substantially in the form of Exhibit B
hereto. A copy of each such certificate will be sent to each Investor
Certificateholder by the Trustee.
SECTION 3.07. Annual Servicing Report of Independent
Public Accountants. Within 90 days after the Transfer Date and on an
annual basis on or before March 31 of each calendar year, beginning with
March 31, 1998, the Servicer shall at the Transferor's expense cause the
Independent Public Accountants to furnish a report (addressed to the
Trustee) to the Trustee, the Servicer, each Rating Agency and each
Enhancement Provider substantially to the effect set forth in Exhibit I;
provided, however, that all such Persons and a Majority in Interest may
approve an alternative arrangement.
SECTION 3.08. Tax Treatment. The Transferor, the
Servicer and the Trustee have entered into this Agreement, and the
Investor Certificates have been (or will be) issued to and acquired by the
Investor Certificateholders, with the intention that, for federal, state and
local income and franchise tax law purposes, the Investor Certificates will
be indebtedness of the Transferor secured by the Receivables. The
Transferor, the Servicer and the Trustee, by entering into this Agreement,
and each Holder, by the acceptance of its Certificate, agree to treat and
report the Certificates for purposes of federal, state and local income and
franchise taxes as indebtedness of the Transferor. Unless either (i) the
Trustee or the Servicer shall receive an Opinion of Counsel, based on a
Change in Tax Law occurring after the date hereof, that such Change in
Tax Law requires a different characterization or (ii) there shall be a final
determination that a different characterization is required, the Transferor
agrees that it will report its income for such federal, state and local income
or franchise taxes on the basis that it is the owner of the Receivables.
SECTION 3.09. Notices to Zenith. In the event that
Zenith is no longer acting as Servicer, any Successor Servicer shall deliver
or make available to Zenith and the Transferor each certificate and report
required to be delivered thereafter pursuant to Sections 3.05, 3.06 and
3.07.
SECTION 3.10. Adjustments. If the Servicer makes a
mistake with respect to the amount of any Collection and deposits or pays
an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Trustee's Account or Transferor's Account or paid to
reflect such mistake and send written notice thereof to the Trustee. Any
Receivable in respect of which a dishonored check is received shall be
deemed not to have been paid.
SECTION 3.11. Securities and Exchange Commission
Filings. For so long as Zenith or any of its Affiliates is the Servicer, the
Servicer shall deliver or cause to be delivered to the Trustee, the Investor
Certificateholders and each Rating Agency copies of each report of Zenith,
the Transferor and any other Affiliate of Zenith which is a party to any
Transaction Document filed with the Securities and Exchange Commission
on Forms 10-K and 10-Q promptly after any such filing has been made.
ARTICLE IV
RIGHTS OF HOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.01. Rights of Holders. (a) The Investor
Certificates shall represent fractional undivided beneficial interests in the
Trust (with respect to each Series, the "Holders' Interest"), which shall
consist of the right to receive, to the extent necessary to make the required
payments with respect to the Investor Certificates of such Series at the
times and in the amounts specified in the related Supplement, the portion of
Collections allocable to Investor Certificateholders of such Series pursuant
to this Agreement and the related Supplement from funds on deposit in the
Concentration Account allocable to Holders of such Series and funds on
deposit in any related Series Account and funds available pursuant to any
related Enhancement (collectively with respect to all Series, the "Aggregate
Holders' Interest"), it being understood that the Investor Certificates of any
Series shall not represent any interest in any Series Account or
Enhancement for the benefit of any other Series. The Transferor
Certificate shall represent the fractional undivided beneficial interest in the
remainder of the Trust Assets not allocated pursuant to this Agreement or
any Supplement to the Aggregate Holders' Interest, including the right to
receive Collections with respect to the Receivables and other amounts at
the times and in the amounts specified in this Agreement or in any
Supplement to be paid to the Holder of the Transferor Certificate (the
"Transferor Interest"); provided, however, that the Transferor Certificate
shall not represent any interest in the Concentration Account, any
Collection Account, any Series Account or any Enhancement, except as
specifically provided in this Agreement or any Supplement.
(b) The Floating Allocation Percentage for each Series
and the Transferor Percentage shall be initially computed by the Servicer as
of the opening of business of the Servicer on the Initial Issuance Date for
each Series. Thereafter the Floating Allocation Percentage for each Series
and the Transferor Percentage shall be recomputed by the Servicer as of
the close of business of the Servicer on each Business Day until and
including the Business Day immediately preceding the commencement of
an Amortization Period for a Series, an Early Amortization Period for a
Series or a Partial Amortization Period. Each of the Floating Allocation
Percentage for each Series and the Transferor Percentage (i) shall remain
constant from the time as of which any such computation or recomputation
is made until the time as of which the next such recomputation, if any, shall
be made and (ii) as computed as of the close of business of the Servicer on
the Business Day immediately preceding the commencement of an
Amortization Period for a Series, an Early Amortization Period for a Series
or a Partial Amortization Period, shall remain constant at all times during
such Amortization Period, Early Amortization Period or such Partial
Amortization Period.
SECTION 4.02. Establishment of Concentration Account
and Collection Accounts. (a) Concentration Account. On or prior to the
Transfer Date, the Servicer, for the benefit of the Beneficiaries, shall
establish and maintain or cause to be established and maintained in the
name of the Trustee, on behalf of the Trust, with an Eligible Institution a
segregated trust account accessible by the Trustee (such account being the
"Concentration Account" and such institution holding such account being
the "Concentration Account Bank"), such account bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Beneficiaries. The Trustee shall possess all right, title and interest in
and to all funds from time to time on deposit in the Concentration Account
and in all proceeds thereof. The Concentration Account shall be under the
sole dominion and control of the Trustee for the benefit of the
Beneficiaries. Except as expressly provided in this Agreement, the Servicer
agrees that it shall have no right of set-off or banker's lien against, and no
right to otherwise deduct from, any funds held in the Concentration
Account for any amount owed to it by the Trustee, the Trust or any
Beneficiary. The Servicer shall cause Collections to be deposited into the
Concentration Account on each Business Day as promptly as is reasonably
practicable after receipt in a Collection Account. The Transferor will
require the Originators to mail any Collections received by them to a Lock
Box or deposit any Collections received by any of them into a Collection
Account within five Business Days following the Business Day on which
such Collections are so received. Notwithstanding the foregoing, if and to
the extent that funds that are not Collections are deposited into the
Concentration Account, the Servicer may direct in writing the Trustee to
withdraw such funds from the Concentration Account and deposit them in
the Transferor's Account.
If, at any time, the institution holding the Concentration
Account ceases to be an Eligible Institution, the Servicer, upon obtaining
actual Knowledge thereof, for the benefit of the Beneficiaries, shall within
15 Business Days (i) establish a new Concentration Account meeting the
conditions specified above with an Eligible Institution, (ii) transfer any cash
and/or any investments held therein or with respect thereto to such new
Concentration Account and (iii) in the case of any new Concentration
Account, deliver to all Collection Account Banks new Collection Account
Letters (with copies thereof to the Trustee) referring to such new
Concentration Account, and from the date such new Concentration
Account is established, it shall be the "Concentration Account". Pursuant
to the authority granted to the Servicer in Section 3.01, the Servicer shall
have the power to instruct the Trustee to make withdrawals and payments
from the Concentration Account for the purposes of carrying out the
Servicer's or the Trustee's duties specified in this Agreement.
Funds on deposit in the Concentration Account, shall at the
direction of the Servicer be invested by the Trustee or the Eligible
Institution maintaining such accounts in Eligible Investments as instructed
by the Servicer in writing (which may be a standing instruction) (or if not
so instructed, then invested by the Trustee or the Eligible Institution
maintaining such accounts in any Eligible Investments listed in clause (b) of
the definition of Eligible Investments). All such Eligible Investments shall
be held by the Trustee or the Eligible Institution maintaining such accounts
for the benefit of the Beneficiaries. Such funds shall be invested in Eligible
Investments that will mature so that funds will be available in amounts
sufficient for the Servicer to make each distribution required under the
applicable Supplement on the Distribution Date with respect to such
Collection Period. Funds deposited in the Concentration Account on a
Determination Date with respect to the next following Distribution Date
are required to be invested overnight. On each Distribution Date, all
interest and other investment earnings (net of losses and investment
expenses) received on funds on deposit in the Concentration Account, to
the extent such investment income is not needed to pay the Holders on
such Distribution Date, shall be paid to the Transferor, except as otherwise
specified in any Supplement. The Trustee is hereby authorized, unless
otherwise directed by the Servicer, to effect transactions in Eligible
Investments through a capital markets affiliate of the Trustee.
(b) Collection Accounts. On or prior to the Transfer
Date, the Servicer, for the benefit of the Beneficiaries, shall establish and
maintain or cause to be established and maintained (i) lock boxes to which
Obligors will remit payments with respect to any Receivable (each such
lock box, a "Lock Box") and (ii) in the name of the Trustee, on behalf of
the Trust, with an Eligible Institution, segregated accounts accessible by
the Trustee (each such account, a "Collection Account"). Obligors will be
directed to remit payments with respect to their Receivables to a Lock Box
or a Collection Account. The Lock Boxes and Collection Accounts shall
be under the sole dominion and control of the Trustee for the benefit of the
Beneficiaries. The Servicer shall cause the Trustee to transfer Collections
to the Concentration Account in the manner set forth in Section 4.02(a).
Each Collection Account shall be maintained with documentation and
instructions in form and substance satisfactory to the Trustee. Such
documentation shall provide, among other things, that available amounts
shall be promptly transferred to the Concentration Account. The Servicer
will not (i) make any change in any Lock Box numbers, the name, address
or ABA number of any Collection Account Bank, the account number of
any Collection Account, the name, address or ABA number of any
Concentration Account Bank, or the account number for any
Concentration Account from that set forth in Schedule 3.03(f) hereto or (ii)
amend any instruction to any Obligor or any instruction to or agreement
with any Collection Account Bank with respect to any Lock Box or
Collection Account (other than to (A) redirect payments of Obligors to a
different Lock Box or Collection Account or to the Concentration
Account, (B) to close unused Lock Boxes and Collection Accounts and
(C) open new Lock Boxes and Collection Accounts if the Trustee shall
have received executed copies of the Collection Account Letters with each
new Collection Account Bank or Lock Box Letters with each new Person
holding a Lock Box, as applicable) unless the Trustee (if directed to do so
by a Majority in Interest of each outstanding Series or, if the related
Supplement so provides, the Enhancement Provider for such Series) shall
have given its prior consent to such change or amendment.
The Servicer hereby agrees and acknowledges that (i) it has
executed and delivered to the Trustee a letter and executed
acknowledgement thereto substantially in the form of Exhibit C hereto
(each, a "Collection Account Letter" or a "Lock Box Letter", as the case
may be), addressed to and executed by each banking institution or other
Person with which a Collection Account or a Lock Box, as the case may
be, is maintained (each such banking institution with which a Collection
Account is maintained being a "Collection Account Bank") and (ii) it shall
execute and deliver a substantially similar executed Collection Account
Letter or Lock Box Letter, as the case may be, prior to the establishment
by it of any additional or alternative Collection Account or Lock Box, as
the case may be. The Servicer hereby agrees, and the Trustee hereby
acknowledges, that the execution and delivery of each Collection Account
Letter and each Lock Box Letter transfers all right, title and interest in all
monies, securities and instruments in the applicable Collection Account or
Lock Box to the Trustee. The Servicer agrees, and is hereby granted the
authority, to amend Schedule 3.03(f) hereto to reflect any change made in
compliance with this Agreement in the Collection Account Banks or the
Persons holding Lock Boxes and to execute such further documents and
take such other actions as may be reasonably requested by the Trustee in
order to effect such transfer.
SECTION 4.03. Allocation of Collections. Collections will
be allocated to each Series as specified in the related Supplement, and
amounts so allocated to any Series will not, except as specified in the
related Supplement, be available to the Investor Certificateholders of any
other Series. Allocations thereof between the Holders' Interest and the
Transferor Interest, among the Series or to any Enhancement Agreement
and to any Enhancement Provider shall be set forth in the related
Supplement or Supplements. If, on any day, the sum of the Floating
Allocation Percentages for all outstanding Series exceeds 100%, as set
forth on the applicable Daily Report, then the aggregate of the Investor
Collections for all outstanding Series shall be allocated pro rata among all
outstanding Series on the basis of the Series Allocation Percentage for each
such Series; provided, however, that if on any day the amount of Investor
Collections for any Series is not sufficient to pay the full amount of interest
due and payable on such day to the Investor Certificateholders of each
Series on such day, then the aggregate of the Investor Collections for all
outstanding Series shall be allocated pro rata among all outstanding Series
on the basis of a fraction, for each Series, the numerator of which is the
Invested Amount of such Series and the denominator of which is the Trust
Invested Amount.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO HOLDERS
SECTION 5.01. Distributions and Reports to Holders.
Distributions shall be made to, and reports shall be provided to, Holders as
set forth in the applicable Supplement.
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. The Certificates. The Investor Certificates
of any Series shall be issued in registered form (for purposes of Section
163(f) of the Internal Revenue Code and otherwise) and shall be in
substantially the form set forth as an exhibit to the applicable Supplement
and shall upon issue be executed and delivered by the Transferor to the
Trustee for authentication and redelivery as provided in Section 6.02. The
Investor Certificates shall be issued in minimum denominations of
$1,000,000 and in integral multiples of $1,000 in excess thereof (except
that one Certificate may be issued in a denomination that includes any
residual amount), and shall be issued upon initial issuance as one or more
Investor Certificates in an aggregate original principal amount equal to the
Initial Invested Amount. The Transferor Certificate shall be a single
certificate, substantially in the form of Exhibit A hereto, and shall represent
the entire Transferor Interest. Each Certificate shall be executed by manual
or facsimile signature on behalf of the Transferor by the President, any Vice
President, the Chief Administrative and Credit Officer, Treasurer or the
Secretary of the Transferor, or by any other officer or assistant officer duly
authorized to execute such Certificate on behalf of the Transferor.
Certificates bearing the manual or facsimile signature of the individual who
was, at the time when such signature was affixed, authorized to sign on
behalf of the Transferor shall not be rendered invalid, notwithstanding that
such individual ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates. No Certificates shall be entitled to any benefit under this
Agreement or the applicable Supplement or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication in
substantially the form provided in Exhibit A hereto executed by or on
behalf of the Trustee by the manual signature of a duly authorized
signatory, and such certificate upon any Certificate shall be conclusive
evidence that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
SECTION 6.02. Authentication of Certificates. The
Trustee shall authenticate and deliver the Investor Certificates of each
Series to, and upon the written order of, the Transferor against payment to
the Transferor of the purchase price therefor. The Trustee shall
authenticate and deliver the Transferor Certificate to the Transferor
simultaneously with its delivery of the first Series of Investor Certificates
to be issued hereunder. The Certificates of any Series shall be duly
authenticated by or on behalf of the Trustee, in authorized denominations
equal to (in the aggregate), in the case of the Investor Certificates, the
Initial Invested Amount, and, in the case of the Transferor Certificate equal
to the Transferor Interest from time to time, and together evidencing the
entire ownership of the Trust.
SECTION 6.03. Registration of Transfer and Exchange of
Certificates. (a) The Trustee shall cause to be kept at its Corporate Trust
Office a register (the "Certificate Register") in which, subject to such
reasonable regulations as it may prescribe, a transfer agent and registrar
(which may be the Trustee) (the "Transfer Agent and Registrar") shall
provide for the registration of the Certificates and of transfers and
exchanges of the Certificates as herein provided. The Transfer Agent and
Registrar shall initially be the Trustee, and any co-transfer agent and co-
registrar chosen by the Trustee and acceptable to the Servicer. Any
reference in this Agreement to the Transfer Agent and Registrar shall
include any co-transfer agent and co-registrar unless the context requires
otherwise.
The Trustee shall be permitted to resign as Transfer Agent
and Registrar upon 30 days' (60 days' during an Amortization Period)
written notice to the Transferor and the Servicer; provided, however, that
such resignation shall not be effective and the Trustee shall continue to
perform its duties as Transfer Agent and Registrar until the Servicer has
appointed a Successor Trustee pursuant to Section 11.07, which Successor
Trustee shall act as the successor Transfer Agent and Registrar hereunder.
Upon surrender for registration of transfer of any Investor
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose and receipt of a representation letter described
in Section 6.03(c) and a certificate or letter from the transferring Person to
the effect that such transfer is in compliance with all applicable
requirements of the applicable Supplement or Certificate Purchase
Agreement, the Transferor shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Investor Certificates (of the same Series) in authorized
denominations of like aggregate Undivided Fractional Interests in the
Aggregate Holders' Interest.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates (of the same
Series) in authorized denominations of like aggregate Undivided Fractional
Interests in the Holders' Interest, upon surrender of the Investor
Certificates to be exchanged at any such office or agency. Whenever any
Investor Certificates are so surrendered for exchange, the Transferor shall
execute, and the Trustee shall authenticate and deliver, the Investor
Certificates which the Holder making the exchange is entitled to receive.
Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee or the Transfer
Agent and Registrar duly executed by the Holder thereof or his attorney-in-
fact duly authorized in writing. Each Holder must satisfy all transfer
restrictions set forth herein, in the Certificates and in the related
Supplement or Certificate Purchase Agreement.
Each Investor Certificate shall be registered at all times as
herein provided, and any transfer or exchange of such Investor Certificate
will be valid for purposes hereunder only upon registration of such transfer
or exchange by the Trustee or the Transfer Agent and Registrar as
provided herein. Payments on any Distribution Date shall be made to
Holders of record on the immediately preceding Record Date.
No service charge shall be made for any registration of
transfer or exchange of Investor Certificates, but the Transfer Agent and
Registrar or any co-transfer agent and co-registrar may require payment of
a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Investor
Certificates.
All Investor Certificates surrendered for registration of
transfer or exchange, or for payment, shall be cancelled and disposed of in
a manner reasonably satisfactory to the Trustee.
(b) The Transfer Agent and Registrar will maintain at its
expense in New York, New York an office or offices or agency or agencies
where Investor Certificates may be surrendered for registration of transfer
or exchange.
(c) Notwithstanding any other provision of this Section
6.03, no registration of transfer of any Investor Certificate shall be made
unless the Transferor or the transferee shall deliver, at its expense, to the
Transferor, the Servicer and the Trustee a representation letter,
substantially in the form attached as Exhibit D to this Agreement, stating,
among other things, that such transferee is not (i) an employee benefit plan
(as defined in Section 3(3) of ERISA) subject to Title I of ERISA, (ii) a
plan (as defined in Section 4975(e)(1) of the Code) or (iii) an entity whose
underlying assets include "plan assets" under Department of Labor
Regulation 29 C.F.R. Section 2510.3-101.
SECTION 6.04. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to the Transfer
Agent and Registrar, or the Transfer Agent and Registrar receives evidence
to its satisfaction of the destruction, loss or theft of any Certificate and
(b) there is delivered to the Transfer Agent and Registrar, the Trustee, the
Transferor and the Servicer such indemnity (provided that a letter of
indemnity from (i) an insurance company or (ii) an institutional investor, in
either case, of investment grade credit rating shall satisfy such requirement)
as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Transferor shall execute and the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and (in
the case of any new Investor Certificate) Undivided Fractional Interest. In
connection with the issuance of any new Certificate under this Section
6.04, the Trustee or the Transfer Agent and Registrar may require the
payment by the Holder of a sum sufficient to pay any tax or other
governmental charge that may be imposed in relation thereto. Any
duplicate Certificate issued pursuant to this Section 6.04 shall constitute
complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 6.05. Persons Deemed Owners. At all times
prior to due presentation of a Certificate for registration of transfer, the
Trustee, the Transfer Agent and Registrar and any agent of any of them
shall treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions
pursuant to the terms of the applicable Supplement and for all other
purposes whatsoever and neither the Trustee, the Transfer Agent and
Registrar nor any agent of any of them shall be affected by any notice to
the contrary. Notwithstanding the foregoing, in determining whether the
requisite Holders have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Certificates owned by the Transferor,
the Servicer or any Affiliate thereof shall be disregarded and deemed not to
be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Certificates which a Responsible
Official of the Trustee actually knows to be so owned shall be so
disregarded. Certificates (other than a Transferor Certificate) so owned
which have been pledged in good faith shall not be disregarded and may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Certificates and
that the pledgee is not the Transferor, the Servicer or an Affiliate thereof or
if a Responsible Official of the Trustee has received written notice thereof.
SECTION 6.06. Access to List of Holders' Names and
Addresses. The Trustee will furnish or cause to be furnished by the
Transfer Agent and Registrar to the Servicer, the Transferor or any
Investor Certificateholder, within five Business Days after receipt by the
Trustee of a written request therefor from the Servicer, the Transferor or
any Investor Certificateholder, respectively, a list of the names and
addresses of the Holders.
Every Holder, by receiving and holding a Certificate, agrees
that neither the Trustee, the Transfer Agent and Registrar, the Transferor,
the Servicer, Zenith, nor any of their respective agents, shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders hereunder, regardless of the sources
from which such information was derived.
SECTION 6.07. Authenticating Agent. (a) The Trustee
may appoint one or more authenticating agents with respect to the
Certificates which shall be authorized to act on behalf of the Trustee in
authenticating the Certificates in connection with the issuance, delivery,
registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an authenticating agent and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent. Each
authenticating agent must be acceptable to the Transferor and the Servicer.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating
agent without the execution or filing of any power or any further act on the
part of the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by
giving written notice of resignation to the Trustee and to the Transferor.
The Trustee may at any time terminate the agency of an authenticating
agent by giving notice of termination to such authenticating agent and to
the Transferor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to be
acceptable to the Trustee or the Transferor, the Trustee may promptly
appoint a successor authenticating agent. Any successor authenticating
agent upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to the Trustee
and the Transferor.
(d) The Transferor agrees to pay to each authenticating
agent, from time to time, reasonable compensation for its services under
this Section 6.07.
(e) The provisions of Sections 7.03, 8.04, 11.01, 11.02
and 11.03 shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section
6.07, the Certificates may have endorsed thereon, in lieu of or in addition
to the Trustee's certificate of authentication, an alternate certificate of
authentication in substantially the following form:
This is one of the Certificates described in the Pooling and
Servicing Agreement among Zenith Finance Corporation,
Zenith Electronics Corporation and Bankers Trust
Company, dated as of March 31, 1997.
as Authenticating
Agent for the Trustee
By:
Authorized
Signer
SECTION 6.08. New Issuances. (a) The Transferor may
from time to time direct the Trustee, on behalf of the Trust, to issue one or
more new Series of Investor Certificates pursuant to a Supplement. The
Investor Certificates of all outstanding Series shall be equally and ratably
entitled as provided herein to the benefits of this Agreement without
preference, priority or distinction, all in accordance with the terms and
provisions of this Agreement and the applicable Supplement except, with
respect to any Series, as provided in the related Supplement.
(b) On or before the Initial Issuance Date relating to any
new Series, the parties hereto will execute and deliver a Supplement which
will specify the Principal Terms of such new Series. The terms of such
Supplement may modify or amend the terms of this Agreement solely as
applied to such new Series. The obligation of the Trustee to issue the
Investor Certificates of such new Series and to execute and deliver the
related Supplement is subject to the satisfaction of the following
conditions:
(i) on or before the tenth Business Day immediately
preceding the Initial Issuance Date for such Series, the Transferor
shall have given the Trustee, the Servicer, each Rating Agency and
any Enhancement Provider written notice of such issuance and the
Initial Issuance Date for such Series;
(ii) the Transferor shall have delivered to the Trustee
the related Supplement, in form satisfactory to the Trustee,
executed by each party thereto other than the Trustee;
(iii) the Transferor shall have delivered to the Trustee
any related Enhancement Agreement executed by each party
thereto other than the Trustee;
(iv) each Rating Agency shall have notified the
Transferor, the Servicer, the Trustee and any Enhancement
Provider in writing that the issuance of such new Series of Investor
Certificates will not result in a reduction or withdrawal of the rating
of any outstanding Series with respect to which it is a Rating
Agency;
(v) such issuance will not result in the occurrence of an
Early Amortization Event and the Transferor shall have delivered to
the Trustee and any Enhancement Provider an Officer's Certificate,
dated the Initial Issuance Date for such Series (upon which the
Trustee may conclusively rely), to the effect that the Transferor
reasonably believes that such issuance will not result in the
occurrence of an Early Amortization Event and is not reasonably
expected to result in the occurrence of an Early Amortization Event
at any time in the future;
(vi) the Transferor shall have delivered to the Trustee
and any Enhancement Provider an Opinion of Counsel to the effect
that the issuance of the Investor Certificates of such Series (A) has
been, or need not be, registered under the Act and will not result in
the requirement that any other Series not registered under the Act
be so registered (unless the Transferor has elected, in its sole
discretion, to register such Certificates), (B) will not result in the
Trust becoming subject to registration as an investment company
under the Investment Company Act and (C) will not require this
Agreement or the related Supplement to be qualified under the
Trust Indenture Act of 1939, as amended (unless the Transferor has
elected, in its sole discretion, to so qualify the Agreement or the
related Supplement);
(vii) the Transferor shall have delivered to the Trustee
and any Enhancement Provider a Tax Opinion, dated the Initial
Issuance Date for such Series, with respect to such issuance;
(viii) such issuance will not result in the aggregate of the
Floating Allocation Percentages for all outstanding Series (after
giving effect to such new issuance) exceeding 100%;
(ix) to the extent required in the related Supplement or
Certificate Purchase Agreement, the Transferor shall have provided
each letter of credit or other credit enhancement required by such
Supplement or Certificate Purchase Agreement; and
(x) the Receivables Purchase Agreements and the Parent
Undertaking Agreement shall be in full force and effect.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and the Transferor shall execute and deliver to the Trustee the
Investor Certificates of such Series for authentication and redelivery to or
upon the written order of the Transferor. Notwithstanding the provisions
of this section 6.08(b), prior to the execution of any Supplement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such Supplement is authorized or permitted by
this Agreement and any Supplement related to any outstanding Series. The
Trustee may, but shall not be obligated to, enter into any such Supplement
which adversely affects the rights, duties or immunities under this
Agreement of the Person, solely in its individual capacity then serving as
Trustee (but not its rights, duties or immunities as Trustee).
(c) The Transferor may surrender the Transferor
Certificate to the Trustee in exchange for a newly issued Transferor
Certificate and a second certificate (a "Supplemental Certificate"), the
terms of which shall be subject to Section 13.01 to the extent that it
amends any of the terms of this Agreement, to be delivered to or upon the
order of the Transferor (or the holder of a Supplemental Certificate, in the
case of the transfer or exchange thereof, as provided below), upon
satisfaction of the following conditions:
(i) the Transferor shall have delivered to the Trustee an
Officer's Certificate certifying that the result obtained by multiplying
(x) an amount equal to the excess of the Net Receivables Balance
over the Trust Invested Amount by (y) the percentage equivalent of
the portion of the Transferor Interest represented by the Transferor
Certificate, shall not be less than 2% of the Outstanding Balance of
all Receivables owned by the Trust, in each case as of the date of,
and after giving effect to, such exchange;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such exchange (or transfer or exchange as
provided below); and
(iii) the Transferor shall have delivered to the Trustee
and any Enhancement Provider a Tax Opinion, dated the date of
such exchange (or transfer or exchange as provided below), with
respect thereto.
The Transferor Certificate will at all times be beneficially owned by
the Transferor. Any Supplemental Certificate may be transferred or
exchanged only upon satisfaction of the conditions set forth in clauses (ii)
and (iii) above.
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
SECTION 7.01. Obligations Not Assignable. The
obligations of the Transferor hereunder shall not be assignable nor shall any
Person succeed to the obligations of the Transferor hereunder.
SECTION 7.02. Limitations on Liability. None of the
directors, officers, employees or agents of the Transferor, past, present or
future, shall be under any liability to the Trust, the Trustee, the Holders,
any Enhancement Provider or any other Person for any action taken or for
refraining from the taking of such action in such capacities pursuant to this
Agreement or for any obligation or covenant under this Agreement;
provided, however, that this provision shall not protect any such Person
against any liability which would otherwise be imposed by reason of willful
misconduct or gross negligence or the reckless disregard by such Person of
any of his, her or its obligations and duties hereunder. The Transferor and
any director, officer, employee or agent of the Transferor may rely in good
faith on any document of any kind prima facie properly executed and
submitted by any Person (other than the Transferor or any Affiliate thereof)
respecting any matters arising hereunder or under any Supplement or the
Receivables Purchase Agreements.
SECTION 7.03. Indemnification of the Trustee, the
Holders, any Program Agent and any Enhancement Provider. Without
limiting any other rights which the Trustee, the Holders (other than the
Transferor and its Affiliates), any Program Agent or any Enhancement
Provider and their respective assignees and their respective officers,
directors, employees, agents and affiliates (each, an "Indemnified Party"
and collectively the "Indemnified Parties") may have hereunder or under
applicable law, the Transferor hereby agrees to indemnify each Indemnified
Party from and against any and all claims, damages, losses and liabilities
and related costs and expenses (including reasonable attorneys' fees and
disbursements) (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them
arising out of or resulting from any Transaction Document, the activities of
the Trustee in connection herewith, the Transferor's use of proceeds of
Transfers of Receivables or reinvestments of Collections, the interest
conveyed hereunder in Trust Assets, or in respect of any Receivable or any
Contract (excluding however (a) Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of such
Indemnified Party, (b) recourse (except as otherwise specifically provided
in any Transaction Document) for uncollectible Receivables or (c) except
with respect to clause (xi) below, any federal, state, foreign or local income
or franchise taxes or any other tax imposed on or measured by income (or
any interest, penalty, or addition to tax with respect thereto or arising from
a failure to comply therewith) incurred by such Indemnified Party arising
out of or as a result of this Agreement or the interest conveyed hereunder
in Trust Assets). Without limiting or being limited by the foregoing, the
Transferor shall pay on demand to each Indemnified Party any and all
amounts necessary to indemnify such Indemnified Party from and against
any and all Indemnified Amounts relating to or resulting from:
(i) reliance on any representation, warranty or covenant
made or statement made or deemed made by the Transferor or the
Parent (or any of their respective Responsible Officials) under or in
connection with any Transaction Document which shall have been
incorrect in any material respect when made or deemed made or
which the Transferor shall have failed to perform;
(ii) the failure by the Transferor to comply with any
Transaction Document or any applicable Requirement of Law with
respect to any Trust Asset or related Contract, or the failure of any
Receivable or the Related Security or related Contract to conform
to any requirement with respect thereto under any Transaction
Document or any Requirement of Law;
(iii) the failure to vest in the Trustee on behalf of the
Trust for the benefit of the Beneficiaries either a perfected first
priority undivided percentage ownership interest, to the extent of
the Aggregate Holders' Interest, or a perfected first priority security
interest in the Receivables and the other Trust Assets, free and clear
of any Lien;
(iv) the failure to have filed, or any delay in filing, any
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable
laws that are necessary for perfection or first priority of the
ownership or security interest created by this Agreement or any
Receivables Purchase Agreement;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable in, or purporting to be in, the Trust
Assets (including a defense based on such Receivable or the related
Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise, insurance or
services related to such Receivable or the furnishing or failure to
furnish such merchandise, insurance or services;
(vi) any products liability claim or other claim allegedly
arising out of or in connection with merchandise, insurance or
services which are the subject of any Contract;
(vii) any failure by the Transferor or any Affiliate of the
Transferor to perform its duties or obligations in accordance with
the provisions of any Transaction Document, including any failure
to so perform in connection with servicing, administering or
collecting any Receivable;
(viii) any commingling of Collections at any time with
other funds;
(ix) any investigation, litigation or proceeding related to
any Transaction Document or the use of proceeds or reinvestments
of proceeds by the Transferor or Zenith of Transfers of Receivables
or the ownership of or security interest in Trust Assets or in respect
of any Receivable or Contract;
(x) any taxes, including sales, excise, intangibles, value
added, personal property and similar taxes, payable with respect to
the Receivables;
(xi) any federal, state, foreign or local income or
franchise tax, or any other tax imposed on or measured by reference
to income, or any interest, penalty or addition to tax with respect
thereto or arising from a failure to comply therewith, imposed upon
the Trust, the assets of the Trust or the Trustee as a result of its
acting in its capacity as trustee hereunder, except with respect to
fees or other compensation received by the Trustee; or
(xii) Any Receivable classified as an "Eligible Receivable"
by the Transferor or the Servicer in any document or report
delivered hereunder failing to satisfy, at the time of such
classification, the requirements of eligibility contained in the
definition of Eligible Receivable.
Any Indemnified Amounts due hereunder shall be payable
within fifteen Business Days of submission of a claim by the Indemnified
Party which describes in reasonable detail the basis for such claim.
Indemnification pursuant to this Section 7.03 shall only be
payable from assets of the Transferor, except that the Holder of the
Transferor Certificate and any Supplemental Certificate (and any corporate
successor thereof whether by merger, consolidation or otherwise, and any
parent corporation of any thereof) shall also be liable with respect to such
indemnification to the extent of any payments made with respect to the
Transferor Certificate or any Supplemental Certificate after the
commencement of the Amortization Period or an Early Amortization
Period (or, if more than one Early Amortization Period occurs, the latest
such Early Amortization Period), which payments are received by such
Holder, corporate successor or parent (whether by dividend, distribution or
otherwise). The rights of the Indemnified Parties under this Section 7.03
shall survive the collection of Receivables, the termination of the Trust and
the payment of all amounts otherwise payable hereunder.
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
SECTION 8.01. Liability of the Servicer. The Servicer
shall be liable under this Agreement only to the extent of the obligations
specifically undertaken by the Servicer in its capacity as Servicer. No
implied duties or covenants shall be read into this Agreement against the
Servicer.
SECTION 8.02. Merger or Consolidation of, or
Assumption of the Obligations of, the Servicer. The Servicer 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:
(a) (i) the Person formed by such consolidation or into
which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be, if the Servicer is not the
surviving entity, a corporation organized and existing under the
laws of the United States of America or any State or the District of
Columbia, and such corporation shall have expressly assumed, by
an agreement supplemental hereto, executed and delivered to the
Trustee in form satisfactory to the Trustee the performance of
every covenant and obligation of the Servicer hereunder; (ii) the
Servicer shall have delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel each in form satisfactory to the Trustee
and stating that such consolidation, merger, conveyance or transfer
complies with this Section 8.02 and that all conditions precedent
provided for in this Section 8.02(a) relating to such transaction
have been complied with; and (iii) the Rating Agency Condition
shall have been satisfied; and
(b) the corporation formed by such consolidation or into
which the Servicer is merged or which acquires by conveyance or
transfer the properties and assets of the Servicer substantially as an
entirety shall have all licenses and approvals of Governmental
Authorities required to service the Receivables, except where the
failure to do so could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
SECTION 8.03. Limitations on Liability. None of the
directors, officers, employees or agents of the Servicer, past, present or
future, shall be under any liability to the Trust, the Trustee, the Holders or
any other Person for any action taken or for refraining from the taking of
any action in such capacities pursuant to this Agreement or for any
obligation or covenant under this Agreement, it being understood that, with
respect to the Servicer, this Agreement and the obligations created
hereunder are solely the obligations of the Servicer; provided, however,
that this provision shall not protect the Servicer or any such Person against
any liability which would otherwise be imposed by reason of willful
misconduct or gross negligence by such Person. The Servicer and any
partner, director, officer, employee or agent of the Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person (other than the Servicer or any Affiliate thereof)
respecting any matters arising hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is
not reasonably related to its duties as Servicer in accordance with this
Agreement and which may involve it in any expense or liability.
SECTION 8.04. Servicer Indemnification. The Servicer
hereby agrees to indemnify each Indemnified Party from and against
Indemnified Amounts awarded against or incurred by any of them
(excluding however (a) Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Indemnified
Party and (b) recourse (except as otherwise specifically provided in any
Transaction Document) for uncollectible Receivables) relating to or
resulting from:
(i) reliance on any representation, warranty or covenant
made or statement made or deemed made by the Servicer (or any of
its Responsible Officials) under or in connection with any
Transaction Document which shall have been incorrect in any
material respect when made or deemed made or which the Servicer
shall have failed to perform;
(ii) the failure by the Servicer to comply with any
Transaction Document or any applicable Requirement of Law with
respect to any Trust Asset or related Contract;
(iii) any failure by the Servicer to perform its duties or
obligations in accordance with the provisions of any Transaction
Document, including any failure to so perform in connection with
servicing, administering or collecting any Receivable; or
(iv) any commingling of Collections at any time with
other funds.
The initial Servicer further agrees (whether or not it is the
Servicer at the time any claim is made under this sentence) to indemnify (a)
each Indemnified Party from and against all reasonable costs and expenses
(including reasonable fees and expenses of counsel for such Indemnified
Party) incurred by such Indemnified Party in connection with the
enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement and the other Transaction Documents and (b)
the Trustee from and against all losses, costs and expenses incurred by the
Trustee, but in each case under clause (a) and (b) of this sentence only to
the extent that such costs and expenses were incurred or arose during or
with respect to any period in which Zenith (or any of its Affiliates other
than the Transferor) is or shall be the Servicer.
Indemnification pursuant to this Section 8.04 shall only be
payable from the assets of the Servicer. The agreement contained in this
Section 8.04 shall survive the collection of all Receivables, the termination
of the Trust and the payment of all amounts otherwise due hereunder.
Any Indemnified Amounts due hereunder shall be payable
within fifteen Business Days of submission of a claim by the Indemnified
Party which describes in reasonable detail the basis for such claim.
SECTION 8.05. The Servicer Not to Resign. The Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon determination that (i) its performance of its duties hereunder is no
longer permissible under applicable law and (ii) there is no reasonable
action which the Servicer could take without incurring material liabilities to
make its performance of its duties hereunder permissible under applicable
law. Any determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel who is not an employee of the
Servicer or any Affiliate of the Servicer with respect to clause (i) above,
delivered to, and in form reasonably satisfactory to, the Trustee. No
resignation shall become effective until the Trustee or a Successor Servicer
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 10.02.
SECTION 8.06. Examination of Records. The Servicer
shall xxxx its computer records to give proper notice that the Receivables
and other Trust Assets have been transferred to the Trustee, on behalf of
the Trust, pursuant to this Agreement for the benefit of the Beneficiaries.
The Servicer (and the Transferor) shall, prior to the sale or transfer to a
party other than the Transferor of any receivable held in its custody,
examine its records to determine that such receivable is not a Receivable.
SECTION 8.07. Confidentiality. The Servicer agrees to use its
best efforts, and shall cause its agents or representatives to use their best
efforts, to hold in confidence all Confidential Information; provided
that nothing herein shall prevent the Servicer from delivering copies of any
financial statements and other documents constituting Confidential
Information or disclosing any other Confidential Information (i) to a
Successor Servicer or as required by a Requirement of Law applicable to
the Servicer, (ii) as required in the performance of the Servicer's duties
hereunder, (iii) as required in enforcing the rights of the Holders hereunder
or (iv) as provided in any Supplement. The Servicer agrees to take such
measures as shall be reasonably requested by the Transferor to protect and
maintain the security and confidentiality of all Confidential Information
and, in connection therewith, will allow the Transferor to inspect the
Servicer's security and confidentiality arrangements from time to time
during normal business hours. The Servicer shall use its best efforts to
provide the Transferor written notice at least five Business Days prior to
any disclosure pursuant to this Section 8.07 and in any event will provide
written notice whenever any such disclosure is made.
ARTICLE IX
EARLY AMORTIZATION EVENTS
SECTION 9.01. Early Amortization Events. If any one of
the following events shall occur:
(a) any failure by the Transferor or the Servicer to make
any payment, transfer or deposit required to be paid, effected or
made by it hereunder (including pursuant to Section 3.04(b)) within
two Business Days after the same shall become due; or
(b) any representation or warranty, certification or
written statement made or deemed made by the Transferor or the
Servicer under or in connection with this Agreement, or by the
Parent under or in connection with the Parent Undertaking
Agreement, or in any statement, record, certificate, financial
statement or other document delivered pursuant to this Agreement
or the Parent Undertaking Agreement, or in connection with this
Agreement or the Parent Undertaking Agreement, shall prove to
have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) the Transferor or the Servicer shall fail to observe or
perform any covenant or agreement applicable to it contained
herein which has a material adverse effect on any Beneficiary if such
failure shall remain unremedied for ten days after the first date on
which any Responsible Official of the Transferor or the Servicer
knew or should have known of such failure; or
(d) any Receivables Purchase Agreement shall for any
reason cease to be in full force and effect or an Early Termination
(as defined therein) shall occur; or
(e) the Net Receivables Balance is less than the
Required Net Receivables Balance upon the termination of a Partial
Amortization Period; or
(f) an Insolvency Event shall occur with respect to any
Originator, the Transferor, the Servicer, Zenith, the Parent or the
Trust; or
(g) the Securities and Exchange Commission or other
regulatory body having jurisdiction shall reach a final determination
that the Trust is an "investment company" within the meaning of the
Investment Company Act; or
(h) (i) any purchase of any Receivables by the
Transferor under any Receivables Purchase Agreement shall cease
to create a valid sale, transfer and assignment to the Transferor of
all right, title and interest of the Originator in and to such Receiv-
xxxxx and the proceeds thereof, or (ii) any Transfer of any
Receivables on any date shall for any reason cease to create a valid
and perfected first priority sale, transfer and assignment to the Trust
of all right, title and interest of the Transferor in and to such
Receivables and the proceeds thereof or, if such Transfer does not
constitute such a sale, transfer and assignment, cease to create a
valid and perfected first priority security interest in such
Receivables and the proceeds thereof, or (iii) the Investor Certifi-
xxxxx delivered hereunder shall for any reason (other than due to the
acts or omissions of the Investor Certificateholders) cease to
evidence the transfer to the Investor Certificateholders of, or the
Investor Certificateholders shall otherwise cease to have, a
beneficial interest in a trust owning, or the Trustee on behalf of the
Trust having a perfected first priority security interest in, the
Receivables and the other Trust Assets now existing and hereafter
arising and the proceeds thereof to the extent of their respective
Undivided Fractional Interests; or
(i) the Trust at any time receives a final determination
that the Trust will be treated as an association (or publicly traded
partnership) taxable as a corporation for federal income tax
purposes; or
(j) a Servicer Default shall have occurred and be
continuing; or
(k) the Servicer shall have resigned in accordance with
the terms of this Agreement; or
(l) the Parent shall fail to observe or perform any
covenant or agreement (within any applicable cure period)
applicable to it contained in the Parent Undertaking Agreement, or
the Parent Undertaking Agreement shall cease to be in effect or the
Parent shall so assert in writing; or
(m) any material adverse change shall occur in the
collectibility of the Receivables taken as a whole or in the financial
condition of the Transferor, Zenith, Zenith and its Subsidiaries
taken as a whole or the Parent, or in the ability of any of them or
any Originator to perform its obligations under any Transaction
Document; or
(n) any of Zenith, the Transferor, the Servicer or any
Originator shall fail to pay principal in respect of any Indebtedness
of Zenith, the Transferor, the Servicer or any Originator (as the
case may be) that is outstanding (i) in a principal amount, either
individually or in the aggregate, of at least $500,000 or (ii) in the
case of the Transferor, in any amount (but excluding, in each case,
Indebtedness outstanding under any Transaction Document), when
the full amount of such Indebtedness becomes due and payable; or
any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Indebtedness, if the
effect of such event or condition is to accelerate the maturity of
such Indebtedness or otherwise to cause such Indebtedness to
mature; or any such Indebtedness shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased
or defeased, or an offer to prepay, redeem, purchase or defease
such Indebtedness shall be required to be made, in each case prior
to the stated maturity thereof; or
(o) the Intercreditor Agreement shall cease to be in full
force and effect; or
(p) (i) any Plan Event shall have occurred, (ii) the
Transferor or any ERISA Affiliate shall have withdrawn from a
Multiemployer Plan, or (iii) any Multiemployer Plan shall have been
terminated or reorganized or become insolvent, and as a result of
one or more such events the Transferor or any ERISA Affiliate has
incurred or is reasonably expected to incur liability in excess of
$1,000,000; or
(q) a Termination Event (other than a Termination
Event based upon an Insolvency Event) under any Receivables
Purchase Agreement shall occur; or
(r) the Parent and its Controlled Affiliates as a group
shall cease to be the beneficial owners of at least a majority of the
Voting Stock of Zenith, or Zenith shall cease to be the beneficial
owner of at least a majority of the outstanding Voting Stock of the
Transferor.
then, if any of the events set forth in paragraph (f) above shall have
occurred, an "Early Amortization Event" shall occur without any notice,
demand, protest or other requirement of any kind immediately upon the
occurrence of such event, and, if any of the events set forth in any other
paragraph above shall have occurred, the Trustee may (and, if directed to
do so by a Majority in Interest of any outstanding Series or, if the related
Supplement so provides, the Enhancement Provider for such Series, shall),
by notice to the Transferor, the Servicer, and each Enhancement Provider,
declare that an "Early Amortization Event" shall occur as of the date set
forth in such notice. Upon the occurrence of an Early Amortization Event,
additional Receivables will not be transferred to the Trust. The Trustee
shall be deemed to have knowledge of an Early Amortization Event only if
a Responsible Official of the Trustee has actual knowledge or if a
Responsible Official of the Trustee has received written notice thereof.
A Majority in Interest of each outstanding Series (or, if so
specified in the related Supplement, each Enhancement Provider for such
Series) may, on behalf of all Holders, waive any default (other than a
default described in paragraph (e) above) by the Transferor or the Servicer
in the performance of their obligations hereunder and its consequences,
except the failure to make any distributions or payments required to be
made to Holders or to make any required deposits of any amounts to be so
distributed or paid. Holders of Certificates evidencing 67% or more of the
aggregate Holders' Interest of each outstanding Series (or, if so specified in
the related Supplement, each Enhancement Provider for such Series) may,
on behalf of all Holders, waive any default described in paragraph (e) above
and its consequences. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
SECTION 9.02. Additional Rights upon the Occurrence of
Any Early Amortization Event. (a) Upon the occurrence and during the
continuance of
any Early Amortization Event, in addition to all other rights and remedies
under this Agreement or otherwise and all other rights and remedies
provided under the UCC of the State of New York and other applicable
laws (which rights shall be cumulative), each of the Servicer, at the
direction of the Trustee, and the Trustee may exercise any and all rights
and remedies of the Transferor under or in connection with the Receivables
Purchase Agreements, including any and all rights of the Transferor to
demand or otherwise require payment of any amount under, or
performance of any provision of, the Receivables Purchase Agreements.
Further, the Trustee may exercise any and all rights and remedies under the
Parent Undertaking Agreement.
(b) If an Insolvency Event with respect to the
Transferor occurs, the Transferor shall immediately cease to transfer
Receivables to the Trust and shall promptly give written notice to the
Trustee, who shall, within two Business Days, forward such notice to the
Holders, each Rating Agency, each Program Agent, each Enhancement
Provider and the Servicer of such event. Receivables transferred to the
Trust prior to the occurrence of such Insolvency Event and collections
relating to such Receivables shall continue to be part of the Trust. Unless,
within 10 Business Days of the date of the notice provided for above, the
Trustee receives written instructions from a Majority in Interest of each
outstanding Series (or, if so specified in the related Supplement, the
Enhancement Provider for the Series) instructing the Trustee not to sell,
dispose of or liquidate the Receivables, the Trustee or its agent shall
promptly proceed to sell, dispose of, or otherwise liquidate the Receivables
in a commercially reasonable manner and on commercially reasonable
terms; provided, however, that, if the amount available to the Trust for
distribution after such sale, disposition or liquidation would be less than the
aggregate unpaid Invested Amount of the Investor Certificates plus any
unpaid Discount Amount thereon through the Distribution Date next
succeeding the date of such sale, the Trustee or its agent shall not proceed
with such sale, disposition or liquidation unless a Majority in Interest of
each outstanding Series (or, if so specified in the related Supplement, the
Enhancement Provider for such Series) shall have consented in writing
thereto. The proceeds from such sale, disposition or liquidation of the
Receivables shall be treated as Collections on the Receivables and shall be
distributed in accordance with the terms of this Agreement after being
deposited in the Concentration Account.
ARTICLE X
SERVICER DEFAULTS
SECTION 10.01. Servicer Defaults. If any one of the
following events (each being a "Servicer Default") shall occur and be
continuing:
(a) any failure by the Servicer to make any payment,
transfer or deposit (including pursuant to Section 3.04(b)), or, if
applicable, to give instructions or notice to the Trustee to make
such payment, transfer or deposit, or to give notice to the Trustee
as to any action to be taken under any Enhancement Agreement, or
any failure to provide a Determination Date Certificate to the
Trustee, in each case, within two Business Days after the same
shall become due; or
(b) the Servicer shall fail to observe or perform any
other covenant or agreement applicable to it contained herein which
has a material adverse effect on any Beneficiary if such failure shall
remain unremedied for ten days after the first date on which any
Responsible Official of the Servicer knew or should have known of
such failure; or
(c) any representation, warranty or certification made or
deemed made by the Servicer under or in connection with this
Agreement, or in any certificate or information delivered pursuant
to or in connection with this Agreement, shall prove to have been
incorrect in any material respect on or as of the date made or
deemed made; or
(d) an Insolvency Event shall occur with respect to the
Servicer; or
(e) the Servicer assigns its duties under this Agreement,
except as specifically permitted by Section 8.02; or
(f) The Servicer shall at any time fail to have
Consolidated Tangible Net Worth of at least $1,000,000;
then, as long as such Servicer Default shall not have been remedied and is
continuing, either the Trustee (unless otherwise directed by a Majority in
Interest of each outstanding Series or, if so specified in the related
Supplement, the Enhancement Provider for such Series) or the Majority in
Interest of each Series (or, if so specified in the related Supplement, the
Enhancement Provider for such Series), by notice then given in writing to
the Servicer (and to the Trustee if given by such Investor
Certificateholders) (each such being a "Termination Notice"), may
terminate all but not less than all the rights and obligations of the Servicer
as Servicer under this Agreement. The Trustee shall be deemed to have
knowledge of a Servicer Default only if a Responsible Official of the
Trustee has actual knowledge or if a Responsible Official of the Trustee
has received written notice thereof.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in Section 10.01(a) or (b) for a period of five
Business Days shall not constitute a Servicer Default if such delay or failure
could not have been prevented by the exercise of reasonable diligence by
the Servicer and such delay or failure was caused by an act of God or the
public enemy, acts of declared or undeclared war, public disorder, rebellion
or sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods, union strikes, work stoppages or similar causes. The preceding
sentence shall not relieve the Servicer from using its best efforts to perform
its obligations in a timely manner in accordance with the terms of this
Agreement, and the Servicer shall provide the Trustee, the Transferor, any
Enhancement Provider and the Investor Certificateholders with an Officer's
Certificate giving prompt notice of such failure or delay by it, together with
a description of its efforts so to perform its obligations.
A Majority in Interest of each outstanding Series (or, if so
specified in the related Supplement, the Enhancement Provider for such
Series) may, on behalf of all Holders, waive any default by the Servicer in
the performance of its obligations hereunder and its consequences, except
the failure to make any distributions or payments required to be made to
Holders or to make any required deposits of any amounts to be so
distributed or paid. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
After receipt by the Servicer of a Termination Notice, and
on the date that a Successor Servicer shall have been appointed by the
Trustee pursuant to Section 10.02, all authority and power of the Servicer
under this Agreement shall pass to and be vested in such Successor
Servicer (a "Service Transfer") and, without limitation, the Trustee is
hereby authorized, empowered and instructed (upon the failure of the
Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments,
and to do and accomplish all other acts or things necessary or appropriate
to effect the purposes of such Service Transfer. The Servicer agrees to
cooperate, at its expense, with the Trustee and such Successor Servicer in
(i) effecting the termination of the responsibilities and rights of the
Servicer to conduct servicing hereunder, including the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
as provided under this Agreement, including all authority over all Collections
which shall on the date of such Service Transfer be held by the Servicer for
deposit to the Concentration Account, any Collection Account, the
Trustee's Account or the Transferor's Account, or which have been
deposited by the Servicer to the Concentration Account, any Collection
Account, or any other account, or which shall thereafter be received with
respect to the Receivables, (ii) taking such measures as shall be reasonably
requested by the Transferor to protect and maintain the security and
confidentiality of all Confidential Information in accordance with Section
8.07 and (iii) assisting the Successor Servicer until all servicing activities
have been transferred to such Successor Servicer, such assistance to
include (x) assisting any accountants selected by the Successor Servicer to
verify collection records and reports made prior to the Service Transfer and
(y) assisting to make the computer systems of the Servicer and the
Successor Servicer compatible to the extent necessary to effect the
Servicer Transfer. The Servicer shall, at its expense, within five Business
Days of such Service Transfer, (A) assemble such documents, instruments
and other records (including computer tapes and disks), which evidence the
Receivables and the other Trust Assets, and which are necessary or
desirable to collect the Receivables, and shall make the same available to
the Successor Servicer or the Trustee or its designee at a place selected by
the Successor Servicer or the Trustee and in such form as the Successor
Servicer or the Trustee may reasonably request, and (B) segregate all cash,
checks and other instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Successor
Servicer and the Trustee, and, promptly upon receipt, remit all such cash,
checks and instruments to the Successor Servicer or the Trustee or its
designee.
At any time following a Termination Notice:
(1) the Servicer shall, at the Trustee's request and at the
Servicer's expense, give notice of the Trust's interest in the
Receivables to the related Obligors and direct that payments be
made directly to the Trustee or its designee;
(2) if the Servicer fails to provide the notice to the
Obligors required in paragraph (1) above, the Trustee may direct
the Obligors of Receivables, or any of them, that payment of all
amounts payable under any such Receivables be made directly to
the Trustee or its designee; and
(3) each of the Transferor and each Holder hereby
authorizes the Trustee to take any and all steps in the Transferor's
name and on behalf of the Transferor and the Holders necessary or
desirable, in the determination of the Trustee, to collect all amounts
due under any and all Receivables, including endorsing the
Transferor's name on checks and other instruments representing
Collections in respect of such Receivables and enforcing such
Receivables.
SECTION 10.02. Trustee to Act; Appointment of
Successor Servicer. (a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 10.01 or upon a resignation by the
Servicer pursuant to Section 8.05, the Servicer shall continue to perform all
servicing functions under this Agreement until (i) in the case of any such
receipt, the date specified in such Termination Notice or otherwise
specified by the Trustee in writing or, if no such date is specified in such
Termination Notice or otherwise specified by the Trustee, until the earlier
of a date agreed upon by the Servicer and the Trustee and a date specified
by the Trustee in a written notice to the Servicer and (ii) in the case of any
such resignation, until the Trustee or a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer pursuant to this
Section 10.02. The Trustee shall as promptly as possible after the giving of
a Termination Notice or such a resignation pursuant to Section 8.05 hereof
appoint an Eligible Servicer (which may be Citibank, N.A.) as a successor
servicer (the "Successor Servicer") subject, if specified in any Supplement,
to the consent of a Majority in Interest of such Series, which consent shall
not be unreasonably withheld or delayed, and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to the
Trustee. In the event that a Successor Servicer has not been appointed or
has not accepted its appointment by the earlier of 30 days after the date of
such Termination Notice or resignation or at the time when the Servicer
ceases to act as Servicer, the Trustee without further action shall
automatically be appointed the Successor Servicer. The Trustee may
delegate any of its servicing obligations to an affiliate or agent of the
Trustee in accordance with the terms of this Agreement. Notwithstanding
the foregoing, the Trustee shall, if it is unable or unwilling so to act as
Successor Servicer, petition a court of competent jurisdiction to appoint
any established institution that is an Eligible Servicer (other than the
Trustee) as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, and all references in this Agreement to
the Servicer shall be deemed to refer to such Successor Servicer; provided,
however, that neither the Trustee (solely in its capacity as such) nor any
Successor Servicer shall be deemed in default hereunder as a result of the
predecessor Servicer's failure to deliver necessary Trust Assets, documents,
or records to the Trustee (solely in its capacity as such) or to such
Successor Servicer; and provided further that the Successor Servicer shall
not be liable for any acts or omissions of the Servicer occurring prior to
such succession or for any breach by the Servicer of any of its
representations and warranties contained herein or in any related document
or agreement. The Successor Servicer shall be reimbursed by the
Transferor for any reasonable transition fees, costs and out-of-pocket
expenses incurred in connection with a Service Transfer in accordance with
Section 3.02(b). Any Successor Servicer, by its acceptance of its
appointment, will automatically agree to be bound by the terms and
provisions of any Enhancement Agreement.
(c) In connection with any Termination Notice, the
Trustee shall be permitted to appoint any Eligible Servicer as a Successor
Servicer for servicing compensation not in excess of the Servicing Fee,
unless the Trustee shall agree to pay the excess over the Servicing Fee of
the compensation of any such Successor Servicer but in no event shall such
compensation exceed a per annum fee equal to the lesser of (i) the product
of 1% and the average of the aggregate Invested Amounts with respect to
all Series on each day in the immediately preceding Interest Period, and (ii)
the product of 110% and an amount equal to the aggregate amount of such
Servicer's actual costs.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically terminate upon
termination of the Trust and shall pass to and be vested in the Transferor,
and, without limitation, the Transferor is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to
do and accomplish all other acts or things, necessary or appropriate to
effect the purposes of such transfer of servicing rights. The Successor
Servicer agrees to cooperate with the Transferor in effecting the
termination of the responsibilities and rights of the Successor Servicer to
conduct servicing of the Receivables. Upon such termination of the Trust,
the Successor Servicer shall transfer its electronic records relating to the
Receivables to the Transferor in such electronic form as the Transferor may
reasonably request and shall transfer all other records, correspondence and
documents to the Transferor in the manner and at such times as the
Transferor shall reasonably request.
SECTION 10.03. Notification to Holders. Promptly and in
any event within two Business Days after a Responsible Official of the
Servicer obtains knowledge of any Servicer Default, the Servicer shall give
written notice thereof to a Responsible Official of the Trustee, and the
Trustee shall promptly deliver a copy of such notice to the Holders, each
Enhancement Provider and each Rating Agency. Upon any termination or
appointment of a Successor Servicer pursuant to this Article X, the Trustee
shall give prompt written notice thereof to the Transferor and the Holders.
ARTICLE XI
THE TRUSTEE
SECTION 11.01. Duties of the Trustee. (a) Other than
while acting in its capacity as Successor Servicer, the Trustee, prior to the
occurrence of a Servicer Default of which a Responsible Official of the
Trustee has actual knowledge and after the curing of all Servicer Defaults
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement, and no implied duties
or covenants shall be read into this Agreement against the Trustee. If a
Responsible Official of the Trustee has actual knowledge that a Servicer
Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Agreement
and use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his
or her own affairs.
(b) The Trustee, upon receipt of any resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement or any Supplement,
shall examine them to determine whether they substantially conform to the
requirements of this Agreement or any Supplement. The Trustee shall give
prompt written notice to the Transferor, the Holders, any Enhancement
Provider and each Rating Agency of any material lack of conformity of any
such instrument to the applicable requirements of this Agreement or any
Supplement discovered by the Trustee which would entitle any
Enhancement Provider or a specified percentage of the Investor
Certificateholders to take any action pursuant to this Agreement or any
Supplement.
(c) Subject to Section 11.01(a), no provision of this
Agreement shall be construed to relieve the Trustee from liability for its
own grossly negligent action, its own grossly negligent failure to act or its
own willful misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an error
of judgment made in good faith by any Responsible Official of the
Trustee, unless it shall be proved that the Trustee was grossly
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of a Majority in Interest
of each outstanding Series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee
in accordance with the terms of this Agreement, or exercising any
trust or power conferred upon the Trustee, under this Agreement;
and
(iii) the Trustee shall not be charged with knowledge of
any failure by the Servicer to comply with the obligations of the
Servicer referred to in Section 10.01 or of any Early Amortization
Event unless a Responsible Official of the Trustee obtains actual
knowledge of such failure or such event or the Trustee receives
written notice of such failure or such event from the Servicer, each
Enhancement Provider or the Holders of any outstanding Series
evidencing not less than 20% of the Invested Amount for such
Series.
(d) The Trustee shall not be required to expend or risk
its own funds or otherwise incur financial liability in the performance of any
of its duties hereunder or under any Supplement or in the exercise of any of
its rights or powers if there is reasonable grounds for believing that the
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not reasonably assured to it, and none of the provisions
contained in this Agreement shall in any event require the Trustee to
perform, or be responsible for the manner of performance of, any
obligations of the Servicer under this Agreement except during such time,
if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
(e) Except for actions expressly authorized by this
Agreement, the Trustee shall take no action reasonably likely to impair the
interests of the Trust in any Receivable now existing or hereafter created or
to impair the value of any Receivable now existing or hereafter created.
(f) Except as expressly provided in this Agreement, the
Trustee shall have no power to vary the corpus of the Trust including by (i)
accepting any substitute obligation for a Receivable initially Transferred to
the Trust under Section 2.01, (ii) adding any other investment, obligation
or security to the Trust or (iii) withdrawing from the Trust any Receivable.
(g) In the event that the Transfer Agent and Registrar
shall fail to perform any obligation, duty or agreement in the manner or on
the day required to be performed by the Transfer Agent and Registrar, as
the case may be, under this Agreement or under any Supplement, the
Trustee shall be obligated promptly upon its actual knowledge thereof to
perform such obligation, duty or agreement in the manner so required.
(h) The Trustee shall have no responsibility or liability
for the selection of, or investment losses on, Eligible Investments.
(i) Notwithstanding any other provision contained
herein, the Trustee is not acting as, and shall not be deemed to be, a
fiduciary for any Enhancement Provider in its capacity as such or as a
Beneficiary, and the Trustee's sole responsibility with respect to any such
Enhancement Provider shall be to perform those duties with respect to any
such Enhancement Provider as are specifically set forth herein, and no
implied duties or obligations shall be read into this Agreement against the
Trustee with respect to any such Enhancement Provider.
(j) The Trustee shall notify each Rating Agency and
each Enhancement Provider (i) of any notice which the Trustee receives
pursuant to Section 2.05(f)(i), 2.05(g) or 3.04(h)(i), (ii) of any change in
any rating of the Certificates of any other Rating Agency and (iii)
immediately of the occurrence of any Early Amortization Event under
Article IX.
(k) The Trustee shall, with respect to each Daily Report
(upon which the Trustee may conclusively rely), (A) compare the
Collections reported that day by the Servicer to the actual Collections
deposited to the Collection Account, (B) with respect to the reconciliation
of each of the trust accounts, compare the beginning balance as reported by
the Servicer to the amount on deposit in the trust accounts per the
accounting records of the Trustee and (C) perform each of the account
transfers set forth in the Daily Report, as directed by the Servicer.
(l) The Trustee shall follow the following procedures
with respect to each Determination Date Certificate (upon which the
Trustee may conclusively rely):
(i) with respect to the reconciliation of each of the trust
accounts, compare the beginning and ending balances to the
amounts which were on deposit in the trust accounts per the
accounting records of the Trustee as of the applicable date; and
(ii) examine potential Early Amortization Events for
positive indications of actual Early Amortization Events pursuant to
any such requirement in any applicable Supplement.
(m) Notwithstanding any other provision of this
Agreement or any Supplement, upon discovery by the Trustee of any
material discrepancy between the amounts reported by the Servicer and the
amounts calculated as provided above, the Trustee shall promptly notify
the Servicer thereof and the Servicer shall thereupon have ten days to
resolve such discrepancy before the Trustee shall be obligated to give
notice to the Holders, each Enhancement Provider and each Rating
Agency.
SECTION 11.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.01:
(a) the Trustee may conclusively rely on and shall be
fully protected in acting on, or in refraining from acting in accord
with, any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it in good faith to be genuine and to have been signed
or presented to it pursuant to this Agreement by the proper party or
parties;
(b) the Trustee may consult with counsel and, as a
condition to taking, suffering or omitting to take any action, may
demand an Opinion of Counsel, and any advice or opinion of
counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion of
counsel;
(c) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Holders,
unless such Holders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities
which may be incurred therein or thereby; provided, however, that
nothing contained herein shall relieve the Trustee of the obligations,
upon the occurrence of a Servicer Default (which has not been
cured or waived), to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care and skill
in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs;
(d) subject to Section 11.01(c), the Trustee shall not be
personally liable for any action taken, suffered or omitted by it in
good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any in-
vestigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, approval, bond or other paper or
document, unless requested in writing so to do by Holders of any
outstanding Series evidencing not less than 20% of the Invested
Amount for such Series or, if so specified in any Supplement, the
Enhancement Provider therefor;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian, and the Trustee shall
not be responsible for any misconduct or negligence on the part of,
or for the supervision of any such agent, attorney or custodian
appointed with due care by it hereunder;
(g) except as required by Section 11.01, the Trustee
shall not be required to make any initial or periodic examination of
any documents or records related to the Receivables for the
purpose of establishing the presence or absence of defects, the
compliance by the Transferor with its representations and
warranties or for any other purpose; and
(h) nothing in this Agreement shall be construed to
require the Trustee to monitor the performance of the Servicer or
act as a guarantor of the Servicer's performance.
SECTION 11.03. Trustee Not Liable for Recitals in
Certificates or Receivables. The Trustee assumes no responsibility for the
correctness of the recitals contained herein and in the Certificates (other
than the certificate of authentication on the Certificates). Except as set
forth in Section 11.15, the Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than
the certificate of authentication on the Certificates) or of any Receivable or
related document. The Trustee shall not be accountable for the use or
application by the Transferor of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Transferor in respect of the Receivables or deposited in or withdrawn from
the Concentration Account, any Collection Account, the Transferor's
Account, the Trustee's Account or any other account hereafter established
in accordance with the terms of this Agreement and any Supplement. The
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any security interest
in any Receivable, or the perfection and priority of such security interest or
the maintenance of any such perfection and priority or the accuracy,
content or completeness of any offering documents used in connection with
the sale of the Certificates.
SECTION 11.04. Trustee May Own Certificates. The
Trustee in its individual or any other capacity may become the owner or
pledgee of Investor Certificates and may otherwise deal, and transact
banking business, with the Servicer and the Transferor with the same rights
as it would have if it were not the Trustee.
SECTION 11.05. Compensation; Trustee's Expenses. (a)
The Trustee shall be entitled to receive a monthly Trustee's fee (which fee,
to the extent permitted by applicable law, shall not be limited by any
provision of law, such fee being the "Trustee's Fee") in respect of each
Collection Period (or portion thereof) from the date hereof until the
termination of the Amortization Period, payable in arrears on each
Distribution Date in an amount agreed upon in writing by the Trustee and
the Transferor. The Trustee's Fee shall be the aggregate of the Series
Trustee's Fees specified in the Supplements. The Trustee's Fee shall be
payable, first, from Investor Collections pursuant to, and subject to the
priority of payment set forth in, the applicable Supplement, second, to the
extent not paid from Investor Collections, by the Transferor, and third, to
the extent not paid from Investor Collections or by the Transferor, by the
Servicer pursuant to Section 3.02(b). When the Trustee incurs expenses or
renders services in connection with an Insolvency Event such expenses
(including the reasonable fees and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors rights
generally.
(b) Expenses. The Transferor will pay or reimburse the
Trustee upon its request on at least 5 Business Days' notice providing
reasonable detail, and if the Transferor shall fail to do so, the Servicer will
so pay or reimburse the Trustee (with a right to reimbursement from the
Transferor) pursuant to Section 3.02(b), and if both the Transferor and the
Servicer shall fail to do so, the Program Agent will have the right, but not
the obligation, to so pay or reimburse the Trustee (with a right to
reimbursement from the Transferor), for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any of the provisions of this Agreement or any Supplement or in
connection with any amendment hereto (including the reasonable fees and
expenses of its agents, any co-trustee and counsel and fees incurred in
connection with a Servicer Default or an Early Amortization Event) except
any such expense, disbursement or advance as may arise from its gross
negligence or willful misconduct and except as provided in the following
sentence. If the Trustee is appointed Successor Servicer pursuant to
Section 10.02, the provision of this Section 11.05 shall not apply to
expenses, disbursements and advances made or incurred by the Trustee in
its capacity as Successor Servicer, which shall be paid, first, out of the
Servicing Fee and, second, to the extent not paid out of the Servicing Fee,
by the Transferor pursuant to Section 3.02(b). The Transferor's and
Servicer's covenant provided in this Section 11.05 shall survive the
termination of the Trust.
SECTION 11.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an Eligible Institution. If the
Trustee publishes reports of condition at least annually, pursuant to law or
to the requirements of any supervising or examining authority, then, for the
purpose of this Section 11.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 11.06, the Trustee shall resign immediately in the manner
and with the effect specified in Section 11.07.
SECTION 11.07. Resignation or Removal of Trustee. (a)
The Trustee may at any time resign and be discharged from the trust hereby
created by giving 30 days' written notice thereof to the Transferor, the
Parent and the Servicer. Upon receiving such notice of resignation, the
Servicer shall promptly appoint a successor trustee acceptable to each
Enhancement Provider and a Majority in Interest of each outstanding
Series by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 and shall fail to resign
after written request therefor by the Servicer, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged as bankrupt or insolvent,
or if a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation, then
the Servicer may remove the Trustee and promptly appoint a successor
trustee acceptable to each Enhancement Provider and to a Majority in
Interest of each outstanding Series by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee.
(c) If at any time the Trustee shall fail to perform its
obligations under this Agreement, a Majority in Interest of each
outstanding Series may remove the Trustee and direct the Servicer to
promptly appoint a successor trustee acceptable to each Enhancement
Provider and to a Majority in Interest of each outstanding Series by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee; provided
that if all other procedures fail and a successor trustee has not accepted an
appointment pursuant to this Section 11.07(c) within 30 days after the
Trustee shall have received notice from the Majority in Interest of each
outstanding Series of their intention to remove such Trustee, the Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
(d) Notwithstanding anything herein to the contrary, any
resignation or removal of the Trustee and appointment of successor trustee
pursuant to any of the provisions of this Section 11.07 shall not become
effective until acceptance of appointment by the successor trustee as
provided in Section 11.08.
SECTION 11.08. Successor Trustee. (a) Any successor
trustee appointed as provided in Section 11.07 shall execute, acknowledge
and deliver to the Transferor, the Servicer and its predecessor Trustee an
instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective,
and such successor trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations
of its predecessor hereunder, with like effect as if originally named as
Trustee herein. The predecessor Trustee shall deliver (with the expense
therefor payable out of the Trustee's Fee, and by the Transferor and the
Servicer, pursuant to Sections 3.02(b) and 11.05(b)) to the successor
trustee all documents or copies thereof and statements held by it hereunder,
and the Transferor and the predecessor Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as
provided in this Section 11.08 unless at the time of such acceptance such
successor trustee shall be eligible under the provisions of Section 11.06.
(c) Upon acceptance of appointment by a successor
trustee as provided in this Section 11.08, such successor trustee shall mail
notice of such succession hereunder to all Investor Certificateholders, each
Enhancement Provider and to and each Rating Agency.
SECTION 11.09. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Person succeeding to the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided that such corporation
shall be eligible under the provisions of Section 11.06.
SECTION 11.10. Appointment of Co-Trustee or Separate
Trustee. (a) Notwithstanding any other provisions of this Agreement, at
any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments
to appoint one or more Persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Beneficiaries, such title to the Trust, or any part thereof, and, subject to
the other provisions of this Section 11.10, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 11.06 and no notice to
Holders of the appointment of any co-trustee or separate trustee shall he
required under Section 11.08.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that, under any
law of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as Successor Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely
at the direction of the Trustee;
(ii) no separate trustee or co-trustee hereunder shall be
personally liable by reason of any act or omission of any other
trustee or co-trustee hereunder; and
(iii) the Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article XI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject
to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
appoint the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all its estates, properties, rights, remedies and trusts shall vest in
and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
SECTION 11.11. Tax Returns. In the event the Trust shall
be required to file any tax returns, the Servicer shall prepare or shall cause
to be prepared any tax returns required to be filed by the Trust and shall
remit such returns to the Trustee for signature at least five days before such
returns are due to be filed, and the Servicer shall cause the Trust not to
elect to be taxed under the Internal Revenue Code as a corporation or as an
association taxable as a corporation. The Trustee shall promptly sign such
returns and deliver such returns after signature to the Servicer, and such
returns shall be filed by the Servicer. The Servicer in accordance with the
Supplements shall also prepare or shall cause to be prepared all tax
information required by law to be distributed to Investor Certificateholders
and shall deliver such information to the Trustee at least five days prior to
the date it is required by law to be distributed to the Holders. The Trustee,
upon request, will furnish the Servicer with all such information known to
the Trustee as may be reasonably required in connection with the
preparation of all tax returns of the Trust, and shall, upon request, execute
such returns. In no event shall the Trustee be liable for any liabilities,
costs or expenses of the Trust or the Investor Certificateholders arising out
of the application of any tax law, including federal, state, foreign or local
income or franchise taxes or any other tax imposed on or measured by
income (or any interest, penalty or addition to tax with respect thereto or
arising from a failure to comply therewith).
SECTION 11.12. Trustee May Enforce Claims Without
Possession of Certificates. All rights of action and claims under this
Agreement or the Certificates may be prosecuted and enforced by the
Trustee without the possession of any of the Certificates or the production
thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as Trustee. Any
recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the benefit of the Beneficiaries in
respect of which such judgment has been obtained.
SECTION 11.13. Suits for Enforcement. (a) If a Servicer
Default shall occur and be continuing, the Trustee, in its discretion may,
subject to the provisions of Sections 11.01 and 11.14, proceed to protect
and enforce its rights and the rights of the Holders under this Agreement by
suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this
Agreement or in aid of the execution of any power granted in this
Agreement or for the enforcement of any other legal, equitable or other
remedy as the Trustee, being advised by counsel, shall deem most effectual
to protect and enforce any of the rights of the Trustee or the Holders.
(b) Nothing herein contained shall be deemed to
authorize the Trustee to authorize, consent to, accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Certificates or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
SECTION 11.14. Rights of Holders to Direct Trustee. A
Majority in Interest of any outstanding Series (or, if so specified in the
related Supplement, the Enhancement Provider for such Series or, in the
event of conflicting instructions from the Majority in Interest of two or
more separate Series, the Majority in Interest for all Series) shall have the
right to direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee under any Transaction Document,
or exercising any trust or power conferred on the Trustee under any
Transaction Document; provided, however, that, subject to Section 11.01,
the Trustee shall have the right to decline to follow any such direction if the
Trustee after being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by
any Responsible Official of the Trustee, determine that the proceedings so
directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Holders not parties to such direction.
SECTION 11.15. Representations and Warranties of
Trustee. The Trustee represents and warrants that:
(a) the Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of
New York, and has the power to own its assets and to transact the
business in which it is presently engaged;
(b) the Trustee has full power, authority and right to
execute, deliver and perform this Agreement, and has taken all
necessary action to authorize the execution, delivery and
performance by it of this Agreement; and
(c) this Agreement has been duly executed and
delivered by the Trustee and constitutes a legal, valid and binding
obligation of the Trustee enforceable against the Trustee in
accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and except as such enforceability may be limited by
general principles of equity, whether considered in a suit at law or
in equity).
SECTION 11.16. Maintenance of Office or Agency. The
Trustee will maintain at its expense in New York, New York an office or
agency (the "Corporate Trust Office") where notices and demands to or
upon the Trustee in respect of the Certificates and this Agreement may be
served. The Trustee initially designates its office or agency at Four Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and
Agency Group/Structured Finance, as such office. The Trustee will give
prompt written notice to the Transferor, the Servicer and to the Holders of
any change in the location of the Certificate Register or any such office or
agency.
ARTICLE XII
TERMINATION
SECTION 12.01. Termination of Trust. The Trust and the
respective obligations and responsibilities of the Transferor, the Servicer
and the Trustee created hereby (other than the obligation of the Trustee to
make payments to Holders as hereinafter set forth) shall terminate, except
with respect to the duties described in Sections 2.01(b), 3.02(b), 7.03,
8.04, 8.07, 11.05 and 12.02(b), upon the earlier to occur of (i) the
Termination Date of the last outstanding Series of Certificates and (ii)
December 31, 2017.
SECTION 12.02. Final Distribution. (a) The Servicer
shall give the Parent and the Trustee, and the Trustee shall give each
Holder, at least 30 days' prior written notice of the date on which (i) the
Trust is expected to terminate in accordance with Section 12.01 and (ii) the
Holders may surrender their Certificates for payment of the final
distribution on and cancellation of such Certificates. Such notice shall be
accompanied by an Officer's Certificate setting forth the information
specified in Section 3.06 covering the period during the then-current
calendar year through the date of such notice. Not later than five days
after the Trustee shall receive such notice, the Trustee shall mail notice to
the Holders specifying (i) the date upon which such final distribution will
be made upon presentation and surrender of such Certificates at the office
or offices therein designated, (ii) the amount of any such final distribution
and (iii) that the Distribution Date otherwise applicable to such final
distribution is not applicable, payments being made only upon presentation
and surrender of such Certificates at the office or offices therein specified.
Each such Holder shall surrender its Certificate to the Trustee following
receipt of the final distribution thereon. The Trustee shall give such notice
to the Transfer Agent and Registrar at the time such notice is given to the
Holders.
(b) Notwithstanding the Servicer's delivery to the
Trustee, or the Trustee's delivery to the Holders, of the notices required
under Section 12.02(a), all funds then on deposit in the Concentration
Account, any Collection Account, any Series Account, the Transferor's
Account or the Trustee's Account shall continue to be held in trust for the
benefit of the Beneficiaries, and the Trustee shall pay such funds to the
Holders upon surrender of their Certificates pursuant to, and subject to the
priorities set forth in, the applicable Supplement, as if such surrender date
were on a Distribution Date. In the event that all Holders do not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice from the Trustee, the Trustee shall
give a second written notice to the remaining Holders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto and no further interest shall be payable with respect to any such
Certificate for any period after such specified date. If within one year after
the second notice all the Certificates shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining Holders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds in the Trustee's Account (if such Holders are Investor
Certificateholders) or the Transferor's Account (if any such Holder is the
Holder of the Transferor Certificate) held for the benefit of such Holders.
The Trustee shall pay to the Transferor any monies held by it for the
payment of principal or interest that remains unclaimed for two years after
the date specified in the initial above-mentioned written notice from the
Trustee. After payment to the Transferor, Investor Certificateholders
entitled to any monies must look to the Transferor for payment as general
creditors unless an applicable abandoned property law designates another
Person.
SECTION 12.03. Transferor's Termination Rights. Upon
the termination of the Trust, the indefeasible payment in full of all amounts
due to the Investor Certificateholders, payment of Trustee's fees and
expenses and the surrender of the Transferor Certificate, the Trustee shall
assign and convey to the Holder of the Transferor Certificate or its
designee, without recourse, representation or warranty (except for the
representation that each Receivable and all other Trust Assets will be free
and clear of all Liens which arose as a result of any claim against or
affecting, or any act or omission of, the Trustee in its individual capacity
not related to the transactions contemplated by the Transaction
Documents), all right, title and interest of the Trust in and to the
Receivables, whether then existing or thereafter created, and all other Trust
Assets, and all proceeds thereof except for amounts held in any account by
the Trustee pursuant to Section 12.02(b). The Trustee at the expense of
the Transferor shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, representation or warranty, as
shall be prepared by the Transferor for execution by the Trustee which are
reasonably requested by the Transferor to vest in the Transferor all right,
title and interest which the Trust had in the Receivables and all other Trust
Assets.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Amendment. (a) This Agreement or any
Supplement may be amended from time to time by the Servicer, the
Transferor, the Parent and the Trustee without the consent of any of the
Investor Certificateholders (i) to cure any ambiguity or (ii) to correct or
supplement any provision herein which may be inconsistent with any other
provision herein; provided that any amendment pursuant to this clause (a)
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Beneficiary.
(b) This Agreement or any Supplement may be amended
from time to time by the Servicer, the Transferor, the Parent and the
Trustee, so long as the Rating Agency Condition is satisfied, with the
consent of a Majority in Interest of each adversely affected Series (or, if so
specified in the related Supplement, the Enhancement Provider for such
Series), for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders; provided, however, that
no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, distributions to be made to any Holder or deposits of
amounts to be so distributed or the amount available under any
Enhancement without the consent of each such Holder, (ii) change the
definition of or the manner of calculating the Holders' Interest or the
Aggregate Holders' Interest or any Investor Certificateholder's interest
therein without the consent of each affected Investor Certificateholder or
(iii) reduce the aforesaid percentage required to consent to any such
amendment without the consent of each Investor Certificateholder. The
Trustee may request an Officer's Certificate and Opinion of Counsel with
respect to an amendment entered into pursuant to this Section 13.01(b)
concerning compliance with the requirements of this Agreement. Any
amendment to be effected pursuant to this paragraph shall be deemed to
adversely affect all outstanding Series, other than any Series with respect to
which such action shall not, as evidenced by an Opinion of Counsel (which
counsel shall not be an employee of, or counsel for, Zenith, the Servicer or
the Transferor), addressed and delivered to the Trustee, adversely affect
the interests of any Investor Certificateholder of such Series.
(c) Promptly after the execution of any such amendment
or consent (other than an amendment pursuant to Section 13.01(a)), the
Trustee shall furnish written notification of the substance of such
amendment to the Parent, each Rating Agency, Investor Certificateholder
and Enhancement Provider.
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 to approve the particular form
of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(e) Notwithstanding anything in this Section 13.01 to
the contrary, no amendment may be made to this Agreement or any
Supplement which would adversely affect the interests of any
Enhancement Provider without the consent of such Enhancement Provider.
(f) Any supplement executed in accordance with the
provisions of Section 6.08 shall not be considered an amendment to this
Agreement for the purposes of this Section 13.01.
(g) Prior to the execution of any amendment to this
Agreement or any Supplement, the Trustee and any Enhancement Provider
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any
such amendment which adversely affects its own rights, duties, indemnities
or immunities in its individual capacity under this Agreement, any
Supplement or otherwise.
SECTION 13.02. Limitation on Rights of Holders.
(a) The death or incapacity of any Investor Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Investor Certificateholders' legal representatives or
heirs to claim an accounting or to take any action or commence any
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) No Holder shall have the right to vote (except as
expressly provided in this Agreement, including under Section 11.14) or in
any manner otherwise control the operation and management of the Trust,
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Certificates, be construed so as to
constitute the Holders from time to time as partners or members of an
association for any reason, nor shall any Investor Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) No Investor Certificateholder shall have any right
by virtue of any provisions of this Agreement to file or otherwise institute
any suit, action or proceeding in equity or at law upon or under or with
respect to this Agreement, unless such Investor Certificateholder
previously shall have made, and unless a Majority in Interest of each
outstanding Series shall have made, a written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee, for 60 days after such request and offer
of indemnity, shall have failed to file or otherwise refused to institute any
such action, suit or proceeding. No one or more Holders shall have any
right in any manner whatever by virtue or by availing itself or themselves of
any provisions of this Agreement to affect, disturb or prejudice the rights of
the Holders of any of the Investor Certificates, or to obtain or seek to
obtain priority over or preference to any such Investor Certificateholder, or
to enforce any right under this Agreement, except in the manner herein
provided. For the protection and enforcement of the provisions of this
Section 13.02, each and every Investor Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Agreement, the Certificates or
any Supplement, each Investor Certificateholder shall have the right to
receive the payments of all amounts due hereunder under the Certificates
held by such Holder and under the Supplement relating to the Series of
Certificates held by such Holder and the right to institute suit for the
enforcement of any such payment without the consent of the Trustee or
any other Holder.
(d) By its acceptance of the Transferor Certificate, the
Holder thereof agrees that it will take no action with respect to such
Holder's rights under this Agreement that is inconsistent with, or adverse
to, the interests of any Beneficiary.
SECTION 13.03. Notices; Payments. (a) All notices and
other communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including telex and facsimile communication) and
shall be personally delivered or sent by certified mail, postage prepaid, or
overnight courier or facsimile, to the intended party at the address or
facsimile number of such party set forth below or at such other address or
facsimile number as shall be designated by such party in a written notice to
the other parties hereto. All such notices and communications shall be
effective (i) if personally delivered, when received, (ii) if sent by certified
mail, four Business Days after having been deposited in the mail, postage
prepaid, (iii) if sent by overnight courier, two Business Days after having
been given to such courier, unless sooner received by the addressee and
(iv) if transmitted by facsimile, when sent, upon receipt confirmed by
telephone or electronic means. Notices and communications sent
hereunder on a day that is not a Business Day shall be deemed to have been
sent on the following Business Day.
If to the Transferor,
Zenith Finance Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn.: Treasurer
with a copy to:
Tel.: (000) 000-0000
Fax.: (000) 000-0000
Attn.: Secretary
If to the Servicer,
Zenith Electronics Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn.: Manager Banking and Finance
with a copy to:
Tel.: (000) 000-0000
Fax.: (000) 000-0000
Attn.: General Counsel
If to the Parent,
LG Electronics Inc.
00 Xxxxx-xxxx
Xxxxxxxxxxx-xx
Xxxxx, Xxxxx 150-721
Tel.: 000 000 0000 0000
Fax: 000 000 0000 0000
Attn.: Director of Finance
If to the Trustee,
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn.: Corporate Trust and Agency Group/Structured
Finance
If to the Transfer Agent and Registrar,
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn.: Corporate Trust and Agency Group/Structured
Finance
If to an Enhancement Provider or to a Program Agent, to
the address of such Person specified in the related
Supplement.
If the Servicer is not Zenith, notices shall be given to the
Servicer at the address designated by such Servicer, with a copy to Zenith
at the address designated above.
(b) Any notice required or permitted to be mailed to an
Investor Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.
(c) If the Transferor is not the Holder of the Transferor
Certificate, the Holder of the Transferor Certificate shall be entitled to
receive all notices which the Investor Certificateholders receive.
SECTION 13.04. Rule 144A Information. For so long as
any of the Investor Certificates of any Series are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, the Transferor, the
Servicer and any Enhancement Provider agree to cooperate with each other
to provide to each Investor Certificateholder of such Series and to each
prospective purchaser of Investor Certificates designated by such an
Investor Certificateholder, upon the request of such Investor
Certificateholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition
set forth in Rule 144A(d)(4) under the Act (or any successor provision).
SECTION 13.05. Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this Agreement
shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
covenants, agreements, provisions or terms of this Agreement or of the
Certificates or rights of the Holders.
SECTION 13.06. Assignment. Notwithstanding anything
to the contrary contained herein, (i) this Agreement may not be assigned by
the Transferor and (ii) except as provided in Section 8.02, this Agreement
may not be assigned by the Servicer without the prior consent of a Majority
in Interest of each outstanding Series.
SECTION 13.07. Certificates Nonassessable and Fully
Paid. It is the intention of the parties to this Agreement that the Holders
shall not be personally liable for obligations of the Trust, that the interests
in the Trust represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever and that
Certificates upon authentication thereof by the Trustee pursuant to Section
6.02 are and shall be deemed fully paid.
SECTION 13.08. No Proceedings. Notwithstanding any
prior termination of the Trust, the Servicer, each Program Agent, each
Enhancement Provider, the Trustee and the Holders shall not, so long as
there shall not have elapsed one year and one day after the termination of
the Trust, institute against the Trust or the Transferor any proceeding of
the type referred to in the definition of "Insolvency Event" and the
Transferor shall not institute any such proceeding against the Trust.
SECTION 13.09. No Waiver; Cumulative Remedies. No
failure to exercise and no delay in exercising, on the part of any Person, any
right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by
law.
SECTION 13.10. Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 13.11. Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the parties
hereto, each Beneficiary and their respective successors and permitted
assigns. Except as otherwise provided in this Agreement, no other Person
will have any right or obligation hereunder.
SECTION 13.12. Actions by Holders. (a) Whenever in
this Agreement a provision is made that an action may be taken or a notice
given by Investor Certificateholders, such action or notice may be taken or
given by any Investor Certificateholder, unless such provision requires a
specific percentage of Investor Certificateholders.
(b) Any notice, consent, waiver or other act by the
Holder of a Certificate shall bind such Holder and every subsequent Holder
of such Certificate and of any Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
SECTION 13.13. Merger and Integration. Except as
specifically stated otherwise herein, this Agreement and the other
Transaction Documents set forth the entire understanding of the parties
relating to the subject matter hereof and thereof, and all prior
understandings, written or oral, are superseded by the Transaction
Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 13.14. Headings. The headings herein are for
purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
SECTION 13.15. Construction of Agreement. The
Transferor hereby grants to the Trustee on behalf of the Trust a security
interest in all of the Transferor's right, title and interest in, to and under
the Receivables now existing and hereafter created, all monies due or to
become due and all amounts received with respect thereto, and all other
Trust Assets, and all "proceeds" thereof, to secure all the Transferor's and
Servicer's obligations hereunder, including the Transferor's obligation to
sell or transfer to the Trust all Receivables existing on the date hereof or
hereafter created and transferred to the Transferor from time to time under
the Receivables Purchase Agreements. This Agreement shall constitute a
security agreement under applicable law.
SECTION 13.16. Governing Law; Jurisdiction; Consent to
Service of Process. (a) Governing Law. THIS AGREEMENT,
INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES
HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE
INTERESTS OF THE TRUSTEE ON BEHALF OF THE TRUST IN
THE TRUST ASSETS IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) Jurisdiction. (i) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive general jurisdiction of any New York State court or federal
court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement or any of the other Transaction Documents to
which it is a party, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted
by law, in such federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right
that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Transaction Documents in
the courts of any jurisdiction.
(ii) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this
Agreement or any of the other Transaction Documents to which it is a
party in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Consent to Service of Process. Each party to this
Agreement irrevocably consents to service of process by personal delivery,
certified mail, postage prepaid or overnight courier. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(d) Waiver of Jury Trial. Each party to this Agreement
waives any right to a trial by jury in any action or proceeding to enforce or
defend any rights under or relating to this Agreement, any other
Transaction Document or any amendment, instrument, document or
agreement delivered or which may in the future be delivered in connection
herewith or therewith or arising from any course of conduct, course of
dealing, statements (whether oral or written), actions of any of the parties
hereto and the liquidity providers or any other relationship existing in
connection with this Agreement or any other Transaction Document, and
agrees that any such action or proceeding shall be tried before a court and
not before a jury.
IN WITNESS WHEREOF, the parties hereto have caused
this Pooling and Servicing Agreement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first
above written.
ZENITH FINANCE CORPORATION,
as Transferor
By:
Name:
Title:
ZENITH ELECTRONICS CORPORATION,
and as Servicer
By:
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By:
Name:
Title:
[BELONGS IN THE BEGINNING OF DOCUMENT]
EXECUTION COPY
ZENITH TRADE RECEIVABLES MASTER TRUST
POOLING AND SERVICING AGREEMENT
Dated as of March 31, 1997
Among
ZENITH FINANCE CORPORATION,
as Transferor
ZENITH ELECTRONICS CORPORATION,
as Servicer
and
BANKERS TRUST COMPANY,
as Trustee
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Other Definitional Provisions 24
SECTION 1.03. Computation of Time Periods 24
ARTICLE II
TRANSFER OF RECEIVABLES
SECTION 2.01. Transfer of Receivables 24
SECTION 2.02. Acceptance by Trustee 26
SECTION 2.03. Representations and Warranties of the
Transferor Relating to the Transferor. 26
SECTION 2.04. Representations and Warranties of the
Transferor Relating to the Trust Assets 31
SECTION 2.05. Affirmative Covenants of the Transferor 33
SECTION 2.06. Negative Covenants of the Transferor 38
SECTION 2.07. Addition and Removal of Originators 42
SECTION 2.08. Deemed Collections for Dilution 43
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Acceptance of Appointment and Other
Matters Relating to the Servicer 43
SECTION 3.02. Servicing Compensation; Servicer's Expenses 45
SECTION 3.03. Representations and Warranties of the Servicer 46
SECTION 3.04. Covenants of the Servicer 48
SECTION 3.05. Reports and Records for the Trustee 54
SECTION 3.06. Annual Certificate of Servicer 54
SECTION 3.07. Annual Servicing Report of Independent
Public Accountants 54
SECTION 3.08. Tax Treatment 54
SECTION 3.09. Notices to Zenith. 55
SECTION 3.10. Adjustments 55
SECTION 3.11. Securities and Exchange Commission Filings 55
ARTICLE IV
RIGHTS OF HOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.01. Rights of Holders 55
SECTION 4.02. Establishment of Concentration Account
and Collection Accounts 56
SECTION 4.03. Allocation of Collections 59
ARTICLE V
DISTRIBUTIONS AND REPORTS TO HOLDERS
SECTION 5.01. Distributions and Reports to Holders 59
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. The Certificates 59
SECTION 6.02. Authentication of Certificates 60
SECTION 6.03. Registration of Transfer and Exchange of
Certificates 60
SECTION 6.04. Mutilated, Destroyed, Lost or Stolen
Certificates 62
SECTION 6.05. Persons Deemed Owners 62
SECTION 6.06. Access to List of Holders' Names and
Addresses 63
SECTION 6.07. Authenticating Agent 63
SECTION 6.08. New Issuances 64
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
SECTION 7.01. Obligations Not Assignable 67
SECTION 7.02. Limitations on Liability 67
SECTION 7.03. Indemnification of the Trustee, the
Holders, any Program Agent and any Enhancement Provider 67
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
SECTION 8.01. Liability of the Servicer 70
SECTION 8.02. Merger or Consolidation of, or
Assumption of the Obligations of, the Servicer 70
SECTION 8.03. Limitations on Liability 71
SECTION 8.04. Servicer Indemnification 71
SECTION 8.05. The Servicer Not to Resign 72
SECTION 8.06. Examination of Records 72
SECTION 8.07. Confidentiality 72
ARTICLE IX
EARLY AMORTIZATION EVENTS
SECTION 9.01. Early Amortization Events 73
SECTION 9.02. Additional Rights upon the Occurrence of
Any Early Amortization Event 76
ARTICLE X
SERVICER DEFAULTS
SECTION 10.01. Servicer Defaults 77
SECTION 10.02. Trustee to Act; Appointment of Successor Servicer 80
SECTION 10.03. Notification to Holders 81
ARTICLE XI
THE TRUSTEE
SECTION 11.01. Duties of the Trustee 82
SECTION 11.02. Certain Matters Affecting the Trustee 84
SECTION 11.03. Trustee Not Liable for Recitals in
Certificates or Receivables 86
SECTION 11.04. Trustee May Own Certificates 86
SECTION 11.05. Compensation; Trustee's Expenses 86
SECTION 11.06. Eligibility Requirements for Trustee 87
SECTION 11.07. Resignation or Removal of Trustee 87
SECTION 11.08. Successor Trustee 88
SECTION 11.09. Merger or Consolidation of Trustee 89
SECTION 11.10. Appointment of Co-Trustee or Separate
Trustee 89
SECTION 11.11. Tax Returns 90
SECTION 11.12. Trustee May Enforce Claims Without
Possession of Certificates 91
SECTION 11.13. Suits for Enforcement 91
SECTION 11.14. Rights of Holders to Direct Trustee 91
SECTION 11.15. Representations and Warranties of
Trustee 92
SECTION 11.16. Maintenance of Office or Agency 92
ARTICLE XII
TERMINATION
SECTION 12.01. Termination of Trust 92
SECTION 12.02. Final Distribution 93
SECTION 12.03. Transferor's Termination Rights 94
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Amendment 94
SECTION 13.02. Limitation on Rights of Holders 95
SECTION 13.03. Notices; Payments 96
SECTION 13.04. Rule 144A Information 99
SECTION 13.05. Severability of Provisions 99
SECTION 13.06. Assignment 99
SECTION 13.07. Certificates Nonassessable and Fully Paid 99
SECTION 13.08. No Proceedings 99
SECTION 13.09. No Waiver; Cumulative Remedies 100
SECTION 13.10. Counterparts 100
SECTION 13.11. Third-Party Beneficiaries 100
SECTION 13.12. Actions by Holders 100
SECTION 13.13. Merger and Integration 100
SECTION 13.14. Headings 100
SECTION 13.15. Construction of Agreement 101
SECTION 13.16. Governing Law; Jurisdiction; Consent to
Service of Process 101
SCHEDULES
Schedule 3.03(f) Lock Boxes, Collection Accounts and Concentration
Account
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Annual Servicer's Certificate
Exhibit C Form of Collection Account/Lock Box Letter
Exhibit D Form of Rule 144A and Non-Rule 144A Letters
Exhibit E Form of Daily Report
Exhibit F Credit Policy Manual
Exhibit G Form of Annual Servicing Report of Independent
Public Accountants
