EXHIBIT 10.29
EXECUTION COPY
AMENDED AND RESTATED
INDENTURE AND SERVICING AGREEMENT
dated as of December 9, 2002
among
XXXXXX RECEIVABLES, LLC,
as Issuer,
XXXXXX, INC.,
as Servicer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
TABLE OF CONTENTS
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 6.2 Registration of Transfer and Exchange of Notes...................................23
SECTION 6.3 Mutilated, Destroyed, Lost or Stolen Notes.......................................25
SECTION 6.4 Persons Deemed Owners............................................................25
SECTION 6.5 Appointment of Paying Agent......................................................26
SECTION 6.6 Access to List of Noteholders' Names and Addresses...............................26
SECTION 6.7 Authenticating Agent.............................................................27
SECTION 6.8 Tax Treatment....................................................................28
ARTICLE VII. ISSUER................................................................................28
SECTION 7.1 Representations and Warranties of Issuer Relating to Issuer and the
Transaction Documents............................................................28
SECTION 7.2 Covenants of Issuer..............................................................31
SECTION 7.3 Indemnification by Issuer........................................................36
SECTION 7.4 Indemnity for Reserves and Expenses..............................................37
ARTICLE VIII. SERVICER..............................................................................38
SECTION 8.1 Representations and Warranties of Servicer.......................................38
SECTION 8.2 Covenants of Servicer............................................................40
SECTION 8.3 Merger or Consolidation of, or Assumption of the Obligations of, Servicer........40
SECTION 8.4 Indemnification by Servicer......................................................41
SECTION 8.5 Servicer Liability...............................................................41
SECTION 8.6 Limitation on Liability of Servicer and Others...................................41
SECTION 8.7 Actions by Servicer..............................................................42
ARTICLE IX. EVENTS OF DEFAULT; TERMINATION BY SELLERS.............................................42
SECTION 9.1 Events of Default................................................................42
SECTION 9.2 Early Amortization Period........................................................44
SECTION 9.3 Remedies.........................................................................44
SECTION 9.4 Termination by Sellers...........................................................45
ARTICLE X. SERVICER DEFAULTS.....................................................................45
SECTION 10.1 Servicer Defaults................................................................45
SECTION 10.2 Trustee to Act; Appointment of Successor.........................................46
SECTION 10.3 Notification of Servicer Default; Notification of Appointment of
Successor Servicer...............................................................48
-ii-
TABLE OF CONTENTS
(CONTINUED)
-iii-
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 13.9 Counterparts.....................................................................65
SECTION 13.10 Third-Party Beneficiaries........................................................65
SECTION 13.11 Integration......................................................................65
SECTION 13.12 Binding Effect; Assignability; Survival of Provisions............................65
SECTION 13.13 Recourse to Issuer...............................................................65
SECTION 13.14 Recourse to Collateral...........................................................66
SECTION 13.15 Submission to Jurisdiction.......................................................66
SECTION 13.16 Waiver of Jury Trial.............................................................66
SECTION 13.17 Certain Partial Releases.........................................................66
EXHIBITS
EXHIBIT A-1 Form of Lockbox Account Letter Agreement
EXHIBIT A-2 Form of Blocked Account Agreement
EXHIBIT B Form of Concentration Account Letter Agreement
EXHIBIT C Form of Monthly Servicer's Certificate
EXHIBIT D Annual Agreed Upon Procedures
EXHIBIT E Form of Daily Report
EXHIBIT F Form of Monthly Report
EXHIBIT G-1 Form of Class A Note
EXHIBIT G-2 Form of Class B Note
EXHIBIT H Form of Quitclaim Xxxx of Sale
EXHIBIT I Annual Officer's Certificate from Servicer
EXHIBIT J Form of Purchaser Representation Letter
SCHEDULE I List of Bank Accounts Maintained at
Blocked Account Banks and Location of Bank Accounts
SCHEDULE II Perfection Representations, Warranties and Covenants
SCHEDULE 6.1 Conditions Precedent
SCHEDULE 13.5 Address for Notices
-iv-
This AMENDED AND RESTATED
INDENTURE AND SERVICING AGREEMENT, dated as of
December 9, 2002 (as amended, supplemented or otherwise modified from time to
time, this "AGREEMENT"), is made among XXXXXX RECEIVABLES, LLC, a Delaware
limited liability company (formerly BFP Receivables Corporation) ("ISSUER"),
XXXXXX, INC., a Delaware corporation (formerly known as Big Flower Press
Holdings, Inc.) ("XXXXXX"), and MANUFACTURERS AND TRADERS TRUST COMPANY, a
New
York banking corporation, as Trustee ("TRUSTEE").
ARTICLE I. DEFINITIONS
SECTION 1.1 DEFINITIONS. Capitalized terms used in this Agreement have the
meanings that APPENDIX A assigns to them, and this Agreement shall be
interpreted in accordance with PART B of APPENDIX A.
ARTICLE II. GRANTING OF SECURITY INTEREST
SECTION 2.1 GRANTING CLAUSE. (a) To secure the payment of all of the
Secured Obligations, and the payment and performance of all of Issuer's
covenants and agreements set forth in this Agreement and the other Transaction
Documents, Issuer hereby transfers, assigns, sets over, grants and otherwise
conveys to Trustee, for the benefit of the Noteholders and the Indemnified
Parties, a security interest in all of Issuer's right, title and interest in, to
and under, (i) all Receivables that have been or are hereafter transferred
(whether by sale or contribution) by the Sellers to Issuer, (ii) all Related
Assets, (iii) all of Issuer's rights under the Seller Transaction Documents (the
property described in CLAUSES (ii) and (iii) being called the "RELATED PLEDGED
ASSETS"), (iv) the Transaction Accounts, the Bank Accounts, all funds, Financial
Assets, Investment Property or other property from time to time on deposit in
each of the Transaction Accounts and all funds from time to time on deposit in
each of the Bank Accounts, whether or not representing Collections on, or other
proceeds of, the foregoing and, in each case, all certificates and instruments,
if any, from time to time evidencing such funds, all investments made with such
funds, all claims thereunder or in connection therewith and all interest,
dividends, monies, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing, and (v) all moneys due or to become due and all
amounts received or receivable with respect to any of the foregoing and all
proceeds of the foregoing. Such property, whether now existing or hereafter
acquired, is referred to, collectively, as the "COLLATERAL". This Agreement
shall constitute a security agreement.
(b) In connection with the grant described in SUBSECTION (a), Issuer and
Servicer shall record and file or cause to be recorded and filed, and hereby
authorize Trustee to file, as an expense of Servicer paid out of the Servicing
Fee, financing statements with respect to the Collateral meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect the security interest granted in the Collateral in
favor of Trustee. In connection with the grant described in SUBSECTION (a),
Issuer and Servicer further agree to deliver to Trustee each item of Collateral
(including any original documents or instruments included in the Collateral) in
which the transfer of a security interest is only perfected under the UCC or
otherwise by possession. Issuer or Servicer shall deliver each such
1
item of Collateral to Trustee, as an expense of Servicer paid out of the
Servicing Fee, immediately upon the creation thereof, or acquisition thereof by
Issuer.
(c) In connection with the grant described above in SUBSECTION (a),
Servicer shall, on behalf of Issuer, as an expense of Servicer paid out of the
Servicing Fee, on or prior to the Issuance Date, xxxx the master data processing
records evidencing the Receivables with the following legend:
"THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO XXXXXX RECEIVABLES, LLC
("VR") PURSUANT TO AN AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT,
DATED AS OF DECEMBER 9, 2002, AMONG XXXXXX, INC., CERTAIN SUBSIDIARIES OF
XXXXXX, INC. ("XXXXXX"), AS XXXXXXX, XXXXXX, AS SERVICER, AND VR, AS BUYER;
AND A SECURITY INTEREST IN SUCH RECEIVABLES HAS BEEN GRANTED TO THE TRUSTEE
PURSUANT TO AN AMENDED AND RESTATED
INDENTURE AND SERVICING AGREEMENT,
DATED AS OF DECEMBER 9, 2002, AMONG VR, AS ISSUER, XXXXXX, AS SERVICER, AND
MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE."
(d) (i) The right, title and interest of Trustee in the Collateral under
the Original Agreement is referred to herein as the "ORIGINAL LIEN."
(ii) This Agreement amends and restates the Original Agreement, and
the parties agree that the interest of Trustee in the Collateral under this
Agreement, as amended and restated, is intended to be that of a secured
party holding a security interest in the Collateral for the benefit of the
Noteholders. To effect the intent of the parties as described in the
preceding sentence, and without limiting the effect of any other provision
of this Agreement, Trustee, as Trustee under the Original Agreement, hereby
transfers, assigns, sets over, and otherwise conveys to Issuer (without
recourse, representation or warranty) Trustee's right, title and interest
in the Collateral under the Original Agreement, RESERVING AND RETAINING,
HOWEVER, a security interest therein, which security interest Trustee, as
Trustee under the Original Agreement, hereby assigns to Trustee under this
Agreement for the benefit of the Noteholders. Issuer confirms that all
right, title and interest of Issuer in the Collateral is subject to the
security interest of Trustee under this Agreement for the benefit of the
Noteholders.
(iii) If the transfer, assignment, set-over, grant and conveyance
described in SUBSECTION 2.1(a) of the Original Agreement were deemed to
create a security interest, as provided for in SUBSECTION 2.1(e) of the
Original Agreement, then Trustee, as Trustee under the Original Agreement,
hereby assigns such security interest to Trustee under this Agreement for
the benefit of the Noteholders.
(iv) Trustee, as Trustee under the Original Agreement, hereby assigns
to Trustee under this Agreement, for the benefit of the Noteholders, (a)
all Uniform Commercial Code financing statements of record relating to the
Original Lien, and (b) all Account Agreements relating to the Original
Lien.
2
(e) Upon the request of Issuer, Trustee shall cause Notes in authorized
denominations to be duly authenticated and delivered to or upon the order of
Issuer.
SECTION 2.2 ACCEPTANCE BY TRUSTEE. Trustee hereby acknowledges its
acceptance, for the benefit of the Noteholders and the Indemnified Parties, of a
security interest in all right, title and interest to the Collateral and
declares that it shall maintain such security interest for the benefit of all
Noteholders and the Indemnified Parties, on the terms and subject to the
conditions hereinafter set forth.
SECTION 2.3 REPRESENTATIONS AND WARRANTIES OF ISSUER RELATING TO THE
COLLATERAL.
(a) REPRESENTATIONS AND WARRANTIES. On the date hereof and on the Issuance
Date, Issuer hereby represents and warrants that:
(i) QUALITY OF TITLE. (A) The Receivables and Related Pledged Assets
are owned by Issuer free and clear of any Adverse Claim (other than any
Permitted Adverse Claim); and, on or prior to the Issuance Date or within
ten (10) days after the Issuance Date, Issuer and Servicer made or shall
cause to be made, or caused to be made, all filings and took all other
action under applicable law in each relevant jurisdiction in order to
protect and perfect Trustee's security interest in such Receivables, such
Related Pledged Assets and the funds in the Transaction Accounts against
all creditors of, and purchasers from, Issuer and the Sellers.
(B) The grant of a security interest in the Receivables and the other
Collateral by Issuer to Trustee pursuant to this Agreement constitutes a
valid grant of a security interest to Trustee in all right, title and
interest of Issuer in the Receivables and the other Collateral, free and
clear of any Adverse Claim (other than any Permitted Adverse Claim).
(C) No effective financing statement or other instrument similar in
effect that covers all or part of the Collateral or any interest in any
proceeds thereof is on file in any recording office except financing
statements as to which termination statements or releases are filed on or
prior to the Issuance Date and except filings relating to any Permitted
Adverse Claim.
(D) No acquisition of any Receivable or other Collateral by Issuer or
Trustee constitutes a fraudulent transfer or fraudulent conveyance under
the United States Bankruptcy Code or applicable state bankruptcy or
insolvency laws or is otherwise void or voidable or subject to
subordination under similar laws or principles or for any other reason.
(ii) GOVERNMENTAL APPROVALS. With respect to each Receivable and the
other Collateral, all consents, licenses, approvals or authorizations of,
or notices to or registrations, declarations or filings with, any
Governmental Authority required to be obtained, effected or made by the
Sellers, Servicer or Issuer in connection with the conveyance of the
Receivable and other Collateral by the Sellers to Issuer, or the grant of a
security interest therein by Issuer to Trustee, have been duly obtained,
effected or given and are in full force and effect.
3
(iii) ELIGIBLE RECEIVABLES. (A) On the date on which the applicable
Seller transfers a Receivable to Issuer, and Issuer grants a security
interest in such Receivable to Trustee, unless otherwise identified by
Servicer in the Daily Report for such date, such Receivable is an Eligible
Receivable, and (B) on the date of each Daily Report or Monthly Report that
identifies a Receivable as an Eligible Receivable, such Receivable is an
Eligible Receivable.
(iv) PERFECTION REPRESENTATIONS. Issuer hereby represents and warrants
that its representations and warranties set forth in Schedule II hereto are
true and correct.
(b) NOTICE OF BREACH. The representations and warranties set forth in
SUBSECTION (A) shall survive the grant of a security interest in the Receivables
and the other Collateral to Trustee. Upon discovery by Issuer, Servicer or
Trustee of a breach of any of the representations and warranties set forth in
SUBSECTION (A), the party discovering the breach shall give written notice to
the others within four Business Days following the discovery; PROVIDED, HOWEVER,
that if such breach arises from a Seller's failure to perform its obligations
under the Purchase Agreement and such failure is of the type that may be cured
by settlement of a Seller Non-Complying Receivables Adjustment or Seller
Dilution Adjustment under Sections 3.1 and 3.5 of the Purchase Agreement, and
such settlement shall have (in fact) been made, then no breach shall be deemed
to have occurred under this Agreement. Trustee's obligations in respect of
discovering any breach are limited as provided in SECTION 11.2(g).
SECTION 2.4 NO ASSUMPTION OF OBLIGATIONS RELATING TO RECEIVABLES, RELATED
PLEDGED ASSETS OR CONTRACTS. The transfer, assignment, set over, grant and
conveyance described in SECTION 2.1 does not constitute and is not intended to
result in a creation or an assumption by Trustee or any Noteholder of any
obligation of Servicer, Issuer, the applicable Seller or any other Person in
connection with the Receivables or the Related Pledged Assets or under the
related Contracts or any other agreement or instrument relating thereto. Neither
Trustee nor any Noteholder shall have any obligation or liability to any
Obligor.
SECTION 2.5 RELEASE OF CERTAIN RECEIVABLES. (a) Issuer may, upon five
Business Days written notice to Trustee ("RECONVEYANCE NOTICE") convey to the
applicable Seller certain of the Receivables sold to Issuer by such Seller
("RECONVEYANCE RECEIVABLES"), and concurrently with such conveyance described in
such Reconveyance Notice and upon Trustee's receipt of the consideration set
forth in SECTION 2.5(b), Trustee shall release Trustee's security interest in
the Receivables so conveyed; PROVIDED that on the date of the Reconveyance
Notice (i) the Receivables specified therein shall be Seller Noncomplying
Receivables, and shall have been Seller Noncomplying Receivables on the date
initially transferred pursuant to the Purchase Agreement, (ii) any Seller
Noncomplying Receivables Adjustment required to be made in respect of such
Receivables pursuant to Section 3.5(a) of the Purchase Agreement shall have been
made, and (iii) no Event of Default or Unmatured Event of Default shall be in
effect; and PROVIDED, FURTHER that on the date of conveyance by Issuer to the
applicable Seller of any Reconveyance Receivables, (x) such Reconveyance
Receivables are sold by such Seller to a Person other than Issuer or any Xxxxxx
Person and (y) the Obligors of such Receivables shall have been instructed to
make all payments in respect of such Receivables to a location other than to any
of the Bank Accounts.
4
(b) Any Reconveyance Notice shall specify the consideration to be paid to
Trustee by the applicable Seller (on behalf of Issuer) in respect of the
Reconveyance Receivables, which shall be equal to (A) the Purchase Price for
such Receivables MINUS (B) the sum of the Seller Noncomplying Receivables
Adjustments (if any) paid in respect of such Receivables MINUS (C) any
Collections received in respect of such Receivables.
(c) Upon receipt of such Reconveyance Notice Issuer shall execute and
deliver to the applicable Seller a Quitclaim Xxxx of Sale in the form attached
hereto as EXHIBIT H.
(d) Trustee shall deposit the consideration specified in the Reconveyance
Notice into the Master Collection Account upon receipt thereof.
ARTICLE III. ADMINISTRATION AND SERVICING
SECTION 3.1 ACCEPTANCE OF APPOINTMENT; OTHER MATTERS.
(a) DESIGNATION OF SERVICER. The servicing, administering and collection of
the Receivables and the Related Pledged Assets shall be conducted by the Person
designated as Servicer hereunder from time to time in accordance with this
Section. Until Issuer gives a Termination Notice to Xxxxxx pursuant to SECTION
10.1, Xxxxxx is designated (and agrees to act) as Servicer.
(b) DELEGATION OF CERTAIN SERVICING ACTIVITIES. In the ordinary course of
business, Servicer may at any time delegate its duties hereunder with respect to
the Receivables and the Related Pledged Assets to any Person. Each Person to
whom any such duties are delegated in accordance with this Section is called a
"SUB-SERVICER". Notwithstanding any such delegation, Servicer shall remain
liable for the performance of all duties and obligations of Servicer pursuant to
the terms of this Agreement and the other Transaction Documents. The fees and
expenses of any Sub-Servicers shall be as agreed between Servicer and the
Sub-Servicers from time to time and none of Issuer, Trustee or the Noteholders
shall have any responsibility therefor. Upon any termination of a Servicer
pursuant to SECTION 10.1, all Sub-Servicers designated pursuant to this
subsection by such Servicer shall automatically also be terminated (unless
otherwise specified in writing by Trustee).
(c) TERMINATION. (i) The designation of Servicer (and each Sub-Servicer)
under this Agreement shall automatically terminate upon termination of the
obligations under this Agreement pursuant to SECTION 12.1.
(ii) Provided that no Servicer Default or Event of Default shall have
occurred which is continuing, Issuer (with the prior written consent of the
Required Holders) may terminate all of the rights and obligations of Servicer as
servicer hereunder. No termination of any Person acting as Servicer pursuant to
this CLAUSE (ii) above shall become effective until Trustee or another Successor
Servicer shall have assumed the responsibilities and obligations of Servicer in
accordance with SECTION 10.2. Trustee shall give prompt notice to the Rating
Agencies of the appointment of any Successor Servicer.
(d) RESIGNATION OF SERVICER. Xxxxxx shall not resign as Servicer unless it
determines that (i) the performance of its duties is no longer permissible under
applicable law and (ii) there is no
5
reasonable action that it could take to make the performance of its duties
permissible under applicable law. If Xxxxxx determines that it must resign for
the reasons stated above, it shall, prior to the tendering of its resignation,
deliver to Trustee an Opinion of Counsel confirming the satisfaction of the
conditions set forth in CLAUSE (i) of the preceding sentence. No resignation by
Xxxxxx shall become effective until Trustee or another Successor Servicer shall
have assumed the responsibilities and obligations of Servicer in accordance with
SECTION 10.2. Trustee shall give prompt notice to the Rating Agencies of the
appointment of any Successor Servicer.
SECTION 3.2 DUTIES OF SERVICER AND ISSUER.
(a) DUTIES OF SERVICER IN GENERAL. Servicer shall service the Receivables
and the Related Pledged Assets and, subject to the terms and provisions of this
Agreement, shall have full power and authority, acting alone or through any
Sub-Servicer, to do any and all things in connection with such servicing that it
may deem necessary or appropriate. Trustee shall execute and deliver to Servicer
any powers of attorney or other instruments or documents that are prepared by
Servicer and stated in an Officer's Certificate to be, and shall furnish
Servicer with any documents in its possession, necessary or appropriate to
enable Servicer to carry out its servicing duties. Servicer shall exercise the
same care and apply the same policies with respect to the collection and
servicing of the Receivables and the Related Pledged Assets that it would
exercise and apply if it owned such Receivables and the Related Pledged Assets,
all in substantial compliance with applicable law and in accordance with the
Credit and Collection Policy.
Servicer shall take or cause to be taken (and shall cause each Sub-Servicer
(if any) to take or cause to be taken) all such actions as Servicer deems
necessary or appropriate to collect each Receivable and Related Pledged Asset,
all in accordance with applicable law and the Credit and Collection Policy.
Without limiting the generality of the foregoing and subject to the next
preceding paragraph and SECTION 10.1, Servicer or its designee is hereby
authorized and empowered, unless such power and authority is revoked by Trustee
on account of the occurrence of a Servicer Default, (i) to collect and record
payments, communicate with Obligors, investigate payment delinquencies, provide
billing and tax records to Obligors and maintain internal records with respect
to each Obligor, (ii) to instruct Trustee to make withdrawals and payments from
the Transaction Accounts as set forth in this Agreement, (iii) to execute and
deliver, on behalf of Issuer for the benefit of the Noteholders, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Receivables
and the Related Pledged Assets, (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 Issuer as may be necessary or appropriate to comply with any
federal or state securities laws or reporting requirements or other laws or
regulations, and (v) to the extent permitted under and in compliance with the
Credit and Collection Policy and with all applicable laws, rules, regulations,
judgments, orders and decrees of courts and other governmental authorities
(whether federal, state, local or foreign) and all other tribunals, to commence
or settle collection proceedings with respect to the Receivables and otherwise
to enforce the rights and interests of Trustee and the Noteholders in, to and
under the Receivables or Related Pledged Assets (as applicable).
6
(b) IDENTIFICATION AND TRANSFER OF COLLECTIONS. Servicer shall cause
Collections and all other Collateral that consist of cash or cash equivalents to
be deposited into the Bank Accounts and the Transaction Accounts pursuant to the
terms and provisions of SECTION 3.3 and ARTICLE IV. Following notification from
any Seller to Servicer or discovery by Servicer that any amounts that are not
Collections of a Receivable or a Related Pledged Asset have been deposited into
a Bank Account or the Master Collection Account, Servicer shall cause all such
amounts to be segregated, apart and in different accounts, from the Bank
Accounts and the Transaction Accounts. Servicer and, to the extent applicable,
Trustee shall hold all such funds in trust, separate and apart from such
Person's other funds. On each Business Day, after such misapplied collections
have been reasonably identified by Servicer to Trustee, Servicer shall instruct
Trustee to, and Trustee shall, turn over to the appropriate Lockbox Bank,
applicable Seller or other applicable Xxxxxx Person (or their designees) all
such misapplied collections less all reasonable and appropriate out-of-pocket
costs and expenses, if any, incurred by Servicer in collecting such receivables.
All payments made by an Obligor that is obligated to make payments with
respect to both Receivables included in the Collateral and Receivables not
included in the Collateral shall be applied against the Receivables, if any,
that are designated by such Obligor by reference to the applicable invoice as
the Receivables with respect to which such payments should be applied. In the
absence of such designation, such payments shall be applied first against the
oldest outstanding Receivables owed by such Obligor.
Following notification from a Lockbox Bank that any item has been returned
or is uncollected and that such Lockbox Bank has not been otherwise reimbursed
pursuant to the terms of the applicable Lockbox Agreement for any amounts it
credited to the relevant Lockbox Account (and then transferred to the Master
Collection Account), Servicer shall instruct Trustee to, and Trustee shall, turn
over to such Lockbox Bank Collections in such amount from Collections on deposit
in the Master Collection Account.
(c) MODIFICATION OF RECEIVABLES, ETC. So long as no Servicer Default shall
have occurred and be continuing, Servicer may adjust, and may permit each
Sub-Servicer to adjust, in accordance with SECTION 3.2(a) and the Credit and
Collection Policy, the Unpaid Balance of any Receivable, or otherwise modify the
terms of any Receivable or amend, modify or waive any term or condition of any
Contract related thereto, all as it may determine to be appropriate to maximize
collection thereof. Servicer shall, or shall cause the applicable Sub-Servicer
to, write off Receivables from time to time in accordance with the Credit and
Collection Policy.
(d) DOCUMENTS AND RECORDS. At any time when Xxxxxx is not Servicer, Issuer,
to the extent that it is entitled to do so under the Purchase Agreement, shall,
upon the request of the then-acting Servicer, cause the applicable Seller to
deliver to Servicer, and Servicer shall hold in trust for Issuer and Trustee in
accordance with their respective interests, all Records that evidence or relate
to the Receivables and Related Pledged Assets of the applicable Seller.
(e) CERTAIN DUTIES TO THE SELLERS. Servicer, if other than Xxxxxx, shall,
as soon as practicable after a demand by any Seller, deliver to the Seller all
documents, instruments and records in its possession that evidence or relate to
accounts receivable of the Seller or other Xxxxxx Persons that are not
Receivables or Related Pledged Assets, and copies of all documents,
7
instruments and records in its possession that evidence or relate to Receivables
and Related Pledged Assets.
(f) IDENTIFICATION OF ELIGIBLE RECEIVABLES. The initial Servicer will (i)
establish and maintain such procedures as are necessary for determining no less
frequently than each Business Day whether each Receivable qualifies as an
Eligible Receivable, and for identifying, on any Business Day, all Receivables
that are not Eligible Receivables, and (ii) include in each Daily Report
information that shows whether, and to what extent, the Receivables described in
such Daily Report are Eligible Receivables.
(g) AUTHORIZATION TO ACT AS ISSUER'S AGENT. Without limiting the generality
of SUBSECTION (A), Issuer hereby appoints Servicer as its agent for the
following purposes: (i) specifying accounts to which payments are to be made to
Issuer, (ii) making transfers among, and deposits to and withdrawals from, all
deposit accounts of Issuer for the purposes described in the Transaction
Documents, and (iii) arranging payment by Issuer of all fees, expenses and other
amounts payable by Issuer pursuant to the Transaction Documents. Issuer
irrevocably agrees that (A) it shall be bound by all actions taken by Servicer
pursuant to the preceding sentence, and (B) Trustee and the banks holding all
deposit accounts of Issuer are entitled to accept submissions, determinations,
selections, specifications, transfers, deposits and withdrawal requests, and
payments from Servicer on behalf of Issuer.
(h) GRANT OF POWER OF ATTORNEY. Issuer and Trustee hereby each grant to
Servicer a power of attorney, with full power of substitution, to take in the
name of Issuer and Trustee all steps that are necessary or appropriate to
endorse, negotiate, deposit or otherwise realize on any writing of any kind held
or transmitted by Issuer or transmitted or received by Trustee (whether or not
from Issuer) in connection with any Receivable or Related Pledged Asset. The
power of attorney that Issuer and Trustee have granted to Servicer (including
the power of attorney granted pursuant to SECTION 3.3(a)) may be revoked by
Trustee, and shall be revoked by Issuer, on the date on which Trustee shall be
entitled to exercise the powers granted to Trustee pursuant to SECTION 3.8(B).
In exercising its power granted hereby, Servicer shall take directions from
Trustee, if any, arising out of the exercise of the rights granted under SECTION
11.13.
(i) TURNOVER OF COLLECTIONS. If Servicer, Issuer or any of their respective
agents or representatives shall at any time receive any cash, checks or other
instruments constituting Collections, such recipient shall segregate such
payments and hold such payments in trust for Trustee and shall, promptly upon
receipt (and in any event within two Business Days following receipt), remit all
such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to a Bank Account or the Master Collection Account.
(j) ANNUAL STATEMENT AS TO COMPLIANCE. Servicer will deliver to Trustee,
each Noteholder and each Rating Agency on or before September 30, 2003 and each
March 31 thereafter, beginning March 31, 2004, an Officer's Certificate, in
substantially the form of EXHIBIT I, stating, as to each signer thereof, that
(i) a review of the activities of Servicer during (x) with respect to the
Officer's Certificate due September 30, 2003, the period commencing on the date
of this Agreement and ending on June 30, 2003, (y) with respect to the Officer's
Certificate due March 31, 2004, the period commencing on July 1, 2003 and ending
on December 31, 2003 and (z) with respect to any Officer's Certificate due on or
after March 31,
8
2005, the preceding calendar year; and of performance under this Agreement has
been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, Servicer has fulfilled all its
obligations under this Agreement throughout such reporting period, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof and
remedies therefor being pursued.
SECTION 3.3 LOCKBOX, CONCENTRATION AND BLOCKED ACCOUNTS. (a) Each Lockbox
Account (other than the Wachovia Accounts) shall be subject to a Lockbox
Agreement substantially in the form of EXHIBIT A-1, and each Blocked Account
shall be subject to a Blocked Account Agreement substantially in the form of
EXHIBIT A-2. Unless instructed otherwise by Servicer (or, after the occurrence
and continuance of an Event of Default, Trustee), each Lockbox Bank and Blocked
Account Bank shall be instructed by Servicer to remit, on a daily basis (but
subject to such bank's customary funds availability schedule), all amounts
deposited in the Lockbox Accounts or Blocked Accounts maintained with it to a
Concentration Account or the Master Collection Account. Any Concentration
Account shall be maintained in the name of Trustee on behalf of Issuer pursuant
to a Concentration Account Agreement substantially in the form of EXHIBIT B.
Except as expressly provided in this Agreement and the applicable Account
Agreements, none of any Seller, Issuer, Servicer, or any Person claiming by,
through or under any Seller, Issuer or Servicer shall have any control over the
use of, or any right to withdraw any item or amount from, any Lockbox Account,
Blocked Account or Concentration Account. Servicer and Trustee are each hereby
irrevocably authorized and empowered, as Issuer's attorney-in-fact, to endorse
any item deposited in a lockbox or presented for deposit in any Lockbox Account,
Blocked Account or Concentration Account requiring the endorsement of Issuer,
which authorization is coupled with an interest and is irrevocable. Each Lockbox
Account, Blocked Account and Concentration Account shall be an Eligible Deposit
Account.
(b) Servicer shall instruct (or shall cause the applicable Seller to
instruct) all Obligors to make all payments due to Issuer or the applicable
Seller relating to or constituting Collections (or any proceeds thereof) (i) to
lockboxes maintained at the Lockbox Banks for deposit in a Lockbox Account that
is subject to a Lockbox Agreement or a Concentration Account that is subject to
a Concentration Account Agreement or (ii) directly to a Lockbox Account that is
subject to a Lockbox Agreement. Servicer hereby covenants and agrees within 120
days after the Issuance Date, to arrange for new lockbox arrangement with a
Lockbox Bank to replace the current Wachovia Accounts and such new lockbox
arrangements shall meet the requirements set forth in SECTION 3.3C(i). If Issuer
or the applicable Seller receives any Collections or any other payment of
proceeds of any other Related Pledged Asset, Servicer shall cause such recipient
to (x) segregate such payment and hold it in trust for the benefit of Trustee,
and (y) as soon as practicable, but no later than the second Business Day
following receipt of such item by such Person, deposit such payment in a Bank
Account or the Master Collection Account. Servicer shall, and shall cause Issuer
and the applicable Seller to, use reasonable efforts to prevent the deposit of
any amounts other than Collections in any Bank Account.
(c) (i) Servicer may, from time to time after the Issuance Date, designate
a new account as a Lockbox Account, Blocked Account or a Concentration Account,
and such account shall become a Lockbox Account, Blocked Account or
Concentration Account (and the bank at which such account is maintained shall
become a Lockbox Bank, Blocked Account Bank or a
9
Concentration Account Bank for purposes of this Agreement); PROVIDED that
Trustee shall have received not less than 15 Business Days' (or such shorter
number of days as is acceptable to Trustee) prior written notice of the account
and/or the bank that are proposed to be added as a Bank Account or an Account
Bank (as applicable) and, not less than ten Business Days (or such shorter
number of days as is acceptable to Trustee) prior to the effective date of any
such proposed addition, Trustee shall have received (x) counterparts of a
Lockbox Agreement, Blocked Account Agreement or a Concentration Account
Agreement in the form of EXHIBIT X-0, XXXXXXX X-0 or EXHIBIT B, as applicable,
or in such other form as is satisfactory to the Trustee, as applicable, with
each new Account Bank, duly executed by such new Account Bank and all other
parties thereto and (y) copies of all other agreements and documents signed by
the new Account Bank or such other parties with respect to any new Lockbox
Account, Blocked Account or Concentration Account, as applicable.
(ii) Servicer may, from time to time after the Issuance Date,
terminate an account as a Lockbox Account, Blocked Account or a
Concentration Account or a bank as an Account Bank; PROVIDED that (x) no
such termination shall occur unless Trustee shall have received not less
than ten Business Days' (or such shorter number of days as is acceptable to
Trustee) prior written notice of the account and/or the bank that are
proposed to be terminated as a Bank Account or an Account Bank (as
applicable) and, not less than ten Business Days (or such shorter number of
days as is acceptable to Trustee) prior to the effective date of any such
proposed termination, Trustee shall have received counterparts of an
agreement, duly executed by the applicable Account Bank and reasonably
satisfactory in form and substance to Trustee, pursuant to which such
Account Bank agrees that, if it receives any funds or items that constitute
Collections on or after the effective date of the termination of the
applicable Bank Account or the effective date of its termination as an
Account Bank (as the case may be), such Account Bank or former Account Bank
(as applicable) shall cause such funds and items to be delivered in the
form received to another lockbox or transferred to another Lockbox Account,
Blocked Account, Concentration Account or the Master Collection Account
promptly after such Account Bank or former Account Bank (as applicable)
discovers that it has received any such funds or items, and (y)
notwithstanding CLAUSE (X), Issuer and Servicer may at any time establish
alternative collection procedures that do not require the use of Lockbox
Accounts or Blocked Accounts upon satisfaction of the Modification
Condition.
(d) Servicer shall instruct each Concentration Account Bank (if any), to
transfer on a daily basis (subject to such Concentration Account Bank's
customary funds availability schedule) in same day funds to the Master
Collection Account all collected funds on deposit in the Concentration Account
maintained with such Concentration Account Bank. All such transfers shall be
made in accordance with the relevant Concentration Account Agreement.
SECTION 3.4 SERVICING COMPENSATION. As full compensation for its servicing
activities hereunder, and as reimbursement for any expense incurred by it in
connection therewith, Servicer shall be entitled to receive a monthly servicing
fee (the "SERVICING FEE"), payable in arrears on each Payment Date in respect of
each Payment Period (or portion thereof) during which any Note is outstanding.
The Servicing Fee shall be payable solely as provided in SECTION 5.3.
10
The Servicing Fee payable on each Payment Date shall be calculated as
follows. At any time when Xxxxxx or any of its Affiliates is Servicer, the
Servicing Fee for any Payment Period shall be equal to one-twelfth of the
product of (a) 2.00%, multiplied by (b) the aggregate Unpaid Balance of the
Receivables as measured on the first Business Day of that Payment Period. If
Xxxxxx ceases to be Servicer, the Servicing Fee for a Successor Servicer that is
not a Xxxxxx Person shall be an amount equal to the greater of (i) the amount
calculated pursuant to the preceding sentence and (ii) an alternative amount
specified by such Servicer not exceeding the sum of (x) 110% of the aggregate
reasonable costs and expenses incurred by such Servicer during such Payment
Period in connection with the performance of its obligations under this
Agreement and the other Transaction Documents, and (y) the other costs and
expenses that are to be paid out of the Servicing Fee, as described in the next
sentence; PROVIDED that the amount provided for in CLAUSE (x) shall not exceed
one-twelfth of 2.00% of the aggregate Unpaid Balance of the Receivables as
measured on the first Business Day of the Payment Period. The fees, costs and
expenses of Trustee, the Paying Agent, any authenticating agent, the Lockbox
Banks, the Concentration Account Banks and the Transfer Agent and Registrar, and
certain other costs and expenses payable from the Servicing Fee pursuant to
other provisions of this Agreement, and all other fees and expenses that are not
expressly stated in this Agreement to be payable by Issuer, other than Federal,
state, local and foreign income and franchise taxes, if any, or any interest or
penalties with respect thereto, of Issuer, shall be paid out of the Servicing
Fee and shall be paid by Servicer from the funds that constitute the Servicing
Fee.
SECTION 3.5 RECORDS OF SERVICER AND REPORTS TO BE PREPARED BY SERVICER.
(a) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Servicer shall maintain at all
times accurate and complete books, records and accounts relating to the
Receivables, Related Pledged Assets and Contracts of each Seller and all
Collections thereon in which timely entries shall be made. Servicer shall
maintain and implement administrative and operating procedures (including an
ability to generate duplicates of Records evidencing Receivables and the Related
Pledged Assets in the event of the destruction of the originals thereof), and
shall keep and maintain all documents, books, records and other information that
Servicer deems reasonably necessary for the collection of all Receivables and
Related Pledged Assets.
(b) RECEIVABLES REVIEWS. Servicer shall provide Trustee access to the
documentation regarding the Receivables when Trustee is required, in connection
with the enforcement of the rights of Noteholders or by applicable statutes or
regulations, to review such documentation, such access being afforded without
charge but only (i) upon reasonable request, (ii) during normal business hours,
(iii) subject to Servicer's normal security and confidentiality procedures, (iv)
at reasonably accessible offices in the continental United States of America
designated by Servicer and (v) upon five Business Days' prior notice; PROVIDED
that no notice shall be required if an Event of Default shall have occurred and
be continuing; and PROVIDED, FURTHER that no more than one such review during
any calendar year shall be conducted unless an Event of Default shall have
occurred and be continuing.
(c) DAILY REPORTS. Prior to 2:00 p.m.,
New York City time, on each Business
Day, Servicer shall prepare and deliver to Trustee a report, substantially in
the form attached hereto as EXHIBIT E or in such other form as is reasonably
acceptable to Trustee and Servicer (each such report being a "DAILY REPORT")
setting out, among other things, the Base Amount as of the end of
11
business on the preceding Business Day; PROVIDED that if, on any Business Day,
Servicer is unable to prepare and deliver a Daily Report to Trustee because of
acts of God or the public enemy, riots, acts of war, acts of terrorism,
epidemics, fire, failure of communication lines, equipment or power failure,
computer systems failure, flood, embargoes, weather, earthquakes or other
unanticipated disruptions of Servicer's ability to monitor the origination
and/or collection of Receivables, then the Base Amount shall be the lowest Base
Amount shown in the related Daily Reports delivered during the immediately
preceding month (such amount, an "ESTIMATED BASE AMOUNT"). Servicer may use an
Estimated Base Amount to prepare the Daily Report until the earlier to occur of
(i) the day upon which disruption no longer prevents Servicer from preparing the
Daily Report using the actual data required by the Daily Report and delivering
it to Trustee, and (ii) the sixth Business Day following the commencement of
such disruption. Servicer shall notify each Rating Agency promptly following its
use of an Estimated Base Amount in any Daily Report.
(d) MONTHLY REPORT. On each Report Date, Servicer shall prepare and deliver
to Trustee, each Noteholder and the Rating Agencies a report, substantially in
the form attached hereto as EXHIBIT F or in such other form as is reasonably
acceptable to Trustee and Servicer (each such report being a "MONTHLY REPORT").
In addition, on each Report Date, Servicer shall prepare and deliver to Trustee,
in either electronic or hard copy form, a report setting forth as of the last
day of the prior calendar month, the unpaid balance of each invoice related to
the Receivables, the Obligor for each invoice and the contact information for
each Obligor.
(e) NOTICE OF SELLER CHANGE EVENTS; SUPPLEMENTS TO MONTHLY REPORTS.
Sections 1.7 and 1.8 of the Purchase Agreement describe circumstances under
which (i) additional Sellers may be added to the Program and (ii) a Seller may
terminate its status as Seller under the Program (each such event being a
"SELLER CHANGE EVENT"). Those Sections of the Purchase Agreement require Xxxxxx
to give written notice to Issuer of the occurrence of a Seller Change Event not
less than 30 days prior to the occurrence thereof, and Issuer hereby agrees to
give prompt written notice of its receipt of any such notice to Trustee, each
Noteholder and the Rating Agencies. If the notice is given to Trustee, within
five Business Days after the receipt of the notice by Trustee (or such later
date, as specified in the notice, on which the applicable Seller Change Event
shall become effective), Servicer shall deliver to Trustee, each Noteholder and
the Rating Agencies a supplement to the Monthly Report then in effect, which
supplement shall show the calculation (complete with the historical and/or pro
forma receivables data necessary to do such calculation) of (A) the Base Amount
and the applicable reserve ratios to reflect the addition of accounts receivable
originated by any Person that is being added to the Program as a Seller, and the
exclusion of any Receivables originated by any such Person that is terminating
its status as a Seller (as applicable), and (B) the Loss Discount and the
Purchase Discount Reserve Ratio for any such Person that is being added to the
Program as a Seller. For purposes of all calculations hereunder and under the
Purchase Agreement, the Base Amount, such reserve ratios and (if applicable) the
Loss Discount and the Purchase Discount Reserve Ratio for the relevant Person
shown in such supplement shall supersede and/or supplement the calculation of
such items in the then outstanding Monthly Report, effective as of the fifth
Business Day following Trustee's receipt of such notice (or such later date, as
specified in such notice, on which the applicable Seller Change Event shall
become effective).
12
SECTION 3.6 MONTHLY SERVICER'S CERTIFICATE. On each Report Date, Servicer
shall deliver to Trustee, the Paying Agent, Issuer, each Noteholder and the
Rating Agencies a certificate of an Authorized Officer of Servicer substantially
in the form of EXHIBIT C.
SECTION 3.7 SERVICING REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS; FORMS 10-Q
AND 10-K. (a) (i) On or before September 30 each year, beginning September 30,
2003, Servicer shall, as an expense of Servicer paid out of the Servicing Fee,
cause Deloitte & Touche or another nationally recognized firm of independent
public accountants (which may also render other services to Servicer, the
Sellers or Issuer) to furnish a report to Trustee, Servicer, the Rating
Agencies, each Noteholder and Issuer (which report shall be addressed to Trustee
and shall relate to (x) with respect to the report due September 30, 2003, the
period commencing on the date of this Agreement and ending on June 30, 2003 and
(y) with respect to reports due September 30, 2004 and thereafter, the twelve
month period ending June 30 of the calendar year in which such report is due).
The accountants' report shall set forth the results of their performance of the
procedures described in EXHIBIT D with respect to the Monthly Reports and Daily
Reports delivered to Trustee pursuant to SECTION 3.5 during the reporting
periods specified in the preceding sentence.
(ii) Each accountants' report shall state that the accountants have
compared the amounts contained in a sample randomly selected from all
Monthly Reports and a sample randomly selected from all Daily Reports
delivered to Trustee during the period covered by the report with the
records (including computer records) from which the amounts were derived
and that, on the basis of such comparison, the amounts are in agreement
with the documents and records, except for such exceptions as they believe
to be immaterial and such other exceptions as shall be set forth in the
report.
(b) Servicer shall provide each of the Rating Agencies and each Noteholder
with copies of each Quarterly Report on Form 10-Q and each Annual Report on Form
10-K of Servicer promptly after the filing of such reports with the Securities
and Exchange Commission.
SECTION 3.8 RIGHTS OF TRUSTEE.
(a) Trustee has the exclusive dominion and control over the Bank Accounts
(other than the Wachovia Accounts), and, until the obligations under this
Agreement are terminated pursuant to SECTION 12.1 and all amounts owed under the
Transaction Documents have been paid in full, Issuer shall take any action that
Trustee may reasonably request to effect or evidence such dominion and control.
At any time following the occurrence of a Servicer Default, Trustee is hereby
authorized to give notice to the Account Banks, as provided in the Account
Agreements, of the revocation of Servicer's authority to give instructions or
take any other actions with respect to the Bank Accounts (other than the
Wachovia Accounts) that Servicer would otherwise be authorized to give or to
take.
(b) At any time following the occurrence of a Servicer Default and the
termination of the then acting Servicer:
(i) Trustee may direct any Obligors of Receivables to pay all amounts
payable under any Receivable or any Related Pledged Assets directly to
Trustee or its designee.
13
(ii) Trustee may direct any Seller to make payment of all amounts
payable to Issuer under any Transaction Document to which the Seller is a
party directly to Trustee or its designee.
(iii) Issuer and Servicer shall, at Trustee's request and as an
expense of Servicer paid out of the Servicing Fee, give notice of Trustee's
security interest in the Receivables and the Related Pledged Assets to each
Obligor and direct that payments be made directly to Trustee or its
designee.
(iv) Issuer shall, and shall cause the Sellers to, at Trustee's
request, (A) assemble all of the Records that are necessary or appropriate
to collect the Receivables and Related Pledged Assets, and shall make the
same available to Trustee at one or more places selected by Trustee or its
designee, (B) segregate all cash, checks and other instruments received by
it from time to time constituting Collections in a manner acceptable to
Trustee and shall, promptly upon receipt (and, subject to SECTION 3.2(i),
in no event later than the second Business Day following receipt), remit
all such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to a Bank Account or the Master Collection Account
and (C) permit, upon not less than two Business Days' prior written notice,
any Successor Servicer and its agents, employees and assignees access to
their respective facilities and their respective Records.
(c) Each of Issuer and Servicer hereby authorizes Trustee, from time to
time after the occurrence of a Servicer Default and the termination of the then
acting Servicer (until a Successor Servicer (if other than Trustee) has been
appointed), to take any and all steps in Issuer's name and on behalf of Issuer
and Servicer that are necessary or appropriate, in the reasonable determination
of Trustee, to collect all amounts due under any and all Receivables or Related
Pledged Assets, including endorsing the name of Issuer or the applicable Seller
on checks and other instruments representing Collections and enforcing such
Receivables and the Related Pledged Assets.
(d) Issuer hereby irrevocably appoints Trustee to act as Issuer's
attorney-in-fact, with full authority in the place and stead of Issuer and in
the name of Issuer or otherwise, from time to time after the occurrence of a
Servicer Default and the termination of the then acting Servicer (until a
Successor Servicer (if other than Trustee) has been appointed), to take (subject
to SECTION 11.13) any action and to execute any instrument or document that
Trustee, in its reasonable determination, may deem necessary to accomplish the
purposes of this Agreement, including:
(i) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any Receivable or any Related Pledged Asset;
(ii) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with CLAUSE (I);
(iii) to file any claims or take any action or institute any
proceedings that Trustee in its reasonable determination may deem necessary
or appropriate for the collection of any of the Receivables or any Related
Pledged Asset or otherwise to enforce the rights of
14
Trustee and the Noteholders with respect to any of the Receivables or any
Related Pledged Asset; and
(iv) to perform the affirmative obligations of Issuer under any
Transaction Document.
Issuer hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 3.9 ONGOING RESPONSIBILITIES OF XXXXXX. Anything herein to the
contrary notwithstanding:
(a) If at any time Xxxxxx shall not be Servicer, Xxxxxx shall deliver all
Collections received or deemed received by it or its Subsidiaries to Trustee no
later than two Business Days after receipt or deemed receipt thereof and Trustee
shall pay such Collections to the same extent as if such Collections had
actually been received from the related Obligor on the applicable dates. So long
as Xxxxxx or any of its Subsidiaries shall hold any Collections or deemed
Collections required to be paid to Trustee, each of them shall hold such amounts
in trust (and separate and apart from its own funds) and shall clearly xxxx its
records to reflect such trust. Xxxxxx hereby grants to Trustee an irrevocable
power of attorney, with full power of substitution, coupled with an interest,
upon the occurrence of a Servicer Default, to take in the name of Xxxxxx all
steps necessary or appropriate to endorse, negotiate or otherwise realize on any
writing or other right of any kind held or transmitted by Xxxxxx or transmitted
and received by Trustee (whether or not from Xxxxxx) in connection with any
Receivable or Related Pledged Asset.
(b) In addition, if at any time Xxxxxx shall not be Servicer, Xxxxxx shall
act (if the Successor Servicer so requests) as the data processing agent of
Servicer and, in such capacity, Xxxxxx shall conduct (and shall cause any other
necessary Persons to conduct) the data processing functions of the
administration of the Receivables, the Related Pledged Assets and the
Collections thereon in substantially the same way that Xxxxxx (or its
Sub-Servicers) conducted such data processing functions while Xxxxxx acted as
Servicer. Xxxxxx and each such other Person shall be entitled to reasonable
compensation for such service to be paid from the Servicing Fee.
(c) Notwithstanding any termination of Xxxxxx as Servicer hereunder, Xxxxxx
shall continue to indemnify Trustee on the terms set out in SECTION 11.5 with
respect to circumstances existing, or actions taken or omitted, prior to such
termination.
SECTION 3.10 FURTHER ACTION EVIDENCING TRANSFERS. Servicer shall cause all
financing statements and continuation statements and any other necessary
documents relating to the right, title and interest of Trustee in and to the
Collateral to be promptly recorded, registered and filed, and at all times to be
kept recorded, registered and filed, all in such manner and in such places as
may be required by law fully to preserve, maintain, protect and perfect the
security interest of Trustee (including the priority of such security interest)
hereunder in and to all property comprising the Collateral. Servicer shall
deliver to Trustee file-stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as available following
such recording, registration or filing. Issuer shall cooperate fully with
Servicer in
15
connection with the obligations set forth above and will execute any and all
documents that are reasonably required to fulfill the intent of this Section.
Issuer hereby authorizes Trustee to file all financing statements and
continuation statements that Trustee reasonably deems necessary or advisable to
perfect Trustee's security interest in the Collateral.
If Issuer or Servicer fails to perform any of its agreements or obligations
under any Transaction Document and does not remedy such failure within the
applicable cure period, if any, then Trustee or its designee may (but shall not
be required to) itself perform, or cause performance of, such agreement or
obligation, and the reasonable expenses of Trustee or its designee incurred in
connection therewith shall be payable by Servicer as provided in SECTION 11.5
and (if applicable) by Issuer as provided in SECTION 7.3.
ARTICLE IV. ALLOCATIONS
SECTION 4.1 ESTABLISHMENT OF TRANSACTION ACCOUNTS. (a) On or prior to the
date of this Agreement, Trustee has established, and until the Secured
Obligations have been paid in full or the Collateral has been disposed of
Trustee shall (except as expressly permitted or required below) maintain on the
book of Manufacturers and Traders Trust Company, in the name of Trustee and for
the benefit of the Noteholders, the following accounts:
(i) account no. 0000000 and account number 185611860 (with respect to
funds transferred from the Wachovia Accounts), which shall be called the
"MASTER COLLECTION ACCOUNT" and into which all Collections and all other
Collateral consisting of cash, cash equivalents or cash proceeds shall be
transferred on a daily basis from the Bank Accounts;
(ii) account no. 0000000, which shall be called the "CARRYING COST
ACCOUNT" and into which funds shall be allocated from time to time to cover
carrying costs of the Notes (including interest payable on the Notes and
the Servicing Fee);
(iii) account no. 0000000, which shall be called the "EQUALIZATION
ACCOUNT" and into which funds will from time to time be transferred from
the Master Collection Account to compensate for fluctuations in the Base
Amount; and
(iv) account no. 0000000, which shall be called the "PRINCIPAL FUNDING
ACCOUNT" and into which funds will from time to time be transferred from
the Master Collection Account and/or the Equalization Account in
anticipation of payments to the Noteholders on account of their respective
principal balances.
(b) The Master Collection Account, the Carrying Cost Account, the
Equalization Account and the Principal Funding Account are collectively called
the "TRANSACTION ACCOUNTS." Each of the Transaction Accounts shall be
established and maintained as an Eligible Deposit Account and shall bear a
designation clearly indicating that funds deposited therein are held for the
benefit of the Noteholders. If any Transaction Account ceases to be an Eligible
Deposit Account, Servicer shall cause Trustee to open a substitute Transaction
Account that is an Eligible Deposit Account and transfer the funds in the
existing Transaction Account to the substitute
16
Transaction Account, and thereafter all references in any Transaction Document
to the original Transaction Account shall be deemed instead to refer to the
substitute Transaction Account.
(c) The Master Collection Account, the Carrying Cost Account, the
Equalization Account and the Principal Funding Account shall be held by Trustee
for the benefit of all Noteholders.
(d) (i) Trustee shall possess (for its benefit and for the benefit of the
Noteholders) all right, title and interest in and to all funds on deposit from
time to time in each of the Transaction Accounts and in all proceeds thereof.
The Transaction Accounts shall be under the sole dominion and control of Trustee
for the benefit of the Noteholders. Each of Servicer and Trustee agrees that it
shall have no right of setoff against, and no right otherwise to deduct from,
any funds held in any of the Transaction Accounts or the Bank Accounts for any
amount owed to it by Issuer, any party hereto or any Noteholder.
(ii) With respect to the Transaction Account Property, Issuer and
Trustee agree, as security for Issuer's obligations under this Agreement,
that:
(A) any Transaction Account Property that is held in deposit
accounts shall be held solely in an Eligible Deposit Account, subject
to SECTION 4.1(b);
(B) any Transaction Account Property that constitutes a
Certificated Security (other than a Certificated Security, instrument
or other investment evidenced in tangible form that forms the basis of
a Security Entitlement by reason of the fact that it is held by or
through a clearing corporation or other Securities Intermediary),
shall be delivered to Trustee or its nominee or custodian in
accordance with clause (i) of the definition of "Delivery";
(C) any Transaction Account Property that is an Uncertificated
Security (other than an uncertificated Security that forms the basis
of a Security Entitlement by reason of the fact that it is held
through a clearing corporation or other Securities Intermediary) shall
be delivered to Trustee in accordance with clause (ii) of the
definition of "Delivery" and shall be maintained by Trustee, pending
maturity or disposition, through continued registration of Trustee's
(or its nominee's) ownership of such security.
(D) any Transaction Account Property that constitutes a
Securities Entitlement (other than a Security Entitlement to a Federal
Book Entry Security) issued to or maintained by a clearing corporation
or other Securities Intermediary shall be maintained by Trustee,
pending maturity or disposition, through continued book-entry
registration of such Transaction Account Property by the crediting to
a Securities Account maintained for Trustee with a Securities
Intermediary, including The Depository Trust Company or another
clearing corporation, in accordance with the definition of "Control"
contained in this Agreement;
(E) any Transaction Account Property that is a Security
Entitlement to a Federal Book-Entry Security shall be maintained by
Trustee, pending maturity or
17
disposition, through continued book-entry registration of such
Transaction Account Property by the crediting to a Securities Account
maintained for Trustee with a Federal Reserve Bank of a Security
Entitlement to such Federal Book Entry Security in accordance with the
definition of "Control" contained in this Agreement; and
SECTION 4.2 CALCULATIONS AND FUNDS ALLOCATIONS.
(a) ALLOCATION OF DAILY COLLECTIONS. On each Business Day, Servicer shall
determine the amount of collected funds received (and expected to be received on
such Business Day as a result of transfers from the Account Banks) in the Master
Collection Account (other than funds that are required to be returned to Xxxxxx
Persons (or their designees) pursuant to SECTION 3.2(b)) since the preceding
Business Day and shall specify such amount of collected funds in the Daily
Report delivered to Trustee on such Business Day (the "DAILY COLLECTIONS"). It
is understood and agreed that Daily Collections for any Business Day shall be
determined after deducting any amounts charged against a Concentration Account,
Blocked Account or Lockbox Account, or otherwise required to be paid by the
Trustee to an Account Bank, in each case with respect to fees, expenses,
indemnities, returned items and other adjustments in accordance with the
applicable Account Agreement, whether attributable to such day or a prior day.
If, after Servicer's delivery of the Daily Report to Trustee on any Business Day
Servicer determines that the amount of collected funds actually received in the
Master Collection Account is less or more than the amount specified in such
Daily Report (determined as described above), Servicer shall deliver a
supplemental written notice to Trustee specifying the actual amount of collected
funds on such Business Day, together with an adjusted allocation of funds which
takes into account such actual amount of collected funds. To the extent Trustee
has not already paid collected funds on any Business Day in accordance with the
Daily Report delivered on such Business Day, Trustee shall adjust the amounts
paid on such Business Day in accordance with the instructions set forth in any
supplemental written notice delivered prior to 4:30 p.m.,
New York City time, on
such Business Day.
(b) On each Business Day (other than a Business Day falling in an
Amortization Period or after the Fully Funded Date), Servicer shall allocate the
Daily Collections (or, if less, the aggregate amount of Daily Collections
required to fund the items described in priorities first through fourth below)
to the following purposes, in the priority indicated (and to the extent of Daily
Collections available):
FIRST, to the Carrying Cost Account until the amount allocated to the
Carrying Cost Account equals the Carrying Costs; PROVIDED that the
aggregate amount allocated pursuant to this clause for Carrying Costs
(other than interest on the Notes and the Servicing Fee) with respect to
any calendar year shall not exceed $100,000 (the "EXPENSE CAP").
SECOND, if the Net Principal Amount is greater than the Base Amount,
to the Equalization Account in an amount sufficient to reduce the Net
Principal Amount to an amount equal to the Base Amount;
18
THIRD, to any amounts due hereunder to any Indemnified Party and any
other Secured Obligations then due (including any Carrying Cost in excess
of applicable Expense Cap); and
FOURTH, to the Issuer any amounts due for Issuer Expenses.
On such Business Day, Servicer shall allocate the remainder of the Daily
Collections to Issuer; provided that during a Suspension Period, any funds so
allocated shall not be paid to the Issuer, and shall instead be deposited to,
and held in, the Equalization Account.
If, on any day, the amount of Collections that is then allocated to the
Carrying Cost Account exceeds the amount of Collections that is then required to
be allocated to the Carrying Cost Account, Servicer shall reallocate such
Collections on such day to one or more of the obligations described in the first
paragraph of this Section in PRIORITIES SECOND through FOURTH ABOVE, and in the
preceding paragraph, in the order of priority set forth therein with any
remainder being allocated to Issuer.
On any Business Day falling after the Fully Funded Date, all Daily
Collections shall be paid to Issuer.
(c) ALLOCATIONS OF DAILY COLLECTIONS DURING AN AMORTIZATION PERIOD. On each
Business Day falling in an Amortization Period and prior to or on the Fully
Funded Date, Servicer shall allocate the Daily Collections to the following
purposes, in the priority indicated (and to the extent of Daily Collections
available):
FIRST, to the Carrying Cost Account to the extent that the balance
therein is less than the amount of Carrying Costs (other than any Servicing
Fee payable to any Xxxxxx Person); PROVIDED that the aggregate amount
allocated pursuant to this clause for Carrying Costs (other than interest
on the Notes and the Servicing Fee) with respect to any calendar year shall
not exceed the Expense Cap;
SECOND, to the Principal Funding Account the excess of the Daily
Collections over the amount allocated on that Business Day pursuant to
PRIORITY FIRST, PROVIDED that the aggregate amount so deposited in the
Principal Funding Account shall not exceed the Principal Deposit Amount;
THIRD, to pay any Indemnified Losses due to any Indemnified Party, any
other Secured Obligations then due (including any Carrying Cost specified
in priority first in excess of applicable Expense Cap);
FOURTH, to pay any Servicing Fee payable to any Xxxxxx Person on the
Payment Date relating to the Calculation Period during which such Business
Day falls;
FIFTH, to the Issuer any amounts due for Issuer Expenses; and
SIXTH, the balance to Issuer.
19
On any Business Day falling after the Fully Funded Date, all Daily
Collections shall be paid to Issuer.
(d) WITHDRAWALS FROM THE EQUALIZATION ACCOUNT AND PRINCIPAL FUNDING
ACCOUNT. On any Business Day (other than a day during a Suspension Period, an
Amortization Period or on which an Event of Default or Unmatured Event of
Default exists), Servicer may instruct Trustee in writing to withdraw funds from
the Equalization Account and apply such funds as Daily Collections, so long as
the Net Principal Amount would not exceed the Base Amount after giving effect to
such transfer and application. On the first day of an Amortization Period,
Servicer shall instruct Trustee to withdraw the entire balance in the
Equalization Account (including funds deposited therein during a Suspension
Period pursuant to SECTION 4.2(b)) and apply the same as Daily Collections on
that day. On the first day of the Amortization Period, Servicer shall instruct
Trustee likewise to withdraw the entire balance in the Principal Funding Account
and apply the same as Daily Collections on that day.
SECTION 4.3 INVESTMENT OF FUNDS IN TRANSACTION ACCOUNTS. On any day when
there are any funds on deposit in any Transaction Account (after giving effect
to the allocations of such funds required by this ARTICLE IV), and at such other
times as investment is practicable, Trustee, at the direction of Issuer (or
Servicer on its behalf) shall invest and reinvest monies on deposit in such
Transaction Account (in the name of Trustee) in such Eligible Investments as are
specified in a notice from Servicer, subject to the restrictions set forth
hereinafter; PROVIDED HOWEVER, that whenever an Event of Default shall be
existing, such investments shall be made by the Trustee at the direction of
Servicer. All Eligible Investments made from funds in any Transaction Account,
and the interest, dividends and income received thereon and therefrom and the
net proceeds realized on the sale thereof, shall be deposited in such
Transaction Account. Trustee may liquidate an Eligible Investment prior to
maturity if such liquidation would not result in a loss of all or part of the
principal portion of such Eligible Investment or if, prior to the maturity of
such Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. In the absence of
negligence of Trustee or willful misconduct by Trustee, Trustee shall have no
liability in connection with investment losses incurred on Eligible Investments.
It is intended for income tax purposes that the income earned through investment
of funds in the Transaction Accounts shall be treated as income of Issuer.
SECTION 4.4 ATTACHMENT OF TRANSACTION ACCOUNTS. If Trustee receives written
notice that any Transaction Account has or will become subject to any writ,
judgment, warrant of attachment, execution or similar process, Trustee shall
(notwithstanding any other provision of the Transaction Documents) promptly
notify Issuer, Servicer and the Noteholders thereof, and shall not deposit or
transfer funds into such Transaction Account but shall cause funds otherwise
required to be deposited into such Transaction Account to be held in another
account pending payment of such funds in the manner required by the Transaction
Documents.
20
ARTICLE V. INTEREST; PAYMENTS
SECTION 5.1 INTEREST.
(a) Interest on each Class A Note shall (i) accrue during each Interest
Period at a rate PER ANNUM equal to LIBOR PLUS the applicable Note Spread, (ii)
be calculated on the basis of actual days over a year of 360 days, and (iii) be
payable on each Payment Date.
(b) Interest on each Class B Note shall (i) accrue during each Interest
Period at a rate PER ANNUM equal to LIBOR PLUS the applicable Note Spread, (ii)
be calculated on the basis of actual days over a year of 360 days, and (iii) be
payable on each Payment Date.
(c) Interest with respect to the Notes due but not paid on any Payment Date
will be due on the next Payment Date with additional interest on any amount not
paid when due at 2% per annum above the Alternate Base Rate (but in no event
greater than the maximum rate of interest permitted under applicable law).
SECTION 5.2 OPTIONAL EARLY PAY OUT.
(a) The Notes are subject to redemption in whole, but not in part, on any
Prepayment Payment Date on which Servicer exercises its option to purchase the
Receivables pursuant to Clause (b) below; provided, however, that Issuer has
available funds sufficient to pay an amount (the "PREPAYMENT AMOUNT") equal to
the unpaid Principal Amount of the Notes plus accrued and unpaid interest on the
unpaid principal amount of the Notes (and accrued and unpaid interest with
respect to interest amounts that were due but not paid on a prior Payment Date)
through the day preceding the Prepayment Payment Date at the rates of interest
then applicable to such Notes. Issuer shall furnish ten days' prior written
notice of such redemption to Servicer, Trustee and the Rating Agencies. Upon
tender of all outstanding Notes by the Noteholders, Trustee shall then pay such
amounts, together with all other amounts on deposit in the Principal Funding
Account to the Noteholders on the next Payment Date in repayment of the
principal amount and all accrued and unpaid interest owing to the Noteholders.
Following the Prepayment Payment Date, the Noteholders shall have no further
rights with respect to the Receivables and Trustee shall execute and deliver the
instruments of release (including any document necessary to release the security
interest in favor of Trustee in the Collateral and to release any filing
evidencing or perfecting the security interest), in each case without recourse,
representation or warranty, as shall be reasonably requested by Issuer to vest
in Issuer all right, title and interest that Trustee had in the Collateral. In
the event that Servicer fails for any reason to deposit the Prepayment Amount,
payments shall continue to be made to the Noteholders in accordance with the
terms of this Agreement.
(b) On any Payment Date occurring on or after the date that the aggregate
Unpaid Balance of the Receivables then included in the Receivables Pool is 10%
or less of the aggregate Unpaid Balance of the Receivables included in the
Receivables Pool as of the commencement of any Amortization Period (the
"PREPAYMENT PAYMENT DATE"), Servicer shall have the option, upon the giving of
twenty days' prior written notice by Servicer to Issuer, Trustee and the Rating
Agencies, to purchase, without representation or warranty, all, but not less
than all of the Receivables for a price at least equal to the aggregate Unpaid
Balance of the Receivables;
21
provided, however, no such purchase shall be permitted unless the purchase price
paid for the Receivables is at least equal to the Prepayment Amount. Servicer
shall deposit the purchase price for the Receivables into the Principal Funding
Account on the Prepayment Payment Date.
SECTION 5.3 PAYMENTS. On each Payment Date, Trustee shall, in accordance
with instructions set out in the applicable Daily Report, pay the following
amounts:
(a) on each Payment Date, from the Carrying Cost Account to the extent
funds are available for such payment in the Carrying Cost Account in the
following order and priority:
(i) FIRST, if the Person then acting as Servicer is not a Xxxxxx
Person, to the Servicer for payment of the Servicing Fee;
(ii) SECOND, to the trustee for the payment of fees, costs and
expenses incurred by the Trustee for the period and paid to Persons other
than Xxxxxx Persons in connection with its duties under the Transaction
Documents and not included in the Servicing Fee; PROVIDED that the
aggregate amount allocated per this clause with respect to any calendar
year shall not exceed the Expense Cap;
(iii) THIRD, to the Holders of the Class A Notes, ratably in
accordance with the total amount of interest owed on the Class A Notes;
(iv) FOURTH, to the Holders of the Class B Notes, ratably in
accordance with the total amount of interest owed on the Class B Notes; and
(v) FIFTH, if the Person then acting as Servicer is a Xxxxxx Person,
to the Servicer for payment of the Servicing Fee; PROVIDED that if such
Payment Date is the Expected Final Payment Date or falls in an Amortization
Period, no payment shall be made to the Servicer pursuant to this priority
fifth; and
(b) on each Principal Payment Date, all funds deposited in the Principal
Funding Account on or prior to the most recent Cut-Off Date shall be paid in
reduction of the Principal Amounts; PROVIDED that (i) all such amounts on
deposit in the Principal Funding Account shall be paid to the Holders of Class A
Notes until they have been paid or provided for in full before any such amounts
are paid to the Holders of Class B Notes, and any remaining amounts on deposit
in the Principal Funding Account shall be paid to the Holders of Class B Notes
until they have been paid or provided for in full, and (ii) no such amounts
shall be paid to the Holders of the Class B Notes on any day if the Class A
Notes will remain outstanding after that date (after giving effect to all
payments and allocations made pursuant to SECTION 4.2 on that day); and
(c) if, on the Expected Final Payment Date or any Payment Date falling in
an Amortization Period, the funds on deposit in the Carrying Cost Account will
be equal to or greater than the Net Principal Amount (after giving effect to all
payments required by SUBSECTIONS (a)(i) THROUGH (iv) AND (b)), then an amount
equal to such remaining Net Principal Amount shall be withdrawn from the
Carrying Cost Account and paid in reduction of the Net Principal Amount.
22
Such payments in respect of Notes shall be by wire transfer in immediately
available funds to an account specified in writing to Trustee by the Person
whose name appears as the registered Holder of such Note on the Note Register on
the Record Date immediately prior to such payment, or, if an account is not so
specified by such Record Date, by check mailed to such registered Holder at the
address of such Person as it appears on such Note Register.
Servicer shall furnish instructions to Trustee two (2) Business Days prior
to each Payment Date setting forth the calculation of interest for such Interest
Period and the amounts to be paid to the Holders.
ARTICLE VI. THE NOTES
SECTION 6.1 THE NOTES. (a) The Notes will consist of two classes: the
$110,000,000 Variable Rate Class A, Trade Receivables Backed Notes, (the "CLASS
A NOTES"), which shall be a senior class; and the $20,000,000 Variable Rate
Class B, Trade Receivables Backed Notes (the "CLASS B NOTES"), which shall be a
subordinated class. Trustee shall authenticate and deliver the Class A Notes and
the Class B Notes, to or upon the order of Issuer in the aggregate principal
amount indicated for each above. The Class A Notes and the Class B Notes will be
issued in minimum denominations of $1,000,000 and in integral multiples of
$500,000. The issuance of the Notes under this Agreement will be subject to the
satisfaction of the conditions precedent set forth in SCHEDULE 6.1.
Each Note shall be executed by manual or facsimile signature on behalf of
Issuer by its President, Treasurer, Secretary or any Vice President or by any
attorney-in-fact duly authorized to execute the Note on behalf of any such
officer. The Notes shall be authenticated by manual signature of a duly
authorized signatory of Trustee. Notes bearing the manual or facsimile signature
of the individual who was, at the time when the signature was affixed,
authorized to sign on behalf of Issuer shall be valid and binding,
notwithstanding that the individuals or any of them ceased to be so authorized
prior to the authentication and delivery of the Notes or does not hold such
office on the date of issuance of such Notes. No Note shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there appears
on the Note a certificate of authentication substantially in the form provided
for herein executed by or on behalf of Trustee by the manual signature of a duly
authorized signatory, and the certificate of authentication upon any Note shall
be conclusive evidence, and the only evidence, that the Note has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Agreement. All Notes shall be dated the date of their authentication.
(b) The Class A Notes and the Class B Notes initially sold in the United
States to U.S. Persons that are Qualified Institutional Buyers or Accredited
Investors, shall be represented by one or more permanent notes in definitive
form with the applicable legends, as set forth in Exhibits G-1 and G-2 hereto,
added to the form of such Note (each, a "U.S. PHYSICAL NOTE").
(c) The Class A Notes and the Class B Notes initially sold outside the
United States pursuant to Regulation S under the Securities Act shall be
represented by one or more permanent notes in definitive form with the
applicable legends, as set forth in Exhibits G-1 and G-2 hereto, added to the
form of such Note (each, a "REGULATION S NOTE").
23
(d) References in any other documents to "INVESTOR CERTIFICATES" issued
under the Original Agreement means the Notes issued under this Agreement.
SECTION 6.2 REGISTRATION OF TRANSFER AND EXCHANGE OF NOTES. (a) Trustee, as
agent for Issuer, shall keep, or shall cause to be kept, at the office or agency
to be maintained in accordance with the provisions of SECTION 11.15, a register
in written form or capable of being converted into written form within a
reasonable time (the "NOTE REGISTER") in which, subject to such reasonable
regulations as it may prescribe, a transfer agent and registrar (which may be
Trustee) (the "TRANSFER AGENT AND REGISTRAR") shall provide for the registration
of the Notes and of transfers and exchanges of the Notes as herein provided.
Issuer hereby appoints Trustee as the initial Transfer Agent and Registrar.
Issuer, or Trustee as agent for Issuer, may revoke the appointment as
Transfer Agent and Registrar and remove the then-acting Transfer Agent and
Registrar if Trustee or Issuer (as applicable) determines in its sole discretion
that the then-acting Transfer Agent and Registrar has failed to perform its
obligations under this Agreement in any material respect. The then-acting
Transfer Agent and Registrar shall be permitted to resign as Transfer Agent and
Registrar upon 30 days' prior written notice to Trustee, Issuer and Servicer;
PROVIDED that such resignation shall not be effective and the then-acting
Transfer Agent and Registrar shall continue to perform its duties as Transfer
Agent and Registrar until Trustee has appointed a successor Transfer Agent and
Registrar reasonably acceptable to Issuer and the Person so appointed has given
Trustee written notice that it accepts the appointment. The provisions of
SECTIONS 11.1 through 11.5 shall apply to the Transfer Agent and Registrar as if
all references to "Trustee" in the applicable provisions of SECTIONS 11.1
through 11.5 were references to the Transfer Agent and Registrar.
It is intended that the registration of Notes that is described in this
Section comply with the registration requirements contained in Section 163 of
the Internal Revenue Code.
(b) Subject to the requirements of SUBSECTIONS (d) AND (e), if applicable,
having been fulfilled, upon surrender for registration of transfer of any Note,
Issuer shall execute, and Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Notes of the
appropriate class that are in authorized denominations that bear numbers that
are not contemporaneously outstanding.
At the option of a Noteholder, its Notes may be exchanged for other Notes
of the same class of authorized denominations and bearing numbers that are not
contemporaneously outstanding, upon surrender of the Notes to be exchanged at
any such office or agency. Whenever any Notes are so surrendered for exchange,
Issuer shall execute, and Trustee shall authenticate and deliver, the
appropriate number of Notes of the class that the Noteholder making the exchange
is entitled to receive. Every Note presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
a form satisfactory to Trustee or the Transfer Agent and Registrar duly executed
by the Noteholder thereof or its attorney-in-fact duly authorized in a writing
delivered to the Transfer Agent and Registrar.
24
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Transfer Agent and Registrar may require the
Noteholder to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be
cancelled and disposed of in a manner satisfactory to Trustee.
(c) Notes may be surrendered for registration of transfer or exchange at
the office of the Transfer Agent and Registrar designated in SECTION 11.15.
(d) Except with respect to a transfer to a Permitted Transferee, no Note
may be sold or transferred (including by pledge or hypothecation) unless such
sale or transfer is exempt from the registration requirements of the Securities
Act and is exempt from the registration requirements under applicable state
securities laws and, prior to the proposed sale, transfer or disposition, the
Noteholder and the proposed transferee each provide the Registrar and Transfer
Agent (with a copy to Trustee and Issuer) with a Purchaser Representation Letter
substantially in the form of Exhibit J hereto.
No Note may be offered, sold or delivered as part of the initial placement
of the Notes by the Placement Agent at any time to or for the benefit of, U.S.
Persons except in accordance with SECTION 6.2 (e) and either (i) in accordance
with Rule 144A to Qualified Institutional Buyers purchasing for their own
account or for the accounts or one or more Qualified Institutional Buyers, for
which the purchaser is acting as fiduciary or agent or (ii) in connection with a
transfer to an Accredited Investor under the Securities Act. The Notes may be
offered, sold, resold or delivered, as the case may be, in offshore transactions
to non-U.S. Persons in reliance on Regulation S.
(e) If a Holder of a Regulation S Note wishes to transfer its Note to a
person who wishes to take delivery thereof in the form of an interest in the
corresponding U.S. Physical Note, the transferee will be required to provide the
Registrar and Transfer Agent with a Purchaser Representation Letter
substantially in the form of Exhibit J, specifying that either the transferee is
a Qualified Institutional Buyer or an Accredited Investor. If the Holder of a
U.S. Physical Note wishes to transfer its Note to a person who wishes to take
delivery thereof in the form of a Regulation S Note, the transferee will be
required to provide the Registrar and Transfer Agent with a Purchaser
Representation Letter substantially in the form of Exhibit J specifying that the
transferee is not a U.S. Person.
(f) The Notes shall bear such restrictive legends as shall be set forth in
the applicable forms of notes attached hereto as Exhibits G-1 and G-2.
SECTION 6.3 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (a) any
mutilated Note 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 Note and (b) there is delivered to the
Transfer Agent and Registrar and Trustee such security or indemnity as may be
required by them and Issuer to hold each of them and Issuer harmless, then, in
the absence of notice to Trustee that such Note has been acquired by a BONA FIDE
purchaser, Issuer shall execute and, upon the request of Issuer, Trustee shall
authenticate and deliver, in exchange for or in lieu of
25
any such mutilated, destroyed, lost or stolen Note, a new Note of like class,
tenor, terms and principal amount and bearing a number that is not
contemporaneously outstanding. In connection with the issuance of any new Note
under this Section, Trustee or the Transfer Agent and Registrar may require the
payment by the Noteholder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the reasonable fees and expenses of Trustee and Transfer
Agent and Registrar) connected therewith. Any duplicate Note issued pursuant to
this Section shall constitute conclusive and indefeasible evidence of
indebtedness of Issuer, as if originally issued, whether or not the lost, stolen
or destroyed Note shall be enforceable by anyone, and shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
Notes of the same class that are duly issued hereunder.
SECTION 6.4 PERSONS DEEMED OWNERS. Prior to due presentation of a Note for
registration of transfer, Issuer, Trustee, the Paying Agent, the Transfer Agent
and Registrar and any agent of any of them may treat the Person in whose name
any Note is registered as the owner of such Note for the purpose of receiving
payments pursuant to ARTICLE V and for all other purposes whatsoever, and none
of Issuer, Trustee, the Paying Agent, the Transfer Agent and Registrar or any
agent of any of them shall be affected by any notice to the contrary; PROVIDED
that, in determining whether the Holders of the requisite principal amount or
stated amount (as applicable) of Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
Issuer, Servicer or any Affiliate thereof shall be disregarded and deemed not to
be outstanding, except that, in determining whether Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes that Trustee knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good faith shall not be
disregarded and may be regarded as outstanding if the pledgee establishes to the
satisfaction of Trustee the pledgee's right so to act with respect to such Notes
and that the pledgee is not Issuer, Servicer or an Affiliate thereof.
SECTION 6.5 APPOINTMENT OF PAYING AGENT. The Paying Agent initially shall
be Trustee. Issuer hereby appoints the Paying Agent as its agent to make
payments to Noteholders pursuant to hereto and to report the amounts of the
payments to Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Master Collection Account for the purpose of making the payments.
Trustee or, at any time when Trustee is also the Paying Agent, Issuer may revoke
such power of the Paying Agent and remove the Paying Agent if Trustee or Issuer
(as applicable) determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect. The Paying Agent shall be permitted to resign as Paying Agent upon 30
days' prior written notice to Trustee, Issuer, Servicer and the Rating Agencies.
Any resignation or removal of the Paying Agent, and appointment of a successor
Paying Agent, shall not become effective until the appointment has been accepted
by the successor Paying Agent. If no successor Paying Agent shall have been
appointed and shall have accepted appointment within 30 days after the giving of
the notice of resignation, the resigning Paying Agent may petition any court of
competent jurisdiction to appoint a successor Paying Agent. In the event that
Trustee shall no longer be the Paying Agent, Trustee shall appoint a successor
Paying Agent (which shall be a bank or trust company) reasonably acceptable to
Issuer, which appointment shall be effective on the date on which the Person so
appointed gives Trustee written notice that it accepts the appointment. Trustee
shall cause the successor Paying Agent or any additional Paying Agent appointed
by Trustee to
26
execute and deliver to Trustee an instrument in which it shall agree with
Trustee that, as Paying Agent, it will hold all sums, if any, held for payment
to the Noteholders in trust for the benefit of the Noteholders entitled thereto
until the sums shall be paid to the Noteholders. The Paying Agent shall return
all unclaimed funds to Trustee, and upon removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to Trustee. The provisions
of SECTIONS 11.1 through 11.5 shall apply to the Paying Agent as if all
references in the applicable provisions thereof to "Trustee" were references to
the Paying Agent.
SECTION 6.6 ACCESS TO LIST OF NOTEHOLDERS' NAMES AND ADDRESSES. Each
Noteholder may from time to time designate in a written notice to Trustee an
address and facsimile number for the purpose of delivering notices to such
Noteholder in accordance with the Transaction Documents; provided that such
designation shall take effect five Business Days after the Trustee's receipt of
such written notice. Trustee will furnish or cause to be furnished by the
Transfer Agent and Registrar to Issuer, Servicer or the Paying Agent, within two
Business Days after receipt by Trustee of a written request therefor from
Servicer or the Paying Agent, a list in the form Servicer or the Paying Agent
may reasonably require of the names, addresses and facsimile number, if
applicable, of the Noteholders as of the most recent Payment Date. If any Holder
or group of Holders of Notes evidencing not less than 7% of the aggregate unpaid
principal amount of the Notes (the "APPLICANT") applies in writing to Trustee,
and the application states that the Applicant desires to communicate with other
Noteholders with respect to their rights under this Agreement or the Notes and
is accompanied by a copy of the communication that the Applicant proposes to
transmit, then Trustee, after having been adequately indemnified by the
Applicant for its costs and expenses, shall afford or shall cause the Transfer
Agent and Registrar to afford the Applicant access during normal business hours
to the most recent list of Noteholders held by Trustee, within five Business
Days after the receipt of the application and indemnification. The list shall be
as of a date no more than 45 days prior to the date of receipt of the
Applicant's request.
Every Noteholder, by receiving and holding a Note, agrees with Trustee that
neither Trustee, the Transfer Agent and Registrar, Issuer, Servicer, any Seller
nor any of their respective agents shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Noteholders
hereunder, regardless of the sources from which the information was derived.
SECTION 6.7 AUTHENTICATING AGENT. (a) Trustee may appoint one or more
authenticating agents with respect to the Notes that shall be authorized to act
on behalf of Trustee in authenticating the Notes in connection with the
issuance, delivery, registration of transfer, exchange or repayment of the
Notes. Either Trustee or the authenticating agent, if any, then appointed and
acting on behalf of Trustee shall authenticate the Notes. Whenever reference is
made in this Agreement to the authentication of Notes by Trustee or Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of Trustee by an authenticating agent and a certificate
of authentication executed on behalf of Trustee by an authenticating agent. Each
authenticating agent must be acceptable to Issuer.
(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 document or any further act on the part of Trustee,
the authenticating agent or any other Person.
27
(c) An authenticating agent may at any time resign by giving written notice
of resignation to Trustee and Issuer. Trustee may at any time terminate the
agency of an authenticating agent by giving notice of termination to the
authenticating agent and Issuer. Upon receiving a notice of resignation or upon
a termination, or in case at any time an authenticating agent shall cease to be
acceptable to Trustee or Issuer, Trustee may promptly appoint a successor
authenticating agent. Any successor authenticating agent, upon acceptance of its
appointment, shall become vested with all the rights, powers and duties of its
predecessor, with like effect as if originally named as an authenticating agent.
No successor authenticating agent shall be appointed unless acceptable to
Trustee and Issuer.
(d) Servicer agrees to pay to each authenticating agent (if any), as an
expense of Servicer paid out of the Servicing Fee, reasonable compensation from
time to time for services performed under this Section.
(e) The provisions of SECTIONS 11.1, 11.2 and 11.3 shall be applicable to
any authenticating agent as if the references in the applicable provisions
thereof to "Trustee" were references to the authenticating agent.
(f) Pursuant to an appointment made under this Section, the Notes may have
endorsed thereon, in lieu of Trustee's certificate of authentication, an
alternate certificate of authentication in substantially the following form:
"This is one of the Notes described in the Amended and Restated
Indenture and Servicing Agreement dated as of December 9, 2002.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:
----------------------------
as Authenticating Agent
for Trustee,
By:
----------------------------
Authorized Officer."
SECTION 6.8 TAX TREATMENT. It is the intent of Issuer and the Noteholders
that, for purposes of Federal, state and local income and franchise taxes and
other taxes measured by or imposed on income: (i) the Notes properly will be
treated for U.S. Federal income tax purposes as indebtedness that is secured by
an interest in the Receivables, (ii) the arrangement created by this Agreement
will constitute a security arrangement and not a separate business entity for
U.S. Federal income tax purposes and (iii) so long as all of the outstanding
membership interests of Issuer are owned by Xxxxxx or any other single person
for U.S. Federal income tax purposes, Issuer will be disregarded as an entity
separate from its owner, and consequently will not be treated as a corporation,
for U.S. Federal income tax purposes. Issuer, by entering into this Agreement,
and each Noteholder, by its acceptance of its Note, agree to treat the Notes as
indebtedness for purposes of Federal, state and local income and franchise taxes
and any other
28
taxes measured by or imposed on income. The provisions of this Agreement and all
related Transaction Documents shall be construed to further these intentions of
the parties. In accordance with the foregoing, Issuer agrees that it will report
its income for purposes of Federal, state and local income or franchise taxes,
and any other taxes measured by or imposed on income, on the basis that it is
the owner of the Receivables.
ARTICLE VII. ISSUER
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF ISSUER RELATING TO ISSUER AND
THE TRANSACTION DOCUMENTS. On the date hereof and on the Issuance Date, Issuer
hereby represents and warrants that:
(a) ORGANIZATION AND GOOD STANDING. Issuer is a limited liability company
formed and validly existing and in good standing under the laws of its
jurisdiction of formation and has all necessary power and authority to acquire,
own and transfer the Receivables and the other Collateral.
(b) DUE QUALIFICATION. Issuer is duly qualified to do business and is in
good standing as a foreign corporation (or is exempt from such requirements),
and has obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of property or the conduct of its business requires
qualification, licenses or approvals and where the failure so to qualify, to
obtain the licenses and approvals or to preserve and maintain the qualification,
licenses or approvals has, or would have a substantial likelihood of having, a
Material Adverse Effect.
(c) POWER AND AUTHORITY. Issuer has all necessary limited liability company
power and authority to execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party.
(d) BINDING OBLIGATIONS. This Agreement constitutes, and each other
Transaction Document to which Issuer is a party when executed and delivered will
constitute, a legal, valid and binding obligation of Issuer, enforceable against
it in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether enforceability is considered in a proceeding in equity or
at law.
(e) AUTHORIZATION; NO CONFLICT OR VIOLATION. The execution, delivery and
performance of, and the consummation of the transactions contemplated by, this
Agreement and the other Transaction Documents to be signed by Issuer and the
fulfillment of the terms hereof and thereof have been duly authorized by all
necessary action and will not (i) conflict with, violate, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, (A) its certificate of formation or
limited liability company operating agreement or (B) any indenture, loan
agreement, mortgage, deed of trust or other material agreement or instrument to
which Issuer is a party or by which it or any of its properties is bound, (ii)
result in the creation or imposition of any Adverse Claim upon any of its
properties pursuant to the terms of any such contract, indenture, loan
agreement, mortgage, deed of trust, or other agreement or instrument, other than
this Agreement and the other Transaction Documents,
29
or (iii) conflict with or violate any federal, state, local or foreign law or
any decision, decree, order, rule or regulation applicable to it or any of its
properties of any court or of any federal, state, local or foreign regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over it or any of its properties, which conflict, violation,
breach, default or Adverse Claim, individually or in the aggregate, has, or
would have a substantial likelihood of having, a Material Adverse Effect.
(f) LITIGATION AND OTHER PROCEEDINGS. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of Issuer,
threatened against it before any court, regulatory body, arbitrator,
administrative agency or other tribunal or governmental instrumentality and (ii)
it is not subject to any order, judgment, decree, injunction, stipulation or
consent order of or with any court or other government authority that, in the
case of CLAUSES (i) and (ii), (A) asserts the invalidity of this Agreement or
any other Transaction Document, (B) seeks to prevent the grant of a security
interest in the Collateral to Trustee, the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
other Transaction Document, (C) seeks any determination or ruling that would
materially and adversely affect the performance by Issuer of its obligations
under this Agreement or any other Transaction Document or the validity or
enforceability of this Agreement or any other Transaction Document, (D) seeks to
affect materially and adversely the income tax attributes of the transfer of the
Receivables under the Purchase Agreement or the grant of a security interest in
the Receivables hereunder under the United States Federal income tax system or
any state income tax system or (E) individually or in the aggregate for all such
actions, suits, proceedings and investigations has, or would have a reasonable
likelihood of having, a Material Adverse Effect.
(g) GOVERNMENTAL APPROVALS. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are required
to be obtained by Issuer, and all notices to and filings with any Governmental
Authority, that are required to be made by it, in the case of each of the
foregoing in connection with the grant of a security interest in the Collateral
to Trustee for the benefit of the Noteholders and the Indemnified Parties or the
execution, delivery and performance by it of this Agreement and any other
Transaction Documents to which it is a party and the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents,
have been obtained or made and are in full force and effect, except where the
failure to obtain or make any such authorization, consent, order, approval,
notice or filing, individually or in the aggregate for all such failures, does
not, and would not reasonably be expected to have, a Material Adverse Effect.
(h) OFFICES. Issuer's principal place of business and chief executive
office is located at the address specified in SECTION 11.5. Issuer has not (i)
changed (A) its name (except for the name change from BFP Receivables
Corporation to Xxxxxx Receivables, LLC), (B) the location of its chief executive
office, (C) its form of organization (except for the conversion from a Delaware
corporation to a Delaware limited liability company) or (D) its jurisdiction of
organization, or (ii) transferred to, domesticated in or continued in any
jurisdiction other than the State of Delaware.
(i) ACCOUNT BANKS. The names and addresses of all the Account Banks are
specified in SCHEDULE 1 or, after the Issuance Date, have been provided by
Servicer to Trustee pursuant to
30
SECTION 3.3(c), and the account numbers of the Bank Accounts at such Account
Banks are specified in SCHEDULE I or, after the Issuance Date, have been
provided by Servicer to Trustee pursuant to SECTION 3.3(c). The Account
Agreements to which Issuer is a party constitute the legal, valid and binding
obligations of the parties thereto enforceable against such parties in
accordance with their respective terms subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally and general equitable principles.
(j) INVESTMENT COMPANY ACT. Issuer is not, and is not controlled by, an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended.
The representations and warranties set forth in this Section shall survive
the grant of a security interest in the Collateral to Trustee. Upon discovery by
Issuer, Servicer or Trustee of a breach of any of the foregoing representations
and warranties, the party discovering the breach shall give written notice to
the other parties to this Agreement within three Business Days following the
discovery; PROVIDED, HOWEVER, that if such breach arises from a Seller's failure
to perform its obligations under the Purchase Agreement and such failure is of
the type that may be cured by settlement of a Seller Non-Complying Receivables
Adjustment or Seller Dilution Adjustment under Sections 3.1 and 3.5 of the
Purchase Agreement, and such settlement shall have (in fact) been made, then no
breach shall be deemed to have occurred under this Agreement. Trustee's
obligations in respect of discovering any breach are limited as provided in
SECTION 11.2(g).
SECTION 7.2 COVENANTS OF ISSUER. So long as any Notes remain outstanding
(other than any Notes payment for which has been duly provided for in accordance
with this Agreement), Issuer shall:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with all
applicable laws, rules, regulations, judgments, decrees and orders (including
those relating to the Receivables, the Related Pledged Assets, the funds in the
Transaction Accounts and the related Contracts and any other agreements related
thereto), in each case to the extent the failure to comply, individually or in
the aggregate for all such failures, would have a substantial likelihood of
having a Material Adverse Effect.
(b) PRESERVATION OF LIMITED LIABILITY COMPANY EXISTENCE. Preserve and
maintain its limited liability company existence, rights, franchises and
privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a foreign limited liability company in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualifications would have a substantial likelihood of
having a Material Adverse Effect.
(c) LOCATION OF OFFICES. Keep its principal place of business and chief
executive office at the address referred to in SECTION 7.1(h) and maintain its
jurisdiction of organization as Delaware or, upon not less than 30 days' (or
such shorter number of days as is acceptable to Servicer and Trustee) prior
written notice given by Issuer to Servicer and Trustee, Issuer may (i) change
the location of its principal place of business and chief executive office or
its jurisdiction of
31
organization from Delaware or (ii) change its name, identity or limited
liability company structure (or the equivalent) or change the location where it
maintains its records with respect to the Collateral provided that it shall have
delivered to Trustee all Uniform Commercial Code financing statements and
amendments and taken all other actions as are necessary (or as are reasonably
requested by Trustee) to continue the perfection and priority of Trustee's
interest in the Collateral. Issuer will at all times maintain its chief
executive offices within the United States of America.
(d) REPORTING REQUIREMENTS OF ISSUER. Furnish to Trustee, the Noteholders
and the Rating Agencies:
(i) EVENTS OF DEFAULT. As soon as possible, and in any event within
five Business Days after an Authorized Officer of Issuer has obtained
knowledge of the occurrence of any Event of Default or any Unmatured Event
of Default, a written statement of an Authorized Officer of Issuer
describing the event and the action that Issuer proposes to take with
respect thereto, in each case in reasonable detail,
(ii) MATERIAL ADVERSE EFFECT. As soon as possible and in any event
within five Business Days after an Authorized Officer of Issuer has
knowledge thereof, written notice that describes in reasonable detail any
Adverse Claim, other than any Permitted Adverse Claim, against the
Collateral or any other event or occurrence that, individually or in the
aggregate for all such events or occurrences, has, or would have a
substantial likelihood of having, in the reasonable, good faith judgment of
Issuer, a Material Adverse Effect,
(iii) PROCEEDINGS. As soon as possible and in any event within five
Business Days after an Authorized Officer of Issuer has knowledge thereof,
written notice of (A) any litigation, investigation or proceeding of the
type described in SECTION 7.1(f) not previously disclosed to Trustee and
(B) any material adverse development that has occurred with respect to any
such previously disclosed litigation, investigation or proceeding,
(iv) OTHER. Promptly, from time to time, any other information,
documents, records or reports respecting the Receivables or the Related
Pledged Assets or any other information respecting the condition or
operations, financial or otherwise, of Issuer, in each case as Trustee may
from time to time reasonably request in order to protect the interests of
Trustee or the Noteholders under or as contemplated by this Agreement.
(e) ADVERSE CLAIMS. Except for any conveyances under the Transaction
Documents, not permit to exist any Adverse Claim (other than Permitted Adverse
Claims) to or in favor of any Person upon or with respect to, or cause to be
filed any financing statement or equivalent document relating to perfection that
covers, the Collateral or any part thereof or any interest therein. Issuer shall
defend the right, title and interest of Trustee in, to and under the Collateral,
whether now existing or hereafter created, against all claims of third parties
claiming through or under Issuer.
32
(f) EXTENSION OR AMENDMENT OF RECEIVABLES; CHANGE IN CREDIT AND COLLECTION
POLICY OR CONTRACTS. Not (i) extend, amend or otherwise modify the terms of any
Receivable or Contract (except as permitted by the Credit and Collection Policy)
in a manner that would have a material adverse effect on the Noteholders, or
(ii) permit any Seller to make any change in its Credit and Collection Policy
that would have a material adverse effect on the Noteholders; PROVIDED that
Issuer or Servicer, as applicable, may change the terms and provisions of the
Credit and Collection Policy if (A) with respect to any material change of
collection policies, the Modification Condition is satisfied with respect
thereto, (B) with respect to any material change of collection procedures, no
material adverse effect on any Note would result, and (C) with respect to any
material change in accounting policies relating to Write-Offs, the change is
made in accordance with GAAP.
(g) MERGERS, ACQUISITIONS, SALES, ETC. Not:
(i) except pursuant to the Transaction Documents (A) be a party to any
merger or consolidation, or directly or indirectly purchase or otherwise
acquire all or substantially all of the assets or any stock of any class
of, or any partnership or joint venture interest in, any other Person, or
(B) directly or indirectly, sell, transfer, assign, convey or lease,
whether in one transaction or in a series of transactions, all or
substantially all of its assets, or sell or assign with or without recourse
any Receivables or Related Pledged Assets (other than pursuant hereto)
unless:
(w)(1) the entity formed by the consolidation or into which
Issuer is merged or the Person that acquires by conveyance or
transfer the properties and assets of Issuer substantially as an
entirety shall be, if Issuer is not the surviving entity,
organized and existing under the laws of the United States of
America or any state thereof or the District of Columbia, and
shall expressly assume, by an agreement supplemental hereto,
executed and delivered to Trustee, in form satisfactory to
Trustee, the performance of every covenant and obligation of
Issuer hereunder, including its obligations under SECTION 7.3,
and (2) Issuer has delivered to Trustee an Officer's Certificate
stating that the consolidation, merger, conveyance or transfer
and the supplemental agreement comply with this Section and an
Opinion of Counsel stating that the supplemental agreement is a
valid and binding obligation of the surviving entity enforceable
against it 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 from time to time in effect
and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity), and
(x) such consolidation, merger, conveyance or transfer shall
have been approved by the Required Holders, and
(y) the Modification Condition shall have been satisfied
with respect to the consolidation, merger, conveyance or
transfer, and Issuer's
33
independent manager shall have approved such consolidation,
merger, conveyance or transfer, and
(z) Issuer shall have delivered to Trustee and each Rating
Agency (i) a Tax Opinion, (ii) a bring down letter stating that
such consolidation, merger, conveyance or transfer will not
adversely affect the conclusions set forth in the true sale
opinion delivered on the Issuance Date, and (iii) a bring down
letter stating that such consolidation, merger, conveyance or
transfer will not adversely affect the conclusions set forth in
the non-consolidation opinion delivered on the Issuance Date,
each dated the date of the consolidation, merger, conveyance or
transfer, with respect thereto, or
(ii) except as contemplated in the Purchase Agreement in connection
with Issuer's purchases of Receivables and Related Assets from the Sellers,
(A) make, incur or suffer to exist an investment in, equity contribution
to, or payment obligation in respect of the deferred purchase price of
property or services from, any Person, or (B) declare or pay any dividends
on its capital stock or make any loan or advance to any Person other than
for reasonable and customary operating expenses provided that
notwithstanding (A) or (B), (I) Issuer may make payments in respect of its
obligations under the Buyer Notes in accordance with their terms and (II)
at any time when the Issuer Net Worth shall be at least $26,000,000, Issuer
shall be permitted to declare and pay dividends on its capital stock and
make loans and/or suffer to exist an investment in Xxxxxx.
(h) CHANGE IN NAME. Not change its limited liability company name or the
name under or by which it does business, or the jurisdiction of its formation,
or its form of organization, or permit any Seller to change its corporate name
or the name under or by which it does business, or the jurisdiction of its
formation, or its form of organization unless prior to the change in name,
Issuer shall have filed (or shall have caused to be filed) any financing
statements or amendments as Servicer or Trustee determines may be necessary to
continue the perfection of Issuer's and Trustee's interest in the Collateral and
the proceeds thereof.
(i) AMENDMENT OF LIMITED LIABILITY COMPANY OPERATING AGREEMENT; CHANGE IN
BUSINESS. Not amend any of Section 1.2, 1.4, 1.6, 2.1, 2.2, 2.3, 2.6, 3.1.B,
4.1.A, 4.3, 5.1, 6.1, 8.4, and 8.6 nor any of the provisions of Article IX of
its limited liability company operating agreement, or engage in any business
other than as contemplated by the Transaction Documents, unless the Modification
Condition has been satisfied in connection with the amendment or change in
Issuer's business.
(j) AMENDMENTS TO PURCHASE AGREEMENT. Except as expressly provided
otherwise in this Agreement, make no amendment to the Purchase Agreement except
in compliance with Section 10.1 of the Purchase Agreement.
(k) ENFORCEMENT OF PURCHASE AGREEMENT. Perform all its obligations under
and otherwise comply with the Purchase Agreement in all material respects and,
if requested by Trustee, enforce, for the benefit of the Noteholders and the
Indemnified Parties, the covenants and agreements of any Seller in the Purchase
Agreement.
34
(l) OTHER INDEBTEDNESS. Not (i) create, incur or permit to exist any
Indebtedness, Guaranty or liability or (ii) cause or permit to be issued for its
account any letters of credit or bankers' acceptances, except for (A)
Indebtedness incurred pursuant to the Buyer Notes, (B) other liabilities
specifically permitted to be created, incurred or owed by Issuer pursuant to or
in connection with the Transaction Documents, and (C) liabilities for reasonable
and customary operating expenses in an aggregate amount that do not exceed
$15,000 in any of its fiscal quarters.
(m) SEPARATE EXISTENCE. Hereby acknowledge that Trustee and the Noteholders
are, and will be, entering into the transactions contemplated by the Transaction
Documents in reliance upon Issuer's identity as a legal entity separate from
each Seller, Servicer and any other Person. Therefore, from and after the date
of the Original Agreement, Issuer has taken and shall take all reasonable steps
to maintain its existence as a limited liability company separate and apart from
Servicer, each Seller and any other Xxxxxx Person. Without limiting the
generality of the foregoing, Issuer shall take such actions as shall be
reasonably required in order that:
(i) Issuer will not incur any material indirect or overhead expenses
for items shared between Issuer and any Xxxxxx Person that are not
reflected in the Servicing Fee, other than shared items of expenses not
reflected in the Servicing Fee, such as legal, auditing and other
professional services, that will be allocated to the extent practical on
the basis of actual use or the value of services rendered, and otherwise on
a basis reasonably related to the actual use or the value of services
rendered, it being understood that any Xxxxxx Person will pay all expenses
owing by Issuer or any Xxxxxx Person relating to the preparation,
negotiation, execution and delivery of the Transaction Documents,
including, without limitation, legal, commitment, agency and other fees.
(ii) Issuer will account for and manage its liabilities separately
from those of every other Xxxxxx Person, including payment of all payroll
administrative expenses and taxes (other than taxes that are determined or
required to be determined on a consolidated or combined basis) from its own
assets.
(iii) Issuer will conduct its business at an office segregated from
the offices of each Xxxxxx Person, which office of Issuer may consist of
office space shared with a Xxxxxx Person, a portion of which is allocated
solely to Issuer.
(iv) Issuer will maintain company records, books of account and
stationery separate from those of every Xxxxxx Person.
(v) Any annual financial statements of any Xxxxxx Person that are made
publicly available and which are consolidated to include Issuer will
contain footnotes stating that Xxxxxx and certain Subsidiaries of Xxxxxx
have sold Receivables and indicating that the assets of Issuer will not be
available to Xxxxxx or such Subsidiaries unless the Secured Obligations
have been paid in full.
(vi) Issuer's assets will be maintained in a manner that facilitates
their identification and segregation from those of any Xxxxxx Person.
35
(vii) Issuer shall not, directly or indirectly, be named and shall not
enter into an agreement to be named as a direct or contingent beneficiary
or loss payee on any insurance policy with respect to any loss relating to
the property of a Xxxxxx Person.
(viii) Any transaction between Issuer and any Xxxxxx Person will be
the type of transaction which would be entered into by a prudent Person in
the position of Issuer with a Xxxxxx Person, and will be on terms that are
at least as favorable as may be obtained from a Person that is not a Xxxxxx
Person (it being understood and agreed that the transactions contemplated
in the Transaction Documents meet the requirements of this clause).
(ix) Neither Issuer, on the one hand, nor any Xxxxxx Person, on the
other hand, will be or will hold itself out to be responsible for the debts
of the other.
(x) Issuer will operate, conduct its business and otherwise act in a
manner which is consistent with the factual assumptions in each of the
opinions of Xxxxx Xxxxxxx LLP dated the date hereof regarding certain
substantive consolidation and true sale issues.
(n) TAXES. File or cause to be filed, and cause each Person with whom it
shares consolidated tax liability to file, all Federal, state and local tax
returns that are required to be filed by it, except where the failure to file
such returns do not, and would not have a substantial likelihood of having, a
Material Adverse Effect, and pay or cause to be paid all taxes shown to be due
and payable on such returns or on any assessments received by it, other than any
taxes or assessments, the validity of which are being contested in good faith by
appropriate proceedings and with respect to which Issuer shall have set aside
adequate reserves on its books in accordance with GAAP and which proceedings
have not had, and would not have a reasonable likelihood of having, a Material
Adverse Effect.
(o) PERFECTION COVENANTS. Issuer shall comply with its covenants set forth
in Schedule II hereto.
The covenants set forth in this Section shall survive the grant of a
security interest in the Collateral to Trustee. Upon discovery by Issuer,
Servicer or Trustee of a breach of any of the foregoing covenants, the party
discovering the breach shall give written notice to the other parties to this
Agreement within three Business Days following such discovery; PROVIDED, HOWEVER
that if such breach arises from a Seller's failure to perform its obligations
under the Purchase Agreement and such failure is of the type that may be cured
by settlement of a Seller Non-Complying Receivables Adjustment or Seller
Dilution Adjustment under Sections 3.1 and 3.5 of the Purchase Agreement, and
such settlement shall have (in fact) been made, then no breach shall be deemed
to have occurred under this Agreement. Trustee's obligations in respect of
discovering any breach are limited as provided in SECTION 11.2(g).
SECTION 7.3 INDEMNIFICATION BY ISSUER. Issuer hereby agrees to indemnify
Trustee, each Noteholder, each Affected Party and each of the successors,
permitted transferees and assigns of any such Person and all officers,
directors, shareholders, controlling Persons, employees, affiliates and agents
of any of the foregoing (each of the foregoing Persons individually being called
an "INDEMNIFIED PARTY"), forthwith on demand, from and against any
36
and all damages, losses, claims (whether on account of settlement or otherwise,
and whether or not the relevant Indemnified Party is a party to any action or
proceeding that gives rise to any Indemnified Losses (as defined below)),
judgments, liabilities and related reasonable costs and expenses (including
reasonable attorneys' fees and disbursements) (all of the foregoing collectively
being called "INDEMNIFIED LOSSES") awarded against or incurred by any of them
that arise out of or relate to Issuer's performance of, or failure to perform,
any of its obligations under or in connection with any Transaction Document.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
indemnified against any Indemnified Losses (a) resulting from gross negligence
or willful misconduct on the part of such Indemnified Party (or the gross
negligence or willful misconduct on the part of any of its officers, directors,
employees, affiliates or agents), (b) to the extent they include Indemnified
Losses in respect of Receivables and reimbursement therefor that would
constitute credit recourse to Issuer for the amount of any Receivable or Related
Pledged Asset not paid by the related Obligor, (c) to the extent they are or
result from lost profits, (d) to the extent they are or result from taxes
(including interest and penalties thereon) asserted with respect to (i)
franchise or withholding taxes imposed on any Indemnified Party other than
Trustee in its capacity as Trustee or (ii) federal or other income taxes on or
measured by the net income of the Indemnified Party and costs and expenses in
defending against the same, or (e) to the extent that they constitute
consequential, special or punitive damages.
If for any reason the indemnification provided in this Section is
unavailable to an Indemnified Party or is insufficient to hold it harmless, then
Issuer shall contribute to the amount paid by the Indemnified Party as a result
of any loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by the Indemnified Party on the
one hand and Issuer on the other hand, but also the relative fault of the
Indemnified Party (if any) and Issuer and any other relevant equitable
consideration.
Notwithstanding any provisions contained in any Transaction Document to the
contrary, Issuer shall not, and shall not be obligated to, pay any amount
pursuant to this SECTION 7.3 unless funds are allocated for such payment
pursuant to the provisions hereof governing the allocation of funds in the
Master Collection Account. Any amount which Issuer does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in
Section 101 of the Bankruptcy Code) against or obligation of Issuer for any such
insufficiency.
SECTION 7.4 INDEMNITY FOR RESERVES AND EXPENSES. (a) If after the date
hereof, the adoption of any Governmental Rule or bank regulatory guideline or
any amendment or change in the interpretation of any existing or future
Governmental Rule or bank regulatory guideline by any Governmental Authority
charged with the administration, interpretation or application thereof, or the
compliance with any directive of any Governmental Authority:
(i) shall impose, modify or deem applicable any reserve, capital,
special deposit or similar requirement (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal Reserve
System) against assets of, deposits with or for the account of, or credit
extended by, any Indemnified Party or shall impose on any Indemnified Party
or on the United States market for certificates of deposit or the London
37
interbank market any other condition affecting the Collateral, the
Transaction Documents, the Notes or payments of amounts due under the
Transaction Documents; or
(ii) imposes upon any Indemnified Party any other cost or expense
(including, without limitation, reasonable attorneys' fees and expenses,
and expenses of litigation or preparation therefor in contesting any of the
foregoing if such a contest is requested by the Issuer) with respect to the
Collateral, the Transaction Documents, the Notes or payments of amounts due
hereunder;
and the result of any of the foregoing is to increase the cost or reduce the
payments to such Indemnified Party with respect to the Collateral, the
Transaction Documents, the Notes or payments of amounts due under the
Transaction Documents, by a material amount, then the Issuer agrees to pay such
Indemnified Party, on the Payment Date which is at least 10 days after demand by
such Indemnified Party, such additional amount or amounts as will compensate
such Indemnified Party for such increased cost or reduced payments.
(b) If any Indemnified Party shall have determined that, after the date
hereof, the adoption of any applicable law or regulatory guideline regarding
capital adequacy or consolidation of assets, or any change therein, or any
change in the interpretation thereof by any Governmental Authority, or any
directive regarding capital adequacy or consolidation of assets of any such
Governmental Authority, has or would have the effect of reducing the rate of
return on capital of such Indemnified Party (or its parent) as a consequence of
such Indemnified Party's investment in the Notes or with respect hereto to a
level below that which such Indemnified Party (or its parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount that
is material, then from time to time, the Issuer agrees to pay such Indemnified
Party, on the Payment Date which is at least 10 days after demand by any such
Indemnified Party, such additional amount or amounts as will compensate such
Indemnified Party (or its parent) for such reduction.
(c) Any Indemnified Party who makes a demand for payment of increased costs
or capital pursuant to SECTION 7.4(a) or (b) shall promptly deliver to the
Issuer a certificate setting forth in reasonable detail the computation of such
increased costs or capital and specifying the basis therefor. In the absence of
demonstrable error, such certificate shall be conclusive and binding for all
purposes. The amount demanded shall not relate to any period that is earlier
than the ninetieth day prior to the date of such demand. Each Indemnified Party
shall use reasonable efforts to mitigate the effect upon the Issuer of any such
increased costs or capital requirements; PROVIDED, it shall not be obligated to
take any action that it determines would be disadvantageous to it or
inconsistent with its policies.
(d) Notwithstanding the foregoing, the Issuer shall not be obligated to pay
any amount under this SECTION 7.4 unless and until the Issuer has funds
available to pay any such amount in accordance with SECTION 4.2. Any such amount
that the Issuer does not pay pursuant to the operation of the preceding sentence
shall not constitute a claim (as defined in Section 101 of Title 11 of the
United States Code, as amended) against or obligation of the Issuer for any such
insufficiency unless and until the Issuer has funds available to pay any such
amount.
38
ARTICLE VIII. SERVICER
SECTION 8.1 REPRESENTATIONS AND WARRANTIES OF SERVICER. On the date hereof
and on the Issuance Date, Servicer hereby makes, and any Successor Servicer also
shall be deemed to make by its acceptance of its appointment hereunder, the
following representations and warranties for the benefit of Trustee and the
Noteholders:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a corporation duly
organized and validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all necessary corporate power and
authority to own its properties and to conduct its business as the properties
presently are owned and as the business presently is conducted.
(b) DUE QUALIFICATION. Servicer is duly qualified to do business and is in
good standing as a foreign corporation (or is exempt from such requirements),
and has obtained all necessary licenses and approvals, in all jurisdictions in
which the servicing of the Receivables and the Related Pledged Assets as
required by this Agreement requires qualification, licenses or approvals and
where the failure so to qualify, to obtain the licenses and approvals or to
preserve and maintain the qualification, licenses or approvals has, or would
have a substantial likelihood of having, a material adverse effect on its
ability to perform its obligations as Servicer under this Agreement or a
Material Adverse Effect.
(c) POWER AND AUTHORITY. Servicer has all necessary corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the other Transaction Documents to which it is a party.
(d) BINDING OBLIGATIONS. This Agreement constitutes, and each other
Transaction Document to which Servicer is a party when executed and delivered
will constitute, a legal, valid and binding obligation of Servicer, enforceable
against it in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether enforceability is considered in a proceeding in equity or
at law.
(e) AUTHORIZATION; NO CONFLICT OR VIOLATION. The execution and delivery by
Servicer of this Agreement and the other Transaction Documents to which it is a
party, the performance by it of its obligations hereunder and thereunder and the
fulfillment by it of the terms hereof and thereof that are applicable to it have
been duly authorized by all necessary action and will not (i) conflict with,
violate, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
(A) its Certificate of Incorporation or Bylaws or (B) any indenture, loan
agreement, mortgage, deed of trust, or other material agreement or instrument to
which it is a party or by which it or any of its properties is bound (excluding
any such agreement that is terminated on or before the Issuance Date or under
which Servicer has all necessary consents or (ii) conflict with or violate any
federal, state, local or foreign law or any decision, decree, order, rule or
regulation applicable to it or any of its properties of any court or of any
federal, state, local or foreign regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over it or any of its
properties, which conflict, violation, breach or default, individually or in the
aggregate, has, or would have a substantial likelihood of having, a Material
Adverse Effect.
39
(f) GOVERNMENTAL APPROVALS. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are required
to be obtained by Servicer, and all notices to and filings with any Governmental
Authority that are required to be made by it, in the case of each of the
foregoing in connection with the execution, delivery and performance by it of
this Agreement and any other Transaction Documents to which it is a party and
the consummation of the transactions contemplated by this Agreement, have been
obtained or made and are in full force and effect (other than the filing of the
UCC financing statements referred to in SECTION 2.3(a)(i)(A) AND SCHEDULE II,
all of which, at the time required in SECTION 2.3(a)(i)(A) AND SCHEDULE II, will
be duly made), except where the failure to obtain or make such authorization,
consent, order, approval, notice or filing, individually or in the aggregate for
all such failures, does not, or would not reasonably be expected to have a
Material Adverse Effect.
(g) LITIGATION AND OTHER PROCEEDINGS. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of Servicer,
threatened against it before any court, regulatory body, arbitrator,
administrative agency or other tribunal or governmental instrumentality and (ii)
it is not subject to any order, judgment, decree, injunction, stipulation or
consent order of or with any court or other government authority that, in the
case of CLAUSES (I) and (II), (A) seeks to affect adversely the income tax
attributes of the transfers hereunder or Issuer under the United States federal
income tax system or any state income tax system or has, or (B) individually or
in the aggregate for all such actions, suits, proceedings and investigations
would have, a substantial likelihood of having, a Material Adverse Effect.
The representations and warranties set forth in this Section shall survive
the grant of a security interest in the Collateral to Trustee. Upon discovery by
Issuer, Servicer or Trustee of a breach of any of the foregoing representations
and warranties, the party discovering the breach shall give written notice to
the other parties to this Agreement within three Business Days following the
discovery. Trustee's obligations in respect of discovering any breach are
limited as provided in SECTION 11.2(g).
SECTION 8.2 COVENANTS OF SERVICER. So long as any Notes remain outstanding
(other than any Notes payment in full for which has been duly provided for in
accordance with this Agreement), Servicer shall:
(a) COMPLIANCE WITH LAWS, ETC. Maintain in effect all qualifications
required under applicable law in order to service properly the Receivables and
the Related Pledged Assets and shall comply in all material respects with all
applicable laws, rules, regulations, judgments, decrees and orders, in each case
to the extent the failure to comply, individually or in the aggregate for all
such failures, has, or would have a substantial likelihood of having, a Material
Adverse Effect.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification has,
or would have a substantial likelihood of having, a Material Adverse Effect.
40
(c) NOTICE. As soon as possible (and in any event within five Business Days
after an Authorized Officer has knowledge thereof), furnish to Issuer, Trustee,
the Noteholders and the Rating Agencies notice of any of the events described in
CLAUSES (i), (ii) and (iii) of SECTION 7.2(d).
(d) LOCATION OF OFFICES. Maintain at all times its chief executive offices
within the United States of America.
(e) PERFECTION COVENANTS. Servicer shall comply with its covenants set
forth in Schedule II hereto.
The covenants set forth in this Section shall survive the grant of a security
interest in the Collateral to Trustee. Upon discovery by Issuer, Servicer or
Trustee of a breach of any of the foregoing covenants, the party discovering the
breach shall give written notice to the other parties to this Agreement within
three Business Days following the discovery. Trustee's obligations in respect of
discovering any breach are limited as provided in SECTION 11.2(g).
SECTION 8.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SERVICER. Servicer shall not consolidate with or merge into any other Person
or convey, transfer or sell all or substantially all of its properties and
assets to any Person, unless (a) Servicer is the surviving entity or, if it is
not the surviving entity, the Person formed by the consolidation or into which
Servicer is merged or the Person that acquires by conveyance, transfer or sale
all or substantially all of the properties and assets of Servicer shall be a
corporation organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and such corporation
shall expressly assume, by an agreement supplemental hereto, executed and
delivered to Trustee and in form and substance satisfactory to Trustee, the
performance of every covenant and obligation of Servicer hereunder and under the
other Transaction Documents to which Servicer is a party, and (b) Servicer shall
have delivered to Trustee an Officer's Certificate stating that the
consolidation, merger, conveyance, transfer or sale and the supplemental
agreement comply with this Section and an Opinion of Counsel stating that the
supplemental agreement is a valid and binding obligation of the surviving entity
enforceable against it 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 by general principles of equity.
SECTION 8.4 INDEMNIFICATION BY SERVICER. Servicer hereby agrees to
indemnify each Indemnified Party forthwith on demand from and against any and
all Indemnified Losses awarded against or incurred by any of them that arise out
of or relate to Servicer's performance of, or failure to perform, any of its
obligations under or in connection with any Transaction Document.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
indemnified against any Indemnified Losses (a) resulting from gross negligence
or willful misconduct on the part of such Indemnified Party (or the gross
negligence or willful misconduct on the part of any of its officers, directors,
employees, affiliates or agents), (b) to the extent they include Indemnified
Losses in respect of Receivables and reimbursement therefor that would
constitute credit recourse to Servicer for the amount of any Receivable or
Related Pledged Asset not paid
41
by the related Obligor, (c) to the extent they are or result from lost profits,
(d) to the extent they are or result from taxes (including interest and
penalties thereon) asserted with respect to (i) franchise or withholding taxes
imposed on any Indemnified Party other than the Trustee in its capacity as
Trustee or (ii) federal or other income taxes on or measured by the net income
of the Indemnified Party and costs and expenses in defending against the same,
or (e) to the extent that they constitute consequential, special or punitive
damages.
If for any reason the indemnification provided in this Section is
unavailable to an Indemnified Party or is insufficient to hold it harmless, then
Servicer shall contribute to the amount paid by the Indemnified Party as a
result of any loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnified Party on the one hand and Servicer on the other hand, but also the
relative fault of the Indemnified Party (if any) and Servicer and any other
relevant equitable consideration.
SECTION 8.5 SERVICER LIABILITY. Servicer shall be liable in accordance with
this Agreement only to the extent of the obligations specifically undertaken by
Servicer in such capacity herein and as set forth herein.
SECTION 8.6 LIMITATION ON LIABILITY OF SERVICER AND OTHERS. No recourse
under or upon any obligation or covenant of this Agreement, any Note or any
other Transaction Document, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of Servicer or of any successor
corporation, either directly or through Servicer, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Agreement, all
other relevant Transaction Documents and the obligations incurred hereunder or
thereunder are solely corporate obligations, and that no such personal liability
whatsoever shall attach to, or is or shall be incurred by the incorporators,
shareholders, officers or directors, as such, of Servicer or of any successor
corporation, or any of them, by reason of the obligations, covenants or
agreements contained in this Agreement, any of the Notes or any other
Transaction Documents, or implied therefrom; and that any and all such personal
liability of, either at common law or in equity or by constitution or statute,
and any and all such rights and claims against, every such incorporator,
shareholder, officer or director, as such, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations or
covenants contained in this Agreement, any of the Notes or any other Transaction
Documents, or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Agreement.
Servicer and any director, officer, employee or agent of Servicer may rely in
good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person (other than by an Affiliate of Servicer) respecting any
matters arising hereunder. Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties to
service the Receivables in accordance with this Agreement that in its reasonable
opinion may involve it in any expense or liability.
SECTION 8.7 ACTIONS BY SERVICER. Servicer may, in its sole discretion,
undertake any legal action relating to the servicing, collection or
administration of Receivables and Related Pledged Assets that it may reasonably
deem necessary or appropriate for the benefit of the Noteholders and the
Indemnified Party with respect to this Agreement and the rights and duties
42
of the parties hereto and the interests of the Noteholders and the Indemnified
Party hereunder, provided that such action is in compliance with all applicable
laws and regulations and is in accordance with the servicing standards set forth
herein.
ARTICLE IX. EVENTS OF DEFAULT; TERMINATION BY SELLERS
SECTION 9.1 EVENTS OF DEFAULT. Each of the following shall constitute an
"EVENT OF DEFAULT":
(a) any of the following shall occur:
(i) failure on the part of Issuer or Servicer to make any payment of
the principal amount of any Note when due, or to make any deposit required
by the terms of any Transaction Document within one Business Day after the
date the deposit is required to be made, or to make any payment of any
interest on the Notes or any other payment required by the terms of any
Transaction Document on or before three Business Days after the date such
payment is required to be made; or
(ii) failure on the part of Servicer to deliver a Daily Report within
the time period required under SECTION 3.5(c) and continuance of such
failure for five Business Days; PROVIDED that if Servicer shall have
estimated the Base Amount in the Daily Report for one or more days due to
adverse circumstances beyond its control (as described in, and subject to
the limitations in, such SECTION 3.5(c)), then the five day grace period
specified in this CLAUSE (ii) shall be reduced by the number of days on
which the Base Amount was estimated (or, if such number of days exceeds
five, shall be reduced to zero); or
(iii) failure on the part of Servicer to deliver a Monthly Report
within the time required under SECTION 3.5(d), and continuance of such
failure for three Business Days; or
(iv) failure on the part of Issuer, Guarantor, Servicer or any Seller
duly to observe or perform any covenant or agreement set forth in any
Transaction Document, which failure continues unremedied for a period of 30
days after the date on which written notice of the failure, requiring the
same to be remedied, shall have been given to Issuer by Trustee or to
Issuer and Trustee by any Holder; or
(v) Guarantor gives notice of termination of the Seller Guaranty;
(b) any representation or warranty made by a Seller in SUBSECTION 5.1(d),
5.1(k), 5.1(n), 5.1(o) or 5.1(q) of the Purchase Agreement or by Issuer in
SUBSECTION 2.3(a)(i), 2.3(a)(iii) or 7.1(i) shall prove to have been incorrect
in any material respect when made, and continues to be incorrect in any material
respect for a period of five Business Days after the date on which written
notice of the breach, requiring the same to be remedied, shall have been given
to Issuer by Trustee or to Issuer and Trustee by any Holder, or any other
representation or warranty made by Issuer, Servicer, Guarantor or any Seller in
any Transaction Document shall prove to have been incorrect in any material
respect when made, and continues to be incorrect in any material respect for a
period of 30 days after the date on which written notice of the breach,
requiring the same to be remedied, shall have been given to Issuer by Trustee,
or Issuer and to Trustee by any Holder; PROVIDED that a mistake in the
representation of a Receivable as an Eligible Receivable
43
shall not constitute an Event of Default unless and until the applicable Seller
has failed to make the cash payments (if any) owed under SECTION 3.1 of the
Purchase Agreement in respect of the misrepresentation (it being understood that
certain of such mistakes may result in a non-cash adjustment under the Purchase
Agreement);
(c) a Bankruptcy Event shall occur with respect to Issuer, Servicer,
Guarantor or any Seller, or Issuer shall become unable, for any reason, to grant
a valid security interest in any Collateral to Trustee in accordance with the
provisions of the Purchase Agreement and this Agreement; PROVIDED that if, at
the time any event that would, with the passage of time, become a Bankruptcy
Event occurs as a result of a bankruptcy proceeding being filed against Issuer
or any Seller, then, on and after the day on which the bankruptcy proceeding is
filed until the earlier to occur of the dismissal of the proceeding and the
commencement of the Early Amortization Period, Issuer shall not purchase
Receivables and Related Assets (i) in the case of a Bankruptcy Event relating to
Issuer, from any Seller and (ii) in the case of a Bankruptcy Event relating to
any Seller, from the affected Seller;
(d) Issuer shall be required to be registered as an "investment company"
under and within the meaning of the Investment Company Act of 1940, as amended;
(e) the Net Principal Amount exceeds the Base Amount for a period of five
or more consecutive Business Days;
(f) a Servicer Default shall have occurred and shall not have been
remedied;
(g) Xxxxxx shall cease to own, directly or indirectly, 100% of the issued
and outstanding membership interests of Issuer;
(h) the Internal Revenue Service or the PBGC files one or more Tax or ERISA
Liens against the assets (including Receivables) of Issuer or any Seller;
(i) the cessation of, or the failure to create, a valid perfected security
interest in favor of Trustee in the Collateral (subject only to Permitted
Adverse Claims), including the rights of Issuer under the Purchase Agreement;
(j) the Principal Amount is not paid in full on the Expected Final Payment
Date;
(k) any foreclosure or similar proceeding in respect of any adverse claim
on any Buyer Note or Issuer's membership interests shall have been commenced; or
title to any Buyer Note or Issuer's membership interests shall pass to the
holders of such adverse claim, it being understood that the grant of a security
interest in the membership interests of Issuer or a Buyer Note to a creditor of
a Seller shall not be an Event of Default; or
(l) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Material Indebtedness of Xxxxxx Holdings, Inc. or any of its Subsidiaries or of
any Seller, or the acceleration of the final stated maturity of any such
Material Indebtedness.
44
SECTION 9.2 EARLY AMORTIZATION PERIOD . Upon the occurrence and during the
continuance of any Event of Default described in SUBSECTION 9.1(c), (d), (i),
(j) OR (k), the outstanding Notes shall be automatically accelerated, the
outstanding principal balance thereof shall be immediately due and payable and
an Early Amortization Period shall commence without any notice or other action
on the part of Trustee or the Holders, immediately upon the occurrence of such
Event of Default. Upon the occurrence and during the continuance of any Event of
Default described in SUBSECTION 9.1(l) that has not been waived by the Specified
Holders in accordance with SECTION 13.1(b) of the Indenture by the expiration of
the related Suspension Period, the Outstanding Notes shall be automatically
accelerated, the outstanding principal balance thereof shall be immediately due
and payable and an Early Amortization Period shall commence without any notice
or other action on the part of Trustee or the Holders, immediately upon the
expiration of the related Suspension Period. On the tenth day after Issuer
receives notice or otherwise becomes aware of the occurrence of any Event of
Default described in SUBSECTION 9.1(a), (e) or (h) the outstanding Notes shall
be automatically accelerated, the outstanding principal balance thereof shall be
immediately due and payable and an Early Amortization Period shall commence
without any notice or other action on the part of Trustee or the Holders, unless
waived by the Required Holders or, in the case of SUBSECTION 9.1(a), (e) or (h),
is otherwise cured prior to such tenth day. Upon the occurrence and continuance
of any Event of Default described in any subsection of 9.1 (including SUBSECTION
9.1(a), (e) or (h), but excluding SUBSECTION 9.1 (c), (d), (i), (j) or (k)),
after the applicable grace period, if any, set forth in such subsection, if so
directed by the Specified Holders, Trustee shall by notice then given in writing
to Issuer and Servicer, declare that the outstanding Notes have been
accelerated, the outstanding principal balance thereof is now due and payable
and an Early Amortization Period has commenced as of the date of Issuer's
receipt of the notice.
SECTION 9.3 REMEDIES. Upon the occurrence of an Event of Default, Trustee
shall have, in addition to all other rights and remedies available to Trustee
under this Agreement or otherwise, (a) the right to apply Collections to the
payment of the obligations of Issuer and Servicer under the Transaction
Documents, as provided herein, and (b) all rights and remedies provided under
the Uniform Commercial Code and all other applicable laws, which rights, in the
case of each and all of the foregoing, shall be cumulative. Trustee shall
exercise the rights at the direction of the Noteholders pursuant to (and subject
to the limitations specified in) SECTION 11.13.
SECTION 9.4 TERMINATION BY SELLERS. If all of the Sellers have notified
Trustee in writing of their election to terminate their agreements to sell
Receivables under the Purchase Agreement (as provided in Section 8.1 of the
Purchase Agreement), (i) Trustee shall notify the Noteholders within five
Business Days of its receipt of such notice and (ii) Issuer shall cause the
Notes to be repaid out of Collections as early as is practicable in accordance
with the terms hereof.
45
ARTICLE X. SERVICER DEFAULTS
SECTION 10.1 SERVICER DEFAULTS. Any of the following events shall
constitute a "SERVICER DEFAULT":
(a) any failure by Servicer in its capacity as Servicer to make any
payment, transfer or deposit required by any Transaction Document to be made by
it or to give instructions or to give notice to Trustee to make such payment,
transfer or deposit, which failure continues unremedied for three Business Days,
(b) except as set forth in the other paragraphs of this SECTION 10.1,
failure on the part of Servicer in its capacity as Servicer duly to observe or
perform in any material respect any other covenants or agreements of Servicer
set forth in this Agreement or any other Transaction Document, which failure has
a material adverse effect on the Holders and continues unremedied for a period
of 30 days after the date on which written notice of the failure, requiring the
same to be remedied, shall have been given to Servicer by Trustee, or to
Servicer and Trustee by any Noteholder or, subject to the prior written approval
of the Required Holders, Issuer,
(c) Servicer shall assign its duties under this Agreement, except as
permitted by SECTIONS 3.1(b) and 8.3,
(d) any Daily Report or Monthly Report shall fail to have been correct in
any material respect when made or delivered, or shall not have been delivered
when required under the terms hereof, and in either case such condition
continues unremedied for a period of three Business Days; or any other
representation, warranty or certification made by Servicer in any Transaction
Document or in any certificate or other document or instrument delivered
pursuant to any Transaction Document shall fail to have been correct in any
material respect when made or delivered, which failure has a materially adverse
effect on the Noteholders and which materially adverse effect continues
unremedied for a period of 15 Business Days after the date on which written
notice of failure, requiring the same to be remedied, shall have been given to
Servicer by Trustee or to Servicer and Trustee by any Noteholder or, subject to
the prior written approval of the Required Holders, Issuer, or
(e) any Bankruptcy Event shall occur with respect to Servicer.
In the event of any Servicer Default, so long as such Servicer Default shall not
have been remedied, Issuer shall, at the direction of Trustee or the Required
Holders, by notice then given in writing to Servicer (a "TERMINATION NOTICE"),
terminate all (but not less than all) of the rights and obligations of Servicer
as Servicer under this Agreement and in and to the Receivables, the Related
Pledged Assets and the proceeds thereof.
As soon as possible, and in any event within five Business Days, after an
Authorized Officer of Servicer has obtained knowledge of the occurrence of any
Servicer Default, Servicer shall furnish Issuer, Trustee and the Rating
Agencies, and Trustee shall promptly furnish each Noteholder, notice of such
Servicer Default.
Notwithstanding the foregoing, a delay in or failure in performance
referred to in SUBSECTION (a) for a period of ten Business Days after the
applicable grace period, or in
46
SUBSECTION (b) or (d) for a period of 30 Business Days after the applicable
grace period, shall not constitute a Servicer Default if the delay or failure
could not have been prevented by the exercise of reasonable diligence by
Servicer and the delay or failure was caused by an act of God or the public
enemy, riots, acts of war, acts of terrorism, epidemics, flood, embargoes,
weather, landslides, fire, earthquakes or similar causes. The preceding sentence
shall not relieve Servicer from using its best efforts to perform its
obligations in a timely manner in accordance with the terms of the Transaction
Documents, and Servicer shall promptly give Issuer and Trustee an Officer's
Certificate notifying them of its failure or delay.
SECTION 10.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) On and after
Servicer's receipt of a Termination Notice pursuant to SECTION 10.1, Servicer
shall continue to perform all servicing functions under this Agreement until the
date specified in the Termination Notice or otherwise specified by Issuer
(acting upon the instruction of Trustee or the Required Holders) in writing or,
if no such date is specified in the Termination Notice, or otherwise specified
by Issuer (acting upon the instruction of Trustee or the Required Holders),
until a date mutually agreed upon by Servicer and Issuer (acting upon the
instruction of Trustee or the Required Holders). Issuer (acting upon the
instruction of Trustee or the Required Holders) shall, as promptly as possible
after the giving of a Termination Notice, nominate an Eligible Servicer as
successor servicer (the "SUCCESSOR SERVICER"); PROVIDED that the Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to Issuer (acting upon instruction from Trustee). Any Person who is
nominated to be a Successor Servicer shall accept its appointment by a written
assumption in form and substance acceptable to Issuer (acting upon instruction
from Trustee). In the event that a Successor Servicer has not been appointed or
has not accepted its appointment at the time when Servicer ceases to act as
Servicer, Trustee without further action shall automatically be appointed the
Successor Servicer. Trustee may delegate any of its servicing obligations to an
affiliate or agent in accordance with SECTION 3.1(b). If Trustee is prohibited
by applicable law from performing the duties of Servicer hereunder, Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
Successor Servicer hereunder. Trustee shall give prompt notice to the Rating
Agencies and each Noteholder upon the appointment of a Successor Servicer.
(b) After Servicer's receipt of a Termination Notice, and on the date that
a Successor Servicer shall have been appointed by Issuer (acting upon the
instruction of Trustee or the Required Holders) and shall have accepted the
appointment pursuant to SUBSECTION (a), all authority and power of Servicer
under this Agreement shall pass to and be vested in the Successor Servicer (a
"SERVICE TRANSFER"); and, without limitation, Trustee is hereby authorized and
empowered to execute and deliver, on behalf of Servicer, as attorney-in-fact or
otherwise, all documents and instruments, and to do and accomplish all other
acts or things that Trustee reasonably determines are necessary or appropriate
to effect the purposes of the Service Transfer. Upon the appointment of the
Successor Servicer and its acceptance thereof, Servicer agrees that it will
terminate its activities as Servicer hereunder in a manner that Trustee
indicates will facilitate the transition of the performance of such activities
to the Successor Servicer. Servicer agrees that it shall use reasonable efforts
to assist the Successor Servicer in assuming the obligations to service and
administer the Receivables and the Related Pledged Assets, on the terms and
subject to the conditions set forth herein, and to effect the termination of the
responsibilities and rights of Servicer to conduct servicing hereunder,
including the transfer to such Successor Servicer of all authority of Servicer
to service the Receivables and Related
47
Pledged Assets provided for under this Agreement and all authority over all cash
amounts that shall thereafter be received with respect to the Receivables or the
Related Pledged Assets. Servicer shall, within five Business Days after the
designation of a Successor Servicer, transfer its electronic records (and use
its commercially reasonable best efforts to transfer any related software and
software licenses, appropriately assigned and prepaid) relating to the
Receivables, the related Contracts and the Related Pledged Assets to the
Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables and the Related Pledged Assets in the manner and at
such times as the Successor Servicer shall request. To the extent that
compliance with this Section shall require Servicer to disclose to the Successor
Servicer information of any kind that Servicer reasonably deems to be
confidential, prior to the transfer contemplated by the preceding sentence the
Successor Servicer shall be required to enter into such licensing and
confidentiality agreements as Servicer shall reasonably deem necessary to
protect its interest. All reasonable costs and expenses (including attorneys'
fees and disbursements) incurred in connection with transferring the
Receivables, the Related Pledged Assets and all related Records (including the
related Contracts) to the Successor Servicer and amending this Agreement and the
other Transaction Documents to reflect the succession as Servicer pursuant to
this Section shall be paid by the predecessor Servicer (or, if Trustee serves as
Successor Servicer on an interim basis, the initial Servicer) within 15 days
after presentation of reasonable documentation of the costs and expenses.
(c) Upon its appointment and acceptance thereof, the Successor Servicer
shall be the successor in all respects to Servicer with respect to servicing
functions under this Agreement and shall be subject to all the responsibilities
and duties relating thereto placed on Servicer by the terms and provisions
hereof (and shall carry out such responsibilities and duties in accordance with
standards of reasonable commercial prudence), and all references in this
Agreement to Servicer shall be deemed to refer to the Successor Servicer.
(d) All authority and power granted to Servicer or the Successor Servicer
under this Agreement shall automatically cease and terminate upon termination of
the obligations under this Agreement pursuant to SECTION 12.1, and shall pass to
and be vested in Issuer and, without limitation, Issuer is hereby authorized and
empowered, on and after the effective date of such termination, to execute and
deliver, on behalf of Servicer or the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments and to do and accomplish all
other acts or things that Issuer reasonably determines are necessary or
appropriate to effect the purposes of such transfer of servicing rights.
Servicer or Successor Servicer agrees to cooperate with Issuer in effecting the
termination of the responsibilities and rights of Servicer or Successor Servicer
to conduct servicing of the Receivables and the Related Pledged Assets. The
Successor Servicer shall, within five Business Days after such termination,
transfer its electronic records (and use its commercially reasonable best
efforts to transfer any related software and software licenses assigned)
relating to the Receivables and the Related Pledged Assets to Issuer in such
electronic form as Issuer may reasonably request and shall transfer all other
records, correspondence and documents relating to the Receivables and the
Related Pledged Assets to Issuer in the manner and at such times as Issuer shall
reasonably request. To the extent that compliance with this Section shall
require the Successor Servicer to disclose to Issuer information of any kind
that the Successor Servicer deems to be confidential, Issuer shall be required
to enter into such
48
customary licensing and confidentiality agreements as the Successor Servicer
shall reasonably deem necessary to protect its interests. All reasonable costs
and expenses (including attorneys' fees and disbursements) incurred by Trustee,
in its capacity as Successor Servicer, in connection with the termination shall
be paid by Issuer within 15 days after presentation of reasonable documentation
of the costs and expenses.
Notwithstanding any provisions contained in any Transaction Document to the
contrary, Issuer shall not, and shall not be obligated to, pay any amount
pursuant to this Section unless funds are allocated for such payment pursuant to
the terms hereof. Any amount which Issuer does not pay pursuant to the operation
of the preceding sentence shall not constitute a claim (as defined in Section
101 of the Bankruptcy Code) against or obligation of Issuer for any such
insufficiency.
SECTION 10.3 NOTIFICATION OF SERVICER DEFAULT; NOTIFICATION OF APPOINTMENT
OF SUCCESSOR SERVICER. Within three Business Days after an Authorized Officer of
Servicer becomes aware of any Servicer Default, Servicer shall give written
notice thereof to Issuer, Trustee and the Rating Agencies, and Trustee shall,
promptly upon receipt of the written notice, give notice to the Noteholders at
their respective addresses appearing in the Note Register. Upon any termination
or appointment of a Successor Servicer pursuant to this ARTICLE X, Trustee shall
give prompt written notice thereof to the Noteholders at their respective
addresses appearing in the Note Register and to the Rating Agencies.
SECTION 10.4 WAIVER OF SERVICER DEFAULTS. The Required Holders or Issuer,
acting at the direction of the Required Holders, may, on behalf of Issuer and
all Holders, waive in writing any Servicer Default hereunder and its
consequences. Upon any such waiver of a Servicer Default, such Servicer Default
shall cease to exist, and shall be deemed to have been remedied for every
purpose of this Agreement. Issuer shall provide prompt written notice to the
Rating Agencies of any such waiver. No such waiver shall extend to any
subsequent or other Servicer Default or impair any right consequent thereon
except to the extent expressly so waived.
ARTICLE XI. TRUSTEE
SECTION 11.1 DUTIES OF TRUSTEE. (a) Trustee undertakes to perform the
duties and only the duties as are specifically set forth in this Agreement. The
provisions of this ARTICLE XI shall apply to Trustee solely in its capacity as
Trustee, and not to Trustee in its capacity as Servicer if it is acting as
Servicer. Following the occurrence of a Servicer Default of which a Responsible
Officer has actual knowledge, 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; PROVIDED that if Trustee
shall assume the duties of Servicer pursuant to SECTION 10.2, Trustee in
performing the duties shall use the degree of skill and attention customarily
exercised by a servicer with respect to trade receivables that it services for
itself or others. Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of Issuer other than as expressly
contemplated in, or incidental to the performance of its duties under, the
Transaction Documents.
49
(b) Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to Trustee
that are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they are substantially in the
form required by this Agreement. Trustee shall give written notice to the Person
who furnished any item of the type listed in the preceding sentence of any lack
of substantial conformity of any such item to the applicable requirements of
this Agreement. In addition, Trustee shall give prompt written notice to the
Noteholders of any lack of substantial conformity of any such instrument to the
applicable requirements of this Agreement discovered by Trustee. During the
first week of each year, Trustee shall provide the Rating Agencies with a
certificate, signed by a Responsible Officer, to the effect that Trustee is not
aware of any Event of Default (or, if it is aware of any Event of Default,
specifying the nature of that event).
(c) Subject to SUBSECTION (a), no provision of this Agreement shall be
construed to relieve Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; PROVIDED that:
(i) Trustee shall not be liable for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of Trustee, unless
it shall be proved that Trustee was negligent in ascertaining the pertinent
facts,
(ii) Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction (as applicable) of the Required Holders, relating to the time,
method and place of conducting any proceeding for any remedy available to
Trustee, or exercising any trust or power conferred upon Trustee, under
this Agreement,
(iii) Trustee shall not be charged with knowledge of (A) any failure
by Servicer to comply with the obligations of Servicer referred to in
SUBSECTIONS (a), (b) or (c) of SECTION 10.1, (B) any breach of the
representations and warranties of Issuer set forth in SECTION 2.3 or 7.1 or
the representations and warranties of Servicer set forth in SECTION 8.1,
(C) any breach of the covenants of Issuer set forth in SECTION 7.2 or the
covenants of Servicer set forth in SECTION 8.2 or (d) the ownership of any
Note for purposes of SECTION 6.5, in each case unless a Responsible Officer
of Trustee obtains actual knowledge of the matter or Trustee receives
written notice of the matter from Servicer or from any Holder,
(iv) the duties and obligations of Trustee shall be determined solely
by the express provisions of this Agreement, Trustee shall not be liable
except for the performance of the duties and obligations that specifically
shall be set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against Trustee and, in the absence of
bad faith on the part of Trustee, Trustee may conclusively rely on the
truth of the statements and the correctness of the opinions expressed in
any certificates or opinions that are furnished to Trustee and that conform
to the requirements of this Agreement, and
(v) without limiting the generality of this Section or SECTION 11.2,
Trustee shall have no duty (A) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement evidencing a security interest in
50
the Receivables or the Related Pledged Assets, or to see to the maintenance
of any such recording or filing or depositing or to any rerecording,
refiling or redepositing of any thereof (except that Trustee (x) shall note
in its records the date of filing of each UCC financing statement
identified to it in writing as having been filed in connection with the
Transaction Documents, or filed in connection with a predecessor
receivables securitization and amended and/or assigned in connection with
the Transaction Documents, and naming Trustee as secured party or assignee
of the secured party and (y) shall, unless it shall have received an
Opinion of Counsel to the effect that no such filing is necessary to
continue the perfection of Issuer's or Trustee's interests in the
Receivables and the Related Assets, cause continuation statements to be
filed with respect to each such financing statement to continue the
effectiveness of each such financing statement in accordance with
applicable law, (B) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any Adverse Claim or
encumbrance of any kind owing with respect to, assessed or levied against,
any part of the Collateral, (C) except as set forth in PARAGRAPH (b) above,
to confirm or verify the contents of any reports or certificates of
Servicer delivered to Trustee pursuant to this Agreement that are believed
by Trustee to be genuine and to have been signed or presented by the proper
party or parties or (D) to ascertain or inquire as to the performance or
observance of any of Issuer's or Servicer's representations, warranties or
covenants or Servicer's duties and obligations as Servicer.
(d) 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
under the Transaction Documents hereunder or in the exercise of any of its
rights or powers, if Trustee reasonably believes that the repayment of such
funds or adequate indemnity 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 Trustee to perform, or be responsible for the manner of
performance of, any obligations of Servicer under this Agreement except during
the time, if any, that Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, Servicer in accordance with the terms
of this Agreement.
(e) Except for actions expressly authorized by this Agreement, Trustee
shall take no action reasonably likely to impair the security interests granted
by Issuer hereunder in any Collateral now existing or hereafter created or to
impair the value of any Collateral now existing or hereafter created.
(f) Except to the extent expressly provided otherwise in this Agreement,
Trustee shall have no power to vary the Collateral.
(g) In the event that the Paying Agent or the Transfer Agent and Registrar
shall fail to perform any obligation, duty or agreement in the manner or on the
day on which such obligation, duty or agreement is required to be performed by
the Paying Agent or the Transfer Agent and Registrar, as the case may be, under
this Agreement, Trustee shall be obligated, promptly upon its actual knowledge
thereof, to perform the obligation, duty or agreement in the manner so required.
51
(h) Trustee:
(i) shall at all times be a "participant" (as such term is defined in
the Federal Book Entry Regulations) in the Federal Reserve System;
(ii) shall, to the extent that any of the Transaction Accounts is a
Securities Account, comply with all of the obligations of a Securities
Intermediary under Article 8 of the UCC with respect thereto;
(iii) shall treat each item of property, including funds received by
it for deposit in or credit to a Transaction Account and each investment
made by it pursuant to SECTION 4.3, as a Financial Asset; and
(iv) shall not comply with the instructions, directions or
"entitlement orders" (as such term is defined in Section 8-106 of Article 8
of the UCC) of any other Person and agrees that, absent an Event of
Default, it will act in accordance with the directions of Issuer or
Servicer made in accordance with SECTION 4.3.
(i) Upon the reasonable request of S&P, Trustee shall promptly deliver to
S&P any information that Trustee has received from Servicer.
SECTION 11.2 CERTAIN MATTERS AFFECTING TRUSTEE. Except as otherwise
provided in SECTION 11.1:
(a) Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accordance with, any resolution, Officer's
Certificate, opinion of counsel, certificate of auditors or any other
certificate, statement, instrument, instruction, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document and any
information contained therein believed by it to be genuine and to have been
signed or presented to it pursuant to this Agreement by the proper party or
parties including, but not limited to, reports and records required by ARTICLE
III,
(b) Trustee may consult with counsel and any opinion of counsel rendered by
counsel reasonably satisfactory to Issuer shall be full and complete
authorization and protection in respect of any action taken or permitted or
omitted by it hereunder in good faith and in accordance with such opinion of
counsel,
(c) Trustee (including in its role as Successor Servicer, if it ever acts
in that capacity) 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 or other proceeding hereunder or in relation hereto, at the request,
order or direction of any of the Noteholders, pursuant to the provisions of this
Agreement, unless such Noteholders shall have offered to Trustee reasonable
security or indemnity against the costs, expenses and liabilities that may be
incurred therein or thereby; PROVIDED that nothing contained herein shall
relieve Trustee of the obligations, upon the occurrence and continuance of a
Servicer Default that has not been cured, 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,
52
(d) Trustee shall not be personally liable for any action taken, permitted
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) Trustee shall not be bound to make any investigation into the facts of
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by the Required Holders; PROVIDED
that if the payment within a reasonable time to Trustee of the costs, expenses,
or liabilities likely to be incurred by it in connection with making such
investigation shall be, in the opinion of Trustee, not reasonably assured to
Trustee by the security afforded to it by the terms of this Agreement, Trustee
may require reasonable indemnity against such cost, expense, or liability as a
condition to proceeding with the investigation. The reasonable expense of every
examination shall be paid by Servicer or, if paid by Trustee, shall be
reimbursed by Servicer upon demand,
(f) Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, representatives,
attorneys or a custodian, and Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, representative, attorney or
custodian appointed with due care by it hereunder,
(g) except as may be required by SECTION 11.1(b) hereof, Trustee shall not
be required to make any initial or periodic examination of any documents or
records related to the Collateral for the purpose of establishing the presence
or absence of defects or for any other purpose,
(h) whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to Trustee shall be subject to the provisions of this Section,
(i) Trustee shall have no liability with respect to the acts or omissions
of Servicer (except and to the extent Servicer is Trustee), including, but not
limited to, acts or omissions in connection with: (A) the servicing, management
or administration of the Receivables or the Related Pledged Assets, (B)
calculations made by Servicer whether or not reported to Trustee, and (C)
deposits into or withdrawals from any Bank Accounts or Transaction Accounts
established pursuant to the terms of this Agreement, and
(j) in the event that Trustee is also acting as Paying Agent or Transfer
Agent and Registrar hereunder, the rights and protections afforded to Trustee
pursuant to this ARTICLE XI shall also be afforded to Trustee acting as Paying
Agent or as Transfer Agent and Registrar.
SECTION 11.3 LIMITATION ON LIABILITY OF TRUSTEE. Trustee shall at no time
have any responsibility or liability for or with respect to the correctness of
the recitals contained herein or in the Notes (other than the certificate of
authentication on the Notes). Except as set forth in SECTION 11.14, Trustee
makes no representations as to the validity or sufficiency of this Agreement or
the Notes (other than the certificate of authentication on the Notes) any other
Transaction Document or any Collateral or related document. Trustee shall not be
accountable for the use or application (i) by Issuer of any of the Notes or of
the proceeds of such Notes, or (ii) for the use or application of any funds paid
to Issuer or to Servicer (other than to Trustee in its
53
capacity as Servicer) in respect of the Collateral or deposited by Servicer in
or withdrawn by Servicer from the Bank Accounts, the Transaction Accounts or any
other accounts hereafter established to effectuate the transactions contemplated
herein or in the other Transaction Documents and in accordance with the terms
hereof or thereof.
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity, or enforceability of any ownership or
security interest in any Collateral, or the perfection or priority of such a
security interest or the maintenance of any such perfection or priority, or for
the generation of the payments to be paid to Noteholders under this Agreement,
including: (a) the existence and substance of any Collateral or any related
Record or any computer or other record thereof, (b) the validity of the grant to
Trustee of a security interest in the Collateral or of any preceding or
intervening grant or transfer, (c) the performance or enforcement of any
Collateral, (d) the compliance by Issuer or Servicer with any warranty or
representation made under this Agreement or in any other Transaction Document
and the accuracy of any such warranty or representation prior to Trustee's
receipt of actual notice of any noncompliance therewith or any breach thereof,
(e) any investment of monies pursuant to SECTION 4.3 or any loss resulting
therefrom, (f) the acts or omissions of Issuer, Servicer or any Obligor, (g) any
action of Servicer taken in the name of Trustee, or (h) any action by Trustee
taken at the instruction of Servicer; PROVIDED that the foregoing shall not
relieve Trustee of its obligation to perform its duties (including but not
limited to its duties, if any, to act as Servicer in accordance with SECTIONS
10.2 and 11.1(c)(v)) under this Agreement in accordance with the terms hereof.
Except with respect to a claim based on the failure of Trustee to perform
its duties under this Agreement or based on Trustee's negligence or willful
misconduct, no recourse shall be had against Trustee in its individual capacity
for any claim based on any provision of this Agreement, any other Transaction
Document, the Notes, any Collateral or any assignment thereof. Trustee shall not
have any personal obligation, liability, or duty whatsoever to any Noteholder,
or any other Person with respect to any such claim, and any such claim shall be
asserted solely against Issuer or any indemnitor who shall furnish indemnity to
Trustee as provided in this Agreement or in another Transaction Document.
SECTION 11.4 TRUSTEE MAY DEAL WITH OTHER PARTIES. Subject to any
restrictions that may otherwise be imposed by Section 406 of ERISA or Section
4975(e) of the Internal Revenue Code, Trustee in its individual or any other
capacity may deal with the other parties hereto (other than Issuer) and their
respective affiliates, with the same rights as it would have if it were not
Trustee.
SECTION 11.5 SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES. (a) To the extent
not paid by Servicer to Trustee from funds constituting the Servicing Fee,
Servicer covenants and agrees to pay to Trustee from time to time, and Trustee
shall be entitled to receive, such reasonable compensation as is agreed upon in
writing between Trustee and Servicer (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in connection with the Transaction Documents and
in the exercise and performance of any of the powers and duties hereunder of
Trustee, and Servicer will pay or reimburse Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by Trustee in
accordance with any of the provisions of the Transaction Documents to which it
is a party (including the reasonable fees and expenses of its
54
agents, any co-Trustee and counsel) except any expense, disbursement or advance
that may arise from Trustee's negligence or willful misconduct.
(b) In addition, Servicer agrees to indemnify Trustee from, and hold it
harmless against, any and all losses, liabilities, damages, claims or expenses
incurred by Trustee in connection with the Transaction Documents or in the
exercise or performance of any of the powers or duties of Trustee hereunder,
other than those resulting from the negligence or willful misconduct of Trustee.
(c) If Trustee is appointed Successor Servicer pursuant to SECTION 10.2,
the provisions of this Section shall not apply to expenses, disbursements and
advances made or incurred by Trustee in its capacity as Successor Servicer,
which shall be paid out of the Servicing Fee. Servicer's covenant to pay the
fees, expenses, disbursements and advances provided for in this Section shall
survive the resignation or removal of Trustee and the termination of this
Agreement.
(d) Trustee shall look solely to Servicer for payment of amounts described
in this Section, and Trustee shall have no claim for payment of such amounts
against Issuer or the Collateral.
SECTION 11.6 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. Trustee hereunder shall
at all times: (a) be (i) a banking institution organized under the laws of the
United States, (ii) a member bank of the Federal Reserve System or (iii) any
other banking institution or trust company, incorporated and doing business
under the laws of any State or of the United States, a substantial portion of
the business of which consists of receiving deposits or exercising fiduciary
powers similar to those permitted to national banks under the authority of the
Comptroller of the Currency, and that is supervised and examined by a state or
federal authority having supervision over banks, (b) have, in the case of an
entity that is subject to risk-based capital adequacy requirements, risk-based
capital of at least $250,000,000 or, in the case of an entity that is not
subject to risk-based capital adequacy requirements, a combined capital and
surplus of at least $250,000,000 and (c) have an unsecured long-term debt rating
of at least "BBB" from S&P, "Baa2" from Xxxxx'x and "BBB" from Fitch. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purpose of this Section, the combined capital and
surplus of the corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time Trustee shall cease to be eligible in accordance with
the provisions of this Section, Trustee shall resign immediately in the manner
and with the effect specified in SECTION 11.7.
SECTION 11.7 RESIGNATION OR REMOVAL OF TRUSTEE. (a) Trustee may at any time
resign and be discharged from its obligations hereunder by giving 30 days' prior
written notice thereof to Issuer, Servicer, the Rating Agencies and the
Noteholders. Upon receiving the notice of resignation, Issuer shall promptly
appoint, subject to satisfaction of the Modification Condition, a successor
Trustee who meets the eligibility requirements set forth in SECTION 11.6 by
written instrument, in duplicate, one copy of which shall be delivered to the
resigning Trustee and one copy to the successor Trustee. If no successor Trustee
shall have been so appointed and shall have accepted appointment within 30 days
after the giving of the notice of resignation, the
55
resigning Trustee may petition any court of competent jurisdiction to appoint a
successor Trustee.
(b) If at any time Trustee shall cease to be eligible to be Trustee
hereunder in accordance with the provisions of SECTION 11.6 hereof and shall
fail to resign promptly after its receipt of a written request therefor by
Issuer or if at any time Trustee shall be legally unable to act, or shall be
adjudged bankrupt or insolvent, or if a receiver for Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then Issuer may remove Trustee and, subject to
satisfaction of the Modification Condition, promptly appoint a successor Trustee
by written instrument, in duplicate, one copy of which shall be delivered to
Trustee so removed and one copy to the successor Trustee.
(c) Any resignation or removal of Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until (i) acceptance of appointment by the successor Trustee as
provided in SECTION 11.8 hereof, and (ii) such successor Trustee shall have
agreed in writing to be bound by any Intercreditor Agreements then in effect.
SECTION 11.8 SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed as
provided in SECTION 11.7 shall execute, acknowledge and deliver to Issuer,
Servicer, the Noteholders and the predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall, upon payment of its fees and expenses and other
amounts owed to it pursuant to SECTION 11.5, become effective and the 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 to the successor Trustee, at the expense of
Servicer, all documents or copies thereof and statements held by it hereunder;
and Issuer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
vesting and confirming in the successor Trustee all such rights, powers, duties
and obligations. Servicer shall promptly give notice to the Rating Agencies upon
the appointment of a successor Trustee.
(b) No successor Trustee shall accept appointment as provided in this
Section unless at the time of the acceptance the successor Trustee shall be
eligible to become Trustee under the provisions of SECTION 11.6.
(c) Upon acceptance of appointment by a successor Trustee as provided in
this Section, the successor Trustee shall mail notice of the succession
hereunder to all Noteholders at their addresses as shown in the Note Register,
to each Rating Agency.
SECTION 11.9 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which
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 Trustee
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of Trustee, shall be the successor of Trustee
hereunder, if the Person meets the requirements of SECTION 11.6, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto,
56
anything herein to the contrary notwithstanding. Servicer shall promptly give
notice to the Rating Agencies upon any merger or consolidation of Trustee.
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 Collateral may at the time be located, Trustee shall have the power and
may execute and deliver all instruments to appoint one or more Persons (who may
be an employee or employees of Trustee) to act as a co-Trustee or co-Trustees,
or separate Trustee or separate Trustees, with respect to all or any part of the
Collateral, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders such title to the Collateral, or any part thereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as Trustee may consider necessary or appropriate;
PROVIDED, that such appointment shall be subject to the prior written consent of
Issuer unless an Event of Default or Servicer Default is continuing; and
PROVIDED FURTHER, that in any event Trustee will give Issuer and Servicer prior
written notice of such appointment. No co-Trustee or separate Trustee shall be
required to meet the terms of eligibility as a successor Trustee under SECTION
11.6 and no notice to Noteholders of the appointment of any co-Trustee or
separate Trustee shall be required under SECTION 11.8.
(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 Trustee shall be conferred or imposed upon and exercised or performed
by Trustee and the separate Trustee or co-Trustee jointly (it being
understood that the separate Trustee or co-Trustee is not authorized to act
separately without 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 to Servicer
hereunder), 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 Collateral 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 Trustee,
(ii) no Trustee hereunder shall be personally liable by reason of any
act or omission of any other Trustee hereunder, and
(iii) 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 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 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 or
57
indemnity to, Trustee. Every such instrument shall be filed with Trustee and a
copy thereof given to Servicer.
(d) Any separate Trustee or co-Trustee may at any time constitute 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 to this Agreement or
any other Transaction Document 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 Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
SECTION 11.11 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES. All
rights of action and claims under this Agreement, the Notes, or the other
Transaction Documents may be prosecuted and enforced by Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by 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 Trustee, its agents and counsel, be paid to the Noteholders in respect of
which such judgment has been obtained in accordance with the terms hereof.
SECTION 11.12 SUITS FOR ENFORCEMENT. If an Event of Default or a Servicer
Default shall occur and be continuing, Trustee, in its discretion may, subject
to the provisions of SECTIONS 11.1 and 11.13, proceed to protect and enforce its
rights and the rights of the Noteholders 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 any
other Transaction Document or in aid of the execution of any power granted in
this Agreement or any other Transaction Document or for the enforcement of any
other legal, equitable or other remedy as Trustee, being advised by counsel,
shall deem most effectual to protect and enforce any of the rights of Trustee or
the Noteholders. Nothing herein contained shall be deemed to authorize Trustee
to authorize or consent to or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
SECTION 11.13 RIGHTS OF NOTEHOLDERS TO DIRECT TRUSTEE. The Required
Holders, shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to Trustee with respect to
the Notes, or exercising any trust or power conferred on Trustee (including the
right to take any action related to or concerning the Collateral); provided
that:
(i) subject to SECTION 11.1, Trustee may decline to follow any such
direction if Trustee, being advised by counsel, determines that the action
so directed may not be taken lawfully, or if a Responsible Officer or
Responsible Officers of Trustee shall determine, in good faith, that the
proceedings so directed would be illegal or involve Trustee in personal
liability or be unduly prejudicial to the rights of the Noteholders not
giving such direction; and
58
(ii) nothing in this Agreement shall impair the right of Trustee to
take any action deemed proper by Trustee and that is not inconsistent with
such direction.
SECTION 11.14 REPRESENTATIONS AND WARRANTIES OF TRUSTEE. Trustee represents
and warrants that:
(a) it is a banking corporation organized, existing and in good standing
under the laws of the State of
New York,
(b) it has full power, authority and right to execute, deliver and perform
the Transaction Documents to which it is a party, and has taken all necessary
action to authorize the execution, delivery and performance by it of the
Transaction Documents, and
(c) the Transaction Documents to which it is a party have been duly
executed and delivered by Trustee and, in the case of all such Transaction
Documents, are legal, valid and binding obligations of Trustee, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
SECTION 11.15 MAINTENANCE OF OFFICE OR AGENCY. Trustee will maintain, at
its address designated pursuant to SECTION 13.5, an office, offices, agency or
agencies where notices and demands to or upon Trustee in respect of the Notes
and the Transaction Documents to which it is a party may be served. Trustee will
give prompt written notice to Servicer and to the Noteholders of any change in
the location of the Note Register or any such office or agency.
ARTICLE XII. SATISFACTION AND DISCHARGE
SECTION 12.1 SATISFACTION AND DISCHARGE. This Agreement shall cease to be
of further effect with respect to the Notes except as to: (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) the duties and obligations
described in SECTIONS 3.9(c), 7.3, 8.4, 11.5, 12.4(b), 13.12 AND 13.14 and (v)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with Trustee payable to all or any of them, and Trustee, on demand
of and at the expense of Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Agreement with respect to the Notes, when:
(A) either:
(1) all Notes theretofore authenticated and delivered (other
than: (i) Notes that have been destroyed, lost or stolen and that
have been replaced or paid as provided in SECTION 6.3 and (ii)
Notes for whose payment money has theretofore been deposited in
trust with Trustee or segregated and held in trust by Trustee and
thereafter repaid to Issuer or discharged from such trust) have
been delivered to the Indenture Trustee for cancellation; or
59
(2) all Notes not theretofore delivered to Trustee for
cancellation:
(i) have all become due and payable,
(ii) will become due and payable on the Final Scheduled
Payment Date within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to Trustee for the giving of
notice of redemption by Trustee in the name, and at the
expense, of Issuer,
and Issuer, in the case of CLAUSE (2)(i), (ii) or (iii), has
irrevocably deposited or caused to be irrevocably deposited with
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to Trustee for cancellation when due to the
Final Scheduled Payment Date;
(B) Issuer has paid or caused to be paid all other sums payable
hereunder by Issuer; and
(C) Issuer has delivered to Trustee and an Officers' Certificate,
each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Agreement have been
complied with.
SECTION 12.2 APPLICATION OF TRUST MONEY. All moneys deposited with Trustee
pursuant to SECTION 12.1 shall be held in trust and applied by it, in accordance
with the provisions of the Notes and this Agreement, to the payment, either
directly or through any Paying Agent, as Trustee may determine, to the Holders
of the particular Notes for the payment or redemption of which such moneys have
been deposited with Trustee, of all sums due and to become due thereon for
principal and interest; but such moneys need not be segregated from other funds
except to the extent required herein or as required by law.
SECTION 12.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with
the satisfaction and discharge of this Agreement with respect to the Notes, all
moneys then held by any Paying Agent other than Trustee under this Agreement
with respect to such Notes shall, upon demand of Issuer, be paid to Trustee to
be held and applied in accordance with SECTION 12.4(b), and thereupon such
Paying Agent shall be released from all further liability with respect to such
moneys.
SECTION 12.4 FINAL PAYMENT. (a) Servicer shall give Trustee at least ten
days' prior written notice of the date on which the obligations under this
Agreement are expected to terminate in accordance with SECTION 12.1. The notice
shall be accompanied by a certificate of an Authorized Officer of Servicer
setting forth the information specified in SECTION 3.6 covering the period
during the then current calendar year through the date of the notice. Upon
receiving
60
the notification from Servicer, Trustee shall give the Noteholders written
notice as soon as practicable after Trustee's receipt of notice from Servicer,
which notice shall specify (i) the Payment Date upon which final payment with
respect to the Notes is expected to be made and (ii) the amount of any such
final payment. Trustee shall give the notice to the Transfer Agent and Registrar
and the Paying Agent at the time such notice is given to Noteholders. On the
Payment Date specified in the notice, Trustee shall, based upon the Daily Report
relating to such Payment Date, cause to be paid to the Noteholders the amounts
payable to them on such Payment Date pursuant to the terms hereof. Each
Noteholder shall present its Note to Trustee and surrender its Note for
cancellation at the address of Trustee set forth in SECTION 13.5 not more than
ten Business Days after the Payment Date upon which final payment with respect
to the Notes has been made.
(b) Notwithstanding the termination of the obligations under this Agreement
pursuant to SECTION 12.1, all funds then on deposit in the Master Collection
Account shall continue to be held in trust for the benefit of the Noteholders
and the Paying Agent or Trustee shall pay such funds to the Noteholders at the
time set forth in SECTION 12.1. If any Noteholder does not claim the portion of
such funds to which it is entitled at such time, interest shall cease to accrue
on its Note and Trustee shall hold such funds in trust for such Person, subject
to the further provisions of this Section. In the event that any of the
Noteholders shall not have claimed their final payment with respect to their
Notes within six months after the date specified in the above-mentioned written
notice from Trustee, Trustee shall give a second written notice to the remaining
Noteholders concerning the final payment with respect thereto and surrender of
their Notes for cancellation. If within one year after the second notice all the
Notes shall not have been surrendered for cancellation, Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Noteholders concerning surrender of their Notes, and the cost
thereof shall be paid out of the funds in the Master Collection Account held for
the benefit of such Noteholders. Trustee and the Paying Agent shall pay to
Issuer any monies held by them for the payment of principal of or interest on
the Notes that remains unclaimed for two years after the termination of the
obligations under this Agreement pursuant to SECTION 12.1. After payment of the
monies to Issuer, Noteholders entitled to the money must look to Issuer for
payment as unsecured general creditors unless an applicable abandoned property
law designates another Person.
SECTION 12.5 RIGHTS UPON TERMINATION OF OBLIGATIONS UNDER THIS AGREEMENT.
Upon the termination of the obligations under this Agreement pursuant to SECTION
12.1, Trustee shall release its security interest in the Collateral, and shall
have no further claims with respect thereto, except for amounts held by Trustee
pursuant to SECTION 12.4(b) and except for the rights of RPA Indemnified Parties
(other than Issuer and its officers, directors, shareholders, controlling
Persons, employees and agents) to indemnification and contribution under Section
9.1 of the Purchase Agreement. Trustee shall execute and deliver any document
necessary to release the security interest in favor of Trustee (for the benefit
of the Noteholders) in such Receivables and Related Pledged Assets, to release
any filing evidencing or perfecting such security interest and to terminate all
powers of attorney created by the Transaction Documents), in each case without
recourse, representation or warranty, that shall be reasonably requested by
Issuer to vest in Issuer all right, title and interest that Trustee had in the
Collateral.
61
ARTICLE XIII. MISCELLANEOUS PROVISIONS
SECTION 13.1 AMENDMENT, WAIVER, ETC. (a) This Agreement may be amended from
time to time by Servicer, Issuer and Trustee by a written instrument signed by
each of them, without the consent of any of the Noteholders; PROVIDED that such
action shall not materially adversely affect the interests of any Noteholder or
affect the powers and duties of Issuer and PROVIDED FURTHER, that any amendment
of this Agreement to effect any modification of the Bank Account arrangements
pursuant to SECTION 3.3(c)(ii)(y) shall not require the consent of any of the
Noteholders. This Agreement may not be amended unless Issuer shall have
delivered the proposed amendment to the Rating Agencies (or if no Outstanding
Notes are rated, the Noteholders) at least ten Business Days (or such shorter
period as shall be acceptable to each of them) prior to the execution and
delivery thereof and the Modification Condition has been satisfied with respect
to such amendment; PROVIDED, HOWEVER, that the Modification Condition shall not
apply to proposed amendments the purpose of which is to correct any ambiguities
or inconsistencies in this Agreement or to conform this Agreement to the
descriptions contained in the Offering Memorandum.
(b) The provisions of this Agreement may also be amended, modified or
waived from time to time by Servicer, Issuer and Trustee with the consent of the
Required Holders (or in the case of a waiver of an Event of Default under
SECTION 9.1(l), the consent of the Specified Holders) 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 Noteholders
PROVIDED that no amendment shall (v) reduce in any manner the amount of or delay
the timing of any payments to be made to Noteholders or deposits of amounts to
be so paid without the consent of each affected Noteholder, (w) change the
definition of or the manner of calculating the interest payable to any
Noteholder without the consent of each affected Noteholder, (x) reduce the
aforesaid percentage required to consent to any amendment without the consent of
each Noteholder, (y) adversely affect the rating of any class by any Rating
Agency without the consent of the Holders of Notes of the class evidencing not
less than 100% of the aggregate unpaid principal amount of the Notes of the
class or (z) permits the creation of a Lien on any of the Collateral without the
consent of 100% of the Holders of the Notes. It is understood that the consent
of the Required Holders shall not be required for any amendment, modification or
waiver if all amounts owed to the Holders will be paid (and any commitments of
such Holders will terminate) prior to, or contemporaneously with, the
effectiveness of such amendment, modification or waiver; PROVIDED FURTHER, that
any amendment of this Agreement to effect any modification of the Bank Account
arrangements pursuant to SECTION 3.3(c)(ii)(y) shall not require the consent of
any of the Noteholders.
Issuer or Trustee shall establish a record date for determining which
Noteholders may give such waivers and consents. No waiver of any Event of
Default or other default hereunder given at any time shall apply to any other
prior or subsequent Event of Default or default.
(c) Promptly after the execution of any amendment, consent or waiver
described in SUBSECTION (b), Trustee shall furnish written notification of the
substance of the amendment or consent to each Noteholder, and Servicer shall
furnish written notification of the substance of the amendment or consent to the
Rating Agency.
62
(d) It shall not be necessary for any waiver or consent given by the
Noteholders under this section to approve the particular form of any proposed
amendment, but it shall be sufficient if the consent shall approve the substance
thereof. The manner of obtaining such waivers and consents and of evidencing the
authorization of the execution thereof by the Noteholders shall be subject to
such reasonable requirements as Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of the amendment is authorized or permitted by this Agreement and
that all conditions precedent to the execution and delivery have been satisfied.
Trustee may, but shall not be obligated to, enter into any amendment that
affects Trustee's own rights, duties or immunities under this Agreement.
(f) Notwithstanding anything in this Section to the contrary, no amendment
may be made to this Agreement unless Issuer shall have delivered to Trustee and
the Rating Agencies a Tax Opinion with respect to such amendment.
SECTION 13.2 ACTIONS BY NOTEHOLDERS. (a) By its acceptance of Notes
pursuant to this Agreement, each Noteholder (other than Issuer and any Xxxxxx
Person) acknowledges and agrees that, wherever in this Agreement a provision
states that an action may be taken or a notice, demand or instruction given by
any class of Noteholders or the Noteholders, the action, notice or instruction
may be taken or given by any Holder of a Note of the class or by any Noteholder,
respectively, unless the provision requires a specific percentage of the class
of Noteholders or of all Noteholders.
(b) By its acceptance of Notes pursuant to this Agreement, each Noteholder
(other than Issuer and any Xxxxxx Person) acknowledges and agrees that any
request, demand, authorization, direction, notice, consent, waiver or other act
by the Holder of a Note shall bind the Holder and every subsequent Holder of the
Note and of any Note 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 Trustee or Servicer in reliance thereon, whether or not notation of
the action is made upon such Note.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Noteholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by the Noteholders in person or by agent duly appointed in
writing; and except as herein otherwise expressly provided, the action shall
become effective when the instrument or instruments are delivered to Trustee
and, when required, to Servicer. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of Trustee and Servicer, if made in the manner
provided in this Section.
(d) The fact and date of the execution by any Noteholder of any such
instrument or writing may be proved in any reasonable manner that Trustee deems
sufficient.
SECTION 13.3 LIMITATION ON RIGHTS OF NOTEHOLDERS.
(a) No Noteholder shall have any right to vote (except as expressly
provided otherwise in this Agreement) or in any manner otherwise to control the
operation and management of Issuer,
63
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Notes, be construed so as to constitute the
Noteholders from time to time as partners or members of an association, nor
shall any Noteholder 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.
(b) No Noteholder shall have any right by virtue of any provisions of this
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to the Transaction Documents, unless the Noteholder
previously shall have given to Trustee, and unless the Required Holders shall
have made, written request upon Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and Trustee, for 30 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each Noteholder with
every other Noteholder, and Trustee, that no one or more Noteholders shall have
any right in any manner whatever by virtue of, or by availing itself or
themselves of, any provisions of a Transaction Document to affect, disturb or
prejudice the rights of any other Noteholder or to obtain or seek to obtain
priority over or preference to any such other Noteholder except to the extent
provided in the Transaction Documents, or to enforce any right under the
Transaction Documents, except in the manner herein provided and for the equal,
ratable and common benefit of, all Noteholders (subject to the priorities set
forth in the Transaction Documents). For the protection and enforcement of the
provisions of this Section, each and every Noteholder and Trustee shall be
entitled to such relief as can be given either at law or in equity.
(c) By their acceptance of Notes pursuant to this Agreement, the
Noteholders agree to the provisions of this Section.
SECTION 13.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF
NEW YORK, INCLUDING SECTION 5-1401(1) OF THE
GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER CONFLICT OF LAWS
PRINCIPLE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 13.5 NOTICES. All demands, notices, instructions and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, four Business Days after mailing if mailed by registered
mail, return receipt requested, one Business Day after being sent if sent by
recognized overnight courier service or day sent, if sent by facsimile
transmission during business hours on a Business Day (or the next Business Day,
in all other cases of facsimile transmission) (a) in the case of Issuer, to its
address set forth on SCHEDULE 13.5 hereto, (b) in the case of Xxxxxx, to its
address set forth on SCHEDULE 13.5 hereto, (c) in the case of Trustee, the
Paying Agent or the Transfer Agent and Registrar, to the address of Trustee set
forth on SCHEDULE 13.5 hereto and (d) in the case of a Noteholder, at the
address specified by such Noteholder to the Trustee in accordance with SECTION
6.6; or, as to each party, at such other address or facsimile number as shall be
designated by it in a written notice to each other party given in accordance
with this Section. Any notice required or permitted to be mailed to a Noteholder
shall be sent by first-class mail, postage prepaid, to the address of the
Noteholder
64
as shown in the Note Register. Any notice so mailed within the time prescribed
in this Agreement shall be conclusively presumed to have been duly given on the
fourth Business Day after the notice is so mailed, whether or not the Noteholder
receives the notice. Servicer shall deliver or make available to the Rating
Agencies each certificate and report required to be prepared, forwarded or
delivered pursuant to SECTION 3.5 (excluding the Daily Reports) or 3.6 and a
copy of any amendment, consent or waiver to this Agreement, at the address of
the Rating Agency set forth on SCHEDULE 13.5 hereto or at the other address as
shall be designated by the Rating Agency in a written notice to Servicer.
SECTION 13.6 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then the
unenforceable covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement or the other Transaction Documents (as applicable) and shall in no way
affect the validity or enforceability of the other provisions of this Agreement,
the Notes or any of the other Transaction Documents or the rights of the
Noteholders.
SECTION 13.7 NONPETITION COVENANT. Notwithstanding any prior termination of
this Agreement, each of Trustee, Servicer, Issuer, the Paying Agent, the
Authenticating Agent and the Transfer Agent and Registrar (and each Noteholder
by its acceptance of a Note) agrees that it shall not, with respect to Issuer,
institute or join any other Person in instituting any proceeding of the type
referred to in the definition of "BANKRUPTCY EVENT" so long as any Notes shall
be outstanding or there shall not have elapsed one year plus one day since the
last day on which any such Notes shall have been outstanding. The foregoing
shall not limit the right of Servicer, Issuer, the Paying Agent, the
Authenticating Agent and the Transfer Agent and Registrar to file any claim in
or otherwise take any action with respect to any such insolvency proceeding that
was instituted against Issuer by any Person other than Servicer, Issuer, the
Paying Agent, the Authenticating Agent or the Transfer Agent and Registrar. In
addition, each of Servicer, the Paying Agent, the Authenticating Agent and the
Transfer Agent and Registrar agree that all amounts owed to them by Issuer shall
be payable solely from amounts that become available for such payment pursuant
to this Agreement and the Purchase Agreement, and no such amounts shall
constitute a claim against Issuer to the extent that they are in excess of the
amounts available for their payment. The provisions of this Section shall
survive the termination of this Agreement.
SECTION 13.8 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of Issuer, Trustee, or the Holders, 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
hereunder 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 are not exhaustive of any rights,
remedies, powers and privileges provided by law.
SECTION 13.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
65
SECTION 13.10 THIRD-PARTY BENEFICIARIES. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the Noteholders and their
respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, nothing contained in this Agreement shall confer any
rights upon any Person that is not a party to, or a permitted assignee of a
party to, this Agreement.
SECTION 13.11 INTEGRATION. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
SECTION 13.12 BINDING EFFECT; ASSIGNABILITY; SURVIVAL OF PROVISIONS. This
Agreement shall be binding upon and inure to the benefit of Issuer, Servicer and
Trustee and their respective successors and permitted assigns; PROVIDED, that
Issuer shall not delegate any of its obligations hereunder. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
termination of the obligations under this Agreement pursuant to SECTION 12.1.
The rights and remedies with respect to (a) any breach of any representation and
warranty made by Issuer in SECTION 2.3 or SECTION 7.1, (b) any breach of any
representation and warranty made by Servicer in SECTION 8.1 and (c) the
indemnification and payment provisions in SECTIONS 3.9, 7.3, 8.4, 11.5 and
12.4(b) shall be continuing and shall survive any termination of this Agreement.
SECTION 13.13 RECOURSE TO ISSUER. Except to the extent expressly provided
otherwise in the Transaction Documents, the obligations of Issuer under the
Transaction Documents to which it is a party are solely the obligations of
Issuer, and no recourse shall be had for payment of any fee payable by or other
obligation of or claim against Issuer that arises out of any Transaction
Document to which Issuer is a party against any director, officer or employee of
Issuer. Payments to be made by Issuer pursuant to this Agreement shall be paid
to the extent that funds are available to make the payments after all amounts to
be paid to the Noteholders pursuant hereto shall have been paid, and there shall
be no recourse to Issuer for all or any part of any amounts payable pursuant to
any Transaction Document if the funds are at any time insufficient to make all
or part of any such payments. The provisions of this Section shall survive the
termination of this Agreement.
SECTION 13.14 RECOURSE TO COLLATERAL. The Notes do not represent an
obligation of, or an interest in, any Seller, Servicer, Trustee or any Affiliate
of any of them (other than Issuer). Except as expressly provided otherwise in
this Agreement, the Notes are limited in right of payment to the Collateral.
SECTION 13.15 SUBMISSION TO JURISDICTION. Each party hereto hereby
irrevocably (a) submits to the non-exclusive jurisdiction of any
New York State
or Federal court sitting in the Borough of Manhattan in the City of
New York,
New York over any action or proceeding arising out of or relating to the
Transaction Documents, (b) irrevocably agrees that all claims in respect of the
action or proceeding may be heard and determined in the State or Federal court,
(c) irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of the action or proceeding,
and (d) in the case of Issuer and Xxxxxx,
66
irrevocably appoints the Process Agent as its agent to receive on behalf of it
and its property service of copies of the summons and complaint and any other
process that may be served in any action or proceeding. The service may be made
by mailing or delivering a copy of the process to Issuer or Xxxxxx in care of
the Process Agent at the Process Agent's address, and Issuer hereby irrevocably
authorizes and directs the Process Agent to accept the service on its behalf. As
an alternative method of service, each of Issuer and Servicer also irrevocably
consents to the service of any and all process in any action or proceeding by
the mailing of copies of the process to Issuer or Servicer (as applicable) at
its address specified herein. Nothing in this Section shall affect the right of
any party hereto to serve legal process in any other manner permitted by law or
affect the right of any party hereto to bring any action or proceeding against
any or all of the other parties hereto or any of their respective properties in
the courts of any other jurisdiction.
SECTION 13.16 WAIVER OF JURY TRIAL. Each party hereto waives any right to a
trial by jury in any action or proceeding to enforce or defend any rights under
or relating to the Transaction Documents, or any amendment, instrument, document
or agreement delivered or that may in the future be delivered in connection
therewith or arising from any course of conduct, course of dealing, statements
(whether verbal or written), actions of any of the parties hereto or any other
relationship existing in connection with the Transaction Documents, and agrees
that any such action or proceeding shall be tried before a court and not before
a jury.
SECTION 13.17 CERTAIN PARTIAL RELEASES. If any Seller is discontinued as a
Seller pursuant to Section 1.8(a) of the Purchase Agreement, Trustee shall, upon
the request (and at the expense) of Xxxxxx, execute (if necessary) and deliver
to Xxxxxx such statements of partial release and/or amendment relating to the
UCC-1 financing statements filed against such Seller pursuant to the Purchase
Agreement as shall be prepared by Xxxxxx and provided to Trustee to evidence
such termination; PROVIDED that Trustee shall have received (i) an Officer's
Certificate of Servicer to the effect that all conditions to such termination
specified in subclauses (i), (ii) and (iii) of such Section 1.8(a) have been
satisfied (and shall not have received notice from any Noteholder to the
contrary) and (ii) an Opinion of Counsel to the effect that the filing of such
statements of partial release and/or amendment will not impair the validity,
perfection or priority of Issuer's or Trustee's rights in and to (A) any
Receivables or Related Assets conveyed prior to the effective date of such
termination or (B) any Receivables or Related Assets generated by any remaining
Seller on or after the effective date of such termination. In addition, after a
termination that complies with the requirements set out in the preceding
sentence, Trustee shall, upon the request (and at the expense) of Xxxxxx,
execute (if necessary) and deliver to Xxxxxx the termination statements relating
to the UCC-1 financing statements filed against the Seller pursuant to the
Purchase Agreement as shall be prepared by Xxxxxx and provided to Trustee to
evidence the termination; PROVIDED that Trustee shall have received an Officer's
Certificate of Servicer to the effect that Trustee no longer holds any right,
title or interest in the Receivables generated by the terminated Seller.
[Remainder of page intentionally left blank.]
67
IN WITNESS WHEREOF, Issuer, Servicer and Trustee have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
XXXXXX RECEIVABLES, LLC,
as Issuer
By: /s/ Xxxx X. Xxxxxx, Xx.
-----------------------------------
Name:Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
XXXXXX, INC.,
as initial Servicer
By: /s/ Xxxx X. Xxxxxx, Xx.
-----------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Title: Assistant Vice President
S-1
