Common use of Effect of Payments by the Surety Provider Clause in Contracts

Effect of Payments by the Surety Provider. (a) Anything herein to the contrary notwithstanding, any distribution of principal of or interest on the Series 2007-1 Notes that is made with moneys received pursuant to the terms of the Surety Bond shall not be considered payment of the Series 2007-1 Notes by the Issuers. The Trustee acknowledges that, without the need for any further action on the part of the Surety Provider, (i) to the extent the Surety Provider makes payments, directly or indirectly, on account of principal of or interest on the Series 2007-1 Notes to the Trustee for the benefit of the Series 2007-1 Noteholders or to the Series 2007-1 Noteholders (including any Preference Amounts as defined in the Surety Bond), the Surety Provider will be fully subrogated to the rights of such Series 2007-1 Noteholders to receive such principal and interest and will be deemed to the extent of the payments so made to be a Series 2007-1 Noteholder and (ii) the Surety Provider shall be paid principal and interest in its capacity as a Series 2007-1 Noteholder until all such payments by the Surety Provider have been fully reimbursed, but only from the sources and in the manner provided herein for the distribution of such principal and interest and in each case only after the Series 2007-1 Noteholders have received all payments of principal and interest due to them hereunder on the related Payment Date. The foregoing is without prejudice to the separate and independent rights of the Surety Provider to be reimbursed, without duplication, for payments made under the Surety Bond pursuant to the Insurance Agreement. If any Person other than the Trustee asserts any Lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against any Issuer Account or in any financial asset credited thereto, the Administrator will promptly notify the Trustee, the Surety Provider and the Issuer thereof. (b) Without limiting any rights of the Surety Provider under the Surety Bond or any other Related Document, and without modifying or otherwise affecting any terms or conditions of the Surety Bond, each Series 2007-1 Noteholder agrees (i) with respect to the payment of any Preference Amount (as defined in the Surety Bond) by the Surety Provider to the Trustee, on behalf of the Series 2007-1 Noteholders, under the Surety Bond, to assign irrevocably to the Surety Provider all of its rights and claims relating to or arising under the Insured Obligations against the debtor which made or benefited from the related preference payment or otherwise with respect to the related preference payment and (ii) to appoint the Surety Provider as its agent in any legal proceeding related to such preference payment. In addition, each Series 2007-1 Noteholder hereby grants to the Surety Provider an absolute power of attorney to execute all appropriate instruments related to any items required to be delivered in connection with any preference payment referred to in this Section 5.13(b). In addition, and without limitation of the foregoing, the Surety Provider shall be subrogated to the rights of the Trustee and each such Series 2007-1 Noteholder in the conduct of any such Preference Amount, including all rights of any party to an adversary proceeding action with respect to any order issued in connection with any such Preference Amount. Insured Amounts paid by the Surety Provider to the Trustee shall be received by the Trustee, as agent to the Series 2007-1 Noteholders. (c) By acceptance of a Series 2007-1 Note, each Series 2007-1 Noteholder agrees to the terms of the Surety Bond, including the method and timing of payment and the Surety Provider’s right of subrogation, and acknowledges that in the event that payments on the Series 2007-1 Notes are accelerated, such accelerated payments will not be covered by the Surety Provider under the Surety Bond, unless the Surety Provider elects to make such accelerated payments in accordance with and subject to the terms of the Surety Bond. (d) Nothing in this Section 5.13 or in any other Section hereof shall, or is intended to, modify any of the terms, provisions or conditions of the Surety Bond.