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MAIL-WELL TRADE RECEIVABLES CORPORATION,
Seller
MAIL-WELL I CORPORATION,
Servicer
and
NORWEST BANK COLORADO, NATIONAL ASSOCIATION,
Trustee
MAIL-WELL RECEIVABLES MASTER TRUST
POOLING AND SERVICING AGREEMENT
Dated as of November 15, 1996
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TABLE OF CONTENTS
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ARTICLE I Definitions.................................................................1
Section 1.01. Definitions.....................................................................1
Section 1.02. Other Definitional Provisions..................................................17
ARTICLE II Conveyance of Receivables..................................................17
Section 2.01. Conveyance of Receivables......................................................17
Section 2.02. Acceptance of Trustee..........................................................18
Section 2.03. Representations and Warranties of the Seller Relating to the Seller............19
Section 2.04. Representations and Warranties of the Seller Relating to the Agreement and any
Supplement and the Receivables.................................................21
Section 2.05. Reassignment of Receivables in Trust Portfolio.................................23
Section 2.06. Covenants of the Seller........................................................24
Section 2.07. Covenants of the Seller with Respect to the Purchase Agreement.................27
Section 2.08. Purchase Agreement.............................................................27
ARTICLE III Administration and Servicing of Receivables................................28
Section 3.01. Acceptance of Appointment and Other Matters Relating to the Services...........28
Section 3.02. Servicing Compensation.........................................................28
Section 3.03. Representations, Warranties and Covenants of the Servicer......................29
Section 3.04. Servicer Reports to the Trustee................................................31
Section 3.05. Annual Certificate of Servicer.................................................31
Section 3.06. Semi-Annual Agreed-Upon Procedures Report of Independent Public Accountants;
Copies of Reports Available....................................................32
Section 3.07. Tax Treatment..................................................................32
Section 3.08. Notices to Mail-Well I Corporation.............................................32
Section 3.09. Adjustments....................................................................33
ARTICLE IV Rights of Certificateholders and Allocation and Application of Collections.
Section 4.01. Rights of Certificateholders...................................................33
Section 4.02. Establishment of Lockboxes, Lockbox Accounts, the Concentration Account,
the Collection Account, the Canadian Accounts, the Canadian Collection
Account and Special Funding Account............................................34
Section 4.03. Collections and Allocations....................................................38
ARTICLE V Distributions and Reports to Certificateholders............................39
ARTICLE VI The Certificates...........................................................39
Section 6.01. The Certificates...............................................................39
Section 6.02. Authentication of Certificates.................................................39
Section 6.03. New Issuances..................................................................40
Section 6.04. Registration of Transfer and Exchange of Certificates..........................40
Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates..............................43
Section 6.06. Persons Deemed Owners..........................................................43
Section 6.07. Appointment of Paying Agent....................................................44
Section 6.08. Access to List of Registered Certificateholders' Names and Addresses...........44
Section 6.09. Authenticating Agent...........................................................45
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Section 6.10. Book-Entry Certificates........................................................45
Section 6.11. Notices to Clearing Agency.....................................................46
Section 6.12. Definitive Certificates........................................................46
Section 6.13. Meetings of Certificateholders.................................................47
Section 6.14. Changes in Amount of Variable Funding Certificates.............................48
ARTICLE VII Other Matters Relating to the Seller.......................................49
Section 7.01. Liability of the Seller........................................................49
Section 7.02. Merger or Consolidation of, or Assumption of the Obligations of, the Seller....49
Section 7.03. Limitations on Liability of the Seller.........................................50
Section 7.04. Liabilities....................................................................50
Section 7.05. Transferability of Seller Certificates.........................................51
Section 7.06. Limit on Certain Holders.......................................................51
Section 7.07 Seller Indemnification of the Trust, etc.......................................51
ARTICLE VIII Other Matters Relating to the Servicer.....................................51
Section 8.01. Liability of the Servicer......................................................51
Section 8.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer..51
Section 8.03. Limitation on Liability of the Servicer and Others.............................52
Section 8.04. Servicer Indemnification of the Trust and the Trustee..........................53
Section 8.05. The Servicer Not to Resign.....................................................53
Section 8.06. Access to Certain Documentation and Information Regarding the Receivables......53
Section 8.07. Delegation of Duties...........................................................54
Section 8.08. Examination of Records.........................................................54
ARTICLE IX Pay-Out Events.............................................................54
Section 9.01. Pay-Out Events.................................................................54
Section 9.02. Additional Rights upon the Occurrence of Certain Events........................56
ARTICLE X Servicer Defaults..........................................................57
Section 10.01. Servicer Defaults..............................................................57
Section 10.02. Trustee to Act: Appointment of Successor......................................58
Section 10.03. Notification to Certificateholders.............................................59
ARTICLE XI The Trustee................................................................60
Section 11.01. Duties of Trustee..............................................................60
Section 11.02. Certain Matters Affecting the Trustee..........................................61
Section 11.03. Trustee Not Liable for Recitals in Certificates................................62
Section 11.04. Trustee May Own Certificates...................................................62
Section 11.05. The Seller To Pay Trustee's Fees and Expenses..................................62
Section 11.06. Eligibility Requirements for Trustee...........................................63
Section 11.07. Resignation or Removal of Trustee..............................................63
Section 11.08. Successor Trustee..............................................................64
Section 11.09. Merger or Consolidation of Trustee.............................................64
Section 11.10. Appointment of Co-Trustee or Separate Trustee..................................64
Section 11.11. Tax Return.....................................................................65
Section 11.12. Trustee May Enforce Claims Without Possession of Certificates..................66
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Section 11.13. Suits for Enforcement..........................................................66
Section 11.14. Rights of Certificateholders to Direct Trustee.................................66
Section 11.15. Representations and Warranties of Trustee......................................66
Section 11.16. Maintenance of Office or Agency................................................67
Section 11.17. Confidentiality................................................................67
ARTICLE XII Termination................................................................67
Section 12.01. Termination of Trust...........................................................67
Section 12.02. Final Distribution.............................................................67
Section 12.03. Seller's Termination Rights....................................................68
Section 12.04. Defeasance.....................................................................69
ARTICLE XIII Miscellaneous Provisions...................................................70
Section 13.01. Amendment; Waiver of Past Defaults.............................................70
Section 13.02. Protection of Right, Title and Interest to Trust...............................71
Section 13.03. Limitation on Rights of Certificateholders.....................................72
Section 13.04. Governing Law..................................................................72
Section 13.05. Notices, Payments..............................................................72
Section 13.06. Rule 144A Information..........................................................74
Section 13.07. Severability of Provisions.....................................................74
Section 13.08. Certificates Nonassessable and Fully Paid......................................74
Section 13.09. Further Assurances.............................................................74
Section 13.10. Nonpetition Covenant...........................................................74
Section 13.11. No Waiver; Cumulative Remedies.................................................74
Section 13.12. Counterparts...................................................................75
Section 13.13. Third-Party Beneficiaries......................................................75
Section 13.14. Actions by Certificateholders..................................................75
Section 13.15. Merger and Integration.........................................................75
Section 13.16. Headings.......................................................................75
Section 13.17. No Proceedings.................................................................75
EXHIBITS
Exhibit A Form of Seller Certificate
Exhibit B-1 Form of Daily Report
Exhibit B-2 Form of Weekly Report
Exhibit C Form of Monthly Settlement Report
Exhibit D Form of Annual Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Representation Letter
Exhibit E-3 ERISA Legend
Exhibit F Form of Semi-Annual Agreed-Upon Procedures Report
SCHEDULES
Schedule 1 Credit and Collection Policy
Schedule 2 Schedule of Monthly Periods
Schedule 3 Schedule of Monthly Settlement Report Dates
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POOLING AND SERVICING AGREEMENT, dated as of November 15, 1996, among MAIL-
WELL TRADE RECEIVABLES CORPORATION, a Colorado corporation, as Seller, MAIL-WELL
I CORPORATION, a Delaware corporation, as Servicer, and NORWEST BANK COLORADO,
NATIONAL ASSOCIATION, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Certificateholders
and any Series Enhancer to the extent provided herein and in any Supplement:
ARTICLE I
Definitions
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Section 1.01. Definitions. Whenever used in this Agreement, the following
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words and phrases shall have the following meanings, and the definitions of such
terms are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such
terms:
"Accumulation Period" shall mean, with respect to any Series, the period,
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if any, specified as such in the related Supplement.
"Act" shall mean the Securities Act of 1933, as amended.
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"Affiliate" shall mean, with respect to any specified Person, any other
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Person controlling or controlled by or under common control with such specified
Person. For the purpose of this definition, "control" shall mean the power to
direct the management and policies of a Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise and the
terms "controlling" and "controlled" have meaning correlative to the foregoing.
"Affiliated Obligor" shall mean any Obligor that is an Affiliate of another
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Obligor.
"Agreement" shall mean this Pooling and Servicing Agreement and all
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amendments hereof and supplements hereto, including, with respect to any Series
or Class, the related Supplement.
"Amortization Period" shall mean, with respect to any Series or any Class
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within a Series, a period following the Revolving Period, which shall be the
controlled amortization period, the principal amortization period, the early
amortization period, the optional amortization period, the limited amortization
period or other amortization period, in each case as defined with respect to
such Series in the related Supplement.
"Applicants" shall have the meaning specified in Section 6.08.
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"Appointment Date" shall have the meaning specified in Section 9.02(a).
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"Authorized Newspaper" shall mean any newspaper or newspapers of general
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circulation in the Borough of Manhattan, The City of New York printed in the
English language and customarily published on each Business Day at such place,
whether or not published on Saturdays, Sundays or holidays.
"Bearer Certificate" shall have the meaning specified in Section 6.01.
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"Benefit Plan" shall have the meaning specified in Section 6.04(c).
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"Billing Date" shall mean the date on which the invoice with respect to a
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Receivable was generated.
"Book-Entry Certificates" shall mean beneficial interests in the Investor
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Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 6.10.
"Business Day" shall mean any day other than (a) a Saturday or Sunday, (b)
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any other day on which national banking associations or state banking
institutions in New York, New York or Denver, Colorado are authorized or
obligated by law, executive order or governmental decree to be closed or (c) for
purposes of any particular Series, any other day specified in the related
Supplement.
"Canadian Account" shall mean have the meaning specified in Section 4.02.
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"Canadian Collection Account" shall have the meaning specified in Section
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4.02 and shall include Canadian Collection Subaccounts.
"Canadian Collection Subaccount" shall have the meaning specified in
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Section 4.02.
"Canadian person" shall mean a citizen or resident of Canada, a
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corporation, partnership or other entity created or organized in or under the
laws of Canada or any province thereof or doing business in Canada or any
province thereof.
"Canadian Receivables" shall mean Receivables which are (i) originated by
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an Originator which is a Canadian person and (ii) payable in Canadian Dollars
pursuant to the terms of the Contract with respect to such Receivables.
"Certificate" with respect to any Series, shall have the meaning specified
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in the related Supplement.
"Certificateholder" or "Holder" shall mean an Investor Certificateholder or
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a Person in whose name the Seller Certificate is registered.
"Certificateholders' Interest" shall have the meaning specified in Section
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4.01.
"Certificate Owner" shall mean, with respect to a Book-Entry Certificate,
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the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"Certificate Rate" shall mean, with respect to any Series or Class, the
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certificate rate specified therefor in the related Supplement.
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"Certificate Register" shall mean the register maintained pursuant to
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Section 6.04, providing for the registration of the Registered Certificates and
the Seller Certificate and transfers and exchanges thereof.
"Class" shall mean, with respect to any Series, any one of the classes of
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Investor Certificates of that Series.
"Clearing Agency" shall mean an organization registered as a "clearing
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agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
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financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the closing date
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specified in the related Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
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to time.
"Collection Account" shall have the meaning specified in Section 4.02 and
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shall include Collection Subaccounts.
"Collection Subaccount" shall have the meaning specified in Section 4.02.
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"Collections" shall mean, with respect to any Receivable, all cash
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collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable.
"Commission" shall mean the Securities and Exchange Commission.
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"Concentration Limit" for any Obligor means at any time (a) 5% in the case
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of an Obligor rated at least A-1 or its equivalent by the Rating Agencies, (b)
3% in the case of an Obligor rated below A-1 or its equivalent by the Rating
Agencies but equal to or above A-2 or its equivalent by the Rating Agencies, (c)
2% in the case of an Obligor rated below A-2 or its equivalent by the Rating
Agencies but equal to or above A-3 or its equivalent by the Rating Agencies, (d)
2% in the case of an Obligor the short-term debt of which is not rated by the
Rating Agencies, (e) 0% in the case of any Obligor which is a Governmental
Entity to the extent that the Receivables of such Obligor cause the aggregate
Eligible Receivables of all Obligors which are Governmental Entities to exceed
5% of the aggregate Outstanding Balance of Eligible Receivables, (f)
notwithstanding clauses (a) through (e) above, 2% in the case of an Obligor that
is a Canadian person at any time that the sovereign debt rating of the
Commonwealth of Canada is rated below AA or its equivalent by the Rating
Agencies, (g) 0% in the case of any Obligor which is a Canadian person to the
extent that the Receivables of such Obligor cause the aggregate Eligible
Receivables of all Obligors which are Canadian persons to exceed 20% of the
aggregate Outstanding Balance of Eligible Receivables or (h) such other
percentage ("Special Concentration Limit") for such Obligor designated by the
Series Representative in a writing delivered to the Seller and consented to by
the Seller, which consent shall not be unreasonably withheld (unless such
Special Concentration Limit is designated by the Series Representative at the
request of a Rating Agency in which case such designation need not be consented
to by the Seller); provided that in the case of an Obligor with any Affiliated
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Obligor, the Concentration Limit shall be calculated as if such
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Obligor and such Affiliated Obligor are one Obligor; provided further that the
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Liquidity Agent or any Series Representative may cancel any Special
Concentration Limit upon three Business Days' notice to the Seller.
"Consolidated Fixed Charge Coverage Ratio" shall have the meaning specified
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in the Third Amended and Restated Credit Agreement, dated as of the date hereof,
among Mail-Well I Corporation, certain Affiliates thereof, Banque Paribas and
the Lenders named therein, as in existence on the date hereof, without giving
effect to any amendment of the definition of such term agreed to by the parties
to such agreement after the date hereof.
"Contract" shall mean an agreement between an Originator and an Obligor
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pursuant to or under which such Obligor shall be obligated to pay for
merchandise or services from time to time.
"Controlled Distribution Amount" with respect to any Series, shall have the
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meaning specified in the related Supplement.
"Corporate Trust Office" shall have the meaning specified in Section 11.16.
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"Coupon" shall have the meaning specified in Section 6.01.
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"Credit and Collection Policy" means those receivables credit and
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collection policies and practices of the Originators in effect on the date of
this Agreement and described in Schedule 1 hereto, as modified in compliance
with this Agreement.
"Daily Report" shall have the meaning specified in Section 3.04(a).
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"Debtor Relief Laws" shall mean the Bankruptcy Code of the United States of
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America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, readjustment of debt, marshalling of assets or similar debtor
relief laws of the United States, any state or any foreign country from time to
time in effect, affecting the rights of creditors generally.
"Default Ratio" means the ratio (expressed as a percentage) computed as of
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the last day of each Monthly Period by dividing (i) the sum of (a) the aggregate
Outstanding Balance of all Receivables that were unpaid 90-120 days after the
Billing Date therefor as of the end of the preceding Monthly Period and (b) the
aggregate Outstanding Balance of all Receivables that became Defaulted
Receivables during the preceding Monthly Period by (ii) the aggregate
Outstanding Balance of all Receivables created by the Originators during the
Monthly Period four months prior to such day.
"Defaulted Receivable" shall mean an Originator Receivable:
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(i) as to which any payment, or part thereof, remains unpaid for 150
or more days from the original Billing Date thereof;
(ii) as to which the Obligor thereof or any other Person obligated
thereon has taken any action, or suffered any event to occur, of the
type described in the definition of Insolvency Event; or
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(iii) which, consistent with the Credit and Collection Policy, would
be written off the applicable Originator's or the Seller's books as
uncollectible.
"Defeasance" shall have the meaning specified in Section 12.04.
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"Defeased Series" shall have the meaning specified in Section 12.04.
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"Definitive Certificates" shall have the meaning specified in Section
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6.10.
"Depositaries" shall mean the Person specified in the applicable
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Supplement, in its capacity as depositary for the respective accounts of any
Clearing Agency.
"Depository Agreement" shall mean, with respect to any Series or
--------------------
Class, the agreement among the Seller, the Trustee and the applicable Clearing
Agency.
"Designated Obligor" means, at any time, each Obligor; provided,
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however, that any Obligor shall cease to be a Designated Obligor upon three
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Business Days' notice by the Liquidity Agent to the Seller that the Liquidity
Agent and the Series Representative has determined in its reasonable business
judgment that such Obligor is no longer acceptable, and provided further that
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any Person added as an Obligor after the date hereof shall be judged to be
acceptable or not acceptable in the sole discretion of the Liquidity Agent and
the Series Representative.
"Determination Date" shall mean the third Business Day prior to each
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Distribution Date.
"Diluted Receivable" means on any date that portion of any Eligible
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Receivable which is either (a) reduced or canceled as a result of (i) any
failure by the applicable Originator to deliver any merchandise or services or
otherwise to perform under the underlying Contract, or (ii) any change in or
cancellation of any of the terms of such Contract or any other adjustment by the
applicable Originator which reduces the amount payable by the Obligor on the
related Eligible Receivable or (iii) any setoff in respect of any claim by the
Obligor thereof (whether such claim arises out of the same or a related
transaction or an undated transaction) or (b) subject to any specific dispute,
offset, counterclaim or defense whatsoever (except the potential discharge in
bankruptcy of the Obligor thereof); provided, that Diluted Receivables do not
include (x) contractual adjustments to the amount payable by an Obligor that are
eliminated from the Eligible Receivables balance sold to the Seller through a
reduction in the purchase price for the related Eligible Receivable or (y) any
portion of those Eligible Receivables for which a production prepayment has been
received.
"Dilution Factors" means with respect to the Receivables, any net
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credits, rebates, freight charges, cash discounts, volume discounts, cooperative
advertising expenses, royalty payments, warranties, cost of parts required to be
maintained by agreement (whether express or implied), warehouse and other
offsets, allowances, disputes, chargebacks, defective returns, other returned or
repossessed goods, inventory transfers, allowances for early payments and other
similar allowances that are made or coordinated with an Originator's usual
practices, in each case after, in the case of any Receivable, such Receivable
first became a "Receivable" hereunder; provided that any allowances or
adjustments in accordance with the Credit and Collection Policy made on account
of an Obligor's insolvency or inability to pay shall not constitute a Dilution
Factor.
5
"Dilution Ratio" means the ratio (expressed as a percentage) computed
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as of the last day of each Monthly Period by dividing the aggregate amount of
Diluted Receivables at the end of the preceding Monthly Period by the sales of
the Originators during the second Monthly Period preceding such day.
"Distribution Date" shall mean, unless otherwise specified in the
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Supplement for the related Series, the 15th day of each calendar month during
the term hereof, or, if such 15th day is not a Business Day, the next succeeding
Business Day.
"Eligible Deposit Account" shall mean either (a) a segregated account
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with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), and acting as a trustee for
funds deposited in such account, so long as any of the securities of such
depository institution shall have a credit rating from each Rating Agency in one
of its generic credit rating categories which signifies investment grade.
"Eligible Institution" shall mean (a) a depository institution (which
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may be the Trustee) organized under the laws of the United States or any one of
the states thereof (including the District of Columbia) or any domestic branch
or agency of a foreign bank institution licensed by the Controller of the
Currency or any state banking agency which at all times (i) has either (x) a
long-term unsecured debt rating of A2 or better by Moody's or (y) a certificate
of deposit rating of P-1 by Moody's, (ii) has either (x) a long-term unsecured
debt rating of AAA by Standard & Poor's or (y) a certificate of deposit rating
of A-1+ by Standard & Poor's and (iii) if such depository institution is
organized under the laws of the United States or any one of the states thereof,
is a member of the FDIC or (b) any other institution that is acceptable to each
Rating Agency and the Series Representatives.
"Eligible Investments" shall mean book-entry securities, negotiable
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instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, or subject to the full faith and
credit of, the United States of America;
(b) demand deposits, time deposits or certificate of deposit
(having original maturities of no more than 365 days) of depository institutions
or trust companies incorporated under the laws of the United States of America
or any state thereof (or domestic branches of foreign banks) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided that at the time of the Trust's investment or
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contractual commitment to invest therein, the short-term debt rating of such
depository institution or trust company shall be in the highest investment
category of each Rating Agency;
(c) commercial paper or other short-term obligations having, at the
time of the Trust's investment or contractual commitment to invest therein, a
rating from each Rating Agency in its highest investment category;
(d) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC, with a Person the commercial paper of which
has a credit rating from each Rating Agency in its highest investment category;
6
(e) notes or bankers' acceptances (having original maturities of no
more than 365 days) issued by any depository institution or trust company
referred to in (b) above;
(f) investments in money market funds rated AAAm or AAAmg or the
equivalent by Standard & Poor's and in the equivalent rating categories by each
other Rating Agency or otherwise approved in writing by each Rating Agency;
(g) investments in money market accounts held at an Eligible
Institution which accounts invest solely in securities and instruments described
in the preceding clauses (a) through (f); or
(h) any other investments approved in writing by each Rating
Agency, the Liquidity Agent and the Series Representatives.
"Eligible Receivable" means, at any time, a Receivable:
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(a) the Obligor of which is a U. S. person or Canadian person and
is not an Affiliate of any Originator;
(b) the Obligor of which, at the time of its transfer to the Trust,
is a Designated Obligor and is not the Obligor of any Receivables which remain
unpaid 150 days or more from the original Billing Date which in the aggregate
constitute 10% or more of the aggregate Outstanding Balance of all Receivables
of such Obligor;
(c) which at the time of its transfer to the Trust is not a
Defaulted Receivable;
(d) which, according to the Contract related thereto, is required
to be paid in full in accordance with the Credit and collection Policy but in
any event within 120 days of the original Billing Date therefor;
(e) [Intentionally omitted.]
(f) which is an "account" within the meaning of Section 9-106 of
the UCC of the applicable jurisdictions;
(g) which is denominated and payable only (i) in United States
dollars in the United States or (ii) in Canadian dollars (and subject to
currency swap arrangements satisfactory to the Liquidity Agent and each Series
Representative) and payable in Canada;
(h) which arises under a Contract which, together with such
Receivable, is in full force and effect and constitutes the legal, valid and
binding obligation of the Obligor of such Receivable and is not subject to any
dispute, offset, counterclaim or defense whatsoever (except the potential
discharge in bankruptcy of such Obligor);
(i) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury, consumer protection, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and privacy)
and with respect to
7
which none of the Seller, the applicable Originator or the Obligor is in
violation of any such law, rule or regulation in any material respect;
(j) which arises under a Contract with a party other than a party
subject to the United States Assignment of Claims Act which (A) does not
prohibit (or require the Obligor thereunder to consent to) the transfer, sale or
assignment of the rights and duties of the Seller or the applicable Originator
thereunder and (B) does not contain a confidentiality provision that expressly
restricts the ability of the parties hereto to exercise their rights under this
Agreement, including, without limitation, their right to review the Contract;
(k) which (A) satisfies all applicable requirements of the Credit
and Collection Policy (including, without limitation, those requirements with
respect to the payment terms of such Receivable) and (B) complies with such
other criteria and requirements (other than those relating to the collectibility
of such Receivable) as the Series Representatives or the Liquidity Agent may,
upon the request of any Rating Agency, from time to time specify to the Seller
upon 30 days' notice;
(l) as to which, at or prior to the time of its transfer to the
Trust, the Series Representatives, the Liquidity Agent and the Seller shall
mutually agree or the Rating Agencies (through the Series Representative or
Liquidity Agent) shall require that such Receivable (or class of Receivables) is
no longer acceptable for transfer to the Trust hereunder;
(m) with respect to which all material consents, licenses or
authorizations of any governmental authority have been obtained;
(n) which is not the subject of any specific waiver or modification
except in compliance with the Credit and Collection Policy;
(o) as to which, at the time of its transfer to the Trust, the
Seller or the Trust will have good and marketable title free and clear of all
Liens other than Liens in favor of the Trustee;
(p) which has been the subject of a valid transfer and assignment
from the Seller to the Trust of all the Seller's right, title and interest
therein;
(q) as to which, at the time of its transfer to the Trust, the
Seller has not taken any action which, or failed to take any action the omission
of which, would, at the time of its transfer to the Trust, impair the rights of
the Trust or the Certificateholders therein; and
(r) which remains unpaid for less than 120 days after its original
Billing Date.
"Eligible Servicer" shall mean the Trustee, a wholly-owned subsidiary
-----------------
of the Trustee or an entity which, at the time of its appointment as Servicer,
(a) is legally qualified and has the capacity to service the Receivables, (b) is
qualified (or licensed) to use the software that is then being used to service
the Receivables or obtains the right to use, or has its own, software which is
adequate to perform its duties under this Agreement, (c) has, in the reasonable
judgment of the Trustee, the ability to professionally and competently service a
portfolio of similar accounts receivable and (d) either (i)(x) has a net worth
of at least $50,000,000 as of the end of its most recent fiscal quarter and (y)
is a nationally chartered bank or (ii) is Mail-Well I Corporation or a wholly-
owned subsidiary of Mail-Well I Corporation.
8
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended.
"Established Securities Market" means a national securities exchange
-----------------------------
that is either registered under Section 6 of the Exchange Act or exempt from
registration because of the limited 'volume of transactions, a foreign
securities exchange that, under the law of the jurisdiction where it is
organized, satisfies regulatory requirements that are analogous to the
regulatory requirements of the Exchange Act, a regional or local exchange, or an
interdealer quotation system that regularly disseminates firm buy or sell
quotations by identified brokers or dealers by electronic means or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exchange Date" shall mean, with respect to any Series, any date that
-------------
is after the related Series Issuance Date.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
----
successor.
"Fees" with respect to any Series, shall have the meaning specified in
----
the related Supplement.
"Floating Allocation Percentage" shall mean, with respect to any
------------------------------
Series, the floating allocation percentage specified in the related Supplement.
"Governmental Authority" shall mean the United States of America or
----------------------
any other country, and in each case, any state or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.
"Group" shall mean, with respect to any Series, the group of Series,
-----
if any, in which the related Supplement specifies such Series is to be included.
"Indebtedness" of any Person shall mean indebtedness, obligations and
------------
liabilities of such Person (a) for borrowed money, (b) evidenced by promissory
notes, bonds, debentures, notes or other similar instruments, (c) to pay the
deferred purchase price of property or services other than trade accounts
payable of such Person arising in the ordinary course of business that are not
past due by more than 90 days, (d) as lessee under leases which have been or
should be, in accordance with GAAP, recorded as capital leases, (e) secured by
any lien or other charge upon property or assets owned by such Person, even
though such Person has not assumed or become liable for the payment of such
obligations, (f) under any interest rate, swap, "cap", "collar" or other hedging
agreement, (g) under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in respect of
letters of credit opened to provide for payment of goods and services purchased
in the ordinary course of business) and (h) under direct or indirect guaranties
in respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (g) above. For the purposes hereof, the term "guarantee" shall include
any agreement, whether such agreement is on a contingency or otherwise, to
purchase, repurchase or otherwise acquire Indebtedness of any other Person, or
to purchase, sell or lease, as lessee or lessor, property or services, in any
such case primarily for the purpose of enabling another person to make payment
of Indebtedness, or to make any payment (whether as an advance, capital
contribution,
9
purchase of an equity interest or otherwise) to assure a minimum equity, asset
base, working capital or other balance sheet or financial condition, in
connection with the Indebtedness of another Person, or to supply funds to or in
any manner invest in another Person in connection with Indebtedness of such
Person.
"Insolvency Event" shall mean, with respect to any Person, the
----------------
occurrence of any of the following events: such Person shall fail generally to,
or admit in writing its inability to, pay its debts as they become due; or a
proceeding shall have been instituted in a court having jurisdiction in the
premises seeking a decree or order for relief in respect of such Person in an
involuntary case under any Debtor Relief Law, or for the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of such Person or for any substantial part of its
property, or for the winding-up or liquidation of its affairs and, if instituted
against such Person, any such proceeding shall continue undismissed or unstayed
and in effect, for a period of 60 consecutive days, or any of the actions sought
in such proceeding shall occur; or the commencement by such Person of a
voluntary case under any Debtor Relief Law, or such Person's consent to the
entry of any order for relief in an involuntary case under any Debtor Relief
Law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or for any substantial part of its property, or
any general assignment for the benefit of creditors; or such Person or any
Subsidiary of such Person shall have taken any corporate action in furtherance
of any of the foregoing actions.
"Insolvency Proceeds" shall have the meaning specified in Section
-------------------
9.02(b).
"Interest" with respect to any Series, shall have the meaning
--------
specified in the related Supplement.
"Invested Amount" shall have, with respect to any Series, the meaning
---------------
specified in the related Supplement.
"Investment Company Act" shall mean the Investment Company Act of
----------------------
1940, as amended.
"Investor Certificateholder" shall mean the Person in whose name a
--------------------------
Registered Certificate is registered in the Certificate Register or the holder
of any Bearer Certificate or Coupon.
"Investor Certificate" shall mean any one of the certificates
--------------------
(including the Bearer Certificates or the Registered Certificates) executed by
the Seller and authenticated by or on behalf of the Trustee, substantially in
the form attached to the related Supplement, other than the Seller Certificate.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or other), or
other security agreement of any kind or nature whatsoever, including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the filing of
any financing statement under the UCC (other than any such financing statement
filed for informational purposes only) or comparable law of any jurisdiction to
evidence any of the foregoing, excluding any lien or filing pursuant to this
Agreement; provided, however, that any assignment or transfer pursuant to
-------- -------
Section 7.02 shall not be deemed to constitute a Lien.
10
"Liquidity Agent" shall have the meaning specified in the related
---------------
Supplement.
"Lockboxes" and "Lockbox Accounts" shall have the meanings specified
--------- ----------------
in Section 4.02.
"Minimum Balance" with respect to any Series, shall have the meaning
---------------
specified in the related Supplement.
"Monthly Period" shall mean initially, the period from the close of
--------------
business on the Trust Closing Date to Saturday, November 30, 1996, and
thereafter the period from the last day of the prior Monthly Period to the
fourth (or, in the case of the first Monthly Period of each fiscal quarter, the
fifth) Saturday following such day as set forth on Schedule 2 hereto for the
first 12 calendar months following the date hereof and to be agreed upon by the
Servicer, the Series Representative and the Liquidity Agent thereafter.
"Monthly Settlement Report" shall have the meaning specified in
-------------------------
Section 3.04(c).
"Monthly Servicing Fee" shall have the meaning specified in the
---------------------
related Supplement.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or its
-------
successor.
"Net Receivables Pool Balance" means at any time the Outstanding
----------------------------
Balance of Eligible Receivables reduced by the sum of (i) the Outstanding
Balance of such Eligible Receivables that are then Defaulted Receivables and
(ii) the aggregate amount by which the Outstanding Balance of Eligible
Receivables (other than Defaulted Receivables) of each Obligor exceeds the
product of (A) the Concentration Limit for such Obligor multiplied by (B) the
Outstanding Balance of the Eligible Receivables.
"Notices" shall have the meaning specified in Section 13.05(a).
-------
"Obligor" shall mean a Person obligated to make payments pursuant to a
-------
Contract.
"Officer's Certificate" shall mean, unless otherwise specified in this
---------------------
Agreement, a certificate delivered to the Trustee and the Series Representative
signed by the Chairman of the Board, President, any Vice President or the
Treasurer of the Seller or the Servicer, as the case may be.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
------------------
be counsel for, or an employee of, the Person providing the opinion and which
opinion shall be reasonably acceptable to the Trustee and any Series
Representative.
"Originators" shall mean collectively, Mail-Well I Corporation, Wisco
-----------
Envelope Corp., ▇▇▇▇▇ Envelope and Tag Corp., Mail-Well West, Inc., Wisco II,
L.L.C., Mail-Well Canada Holdings, Inc., Graphic Arts Center, Inc.,Wisco III,
L.L.C., Supremex Inc., Innova Envelope Inc. and each corporation added as a
"Seller" under the Purchase Agreement pursuant to Section 2.08 thereof, and
their successors or assigns under the Purchase Agreement; any one of the
foregoing Persons being referred to herein as an "Originator."
----------
"Originator Receivable" means the indebtedness of any Obligor
---------------------
resulting from the provision or sale of merchandise, insurance or services by an
Originator under a Contract, and includes
11
the right to payment of any interest or finance charges and other obligations of
such Obligor with respect thereto.
"Outstanding Balance" of any Receivable at any time shall mean the
-------------------
then outstanding principal balance thereof after reductions, cancellations and
adjustments resulting from Dilution Factors; provided, however, that with
-------- -------
respect to any Canadian Receivable, Outstanding Balance at any time shall mean
the United States Dollar equivalent of the then outstanding principal balance
thereof as determined by reference to the weighted average of the notional
amount of Canadian Receivables pursuant to any applicable hedge agreement.
"Pay-Out Event" shall, with respect to any Series, have the meaning
-------------
specified in Section 9.01 and shall also include each additional event, if any,
specified in the relevant Supplement as a Pay-Out Event with respect to such
Series.
"Paying Agent" shall mean any paying agent and co-paying agent
------------
appointed pursuant to Section 6.07.
"Person" shall mean any legal entity, including any individual,
------
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
"Principal Terms" shall mean, with respect to any Series, (i) the name
---------------
or designation; (ii) the initial principal amount (or method for calculating
such amount) and its invested amount in the Trust; (iii) the Certificate Rate
(or method for the determination thereof); (iv) the payment date or dates and
the date or dates from which interest shall accrue; (v) the method for
allocating Collections to Certificateholders of such Series; (vi) the
designation of any Series Accounts and the terms governing the operation of any
such Series Accounts; (vii) the method of calculating the servicing fee with
respect thereto; (viii) the provider, if any, and the terms of any form of
Series Enhancement with respect thereto; (ix) the terms on which the Investor
Certificates of such Series may be exchanged for Investor Certificates of
another Series, repurchased by the Seller or any Affiliate of the Seller or
remarketed to other investors; (x) the Series Termination Date; (xi) the number
of Classes of Investor Certificates of such Series and, if such Series consists
of more than one Class, the rights and priorities of each such Class; (xii) the
extent to which the Investor Certificates of such Series will be issuable in
temporary or permanent global form; (xiii) whether the Investor Certificates of
such Series may be issued as Bearer Certificates and any limitation imposed
thereon; (xiv) the priority of such Series with respect to any other Series;
(xv) the Group, if any, to which such Series belongs; (xvi) whether the Investor
Certificates of each Series are Variable Funding Certificates and, if so, the
Stated Amount thereof and (xvii) any other terms of, or with respect to, such
Series.
"Purchase Agreement" shall mean the Purchase and Contribution
------------------
Agreement, dated as of the date hereof, between Mail-Well I Corporation, certain
Affiliates of Mail-Well I Corporation and Mail-Well Trade Receivables
Corporation, as amended, restated or supplemented from time to time in
accordance therewith and herewith.
"Rating Agency" shall mean, with respect to any outstanding Series or
-------------
Class, each statistical rating agency selected by the Seller to rate the
Investor Certificates of such Series or Class.
"Rating Agency Condition" shall mean, with respect to any action, that
-----------------------
each Rating Agency shall have notified the Seller, the Servicer and the Trustee
in writing that such action will not
12
result in a reduction or withdrawal of the rating of any outstanding Series or
Class (or in the case of any Series or Class owned by any commercial paper
conduit, the rating of any outstanding commercial paper notes issued by such
conduit to fund or maintain its investment in such Series or Class) with respect
to which it is a Rating Agency.
"Reassigned Receivables" shall have the meaning specified in Section
----------------------
2.05(a).
"Receivable" shall mean any Originator Receivable which has been
----------
acquired by the Seller from an Originator by purchase or by capital contribution
pursuant to the Purchase Agreement.
"Recoveries" shall mean all cash amounts received by the Servicer with
----------
respect to Receivables which had previously become Defaulted Receivables.
"Record Date" shall mean, with respect to any Distribution Date, the
-----------
last Business Day of the preceding calendar month, except as otherwise provided
with respect to a Series in the related Supplement.
"Registered Certificateholder" shall mean the Holder of a Registered
----------------------------
Certificate.
"Registered Certificates" shall have the meaning specified in Section
-----------------------
6.01.
"Related Security" shall mean with respect to any Receivable all of
----------------
the Seller's interest in :
(i) any merchandise (including returned merchandise) relating to any
sale giving rise to such Receivable;
(ii) all security interests or liens and property subject thereto from
time to time purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise,
together with all financing statements signed by an Obligor describing
any collateral securing such Receivable;
(iii) all guaranties, insurance and other agreements or arrangements
of whatever character from time to time supporting or securing payment
of such Receivable whether pursuant to the Contract related to such
Receivable or otherwise; and
(iv) the Contract and all other books, records and other information
(including, without limitation, computer programs, tapes, discs, punch
cards, data processing software and related property and rights)
directly relating to such Receivable and the related Obligor.
"Requirements of Law" with respect to any Person shall mean the
-------------------
certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether Federal, state or local.
13
"Responsible Officer" shall mean any officer within the Trustee's
-------------------
Corporate Trust Office including any Vice President, any Assistant Vice
President, any Trust Officer, any Assistant Cashier, or any other officer of the
Trustee within the Trustee's Corporate Trust Office customarily performing
functions similar to those performed by any of the above-designated officers and
also, with respect to a particular matter, any other officer within the
Trustee's Corporate Trust Office to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Revolving Period" shall mean, with respect to any Series, the period
----------------
specified as such in the related Supplement.
"Rule 144A" shall mean Rule 144A under the Act, as such Rule may be
---------
amended from time to time.
"Seller" shall mean Mail-Well Trade Receivables Corporation, a
------
Colorado corporation, or its successors or assigns under this Agreement.
"Seller Amount" shall mean at any time of determination an amount
-------------
equal to the total amount of Receivables and the principal amount on deposit in
the Special Funding Account in the Trust at such time minus the aggregate
Invested Amounts for all outstanding Series at such time.
"Seller Certificate" shall mean the certificate executed by the Seller
------------------
and authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit A.
"Seller Retained Certificates" shall mean Investor Certificates of any
----------------------------
Series which the Seller retained pursuant to the terms of any Supplement.
"Seller Retained Class" shall mean any Class of Investor Certificates
---------------------
of any Series which the Seller retained pursuant to the terms of any Supplement.
"Seller's Interest" shall have the meaning specified in Section 4.01.
-----------------
"Seller's Percentage" shall mean, with respect to Receivables and
-------------------
Defaulted Receivables, 100% less the sum of the Floating Allocation Percentages
with respect to all outstanding Series.
"Series" shall mean any series of Investor Certificates established
------
pursuant to a Supplement.
"Series Account" shall mean any deposit, trust, escrow or similar
--------------
account maintained for the benefit of the Investor Certificateholders of any
Series or Class, as specified in any Supplement.
"Series Enhancement" shall mean the rights and benefits provided to
------------------
the Investor Certificateholder of any Series or Class pursuant to any letter of
credit, surety bond, cash collateral account, enhancement invested amount,
spread account, guaranteed rate agreement, maturity liquidity facility, tax
protection agreement, interest rate swap agreement, interest rate cap agreement
or other similar arrangement. The subordination of any Class to another Class
shall be deemed to be a Series Enhancement.
14
"Series Enhancer" shall mean the Person or Persons providing any
---------------
Series Enhancement, other than the Investor Certificateholders of any Class
which is subordinated to another Class.
"Series Invested Amount" shall have, with respect to any Series, the
----------------------
meaning specified in the related Supplement.
"Series Issuance Date" shall mean, with respect to any Series, the
--------------------
date on which the Investor Certificates of such Series are to be originally
issued in accordance with Section 6.03 and the related Supplement.
"Series Representative" shall mean, with respect to any Series, the
---------------------
agent (if any) specified in the related Supplement.
"Series Termination Date" shall mean, with respect to any Series, the
-----------------------
termination date specified in the related Supplement.
"Servicer" shall mean Mail-Well I Corporation, in its capacity as
--------
Servicer pursuant to this Agreement or the Successor Servicer, as the case may
be.
"Servicer Default" shall have the meaning specified in Section 10.01.
----------------
"Servicing Fee" shall mean, with respect to any Series, the servicing
-------------
fee specified in Section 3.02.
"Servicing Fee Rates" shall mean, with respect to any Series, the
-------------------
Servicing Fee Rate specified in the related Supplement.
"Servicing Officer" shall mean any officer of the Servicer involved
-----------------
in, or responsible for, the administration and servicing of the Receivables
whose name appears on a list of servicing officers furnished to the Trustee by
the Servicer, as such list may from time to time be amended.
"Shortfalls" shall have the meaning specified in Section 4.04.
----------
"Special Funding Account" shall have the meaning specified in Section
-----------------------
4.02.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a
-----------------
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"Stated Amount" shall mean, as to any Variable Funding Certificate,
-------------
the maximum principal amount that may be required to be funded by the Holder of
such Variable Funding Certificate as determined by the applicable Supplement.
"Subordinated Note" shall have the meaning specified in the Purchase
-----------------
Agreement.
"Successor Servicer" shall have the meaning specified in Section
------------------
10.02(a).
15
"Supplement" shall mean, with respect to any Series, a Supplement to
----------
this Agreement, executed and delivered in connection with the original issuance
of the Investor Certificates of such Series pursuant to Section 6.03, and all
amendments thereof and supplements thereto.
"Tax Opinion" shall mean, with respect to any action, an Opinion of
-----------
Counsel to the effect that, for Federal income tax purposes, such action will
not adversely affect the tax characterization as debt of Investor Certificates
of any outstanding Series or Class that were characterized as debt at the time
of their issuance.
"Termination Notice" shall have the meaning specified in Section
------------------
10.01.
"Transfer Agent and Registrar" shall have the meaning specified in
----------------------------
Section 6.04.
"Transfer Date" shall mean the Business Day immediately preceding each
-------------
Distribution Date.
"Trust" shall mean the Mail-Well I Corporation Master Trust created by
-----
this Agreement.
"Trust Asset" shall have the meaning specified in Section 2.01.
-----------
"Trust Closing Date" shall mean November 15, 1996.
------------------
"Trustee" shall mean Norwest Bank Colorado, National Association in
-------
its capacity as trustee on behalf of the Trust, or its successor in interest, or
any successor trustee appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to
---
time, as in effect in the State of New York or, where Section 9-103 of the
Uniform Commercial Code as in effect in the State of New York provides that the
perfection of security interests is governed by the Uniform Commercial Code then
in effect in another State, then, with respect to perfection of security
interests only, the Uniform Commercial Code, as amended from time to time, as in
effect in such State.
"United States" shall mean the United States of America (including the
-------------
States and the District of Columbia) its territories, its possessions and other
areas subject to its jurisdiction.
"U.S. person" or "United States person" shall mean a citizen or
----------- --------------------
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States, or of which is
subject to United State Federal income taxation regardless of its source.
"Variable Funding Certificates" shall have the meaning specified in
-----------------------------
any Variable Funding Supplement.
"Variable Funding Supplement" shall mean a Supplement executed in
---------------------------
connection with the issuance of, and otherwise specifying the terms governing
the issuance of, Variable Funding Certificates provided for therein.
"Weekly Report" shall have the meaning specified in Section 3.04(b).
-------------
16
Section 1.02. Other Definitional Provisions. (a) With respect to any
-----------------------------
Series, all terms used herein and not otherwise defined herein shall have
meanings ascribed to them in the related Supplement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent
that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) Any reference to notification to a Rating Agency or to a Rating
Agency Condition shall only apply to any specific rating agency if such rating
agency is then rating any outstanding Series.
(e) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such amount at the
close of business on such day.
(f) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; references to any
Section, Schedule or Exhibit are references to Sections, Schedules and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
means "including without limitation."
(g) For purposes of determining whether the Holders of Variable
Funding Certificates of any Series have consented to, approved or disapproved of
any action to be taken hereunder where a vote of the Certificateholders of such
Series is required, "unpaid principal amount" of such Series of Variable Funding
Certificates shall mean, during the Revolving Period for such Series, the
Stated Amount for such Series, and during the Amortization Period for such
Series, the unpaid principal amount of such Variable Funding Certificates.
ARTICLE II
Conveyance of Receivables
-------------------------
Section 2.01. Conveyance of Receivables. (a) By execution of this
-------------------------
Agreement, the Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Trustee, on behalf of the Trust, for the benefit of the
Certificateholders, all its right, title and interest in, to and under (i) the
Receivables existing at the close of business on the Trust Closing Date and
thereafter created from time to time until the termination of the Trust, (ii)
the Related Security, (iii) all Recoveries, (iv) the Purchase Agreement,
including, without limitation, the Seller's right to approve any additional
"Sellers" thereunder pursuant to Section 2.08 thereof, (v) the right to any
Series Enhancement, and (vi) all
17
Collections and other moneys due or to become due and all amounts received with
respect to any of the foregoing and all proceeds (including "proceeds" as
defined in the UCC) of any of the foregoing. Such property, together with all
moneys on deposit in the Lockbox Accounts, the Concentration Account, the
Collection Account, the Canadian Accounts, the Canadian Collection Account, the
Special Funding Account, the Series Accounts and any Series Enhancement shall
constitute the assets of the Trust (the "Trust Assets"). The foregoing does not
------------
constitute and is not intended to result in the creation or assumption by the
Trust, the Trustee, any Investor Certificateholders or any Series Enhancer of
any obligation of the applicable Originator, the Servicer, the Seller or any
other Person in connection with the Receivables or under any agreement or
instrument relating thereto, including any obligation to Obligors.
(b) The Seller shall file, at its own expense, financing statements
(and continuation statements when applicable) with respect to the Receivables
and other Trust Assets now existing and hereafter created meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect, and maintain the perfection of, the sale and
assignment of such Receivables to the Trust, and to deliver a file stamped copy
of each such financing statement or other evidence of such filing (which may,
for purposes of this Section 2.01 consist of telephone confirmation of such
filing promptly followed by delivery to the Trustee of a file-stamped copy) to
the Trustee on or prior to the initial Closing Date.
(c) The Seller shall, at its own expense, beginning on or prior to
the initial Closing Date until the termination of the Trust pursuant to Section
12.01 hereof indicate in the appropriate records that Receivables have been
conveyed to the Trust pursuant to this Agreement for the benefit of the
Certificateholders by including in such records notations identifying each such
Receivable.
(d) It is the intention of the parties hereto that the conveyance
of the Receivables and all other Trust Assets by the Seller to the Trustee, on
behalf of the Trust, as provided in this Section 2.01 be, and be construed as,
an absolute sale of the Receivables by the Seller to the Trustee for the benefit
of the Certificateholders. Furthermore, it is not intended that such conveyance
be deemed a pledge of the Receivables and the other Trust Assets by the Seller
to the Trustee to secure a debt or other obligation of the Seller. If, however,
a court of competent jurisdiction holds that any transaction provided for hereby
constitutes a loan and not a sale, this Agreement shall be deemed to be a
security agreement within the meaning of Article 9 of the UCC and the conveyance
provided for in this Section 2.01 shall be deemed to be a grant by the Seller to
the Trustee of a "security interest" within the meaning of Article 9 of the UCC
in all of the Seller's right, title and interest in and to the Receivables and
other Trust Assets and all amounts payable to the holders of the Receivables
after the initial Closing Date in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts from time to time held or invested in the Series Accounts, whether
in the form of cash, instruments, securities or other property.
Section 2.02. Acceptance of Trustee. (a) The Trustee hereby
---------------------
acknowledges its acceptance on behalf of the Trust of all right, title and
interest to the property, now existing and hereafter created, conveyed to the
Trust pursuant to Section 2.01 and declares that it shall maintain such right,
title and interest, upon the trust herein set forth, for the benefit of all
Certificateholders.
(b) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement or any Supplement.
18
(c) The Trustee shall not use any information it obtains pursuant
to this Agreement, including any of the information delivered by the Seller to
the Trustee pursuant to Section 2.01, 2.09 or 3.04(c), to compete or assist any
person in competing with any Originator or the Seller in their respective
businesses.
Section 2.03. Representations and Warranties of the Seller Relating
-----------------------------------------------------
to the Seller. (a) Representations and Warranties. The Seller hereby
------------- ------------------------------
represents and warrants to the Trust (and agrees that the Trustee may
conclusively rely on each such representation and warranty in accepting the
Receivables in trust and in authenticating the Certificates) as of each Closing
Date that:
(i) Organization and Good Standing. The Seller is a corporation
------------------------------
duly organized and validly existing in good standing under the laws of
the State of Colorado, and has full corporate power, authority and
legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently
conducted, to execute, deliver and perform its obligations under this
Agreement, each Supplement and the Purchase Agreement and to execute
and deliver to the Trustee the Certificates pursuant hereto.
(ii) Due Qualification. The Seller 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 each jurisdiction necessary for the conduct
of its business.
(iii) Due Authorization and Execution. The execution, delivery
-------------------------------
and performance of this Agreement, each Supplement and the Purchase
Agreement by the Seller, the execution and delivery to the Trustee of
the Certificates by the Seller and the consummation by the Seller of
the transactions provided for in this Agreement, each Supplement and
the Purchase Agreement have been duly authorized by the Seller by all
necessary corporate action on the part of the Seller and have been
duly executed and delivered by the Seller.
(iv) No Conflict. The execution and delivery by the Seller of
-----------
this Agreement, each Supplement, the Purchase Agreement and the
Certificates, the performance by the Seller of the transactions
contemplated by this Agreement, each Supplement and the Purchase
Agreement and the fulfillment by the Seller of the terms hereof and
thereof (i) will not conflict with, 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, any indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which the
Seller is a party or by which it or any of its properties are bound
and (ii) do not result in or require the creation of any Lien,
security interest or other charge or encumbrance upon or with respect
to any of its properties (except for the interest created pursuant to
this Agreement).
(v) No Violation. The execution and delivery by the Seller of
------------
this Agreement, each Supplement, the Purchase Agreement and the
Certificates, the performance by the Seller of the transactions
contemplated by this Agreement, each Supplement and the Purchase
Agreement and the fulfillment by the Seller of the terms hereof and
thereof will not conflict with or violate any Requirements of Law
applicable to the Seller and will not contravene the Seller's charter
or by-laws.
19
(vi) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Seller, threatened against the
Seller, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (A) asserting the invalidity of
this Agreement, any Supplement or the Certificates, (B) seeking to prevent
the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement, any Supplement or the
Certificates, (C) seeking any determination or ruling that, in the
reasonable judgment of the Seller, would materially and adversely affect
the performance by the Seller of its obligations under this Agreement or
any Supplement, (D) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement, any Supplement, the Purchase Agreement or the Certificates, or
(E) seeking to affect adversely the income tax attributes of the Trust
under the Federal or applicable state income or franchise tax systems, and
the Seller is not in default with respect to any order of any court,
arbitration or Governmental Authority except for defaults with respect to
orders of Governmental Authority which defaults are not material to the
business or operations of the Seller, taken as a whole.
(vii) Use of Proceeds. No proceeds of any Distributions will be used
---------------
to acquire any equity security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
(viii) All Consents Required. All approvals, authorizations, consents,
---------------------
orders or other actions of or notices to or filings with any Person or any
Governmental Authority or governmental official required in connection with
the execution and delivery by the Seller of this Agreement, each
Supplement, the Purchase Agreement and the Certificates, the performance by
the Seller of the transactions contemplated by this Agreement, each
Supplement and the Purchase Agreement and the fulfillment by the Seller of
the terms hereof and thereof, have been duly obtained and are in full force
and effect.
(ix) Chief Executive Office. The Seller has its chief executive
----------------------
office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or
such other place of which the Seller has notified the Trustee in accordance
with Section 2.06(g).
(x) Investment Company. The Seller is not an "Investment Company"
------------------
within the meaning of the Investment Company Act.
(xi) Bulk Sales. The execution, delivery and performance of this
----------
Agreement do not require compliance with "bulk sales" law by the Seller.
(xii) Tradenames. The Seller is not known by and does not use any
----------
tradename or doing-business-as name.
(xiii) Incorporation. The Seller was incorporated on November 5, 1996
-------------
and the Seller did not engage in any business activities prior to the date
of this Agreement.
(xiv) Insolvency. (i) The fair value of the property of the Seller is
----------
greater than the total amount of liabilities, including contingent
liabilities, of the Seller, (ii) the present fair salable value of the
assets of the Seller is not less than the amount that will
20
be required to pay all probable liabilities of the Seller on its debts
as they become absolute and matured, (iii) the Seller does not intend
to, and does not believe that it will, incur debts or liabilities
beyond the Seller's abilities to pay such debts and liabilities as
they mature, (iv) the Seller is not engaged in a business or a
transaction, and is not about to engage in a business or a
transaction, for which the Seller's property would constitute
unreasonably small capital and (v) the transfer of the Receivables by
the Seller to the Trust will not render the Seller insolvent.
(b) Notice of Breach. The representations and warranties of the
----------------
Seller set forth in this Section 2.03 shall survive the transfer and assignment
by the Seller of the respective Receivables to the Trust. Upon discovery by the
Seller, the Servicer or the Trustee of a breach of any of the representations
and warranties by the Seller set forth in this Section 2.03, the party
discovering such breach shall give prompt written notice to the others and to
each Series Enhancer entitled thereto pursuant to the relevant Supplement. The
Seller agrees to cooperate with the Servicer and the Trustee in attempting to
cure any such breach. For purposes of the representations and warranties set
forth in this Section 2.03, each reference to a Supplement shall be deemed to
refer only to those Supplements in effect as of the relevant Closing Date.
Section 2.04. Representations and Warranties of the Seller Relating to
--------------------------------------------------------
the Agreement and any Supplement and the Receivables. (a) Representations and
---------------------------------------------------- -------------------
Warranties. The Seller hereby represents and warrants to the Trust (and agrees
----------
that the Trustee may conclusively rely on each such representation and warranty
in accepting the Receivables in trust and in authenticating the Certificates) as
of the date of this Agreement and the date of each Supplement, as of each
Closing Date that:
(i) this Agreement, each Supplement, the Purchase Agreement
and each Certificate constitutes a legal, valid and binding obligation
of the Seller, enforceable against the Seller in accordance with its
terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors' rights generally and by general principles of
equity;
(ii) each Daily Report, Weekly Report and Monthly Settlement
Report (in each case, if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is
supplied by the Seller or an Affiliate), other report exhibit,
financial statement, document, book or record and all information
furnished or to be furnished at any time by or on behalf of the Seller
to the Trustee and each Series Representative in connection with this
Agreement and each Supplement is or will be accurate in all material
respects as of its date or (except as otherwise disclosed to the
Trustee and/or each Series Representative, as the case may be, at such
time) as of the date so furnished, and no such document contains or
will contain any untrue statement of a material fact or omits or will
omit to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances under
which they were made and taken as a whole, not misleading;
(iii) the Seller is the legal and beneficial owner of all
right, title and interest in each Receivable and the Seller has the
full right to transfer such Receivables to the Trust, and each
Receivable conveyed to the Trust by the Seller has been conveyed to
the Trust free and clear of any Lien of any Person claiming through or
under the Seller or any of its Affiliates (other than Liens permitted
under subsection 2.06(b)) and in compliance with all Requirements of
Law applicable to the Seller;
21
(iv) with respect to each Receivable transferred to the
Trust, the Seller (i) shall have received such Receivable as a
contribution to the capital of the Seller by the applicable Originator
or (ii) shall have purchased such Receivable from the applicable
Originator in exchange for payment (made by the Seller to the
applicable Originator in accordance with the provisions of the
Purchase Agreement) of cash, in an amount which constitutes fair
consideration and reasonably equivalent value. Each such sale referred
to in clause (ii) of the preceding sentence shall not have been made
for or on account of an antecedent debt owed by the applicable
Originator to the Seller and no such sale is or may be voidable or
subject to avoidance under any section of any Debtor Relief Laws;
(v) this Agreement constitutes a valid transfer and
assignment to the Trust of all right, title and interest of the Seller
in the Receivables and other Trust Assets conveyed to the Trust by the
Seller and all monies due or to become due with respect thereto and
the proceeds thereof. If, however, a court of competent jurisdiction
holds that any transaction provided for hereby constitutes a loan and
not a sale, this Agreement constitutes a grant of a "security
interest" (as defined in the UCC) in such property to the Trust,
which, in the case of existing Receivables and the proceeds thereof,
is enforceable upon execution and delivery of this Agreement and which
will be enforceable with respect to such Receivables hereafter created
and the proceeds thereof upon such creation. Upon the filing of the
financing statements pursuant to Section 2.01 and, in the case of
Receivables hereafter created and the proceeds thereof, upon the
creation thereof, the Trust shall have a first priority security
interest in such property and proceeds (as defined in the UCC) except
for Liens permitted under subsection 2.06(b);
(vi) except as otherwise expressly provided in this Agreement
or any Supplement, neither the Seller nor any Person claiming through
or under the Seller has any claim to or interest in the Lockboxes, the
Lockbox Accounts, the Concentration Account, the Collection Account,
the Canadian Accounts, the Canadian Collection Account, the Special
Funding Account, any Series Account or any Series Enhancement and the
Seller has no other lockboxes or related accounts other than the
Lockboxes, the Lockbox Accounts and the Canadian Accounts;
(vii) each Receivable designated by the Seller as an Eligible
Receivable on the date hereof is an Eligible Receivable;
(viii) as of the date of the creation of any new Receivable,
such Receivable is an Eligible Receivable, unless such Receivable is
identified as not being an Eligible Receivable in the Monthly
Servicer's Certificate for the month in which such Receivable was
created; and
(ix) except pursuant to the Purchase Agreement or this
Agreement, no effective financing statement or other instrument
similar in effect covering any Contract, any Receivable or collections
or proceeds thereof, is on file in any recording office;
(b) Notice of Breach. The representations and warranties of
----------------
the Seller set forth in this Section 2.04 shall survive the transfer
and assignment by the Seller of Receivables to the Trust.
22
Subject to Section 2.05, upon discovery by the Seller, the Servicer or the
Trustee of a breach of any of the representations and warranties by the Seller
set forth in this Section 2.04, the party discovering such breach shall give
prompt written notice to the others and to each Series Enhancer and Series
Representative entitled thereto pursuant to the relevant Supplement. The Seller
agrees to cooperate with the Servicer and the Trustee in attempting to cure any
such breach. For purposes of the representations and warranties set forth in
this Section 2.04, each reference to a Supplement shall be deemed to refer only
to those Supplements in effect as of the date of the relevant representations or
warranties.
Section 2.05. Reassignment of Receivables in Trust Portfolio. (a) If
----------------------------------------------
any representation or warranty of the Seller set forth in Section
2.04(a)(vii),(viii) or (ix) is not true and correct in any material respect with
respect to any Receivables, then either the Trustee or the Holders of Investor
Certificates evidencing not less than 50% of the aggregate unpaid principal
amount of all outstanding Investor Certificates, by notice then given to the
Seller and the Servicer (and to the Trustee if given by the Investor
Certificateholders), may direct the Seller to accept a reassignment of such
Receivables (the "Reassigned Receivables") transferred to the Trust by the
Seller if such breach of representation or warranty is not cured within 30 days
of such notice and upon those conditions the Seller shall be obligated to accept
such reassignment on the terms set forth below; provided, however, that such
-------- -------
Receivables will not be reassigned to the Seller if, on any day prior to the end
of such 30 day period (i) the relevant representation and warranty shall be true
and correct in all material respects as if made on such day and (ii) the Seller
shall have delivered to the Trustee a certificate of an authorized officer
describing the nature of such breach and the manner in which the relevant
representation and warranty became true and correct.
(b) The Servicer shall deduct the portion of the Reassigned
Receivables from the aggregate amount of Receivables used to calculate the
Seller Amount, the Seller's Interest and the Floating Allocation Percentage
applicable to any Series. If, following the exclusion of such Receivables from
the calculation of the Seller Amount, the Floating Allocation Percentage for all
Series would be greater than 100%, not later than two Business Days after the
date on which such reassignment obligation arises, the Seller shall deposit into
the Collection Account in immediately available funds not later than two
Business Days after the date on which such reassignment obligation arises, in
payment for such reassignment, an amount equal to the amount necessary to reduce
the Floating Allocation Percentage applicable to all Series to be a percentage
no greater than 100% with respect to each outstanding Series in the related
Supplement. Notwithstanding anything to the contrary in this Agreement, such
amounts shall be distributed on such Distribution Date in accordance with
Article IV and the terms of each Supplement. The payment of such deposit amount
in immediately available funds shall be considered payment in full of all of
such Receivables being reassigned.
(c) Upon the deposit, if any, required to be made to the Collection
Account as provided in this Section and the reassignment of the applicable
Receivables, the Trustee, on behalf of the Trust, shall automatically and
without further action be deemed to sell, transfer, assign, set over and
otherwise convey to the Seller or its designee, without recourse, representation
or warranty, all the right, title and interest of the Trust in and to such
Receivables, the Related Security and Recoveries with respect thereto, all
moneys due or to become due and all amounts received with respect thereto and
all proceeds thereof. The Trustee shall execute such documents and instruments
of transfer or assignment and take such other actions as shall be reasonably
requested by the Seller to effect the conveyance of such Receivables pursuant to
this Section. The obligation of the Seller to accept reassignment of any
Receivables, and to make the deposits, if any, required to be made to the
Collection Account as provided in this Section, shall constitute the sole remedy
respecting the event
23
giving rise to such obligation available to Certificateholders (or the Trustee
on behalf of the Certificateholders).
Section 2.06. Covenants of the Seller. The Seller hereby covenants as
-----------------------
follows:
(a) Receivables to be Accounts. The Seller will take no action to
--------------------------
cause any Receivable transferred by it to the Trust (i) not to be classified as
an account or proceeds thereof (as defined in the UCC) or (ii) to be evidenced
by any instrument (as defined in the UCC).
(b) Security Interests. Except for the conveyances hereunder, the
------------------
Seller will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any Receivable, whether now
existing or hereafter created, or any interest therein; and the Seller shall
defend the right, title and interest of the Trust in, to and under the
Receivables, whether now existing or hereafter created, against all claims of
third parties claiming through or under the Seller; provided, however, that
-------- -------
nothing in this Section 2.06(b) shall prevent or be deemed to prohibit the
Seller from suffering to exist upon any of the Receivables any Liens for taxes
if such taxes shall not at the time be due and payable or if the Seller shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto. Notwithstanding the foregoing, nothing in this Section 2.06(b) shall
be construed to prevent or be deemed to prohibit the transfer of the Seller
Certificate and certain other rights of the Seller in accordance with the terms
of this Agreement and any related Supplement.
(c) Seller's Interest. Except for the conveyances hereunder, in
-----------------
connection with any transaction permitted by Section 7.02, the Seller shall not
transfer, assign, exchange or otherwise convey or pledge, hypothecate or
otherwise grant a security interest in the Seller's Interest represented by the
Seller Certificate and any such attempted transfer, assignment, exchange,
conveyance, pledge, hypothecation or grant shall be void.
(d) Delivery of Collections or Recoveries. If the Seller receives
-------------------------------------
Collections or Recoveries, the Seller shall deposit in the Collection Account
all such Collections and Recoveries as soon as practicable after receipt thereof
but in no event later than two Business Days after the date of receipt thereof
by the Seller; provided, however that if such Collections or Recoveries relate
-------- -------
to Canadian Receivables, the Seller shall deposit in the Canadian Collection
Account all such Collections and Recoveries as soon as practicable after receipt
thereof but in no event later than two Business Days after the date of receipt
thereof by the Seller.
(e) Notice of Liens. The Seller shall notify the Trustee, each
---------------
Series Enhancer and each Series Representative entitled to such notice pursuant
to the relevant Supplement promptly after becoming aware of any Lien on any
Receivable other than the conveyances hereunder or Liens permitted under Section
2.07(b).
(f) Separate Corporate Existence. The Seller shall:
----------------------------
(i) Maintain in full effect its existence, rights and franchises
as a corporation under the laws of the state of its incorporation and
will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement and the
Purchase Agreement and each other instrument or agreement necessary or
appropriate
24
to proper administration hereof and permit and effectuate the
transactions contemplated hereby.
(ii) Maintain its own deposit account or accounts, separate
from those of any Affiliate of the Seller, with commercial banking
institutions. The funds of the Seller will not be diverted to any
other Person or for other than the corporate use of the Seller, and,
except as may be expressly permitted by this Agreement or the Purchase
Agreement, the funds of the Seller shall not be commingled with those
of any Affiliate of the Seller.
(iii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders or Affiliates,
the salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary
and benefit costs associated with all such common officers and
employees.
(iv) Ensure that, to the extent that it jointly contracts
with any of its stockholders or Affiliates to do business with vendors
or service providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities, and each
such entity shall bear its fair share of such costs. To the extent
that Seller contracts or does business with vendors or service
providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing shall be
fairly allocated to or among such entities for whose benefit the goods
and services are provided, and each such entity shall bear its fair
share of such costs. All material transactions between the Seller and
any of its Affiliates shall be only on an arm's-length basis and shall
receive the approval of the Seller's Board of Directors including at
least two Independent Directors (defined below).
(v) Maintain a principal executive and administrative office
through which its business is conducted separate from those of its
stockholders and Affiliates. To the extent that the Seller and any of
its stockholders or Affiliates have offices in contiguous space, there
shall be fair and appropriate allocation of overhead costs among them,
and each such entity shall bear its fair share of such expenses.
(vi) Conduct its affairs strictly in accordance with its
Certificate of Incorporation and observe all necessary, appropriate
and customary corporate formalities, including, but not limited to,
holding all regular and special stockholders' and directors' meetings
appropriate to authorize all corporate action, keeping separate and
accurate minutes of such meetings, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts including, but not
limited to, payroll and intercompany transaction accounts. Regular
stockholders' and directors' meetings shall be held at least annually.
(vii) Ensure that its Board of Directors shall be elected
independently from the Boards of Directors of its Affiliates and shall
at all times include at least two Independent Directors (for purposes
hereof, "Independent Director" shall mean any member of the Board of
--------------------
Directors of the Seller who (i) is in fact independent, (ii) does not
have any direct financial interest or any material indirect financial
interest in the
25
Seller, or in any Affiliate of the Seller, (iii) is not connected with
the Seller or any Affiliate of the Seller as an officer, employee,
promoter, underwriter, trustee, partner or person performing similar
functions and (iv) is not, and has not been for a period of at least
five (5) years, a director of any Affiliate of the Seller.
(viii) Ensure that decisions with respect to its business and
daily operations shall be independently made by the Seller (although
the officer making any particular decision may also be an officer or
director of an Affiliate of the Seller) and shall not be dictated by
an Affiliate of the Seller.
(ix) Act solely in its own corporate name and through its own
authorized officers and agents, and no Affiliate of the Seller shall
be appointed to act as agent of the Seller, except as expressly
contemplated by this Agreement or the Purchase Agreement.
(x) Ensure that no Affiliate of the Seller shall advance
funds to the Seller, other than capital contributions from an
Originator made to enable the Seller to pay the purchase price of
Receivables or as is otherwise provided in the Purchase Agreement, and
no Affiliate of the Seller will otherwise supply funds to, or guaranty
debts of, the Seller.
(xi) Not enter into any guaranty, or otherwise become liable,
with respect to any obligation of any Affiliate of the Seller other
than with respect to Section 7.04.
(xii) Ensure that any financial reports required of the Seller
shall comply with generally accepted accounting principles and shall
be issued separately from, but may be consolidated with, any reports
prepared for any of its Affiliates.
(g) Continuous Perfection. The Seller shall not change its name,
---------------------
identity or structure in any manner that might cause any financing or
continuation statement filed pursuant to this Agreement to be misleading within
the meaning of Section 9-402(7) of the UCC (or any other then applicable
provision of the UCC) unless the Seller shall have delivered to the Trustee at
least 30 days' prior written notice thereof and, no later than 30 days after
making such change, shall have taken all action necessary or advisable to amend
such financing statement or continuation statement so that it is not misleading.
The Seller shall not change its chief executive office or change the location of
its principal records concerning the Receivables, the Trust Assets or the
Collections unless it has delivered to the Trustee at least 30 days' prior
written notice of its intention to do so and has taken such action as is
necessary or advisable to cause the interest of the Trustee in the Receivables
and other Trust Assets to continue to be perfected with the priority required by
this Agreement.
(h) Compliance with Laws. The Seller shall comply with Requirements
--------------------
of Law applicable to Seller.
(i) Information. The Seller shall provide to the Servicer, if the
-----------
Servicer is not Mail-Well I Corporation, all information in its possession or
control necessary to service the Receivables in accordance with this Agreement.
(j) Activities of Seller. The Seller shall not engage in any
--------------------
business or activity of any kind or enter into any transaction or indenture,
mortgage, instrument, agreement, contract, lease or
26
other undertaking which is not directly related to the transactions contemplated
and authorized by this Agreement or the Purchase Agreement.
(k) Indebtedness. The Seller shall not create, incur, assume or
------------
suffer to exist any Indebtedness or other liability whatsoever, except (i)
obligations incurred or owing to the Trust under this Agreement or the Purchase
Agreement or (ii) liabilities incident to the maintenance of its corporate
existence in good standing and the ownership of the Receivables.
(l) Guarantees. The Seller shall not become or remain liable,
----------
directly or contingently, in connection with any Indebtedness or other liability
of any other Person, whether by guarantee, endorsement (other than endorsements
of negotiable instruments for deposit or collection in the ordinary course of
business), agreement to purchase or repurchase, agreement to supply or advance
funds, or otherwise.
(m) Distributions. Subject to minimum equity requirements in any
-------------
Supplement, the Seller shall not declare or pay, directly or indirectly, any
dividend or make any other distribution (whether in cash or other property) with
respect to the profits, assets or capital of the Seller or any Person's interest
therein, or purchase, redeem or otherwise acquire for value any of its capital
stock now or hereafter outstanding, except that the Seller may make the
purchases under the Purchase Agreement and so long as (i) there is no
outstanding principal balance on the Subordinated Note, (ii) no Pay-Out Event
has occurred and is continuing and no Pay-Out Event would occur as a result
thereof or after giving effect thereto and (iii) such dividends are in
compliance with all applicable law including the corporate law of the state of
Seller's incorporation, and (iv) such dividends have been approved by all
necessary and appropriate corporate action of the Seller, the Seller may declare
and pay dividends on its capital stock.
Section 2.07. Covenants of the Seller with Respect to the Purchase
----------------------------------------------------
Agreement. The Seller, in its capacity as purchaser of the Receivables from the
---------
Originators pursuant to the Purchase Agreement, hereby covenants that the Seller
will at all times enforce, except for immaterial breaches, the covenants and
agreements of such Originators in the Purchase Agreement. The Seller further
covenants that the Seller will not enter into any amendments to the Purchase
Agreement unless each Series Representative shall consent and the Rating Agency
Condition has been satisfied in each case. The Seller further covenants that the
Seller will not approve any additional "Sellers" pursuant to Section 2.08 of the
Purchase Agreement and will not enter into any waivers with respect to the
Purchase Agreement unless each Series Representative shall consent in each case
Section 2.08. Purchase Agreement. The Seller will not amend, waive or
------------------
modify any provision of the Purchase Agreement or waive the occurrence of any
"Event of Termination" under the Purchase Agreement, without in each case the
prior written consent of the Liquidity Agent and the Series Representative. The
Seller will perform all of its obligations under the Purchase Agreement in all
material respects.
27
ARTICLE III
Administration and Servicing
----------------------------
of Receivables
--------------
Section 3.01. Acceptance of Appointment and Other Matters Relating to
-------------------------------------------------------
the Servicer. (a) Mail-Well I Corporation agrees to act as the Servicer under
------------
this Agreement and the Certificateholders, by their acceptance of Certificates,
consent to Mail-Well I Corporation acting as Servicer.
(b) The Servicer shall service and administer the Receivables,
shall collect payments due under the Receivables and shall charge off
Receivables as uncollectible Receivables, all in accordance with its customary
and usual servicing procedures for servicing receivables comparable to the
Receivables and in accordance with the Credit and Collection Policy. Subject to
the first sentence of this Section 3.01(b), the Servicer shall have full power
and authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Subject to the first
sentence of this Section 3.01(b), without limiting the generality of the
foregoing, subject to Section 10.01, the Servicer is hereby authorized and
empowered (i) to provide information to the Trustee to permit it to make
withdrawals and payments from the Collection Account, the Canadian Collection
Account and any Series Account, as set forth in this Agreement or any
Supplement, and (ii) to take any action required or permitted under any Series
Enhancement, as set forth in this Agreement or any Supplement. Without limiting
the generality of the foregoing and subject to Section 10.01, the Servicer is
hereby authorized and empowered to make any filings, reports, notices,
applications and registrations with, and to seek any consents or authorizations
from, the Commission and any state securities authority on behalf of the Trust
as may be necessary or advisable to comply with any Federal or state securities
laws or reporting requirements. The Trustee shall furnish the Servicer with any
powers of attorney or other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
(c) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other receivables.
Section 3.02. Servicing Compensation. (a) As full compensation for its
----------------------
servicing activities hereunder and as reimbursement for any expense incurred by
it in connection therewith, the Servicer shall be entitled to receive a
servicing fee (the "Servicing Fee") payable solely from Collections from
-------------
Receivables with respect to each Monthly Period, payable monthly on the related
Distribution Date, in an amount equal to one-twelfth of the product of (a) the
weighted average of the Servicing Fee Rates with respect to each outstanding
Series (based upon the Servicing Fee Rate for each Series and the Invested
Amount (or such other amount as specified in the related Supplement) of such
Series, in each case as of the last day of the prior Monthly Period) and (b) the
amount of the Invested Amount on the last day of the prior Monthly Period. The
share of the Servicing Fee allocable to the Certificateholders' Interest of a
particular Series with respect to any Monthly Period (the "Monthly Servicing
-----------------
Fee") will be determined in accordance with the relevant Supplement. The
portion of the Servicing Fee with respect to any Monthly Period not so allocated
to the Certificateholders' Interest of a particular Series shall be paid by the
Holder of the Seller Certificate on the related Distribution Date and in no
event shall the Trust, the Trustee, the Investor Certificateholders of any
28
Series or any Series Enhancer be liable for the share of the Servicing Fee with
respect to any Monthly Period to be paid by the Holder of the Seller
Certificate.
(b) The Servicer's expenses include the reasonable fees and
disbursements of independent accountants and all other expenses incurred by the
Servicer in connection with its activities hereunder; provided that the Servicer
shall not be liable for any liabilities, costs or expenses of the Trust or the
Certificateholders arising under any tax law, including without limitation any
federal, state or local income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith). The Servicer shall be required to pay such
expenses for its own account and shall not be entitled to any payment therefor
other than the Monthly Servicing Fee.
Section 3.03. Representations, Warranties and Covenants of the
------------------------------------------------
Servicer. (a) Mail-Well I Corporation, as initial Servicer, hereby makes, and
--------
any Successor Servicer by its appointment hereunder shall make, on each Closing
Date (and on the date of any such appointment), the following representations,
warranties and covenants to the Trust (and agrees that the Trustee may rely on
each such representation, warranty and covenant in accepting the Receivables in
trust and in authenticating the Certificates):
(i) Organization and Good Standing. The Servicer is a
------------------------------
corporation (or with respect to such Successor Servicer, such other
corporate entity as may be applicable) duly organized, validly
existing and in good standing under the laws of its state of
incorporation (or, in the case of a national banking association, in
good standing under applicable federal law), and has full corporate
power, authority and legal right to execute, deliver and perform its
obligations under this Agreement and each Supplement and to own its
properties and conduct its business as such properties are presently
owned and as such business is presently conducted.
(ii) Due Qualification. The 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 each jurisdiction in the United States
necessary for the conduct of its business of which the failure to
obtain could reasonably be expected to affect the Servicer's ability
to perform its obligations under this Agreement.
(iii) Due Authorization. The execution, delivery, and
-----------------
performance of this Agreement and each Supplement have been duly
authorized by the Servicer by all necessary corporate action on the
part of the Servicer.
(iv) Binding Obligation. This Agreement and each Supplement
------------------
has been, in the case of Mail-Well I Corporation, duly executed and
constitutes a legal, valid and binding obligation of the Servicer,
enforceable in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium, or similar law affecting
creditors' rights generally and by general principles of equity.
(v) No Violation. The execution and delivery of this
------------
Agreement and each Supplement by the Servicer, the performance of the
transactions contemplated by this Agreement and each Supplement and
the fulfillment of the terms hereof and thereof
29
applicable to the Servicer, will (i) not conflict with, violate, result in
any breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, any
Requirement of Law applicable to the Servicer or any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which the
Servicer is a party or by which it or any of its properties are bound and
(ii) do not result in or require the creation of any Lien, security
interest or other charge or encumbrance upon or with respect to any of its
properties (except for the interest created pursuant to this Agreement.)
(vi) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any Supplement, seeking any determination
or ruling that, in the reasonable judgment of the Servicer, would
materially and adversely affect the performance by the Servicer of its
obligations under this Agreement or any Supplement, or seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement or any Supplement. Neither the
Servicer nor any Affiliate thereof is in default with respect to any order
of any court, arbitration or Governmental Authority except for defaults
with respect to orders of Governmental Authority which defaults are not
material to the business or operations of the Servicer and its Affiliates,
taken as a whole.
(vii) Compliance with Requirements of Law. The Servicer shall duly
-----------------------------------
satisfy all obligations on its part to be fulfilled under or in connection
with the Receivables, will maintain in effect all qualifications required
under Requirements of Law in order to properly service the Receivables and
will comply in all material respects with all other Requirements of Law in
connection with servicing the Receivables.
(viii) No Rescission or Cancellation. The Servicer shall not permit
-----------------------------
any rescission or cancellation of a Receivable except as ordered by a court
of competent jurisdiction or other Governmental Authority or in the
ordinary course of its business and in accordance with the Credit and
Collection Policy.
(ix) Protection of Certificateholders' Rights. The Servicer shall
----------------------------------------
take no action which, nor omit to take any action the omission of which,
would materially impair the rights of Certificateholders in any Receivable,
nor shall it, except in the ordinary course of its business and in
accordance with the Credit and Collection Policy, reschedule, revise or
defer Collections due on the Receivables.
(x) Receivables Not to be Evidenced by Promissory Notes. Except in
---------------------------------------------------
connection with its enforcement or collection of a Receivable, the Servicer
will take no action to cause any Receivable to be evidenced by any
instrument (as such term is defined in the UCC).
(xi) All Consents Required. All approvals, authorizations, consents,
---------------------
orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by the
Servicer of this Agreement and each Supplement, the performance by the
Servicer of the transactions contemplated by this
30
Agreement and each Supplement and the fulfillment by the Servicer of
the terms hereof and thereof, have been obtained.
(xii) Maintenance of Records and Books of Account. The
-------------------------------------------
Servicer shall maintain and implement administrative and operating
procedures (including the ability to recreate records evidencing the
Receivables in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, computer records and other
information, reasonably necessary or advisable for the collection of
all the Receivables. Such documents, books and computer records shall
reflect all facts giving rise to the Receivables, all payments and
credits with respect thereto, and such documents, books and computer
records shall indicate the interests of the Trust in the Receivables.
(xiii) Financial Statements. The consolidated balance sheet
--------------------
of the Servicer as at December 31, 1995, and the related consolidated
statements of income and retained earnings of the Servicer for the
fiscal year then ended, copies of which have been furnished to the
Trustee, the Series Representative and the Liquidity Agent, fairly
present the consolidated financial condition of the Servicer as at
such date and the consolidated results of the operations of the
Servicer for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied, and
since December 31, 1995 there has been no material adverse change in
the business, operations, property or financial condition of the
Servicer. The opening pro forma balance sheet of the Seller as at
November 15, 1996, giving effect to the initial purchase to be made
under this Agreement, a copy of which has been furnished to the
Trustee, the Series Representative and the Liquidity Agent, fairly
presents the financial condition of the Seller as at such date, in
accordance with generally accepted accounting principles.
(b) For purposes of the representations and warranties set forth in
this Section 3.03, each reference to a Supplement shall be deemed to refer only
to those Supplements in effect as of the relevant Closing Date or the date of
appointment of a Successor Servicer, as applicable.
Section 3.04. Servicer Reports to the Trustee. (a) Daily Reports. On
------------------------------- -------------
each Business Day, the Servicer shall prepare and forward to the Trustee and
each Series Representative by facsimile a report in the form of Exhibit B-1
hereto (the "Daily Report").
------------
(b) Weekly Reports. On the 4th Business Day of each calendar week,
--------------
the Servicer shall prepare and forward to the Trustee and each Series
Representative by facsimile a report in the form of Exhibit B-2 hereto (the
"Weekly Report").
--------------
(c) Monthly Settlement Report. Unless otherwise stated in the
-------------------------
Supplement related to any Series, on each date set forth on Schedule 3 hereto,
and upon the monthly dates thereafter agreed upon by the Servicer and the
Liquidity Agent and each Series Representative, the Servicer shall forward to
the Trustee, the Paying Agent, each Rating Agency, each Series Enhancer and each
Series Representative entitled thereto pursuant to the relevant Supplement a
certificate of a Servicing Officer in the form of Exhibit C (the "Monthly
-------
Settlement Report").
-----------------
Section 3.05. Annual Certificate of Servicer. The Servicer shall
------------------------------
deliver to the Trustee, each Rating Agency, each Series Enhancer and each Series
Representative entitled thereto
31
pursuant to the relevant Supplement, on or before January 31 of each calendar
year, beginning with the January 31, 1997, an Officer's Certificate (with
appropriate insertions) substantially in the form of Exhibit D.
Section 3.06. Semi-Annual Agreed-Upon Procedures Report of Independent
--------------------------------------------------------
Public Accountants; Copies of Reports Available. On the date hereof and on or
-----------------------------------------------
before May 1 and November 1 of each calendar year thereafter, or, if the
Liquidity Agent and the Series Representative so consent, on one such date
during each calendar year, the Servicer shall cause at its expense a firm of
nationally recognized independent public accountants (who may also render other
services to the Servicer or the Seller) to furnish a report in the form of
Exhibit F hereto (addressed to the Liquidity Agent, the Series Representative,
and the Servicer) to the Trustee, the Servicer and each Rating Agency (a) to the
effect that they have applied certain procedures with the Servicer and examined
certain documents relating to the servicing of Receivables under this Agreement
and each Supplement and that, on the basis of such agreed upon procedures,
nothing has come to the attention of such accountants that caused them to
believe that the servicing (including the allocation of Collections) has not
been conducted in compliance with the terms and conditions set forth in Article
III and Article IV and Section 8.08 of this Agreement and the applicable
provisions of each Supplement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such statement,
(b) to the effect that they have applied certain procedures agreed upon with the
Servicer to compare the mathematical calculations of certain amounts set forth
in the Servicer's Certificates delivered pursuant to Section 3.04(b) during the
period covered by such report with the Servicer's computer reports which were
the source of such amounts and that on the basis of such agreed upon procedures
and comparison, such accountants are of the opinion that such amounts are in
agreement, except for such exceptions as they believe to be immaterial and such
other exceptions as shall be set forth in such statement and (c) to the effect
that they have applied certain procedures agreed upon with the Servicer to
determine compliance by the Seller with Section 2.06(f), and on the basis of
such agreed upon procedures, nothing has come to the attention of the
accountants that caused them to believe that the Seller was not in compliance
with Section 2.06(f), except for such exceptions they believe to be immaterial
and such other exceptions as shall be set forth in such statement. A copy of
such report shall be delivered to each Series Enhancer and each Series
Representative entitled thereto pursuant to the relevant Supplement. A copy of
each certificate and report provided pursuant to Section 3.04(b), 3.05 or 3.06
may be obtained by any Investor Certificateholder or Certificate Owner by a
request to the Trustee addressed to the Corporate Trust Office.
Section 3.07. Tax Treatment. The Seller has entered into this
-------------
Agreement, and the Certificates will be issued with the intention that, for
Federal, state and local income and franchise tax purposes, the Investor
Certificates (except Seller Retained Certificates which are held by the Seller)
of each Series will qualify as debt secured by the Receivables. The Seller, by
entering into this Agreement, each Certificateholder, by the acceptance of its
Certificate (and each Certificate Owner, by its acceptance of an interest in the
applicable Certificate), agree to treat such Investor Certificates for Federal,
state and local income and franchise tax purposes as debt. Each Holder of such
Investor Certificate agrees that it will cause any Certificate Owner acquiring
an interest in a Certificate through it to comply with this Agreement as to
treatment as debt under applicable tax law, as described in this Section 3.07.
Furthermore, subject to Section 11.11, the Trustee shall treat the Trust as a
security device only, and shall not file tax returns or obtain an employer
identification number on behalf of the Trust.
Section 3.08. Notices to Mail-Well I Corporation. If neither
----------------------------------
Mail-Well I Corporation nor one of its Affiliates is acting as Servicer, any
Successor Servicer shall deliver to Mail-Well I
32
Corporation each certificate and report required to be provided thereafter
pursuant to Section 3.04(b), 3.05 or 3.06.
Section 3.09. Adjustments. (a) If the Servicer adjusts downward the
-----------
amount of any Receivable (i) because of a rebate, refund, adjustment,
unauthorized charge or billing error to an Obligor, (ii) because such Receivable
was created in respect of merchandise which was refused or returned by an
Obligor, or (iii) if the Servicer otherwise adjusts downward the amount of any
Receivable without receiving Collections therefor or charging off such amount as
uncollectible, then, in any such case, the amount of Receivables used to
calculate the Seller Amount, the Seller's Interest, the Floating Allocation
Percentage applicable to any Series will be reduced by the amount of the
adjustment. Any reduction required pursuant to the preceding sentence shall be
made no later than the next Business Day following the downward adjustment of
the applicable Receivable.
(b) If (i) the Servicer makes a deposit into the Collection Account
in respect of a Collection of a Receivable and such Collection was received by
the Servicer in the form of a check which is not honored for any reason or (ii)
the Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. If (i) the Servicer makes a deposit into the Canadian Collection
Account in respect of a Collection of a Canadian Receivable and such Collection
was received by the Servicer in the form of a check which is not honored for any
reason or (ii) the Servicer makes a mistake with respect to the amount of any
Collection and deposits an amount that is less than or more than the actual
amount of such Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Canadian Collection Account to reflect such
dishonored check or mistake. Any Receivable in respect of which a dishonored
check is received shall be deemed not to have been paid. Notwithstanding the
first three sentences of this paragraph, any adjustments made pursuant to this
paragraph will be reflected in a current report but will not change any amount
of Collections previously reported pursuant to subsection 3.04(b).
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
Section 4.01. Rights of Certificateholders. The Investor Certificates
----------------------------
shall represent fractional undivided interests in the Trust, which, with respect
to each Series, shall consist of the right to receive, to the extent necessary
to make the required payments with respect to the Investor Certificates of such
Series at the times and in the amounts specified in the related Supplement, the
portion of Collections allocable to Investor Certificateholders of such Series
pursuant to this Agreement and such Supplement, funds on deposit in the
Collection Account and the Canadian Collection Account allocable to
Certificateholders of such Series pursuant to this Agreement and such
Supplement, funds on deposit in any related Series Account and funds available
pursuant to any related Series Enhancement (collectively, with respect to all
Series, the "Certificateholders' Interest"), it being understood that, unless
----------------------------
otherwise specified in the Supplement with respect to such Series, the Investor
Certificates of any Series or Class shall not represent any interest in any
Series Account or Series Enhancement for the benefit of any other Series or
Class. The Seller Certificate shall represent the ownership interest in the
Trust Assets not allocated pursuant to this Agreement or any Supplement to the
Certificateholders' Interest, including the right to receive Collections with
respect to the
33
Receivables and other amounts at the times and in the amounts specified in this
Agreement or any Supplement to be paid to the Seller on behalf of the Holder of
the Seller Certificate (the "Seller's Interest"); provided, however, that the
----------------- -------- -------
Seller Certificate shall not represent any interest in the Lockboxes, the
Lockbox Accounts, the Concentration Account, the Collection Account, the
Canadian Accounts, the Canadian Collection Account, any Series Account or any
Series Enhancement, except as specifically provided in this Agreement or any
Supplement.
Section 4.02. Establishment of Lockboxes, Lockbox Accounts, the
-------------------------------------------------
Concentration Account, the Collection Account, the Canadian Accounts, the
-------------------------------------------------------------------------
Canadian Collection Account and Special Funding Account. (a)(i) The Servicer
-------------------------------------------------------
has instructed all existing Obligors, and will instruct all future Obligors, to
make payments in respect of Receivables only (A) by check or money order mailed
to one or more lockboxes or post office boxes under the control of the Trustee
(each such box being a "Lockbox" and collectively, the "Lockboxes"), (B) by wire
------- ---------
transfer, ACH transfer or moneygram directly to the applicable Lockbox Account
or, (C) in the case of Obligors making payments denominated in Canadian Dollars
in respect of Canadian Receivables, to a Canadian Account. The Servicer shall
endorse, to the extent necessary, all checks or other instruments received in
any Lockbox so that the same can be deposited in such Lockbox Account, in the
form so received (with all necessary endorsements), and the Servicer shall
deposit the same in such Lockbox Account on the Business Day on which such check
or other instruments are received.
(ii) The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Seller, Eligible
Deposit Accounts bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Trust (each
such account being a "Lockbox Account and collectively the "Lockbox
--------------- -------
Accounts"). The Trustee shall possess a security interest in the
--------
Seller's right, title and interest in all funds on deposit from time
to time in the Lockbox Accounts and in all proceeds thereof for the
benefit of the Certificateholders. The Lockbox Accounts shall be under
the sole dominion and control of the Trustee for the benefit of the
Certificateholders. The Servicer hereby grants a first priority
security interest in and to the Lockbox Accounts and all amounts now
or hereafter deposited therein or evidenced thereby. The Servicer
agrees that it shall have no right of set-off or banker's lien
against, and no right to otherwise deduct from, any funds held in the
Lockbox Accounts for any amount owed to it by the Trustee, the Trust,
any Certificateholder or any Series Enhancer. If, at any time, any
Lockbox Account ceases to be an Eligible Deposit Account, the Trustee
(or the Servicer on its behalf) shall, within 10 Business Days after
notice from the Servicer or any Series Representative, establish a new
Lockbox Account meeting the conditions specified above, transfer any
cash or any investments in the old Lockbox Account to such new Lockbox
Account and from the date such new Lockbox Account is established, it
shall be a "Lockbox Account". The Servicer shall irrevocably instruct
---------------
each bank at which a Lockbox Account is held, to transfer, by 12:00
noon (New York City time) on each Business Day, all amounts in such
Lockbox Account to the Concentration Account.
(b) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain at Norwest Bank Colorado, National Association in the
name of the Seller, an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders (the "Concentration Account"). The Trustee shall possess a
---------------------
security interest in the Seller's right, title and interest in all funds on
deposit from time to time in the Concentration Account and in all proceeds
thereof for the benefit of the Certificateholders. The Concentration
34
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Certificateholders. The Servicer hereby grants a first priority
security interest in and to the Concentration Account and all amounts now or
hereafter deposited therein or evidenced thereby. The Servicer agrees that it
shall have no right of set-off or banker's lien against, and no right to
otherwise deduct from, any funds held in the Concentration Account for any
amount owed to it by the Trustee, the Trust, any Certificateholder or any Series
Enhancer. If, at any time, the Concentration Account ceases to be an Eligible
Deposit Account, the Trustee (or the Servicer on its behalf) shall, within 10
Business Days after notice from the Servicer or any Series Representative,
establish a new Concentration Account meeting the conditions specified above,
transfer any cash or any investments to such new Concentration Account and from
the date such new Concentration Account is established, it shall be the
"Concentration Account". The Servicer shall irrevocably instruct the bank at
---------------------
which the Concentration Account is held, to transfer, by 12:00 noon (New York
City time) on each Business Day, all amounts in the Concentration Account to the
Collection Account.
(c) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee, on behalf of the Trust, an
Eligible Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders (including
all Collection Subaccounts therein, the "Collection Account"). The Supplement
------------------
for a Series may require the Trustee to establish and maintain, for
administrative purposes only, subaccounts of the Collection Account for the
benefit of the Certificateholders of such Series (such subaccounts the
"Collection Subaccounts"). The Trustee shall possess all right, title and
-----------------------
interest in all funds on deposit from time to time in the Collection Account and
in all proceeds thereof for the benefit of the Certificateholders. The
Collection Account shall be under the sole dominion and control of the Trustee
for the benefit of the Certificateholders. The Servicer hereby grants a first
priority security interest in and to the Collection Account and all amounts now
or hereafter deposited therein or evidenced thereby. The Servicer agrees that
it shall have no right of set-off or banker's lien against, and no right to
otherwise deduct from, any funds held in the Collection Account for any amount
owed to it by the Trustee, the Trust, any Certificateholder or any Series
Enhancer. If at any time the Collection Account ceases to be an Eligible
Deposit Account, the Trustee (or the Servicer on its behalf) shall within 10
Business Days establish a new Collection Account meeting the conditions
specified above, transfer any cash or any investments to such new Collection
Account and from the date such new Collection Account is established, it shall
be the "Collection Account".
------------------
(d) So long as no Pay-Out Event has occurred and is continuing, funds
on deposit in the Collection Account shall at the direction of the Servicer be
invested by the Trustee in Eligible Investments selected by the Servicer. All
such Eligible Investments shall be held by the Trustee for the benefit of the
Certificateholders. The Trustee shall maintain for the benefit of the
Certificateholders possession of the negotiable instruments or securities, if
any, evidencing such Eligible Investments. Funds representing Collections
collected during any Monthly Period shall be invested in Eligible Investments
that will mature so that all funds will be available at the close of business on
the Transfer Date following such Monthly Period. No Eligible Investment shall
be disposed of prior to its maturity; provided, however, that, at any time when
-------- -------
a Payout Event has not occurred or is not continuing, the Trustee may sell,
liquidate or dispose of an Eligible Investment before its maturity, if so
directed by the Servicer, the Servicer having reasonably determined that the
interests of the Investor Certificateholders may be adversely affected if such
Eligible Investment is held to its maturity and; provided, further, that, at any
-------- -------
time when a Payout Event has occurred and is continuing, the Trustee may sell,
liquidate or dispose of an Eligible Investment before its maturity, if so
directed by the Series Representative and Liquidity Agent. On each Distribution
Date, all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account shall be treated as
Collections
35
of Receivables with respect to the last day of the related Monthly Period,
except as otherwise specified in any Supplement. For purposes of determining the
availability of funds or the balances in the Collection Account for any reason
under this Agreement, all investment earnings net of investment expenses and
losses on such funds shall be deemed not to be available or on deposit.
(e) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Seller, Eligible Deposit Accounts
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Trust (each such account being a "Canadian Account
----------------
and collectively the "Canadian Accounts"). The Trustee shall possess a security
-----------------
interest in the Seller's right, title and interest in all funds on deposit from
time to time in the Canadian Accounts and in all proceeds thereof for the
benefit of the Certificateholders. The Canadian Accounts shall be under the
sole dominion and control of the Trustee for the benefit of the
Certificateholders. The Servicer hereby grants a first priority security
interest in and to the Concentration Accounts and all amounts now or hereafter
deposited therein or evidenced thereby. The Servicer agrees that it shall have
no right of set-off or banker's lien against, and no right to otherwise deduct
from, any funds held in the Canadian Accounts for any amount owed to it by the
Trustee, the Trust, any Certificateholder or any Series Enhancer. If, at any
time, any Canadian Account ceases to be an Eligible Deposit Account, the Trustee
(or the Servicer on its behalf) shall, within 10 Business Days after notice from
the Servicer or any Series Representative, establish a new Canadian Account
meeting the conditions specified above, transfer any cash or any investments in
the old Canadian Account to such new Canadian Account and from the date such new
Canadian Account is established, it shall be a "Canadian Account". The Servicer
----------------
shall irrevocably instruct each bank at which a Canadian Account is held, to
transfer, by 12:00 noon (New York City time) on each Business Day, all amounts
in such Canadian Account to the Canadian Collection Account.
(f) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee, on behalf of the Trust, an
Eligible Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders (including
all Canadian Collection Subaccounts therein, the "Canadian Collection Account").
---------------------------
The Supplement for a Series may require the Trustee to establish and maintain,
for administrative purposes only, subaccounts of the Canadian Collection Account
for the benefit of the Certificateholders of such Series (such subaccounts the
"Canadian Collection Subaccounts"). The Trustee shall possess all right, title
--------------------------------
and interest in all funds on deposit from time to time in the Canadian
Collection Account and in all proceeds thereof for the benefit of the
Certificateholders. The Canadian Collection Account shall be under the sole
dominion and control of the Trustee for the benefit of the Certificateholders.
The Servicer hereby grants a first priority security interest in and to the
Canadian Collection Account and all amounts now or hereafter deposited therein
or evidenced thereby. The Servicer agrees that it shall have no right of set-
off or banker's lien against, and no right to otherwise deduct from, any funds
held in the Canadian Collection Account for any amount owed to it by the
Trustee, the Trust, any Certificateholder or any Series Enhancer. If at any
time the Canadian Collection Account ceases to be an Eligible Deposit Account,
the Trustee (or the Servicer on its behalf) shall within 10 Business Days
establish a new Canadian Collection Account meeting the conditions specified
above, transfer any cash or any investments to such new Collection Account and
from the date such new Collection Account is established, it shall be the
"Canadian Collection Account".
----------------------------
(g) So long as no Pay-Out Event has occurred and is continuing, funds
on deposit in the Canadian Collection Account shall at the direction of the
Servicer be invested by the Trustee in Eligible Investments selected by the
Servicer. All such Eligible Investments shall be held by the Trustee for the
benefit of the Certificateholders. The Trustee shall maintain for the benefit
of the
36
Certificateholders possession of the negotiable instruments or securities, if
any, evidencing such Eligible Investments. Funds representing Collections
collected during any Monthly Period shall be invested in Eligible Investments
that will mature so that all funds will be available at the close of business on
the Transfer Date following such Monthly Period. No Eligible Investment shall be
disposed of prior to its maturity; provided, however, that, at ▇▇▇ time when a
-------- -------
Payout Event has not occurred or is not continuing, the Trustee may sell,
liquidate or dispose of an Eligible Investment before its maturity, if so
directed by the Servicer, the Servicer having reasonably determined that the
interests of the Investor Certificateholders may be adversely affected if such
Eligible Investment is held to its maturity and; provided, further, that, at any
-------- -------
time when a Payout Event has occurred and is continuing, the Trustee may sell,
liquidate or dispose of an Eligible Investment before its maturity, if so
directed by the Series Representative and Liquidity Agent. On each Distribution
Date, all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Canadian Collection Account shall be
treated as Collections of Receivables with respect to the last day of the
related Monthly Period, except as otherwise specified in any Supplement. For
purposes of determining the availability of funds or the balances in the
Canadian Collection Account for any reason under this Agreement, all investment
earnings net of investment expenses and losses on such funds shall be deemed not
to be available or on deposit.
(h) The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee, on behalf of the Trust, an
Eligible Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders (the
"Special Funding Account"). The Trustee shall possess all right, title and
------------------------
interest in all funds on deposit from time to time in the Special Funding
Account and in all proceeds thereof for the benefit of the Certificateholders.
The Special Funding Account shall be under the sole dominion and control of the
Trustee for the benefit of the Certificateholders. The Servicer hereby grants a
first priority security interest in and to the Special Funding Account and all
amounts now or hereafter deposited therein or evidenced thereby. The Servicer
agrees that it shall have no right of set-off or banker's lien against, and no
right to otherwise deduct from, any funds held in the Special Funding Account
for any amount owed to it by the Trustee, the Trust, any Certificateholder or
any Series Enhancer. If, at any time, the Special Funding Account ceases to be
an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall
within 10 Business Days establish a new Special Funding Account meeting the
conditions specified above, transfer any cash or any investments to such new
Special Funding Account and from the date such new Special Funding Account is
established, it shall be the "Special Funding Account".
-----------------------
(i) So long as no Pay-Out Event has occurred and is continuing, funds
on deposit in the Special Funding Account shall at the direction of the Servicer
be invested by the Trustee in Eligible Investments selected by the Servicer.
All such Eligible Investments shall be held by the Trustee for the benefit of
the Certificateholders. The Trustee shall maintain for the benefit of the
Certificateholders possession of the negotiable instruments or securities, if
any, evidencing such Eligible Investments. Funds deposited in the Special
Funding Account on any date during a Monthly Period will be invested in Eligible
Investments that will mature no later than the close of business on the Transfer
Date following such Monthly Period. No Eligible Investment shall be disposed of
prior to its maturity; provided, however, that, at any time when a Payout Event
-------- -------
has not occurred or is not continuing, the Trustee may sell, liquidate or
dispose of an Eligible Investment before its maturity, if so directed by the
Servicer, the Servicer having reasonably determined that the interests of the
Investor Certificateholders may be adversely affected if such Eligible
Investment is held to its maturity and; provided, further, that, at any time
-------- -------
when a Payout Event has occurred and is continuing, the Trustee may sell,
liquidate or dispose of an Eligible Investment before its maturity, if so
directed by the Series
37
Representative and Liquidity Agent. Unless directed by the Servicer, funds
deposited in the Special Funding Account on a Transfer Date with respect to the
next following Distribution Date are not required to be invested overnight. On
each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Special Funding
Account shall be treated as Collections of Receivables with respect to the last
day of the related Monthly Period except as otherwise specified in the related
Supplement. Unless otherwise directed by the Servicer, (i) on each Distribution
Date on which no Series is in an Accumulation Period or an Amortization Period,
funds on deposit in the Special Funding Account will be withdrawn and paid to
the Holder of the Seller Certificate to the extent that the Seller Amount
exceeds the Minimum Balance on such date, and (ii) on each "Purchase Date" (as
defined in the Purchase Agreement) on which no Series is in an Accumulation
Period or an Amortization Period, funds on deposit in the Special Funding
Account will be withdrawn and paid to the Seller, to be applied to the "Purchase
Price" of the Receivables to be purchased on such date pursuant to the Purchase
Agreement; provided, however, amounts may be withdrawn from the Special Funding
-------- -------
Account on any Purchase Date pursuant to this clause (ii) only if, and to the
extent that, such withdrawal will not result in a Payout Event (after giving
effect to all Receivables to be transferred to the Trust on such date). For
purposes of determining the availability of funds or the balances in the Special
Funding Account for any reason under this Agreement, all investment earnings net
of investment expenses and losses on such funds shall be deemed not to be
available or on deposit.
Section 4.03. Collections and Allocations. (a) The Servicer will
---------------------------
apply or will instruct the Trustee to apply all funds on deposit in the
Collection Account and the Canadian Collection Account as described in this
Article IV and in each Supplement. Except as otherwise provided below, the
Servicer shall deposit, or cause to be deposited, all Collections received
(whether through the Lockbox Accounts, the Canadian Accounts or otherwise) into
the Collection Account (or in the case of Collections with respect to Canadian
Receivables into the Canadian Collection Account), no later than two Business
Days following the receipt of such Collections.
(b) With respect to each day during each Monthly Period, Collections
of Receivables will be allocated to the Certificateholders' Interest of each
Series as set forth in the Supplement related to such Series. On each
Determination Date, Defaulted Receivables will be allocated to the
Certificateholders' Interest of each Series, each as set forth in the related
Supplement.
(c) (i) Throughout the existence of the Trust, unless otherwise
stated in any Supplement, the Servicer shall allocate to the Holder of the
Seller Certificate an amount equal to the product of (A) the Seller's Percentage
and (B) the aggregate amount of such Collections allocated to Receivables in
respect of each Monthly Period. Notwithstanding anything in this Agreement to
the contrary, unless otherwise stated in any Supplement, the Servicer need not
deposit this amount or any other amounts so allocated to the Seller Certificate
pursuant to any Supplement into the Collection Account or the Canadian
Collection Account and shall pay, or be deemed to pay, such amounts as collected
to the Holder of the Seller Certificate.
(ii) The payments to be made to the Holder of the Seller
Certificate pursuant to this Section 4.03(c) do not apply to deposits
to the Collection Account or the Canadian Collection Account or other
amounts that do not represent Collections, including payment of the
purchase price for Receivables pursuant to Section 2.06 or 10.01,
proceeds from the sale, disposition or liquidation of Receivables
pursuant to Section 9.02 or 12.02 or payment of the purchase price for
the Certificateholders' Interest of a specific Series pursuant to the
related Supplement.
38
ARTICLE V
Distributions and Reports to
----------------------------
Certificateholders
------------------
Distributions shall be made to, and reports shall be provided to,
Certificateholders as set forth in the applicable Supplement.
ARTICLE VI
The Certificates
----------------
Section 6.01. The Certificates. The Investor Certificates of any
----------------
Series or Class may be issued in bearer form ("Bearer Certificates") with
-------------------
attached interest coupons and any other applicable coupon (collectively, the
"Coupons") or in fully registered form ("Registered Certificates") and shall be
------- -----------------------
substantially in the form of the exhibits with respect thereto attached to the
applicable Supplement. Each Series of Variable Interest Certificates initially
shall be issued as one or more Series of Variable Interest Certificates in an
aggregate original principal amount equal to the Initial Invested Amount (as
defined in the related Supplement) for the Series and with an initial aggregate
Stated Amount in the amount set out in the related Supplement . The Seller
Certificate will be issued in registered form, substantially in the form of
Exhibit A, and shall upon issue, be executed and delivered by the Seller to the
Trustee for authentication and redelivery as provided in Section 6.02. Except
as otherwise provided in Section 6.03 or in any Supplement, Bearer Certificates
shall be issued in minimum denominations of $500,000 and Registered Certificates
shall be issued in minimum denominations of $500,000 and in integral multiples
of $100,000 in excess thereof. If specified in any Supplement, the Investor
Certificates of any Series or Class shall be issued upon initial issuance as a
single certificate evidencing the aggregate original principal amount (or Stated
Amount in the case of Variable Funding Certificates) of such Series or Class.
The Seller Certificate shall initially be a single certificate and shall
initially represent the entire Seller's Interest. Each Certificate shall be
executed by manual or facsimile signature on behalf of the Seller by its
President or any Vice President. Certificates bearing the manual or facsimile
signature of an individual who was, at the time when such signature was affixed,
authorized to sign on behalf of the Seller shall not be rendered invalid,
notwithstanding that such individual ceased to be so authorized prior to the
authentication and delivery of such Certificates or does not hold such office at
the date of such Certificates. No Certificates shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by or on behalf of the Trustee by the manual signature of a
duly authorized signatory, and such certificate of authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. Bearer
Certificates shall be dated the Closing Date. All Registered Certificates and
the Seller Certificate shall be dated the date of their authentication.
Section 6.02. Authentication of Certificates. The Trustee shall
------------------------------
authenticate and deliver the Investor Certificates of each Series and Class that
are issued upon original issuance to or upon the order of the Seller against
payment to the Seller of the purchase price therefor. The Trustee shall
authenticate and deliver the Seller Certificate to the Seller simultaneously
with its delivery of the Investor Certificates of the first Series to be issued
hereunder.
39
Section 6.03. New Issuances. (a) The Seller may from time to time
-------------
direct the Trustee, on behalf of the Trust, to authenticate one or more new
Series of Investor Certificates. The Investor Certificates of all outstanding
Series shall be equally and ratably entitled as provided herein to the benefits
of this Agreement without preference, priority or distinction, all in accordance
with the terms and provisions of this Agreement and the applicable Supplement
except, with respect to any Series or Class, as provided in the related
Supplement.
(b) On or before the Closing Date relating to any new Series, the
parties hereto will execute and deliver a Supplement which will specify the
Principal Terms of such new Series. The terms of such Supplement may modify or
amend the terms of this Agreement solely as applied to such new Series. The
obligation of the Trustee to authenticate the Investor Certificates of such new
Series and to execute and deliver the related Supplement is subject to the
satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately
preceding the Closing Date, the Seller shall have given the Trustee,
the Servicer, each Rating Agency and any Series Representative or
Series Enhancer entitled thereto pursuant to the relevant Supplement
notice of such issuance and the Closing Date;
(ii) the Seller shall have delivered to the Trustee the related
Supplement, in form satisfactory to the Trustee, executed by each
party hereto other than the Trustee;
(iii) the Seller shall have delivered to the Trustee any
related Enhancement Agreement executed by each of the parties thereto,
other than the Trustee;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such issuance and each Series Representative shall have
consented thereto;
(v) the Seller shall have delivered to the Trustee and any
Series Representative or Series Enhancer entitled thereto pursuant to
the relevant Supplement an Officer's Certificate, dated the Series
Issuance Date, to the effect that the Seller reasonably believes that
such issuance will not, based on the facts known to such officer at
the time of such certification, then or thereafter cause a Pay-Out
Event to occur with respect to any Series;
(vi) the Seller shall have delivered to the Trustee and each
Rating Agency a Tax Opinion, dated the Closing Date, with respect to
such issuance; and
(vii) the Floating Allocation Percentage for all Series shall
not be greater than 100%, in each case as of the Closing Date and after
giving effect to such issuance.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and authenticate the Investor Certificates of such Series upon
execution thereof by the Seller.
Section 6.04. Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
(a)(1) The Trustee shall cause to be kept at the office or agency to be
maintained in accordance with the
40
provisions of Section 11.16 a register (the "Certificate Register") in which,
--------------------
subject to such reasonable regulations as it may prescribe, a transfer Agent and
registrar (which may be the Trustee) (the "Transfer Agent and Registrar") shall
----------------------------
provide for the registration of the Registered Certificates and of transfers and
exchanges of the Registered Certificates as herein provided. The Transfer Agent
and Registrar shall initially be the Trustee, except as otherwise specified in
any Supplement with respect to the Certificates issued under that Supplement,
and any co-transfer Agent and co-registrar chosen by the Seller and acceptable
to the Trustee.
(ii) The Trustee may revoke such appointment and remove any
Transfer Agent and Registrar if the Trustee determines in its sole
discretion that such Transfer Agent and Registrar failed to perform
its obligations under this Agreement in any material respect. Any
Transfer Agent and Registrar shall be permitted to resign as Transfer
Agent and Registrar upon 30 days' notice to the Seller, the Trustee
and the Servicer; provided, however, that such
-------- -------
resignation shall not be effective and such Transfer Agent and
Registrar shall continue to perform its duties as Transfer Agent and
Registrar until the Trustee has appointed a successor Transfer Agent
and Registrar reasonably acceptable to the Seller.
(iii) Subject to paragraph (c) below, upon surrender for
registration of transfer of any Registered Certificate at any office
or agency of the Transfer Agent and Registrar maintained for such
purpose, one or more new Registered Certificates (of the same Series
and Class) in authorized denominations of like aggregate fractional
undivided interests in the Certificateholders' Interest shall be
executed, authenticated and delivered, in the name of the designated
transferee or transferees.
(iv) At the option of a Registered Certificateholder,
Registered Certificates (of the same Series and Class) may be
exchanged for other Registered Certificates of authorized
denominations of like aggregate fractional undivided interests in the
Certificateholders' Interest, upon surrender of the Registered
Certificates to be exchanged at any such office or agency; Registered
Certificates, including Registered Certificates received in exchange
for Bearer Certificates, may not be exchanged for Bearer Certificates.
At the option of the Holder of a Bearer Certificate, subject to
applicable laws and regulations, Bearer Certificates may be exchanged
for other Bearer Certificates or Registered Certificates (of the same
Series and Class) of authorized denominations of like aggregate
fractional undivided interests in the Certificateholders' Interest,
upon surrender of the Bearer Certificates to be exchanged at an office
or agency of the Transfer Agent and Registrar located outside the
United States. Each Bearer Certificate surrendered pursuant to this
Section shall have attached thereto all unmatured Coupons; provided
--------
that any Bearer Certificate, so surrendered after the close of
business on the Record Date preceding the relevant payment date or
distribution date after the expected final payment date need not have
attached the Coupon relating to such payment date or distribution date
(in each case, as specified in the applicable Supplement).
(v) Whenever any Investor Certificates are so surrendered
for exchange, the Seller shall execute, the Trustee shall authenticate
and the Transfer Agent and Registrar shall deliver (in the case of
Bearer Certificates, outside the United States) the Investor
Certificates which the Investor Certificateholder making the exchange
is entitled to receive. Every Investor Certificate presented or
surrendered for
41
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee or the
Transfer Agent and Registrar duly executed by the Investor
Certificateholder or the attorney-in-fact thereof duly authorized in
writing.
(vi) No service charge shall be made for any registration of
transfer or exchange of Investor Certificates, but the Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any such
transfer or exchange.
(vii) All Investor Certificates (together with any Coupons)
surrendered for registration of transfer and exchange or for payment
shall be canceled and disposed of by or on behalf of the Trustee in a
manner satisfactory to the Trustee.
(viii) The Seller shall execute and deliver to the Trustee
Bearer Certificates and Registered Certificates in such amounts and at
such times as are necessary to enable the Trustee to fulfill its
responsibilities under this Agreement, each Supplement and the
Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense
in the City of New York, an office or agency where Investor Certificates may be
surrendered for registration of transfer or exchange (except that Bearer
Certificates may not be surrendered for exchange at any such office or agency in
the United States).
(c)(i)(A) Registration of transfer of Investor Certificates containing
a legend substantially to the effect set forth on Exhibit E-1 shall be
effected only if such transfer (x) is made pursuant to an effective
registration statement under the Act, or is exempt from the
registration requirements under the Act, and (y) is made to a Person
which is not an employee benefit plan, trust or account, including an
individual retirement account, that is subject to ERISA or that is
described in Section 4975(e)(1) of the Code or an entity whose
underlying assets include plan assets by reason of a plan's investment
in such entity (a "Benefit Plan"). In the event that registration of a
------------
transfer is to be made in reliance upon an exemption from the
registration requirements under the Act, the transferor or the
transferee shall deliver, at its expense, to the Seller, the Servicer
and the Trustee, an investment letter from the transferee,
substantially in the form of the investment and ERISA representation
letter attached hereto as Exhibit E-2, and no registration of transfer
shall be made until such letter is so delivered.
(B) Investor Certificates issued upon registration or transfer
of, or Investor Certificates issued in exchange for, Investor
Certificates bearing the legend referred to above shall also bear
such legend unless the Seller, the Servicer, the Trustee and the
Transfer Agent and Registrar receive an opinion of counsel,
satisfactory to each of them, to the effect that such legend may
be removed.
(C) Whenever an Investor Certificate containing the legend
referred to above is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar
shall promptly seek instructions from the Servicer regarding such
transfer and shall be entitled to receive instructions
42
signed by a Servicing Officer prior to registering any such
transfer. The Seller hereby agrees to indemnify the Transfer
Agent and Registrar and the Trustee and to hold each of them
harmless against any loss, liability or expense incurred without
negligence or bad faith on their part arising out of or in
connection with actions taken or omitted by them in relation to
any such instructions furnished pursuant to this clause (i).
(ii) Registration of a transfer of Investor Certificates
containing a legend to the effect set forth on Exhibit E-3 shall be
effected only if such transfer is made to a Person which is not a
Benefit Plan. By acquiring any interest in a Book-Entry Certificate
which contains such legend, a Certificate Owner shall be deemed to
have represented and warranted that it is not a Benefit Plan.
Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons (if any) appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Seller shall
execute, the Trustee shall authenticate and the Transfer Agent and Registrar
shall deliver (in the case of Bearer Certificates, outside the United States),
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and aggregate fractional undivided
interest. In connection with the issuance of any new Certificate under this
Section, the Trustee or the Transfer Agent and Registrar may require the payment
by the Certificateholder 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 fees and expenses of the Trustee and Transfer Agent and
Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 6.06. Persons Deemed Owners. The Trustee, the Paying Agent,
---------------------
the Transfer Agent and Registrar and any Agent of any of these may (a) prior to
due presentation of a Registered Certificate for registration of transfer, treat
the Person in whose name any Registered Certificate is registered as the owner
of such Registered Certificate for the purpose of receiving distributions
pursuant to the terms of the applicable Supplement and for all other purposes
whatsoever, and (b) treat the bearer of a Bearer Certificate or Coupon as the
owner of such Bearer Certificate or Coupon for the purpose of receiving
distributions pursuant to the terms of the applicable Supplement and for all
other purposes whatsoever; and, in any such case, neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any Agent of any of these
shall be affected by any notice to the contrary. Notwithstanding the foregoing,
in determining whether the Holders of the requisite Investor Certificates have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder (including under any Supplement), Certificates owned by the Seller,
the Servicer, any other Holder of the Seller Certificate, the Trustee or any
Affiliate thereof, shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates which the Trustee actually knows to be so owned shall be so
disregarded. Certificates so owned which have been pledged in good faith shall
not be disregarded and may be regarded as outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such
43
Certificates and that the pledgee is not the Seller, the Servicer, any other
Holder of the Seller Certificate or any Affiliate thereof.
Section 6.07. Appointment of Paying Agent. The Paying Agent shall
---------------------------
make distributions to Investor Certificateholders from the Collection Account,
Canadian Collection Account or any applicable Series Account pursuant to the
provisions of the applicable Supplement and shall report the amounts of such
distributions to the Trustee. Any Paying Agent shall have the revocable power
to withdraw funds from the Collection Account, Canadian Collection Account or
any applicable Series Account for the purpose of making the distributions
referred to above. The Trustee may revoke such power and remove the Paying
Agent if the Trustee determines in its sole discretion that the Paying Agent
shall have failed to perform its obligations under this Agreement or any
Supplement in any material respect. The "Paying Agent" shall initially be the
------------
Trustee, except as otherwise specified in any Supplement with respect to the
Certificates issued under that Supplement, and any co-paying Agent chosen by the
Seller and acceptable to the Trustee. Any Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' notice to the Trustee; provided, however,
-------- -------
that such resignation shall not be effective and such Paying Agent shall
continue to perform its duties as Paying Agent until the Trustee has appointed a
successor Paying Agent reasonably acceptable to the Seller. In the event that
any Paying Agent shall resign, the Trustee shall appoint a successor to act as
Paying Agent. The Trustee shall cause each successor or additional Paying Agent
to execute and deliver to the Trustee an instrument in which such successor or
additional Paying Agent shall agree with the Trustee that it will hold all sums,
if any, held by it for payment to the Investor Certificateholders in trust for
the benefit of the Investor Certificateholders entitled thereto until such sums
shall be paid to such Investor Certificateholders. The Paying Agent shall
return all unclaimed funds to the Trustee and upon removal shall also return all
funds in its possession to the Trustee. The provisions of Sections 11.01,
11.02, 11.03 and 11.05 shall apply to the Trustee also in its role as Paying
Agent, for so long as the Trustee shall act as Paying Agent. Any reference in
this Agreement to the Paying Agent shall include any co-paying Agent unless the
context requires otherwise.
Section 6.08. Access to List of Registered Certificateholders' Names
------------------------------------------------------
and Addresses. (a) The Trustee will furnish or cause to be furnished by the
-------------
Transfer Agent and Registrar to the Servicer or the Paying Agent, within five
Business Days after receipt by the Trustee of a request therefor, a list in such
form as the Servicer or the Paying Agent may reasonably require, of the names
and addresses of the Registered Certificateholders. If any Holder or group of
Holders of Investor Certificates of any Series or all outstanding Series, as the
case may be, evidencing not less than 10% of the aggregate unpaid principal
amount of such Series or all outstanding Series, as applicable (the
"Applicants"), apply to the Trustee, and such application states that the
----------
Applicants desire to communicate with other Investor Certificateholders with
respect to their rights under this Agreement or any Supplement or under the
Investor Certificates and is accompanied by a copy of the communication which
such Applicants propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses shall
afford or shall cause the Transfer Agent and Registrar to afford such Applicants
access during normal business hours to the most recent list of Registered
Certificateholders of such Series or all outstanding Series, as applicable, held
by the Trustee, within five Business Days after the receipt of such application.
Such list shall be as of a date no more than 45 days prior to the date of
receipt of such Applicants' request.
(b) Every Registered Certificateholder, by receiving and holding a
Registered Certificate, agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar, nor any of their respective agents, shall be held
accountable by reason of the disclosure of any such information
44
as to the names and addresses of the Registered Certificateholders hereunder,
regardless of the sources from which such information was derived.
Section 6.09. Authenticating Agent. (a) The Trustee may appoint one
--------------------
or more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. Whenever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent must be acceptable to the Seller and the Servicer.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any power or any further act on the part of the Trustee
or such authenticating agent. An authenticating agent may at any time resign by
giving notice of resignation to the Trustee and to the Seller. The Trustee may
at any time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Seller. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time an
authenticating agent shall cease to be acceptable to the Trustee or the Seller,
the Trustee promptly may appoint a successor authenticating agent. Any
successor authenticating agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an authenticating agent.
No successor authenticating agent shall be appointed unless acceptable to the
Trustee and the Seller. The Seller agrees to pay to each authenticating agent
from time to time reasonable compensation for its services under this Section.
The provisions of Sections 11.01, 11.02 and 11.03 shall be applicable to any
authenticating agent.
(c) Pursuant to an appointment made under this Section, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Certificates described in the Pooling and Servicing
Agreement.
______________________________________________________________
______________________________________________________________
as Authenticating Agent
for the Trustee
By: ________________________________________________________
Authorized Officer
Section 6.10. Book-Entry Certificates. Unless otherwise specified
-----------------------
in the related Supplement for any Series or Class, the Investor Certificates,
upon original issuance, shall be issued in the form of one or more typewritten
Investor Certificates representing the Book-Entry Certificates, to be delivered
to the Clearing Agency, by, or on behalf of, the Seller. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the Clearing Agency or its nominee, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Investor Certificates, except as provided in Section 6.12. Unless and
until definitive,
45
fully registered Investor Certificates ("Definitive Certificates") have been
-----------------------
issued to the applicable Certificate Owners pursuant to Section 6.12 or as
otherwise specified in any such Supplement:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Seller, the Servicer and the Trustee may deal with
the Clearing Agency and the Clearing Agency Participants for all
purposes (including the making of distributions) as the authorized
representatives of the respective Certificate Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions
of this Section shall control; and
(iv) the rights of the respective Certificate Owners shall be
exercised only through the Clearing Agency and the Clearing Agency
Participants and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency or
the Clearing Agency Participants. Pursuant to the Depository
Agreement, unless and until Definitive Certificates are issued
pursuant to Section 6.12, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the related
Investor Certificates to such Clearing Agency Participants.
(v) purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Investor Certificateholders evidencing a specified percentage of the
aggregate unpaid principal amount of Investor Certificates, such
direction or consent may be given by Certificate Owners (acting
through the Clearing Agency and the Clearing Agency Participants)
owning Investor Certificates evidencing the requisite percentage of
principal amount of Investor Certificates.
Section 6.11. Notices to Clearing Agency. Whenever any notice or
--------------------------
other communication is required to be given to Investor Certificateholders of
any Series or Class with respect to which Book-Entry Certificates have been
issued, unless and until Definitive Certificates shall have been issued to the
related Certificate Owners, the Trustee shall give all such notices and
communications to the applicable Clearing Agency.
Section 6.12. Definitive Certificates. If Book-Entry Certificates
-----------------------
have been issued with respect to any Series or Class and (a) the Seller advises
the Trustee that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Series or Class and the Trustee or the Seller is unable to locate a
qualified successor, (b) the Seller, at its option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Series or Class
through the Clearing Agency or (c) after the occurrence of a Servicer Default,
Certificate Owners of such Series or Class evidencing not less than 50% of the
aggregate unpaid principal amount of such Series or Class advise the Trustee and
the Clearing Agency through the Clearing Agency Participants that the
continuation of a book entry system with respect to the Investor Certificates of
such Series or Class through the Clearing Agency is no longer in the best
interests of the Certificate Owners with respect to such Certificates, then the
Trustee shall notify all Certificate Owners of such Certificates, through the
Clearing Agency, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of any such Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, the Seller shall execute and the Trustee shall
46
authenticate and deliver such Definitive Certificates. Neither the Seller nor
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of such Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates and the Trustee shall
recognize the Holders of such Definitive Certificates as Investor
Certificateholders hereunder.
Section 6.13. Meetings of Certificateholders. (a) If at the time any
------------------------------
Bearer Certificates are issued and outstanding with respect to any Series or
Class to which any meeting described below relates, the Servicer or the Trustee
may at any time call a meeting of Investor Certificateholders of any Series or
Class or of all Series, to be held at such time and at such place as the
Servicer or the Trustee, as the case may be, shall determine, for the purpose of
approving a modification of or amendment to, or obtaining a waiver of any
covenant or condition set forth in, this Agreement, any Supplement or the
Investor Certificates or of taking any other action permitted to be taken by
Investor Certificateholders hereunder or under any Supplement. Notice of any
meeting of Investor Certificateholders, setting forth the time and place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given in accordance with Section 13.05, the first mailing and
publication to be not less than 20 nor more than 180 days prior to the date
fixed for the meeting. To be entitled to vote at any meeting of Investor
Certificateholders a person shall be (i) a Holder of one or more Investor
Certificates of the applicable Series or Class or (ii) a person appointed by an
instrument in writing as proxy by the Holder of one or more such Investor
Certificates. The only persons who shall be entitled to be present or to speak
at any meeting of Investor Certificateholders shall be the persons entitled to
vote at such meeting and their counsel and any representative of the Seller, the
Servicer and the Trustee and their respective counsel.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing a majority of the aggregate unpaid
principal amount of the applicable Series or Class or all outstanding Series, as
the case may be, shall constitute a quorum. No business shall be transacted in
the absence of a quorum, unless a quorum is present when the meeting is called
to order. In the absence of a quorum at any such meeting, the meeting may be
adjourned for a period of not less than 10 days; in the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further adjourned for
a period of not less than 10 days; at the reconvening of any meeting further
adjourned for lack of a quorum, the persons entitled to vote Investor
Certificates evidencing at least 50% of the aggregate unpaid principal amount of
the applicable Series or Class or all outstanding Series, as the case may be,
shall constitute a quorum for the taking of any action set forth in the notice
of the original meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided above except that such notice must be given not less
than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the aggregate principal amount of the outstanding
applicable Investor Certificates which shall constitute a quorum.
(c) Any Investor Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided, that
--------
such Investor Certificateholder shall be considered as present or voting only
with respect to the matters covered by such instrument in writing. Subject to
the provisions of Section 13.01, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
shall be binding on all Investor Certificateholders whether or not present or
represented at the meeting.
47
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate, satisfactory to the
Servicer, executed by any bank, trust company or recognized securities dealer,
wherever situated, satisfactory to the Servicer. Each such certificate shall be
dated and shall state that on the date thereof a Bearer Certificate bearing a
specified serial number was deposited with or exhibited to such bank, trust
company or recognized securities dealer by the person named in such certificate.
Any such certificate may be issued in respect of one or more Bearer Certificates
specified therein. The holding by the person named in any such certificate of
any Bearer Certificate specified therein shall be presumed to continue for a
period of one year from the date of such certificate unless at the time of any
determination of such holding (i) another certificate bearing a later date
issued in respect of the same Bearer Certificate shall be produced, (ii) the
Bearer Certificate specified in such certificate shall be produced by some other
person or (iii) the Bearer Certificate specified in such certificate shall have
ceased to be outstanding. The appointment of any proxy shall be proved by
having the signature of the person executing the proxy guaranteed by any bank,
trust company or recognized securities dealer satisfactory to the Trustee.
(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the holders of Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of Investor Certificates of the applicable
Series or Class or all outstanding Series, as the case may be, represented at
the meeting. No vote shall be cast or counted at any meeting in respect of any
Investor Certificate challenged as not outstanding and ruled by the chairman of
the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote except as an Investor Certificateholder or proxy. Any meeting of
Investor Certificateholders duly called at which a quorum is present may be
adjourned from time to time, and the meeting may be held as so adjourned without
further notice.
(f) The vote upon any resolution submitted to any meeting of Investor
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of Investor Certificateholders or proxies and on which shall be
inscribed the serial number and series and class numbers of the Investor
Certificates held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Investor Certificateholders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was published as provided above. The
record shall be signed and verified by the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Servicer and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
Section 6.14. Changes in Amount of Variable Funding Certificates.
--------------------------------------------------
(a) The outstanding principal amount of a Variable Funding Certificate shall at
no time exceed the Stated Amount then applicable to such Variable Funding
Certificate. The Stated Amount of a Variable Funding Certificate may be
increased or decreased from time to time by the Seller with the prior written
consent of the Holder of the Variable Funding Certificate, if the following
conditions each shall have been satisfied on or prior to the effective date of
the proposed increase or decrease (as the case may be):
48
(i) the Seller shall have delivered to the Trustee a Tax
Opinion with respect to the proposed increase, and
(ii) the Rating Agency Condition shall have been satisfied
with respect to the increase.
(b) The Seller may, pursuant to the Supplement that applies to a
particular Variable Funding Certificate, request the Holder of the Variable
Funding Certificate to provide funds to the Trustee in respect of the Holder's
Variable Funding Certificate in order to increase the then-outstanding principal
amount of the Variable Funding Certificate, which requested increase shall be
subject to the further provisions of this subsection and to the provisions of
the Supplement. Except as otherwise provided in the related Supplement, no
increase shall cause the Invested Amount to exceed the Stated Amount then
applicable to such Variable Funding Certificate. No such increase may be
requested or (even if previously requested) implemented during an Amortization
Period for the Variable Funding Certificate. Subject to Section 6.14(a), the
Seller may make such a request at any time prior to the commencement of the
Amortization Period, and shall make any such request in a writing that is
substantially in the from required by the applicable Supplement, appropriately
completed, and that is delivered to the Holder of the Variable Funding
Certificate at the time required by the applicable Supplement. The outstanding
principal amount of the Holder's Variable Funding Certificate shall be increased
on the Business Day on which the Holder provides to the Seller immediately
available funds in the amount of the requested increase by an amount equal to
the amount of the funds.
ARTICLE VII
Other Matters Relating to the Seller
------------------------------------
Section 7.01. Liability of the Seller. The Seller shall be liable
-----------------------
in all respects for the obligations, covenants, representations and warranties
of the Seller arising under or related to this Agreement or any Supplement. The
Seller shall be liable only to the extent of the obligations specifically
undertaken by it in its capacity as Seller.
Section 7.02. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Seller. (a) The Seller shall not consolidate with or merge
--------------------------
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person unless:
(i) (x) the business entity formed by such consolidation or into
which the Seller is merged or the Person which acquires by conveyance
or transfer the properties and assets of the Seller substantially as
an entirety shall be, if the Seller is not the surviving entity,
organized and existing under the law of the United States of America
or any State or the District of Columbia, and, if the Seller is not
the surviving entity, such business entity shall expressly assume, by
an agreement supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the
performance of every covenant and obligation of the Seller hereunder,
including its obligations under Section 7.04; (y) the Seller has
delivered to the Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section,
that such supplemental agreement is a valid and binding obligation of
such surviving entity enforceable against such surviving entity in
accordance with its terms, except as such
49
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 that all conditions
precedent herein provided for relating to such transaction have been
complied with;
(ii) the Rating Agency Condition shall have been satisfied
with respect to such consolidation, merger, conveyance or transfer;
(iii) the Seller shall have delivered to the Trustee and each
Rating Agency a Tax Opinion, dated the date of such consolidation,
merger, conveyance or transfer, with respect thereto;
(iv) in connection with any merger or consolidation, the
business entity into which the Seller shall merge or consolidate shall
be (x) a business entity that is not subject to Title 11 of the United
States Code or (y) a special-purpose corporation, the powers and
activities of which shall be limited to the performance of the
Seller's obligations under this Agreement, any Supplement and the
Purchase Agreement;
(v) if the Seller is not the surviving entity, the surviving
entity shall file new UCC-l financing statements with respect to the
interest of the Trust in the Receivables; and
(vi) both immediately prior and immediately subsequent to
such consolidation, merger, conveyance or transfer, no Payout Event
shall have occurred and be continuing or would result therefrom.
(b) The obligations of the Seller hereunder shall not be assignable
nor shall any Person succeed to the obligations of the Seller hereunder except
for consolidations, mergers, assumptions or transfers in accordance with the
provisions of the foregoing paragraph.
Section 7.03. Limitations on Liability of the Seller. Subject to
--------------------------------------
Sections 7.01 and 7.04, neither the Seller nor any of the directors, officers,
employees or agents of the Seller acting in such capacities shall be under any
liability to the Trust, the Trustee, the Certificateholders, any Series Enhancer
or any other Person for any action taken or for refraining from the taking of
any action in good faith in such capacities pursuant to this Agreement;
provided, however, that this provision shall not protect the Seller or any
-------- -------
such Person against any liability which would otherwise be imposed by reason of
wilful misconduct, bad faith or gross negligence in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. The Seller
and any director, officer, employee or agent of the Seller may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person (other than the Seller) respecting any matters arising hereunder.
Section 7.04. Liabilities. Notwithstanding Sections 7.03, 8.03 and
-----------
8.04, the Seller by entering into this Agreement, and any Holder of the Seller
Certificate by its acceptance thereof, agree to be liable, directly to the
injured party or the Trustee, for the entire amount of any losses, claims,
damages or liabilities (other than those incurred by an Investor
Certificateholder in the capacity of an investor in the Investor Certificates as
a result of the performance of the Receivables, market fluctuations, a shortfall
or failure to make payment under any Series Enhancement or other similar market
or investment risks associated with ownership of the Investor Certificates)
arising out of or
50
based on the arrangement created by this Agreement or the actions of the
Servicer taken pursuant hereto (to the extent Trust Assets remaining
after the Investor Certificateholders and Series Enhancers have been
paid in full are insufficient to pay any such losses, claims, damages or
liabilities) as though this Agreement created a partnership under the Delaware
Revised Uniform Limited Partnership Act in which the Seller and such Holder of
the Seller Certificate were general partners excluding, however, losses, claims,
------------------
damages or liabilities resulting from (i) the gross negligence or wilful
misconduct of any such injured party, and (ii) income taxes imposed on such
injured party arising out of the transaction. In the event of the appointment
of a Successor Servicer, the Successor Servicer will (from its own assets and
not from the assets of the Trust) indemnify and hold harmless the Seller and
such Holder of the Seller Certificate against and from any losses, claims,
damages and liabilities of the Seller or such Holder as described in this
Section arising from the actions or omissions of such Successor Servicer.
Section 7.05. Transferability of Seller Certificates.
--------------------------------------
Notwithstanding anything contained in this Agreement to the contrary, the Seller
shall not transfer or assign any of the Seller Certificates.
Section 7.06. Limit on Certain Holders. Notwithstanding anything
------------------------
contained in this Agreement to the contrary, the Seller shall not allow (i) to
be outstanding over 100 Holders of Certificates or (ii) any Certificate to be
traded on an Established Securities Market, registered under the Securities Act
of 1933 or offered or sold pursuant to Regulation S (17 C.F.R. (S) 230.901
through (S) 230.904 or any successor thereto) if such offering or sale would
have been required to be registered under the Securities Act of 1933 if the
interests so offered or sold had been offered and sold within the United States.
Section 7.07. Seller Indemnification of the Trust, etc. The Seller
----------------------------------------
shall indemnify the Trust, the Investor Certificateholders or the Certificate
Owners for any liabilities, costs or expenses of the Trust, the Investor
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation, any Federal, state, local or foreign income or
franchise taxes (and any interest or penalties with respect thereto or arising
from a failure to comply therewith), other than any tax imposed on or measured
by income, required to be paid by the Trust, the Investor Certificateholders or
the Certificate Owners in connection herewith to any taxing authority.
Indemnification pursuant to this Section shall not be payable from the Trust
Assets. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof
ARTICLE VIII
Other Matters Relating to the Servicer
--------------------------------------
Section 8.01. Liability of the Servicer. The Servicer shall be liable
-------------------------
under this Article only to the extent of the obligations specifically undertaken
by the Servicer in its capacity as Servicer.
Section 8.02. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
----------------------------
into any other corporation, convey or transfer its properties and assets
substantially as an entirety to any Person, or assign its obligations as
Servicer hereunder, unless:
(a) the corporation formed by such consolidation or into which the
Servicer is merged, the Person which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety, or the
Person to whom the Servicer assigns its obligations hereunder, shall
51
be, if the Servicer is not the surviving entity or if the Servicer assigns its
obligations hereunder, a corporation organized and existing under the laws of
the United States of America or any State or the District of Columbia, and, if
the Servicer is not the surviving entity or if the Servicer assigns its
obligations hereunder, such corporation shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the performance of every covenant and obligation of
the Servicer hereunder;
(b) the Servicer has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance, transfer or assignment and such supplemental agreement
comply with this Section, that such supplemental agreement is a valid and
binding obligation of such surviving entity enforceable against such surviving
entity 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 that all
conditions precedent herein provided for relating to such transaction have been
complied with;
(c) either (i) the corporation formed by such consolidation or into
which the Servicer is merged or the Person which acquired by conveyance or
transfer the properties and assets of the Servicer substantially as an entirety
shall be an Eligible Servicer (such determination, taking into account the
experience and operations of the predecessor Servicer) or (ii) upon the
effectiveness of such consolidation, merger, conveyance, transfer or assignment,
a Successor Servicer shall have assumed the obligations of the Servicer in
accordance with this Agreement;
(d) the Servicer shall have delivered notice of such consolidation,
merger, conveyance, transfer or assignment to each Rating Agency; and
(e) both immediately prior and immediately subsequent to such
consolidation, merger, conveyance, transfer or assignment, no Payout Event shall
have occurred and be continuing or would result therefrom.
Section 8.03. Limitation on Liability of the Servicer and Others.
--------------------------------------------------
Except as provided in Section 8.04, neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer in its capacity as
Servicer shall be under any liability to the Trust, the Trustee, the
Certificateholders, any Series Enhancers or any other Person for any action
taken or for refraining from the taking of any action in good faith in its
capacity as Servicer pursuant to this Agreement; provided, however, that this
-------- -------
provision shall not protect the Servicer or any such Person against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
(other than the Servicer) respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties as Servicer in accordance with this
Agreement and which in its reasonable judgment may involve it in any expense or
liability. The Servicer may, in its sole discretion, undertake any such legal
action which it may deem necessary or desirable for the benefit of the
Certificateholders with respect to this Agreement and the rights and duties of
the parties hereto and the interests of the Certificateholders hereunder.
52
Section 8.04. Servicer Indemnification of the Trust and the Trustee.
-----------------------------------------------------
The Servicer shall indemnify and hold harmless the Trust and the Trustee and its
officers, directors, employees and agents, from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any acts or
omissions of the Servicer with respect to the Trust pursuant to this Agreement,
including any judgment, award, settlement, reasonable attorneys' fees and other
costs or expenses incurred in connection with the defense of any action,
proceeding or claim; provided, however, that the Servicer shall not indemnify
-------- -------
the Trustee if such acts, omissions or alleged acts or omissions constitute or
are caused by gross negligence, or willful misconduct by the Trustee; provided
--------
further, that the Servicer shall not indemnify the Trust, the Investor
-------
Certificateholders or the Certificate Owners for any liabilities, costs or
expenses of the Trust with respect to any action taken by the Trustee at the
request of the Investor Certificateholders; provided further, that the Servicer
-------- -------
shall not indemnify the Trust, the Investor Certificateholders or the
Certificate Owners as to any losses, claims or damages incurred by any of them
in their capacities as investors, including, without limitation, losses with
respect to market or investment risks associated with ownership of the Investor
Certificates or losses incurred as a result of Defaulted Receivables; and
provided further, that the Servicer shall not indemnify the Trust, the Investor
-------- -------
Certificateholders or the Certificate Owners for any liabilities, costs or
expenses of the Trust, the Investor Certificateholders or the Certificate Owners
arising under any tax law, including without limitation, any Federal, state,
local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith) required to be paid by the Trust, the
Investor Certificateholders or the Certificate Owners in connection herewith to
any taxing authority. Indemnification pursuant to this Section shall not be
payable from the Trust Assets. The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations
hereof.
Section 8.05. The Servicer Not to Resign. The Servicer shall not
--------------------------
resign from the obligations and duties hereby imposed on it except (x) upon the
determination that (i) the performance of its duties hereunder is no longer
permissible under Requirements of Law (other than the charter and by-laws of the
Servicer) and (ii) there is no reasonable action which the Servicer could take
to make the performance of its duties hereunder permissible under such
Requirements of Law or (y) as may be required, in connection with the Servicer's
consolidation with, or merger into any other corporation or the Servicer's
conveyance or transfer of its properties and assets substantially as an entirety
to any person in each case, in accordance with Section 8.02. Any determination
permitting the resignation of the Servicer pursuant to clause (x) above shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
resignation shall become effective until the Trustee or a Successor Servicer
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 10.02. If within 120 days of the date of the
determination that the Servicer may no longer act as Servicer, and if the
Trustee is unable to appoint a Successor Servicer, the Trustee shall serve as
Successor Servicer. Notwithstanding the foregoing, the Trustee shall, if it is
legally unable to so act, petition a court of competent jurisdiction to appoint
any established institution having a net worth of not less than $50,000,000 and
whose regular business includes the servicing of trade receivables to be the
Successor Servicer hereunder. The Trustee shall give prompt notice of the
appointment of a Successor Servicer to each Rating Agency, each Series Enhancer
and each Series Representative entitled thereto under the terms of the
applicable Supplement.
Section 8.06. Access to Certain Documentation and Information
-----------------------------------------------
Regarding the Receivables. If the Trustee is required, in connection with the
-------------------------
enforcement of the rights of Certificateholders or by applicable statutes or
regulations, to review the documentation regarding the Receivables, the Servicer
shall provide the Trustee access, without charge, to such documentation (a) upon
reasonable request, (b) during normal business hours, (c) subject to the
Servicer's normal security
53
and confidentiality procedures, and (d) at reasonably accessible offices in the
continental United States designated by the Servicer. Nothing in this Section
shall derogate from the obligation of the applicable Originator, the Seller, the
Trustee and the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors and the failure of the Servicer to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this Section.
Section 8.07. Delegation of Duties. In the ordinary course of
--------------------
business, the Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit and
Collection Policy and this Agreement; provided, however, that at least 30 days
-------- -------
prior written notice of such delegation (except for delegations to collection
agencies for the collection of Defaulted Receivables in the ordinary course of
the Servicer's business as conducted on the Trust Closing Date] shall be given
to the Trustee, each Rating Agency, each Series Enhancer and each Series
Representative entitled thereto pursuant to the relevant Supplement. Any such
delegation shall not relieve the Servicer of its liability and responsibility
with respect to its duties hereunder, and shall not constitute a resignation
within the meaning of Section 8.05 hereof.
Section 8.08. Examination of Records. The Seller and the Servicer
----------------------
shall clearly and unambiguously indicate in their respective records that the
Receivables have been conveyed to the Trustee, on behalf of the Trust, pursuant
to this Agreement for the benefit of the Certificateholders. The Seller and the
Servicer shall, prior to the sale or transfer to a third party of any
"receivable" held in its custody, examine its records to determine that such
"receivable" is not a Receivable for purposes of this Agreement.
ARTICLE IX
Pay-Out Events
--------------
Section 9.01. Pay-Out Events. If any one of the following events
--------------
(each, a "Pay-Out Event") shall occur and be continuing:
-------------
(a) The Servicer (if Mail-Well I Corporation or any of its
Affiliates) or the Seller (i) shall fail to perform or observe any term,
covenant or agreement under this Agreement, any Supplement or the Purchase
Agreement (other than as referred to in clause (ii) of this subsection (a)) and
such failure shall remain unremedied for ten Business Days or (ii) shall fail to
make when due any payment or deposit to be made by it under this Agreement, any
Supplement or the Purchase Agreement provided, that if such failure is a failure
--------
to pay Interest or Fees, such failure shall remain unremedied for one Business
Day after the due date for such Interest or Fees; or
(b) The Seller or any Originator shall fail to transfer to the
Trust when requested any rights, pursuant to this Agreement, which the Seller or
such Originator then has as Servicer; or
(c) Any representation or warranty made or deemed made by the
Seller or the Servicer or any Affiliate thereof (or any of their respective
officers) under or in connection with this Agreement, any Supplement, the
Purchase Agreement or any document related hereto or thereto or any information
or report delivered by the Seller or the Servicer pursuant to this Agreement,
any Supplement, the Purchase Agreement or any document related hereto or thereto
shall prove to have been incorrect or untrue in any material respect when made
or deemed made or delivered; or
54
(d) The Seller or any Originator shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement, any Supplement or
the Purchase Agreement on its part to be performed or observed and any such
failure shall remain unremedied for 10 days after written notice thereof shall
have been given to the Seller by the Trustee, the Series Representative or the
Holders of 50% of the Certificates; or
(e) The Seller or any Originator shall fail to pay any principal of
or premium or interest on any of its Indebtedness which is outstanding in a
principal amount of at least $5,000,000 in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness; or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such Indebtedness and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or any such Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to repay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the stated
maturity thereof; or
(f) Any purchase or any reinvestment pursuant to this Agreement shall
for any reason (other than pursuant to the terms hereof) cease to create a valid
and perfected first priority ownership interest to the extent of the pertinent
Receivable and the Related Security and Collections with respect thereto; or the
security interest created pursuant to Section 2.01 shall for any reason cease to
be a valid first priority security interest in the collateral security referred
to in that section; or
(g) A termination event specified in Section 7.01 of the Purchase
Agreement shall occur, or the Purchase Agreement shall cease to be in full force
and effect; or
(h) All of the outstanding capital stock of the Seller shall cease to
be owned, directly or indirectly, by Mail-Well I Corporation; or
(i) The Seller is determined by the SEC or other regulatory body to
be an investment company within the meaning of the Investment Company Act of
1940, as amended; or
(j) As of any date, the Dilution Ratio shall exceed 5%; or
(k) As of any date, the average Default Ratio for the preceding three
Monthly Periods shall exceed 8%; or
(l) As of each Distribution Date, the sum of the Net Receivables Pool
Balance as of the end of the Monthly Period ending prior to such Distribution
Date plus amounts on deposit in the Special Funding Account on such Distribution
Date shall be less than 100% of the sum of the aggregate outstanding Invested
Amount of all Series; or
(m) An Insolvency Event shall occur with respect to the Seller, the
Holder of the Seller Certificate or Mail-Well I Corporation;
(n) The Trust shall become an "investment company" within the meaning
of the Investment Company Act; or
55
(o) The Trust is at any time treated as an association taxable as a
corporation for federal income tax purposes; or
(p) Any event shall occur which adversely affects the
characterization of the Investor Certificates as debt for Federal income tax
purposes;
then a Pay-Out Event shall occur with respect to all Series without any notice
or other action on the part of the Trustee or the Investor Certificateholders,
immediately upon the occurrence of such event.
Section 9.02. Rights upon the Occurrence of Certain Events. (a) If
--------------------------------------------
an Insolvency Event occurs with respect to the Seller, the Holder of the Seller
Certificate or any Originator, the Seller shall on the day any such Insolvency
Event occurs (the "Appointment Date"), immediately cease to transfer
----------------
Receivables to the Trust and shall promptly give notice to the Trustee thereof.
Notwithstanding any cessation of the transfer to the Trust of additional
Receivables, Receivables transferred to the Trust prior to the occurrence of
such Insolvency Event and Collections in respect of such Receivables, whenever
created, accrued in respect of such Receivables, shall continue to be a part of
the Trust. Upon the Appointment Date this Agreement and the Trust shall be
deemed to have terminated, subject to the liquidation, winding up and
dissolution procedures described below. Within 15 days of the Appointment Date,
the Trustee shall (i) publish a notice in an Authorized Newspaper that the Trust
has terminated and that the Trustee intends to sell, dispose of or otherwise
liquidate the Receivables on commercially reasonable terms and in a commercially
reasonable manner and (ii) send written notice to Investor Certificateholders
and each Series Enhancer or other Person entitled thereto pursuant to the
relevant Supplement describing the provisions of this Section and requesting
instructions from such Holders. Unless the Trustee shall have received
instructions within 90 days from the date notice pursuant to clause (i) above is
first published, from (x) Holders of Investor Certificates evidencing more than
50% of the aggregate unpaid principal amount of each Series or, with respect to
any Series with two or more Classes, of each Class, and (y) to the extent
provided in the relevant Supplement, the Series Enhancer with respect to such
Series, to the effect that such Persons disapprove of the liquidation of the
Receivables and wish to continue having Receivables transferred to the Trust as
before such Insolvency Event or violation, the Trustee shall promptly sell,
dispose of or otherwise liquidate the Receivables in a commercially reasonable
manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids. The Trustee may obtain a prior determination
from the conservator, receiver or liquidator, as the case may be, that the terms
and manner of any proposed sale, disposition or liquidation are commercially
reasonable. The provisions of Sections 9.01 and 9.02 shall not be deemed to be
mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to paragraph (a) above ("Insolvency Proceeds") shall be
-------------------
immediately deposited in the Collection Account. The Insolvency Proceeds shall
be allocated and distributed to Investor Certificateholders in accordance with
Article IV and the terms of each Supplement.
56
ARTICLE X
Servicer Defaults
-----------------
Section 10.01 Servicer Defaults. (a) If any one of the following
-----------------
events (each a "Servicer Default") shall occur and be continuing:
----------------
(i) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the Trustee
pursuant to the terms of this Agreement or any Supplement on or before
the date occurring five Business Days after the date such payment,
transfer or deposit or such instruction or notice is required to be
made or given, as the case may be, under the terms of this Agreement
or any Supplement;
(ii) failure on the part of the Servicer to duly observe or
perform any other covenants or agreements of the Servicer set forth in
this Agreement or any Supplement which continues unremedied for a
period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer by the Trustee, or to the Servicer and the Trustee by
Holders of Investor Certificates evidencing not less than 50% of the
aggregate unpaid principal amount of all Investor Certificates (or,
with respect to any such failure that does not relate to all Series,
50% of the aggregate unpaid principal amount of all Series to which
such failure relates); or the Servicer shall delegate its duties under
this Agreement, except as permitted by Sections 8.02 and 8.07;
(iii) any representation, warranty or certification made by
the Servicer in this Agreement or any Supplement or in any certificate
delivered pursuant to this Agreement or any Supplement shall prove to
have been incorrect when made which continues to be incorrect for a
period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Investor Certificates evidencing not less than 50% of the
aggregate unpaid principal amount of all Investor Certificates (or,
with respect to any such representation, warranty or certification
that does not relate to all Series, 50% of the aggregate unpaid
principal amount of all Series to which such representation, warranty
or certification relates);
(iv) an Insolvency Event shall occur with respect to the
Servicer; or
(v) if the Servicer (if Mail-Well I Corporation) permits the
Consolidated Fixed Charge Coverage Ratio, calculated as of the end of
each fiscal quarter of the Servicer commencing with the fiscal quarter
ended December 31, 1996, for the four fiscal quarters of the Servicer
then ended to be less than 1.10 to 1.00.
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, each Series Representative and the Liquidity Agent, by notice given to
the Servicer (and to the Trustee and any Series Enhancer entitled thereto
pursuant to the relevant Supplement if given by the Investor Certificateholders)
(a "Termination Notice"), may terminate all the rights and obligations of the
------------------
Servicer as Servicer under this Agreement and in and to the Receivables and the
proceeds thereof.
57
(b) After receipt by the Servicer of a Termination Notice, and on
the date that a Successor Servicer shall have been appointed by the Trustee
pursuant to Section 10.02, all authority and power of the Servicer under this
Agreement shall pass to and be vested in the Successor Servicer; and, without
limitation, the Trustee is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such transfer of servicing rights. The Servicer agrees to
cooperate with the Trustee and the Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder including, without limitation, the transfer to the Successor
Servicer of all authority of the Servicer to service the Receivables provided
for under this Agreement, including, without limitation, all authority over all
Collections which shall on the date of transfer be held by the Servicer for
deposit, or which have been deposited by the Servicer, in the Collection Account
or the Canadian Collection Account, or which shall thereafter be received with
respect to the Receivables. The Servicer shall promptly transfer its electronic
records relating to the Receivables 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 in the manner
and at such times as the Successor Servicer shall reasonably request. To the
extent that compliance with this Section 10.01 shall require the Servicer to
disclose to the Successor Servicer information of any kind which the Servicer
reasonably deems to be confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interests.
Section 10.02. Trustee to Act: Appointment of Successor. (a) On and
-----------------------------------------
after the receipt by the Servicer of a Termination Notice pursuant to Section
10.01, the Servicer shall continue to perform all servicing functions under this
Agreement until the date specified in the Termination Notice or otherwise
specified by the Trustee or until a date mutually agreed upon by the Servicer
and Trustee. The Trustee shall as promptly as possible after the giving of a
Termination Notice appoint an Eligible Servicer as a successor servicer (the
"Successor Servicer"), and such Successor Servicer shall accept its appointment
-------------------
by a written assumption in a form acceptable to the Trustee. The Trustee may
obtain bids from any potential successor servicer. If (i) the Trustee is unable
to obtain any bids from any potential successor servicer, or if no such bid is
acceptable to each Series Representative, and (ii) the Servicer delivers to the
Trustee an Officer's Certificate to the effect that it cannot in good faith cure
the Servicer Default which gave rise to a transfer of servicing, and if the
Trustee is legally unable to act as Successor Servicer, then the Trustee shall
notify each Investor Certificateholder, each Series Representative and any
Series Enhancer of the proposed sale of the Receivables and shall provide each
Investor Certificateholder and Series Enhancer an opportunity to bid on the
Receivables and shall offer the Seller the right of first refusal to purchase
the Receivables on terms equivalent to the best purchase offer as determined by
the Trustee, but in no event less than an amount equal to the aggregate Invested
Amount of all Series on the date of such purchase plus all interest accrued but
----
unpaid on all of the outstanding Investor Certificates at the applicable
Certificate Rate, and all fees and expenses under any Supplement due but unpaid
through the date of such purchase. The proceeds of such sale shall be deposited
in the Collection Account, as provided in the related Supplement, for
distribution to the Investor Certificateholders of each outstanding Series and
pursuant to each Supplement. Notwithstanding the foregoing, the Trustee may
petition a court of competent jurisdiction to appoint any established
institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of receivables as the Successor Servicer
hereunder. The Trustee shall give
58
prompt notice of the appointment of a Successor Servicer to each Rating Agency,
each Series Enhancer and each Series Representative entitled thereto pursuant to
the applicable Supplement.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities (except for liabilities arising during the period of time when
the prior Servicer was performing and acting as Servicer) relating thereto
placed on the Servicer by the terms and provisions hereof, and all references in
this Agreement to the Servicer shall be deemed to refer to the Successor
Servicer.
(c) In connection with any Termination Notice, the Trustee will
review any bids which it obtains from Eligible Servicers and shall be permitted
to, upon receiving the written consent of the Series Representative, (i) appoint
any Eligible Servicer submitting such a bid as a Successor Servicer and (ii)
make such arrangements for the compensation of the Successor Servicer out of
Collections as it and such Successor Servicer shall agree; provided, however,
-------- -------
that no such monthly compensation paid out of Collections shall be in excess of
such aggregate Servicing Fees. The Holder of the Seller Certificate agrees
that, if Mail-Well I Corporation (or any Successor Servicer) is terminated as
Servicer hereunder, the portion of the Collections in respect of Receivables
that the Holder of the Seller Certificate is entitled to receive pursuant to
this Agreement or any Supplement shall be reduced by an amount sufficient to pay
the Holder of the Seller Certificate share (determined by reference to the
Supplements with respect to any outstanding Series) of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.01 and shall pass to and be vested in the Seller
and, without limitation, the Seller is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Successor Servicer agrees to cooperate with
the Seller in effecting the termination of the responsibilities and rights of
the Successor Servicer to conduct servicing on the Receivables. The Successor
Servicer shall transfer its electronic records relating to the Receivables to
the Seller in such electronic form as the Seller may reasonably request and
shall transfer all other records, correspondence and documents to the Seller in
the manner and at such times as the Seller shall reasonably request. To the
extent that compliance with this Section 10.02 shall require the Successor
Servicer to disclose to the Seller information of any kind which the Successor
Servicer deems to be confidential, the Seller shall be required to enter into
such customary licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
Section 10.03. Notification to Certificateholders. Within one
----------------------------------
Business Day after the Servicer becomes aware of any Servicer Default, the
Servicer shall give notice thereof to the Trustee, each Rating Agency, each
Series Enhancer and each Series Representative entitled thereto pursuant to the
relevant Supplement and the Trustee shall give notice to the Investor
Certificateholders. Upon any termination or appointment of a Successor Servicer
pursuant to this Article, the Trustee shall give prompt notice thereof to the
Investor Certificateholders.
59
ARTICLE XI
The Trustee
-----------
Section 11.01. Duties of Trustee. (a) The Trustee, prior to the
-----------------
occurrence of a Servicer Default and after the curing of all Servicer Defaults
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If a Servicer Default has
occurred (which has not been cured or waived) the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and use the same degree of
care and skill in its exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
(b) Subject to Section 11.01(a), no provision of this Agreement shall
be construed to relieve the Trustee from liability for its own grossly negligent
action, its own grossly negligent failure to act or its own willful misconduct;
provided, however, that:
-------- -------
(i) the Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee
was grossly negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any
such action that does not relate to all Series, 50% of the aggregate
unpaid principal amount of the Investor Certificates of all Series to
which such action relates) relating to the administration of the Trust
under the terms of this Agreement, including, without limitation, the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any
failure or breach by the Servicer to comply with the obligations of
the Servicer referred to in clauses (i), (ii) and (iii) of Section
10.01(a) unless a Responsible Officer of the Trustee obtains actual
knowledge of such failure or breach or the Trustee receives written
notice of such failure or breach from the Servicer, any Holders of
Investor Certificates evidencing not less than 10% of the aggregate
unpaid principal amount of all Investor Certificates (or, with respect
to any such failure or breach that does not relate to all Series, 10%
of the aggregate unpaid principal amount of all Investor Certificates
of all Series to which such failure or breach relates) or the Series
Enhancers for all Series to which such failure or breach relates.
(c) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers hereunder or
thereunder and none of the provisions contained in this Agreement shall in any
event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
except during such time, if any, as the Trustee
60
shall be the successor to, and be vested with the rights, duties, powers and
privileges of, the Servicer in accordance with the terms of this Agreement.
(d) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to (i) impair the interests of
the Trust in any Receivable now existing or hereafter created or (ii) impair the
value of any Receivable now existing or hereafter created.
(e) The Trustee shall have no power to vary the corpus of the Trust,
except as expressly provided in this Agreement.
(f) 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 required to be performed by the Paying Agent or the Transfer Agent
and Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated as soon as possible upon actual knowledge of a Responsible Officer
thereof and receipt of appropriate records, if any, to perform such obligation,
duty or agreement in the manner so required.
(g) If the Seller has agreed to transfer any of its receivables
(other than the Receivables) to another Person, upon the written request of the
Seller, the Trustee will enter into such intercreditor agreements with the
transferee of such receivables as are customary and necessary to separately
identify the rights of the Trust and such other Person in the Seller's
receivables; provided that the Trustee shall not be required to enter into any
--------
intercreditor agreement which could adversely affect the interests of the
Certificateholders and, upon the request of the Trustee, the Seller will deliver
an Opinion of Counsel on any matters relating to such intercreditor agreement,
reasonably requested by the Trustee.
Section 11.02. Certain Matters Affecting the Trustee. Except as
-------------------------------------
otherwise provided in Section 11.01:
(a) the Trustee may conclusively rely on and shall be protected in
acting on, or in refraining from acting in accord with, any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably 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;
(b) the Trustee may consult with counsel, and any advice of such
counsel or Opinion of Counsel shall be full and complete authorization and
protection from any liability in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Enhancement Agreement, or
to institute, conduct or defend any litigation hereunder or thereunder or in
relation to this Agreement or any Enhancement Agreement, at the request, order
or direction of any of the Certificateholders, pursuant to the provisions of
this Agreement or any Enhancement Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the obligations,
upon the occurrence of any Servicer Default (which 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 its
61
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be required 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 Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid principal
amount of all Investor Certificates (or with respect to any such matters that do
not relate to all Series, 50% of the aggregate unpaid principal amount of the
Investor Certificates of all Series to which such matters relate);
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or custodian
appointed with due care by it hereunder; and
(g) except as may be required by subsection 11.01(a) hereof, the
Trustee shall not be required to make any initial or periodic examination of any
documents or records related to the Receivables for the purpose of establishing
the presence or absence of defects, the compliance by the Seller with its
representations and warranties or for any other purpose.
Section 11.03. Trustee Not Liable for Recitals in Certificates. The
-----------------------------------------------
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or any
Supplement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. The Trustee
shall not be accountable for the use or application by the Seller of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Seller or the Holder of the Seller
Certificate in respect of the Receivables or deposited in or withdrawn from the
Collection Account, Canadian Collection Account, any Series Accounts or any
other accounts hereafter established to effectuate the transactions contemplated
by this Agreement and in accordance with the terms of this Agreement.
Section 11.04. Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Certificates
and may otherwise deal, and transact banking business, with the Servicer and the
Seller with the same rights as it would have if it were not the Trustee.
Section 11.05. The Seller To Pay Trustee's Fees and Expenses. (a) The
---------------------------------------------
Seller covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (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 the execution of the trust
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and the Seller will pay or reimburse the
Trustee (without reimbursement from the Collection Account, Canadian Collection
Account or otherwise) upon its request for all reasonable expenses,
62
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement or any Enhancement Agreement (including
the reasonable fees and expenses of its agents, any co-trustee and counsel)
except any such expense, disbursement or advance as may arise from its own gross
negligence or wilful misconduct and except as provided in the following
sentence. If the Trustee is appointed Successor Servicer pursuant to Section
10.02, the provisions of this Section 11.05 shall not apply to expenses,
disbursements and advances made or incurred by the Trustee in its capacity as
Successor Servicer.
(b) The obligations of the Seller and the Servicer under Sections
7.04 and 8.04 respectively and this Section 11.05 shall survive the termination
of the Trust and the resignation or removal of the Trustee.
(c) In the case of a sale, disposition or liquidation of the
Receivables pursuant to Section 9.02(a), the Trustee shall be entitled to retain
from any amounts distributable to the Seller pursuant to Article IV or any
Supplement from the Insolvency Proceeds an amount equal to the Trustee's
expenses in connection with such sale, disposition or liquidation and the
performance by the Trustee of the procedures set forth in Section 9.02(a).
Section 11.06. Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times (a) be a bank or a corporation organized and doing
business under the laws of the United States or any state thereof that qualifies
as a "bank" (as defined in the Investment Company Act), (b) be authorized under
applicable law to exercise corporate trust powers, (c) have a combined capital
and surplus of at least $50,000,000, (d) be subject to supervision or
examination by Federal or state authority, and (e) have any credit or deposit
rating required by any Rating Agency. If such bank 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 11.06, the combined capital and surplus of such bank shall be
conclusively deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. In no event shall any "affiliate"
(as defined in Rule 405 under the Act) of the Trust or any Person involved in
the organization or operation of the Trust be eligible to act as Trustee, nor
shall any Person that offers or actually does provide any credit or credit
enhancement to the Trust be eligible to act as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.07.
Section 11.07. Resignation or Removal of Trustee. (a) The Trustee
---------------------------------
may at any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Seller and the Servicer. Upon receiving such
notice of resignation, the Seller shall (i) promptly appoint a successor trustee
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee and
(ii) provide written notice to each Rating Agency of such resignation. If no
successor trustee shall have been so appointed and have accepted within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 and shall fail to resign after
written request therefor by the Servicer or the Seller, or if at any time the
Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, the Seller may, but shall not be required to, remove the Trustee
and
63
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.08 and any liability of the Trustee arising hereunder
shall survive such appointment of a successor trustee.
Section 11.08. Successor Trustee. (a) Any successor trustee appointed
-----------------
as provided in Section 11.07 shall execute, acknowledge and deliver to the
Seller, to the Servicer and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor trustee all documents and statements held by it
hereunder, and the Seller and the predecessor Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
(b) No successor trustee shall or shall be eligible to accept
appointment as provided in this Section 11.08 unless at the time of such
acceptance such successor trustee shall be eligible under the provisions of
Section 11.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section, such successor trustee shall provide notice of such
succession hereunder to all Investor Certificateholders and the Servicer shall
provide such notice to each Rating Agency and any Series Enhancer entitled
thereto pursuant to the relevant Supplement.
Section 11.09. Merger or Consolidation of Trustee. Any Person into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 11.10. Appointment of Co-Trustee or Separate Trustee. (a)
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust may at the time be located, the Trustee shall have the power and
may execute and deliver all instruments to appoint one or more Persons to act as
a co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Certificateholders, such title to the Trust, or any
part thereof, and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable; provided, however, that the Trustee shall exercise due
-------- -------
care in the appointment of any co-trustee. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 11.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 11.08.
64
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-
trustee jointly (it being understood that such separate trustee or co-
trustee is not authorized to act separately without the Trustee
joining in such act) except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder) the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 11.11. Tax Return. In the event the Trust shall be required
----------
to file tax returns, the Servicer shall prepare or shall cause to be prepared
any tax returns required to be filed by the Trust and shall remit such returns
to the Trustee for signature at least five Business Days before such returns are
due to be filed; the Trustee shall promptly, but in any event within two
Business Days of receipt, sign such returns and deliver such returns after
signature to the Servicer and such returns shall be filed by the Servicer. The
Servicer in accordance with the terms of each Supplement shall also prepare or
shall cause to be prepared all tax information required by law to be distributed
to Investor Certificateholders. The Trustee upon request, will furnish the
Servicer with all such information known to the Trustee as may be reasonably
required in connection with the preparation of all tax returns of the Trust. In
no event shall the Trustee or the Servicer (except as provided in Sections 7.04
or 8.04) be liable for any liabilities, costs or expenses of the Trust or the
Investor Certificateholders
65
arising under any tax law, including without limitation Federal, state, local or
foreign income or excise taxes or any other tax imposed or measured by income
(or any interest or penalty with respect thereto or arising from a failure to
comply therewith).
Section 11.12. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Certificates. All rights of action and claims under this Agreement or the
------------
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
Section 11.13. Suits for Enforcement. If a Servicer Default shall
---------------------
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Sections 10.01 and 11.14, proceed to protect and enforce its
rights and the rights of the Certificateholders under this Agreement by a suit,
action or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Trustee or the Certificateholders.
Section 11.14. Rights of Certificateholders to Direct Trustee.
----------------------------------------------
Holders of Investor Certificates evidencing more than 50% of the aggregate
unpaid principal amount of all Investor Certificates (or, with respect to any
remedy, trust or power that does not relate to all Series, 50% of the aggregate
unpaid principal amount of the Investor Certificates of all Series to which such
remedy, trust or power relates) shall have the right to direct the Trustee with
respect to all matters relating to the administration of the Trust under the
terms of this Agreement, including, without limitation, the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee relating to such
proceeding; provided, however, that, subject to Section 11.01, the Trustee shall
-------- -------
have the right to decline to follow any such direction if the Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Trustee in good faith shall, by a Responsible Officer or
Responsible Officers of the Trustee, determine that the proceedings so directed
would be illegal or involve it in personal liability or be unduly prejudicial to
the rights of Certificateholders not parties to such direction; and provided
--------
further that nothing in this Agreement shall impair the right of the Trustee to
-------
take any action deemed proper by the Trustee and which is not inconsistent with
such direction.
Section 11.15. Representations and Warranties of Trustee. The Trustee
-----------------------------------------
represents and warrants as of each Closing Date that:
(a) the Trustee is a national banking association organized, existing
and in good standing under the laws of the United States;
(b) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement and each Supplement, and has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement and each Supplement; and
(c) this Agreement and each Supplement has been duly executed and
delivered by the Trustee and is a binding obligation of the Trustee enforceable
against the Trustee in accordance
66
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
Section 11.16. Maintenance of Office or Agency. The Trustee will
-------------------------------
maintain at its expense an office or agency (the "Corporate Trust Office")
----------------------
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served in the City of New York. The Corporate Trust
Office shall initially be located at Norwest Trust Company, ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Trustee will give prompt notice to the Servicer
and to Investor Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
Section 11.17. Confidentiality. Information provided by any
---------------
Originator or the Seller to the Trustee related to the transactions effected
hereunder, including all information related to the Obligors with respect to the
Receivables, and any computer software provided to the Trustee in connection
with the transactions effected hereunder or under any Supplement, in each case
whether in the form of documents, reports, lists, tapes, discs or any other
form, shall be "Confidential Information". The Trustee and its agents,
------------------------
representatives or employees shall at all times maintain the confidentiality of
all Confidential Information and shall not, without the prior written consent of
the applicable Originator or the Seller, as applicable, disclose to third
parties (including Certificateholders) or use such information, in any manner
whatsoever, in whole or in part, except as expressly permitted under this
Agreement or under any Supplement or as required to fulfill an obligation of the
Trustee under this Agreement or under any Supplement, in which case such
Confidential Information shall be revealed only to the extent expressly
permitted or only to the Trustee's agents, representatives and employees who
need to know such Confidential Information to the extent required for the
purpose of fulfilling an obligation of the Trustee under this Agreement or under
any Supplement. Notwithstanding the above, Confidential Information may be
disclosed to the extent required by law or legal process, provided that the
Trustee gives prompt written notice to the applicable Originator or the Seller
(unless such notice is prohibited under any Requirement of Law), as applicable,
of the nature and scope of such disclosure, so that the Seller may request a
protective order or other appropriate remedy.
ARTICLE XII
Termination
-----------
Section 12.01. Termination of Trust. The Trust and the respective
--------------------
obligations and responsibilities of the Seller, the Servicer and the Trustee
created hereby (other than the obligation of the Trustee to make payments to
Investor Certificateholders as hereinafter set forth) shall terminate, except
with respect to the duties described in Sections 7.04, 8.04 and 12.02(b), upon
the earliest of (i) November 15, 2002, (ii) the day following the Distribution
Date on which the Invested Amount for each Series is zero (provided that the
Seller has delivered a written notice to the Trustee electing to terminate the
Trust) and (iii) the Appointment Date.
Section 12.02. Final Distribution. (a) The Servicer shall give the
------------------
Trustee at least 15 days prior notice of the Distribution Date on which the
Investor Certificateholders of any Series or Class may surrender their Investor
Certificates for payment of the final distribution on and cancellation of such
Investor Certificates (or, in the event of a final distribution resulting from
the application of Section 2.06 or 9.02, notice of such Distribution Date
promptly after the Servicer has determined that a
67
final distribution will occur, if such determination is made less than 15 days
prior to such Distribution Date). Such notice shall be accompanied by an
Officer's Certificate setting forth the information specified in Section 3.05
covering the period during the then current calendar year through the date of
such notice. Not later than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable to Investor
Certificateholders, the Trustee shall provide notice to Investor
Certificateholders of such Series or Class specifying (i) the date upon which
final payment of such Series or Class will be made upon presentation and
surrender of Investor Certificates of such Series or Class at the office or
offices therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Investor Certificates at the office or offices therein specified (which, in the
case of Bearer Certificates, shall be outside the United States). The Trustee
shall give such notice to the Transfer Agent and Registrar and the Paying Agent
at the time such notice is given to Investor Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholder of any Series or Class (or the termination of the Trust),
except as otherwise provided in this paragraph, all funds then on deposit in the
Lockbox Accounts, the Concentration Account, the Collection Account, the
Canadian Accounts, the Canadian Collection Account, the Special Funding Account
and any Series Account allocated to such Investor Certificateholders shall
continue to be held in trust for the benefit of such Investor Certificateholders
and the Paying Agent or the Trustee shall pay such funds to such Investor
Certificateholders upon surrender of their Investor Certificates (and any excess
shall be paid in accordance with the terms of any relevant Enhancement
Agreement). In the event that all such Investor Certificateholders shall not
surrender their Investor Certificates for cancellation within six months after
the date specified in the notice from the Trustee described in paragraph (a),
the Trustee shall give a second notice to the remaining such Investor
Certificateholders to surrender their Investor Certificates for cancellation and
receive the final distribution with respect thereto (which surrender and
payment, in the case of Bearer Certificates, shall be outside the United
States). If within one year after the second notice all such Investor
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining such Investor Certificateholders concerning surrender of
their Investor Certificates, and the cost thereof shall be paid out of the funds
in the Collection Account (and to the extent that such costs exceed the funds
therein, the Canadian Collection Account) are insufficient or any Series Account
held for the benefit of such Investor Certificateholders. The Trustee and the
Paying Agent shall pay to the Seller any moneys held by them for the payment of
principal or interest that remains unclaimed for two years. After payment to
the Seller, Investor Certificateholders entitled to the money must look to the
Seller for payment as general creditors unless an applicable abandoned property
law designates another Person.
(c) In the event that the Invested Amount with respect to any Series
is greater than zero on its Series Termination Date or such earlier date as is
specified in the related Supplement (after giving effect to deposits and
distributions otherwise to be made on such date), the Trustee will sell or cause
to be sold on such Series Termination Date, in accordance with the procedures
and subject to the conditions described in such Supplement, Receivables (or
interests therein) in an amount equal to the Invested Amount with respect to
such Series on such date (after giving effect to such deposits and
distributions; provided, however, that in no event shall such amount exceed such
-------- -------
Series' allocable share of Receivables on such Series Termination Date). The
proceeds from any such sale shall be allocated and distributed in accordance
with the terms of the applicable Supplement.
Section 12.03. Seller's Termination Rights. Subject to Section
---------------------------
12.02(b), upon the termination of the Trust pursuant to Section 12.01 and the
surrender of the Seller Certificate, the
68
Trustee shall sell, assign and convey to the Seller or its designee, without
recourse, representation or warranty, all right, title and interest of the Trust
in the Receivables, whether then existing or thereafter created, all moneys due
or to become due and all amounts received with respect thereto and all proceeds
thereof. The Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably requested by
the Seller to vest in the Seller or its designee all right, title and interest
which the Trust had in the Receivables and such other related assets.
Section 12.04. Defeasance. Notwithstanding anything to the contrary in
----------
this Agreement or any Supplement:
(a) The Seller may at its option be discharged from its obligations
hereunder with respect to any Series or all outstanding Series (the "Defeased
--------
Series") on the date the applicable conditions set forth in Section 12.04(c) are
------
satisfied ("Defeasance"); provided, however, that the following rights,
---------- -------- -------
obligations, powers, duties and immunities shall survive with respect to the
Defeased Series until otherwise terminated or discharged hereunder: (i) the
rights of Holders of Investor Certificates of the Defeased Series to receive,
solely from the trust fund provided for in Section 12.04(c), payments in respect
of principal of and interest on such Investor Certificates when such payments
are due; (ii) the Seller's obligations with respect to such Certificates under
Sections 6.04 and 6.05; (iii) the rights, powers, trusts, duties and immunities
of the Trustee, the Paying Agent and the Transfer Agent and Registrar hereunder;
and (iv) this Section 12.04.
(b) Subject to Section 12.04(c), the Seller at its option may cause
Collections allocated to the Defeased Series and available to purchase
additional Receivables to be applied to purchase Eligible Investments rather
than additional Receivables.
(c) The following shall be the conditions to Defeasance under
Section 12.04(a): (i) the Seller irrevocably shall have deposited or assigned,
or caused to be deposited or assigned, with the Trustee, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the Trustee,
as trust funds in trust for making the payments described below, (A) dollars in
an amount, (B) Eligible Investments which through the scheduled payment of
principal and interest in respect thereof will provide, not later than the due
date of payment thereon, money in an amount, (C) interest rate swaps, caps or
other hedging agreements from an Eligible Institution, or (D) a combination
thereof, in each case sufficient to pay and discharge, and, which shall be
applied by the Trustee to pay and discharge, all remaining scheduled interest
and principal payments on all outstanding Investor Certificates of the Defeased
Series on the dates scheduled for such payments in this Agreement and the
applicable Supplements and all amounts owing to the Series Enhancers with
respect to the Defeased Series; (ii) prior to its first exercise of its right
pursuant to this Section 12.04 with respect to a Defeased Series to substitute
money or Eligible Investments for Receivables, the Seller shall have delivered
to the Trustee a Tax Opinion with respect to such deposit and termination of
obligations and an Opinion of Counsel to the effect that such deposit and
termination of obligations will not result in the Trust being required to
register as an "investment company" within the meaning of the Investment Company
Act; (iii) the Seller shall have delivered to the Trustee and each Series
Enhancer entitled thereto pursuant to the relevant Supplement an Officer's
Certificate of the Seller stating that the Seller reasonably believes that such
deposit and termination of obligations will not, based on the facts known to
such officer at the time of such certification, then cause a Pay-Out Event or
any event that, with the giving of notice or the lapse of time, would constitute
a Pay-Out Event to occur with respect to any Series; and (iv) the Rating Agency
Condition has been satisfied.
69
ARTICLE XIII
Miscellaneous Provisions
------------------------
Section 13.01. Amendment; Waiver of Past Defaults. (a) This Agreement
----------------------------------
or any Supplement may be amended from time to time (including, without
limitation, in connection with (i) adding covenants, restrictions or conditions
of the Seller, such further covenants, restrictions or conditions as its Board
of Directors and the Trustee shall consider to be for the benefit or protection
of the Investor Certificateholders, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional covenants,
restrictions or conditions a default or Pay-Out Event permitting the enforcement
of all or any of the several remedies provided in this Agreement as herein set
forth; provided, however, that in respect of any such additional covenant,
-------- -------
restriction or condition such amendment may provide for a particular period of
grace after default or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such default,
(ii) curing any ambiguity or correcting or supplementing any provision contained
herein or in any Supplement which may be defective or inconsistent with any
other provision contained herein or in any Supplement or to surrender any right
or power conferred upon the Seller, (iii) the assumption by another entity, in
accordance with the provisions of this Agreement, of the Seller's obligations
hereunder, or (iv) the provision of additional Series Enhancement for the
benefit of Certificateholders of any Series) by the Servicer, the Seller and the
Trustee without the consent of any of the Certificateholders, provided that (x)
the Seller shall have delivered to the Trustee an Officer's Certificate to the
effect that the Seller reasonably believes that such action shall not adversely
affect in any material respect the interests of any Investor Certificateholder
and (y) the Rating Agency Condition shall have been satisfied with respect to
any such amendment.
(b) This Agreement or any Supplement may also be amended from time
to time by the Servicer, the Seller, each Liquidity Agent, each Series
Representative and the Trustee, with the consent of the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid principal amount
of the Investor Certificates of all adversely affected Series, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or any Supplement or of modifying in any manner the
rights of the Certificateholders; provided, however, that no such amendment
-------- -------
shall (i) reduce in any manner the amount of or delay the timing of any
distributions to be made to Investor Certificateholders or deposits of amounts
to be so distributed or the amount available under any Series Enhancement
without the consent of each affected Certificateholder (provided that any
amendment of the terms of a Pay-Out Event shall not be deemed to be within the
scope of this clause (i)), (ii) change the definition of or the manner of
calculating the interest or priority of any Investor Certificateholder without
the consent of each affected Investor Certificateholder, (iii) reduce the
aforesaid percentage required to consent to any such amendment without the
consent of each Investor Certificateholder or (iv) adversely affect the rating
of any Series or Class by each Rating Agency without the consent of all the
Holders of Investor Certificates of such Series or Class. Any amendment to be
effected pursuant to this paragraph shall be deemed to affect all outstanding
Series adversely, other than any Series with respect to which such action shall
not, as evidenced by an Opinion of Counsel for the Seller, addressed and
delivered to the Trustee, each Liquidity Agent and Series Representative,
adversely affect in any material respect the interests of any Investor
Certificateholder of such Series. The Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Trustee's rights, duties or
immunities under this Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), the Trustee shall furnish
notification of the substance of such
70
amendment to each Investor Certificateholder, and the Servicer shall furnish
notification of the substance of such amendment to each Rating Agency, each
Series Enhancer and each Series Representative entitled thereto pursuant to the
relevant Supplement.
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(e) Any Supplement executed solely in accordance with the
provisions of Section 6.03 shall not be considered an amendment to this
Agreement for the purposes of this Section.
(f) The Holders of Investor Certificates evidencing more than 50%
of the aggregate unpaid principal amount of the Investor Certificates of each
Series, the Liquidity Agent and the Series Representative, or, with respect to
any Series with two or more Classes, of each such Class (or, with respect to any
default that does not relate to all Series, 50% of the aggregate unpaid
principal amount of the Investor Certificates of each Series to which such
default relates or, with respect to any such Series with two or more Classes, of
each Class) each Liquidity Agent and Series Representative may, waive any
default by the Seller or the Servicer in the performance of their obligations
hereunder and its consequences, except the failure to make any distributions
required to be made to Investor Certificateholders or to make any required
deposits of any amounts to be so distributed. Upon any such waiver of a past
default, such default shall cease to exist, and any default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
Section 13.02. Protection of Right, Title and Interest to Trust. (a)
------------------------------------------------
Servicer shall cause this Agreement, all amendments and supplements hereto and
all financing statements and continuation statements and any other necessary
documents covering the Certificateholders' and the Trustee's right, title and
interest to the Trust 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 and protect the right, title
and interest of the Certificateholders and the Trustee hereunder to all property
comprising the Trust Assets. The Servicer shall deliver to the 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. The Seller shall cooperate fully with the Servicer in
connection with the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this paragraph.
(b) Within 15 days after the Seller makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) seriously
misleading within the meaning of Section 9-402(7) (or any comparable provision)
of the UCC, the Seller shall give the Trustee notice of any such change and
shall file such financing statements or amendments as may be necessary to
continue the perfection of the Trust's security interest in the Receivables and
the proceeds thereof.
(c) The Seller and Servicer will give the Trustee prompt notice of
any relocation of any office from which it services Receivables or keeps records
concerning the Receivables or of its principal executive office and whether, as
a result of such relocation, the applicable provisions of the
71
UCC would require the filing of any amendment of any previously filed financing
or continuation statement or of any new financing statement and shall file such
financing statements or amendments as may be necessary to perfect or to continue
the perfection of the Trust's security interest in the Receivables and the
proceeds thereof. The Seller and Servicer will at all times maintain each office
from which it services Receivables and its principal executive offices within
the United States.
Section 13.03. Limitation on Rights of Certificateholders. (a) The
------------------------------------------
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor shall such death or incapacity entitle such
Certificateholders' legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Investor Certificateholder 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 this Agreement, unless such
Investor Certificateholder previously shall have made, and unless the Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid principal
amount of all Investor Certificates (or, with respect to any such action, suit
or proceeding that does not relate to all Series, 50% of the aggregate unpaid
principal amount of the Investor Certificates of all Series to which such
action, suit or proceeding relates) shall have made, a request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after such request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Investor Certificateholder with every other Investor Certificateholder and
the Trustee, that no one or more Investor Certificateholders shall have any
right in any manner whatever by virtue or by availing itself or themselves of
any provisions of this Agreement to affect, disturb or prejudice the rights of
the Holders of any other of the Investor Certificates, or to obtain or seek to
obtain priority over or preference to any other such Investor Certificateholder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all Investor
Certificateholders except as otherwise expressly provided in this Agreement.
For the protection and enforcement of the provisions of this Section, each and
every Investor Certificateholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
SECTION 13.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.05. Notices, Payments. (a) All demands, notices,
-----------------
instructions, directions and communications (collectively, "Notices") under this
Agreement shall be in writing and shall be deemed to have been duly given if
personally delivered at, mailed by registered mail, return receipt requested, or
sent by facsimile transmission
72
(i) in the case of the Seller, to
Mail-Well Trade Receivables Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇
(ii) in the case of the Servicer, to
Mail-Well I Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile no.: 303-397-7400
(iii) in the case of the Trustee, to
Norwest Bank Colorado, National Association
Corporate Trust and Escrow Services
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust
Facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇
(iv) in the case of ▇▇▇▇▇'▇, to
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention of ABS ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇
(v) in the case of Standard & Poor's, to
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention of Asset Backed Group
15th Floor
Facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇
and
(vi) to the Paying Agent, the Transfer Agent and Registrar or any
other Person, as specified in any Supplement; or, as to each party, at such
other address or facsimile number as shall be designated by such party in a
written notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown
73
in the Certificate Register. No Notice shall be required to be mailed to a
Holder of Bearer Certificates or Coupons but shall be given as provided below.
Any Notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Investor
Certificateholder receives such Notice.
Section 13.06. Rule 144A Information. For so long as any of the
---------------------
Investor Certificates of any Series or Class are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, each of the Seller, the Trustee,
the Servicer and any Series Enhancer agrees to cooperate with each other to
provide to any Investor Certificateholders of such Series or Class and to any
prospective purchaser of Certificates designated by such Investor
Certificateholder, upon the request of such Investor Certificateholder or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act.
Section 13.07. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Certificates or the rights of the Certificateholders.
Section 13.08. Certificates Nonassessable and Fully Paid. It is the
-----------------------------------------
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the interests in the
Trust represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by the Trustee pursuant to Section 6.02 are and shall be
deemed fully paid.
Section 13.09. Further Assurances. The Seller and the Servicer agree
------------------
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to the Receivables and
other Trust Assets for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 13.10. Nonpetition Covenant. Notwithstanding any prior
--------------------
termination of this Agreement, the Servicer, the Trustee, the Seller, and each
Series Enhancer shall not, prior to the date which is one year and one day after
the termination of this Agreement with respect to the Trust, acquiesce, petition
or otherwise invoke or cause the Trust to invoke the process of any Governmental
Authority for the purpose of commencing or sustaining a case against the Trust
under any Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Trust or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Trust.
Section 13.11. No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided under this
Agreement are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
74
Section 13.12. Counterparts. This Agreement may be executed in two
------------
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
Section 13.13. Third-Party Beneficiaries. This Agreement will inure
-------------------------
to the benefit of and be binding upon the parties hereto, the
Certificateholders, any Series Enhancer (to the extent provided in this
Agreement and the related Supplement) and their respective successors and
permitted assigns. Except as otherwise expressly provided in this Agreement
(including, without limitation, Section 7.04), no other Person will have any
right or obligation hereunder.
Section 13.14. Actions by Certificateholders. (a) Wherever in this
-----------------------------
Agreement a provision is made that an action may be taken or a Notice given by
Certificateholders, such action or Notice may be taken or given by any
Certificateholder, unless such provision requires a specific percentage of
Certificateholders.
(b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Certificate shall bind such Holder and every
subsequent Holder of such Certificate and of any Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Trustee or the Servicer in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
Section 13.15. Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.16. Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 13.17. No Proceedings. Each of the Trustee, the Servicer, and
--------------
each Certificateholder by acceptance of its Certificate, hereby agrees that it
will not institute against the Seller or join any other Person in instituting
against the Seller, on account of its ownership of the Seller
75
Certificate or its obligations hereunder, any bankruptcy, insolvency,
liquidation, readjustment of debt, marshalling of assets or any similar
proceeding so long as there shall not have elapsed one year plus one day since
the last day on which any Investor Certificates shall have been outstanding.
[SIGNATURE PAGE TO FOLLOW.]
76
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
MAIL-WELL TRADE RECEIVABLES
CORPORATION, as Seller
By:
---------------------------------
Name:
Title:
MAIL-WELL I CORPORATION,
as Servicer
By:
---------------------------------
Name:
Title:
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION, as Trustee
By:
---------------------------------
Name:
Title:
77
EXHIBIT A
[FORM OF] SELLER CERTIFICATE
THIS SELLER CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. NEITHER THIS SELLER CERTIFICATE NOR ANY PORTION HEREOF
MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF
SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION
PROVISIONS.
THIS SELLER CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED,
EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS
OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. R-1 One Unit
MAIL-WELL RECEIVABLES MASTER TRUST
SELLER CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST
IN CERTAIN ASSETS OF THE
MAIL-WELL RECEIVABLES MASTER TRUST
Evidencing an interest in a trust, the corpus of which consists primarily of
receivables generated from time to time in the ordinary course of business of
Mail-Well I Corporation and certain of its Affiliates.
(Not an interest in or obligation of the Seller
or any affiliate thereof)
This certifies that MAIL-WELL TRADE RECEIVABLES CORPORATION is the
registered owner of a fractional interest in the assets of a trust (the "Trust")
not allocated to the Certificateholders' Interest pursuant to the Pooling and
Servicing Agreement dated as of November 15, 1996 (as amended, restated or
supplemented, the "Agreement"), among Mail-Well Trade Receivables Corporation, a
Colorado corporation, as Seller, Mail-Well I Corporation, a Delaware
corporation, as Servicer, and Norwest Bank Colorado, National Association, as
trustee (the "Trustee"). The corpus of the Trust consists of (i) all
receivables (the "Receivables") generated from time to time in the ordinary
course of business of Mail-Well I Corporation and certain of its Affiliates
identified under the Agreement, (ii) all Receivables generated from time to time
thereafter, (iii) funds collected or to be collected from Obligors in respect of
the Receivables, (iv) all funds which are from time to time on deposit in the
Lockbox Accounts, the Concentration Account, Collection Account, the Canadian
Accounts, the Canadian Collection Account, Special Funding Account and in the
Series Accounts, (v) the benefits of any Series Enhancements issued and to be
issued by Series Enhancers with respect to one or more Series of Investor
Certificates, (vi) the Related Security, and (v) all other assets and interests
constituting the Trust. Although a summary of certain provisions of the
Agreement is set forth below, this Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and
A-1
obligations of the Trustee. A copy of the Agreement may be requested from the
Trustee by writing to the Trustee at Norwest Bank Colorado, National
Association, Corporate Trust and Escrow Services, 2nd Floor, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended,
restated or supplemented from time to time, the Holder of this Certificate by
virtue of the acceptance hereof assents and is bound.
The Receivables arise from the sale of merchandise and services.
This Certificate is the Seller Certificate, which represents the
Seller's interest in certain assets of the Trust, including the right to receive
a portion of the Collections and other amounts at the times and in the amounts
specified in the Agreement. The aggregate interest represented by the Seller
Certificate at any time in the Receivables in the Trust shall not exceed the
Seller's Interest at such time. In addition to the Seller Certificate, Investor
Certificates will be issued to investors pursuant to the Agreement, which will
represent the Certificateholders' Interest. This Seller Certificate shall not
represent any interest in the Lockboxes, the Lockbox Accounts, the Concentration
Account, the Collection Account, the Canadian Accounts, the Canadian Collection
Account, the Special Funding Account or the Series Accounts, except as expressly
provided in the Agreement, or any Series Enhancements.
Subject to certain conditions and exceptions specified in the
Agreement, the obligations created by the Agreement and the Trust created
thereby shall terminate upon the earlier of (i) November 15, 2002, (ii) the day
following the Distribution Date on which the Invested Amount for each Series is
zero (provided the Seller has delivered a written notice to the Trustee electing
to terminate the Trust) and (iii) the Appointment Date specified in Section
9.02(a) of the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
[SIGNATURE PAGE TO FOLLOW.]
A-2
IN WITNESS WHEREOF, the Seller has caused this Certificate to be duly
executed.
MAIL-WELL TRADE RECEIVABLES
CORPORATION, as Seller
By:
---------------------------------
Name:
Title:
Dated: November 13, 1996
A-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Seller Certificate described in the within-mentioned Agreement.
NORWEST BANK COLORADO,
NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Signatory
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF DAILY REPORT
[See Attached.]
B-1
EXHIBIT B-2
FORM OF WEEKLY REPORT
[See Attached.]
B-2
EXHIBIT C
FORM OF MONTHLY SETTLEMENT REPORT
[See Attached.]
C-1
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before [ ] of
each calendar year beginning with [ ], 1996,
pursuant to Section 3.05 of the Pooling and
Servicing Agreement referred to below)
MAIL-WELL I CORPORATION
MAIL-WELL RECEIVABLES MASTER TRUST
The undersigned, a duly authorized representative of Mail-Well I
Corporation, as Servicer (the "Servicer"), pursuant to the Pooling and Servicing
--------
Agreement dated as of _______ __, 1996 (as amended, restated or and supplemented
from time to time, the "Agreement"), among Mail-Well Trade Receivables
Corporation, as Seller, Mail-Well I Corporation, as Servicer, and Norwest Bank
Colorado, National Association, as Trustee, does hereby certify that:
1. Mail-Well I Corporation is, as of the date hereof, the Servicer
under the Agreement. Capitalized terms used in this Certificate have their
respective meanings as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the
Trustee.
3. A review of the activities of the Servicer during the [period
from the initial Closing Date to December 31, 1996] [calendar year ended
December 31, 19__], and of its performance under the Agreement was conducted
under my supervision.
4. Based on such review, the Servicer has, to the best of my
knowledge, performed in all material respects its obligations under the
Agreement throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 5
below.
5. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the Agreement known to me
to have been made by the Servicer during the fiscal year ended, which sets forth
in detail (i) the nature of each such default, (ii) the action taken by the
Servicer, if any, to remedy each such default and (iii) the current status of
each default: [If applicable, insert "None."]
D-1
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ____ day of _________, 19__.
MAIL-WELL I CORPORATION,
as Servicer
By:
--------------------------------
Name:
Title:
D-2
EXHIBIT E-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE
PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW).
E-1-1
EXHIBIT E-2
[FORM OF REPRESENTATION LETTER]
[Date]
[
Attention: ]
Mail-Well Trade Receivables Corporation
Attention:
Re: Purchase of $___________/1/ principal amount of Mail-Well
Receivables Master Trust, [Class ____], [ %] [Floating Rate]
Asset Backed Certificates, Series [ ]
Dear Sirs:
In connection with our purchase of the above-referenced Asset Backed
Certificate (the "Certificates") we confirm that:
(i) we understand that the Certificates are not being registered under
the Securities Act of 1933, as amended (the "1933 Act"), and are being sold
to us in a transaction that is exempt from the registration requirements of
the 1933 Act;
(ii) any information we desire concerning the Certificates or any
other matter relevant to our decision to purchase the Certificates is or
has been made available to us;
(iii) we have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the Certificates, and we (and any account for which we are
purchasing under paragraph (iv) below) are able to bear the economic risk
of an investment in the Certificates; we (and any account for which we are
purchasing under paragraph (iv) below) are an "accredited investor" (as
such term is defined in Rule 501(a)(1), (2) or (3) of Regulation D under
the ▇▇▇▇ ▇▇▇); and we are not, and none of such accounts is, a Benefit
Plan;
(iv) we are acquiring the Certificates for our own account or for
accounts as to which we exercise sole investment discretion and not with a
view to any distribution of the Certificates, subject, nevertheless, to the
understanding that the disposition of our property shall at all times be
and remain within our control;
-------------------------------
/1/ Not less than $250,000 minimum amount.
E-2-1
(v) we agree that the Certificates must be held indefinitely by us
unless subsequently registered under the 1933 Act or an exemption from any
registration requirements of that Act and any applicable state securities
laws is available;
(vi) we agree that in the event that at some future time we wish to
dispose of or exchange any of the Certificates (such disposition or exchange
not being currently foreseen or contemplated), we will not transfer or
exchange any of the Certificates unless
(A)(1) the sale is of at least U.S. $250,000 principal amount
of Certificates to an Eligible Purchaser (as defined below), (2) a
letter to substantially the same effect as paragraphs (i), (ii), (iii),
(iv), (v) and (vi) of this letter is executed promptly by the purchaser
and (3) all offers or solicitations in connection with the sale,
whether directly or through any Agent acting on our behalf, are limited
only to Eligible Purchasers and are not made by means of any form of
general solicitation or general advertising whatsoever; or
(B) the Certificates are transferred pursuant to Rule 144
under the 1933 Act by us after we have held them for more than three
years; or
(C) the Certificates are sold in any other transaction that
does not require registration under the 1933 Act and, if the Seller,
the Servicer, the Trustee or the Transfer Agent and Registrar so
requests, we theretofore have furnished to such party an opinion of
counsel satisfactory to such party, in form and substance satisfactory
to such party, to such effect; or
(D) the Certificates are transferred pursuant to an
exception from the registration requirements of the 1933 Act under Rule
144A under the 1933 Act; and
(vii) we understand that the Certificates will bear a legend to
substantially the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE
PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW)."
The first paragraph of this legend may be removed if the Seller, the Servicer,
the Trustee and the Transfer Agent and Registrar have received an opinion of
counsel satisfactory to them, in form and substance satisfactory to them, to the
effect that such paragraph may be removed.
"Eligible Purchaser" means either an Eligible Dealer or a corporation,
------------------
partnership or other entity which we have reasonable grounds to believe and do
believe can make representations with respect
E-2-2
to itself to substantially the same effect as the representations set forth
herein. "Eligible Dealer" means any corporation or other entity the principal
---------------
business of which is acting as a broker and/or dealer in securities. "Benefit
-------
Plan" means any employee benefit plan, trust or account, including an individual
----
retirement account, that is subject to the Employee Retirement Income Security
Act of 1974, as amended, or that is described in Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended, or an entity whose underlying assets
include plan assets by reason of a plan's investment in such entity. Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Pooling and Servicing Agreement, dated as of ______ __, 1996, as amended,
restated or supplemented from time to time, among Mail-Well Trade Receivables
Corporation, Mail-Well I Corporation and Norwest Bank Colorado, National
Association.
Very truly yours,
____________________________
(Name of Purchaser)
By:_________________________
(Authorized Officer)
E-2-3
EXHIBIT E-3
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS
DEFINED BELOW)./1/
--------------------------------
/1/The following text should be included in any Certificate in which the above
legend appears:
The [Certificates] may not be acquired by or for the account of any
employee benefit plan, trust or account, including an individual retirement
account, that is subject to the Employee Retirement Income Security Act of
1974, as amended, or that is described in Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended, or an entity whose underlying
assets include plan assets by reason of a plan's investment in such entity
(a "Benefit Plan"). By accepting and holding this Certificate, the Holder
hereof shall be deemed to have represented and warranted that it is not a
Benefit Plan. By acquiring any interest in this Certificate, the
applicable Certificate Owner or Owners shall be deemed to have represented
and warranted that it or they are not Benefit Plans.
E-3-1
EXHIBIT F
FORM OF SEMI-ANNUAL AGREED-UPON
PROCEDURES REPORT
[See Attached.]
F-1
SCHEDULE 1
Credit and Collection Policy
[See attached.]
S-1-1
SCHEDULE 2
Schedule of Monthly Periods
(Dates shown are the last dates of Monthly Periods)
November 2, 1996
November, 30, 1996
December 28, 1996
February 1, 1997
▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇ 29, 1997
May 3, 1997
May 31, 1997
June 28, 1997
August 2, 1997
August 30, 1997
September 27, 1997
October 1, 1997
November 29, 1997
December 27, 1997
S-2-1
SCHEDULE 3
Schedule of Monthly Settlement Report Dates
November 18, 1996
December 16, 1996
January 13, 1997
February 17, 1997
March 17, 1997
April 14, 1997
May 19, 1997
June 16, 1997
July 14, 1997
August 18, 1997
September 15, 1997
October 13, 1997
November 17, 1997
December 15, 1997
January 12, 1998
S-2-2