Exhibit 4.2
[EXECUTION COPY]
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MELLON PREMIUM FINANCE LOAN OWNER TRUST
Transferor
AFCO CREDIT CORPORATION
Servicer
AFCO ACCEPTANCE CORPORATION
Servicer
PREMIUM FINANCING SPECIALISTS, INC.
Back-up Servicer
PREMIUM FINANCING SPECIALISTS OF CALIFORNIA, INC.
Back-up Servicer
And
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
on behalf of the Holders
of the Mellon Bank Premium Finance Loan Master Trust
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of June 15, 2001
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions....................................................1
SECTION 1.2. Other Interpretive Provisions.................................21
SECTION 1.3. Daily Allocation of Finance Charge Collections................22
SECTION 1.4. Daily Allocation of Principal Collections.....................22
SECTION 1.5. Servicer Obligation to True-Up................................22
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables.....................................23
SECTION 2.2. Acceptance by Trustee.........................................24
SECTION 2.3. Representations and Warranties of Transferor..................25
SECTION 2.4. Representations and Warranties of Transferor Relating to
this Agreement, the Second Tier Receivables Purchase
Agreement and the Receivables...............................25
SECTION 2.5. Covenants of Transferor.......................................30
SECTION 2.6. Mandatory Removal of Receivables..............................32
ARTICLE III
ADMINISTRATION AND SERVICING
SECTION 3.1. Acceptance of Appointment as Servicer and Back-up Servicer....32
SECTION 3.2. Servicing Compensation and Back-up Servicing Compensation.....35
SECTION 3.3. Representations and Warranties of Servicer....................35
SECTION 3.4. Reports and Records for Trustee...............................37
SECTION 3.5. Annual Servicer's Certificate.................................37
SECTION 3.6. Annual Independent Accountants' Servicing Report..............37
SECTION 3.7. Tax Treatment.................................................38
SECTION 3.8. Notices to Transferor.........................................39
SECTION 3.9. Reports to the Commission.....................................39
SECTION 3.10. Covenants of Servicer........................................39
SECTION 3.11. Representations and Warranties of Back-up Servicer...........40
SECTION 3.12. Back-Up Servicer Covenant....................................41
SECTION 3.13. Servicer Licensing Covenant..................................42
SECTION 3.14. Custody of Premium Finance Agreements........................42
SECTION 3.15. Duties of Servicer as Custodian..............................42
SECTION 3.16. Instruction; Authority to Act................................43
SECTION 3.17. Effective Period and Termination.............................43
SECTION 3.18. AFCO Credit to act as Servicer...............................44
ARTICLE IV
RIGHTS OF HOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.1. Rights of Holders..............................................44
SECTION 4.2. Establishment of Accounts......................................44
SECTION 4.3. Collections and Allocations....................................46
SECTION 4.4. Shared Principal Collections...................................48
SECTION 4.5. Excess Finance Charge Collections..............................48
ARTICLE V
[ARTICLE IS RESERVED AND SHALL BE SPECIFIED IN THE SUPPLEMENT WITH
RESPECT TO ANY SERIES.]
ARTICLE VI
THE CERTIFICATES
SECTION 6.1. The Certificates...............................................49
SECTION 6.2. Authentication of Certificates.................................49
SECTION 6.3. Registration of Transfer and Exchange of Certificates..........50
SECTION 6.4. Mutilated, Destroyed, Lost or Stolen Certificates..............52
SECTION 6.5. Persons Deemed Owners..........................................52
SECTION 6.6. Appointment of Paying Agent....................................53
SECTION 6.7. Access to List of Holders' Names and Addresses.................54
SECTION 6.8. Authenticating Agent...........................................54
SECTION 6.9. New Issuances..................................................55
SECTION 6.10. Book-Entry Certificates.......................................57
SECTION 6.11. Notices to Clearing Agency....................................58
SECTION 6.12. Definitive Certificates.......................................58
SECTION 6.13. Global Certificate; Euro-Certificate Exchange Date............59
ARTICLE VII
MATTERS RELATING TO TRANSFEROR
SECTION 7.1. Liability of Transferor........................................59
SECTION 7.2. Merger or Consolidation of, or Assumption of the Obligations
of, Transferor.................................................59
SECTION 7.3. Limitation on Liability........................................61
SECTION 7.4. Liabilities....................................................61
SECTION 7.5. No Other Business..............................................62
SECTION 7.6. No Borrowing...................................................62
SECTION 7.7. Guarantees, Loans, Advances and Other Liabilities..............62
SECTION 7.8. Capital Expenditures...........................................62
SECTION 7.9. Commingling of Funds or Assets.................................62
ARTICLE VIII
OTHER MATTERS RELATING TO SERVICER
SECTION 8.1. Liability of Servicer..........................................63
SECTION 8.2. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer...................................................63
SECTION 8.3. Limitation on Liability of Servicer and Others.................63
SECTION 8.4. Servicer Indemnification of the Trust and Trustee..............64
SECTION 8.5. Servicer Not to Resign.........................................64
SECTION 8.6. Access to Certain Documentation and Information Regarding the
Receivables....................................................65
SECTION 8.7. Delegation of Duties...........................................65
SECTION 8.8. Examination of Records.........................................65
SECTION 8.9. Merger or Consolidation of, or Assumption of the Obligations
of, Back-up Servicer...........................................65
SECTION 8.10. Back-up Servicer Not to Resign................................66
SECTION 8.11. Cooperation Among Servicer and Back-up Servicer...............67
ARTICLE IX
TRUST PAY OUT EVENTS
SECTION 9.1. Trust Pay Out Event............................................67
SECTION 9.2. Additional Rights Upon the Occurrence of Certain Events........68
ARTICLE X
SERVICER DEFAULTS
SECTION 10.1. Servicer Defaults.............................................69
SECTION 10.2. Back-up Servicer, Trustee to Act, Appointment of Successor....71
SECTION 10.3. Notification to Holders.......................................72
SECTION 10.4. Waiver of Past Defaults.......................................73
ARTICLE XI
TRUSTEE
SECTION 11.1. Duties of Trustee.............................................73
SECTION 11.2. Certain Matters Affecting Trustee.............................75
SECTION 11.3. Trustee Not Liable for Recitals or Issuance of Certificates...76
SECTION 11.4. Trustee May Not Own Certificates..............................76
SECTION 11.5. Transferor to Pay Trustee's Fees and Expenses;
Indemnification of Trustee....................................76
SECTION 11.6. Eligibility Requirements for Trustee..........................77
SECTION 11.7. Resignation or Removal of Trustee.............................77
SECTION 11.8. Successor Trustee.............................................78
SECTION 11.9. Merger or Consolidation of Trustee............................78
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.................79
SECTION 11.11. Tax Returns...................................................80
SECTION 11.12. Trustee May Enforce Claims Without Possession of
Certificates..................................................80
SECTION 11.13. Suits for Enforcement.........................................80
SECTION 11.14. Rights of Holders to Direct Trustee...........................80
SECTION 11.15. Representations and Warranties of Trustee.....................81
SECTION 11.16. Maintenance of Office or Agency...............................81
SECTION 11.17. Obligor Claims................................................81
SECTION 11.18. Liabilities to Obligors.......................................82
SECTION 11.19. Money Held in Trust...........................................82
ARTICLE XII
TERMINATION
SECTION 12.1. Termination of Trust..........................................82
SECTION 12.2. Optional Purchase.............................................83
SECTION 12.3. Final Payment with Respect to any Series......................83
SECTION 12.4. Termination Rights of Transferor..............................84
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1. Amendment.....................................................85
SECTION 13.2. Protection of Right, Title and Interest to Trust..............86
SECTION 13.3. Limitation on Rights of Holders...............................87
SECTION 13.4. Governing Law.................................................88
SECTION 13.5. Notices.......................................................88
SECTION 13.6. Severability of Provisions....................................88
SECTION 13.7. Assignment....................................................88
SECTION 13.8. Certificates Non-Assessable and Fully Paid....................89
SECTION 13.9. Further Assurances............................................89
SECTION 13.10. No Waiver, Cumulative Remedies................................89
SECTION 13.11. Counterparts..................................................89
SECTION 13.12. No Petition...................................................89
SECTION 13.13. Third Party Beneficiaries.....................................89
SECTION 13.14. Actions by Holders............................................89
SECTION 13.15. Rule 144A Information.........................................90
SECTION 13.16. Merger and Integration........................................90
SECTION 13.17. Headings......................................................90
SECTION 13.18. No Liability of Owner Trustee.................................90
EXHIBITS AND SCHEDULES
Schedule I Location of Receivables
Schedule II Schedule of Permitted Jurisdictions
Schedule III Receivables Schedule
Exhibit A Form of Monthly Servicer's Certificate
Exhibit B Form of Annual Servicer's Certificate
Exhibit C Form of Reconveyance of Receivables
Exhibit D Form of Notice of Financed Premium
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT (this
"Agreement"), dated as of June 15, 2001, by and among MELLON PREMIUM FINANCE
LOAN OWNER TRUST, a Delaware business trust, as Transferor, AFCO CREDIT
CORPORATION, a New York corporation, as Servicer, AFCO ACCEPTANCE CORPORATION, a
California corporation, as Servicer, PREMIUM FINANCING SPECIALISTS, INC., a
Missouri corporation, as Back-up Servicer, PREMIUM FINANCING SPECIALISTS OF
CALIFORNIA, INC., a California corporation, as Back-up Servicer and ▇▇▇▇▇ FARGO
BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association ("▇▇▇▇▇
Fargo"), as Trustee.
WHEREAS, Mellon Bank, N.A., as transferor, AFCO Credit Corporation, as
servicer, AFCO Acceptance Corporation, as servicer, Premium Financing
Specialists, Inc., as back-up servicer, Premium Financing Specialists of
California, Inc., as back-up servicer and Bank One, N.A. (formerly The First
National Bank of Chicago)("Bank One"), as trustee, are parties to the Pooling
and Servicing Agreement, dated as of December 1, 1996 (the "Original PSA");
WHEREAS, Mellon Bank, N.A. intends to transfer the Transferor Interest
to Premium Finance Loan Owner Trust and Premium Finance Loan Owner Trust intends
to become the Transferor hereunder;
WHEREAS, Bank One has resigned as trustee pursuant to the Original PSA
and ▇▇▇▇▇ Fargo has been appointed successor trustee thereunder; and
WHEREAS, AFCO Credit Corporation, AFCO Acceptance Corporation, Premium
Financing Specialists, Inc., Premium Financing Specialists of California, Inc.,
Mellon Bank, N.A. and ▇▇▇▇▇ Fargo, as successor trustee to Bank One, desire to
amend and restate the Original PSA on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, each party agrees as follows for the benefit of the other parties and
the Holders:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases have the meanings identified below:
"ACCOUNT" means, with respect to each Obligor, each account of such
Obligor that is identified as such by the applicable Originator by a separate
account number.
"ADDITION DATE" means the date on which any Additional Receivable is
added to the Receivables Schedule.
"ADDITIONAL RECEIVABLE" means each Premium Finance Agreement added or
required to be added to the Receivable Schedule after the Initial Closing Date
pursuant to subsection 2.1(g).
"ADJUSTED AGGREGATE INVESTOR INTEREST" means as of any date of
determination, the sum of the "Adjusted Investor Interest" (as defined in the
related Supplement) of each Series then issued and outstanding for which an
Adjusted Investor Interest is specified in the related Supplement plus the sum
of the Investor Interests of all other Series then issued and outstanding.
"AFCO ACCEPTANCE" means AFCO Acceptance Corporation, a California
corporation.
"AFCO CREDIT" means AFCO Credit Corporation, a New York corporation.
"AFFILIATE" of any Person means any other Person controlling,
controlled by or under common control with such Person.
"AGGREGATE INVESTOR INTEREST" means, as of any date of determination,
the sum of the Investor Interests of all Series then issued and outstanding.
"AGGREGATE INVESTOR PERCENTAGE" means, as to Principal Receivables,
Finance Charge Receivables and Defaulted Receivables, as the case may be, as of
any date of determination, the sum (not to exceed 100%) of the relevant Investor
Percentages for all Series then issued and outstanding.
"AGGREGATE RECEIVABLES" means, with respect to the Receivables as of
any date of determination, the aggregate amount of payments owed on such
Receivables (exclusive of Late Fees and any other administrative charges) less
Net Payables as of such date of determination, as reduced by the aggregate
amount of such payments owed in respect of (i) any Transferor Ineligible
Receivables reassigned to the Transferor as provided in Section 2.4 (d)(iii),
(ii) any Servicer Ineligible Receivables removed from the Trust as provided in
Section 3.10(c), (iii) any Receivables removed from the Trust pursuant to
Section 2.6 and (iv) any Defaulted Receivables not included in Transferor
Ineligible Receivables or Servicer Ineligible Receivables removed from the Trust
in accordance with Section 2.4(d)(iii) or 3.10(c) or in Receivables removed from
the Trust pursuant to Section 2.6.
"AGGREGATE RECEIVABLE BALANCE" means, with respect to any Receivable
as of any date of determination, the aggregate amount of payments owed on such
Receivable (exclusive of Late Fees and any other administrative charges) less
related Net Payables as of such date of determination.
"AGGREGATE TOP TIER 2 INSURER PERCENTAGE" means, as of any date of
determination, a fraction (expressed as a percentage) the numerator of which is
Aggregate Receivables relating to the financing of insurance premiums of the Top
Tier 2 Insurers and the denominator of which is Aggregate Receivables as of such
date of determination.
"AGGREGATE TOP TIER 3 INSURER PERCENTAGE" means, as of any date of
determination, a fraction (expressed as a percentage) the numerator of which is
Aggregate Receivables relating to the financing of insurance premiums of the Top
Tier 3 Insurers and the denominator of which is Aggregate Receivables as of such
date of determination.
"AGREEMENT" means this Amended and Restated Pooling and Servicing
Agreement, as amended, supplemented or otherwise modified from time to time,
including by any Supplement.
"AMORTIZATION PERIOD" means, as to any Series or Class, any period
specified in the related Supplement during which principal collections are
applied to repay the principal investment in that Series or Class (excluding
repayments of a Variable Interest during its revolving period).
"APPLICANTS" is defined in Section 6.7.
"APPOINTMENT DAY" is defined in subsection 9.2(a).
"AUTHORIZED NEWSPAPER" means a newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"BACK-UP SERVICER" means initially, PFSI and its successors and
assigns; provided, however, that with respect to Receivables having borrowers
with addresses in the State of California, "Back-up Servicer" shall mean PFSIC.
"BACK-UP SERVICING FEE" is defined in Section 3.2.
"BEGINNING OF MONTH PRINCIPAL RECEIVABLES" means, with respect to the
Receivables and any Monthly Period, an amount equal to the Aggregate Receivables
as of the first day of such Monthly Period (or, in the case of the Monthly
Period commencing June 1, 2001, as of June 15, 2001) minus Finance Charge
Receivables as of such date.
"BIF" means the Bank Insurance Fund administered by the FDIC.
"BOOK-ENTRY CERTIFICATES" means certificates evidencing a beneficial
interest in the Investor Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 6.10.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York, Minneapolis, Minnesota or
Pittsburgh, Pennsylvania (or, for any Series, any additional city specified in
the related Supplement) are authorized or obligated by law or executive order to
be closed.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Codess.3801 et seq., as it may be amended from time to time, or
any successor legislation.
"CERTIFICATE" means an Investor Certificate or a Supplemental
Certificate.
"CERTIFICATE OWNER" means the beneficial owner of a Book-Entry
Certificate, as reflected on the books of the Clearing Agency or of a Person
maintaining an account with the Clearing Agency (directly or as an indirect
participant).
"CERTIFICATE REGISTER" is defined in Section 6.3.
"CLASS" means any class of Investor Certificates of any Series.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency or Foreign Clearing Agency.
"CLEARSTREAM" means Clearstream Banking, societe anonyme.
"CLOSING DATE" means, for any Series, the date of issuance of such
Series of Certificates, as specified in the related Supplement.
"COLLECTION ACCOUNT" is defined in subsection 4.2(a).
"COLLECTIONS" means all payments received by the Servicer in respect
of the Receivables, including without limitation Recoveries, whether in the form
of cash, checks, wire transfers, ATM transfers or other form of payment in
accordance with the applicable Premium Finance Agreement. If the Servicer
establishes any lock-box account for the receipt of payments, a payment shall be
deemed received by the Servicer on the date of deposit in such lock-box account.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of
the Trustee at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at Sixth Street and
Marquette Avenue, MAC N9311-161, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Services--Asset Backed Administration.
"CREDIT ENHANCEMENT" means, as to any Series, any subordination, cash
collateral guaranty or account, collateral interest, letter of credit, surety
bond, insurance policy, spread account, reserve account, cross-support feature
or any other contract or agreement for the benefit of the Holders of such Series
(or Holders of a Class within such Series) as designated in the applicable
Supplement.
"CREDIT ENHANCEMENT PROVIDER" means, as to any Series, any Person
designated as such in the related Supplement.
"DATE OF PROCESSING" means, as to any transaction, the date on which
such transaction is first recorded on the Servicer's computer master file of
accounts (without regard to the effective date of such recordation).
"DEFAULT AMOUNT" means, with respect to any Monthly Period, the
excess, if any, of (i) the amount of Principal Receivables related to
Receivables which became Defaulted Receivables during such Monthly Period over
(ii) Recoveries for such Monthly Period.
"DEFAULTED RECEIVABLE" means a Receivable (i) as to which the
insurance policy or policies related to such Receivable have been canceled for
270 days or more, (ii) as to which the related insurance policy or policies have
not been cancelled and with respect to which no payment has been received for
300 days since the payment due date; or (iii) that the Servicer has charged off
in accordance with the Servicer's customary and usual practices. Notwithstanding
any other provision hereof, any Defaulted Receivable that is an Ineligible
Receivable shall be treated as an Ineligible Receivable rather than a Defaulted
Receivable. In the event that, for administrative reasons, the Servicer is
unable to identify or segregate a Defaulted Receivable from other Receivables in
the related Account, then all such Receivables in such Account shall be deemed
to be Defaulted Receivables.
"DEFINITIVE CERTIFICATES" is defined in Section 6.10.
"DEPOSITORY" is defined in Section 6.10.
"DEPOSITORY AGREEMENT" means, as to each Series (subject to the
related Supplement), the agreement among the Transferor, the Trustee and the
applicable Clearing Agency.
"DETERMINATION DATE" means, unless otherwise specified in the related
Supplement, the third Business Day prior to each Transfer Date.
"DISTRIBUTION ACCOUNT" is defined in subsection 4.2(c).
"DISTRIBUTION DATE" is defined, for each Series, in the related
Supplement.
"DOLLARS", "$" or "U.S. $" means United States dollars.
"ELIGIBLE RECEIVABLE" means a Receivable, as of its Closing Date or
its Addition Date, as applicable:
(a) which is payable in United States dollars;
(b) which (i) has been funded by the related Originator in whole
or in part, (ii) relates to an Account that has been funded by the
Originator in whole or in part or (iii) has been acquired by the
Originator from a third party, provided that (A) such Receivable has
been underwritten in accordance with underwriting standards that are
not materially different from the Guidelines used by the Originators
with respect to the Receivables transferred to the Trust on June 15,
2001; (B) the Receivable purchased by the applicable Originator (x)
contains an unconditional commitment of the related Obligor to
repayment of principal and interest, (y) contains a power of attorney
to cancel insurance coverage in the event of a default and (z)
contains a security interest granted by the related Obligor in
Unearned Premiums; and (C) after giving effect to transfer of such
Receivable to the Trust (x) for any calendar quarter during any
calendar year, no more than 15% and (y) for any calendar year, no more
than 20%, in each case of Aggregate Receivables as of the first day of
the related calendar year, are Receivables that have been acquired by
an Originator from a third party; provided, however, that these
limitations will not apply to a Receivable that has been acquired by
an Originator from a third party in which an Originator has an
interest;
(c) which does not finance premiums of any insurance policy of
any foreign insurance carrier (excluding Lloyds of London) if, after
giving effect to transfer of such Receivable to the Trust, over 3% of
Aggregate Receivables relate to premiums of insurance policies of
foreign insurance carriers (excluding Lloyds of London);
(d) which does not finance premiums of any insurance policy of
any insurance carrier known at origination or acquisition to any of
the Originators, Mellon Bank or the Transferor to be the subject of a
proceeding that would impair enforcement of the Originator's right to
the return of Unearned Premiums;
(e) which does not relate to a Premium Finance Agreement under
which the Obligor is a Governmental Authority;
(f) which (x) if a Receivable transferred to the Trust on June
15, 2001 (other than a Receivable acquired by an Originator from a
third party) is underwritten in accordance with the Guidelines in
effect at the time of origination of such Receivable and (y) if an
Additional Receivable (other than a Receivable acquired by an
Originator from a third party) is underwritten in accordance with
Guidelines that are not materially different from the Guidelines used
by the Originators with respect to the Receivables transferred to the
Trust on June 15, 2001;
(g) as to which the related Obligor used all the proceeds to pay
premiums and related items with respect to commercial property or
casualty insurance policies under which such Obligor is the insured
that are governed by the law of any state, territory or commonwealth
of the United States of America, the District of Columbia or the
United States Virgin Islands;
(h) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations or declarations with,
any Governmental Authority required in connection with the creation of
such Receivable, and the execution, delivery and performance by the
related Originator of the related Premium Finance Agreement, have been
duly obtained, effected or given and are in full force and effect as
of the date of transfer of such Receivable to the Trust;
(i) as to which, at the time of transfer of such Receivable to
the Trust, the terms of the related Premium Finance Agreement have not
been waived or modified except for waivers or modifications arising in
the ordinary course of business that do not (x) impair the
Originator's security interest in any Unearned Premium or related
power of attorney, (y) limit the validity, enforceability or
assignability of the related Premium Finance Agreement or (z) result
in an extension of the term of or decrease in the interest rate (if
applicable) on the related Premium Finance Agreement;
(j) with respect to which the related Premium Finance Agreement
is not subject to any right of rescission, setoff, counterclaim or
defense arising out of violations of usury laws or any other defenses
of any Obligor at the time of transfer of such Receivable to the
Trust, other than defenses that may arise after the time of transfer
out of applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights in
general and general equity principles;
(k) with respect to which, at the time of transfer of such
Receivable to the Trust, the related Originator has not taken any
action that would impair, or failed to take any action necessary to
avoid impairing, the rights of the Trust or the Holders with respect
to such Receivable;
(l) which is not delinquent for more than 30 days following the
date that a payment has become due thereunder;
(m) which (x) provides the related Originator with a limited
power of attorney allowing it to cancel the related insurance policy
or policies in accordance with applicable law upon non-payment of a
loan installment by the related Obligor and (y) with respect to which
the Trust has a first priority perfected security interest in any
Unearned Premiums relating to such Receivable and a Notice of Financed
Premium has been delivered to the applicable insurance carrier or
carriers or any of their agents, designees or representatives;
provided, however, that up to 2% of Aggregate Receivables may consist
of Receivables as to which the applicable Originator has no right to
cancel the related insurance policy or policies or to return of such
Unearned Premiums;
(n) with respect to which no related insurance policy has been
canceled;
(o) with respect to which the stated address of the Obligor in
the related Premium Finance Agreement is in a Permitted Jurisdiction;
(p) which was originated in compliance, in all material respects,
with all Requirements of Law applicable to the related Originator and
pursuant to loan documents which comply, in all material respects,
with all Requirements of Law applicable to the related Originator;
(q) which is the legal, valid and binding payment obligation of
the related Obligor, legally enforceable against such Obligor in
accordance with its terms;
(r) with respect to which the related Obligor (x) is not the
subject of a bankruptcy or insolvency proceeding or (y) is the subject
of a bankruptcy or insolvency proceeding if (1) such Obligor has
assumed its obligations under or has entered into the related Premium
Finance Agreement pursuant to an interim or final order of the
bankruptcy court and, if assumed, is not undercollateralized, or, if
new, is treated as a post-petition debtor-in-possession financing, (2)
the related Unearned Premiums fully collateralize the related Premium
Finance Agreement and (3) after giving effect to transfer of such
Receivable to the Trust, no more than 10% of Aggregate Receivables
that, at the time of their transfer to the Trust, were the subject of
a bankruptcy or insolvency proceeding would have Obligors that are
subject to any of those proceedings;
(s) with respect to which the related Premium Finance Agreement
provides for monthly or quarterly payments by the related Obligor,
provided that, after giving effect to transfer of such Receivable to
the Trust, no more than 15% of Aggregate Receivables have Premium
Finance Agreements that provide for quarterly payments by the related
Obligors;
(t) which is an interest-bearing Receivable;
(u) which is a "general intangible" under the UCC;
(v) which, after giving effect to the transfer of such Receivable
to the Trust, would not cause any Excess Insurer Concentration Amount
to exist;
(w) which, after giving effect to the transfer of such Receivable
to the Trust, would not cause (x) the Aggregate Top Tier 3 Insurer
Percentage to exceed the Maximum Aggregate Top Tier 3 Insurer
Percentage or (y) the Aggregate Top Tier 2 Insurer Percentage to
exceed the Maximum Aggregate Top Tier 2 Insurer Percentage;
(x) which, after giving effect to transfer of such Receivable to
the Trust, would not cause an Excess Aggregate Tier 3 Insurer
Concentration Amount to exist; and
(y) which, after giving effect to the transfer of such Receivable
to the Trust, would not cause any Excess Obligor Concentration Amount
to exist; and
(z) which complies with any other restrictions, qualifications,
requirements and criteria under any agreement relating to any
Enhancement for a Receivable to be considered an Eligible Receivable.
PROVIDED, HOWEVER, that with respect to any Receivable transferred to the Trust
prior to June 15, 2001, "Eligible Receivable" and each defined term used in such
definition shall have the meaning set forth in the Original PSA, and provided
further that, notwithstanding any other provision of this Agreement, clause (z)
of this definition may be amended at any time by the Transferor, the Servicer,
the Back-up Servicer and the Trustee with the consent of the applicable provider
of Enhancement, but without the consent of the Holders.
"ENHANCEMENT" means, with respect to any Series or Class of
Certificates, any Credit Enhancement, guaranteed rate agreement, maturity
liquidity facility, interest rate cap agreement, interest rate swap agreement or
other similar arrangement for the benefit of the Holders of such Series or
Class.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"EUROCLEAR OPERATOR" means ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels, Belgium office, as operator of the Euroclear System.
"EXCESS AGGREGATE TIER 3 INSURER CONCENTRATION AMOUNT" means, as of
any date of determination, Aggregate Receivables relating to the financing of
the insurance premiums of Tier 3 Insurers in excess of 60% of Aggregate
Receivables as of that date of determination.
"EXCESS FINANCE CHARGE COLLECTIONS" means, with respect to any
Transfer Date, the aggregate amount for all outstanding Series that the related
Supplements specify are to be treated as "Excess Finance Charge Collections" for
such Transfer Date.
"excess funding account" is defined in subsection 4.2(b).
"EXCESS INSURER CONCENTRATION AMOUNT" means, as of any date of
determination, an amount equal to the sum of (i) with respect to each Tier 1
Insurer, the amount by which aggregate receivables relating to the financing of
insurance premiums of such Tier 1 Insurer, as a percentage of aggregate
receivables, exceeds (x) if such Tier 1 Insurer is Lloyd's of London, 15% and
(y) otherwise, 25%; (ii) with respect to each Tier 2 Insurer, the amount by
which aggregate receivables relating to the financing of insurance premiums of
such Tier 2 Insurer, as a percentage of aggregate receivables, exceeds (x) if
such Tier 2 Insurer is Lloyd's of London, 5% and (y) otherwise, 10%; and (iii)
with respect to each Tier 3 Insurer (including, if applicable, Lloyds of
London), the amount by which aggregate receivables relating to the financing of
insurance premiums of such Tier 3 Insurer exceeds 5% of aggregate receivables;
provided, however, that notwithstanding anything to the contrary contained in
Section 13.1, the percentages herein may be increased at any time by the
Servicer, and the Transferor with the consent of any Credit Enhancement
Provider, but without the consent of the Holders, if the Rating Agency Condition
has been satisfied with respect to such increase.
"EXCESS OBLIGOR CONCENTRATION AMOUNT" means as of any date of
determination, the amount of Aggregate Receivables related to a single Obligor
(or an affiliated group of Obligors), but only to the extent such amount is in
excess of 5% of Aggregate Receivables as of such date of determination.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"FEE AGREEMENT" means that agreement dated January 5, 2001, between
the Trustee and Mellon Bank.
"FINANCE CHARGE ACCOUNT" is defined in subsection 4.2(b).
"FINANCE CHARGE COLLECTIONS" means, with respect to the Receivables
and any Monthly Period, an amount equal to the sum of (i) to the extent of
Collections (other than amounts covered in clauses (ii) and (iii) hereof) during
such Monthly Period, the aggregate amount of interest accrued on such
Receivables for such Monthly Period calculated in accordance with the Rule of
78's Method, (ii) Late Fees and other administrative charges collected during
such Monthly Period and (iii) Net Recoveries received during such Monthly
Period.
"FINANCE CHARGE RECEIVABLES" means, with respect to the Receivables as
of the first day in any Monthly Period, the aggregate amount of unearned
interest on Aggregate Receivables as of such date calculated in accordance with
the Rule of 78's Method.
"FINANCE CHARGE SHORTFALL" is defined, for any Series, in the related
Supplement.
"FIRST TIER RECEIVABLES PURCHASE AGREEMENT" means the Receivables
Purchase Agreement dated as of the
date hereof, by and among AFCO Credit, AFCO Acceptance and Mellon Bank.
"FOREIGN CLEARING AGENCY" means Clearstream and the Euroclear
Operator.
"GLOBAL CERTIFICATE" is defined in Section 6.13.
"GOVERNMENTAL AUTHORITY" means the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GROUP" means, as to any Series, the group of Series in which the
related Supplement specifies that such Series shall be included.
"GUIDELINES" means the Originators' (or, if the Back-up Servicer is
Servicer, the Back-up Servicer's) policies and procedures relating to the
operation of its insurance premium finance loan business, including policies and
procedures for determining the creditworthiness of borrowers and insurance
carriers, the extension of credit to borrowers and collection of insurance
premium finance loans, as such policies and procedures may be amended from time
to time.
"HOLDER" means the Person in whose name a Certificate is registered in
the Certificate Register, and, as to any Series, such other Person deemed to be
an "Investor Holder" or "Holder" in any related Supplement except as otherwise
provided in such Supplement.
"INELIGIBLE RECEIVABLE" means a Servicer Ineligible Receivable or a
Transferor Ineligible Receivable.
"INITIAL CLOSING DATE" means June 15, 2001.
"INITIAL INVESTOR INTEREST" means as to any Series, the amount stated
in the related Supplement.
"INITIAL PRINCIPAL PAYMENT DATE" shall have the meaning set forth in
any Supplement.
"INITIAL RECEIVABLES" means the Premium Finance Agreements identified
in the Receivables Schedule delivered to the Trustee on the Initial Closing
Date.
"INSOLVENCY EVENT" is defined in subsection 9.2 (a).
"INSURER SCHEDULE" means a schedule dated as of a Determination Date
which lists (in order) each of the top 15 insurance carriers with respect to the
Receivables as of such Determination Date, each ranked in accordance with the
aggregate amount of Aggregate Receivables which relate to the financing of
insurance premiums of such insurance carrier as of such Determination Date,
together with the rating, if any, of each such insurance carrier by each of
Standard & Poor's and Moody's.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940.
"INVESTOR ACCOUNT" means each of the Finance Charge Account, the
Excess Funding Account and the Distribution Account.
"INVESTOR CERTIFICATE" means any one of the certificates (including
Book-Entry Certificates, Registered Certificates and Global Certificates)
executed by the Transferor and authenticated by the Trustee substantially in the
form (or forms in the case of a Series with multiple Classes) attached to the
related Supplement.
"INVESTOR HOLDER" means the holder of record of an Investor
Certificate.
"INVESTOR INTEREST" is defined, as to any Series, in the related
Supplement.
"INVESTOR PERCENTAGE" is defined, as to any Series, in the related
Supplement.
"INVESTOR SERVICING FEE" is defined in Section 3.2.
"ISSUANCE" means either of the procedures described under Section
6.9(b).
"ISSUANCE DATE" is defined in subsection 6.9(b).
"ISSUANCE NOTICE" is defined in subsection 6.9(b).
"LATE FEES" means with respect to any Receivable, amounts referred to
as "late fees" (or similar terms) in the related Premium Finance Agreement.
"LICENSING LAWS" means any statute or regulation which would impose a
requirement that the Originator, the Transferor, the Trustee, the Trust, the
Servicer, the Back-up Servicer or any Successor Servicer obtain and maintain a
license in order to own or acquire Premium Finance Agreements, service Premium
Finance Agreements or otherwise engage in the business of insurance premium
financing, in each case, as contemplated by this Agreement, the First Tier
Receivables Purchase Agreement and the Second Tier Receivables Purchase
Agreement.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, participation or equity interest, deposit arrangement, encumbrance,
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement 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) and which upon investigation does not
relate to any Receivable or comparable law of any jurisdiction to evidence any
of the foregoing; provided that any assignment pursuant to Section 7.2 shall not
be deemed to constitute a Lien.
"MAXIMUM AGGREGATE TOP TIER 2 INSURER PERCENTAGE" means 30%; provided,
however, that notwithstanding anything to the contrary contained in Section
13.1, the percentage referred to herein may be increased at any time by the
Servicer and the Transferor with the consent of any Credit Enhancement Provider,
but without the consent of the Holders, if the Rating Agency Condition has been
satisfied with respect to such increase.
"MAXIMUM AGGREGATE TOP TIER 3 INSURER PERCENTAGE" means 17%; provided,
however, that notwithstanding anything to the contrary contained in Section
13.1, the percentage referred to herein may be increased at any time by the
Servicer and the Transferor with the consent of any Credit Enhancement Provider,
but without the consent of the Holders, if the Rating Agency Condition has been
satisfied with respect to such increase.
"MELLON BANK" means Mellon Bank, N.A., a national banking association
and its successors and assigns.
"MINIMUM AGGREGATE PRINCIPAL RECEIVABLES" means, as of any date of
determination, an amount equal to the sum of the numerators used to calculate
the Investor Percentage with respect to the allocation of Principal Collections
for each Series outstanding on such date.
"MINIMUM TRANSFEROR INTEREST" means as of any date of determination,
an amount equal to 5% of (a) the amount of Principal Receivables as of such date
of determination plus (b) the amount on deposit in the Excess Funding Account on
the date of determination; provided that the Transferor may increase or reduce
the percentage used to determine the Minimum Transferor Interest (but not below
2%) upon (a) 30 day's prior notice to the Trustee, each Rating Agency and any
Credit Enhancement Provider, (b) satisfaction of the Rating Agency Condition,
and (c) delivery to the Trustee and each such Credit Enhancement Provider of an
Officer's Certificate stating that the Transferor reasonably believes that such
reduction 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.
"MONTHLY PERIOD" means, unless otherwise defined in any Supplement,
each period from and including the first day of a calendar month to and
including the last day of that calendar month.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NET PAYABLES" means with respect to any Receivable, the unfunded
portion of such Receivable.
"NET RECOVERIES" means with respect to any Monthly Period the excess,
if any, of Recoveries for such Monthly Period over the amount of Principal
Receivables related to Receivables which became Defaulted Receivables during
such Monthly Period.
"NOTICE OF FINANCED PREMIUM" means each notice of financed premium
delivered to the insurance companies by an Originator pursuant to the First Tier
Receivables Purchase Agreement and in the form of Exhibit D.
"OBLIGOR" means, as to any Receivable, the Person or Persons obligated
to make payments on that Receivable, including any guarantor.
"OFFICER'S CERTIFICATE" means a certificate signed by any Vice
President or more senior officer of the Transferor or the Servicer and delivered
to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for or an employee of the Person providing the opinion, and who shall be
reasonably acceptable to the Trustee.
"ORIGINATOR" means either AFCO Credit or AFCO Acceptance.
"PAIRED SERIES" means each Series that has been paired with another
Series (one of which Series may be prefunded or partially prefunded) such that a
reduction of the Investor Interest of one Series results in an increase in the
Investor Interest of the other Series.
"PAYING AGENT" means any paying agent appointed pursuant to Section
6.6 and shall initially be the Trustee.
"PAY OUT EVENT" means each Trust Pay Out Event and, as to any Series,
each other "Pay Out Event," if any, described in the Supplement for such Series.
"PERMITTED INVESTMENTS" means, unless otherwise provided in the
Supplement with respect to any Series: (i) obligations of or fully guaranteed by
the United States of America, (ii) demand deposits, time deposits or
certificates of deposit of any depository institution or trust company
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 contractual commitment to invest
therein, the certificates of deposit or short-term deposits of such depository
institution or trust company shall have a credit rating from Moody's and
Standard & Poor's of P-1 and A-1 +, respectively, (iii) commercial paper having,
at the time of the Trust's investment or contractual commitment to invest
therein, a rating from Moody's and Standard & Poor's of P-1 and A-1 +,
respectively, (iv) bankers' acceptances issued by any depository institution or
trust company described in clause (ii), (v) investments in money market funds
that have the highest rating from, or have otherwise been approved in writing
by, Standard & Poor's and Moody's, so long as such investment will not require
the Trust to register as an "investment company" under the Investment Company
Act, (vi) repurchase obligations with respect to (A) any security described in
clause (i) or (B) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal) described
in clause (ii), and (vii) any other investment if (x) prior to the purchase of
such investment the Rating Agency Condition has been satisfied, and (y) purchase
of such investment will not require the Trust to be registered as an "investment
company" under the Investment Company Act. Any Permitted Investment may be
sponsored by the Transferor, the Servicer or the Trustee (and may include
investments for which the Trustee and/or its affiliates provides services or
receives compensation) if such investment would otherwise qualify hereunder.
"PERMITTED JURISDICTION" means, as of any date of determination, any
jurisdiction with respect to which each of the Originators, Mellon Bank, the
Transferor, the Servicer, the Trustee and the Trust has either complied with
such jurisdiction's Licensing Laws or is not required to be licensed under such
Licensing Laws, in each case as evidenced by either (i) an Opinion of Counsel of
the Originators or (ii) written correspondence from the applicable state or
other jurisdictional authority and a related Permitted Jurisdiction Officer's
Certificate, on which the Trustee may conclusively rely. For Receivables
transferred to the Trust prior to June 15, 2001, the Permitted Jurisdictions
were the jurisdictions listed on Schedule II to the Original PSA and any
additional jurisdictions added following the Initial Closing Date (as defined in
the Original PSA). For Receivables to be transferred to the Trust on or after
June 15, 2001, the initial Permitted Jurisdictions shall be the jurisdictions
listed on Schedule II. The Transferor may from time to time add Permitted
Jurisdictions upon satisfaction of the conditions described in clauses (i) and
(ii) of this definition.
"PERMITTED JURISDICTION OFFICER'S CERTIFICATE" means, with respect to
the determination of whether any jurisdiction is a Permitted Jurisdiction, an
Officer's Certificate of AFCO Credit certifying that the applicable written
correspondence from a state or other jurisdiction's authority is the written
correspondence referred to in clause (ii) of the definition of "Permitted
Jurisdiction" with respect to the jurisdiction in question.
"PERSON" means any legal person, including any individual,
corporation, limited liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental entity or
other entity of similar nature.
"PFSI" means Premium Financing Specialists, Inc., a Missouri
corporation.
"PFSIC" means Premium Financing Specialists of California, Inc., a
California corporation.
"PREMIUM FINANCE AGREEMENT" shall mean a written agreement by which an
insured or prospective insured promises to pay to either AFCO Credit or AFCO
Acceptance, or, in the case of a Premium Finance Agreement purchased by AFCO,
the originator thereof, as the case may be, an amount advanced or to be advanced
thereunder to an insurance carrier (or to an insurance company, broker or agent
for payment to the insurance carrier) in payment of premiums on an insurance
contract together with any finance charges and any other incidental fees and
charges.
"PRINCIPAL COLLECTIONS" means, with respect to the Receivables and any
Monthly Period, all Collections not treated as Finance Charge Collections.
"PRINCIPAL RECEIVABLES" means, as of any date of determination, an
amount equal to the product of (x) Aggregate Receivables as of such date of
determination and (y) a fraction, the numerator of which is Beginning of Month
Principal Receivables and the denominator of which is the amount of Aggregate
Receivables as of the first day of the current Monthly Period.
"PRINCIPAL SHARING SERIES" means a Series that, pursuant to the
related Supplement, is entitled to receive Shared Principal Collections.
"PRINCIPAL SHORTFALLS" is defined, as to any Series, in the related
Supplement.
"PRINCIPAL TERMS" is defined in subsection 6.9(c).
"QUALIFIED INSTITUTION" is defined in subsection 4.2(a).
"RATING AGENCY" means, as to each Series, the rating agency or
agencies, if any, specified in the related Supplement.
"RATING AGENCY CONDITION" means, as to any event or condition, receipt
by the Transferor, the Servicer and the Trustee from each Rating Agency of
written confirmation that such event or condition will not result in a downgrade
or withdrawal of its then current rating of any outstanding Series.
"RATING AGENCY TEST" shall have the meaning assigned to it in any
Supplement.
"REASSIGNMENT DATE" is defined in subsection 2.4(e).
"RECEIVABLE" means each Premium Finance Agreement, including the power
of attorney included therein that is listed or is required to be listed on the
Receivables Schedule pursuant to subsection 2.1(g).
"RECEIVABLES SCHEDULE" means a computer file or microfiche list
containing a true and complete list of the Premium Finance Agreements required
to be listed thereon pursuant to (x) the definition of "Receivables Schedule"
contained in the Original PSA immediately prior to amendment and restatement
thereof and (y) pursuant to subsection 2.1(g) hereof, such Premium Finance
Agreements pursuant to this clause (y) to be identified by account number and
setting forth the Aggregate Receivables Balance thereof as of (a) one Business
Day prior to the Initial Closing Date (for the Premium Finance Agreements listed
on the Receivables Schedule delivered on the Initial Closing Date) or (b) the
related Addition Date (for any Premium Finance Agreements added to the
Receivables Schedule on such Addition Date).
"RECORD DATE" means, with respect to any Distribution Date, the last
Business Day of the preceding Monthly Period.
"RECOVERIES" means all amounts, including the proceeds of Unearned
Premiums received by the Servicer with respect to Defaulted Receivables, less
related collection expenses.
"REGISTERED CERTIFICATES" is defined in Section 6.1.
"REQUIREMENTS OF LAW" for any Person means 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 (including usury laws, the Federal Truth in
Lending Act and Regulation Z and Regulation B of the Board of Governors of the
Federal Reserve System).
"RESPONSIBLE OFFICER" means any officer within the Corporate Trust
Office (or any successor group of the Trustee), including any Vice President,
any Assistant Secretary and any Trust Officer or any other officer of the
Trustee customarily performing functions similar to those performed by any
person who at the time shall be an above-designated officer and any particular
officer to whom any corporate trust mailer is referred because of such officer's
knowledge of and familiarity with the particular subject.
"RULE OF 78'S METHOD" means, with respect to a Receivable, the method
using the "sum of periodic balances" or "sum of monthly payments" similar to the
"Rule of 78's" by which an installment of single payments payable by the related
Obligor, representing both the principal amount financed and interest calculated
on the basis of the stated annual percentage rate for the term of such
Receivable, is allocated to earned interest and to principal.
"SAIF" means the Savings Association Insurance Fund administered by
the FDIC.
"SALE NOTICE" means an officer's certificate signed by the President
or chief executive officer of the Back-up Servicer certifying (i) the Back-up
Servicer has agreed to consolidate with or merge with a third party or a third
party has agreed to acquire the Back-up Servicer's properties and assets
substantially as an entirety (other than assets conveyed or transferred through
a financing or securitization program) or purchase all or substantially all of
the capital stock of the Back-up Servicer and (ii) such agreement is conditioned
on the Back-up Servicer being released from its obligations under this Agreement
or the purchase price included in such agreement is subject to downward
adjustment unless the Back-up Servicer is released from its obligations under
this Agreement.
"SECOND TIER RECEIVABLES PURCHASE AGREEMENT" means the Receivables
Purchase Agreement dated as of the date hereof, by and between Mellon Bank and
the Transferor.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERIES" means any series of Investor Certificates issued pursuant to
a Supplement.
"SERIES 2001-1 SUPPLEMENT" means the Series 2001-1 Supplement, dated
as of June 15, 2001, to this Agreement, among the Transferor, the Servicer, the
Back-up Servicer and the Trustee.
"SERIES ACCOUNT" means any account established pursuant to a
Supplement for the benefit of the related Series.
"SERIES SERVICING FEE PERCENTAGE" is defined, as to any Series, in the
related Supplement.
"Series Termination Date" is defined, as to any Series, in the related
Supplement.
"SERVICER" means (a) initially, AFCO Credit and AFCO Acceptance,
jointly and severally and (b) after any Person is appointed as Successor
Servicer, such Person as herein provided to service the Receivables.
"SERVICER DEFAULT" is defined in Section 10.1.
"SERVICER INELIGIBLE ACCOUNT" is described in subsection 3.13(c).
"SERVICER INELIGIBLE RECEIVABLE" is defined in subsection 3.10(c).
"SERVICING FEE" is defined in Section 3.2.
"SERVICING OFFICER" means 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 be amended from time to time.
"SHARED PRINCIPAL COLLECTIONS" means, with respect to any Transfer
Date, the aggregate amount for all outstanding Series that the related
Supplements specify are to be treated as "Shared Principal Collections" for such
Transfer Date.
"SPLIT RATING DETERMINATION METHODOLOGY" means, for purposes of
determining whether an insurance carrier is a Tier 1 Insurer, a Tier 2 Insurer
or a Tier 3 Insurer, in the event that (i) an insurance carrier has a split
rating from Moody's and Standard & Poor's, such insurance carrier will be
considered to have a single rating equal to the lower of the two ratings and
(ii) in the event that an insurance carrier (other than Lloyd's of London) is
rated by one but not both rating agencies, that rating will be reduced by one
full rating category.
"STANDARD & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SUCCESSOR BACK-UP SERVICER TERMINATION NOTICE" means written notice
signed by the President or the chief executive officer of a Back-up Servicer
that became a successor Back-up Servicer pursuant to Section 8.9, which states
that the Back-up Servicer is terminating its obligations and duties under this
Agreement pursuant to subsection 8.10(c).
"SUCCESSOR SERVICER" means the Back-up Servicer or any other entity
appointed as successor to the Servicer pursuant to Section 10.2.
"SUPPLEMENT" means, as to any Series or Supplemental Certificate, a
supplement to this Agreement executed in conjunction with any issuance of that
Series or Supplemental Certificate.
"SUPPLEMENTAL CERTIFICATE" is defined in subsection 6.3(b).
"TAX OPINION" means, as to any action, an Opinion of Counsel to the
effect that, for Federal income tax purposes, (a) such action will not adversely
affect the tax characterization as debt of Investor Certificates of any
outstanding Series or Class with respect to which an Opinion of Counsel was
delivered at the time of their issuance that such Investor Certificates would be
characterized as debt, (b) such actions will not cause the Trust to be
classified, for Federal income tax purposes, as an association (or publicly
traded partnership) taxable as a corporation and (c) such action will not cause
or constitute an event in which gain or loss would be recognized by any Investor
Certificateholder.
"TERMINATION NOTICE" is defined in Section 10.1.
"TIER 1 INSURER" means, as of any date of determination, applying, if
applicable, the Split Rating Determination Methodology, an insurance carrier
that has a then current (i) claims-paying ability rating, if available, or
otherwise an unsecured rating, from Standard & Poor's of at least A- and/or (ii)
insurance financial strength rating, if available, or otherwise an unsecured
rating, from Moody's of at least A3.
"TIER 2 INSURER" means, as of any date of determination, applying, if
applicable, the Split Rating Determination Methodology, an insurance carrier
that has a then current (i) claims-paying ability rating, if available, or
otherwise an unsecured rating, from Standard & Poor's of at least BBB-, but
below A- and/or (ii) insurance financial strength rating, if available, or
otherwise an unsecured rating, from Moody's of at least Baa3, but below A3.
"TIER 3 INSURER" means, as of any date of determination, applying, if
applicable, the Split Rating Determination Methodology, (i) an insurance carrier
that has a then current (a) a claims-paying ability rating, if available, or
otherwise an unsecured rating, of below investment grade (investment grade being
a rating in one of the top four generic rating categories, irrespective of any
plus or minus) from Standard & Poor's and/or (b) an insurance financial strength
rating, if available, or otherwise an unsecured rating, of below investment
grade (investment grade being a rating in one of the top four generic rating
categories, irrespective of any plus or minus) by ▇▇▇▇▇'▇ or (ii) an insurance
carrier that has been rated by neither Standard & Poor's nor ▇▇▇▇▇'▇.
"TOP TIER 2 INSURER" means, as of any date of determination, any of
the four Tier 2 Insurers with the largest aggregate amounts of insurance
premiums financed by the Receivables relative to all Tier 2 Insurers with
insurance premiums financed by the Receivables, based on the most recent Insurer
Schedule delivered to the Rating Agencies by the Originators or the Transferor.
"TOP TIER 3 INSURER" means, as of any date of determination, any of
the five Tier 3 Insurers with the largest aggregate amounts of insurance
premiums financed by the Receivables relative to all Tier 3 Insurers with
insurance premiums financed by the Receivables, based on the most recent Insurer
Schedule delivered to the Rating Agencies by the Originators or the Transferor.
"TRANSFER AGENT AND REGISTRAR" is defined in Section 6.3 and shall
initially be the Trustee's Corporate Trust Office.
"TRANSFER DATE" means, unless otherwise specified in the related
Supplement, with respect to any Series, the Business Day immediately prior to
each Distribution Date.
"TRANSFEROR" means Mellon Premium Finance Loan Owner Trust, a Delaware
business trust, and any successors pursuant to Section 7.2.
"TRANSFEROR INELIGIBLE ACCOUNT" is defined in subsection 2.4(d)(v).
"TRANSFEROR INELIGIBLE RECEIVABLE" is defined in subsection
2.4(d)(iii).
"TRANSFEROR INTEREST" shall equal on any date of determination an
amount equal to (a) the amount of Principal Receivables as of such date of
determination, less (b) the Adjusted Aggregate Investor Interest on such date of
determination, less (c) the outstanding amount of all Supplemental Certificates
(and any purchased interest sold pursuant to subsection 6.9(d)) as of such date
of determination, plus (d) the amount on deposit in the Excess Funding Account
on such date of determination.
"TRANSFEROR PERCENTAGE" means, on any date of determination, when used
with respect to Principal Receivables, Finance Charge Receivables and Defaulted
Receivables, a percentage equal to 100% minus the Aggregate Investor Percentage
with respect to such categories of Receivables.
"TRANSFEROR SERVICING FEE" is defined in Section 3.2.
"TRUST" means the trust created by this Agreement, which shall be
known as the Mellon Bank Premium Finance Loan Master Trust, and the corpus of
which is the Trust Assets.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement,
dated as of June 15, 2001, between Mellon Bank, as beneficiary and
administrator, and Chase Manhattan Bank USA, National Association, as owner
trustee.
"TRUST ASSETS" means (i) the Receivables conveyed to the Trust from
time to time; (ii) all monies due or to become due with respect to such
Receivables, including all monies received from insurance companies and state
insurance guaranty funds representing returns of Unearned Premiums, the proceeds
from any guarantees issued by insurance agents or other parties with respect to
the Receivables and other charges due on such Receivables; (iii) such amounts as
may be from time to time deposited into the Collection Account, the Finance
Charge Account, the Excess Funding Account, the Distribution Account and any
Series Account; (iv) any Enhancement issued with respect to any Series; (v) all
of the Transferor's rights under the Second Tier Receivables Purchase Agreement
(including, without limitation, the rights of Mellon Bank under the First Tier
Receivables Purchase Agreement that were assigned to the Transferor therein) and
(vi) the proceeds of all of the foregoing.
"TRUST PAY OUT EVENT" is defined in Section 9.1.
"TRUST TERMINATION DATE" means the earliest to occur of (a) the first
Business Day after the Distribution Date on which, following application of all
funds as provided in the Agreement, including all Supplements thereto, the
Aggregate Investor Interest equals zero, (b) April 7, 2020, and (c) the date,
following sale, disposition or liquidation of the Receivables, designated as the
date that the Trust shall terminate pursuant to Section 9.2.
"TRUSTEE" means ▇▇▇▇▇ Fargo Bank Minnesota, National Association, and
its successors and any corporation resulting from or surviving any consolidation
or merger to which it or its successors may be a party and any successor trustee
appointed as herein provided.
"UCC" means the Uniform Commercial Code as in effect in any specified
jurisdiction.
"UNDIVIDED INTEREST" means the undivided interest in the Trust
evidenced by an Investor Certificate.
"UNEARNED PREMIUM" shall mean, with respect to any Receivable, the
portion, if any, of any insurance premium financed under the related Premium
Finance Agreement that is considered unearned and is required under applicable
law and/or the terms of the related insurance policy to be returned by the
insurance company directly, or indirectly through an insurance broker or agent,
to an Originator upon issuance to the related Obligor and the insurance company
of a notice of cancellation of the related insurance policy, if such insurance
policy is cancelable.
"VARIABLE INTEREST" means either of (a) any Investor Certificate that
is designated as a variable funding certificate in the related Supplement and
(b) any purchased interest sold as permitted by subsection 6.9(d).
"VICE PRESIDENT" when used with respect to the Trustee, means any Vice
President, whether or not designated by a number or a word or words added before
or after the title "Vice President."
SECTION 1.2. OTHER INTERPRETIVE PROVISIONS. With respect to any
Series, all terms used and not defined herein are used as defined in the related
Supplement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document delivered pursuant hereto unless
otherwise defined therein. For purposes of this Agreement and all such
certificates and other documents, unless the context otherwise requires: (a)
accounting terms not otherwise defined in this Agreement, and accounting terms
partly defined in this Agreement to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles; (b) terms defined in Article 9 of the UCC as in effect in the State
of Delaware and not otherwise defined in this Agreement are used as defined in
that Article; (c) any reference to each Rating Agency shall only apply to any
specific rating agency if such rating agency is then rating any outstanding
Series; (d) references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on such day; (e) the
words "hereof," "herein" and "hereunder" and words of similar import refer to
this Agreement (or the certificate or other document in which they are used) as
a whole and not to any particular provision of this Agreement (or such
certificate or document); (f) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to this Agreement (or the
certificate or other document in which the reference is made), and references to
any paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (g) the term "including" means "including without
limitation"; (h) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (i) references to any Person include that Person's successors and
assigns; and (j) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof. The
agreements, representations and warranties of each of AFCO Credit, AFCO
Acceptance and Mellon Premium Finance Loan Owner Trust in this Agreement, in
their respective capacities as Servicer and the Transferor, shall be deemed to
be its agreements, representations and warranties only so long as it remains a
party to this Agreement in such capacity; provided, that any obligations of AFCO
Credit, AFCO Acceptance and Mellon Premium Finance Loan Owner Trust under this
Agreement that arise out of any of their acts or omissions in the performance of
their duties under this Agreement shall survive the termination of any such
party as a party to this Agreement. The monthly Servicer certificate shall be in
substantially the form of Exhibit A, with such changes as the Servicer may
determine to be necessary or desirable; provided that no such change shall serve
to exclude information required by this Agreement or any Supplement. The
Servicer shall, upon mailing such determination, deliver to the Trustee and each
Rating Agency an Officer's Certificate to which shall be annexed the form of the
related Exhibit, as so changed. Upon the delivery of such Officer's Certificate
to the Trustee, the related Exhibit, as so changed, shall for all purposes of
this Agreement constitute such Exhibit. The Trustee may conclusively rely upon
such Officer's Certificate in determining whether the related Exhibit, as
changed, conforms to the requirements of this Agreement.
SECTION 1.3. DAILY ALLOCATION OF FINANCE CHARGE COLLECTIONS.
(i) On each Business Day in each Monthly Period, the amount of
Collections treated as Collections on Finance Charge Receivables
("DAILY FINANCE CHARGE COLLECTIONS") shall be an amount equal to the
Finance Charge Collections in the immediately preceding Monthly Period
divided by the number of Business Days in such Monthly Period.
(ii) Notwithstanding the foregoing, the Servicer may adopt a
different method of determining the amount of Finance Charge
Collections which in the good faith judgment of the Servicer is
designed to more accurately reflect the amounts constituting Finance
Charge Collections with notice to the Rating Agencies.
SECTION 1.4. Daily Allocation of Principal Collections. For each
Business Day in each Monthly Period, the amount of Collections treated as
Collections on Principal Receivables ("DAILY PRINCIPAL COLLECTIONS") shall equal
the amount of Collections received by the Servicer on such day less the amount
of Daily Finance Charge Collections for such day.
SECTION 1.5. SERVICER OBLIGATION TO TRUE-UP. (a) On the Determination
Date following each Monthly Period, the Servicer shall be obligated to adjust
the amount that should have been recorded as Collections in respect of Principal
Receivables and Finance Charge Receivables in accordance with the definitions of
Principal Collections and Finance Charge Collections, respectively.
(b) Notwithstanding the foregoing, the Servicer may adopt a different
method of estimating the amount of Collections allocable to the Accounts which
in the good faith judgment of the Servicer is designed to more accurately
reflect the actual amounts being collected in respect thereof. The Servicer
shall provide to each Rating Agency and to the Trustee written notice each time
the Servicer adopts a different method of estimating such amounts.
Sections 1.3, 1.4 and 1.5 shall only apply if the Servicer is required
to make daily deposits of Collections into the Collection Account pursuant to
Section 4.3.
ARTICLE IA
AMENDMENT AND RESTATEMENT
SECTION 1A.1. AMENDMENT AND RESTATEMENT. The Original PSA is hereby
amended and restated in its entirety and replaced for all purposes by this
Agreement from and as of the date hereof; provided, however, that the terms and
conditions of the Original PSA shall continue to be in full force and effect and
apply for all periods prior to the date of this Agreement. Notwithstanding
anything to the contrary contained in the Original PSA, the parties hereto agree
that the Trustee shall have no liability in respect of any action or failure to
act by Bank One as predecessor trustee under the Original PSA.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. CONVEYANCE OF RECEIVABLES. (a) The Transferor hereby
transfers, assigns and otherwise conveys to the Trustee, on behalf of the Trust,
for the benefit of the Holders, without recourse, all of its right, title and
interest in and to (i) the Initial Receivables, including the powers of attorney
included therein, (ii) the Transferor's security interest in the related
Unearned Premiums, (iii) all monies due or to become due with respect to such
Receivables on or after the Initial Closing Date, including all monies received
from insurance companies and state insurance guaranty funds representing returns
of Unearned Premiums, the proceeds from any guarantees issued by insurance
agents and other parties in respect of the Receivables and other charges,
rebates or refunds due on such Receivables, (iv) its rights (but none of its
obligations) under the Second Tier Receivables Purchase Agreement (including the
assignment of Mellon Bank's rights amongst the Originators under the First Tier
Receivables Purchase Agreement) and (v) all proceeds of all of the foregoing
(the property described in clauses (i) - (v) above being, the "CONVEYED
PROPERTY").
(b) The Transferor hereby transfers, assigns, and otherwise conveys to
the Trustee, on behalf of the Trust, for the benefit of the Holders, without
recourse, as of the related Addition Date, all of its right title and interest
in and to (i) the Additional Receivables, including the powers of attorney
included therein, (ii) the Transferor's security interest in the related
Unearned Premiums, (iii) all monies due or to become due with respect to such
Additional Receivables on or after the related Addition Date, including all
monies received from insurance companies and state insurance guaranty funds
representing returns of Unearned Premiums, the proceeds of any guarantees issued
by insurance agents and other parties in respect of the Additional Receivables
and other charges, rebates or refunds due on such Additional Receivables and
(iv) all of the proceeds of the foregoing (the property described in clauses (i)
- (iv) above being, the "ADDITIONAL PROPERTY").
(c) In connection with any transfer, assignment and conveyance
pursuant to Section 2.1(a) or Section 2.1(b), the Transferor agrees to record
and file, at its own expense, a financing statement (including any continuation
statements with respect to such financing statement when applicable) with
respect to the Conveyed Property and the Additional Property meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect the assignment of the Conveyed Property and the
Additional Property to the Trust, and to deliver a file-stamped copy of such
financing statement or continuation statement or other evidence of such filing
to the Trustee on or prior to the date of issuance of the Certificates (and in
the case of any continuation statements filed pursuant to this Section 2.1, as
soon as practicable after receipt thereof by the Transferor). The foregoing
transfer, assignment and conveyance to the Trust shall be made to the Trustee,
on behalf of the Trust, and each reference in this Agreement to such transfer,
assignment and conveyance shall be construed accordingly.
(d) In connection with any transfer pursuant to Section 2.1, the
Transferor agrees on or prior to the Initial Closing Date or the applicable
Addition Date, as applicable, to cause Mellon Bank, pursuant to Section 2.1(d)
of the Second Tier Receivables Purchase Agreement, to cause each of the
Originators, at such Originator's expense, to indicate in its computer files
that the related Initial Receivables or Additional Receivables, as applicable,
have been transferred (i) by such Originator to Mellon Bank pursuant to the
First Tier Receivables Purchase Agreement, (ii) by Mellon Bank to the Transferor
pursuant to the Second Tier Receivables Purchase Agreement and (iii) by the
Transferor to the Trustee, on behalf of the Trust, for the benefit of the
Holders, pursuant to this Agreement.
(e) The parties intend that if, and to the extent that, any transfer
pursuant to this Section 2.1 is not deemed to be a sale, the Transferor shall be
deemed hereunder to have granted to the Trustee, on behalf of the Trust, for the
benefit of the Holders, a first priority perfected security interest in all of
the Transferor's right, title and interest in, to and under the Conveyed
Property and that this Agreement shall constitute a security agreement under
applicable law.
(f) [Reserved]
(g) On the date any Premium Finance Agreements are conveyed to the
Transferor pursuant to the Second Tier Receivables Purchase Agreement, the
Transferor shall, prior to or simultaneously with conveying such Premium Finance
Agreements to the Trust, add or cause to be added such Premium Finance
Agreements to the Receivables Schedule as set forth in Schedule III.
At the request of the Transferor, the Trustee shall cause Certificates
in authorized denominations evidencing the entire interest in the Trust to be
duly authenticated and delivered to or upon the order of the Transferor pursuant
to Section 6.2.
SECTION 2.2. ACCEPTANCE BY TRUSTEE. (a) The Trustee hereby
acknowledges its acceptance, on behalf of the Trust, of all right, title and
interest previously held by the Transferor in and to the Conveyed Property, and
declares that it shall maintain such right, title and interest, upon the Trust
herein set forth, for the benefit of all Holders. The Trustee further
acknowledges that, prior to or simultaneously with the execution and delivery of
this Agreement, the Transferor delivered to the Trustee the Receivables Schedule
referred to in SUBSECTION 2.1(D).
(b) The Trustee agrees not to disclose to any Person any of the
account numbers or other information contained in the computer files or
microfiche lists delivered to the Trustee by the Originators or the Transferor
pursuant to SECTION 2.1, except as is required in connection with the
performance of its duties hereunder or in enforcing the rights of the Holders or
to a Successor Servicer appointed pursuant to SECTION 10.2, as mandated pursuant
to any Requirement of Law applicable to the Trustee or as requested by any
Person in connection with financing statements filed with the Trust. The Trustee
agrees to take such reasonable measures to protect and maintain the security and
confidentiality of such information, and, in connection therewith, shall allow
the Transferor reasonable access to inspect the Trustee's security and
confidentiality arrangements from time to time during normal business hours. In
the event that the Trustee is required by law to disclose any such information,
the Trustee shall provide the Transferor with prompt written notice, unless such
notice is prohibited by law, of any such request or requirement so that the
Transferor may request a protective order or other appropriate remedy. The
Trustee shall make best efforts to provide the Transferor with written notice no
later than five days prior to any disclosure pursuant to this subsection 2.2(b).
(c) 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.
SECTION 2.3. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. The
Transferor hereby represents and warrants to the Trust as of the Initial Closing
Date and as of any Addition Date:
(a) ORGANIZATION AND GOOD STANDING. The Transferor is a Delaware
business trust under the Business Trust Act and is duly formed and validly
existing in good standing under the laws of the State of Delaware and has full
trust 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, and to execute, deliver and perform its obligations under this
Agreement and to execute and deliver to the Trustee the Certificates pursuant
hereto.
(b) DUE QUALIFICATION. The Transferor is duly qualified to do business
and is in good standing (or is exempt from such requirement) in any state
required in order to conduct its business, and has obtained all necessary
licenses and approvals with respect to the Transferor required under Federal and
Delaware law (including any necessary licenses required under the Licensing Laws
of each Permitted Jurisdiction).
The representations and warranties set forth in this Section 2.3 shall
survive the transfer and assignment of the respective Receivables to the Trust
and any termination of the rights and obligations of the Servicer pursuant to
Section 10.1. The Transferor hereby represents and warrants to the Trust, with
respect to any Series of Certificates, as of its Closing Date, unless otherwise
stated in the related Supplement, that the representations and warranties of the
Transferor set forth in this Section 2.3 are true and correct as of such date
(and for purposes of such representations and warranties, (x) "CERTIFICATES"
means the Certificates issued on the related Closing Date and (y) references to
the Initial Closing Date shall be deemed to refer to that Closing Date). Upon
discovery by the Transferor, the Servicer or the Trustee of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the others.
SECTION 2.4. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
THIS AGREEMENT, THE SECOND TIER RECEIVABLES PURCHASE AGREEMENT AND THE
RECEIVABLES.
(a) BINDING OBLIGATION; VALID TRANSFER AND ASSIGNMENT. The Transferor
hereby represents and warrants to the Trust that, as of the Initial Closing Date
and as of any Addition Date:
(i) DUE AUTHORIZATION. The execution and delivery of this
Agreement and the Second Tier Receivables Purchase Agreement by the
Transferor and the consummation of the transactions provided for in
this Agreement and the Second Tier Receivables Purchase Agreement have
been duly authorized by the Transferor by all necessary corporate
action on its part, and this Agreement and the Second Tier Receivables
Purchase Agreement will remain, from the time of its execution, an
official record of the Transferor.
(ii) BINDING OBLIGATION. This Agreement and the Second Tier
Receivables Purchase Agreement constitute legal, valid and binding
obligations of the Transferor, enforceable against the Transferor in
accordance with their terms, except (A) 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 the rights of
creditors of national banking associations, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(iii) NO CONFLICT. The execution and delivery of this Agreement,
the Certificates, the First Tier Receivables Purchase Agreement and
the Second Tier Receivables Purchase Agreement, the performance of the
transactions contemplated by this Agreement, the Certificates, the
First Tier Receivables Purchase Agreement and the Second Tier
Receivables Purchase Agreement and the fulfillment of the terms hereof
and thereof will not conflict with, 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 material default under, any
indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Transferor is a party or by which it or any of
its properties are bound.
(iv) NO VIOLATION. The execution and delivery of this Agreement,
the Certificates and the Second Tier Receivables Purchase Agreement,
the performance of the transactions contemplated by this Agreement and
the fulfillment of the terms hereof and thereof will not conflict with
or violate any Requirements of Law applicable to the Transferor.
(v) VALID TRANSFER OR GRANT OF SECURITY INTEREST. This Agreement
constitutes either (A) a valid transfer, assignment and conveyance to
the Trustee, on behalf of the Trust, for the benefit of the Holders,
of all right, title and interest of the Transferor in and to the
Conveyed Property and any Additional Property all of which will be
held by the Trustee on behalf of the Trust, free and clear of any Lien
of any Person claiming through or under the Transferor or any of its
Affiliates, except for (i) Liens permitted under subsection 2.5(b),
(ii) the Transferor Interest and (iii) the Transferor's right to
receive interest accruing on, and investment earnings in respect of,
the Finance Charge Account and the Excess Funding Account, or any
Series Account as provided in this Agreement and any related
Supplement or (B) a grant of an enforceable security interest (as
defined in the UCC as in effect in the State of New York) in the
Conveyed Property and any Additional Property. If this Agreement
constitutes the grant of a security interest to the Trust in the
Conveyed Property and any Additional Property, upon the filing of the
financing statement described in SECTION 2.1, the Trust shall have a
first priority perfected security interest in such property (as
defined in the UCC as in effect in the States of New York and
Delaware), except for Liens permitted under SUBSECTION 2.5(B). Neither
the Transferor nor any Person claiming through or under the Transferor
shall have any claim to or interest in the Excess Funding Account, the
Finance Charge Account, the Distribution Account or any Series
Account, except for the Transferor's rights to receive interest
accruing on, and investment earnings in respect of, the Finance Charge
Account and Excess Funding Account as provided in this Agreement (or,
if applicable, any Series Account as provided in any Supplement) and,
if this Agreement constitutes the grant of a security interest in such
property, except for the interest of the Transferor in such property
as a debtor for purposes of the UCC as in effect in the State of New
York.
(vi) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of the Transferor, threatened
against the Transferor before any court, regulatory body,
administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, the
Certificates or the Second Tier Receivables Purchase Agreement, (ii)
seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this
Agreement, the Certificates or the Second Tier Receivables Purchase
Agreement, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Transferor, would materially and adversely
affect the performance by the Transferor of its obligations under this
Agreement, the Certificates or the Second Tier Receivables Purchase
Agreement, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement, the Certificates or the Second Tier Receivables Purchase
Agreement or (v) seeking to affect adversely the income tax attributes
of the Trust.
(vii) 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
of this Agreement, the Certificates and the Second Tier Receivables
Purchase Agreement, the performance of the transactions contemplated by
this Agreement, the Certificates and the Second Tier Receivables
Purchase Agreement and the fulfillment of the terms hereof, have been
obtained.
(viii) RECEIVABLES SCHEDULE. The related Receivables Schedule, as
of any date, is an accurate and complete listing in all material
respects of all the Receivables conveyed to the Trust on or prior to
such date and the information contained therein with respect to the
identity of each Receivable is true and correct in all material
respects as of the date such Receivables are conveyed to the Trust.
(b) ELIGIBILITY OF RECEIVABLES. The Transferor hereby represents and
warrants to the Trust as of the Initial Closing Date, with respect to the
Initial Receivables, and as of the related Addition Date with respect to the
Additional Receivables:
(i) Each Receivable conveyed to the Trust on such date is an
Eligible Receivable.
(ii) Each Receivable then existing has been conveyed to the Trust
free and clear of any Lien of any Person claiming through or under the
Transferor or any of its Affiliates (other than Liens permitted under
SUBSECTION 2.5(B)) and in compliance, in all material respects, with
all Requirements of Law applicable to the Transferor.
(c) NOTICE OF BREACH. The representations and warranties set forth in
this SECTION 2.4 shall survive the transfer and assignment of the respective
Receivables to the Trust. Upon discovery by the Transferor, the Servicer or the
Trustee of a breach of any of the representations and warranties set forth in
this SECTION 2.4, the party discovering such breach shall give prompt written
notice to the other parties mentioned above and to the Rating Agencies. The
Transferor agrees to cooperate with the Servicer and the Trustee in attempting
to cure any such breach.
(d) TRANSFER OF INELIGIBLE RECEIVABLES.
(i) [Reserved.]
(ii) REMOVAL AFTER CURE PERIOD. In the event of a breach of the
representation and warranty set forth in SUBSECTION 2.4(B)(I) or
SUBSECTION 2.4(B)(II), then, upon the expiration of 60 days from the
earlier to occur of the discovery of any such event by either the
Transferor or the Servicer, or receipt by the Transferor of written
notice of any such event given by the Trustee, such Receivable shall
be removed from the Trust on the terms and conditions set forth in
SUBSECTION 2.4(D)(III); provided that no such removal shall be
required to be made if, on any day within such applicable period, such
representations and warranties with respect to such Receivable shall
then be true and correct as if such Receivable had been created on
such day.
(iii) PROCEDURES FOR REMOVAL. When the provisions of
SUBSECTION 2.4(D)(II) require removal of a Receivable, the Transferor
shall, subject to SUBSECTION 2.4(D)(V), accept reassignment of such
Receivable (a "TRANSFEROR INELIGIBLE RECEIVABLE") by directing the
Servicer to deduct the Aggregate Receivable Balance of each Transferor
Ineligible Receivable from the Aggregate Receivables in the Trust (to
the extent previously included therein) as of such date. On and after
the date of such removal, the principal portion of each Transferor
Ineligible Receivable shall be deducted from the aggregate amount of
Principal Receivables used in the calculation of any Investor
Percentage, the Transferor Percentage or the Transferor Interest. If
the exclusion of a Transferor Ineligible Receivable from the
calculation of the Transferor Interest would cause the Transferor
Interest to be reduced below zero or would otherwise not be permitted
by law, the Transferor shall promptly, and in no event later than 10
Business Days after such event, make a deposit in the Excess Funding
Account (for allocation as Principal Collections received on the day of
deposit) in immediately available funds prior to the next succeeding
Transfer Date in an amount equal to the amount by which the Transferor
Interest would be reduced below zero. Upon the removal of any
Transferor Ineligible Receivable (and the mailing of any deposit
required above), the Trust shall automatically and without further
action be deemed to transfer, assign and otherwise convey to the
Transferor, without recourse, representation or warranty, all the
right, title and interest of the Trust in and to each such Transferor
Ineligible Receivable, all monies due or to become due with respect to
such Transferor Ineligible Receivable and all proceeds of such
Transferor Ineligible Receivable and Recoveries relating to such
Transferor Ineligible Receivable. The Trustee shall execute such
documents and instruments of transfer or assignment and take other
actions as shall reasonably be requested by the Transferor to evidence
the conveyance of such Transferor Ineligible Receivable pursuant to
this subsection 2.4(d)(iii). The obligation of the Transferor set forth
in this subsection 2.4(d)(iii), shall constitute the sole remedy
respecting any breach of the representations and warranties set forth
in the above-referenced subsections with respect to such Receivable
available to the Holders or the Trustee on behalf of the Holders.
(iv) [Reserved.]
(v) REASSIGNMENT OF ALL RECEIVABLES IN ACCOUNT. In the event
that, for administrative reasons, the Transferor is unable to
segregate a Transferor Ineligible Receivable from other Receivables in
the related Account (a "TRANSFEROR INELIGIBLE ACCOUNT"), then all the
Receivables in such Transferor Ineligible Account shall be treated as
Transferor Ineligible Receivables and the Transferor shall be
obligated to accept reassignment of all such Receivables in such
Transferor Ineligible Account.
(e) REASSIGNMENT OF TRUST PORTFOLIO. If any of the representations and
warranties set forth in subsection 2.4(a) is not true and correct in any
material respect when made and such breach has a material adverse effect upon
the interest of the Holders in the Receivables, then either the Trustee or the
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Investor Interest, by notice then given in writing to
the Transferor (and to the Trustee and the Servicer, if given by the Investor
Holders), may direct the Transferor to accept reassignment of all Principal
Receivables within 60 days of such notice (or within such longer period as may
be specified in such notice), and the Transferor shall accept reassignment of
such Principal Receivables on a Distribution Date specified by the Transferor
(such Distribution Date, the "REASSIGNMENT DATE") occurring within such
applicable period on the terms and conditions set forth below; PROVIDED that no
such reassignment shall be required to be made if, at any time during such
applicable period, the representations and warranties contained in SUBSECTION
2.4(A) shall then be true and correct in all material respects. The Transferor
shall deposit on the Transfer Date (in New York Clearing House, next day funds)
preceding the Reassignment Date an amount equal to the reassignment deposit
amount for such Receivables in the Distribution Account or Series Account, as
provided in the related Supplement, for distribution to the Investor Holders
pursuant to ARTICLE XII. The reassignment deposit amount with respect to each
Series for such reassignment, unless otherwise stated in the related Supplement,
shall be equal to (i) the Investor Interest of such Series at the end of the day
on the last day of the Monthly Period preceding the Reassignment Date, less the
amount, if any, previously allocated for payment of principal to such Holders on
the related Distribution Date in the Monthly Period in which the Reassignment
Date occurs, PLUS (ii) an amount equal to all interest accrued but unpaid on the
Investor Certificates of such Series at the applicable interest rate through the
Distribution Date in the Monthly Period in which such Reassignment Date occurs,
less the amount if any, previously allocated for payment of interest to the
Holders of such Series on such Distribution Date. Payment of the reassignment
deposit amount with respect to each Series, and all other amounts in the
Distribution Account or the applicable Series Account in respect of the
preceding Monthly Period, shall be considered a prepayment in full of the
Receivables represented by the Investor Certificates. On the Distribution Date
following the Transfer Date on which such amount has been deposited in full into
the Distribution Account or the applicable Series Account, the Receivables and
all monies due or to become due with respect to such Receivables and all
proceeds of the Receivables and Recoveries relating to such Receivables shall be
released to the Transferor after payment of all amounts otherwise due hereunder
on or prior to such dates and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are reasonably
requested by the Transferor to vest in the Transferor, or its designee or
assignee, all right, title and interest of the Trust in and to the Receivables,
all monies due or to become due with respect to such Receivables and all
proceeds of the Receivables and Recoveries and relating to such Receivables. If
the Trustee or the Investor Holders give notice directing the Transferor to
accept reassignment as provided above, the obligation of the Transferor to
accept reassignment of the Receivables and pay the reassignment deposit amount
pursuant to this SUBSECTION 2.4(E) shall constitute the sole remedy respecting a
breach of the representations and warranties contained in CLAUSE (II) or (VIII)
of SUBSECTION 2.4(A) available to the Investor Holders or the Trustee on behalf
of the Investor Holders.
SECTION 2.5. COVENANTS OF TRANSFEROR. The Transferor hereby covenants
that:
(a) RECEIVABLES TO BE GENERAL INTANGIBLES. The Transferor will take no
action to cause any Receivable to be anything other than a general intangible as
defined under the UCC of the States of Delaware and New York or of the
Commonwealth of Pennsylvania.
(b) SECURITY INTERESTS. Except for the conveyances hereunder, the
Transferor shall 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; the
Transferor shall immediately notify the Trustee of the existence of any Lien on
any Receivable; and the Transferor shall take all actions necessary to enforce
its rights and claims under the Second Tier Receivables Purchase Agreement and
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 Transferor; PROVIDED that nothing in
this SUBSECTION 2.5(B) shall prevent or be deemed to prohibit the Transferor
from suffering to exist upon any of the Receivables any Liens for municipal or
other local taxes if such taxes shall not at the time be due and payable or if
the Transferor 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.
(c) RECEIVABLE ALLOCATIONS.
(i) If the Transferor is unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of this
Agreement (including by reason of the application of the provisions of
SECTION 9.2 or an order by any Federal governmental agency having
regulatory authority over the Transferor or any court of competent
jurisdiction that the Transferor not transfer any additional Principal
Receivables to the Trust) then, in any such event: (A) the Transferor
agrees to allocate and pay to the Trust, after the date of such
inability, all Principal Collections, and all amounts which would have
constituted Principal Collections but for the Transferor's inability
to transfer such Receivables (up to an aggregate amount equal to the
amount of Principal Receivables in the Trust on such date); (B) the
Transferor agrees to have such amounts applied as Collections in
accordance with ARTICLE IV; and (C) for only so long as all
Collections and all amounts which would have constituted Collections
are allocated and applied in accordance with CLAUSES (A) and (B),
Principal Receivables (and all amounts which would have constituted
Principal Receivables but for the Transferor's inability to transfer
Receivables to the Trust) that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in
accordance with ARTICLE IV, and all amounts that would have
constituted Principal Receivables but for the Transferor's inability
to transfer Receivables to the Trust shall be deemed to be Principal
Receivables for the purpose of calculating (i) the applicable Investor
Percentage with respect to any Series and (ii) the Aggregate Investor
Percentage. The parties hereto agree that Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables that
have been conveyed to the Trust, or that would have been conveyed to
the Trust but for the above described inability to transfer such
Receivables, shall continue to be a part of the Trust notwithstanding
any cessation of the transfer of additional Principal Receivables to
the Trust and Collections with respect thereto shall continue to be
allocated and paid in accordance with ARTICLE IV.
(ii) If the Transferor accepts reassignment of an Ineligible
Receivable pursuant to SUBSECTION 2.4(D), then, in any such event, the
Transferor agrees to account for payments received with respect to
such Ineligible Receivable separately from its accounting for
Collections on Principal Receivables retained by the Trust. If
payments received from or on behalf of an Obligor are not specifically
applicable either to an Ineligible Receivable of such Obligor
reassigned to the Transferor or to the Receivables of such Obligor
retained in the Trust, then the Transferor agrees to allocate payments
proportionately based on the total amount of Principal Receivables of
such Obligor retained in the Trust and the total amount owing by such
Obligor on any Ineligible Receivables reassigned to the Transferor,
and the portion allocable to any Principal Receivables retained in the
Trust shall be treated as Collections and deposited in accordance with
the provisions of ARTICLE IV.
(d) CONVEYANCE OF RECEIVABLES. The Transferor shall not convey,
assign, exchange or otherwise transfer the Receivables to any Person prior to
the termination of this Agreement as provided by Article XII, except as provided
in Section 2.1; provided that the Transferor shall not be prohibited hereby from
conveying, assigning, exchanging or otherwise transferring the Receivables in
connection with a transaction complying with the provisions of Section 7.2.
(e) INSURER SCHEDULE. On each Determination Date, the Transferor shall
deliver to each Rating Agency an Insurer Schedule, dated as of such
Determination Date.
SECTION 2.6. Mandatory Removal of Receivables. If, on any date of
determination, (i) there exists an Excess Obligor Concentration Amount, (ii)
there exists an Excess Insurer Concentration Amount, (iii) there exists an
Excess ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇) the Aggregate Top
Tier 3 Insurer Percentage exceeds the Maximum Aggregate Top Tier 3 Insurer
Percentage,(v) the Aggregate Top Tier 2 Insurer Percentage exceeds the Maximum
Aggregate Top Tier 2 Insurer Percentage or (vi) violation of such concentration
limits set forth in any agreement evidencing Enhancement as are specified in any
Supplement hereto (each, a "Concentration Limit Breach") and such Concentration
Limit Breach is not the result of a breach of any of the representations or
warranties set forth in subsections 2.4(b)(i) or 2.4(b)(ii), then, promptly
following the earlier to occur of the discovery of such Concentration Limit
Breach by either the Transferor or the Servicer, or receipt by the Transferor of
written notice of any such Concentration Limit Breach from the Trustee, the
Transferor shall designate those Receivables for deletion and removal ("Removed
Receivables") from the Trust as are necessary solely to cure any such
Concentration Limit Breach; provided that (i) Removed Receivables shall be
selected in the reverse order from that in which they were added to the Trust,
and, if more than one such Receivable shall have been added to the Trust on the
same day, any such Receivable having the lowest principal balance shall be
removed prior to any such other Receivable and (ii) aggregate Principal
Receivables removed from the Trust since the Initial Closing Date pursuant to
this Section shall not exceed 5% of Principal Receivables on the Initial Closing
Date. Removed Receivables shall be removed from the Trust in the manner set
forth in Section 2.4(d)(iii), as if such Removed Receivables were Transferor
Ineligible Receivables.
ARTICLE III
ADMINISTRATION AND SERVICING
SECTION 3.1. ACCEPTANCE OF APPOINTMENT AS SERVICER AND BACK-UP
SERVICER.
(a) The Transferor hereby appoints AFCO Credit and AFCO Acceptance to
act as Servicer under this Agreement and AFCO Credit and AFCO Acceptance hereby
agree to such appointment. The Transferor hereby appoints PFSI and PFSIC to act
as Back-up Servicer under this Agreement and to act as Successor Servicer under
this Agreement upon removal of the Servicer pursuant to SECTION 10.2 and PFSI
and PFSIC hereby agree to such appointment. The Back-up Servicer hereby agrees
to, upon its appointment as Successor Servicer, perform all of the duties of the
Servicer under this Agreement (except as expressly stated otherwise herein). The
Investor Holders and Credit Enhancement Provider of each Series, by their
acceptance of the related Certificates and the issuance of the Credit
Enhancement, consent to AFCO Credit and AFCO Acceptance acting as Servicer and
PFSI and PFSIC acting as Back-up Servicer. The Back-up Servicer shall continue
to act as Back-up Servicer under this Agreement until the earlier of (x) the
removal or resignation of the Back-up Servicer pursuant to SECTIONS 10.2 or 8.10
or (y) the initial Series Termination Date.
(b) The Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing insurance premium finance
receivables comparable to the Receivables and in accordance with the Guidelines
and 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.
Without limiting the generality of the foregoing and subject to SECTION 10.1,
the Servicer is hereby authorized and empowered (i) to make withdrawals from the
Collection Account as set forth in this Agreement, (ii) unless such power and
authority is revoked by the Trustee on account of the occurrence of a Servicer
Default pursuant to SECTION 10.1, to instruct the Trustee to make withdrawals
and payments, from the Finance Charge Account, the Excess Funding Account and
any Series Account, in accordance with such instructions as set forth in this
Agreement, (iii) unless such power and authority is revoked by the Trustee on
account of the occurrence of a Servicer Default pursuant to SECTION 10.1, to
instruct the Trustee in writing, as set forth in this Agreement, (iv) to execute
and deliver, on behalf of the Trust for the benefit of the Holders, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Receivables
and, after the delinquency of any Receivable and to the extent permitted under
and in compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (v) as long as the Originators
are Servicer, to make any filing, reports, notices, applications, registrations
with, and to seek any consents or authorizations from the Securities and
Exchange Commission and any state securities authority on behalf of the Trust as
may be necessary or advisable to comply with any Federal or state securities or
reporting requirements. In the event the Originators are no longer Servicer, the
Back-up Servicer shall upon written request of the Transferor supply to the
Transferor all necessary information reasonably available requested by the
Transferor in such written request for the preparation of the documents referred
to in CLAUSE (v) and the Transferor shall make such filings, reports, notices,
applications, registrations with, and seek any such consents or authorizations
from the Securities and Exchange Commission and any state securities authority
on behalf of the Trust as may be necessary or advisable and comply with any such
Federal or state securities or reporting requirements. The Trustee agrees that
it shall promptly follow the instructions of the Servicer to withdraw funds from
the Excess Funding Account, the Finance Charge Account or any Series Account and
to take any action required under any Credit Enhancement at such time as
required under this Agreement. The Trustee shall execute at the Servicer's
written request such documents prepared by the Transferor and acceptable to the
Trustee as may be necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder.
(c) If the Transferor is unable for any reason to transfer Receivables
to the Trust in accordance with the provisions of this Agreement (including by
reason of the application of the provisions of SECTION 9.2 or the order of any
Federal governmental agency having regulatory authority over the Transferor or
any court of competent jurisdiction that the Transferor not transfer any
additional Principal Receivables to the Trust) then, in any such event, (A) the
Servicer agrees to allocate, after such date, all Collections with respect to
Principal Receivables, and all amounts which would have constituted Collections
with respect to Principal Receivables but for the Transferor's inability to
transfer such Receivables (up to an aggregate amount equal to the aggregate
amount of Principal Receivables in the Trust as of such date) in accordance with
SUBSECTION 2.5(c); (B) the Servicer agrees to apply such amounts as Collections
in accordance with ARTICLE IV, and (C) for only so long as all Collections and
all amounts which would have constituted Collections are allocated and applied
in accordance with CLAUSES (A) and (B) above, Principal Receivables and all
amounts which would have constituted Principal Receivables but for the
Transferor's inability to transfer Receivables to the Trust that are written off
as uncollectible in accordance with this Agreement shall continue to be
allocated in accordance with ARTICLE IV and all amounts which would have
constituted Principal Receivables but for the Transferor's inability to transfer
Receivables to the Trust shall be deemed to be Principal Receivables for the
purpose of calculating the applicable Investor Percentage with respect to any
Series and the Aggregate Investor Percentage. The parties hereto agree that
Finance Charge Receivables, whenever created, accrued in respect of Principal
Receivables which have been conveyed to the Trust, or which would have been
conveyed to the Trust but for the above described inability to transfer such
Receivables, shall continue to be a part of the Trust notwithstanding any
cessation of the transfer of additional Principal Receivables to the Trust and
Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV.
(d) If the Transferor accepts reassignment of an Ineligible Receivable
pursuant to SUBSECTION 2.4(D) then, in any such event, the Servicer agrees to
account for payments received with respect to such Ineligible Receivable
separately from its accounting for Collections on Principal Receivables retained
by the Trust. If payments received from or on behalf of an Obligor are not
specifically applicable either to an Ineligible Receivable of such Obligor
reassigned to the Transferor or to Receivables of such Obligor retained in the
Trust, then the Servicer agrees to allocate payments proportionately based on
the total amount of Principal Receivables of such Obligor retained in the Trust
and the total amount owing by such Obligor on any Ineligible Receivables
purchased by the Transferor, and the portion allocable to any Principal
Receivables retained in the Trust shall be treated as Collections and deposited
in accordance with the provisions of ARTICLE IV.
(e) 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 premium finance loans.
(f) The Servicer shall maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are involved
in the servicing of premium finance loans covering such actions and in such
amounts as the Servicer believes to be reasonable from time to time.
The relationship of the Servicer (and of any Successor Servicer) to
the Trustee under this Agreement is intended by the parties to be that of
independent contractor and not that of a joint venture, partner or agent of the
Trustee, including any act of the Servicer performed in the name of the Trustee.
SECTION 3.2. Servicing Compensation and Back-up Servicing
Compensation. As compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in the immediately following
paragraph, the Servicer shall be entitled to receive a servicing fee (the
"SERVICING FEE") prior to the termination of the Trust pursuant to Section 12.1.
The Servicing Fee shall be payable, with respect to each Series, at the times
and in the amounts set forth in the related Supplement. The Servicing Fee shall
be allocated between the Investor Certificates (the "INVESTOR SERVICING FEE")
and the Transferor (the "TRANSFEROR SERVICING FEE").
As compensation for its agreement to act as a back-up servicer under
this Agreement, the Back-up Servicer shall be entitled to receive a back-up
servicing fee (the "BACK-UP SERVICING FEE") until the earlier of (x) the
termination of the Trust pursuant to Section 12.1 and (y) the first date on
which the Back-up Servicer is Servicer (in which case the Back-up Servicer will
be entitled to receive the Servicing Fee). The Back-up Servicing Fee shall be
payable by AFCO Acceptance or AFCO Credit, as applicable.
So long as the Servicer is one of the Originators, the Servicer's
expenses include the amounts due to the Trustee pursuant to Section 11.5 and the
reasonable fees and disbursements of independent public accountants and all
other expenses incurred by the Servicer in connection with its activities
hereunder; provided that the Servicer (including the Back-up Servicer, if
Servicer) shall not be liable for any liabilities, costs or expenses of the
Trust, the Investor Holders or the Certificate Owners arising under any tax law,
including 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 Servicing Fee. In the event that the
Servicer is not one of the Originators, AFCO will assume the obligation to pay
the fees, expenses and disbursements of the accountants and the Trustee referred
to in the second preceding sentence.
SECTION 3.3. REPRESENTATIONS AND WARRANTIES OF SERVICER. Each of AFCO
Credit and AFCO Acceptance, as initial Servicer, hereby makes, and any Successor
Servicer by its appointment hereunder shall make the following representations
and warranties, on which the Trustee has relied in accepting the Receivables in
trust and in authenticating the Certificates issued on the Initial Closing Date
and on any other Closing Date:
(a) ORGANIZATION AND GOOD STANDING. Such Servicer or Successor
Servicer, as applicable, is duly organized, validly existing and in good
standing under the laws of the state of its incorporation and has full corporate
power, authority and legal right to own its properties and conduct its premium
finance loan business as such properties are presently owned and as such
business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.
(b) DUE QUALIFICATION. Such Servicer or Successor Servicer, as
applicable, is qualified to do business as a foreign corporation in good
standing in any state where the conduct of its business (including the servicing
of the Receivables as required by this Agreement) would require such
qualification and has obtained all licenses and approvals (including any
licenses or approvals under the Licensing Laws of a Permitted Jurisdiction)
necessary in order to service the Receivables as required under Federal, state
or local law. If after the Initial Closing Date or any other Closing Date either
such Servicer or Successor Servicer, as applicable, shall be required by any
Requirement of Law (including any Licensing Law of a Permitted Jurisdiction) to
so qualify or register or obtain such license or approval, then it shall do so
as soon as possible.
(c) DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement have been duly authorized by such Servicer or Successor Servicer, as
applicable, by all necessary corporate action on the part of such Servicer or
Successor Servicer, as applicable, and this Agreement will remain, from the time
of its execution, an official record of each of such Servicer or Successor
Servicer, as applicable.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of such Servicer or Successor Servicer, as applicable,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect, affecting the enforcement of
creditors' rights in general and the rights of creditors of national banking
associations and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement by such
Servicer or Successor Servicer, as applicable, and the performance of the
transactions contemplated by this Agreement and the fulfillment of the terms
hereof applicable to such Servicer or Successor Servicer, as applicable, will
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 such Servicer or
Successor Servicer, as applicable, or any indenture, contract, agreement,
mortgage, deed of trust or other instrument to which such Servicer or Successor
Servicer, as applicable, is a party or by which it is bound.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the best knowledge of such Servicer or Successor Servicer, as applicable,
threatened against such Servicer or Successor Servicer, as applicable, 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,
seeking any determination or ruling that, in the reasonable judgment of the
Servicer, would materially and adversely affect the performance by such Servicer
or Successor Servicer, as applicable, of their obligations under this Agreement,
or seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement.
(g) COMPLIANCE WITH REQUIREMENTS OF LAW. Such Servicer or Successor
Servicer, as applicable, shall duly satisfy all obligations on its part to be
fulfilled under or in connection with each Receivable and the related Account in
accordance with subsection 3.1(b), will maintain in effect all qualifications
required under Requirements of Law in order to service properly each Receivable
and the related Account and will comply in all material respects with all other
Requirements of Law in connection with servicing each Receivable and the related
Account the failure to comply with which would have a material adverse effect on
the Holders or any Credit Enhancement Provider.
SECTION 3.4. REPORTS AND RECORDS FOR TRUSTEE. (a) DAILY REPORTS. On
each Business Day, the Servicer, with prior notice, shall prepare and make
available at the office of the Servicer for inspection by the Trustee a record
setting forth (i) the aggregate amount of Collections processed by the Servicer
on the preceding Business Day and (ii) the aggregate amount of Receivables as of
the close of business on the preceding Business Day; provided that the Servicer
shall be required to so report the information provided in clause (i) only at
such times as the Servicer is required to make deposits, payments and
withdrawals on a daily basis, rather than on each Transfer Date, as permitted in
Section 4.3(a).
(b) MONTHLY SERVICER'S CERTIFICATE. Unless otherwise stated in the
related Supplement with respect to any Series, on each Determination Date the
Servicer shall forward, as provided in Section 13.5, to the Trustee, the Paying
Agent, any Credit Enhancement Provider and each Rating Agency, a certificate of
a Servicing Officer in the form of Exhibit A (which includes the Schedule
thereto specified as such in each Supplement) as to such matters as are set
forth in Exhibit A.
SECTION 3.5. ANNUAL SERVICER'S CERTIFICATE. On or before March 31 of
each calendar year, beginning with March 31, 2002, the Servicer will deliver, as
provided in Section 13.5, to the Trustee, any Credit Enhancement Provider and
each Rating Agency, an Officer's Certificate substantially in the form of
Exhibit B stating that (a) a review of the activities of the Servicer during the
twelve-month period ending on December 31 of the immediately prior calendar
year, or for the initial period, from the Closing Date until December 31, 2001,
and of its performance under this Agreement was made under the supervision of
the officer signing such certificate and (b) to the best of such officer's
knowledge, based on such review, the Servicer has fully performed all its
obligations under this Agreement throughout such period, or, if there has been a
default in the performance of any such obligation, specifying each such default
known to such officer and the nature and status thereof. In the event that the
Back-up Servicer or another Successor Servicer becomes Servicer, the Officer's
Certificate that such Successor Servicer delivers to the Trustee pursuant to
this Section 3.5, which relates to the year in which the Back-up Servicer or
another Successor Servicer became Servicer, will only relate to the portion of
the year that the Back-up Servicer or such Successor Servicer acted as Servicer.
A copy of such certificate may be obtained by any Investor Holder by a request
in writing to the Trustee addressed to the Corporate Trust Office.
SECTION 3.6. ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT. (a) On
or before March 31 of each calendar year, beginning with March 31, 2002, the
Servicer shall cause a firm of nationally recognized independent certified
public accountants (who may also render other services to the Servicer or the
Transferor) to furnish, as provided in Section 13.5, a report to the Trustee,
any Credit Enhancement Provider and each Rating Agency, to the effect that such
firm has examined the Servicer's compliance with Sections 4.2, 4.3, 4.5 and 8.8
of this Agreement, Sections 4.7(a)(i) and 4.8 of the Series 2001-1 Supplement
and equivalent sections in any other Supplement, and that, on the basis of such
examination, such firm is of the opinion (assuming the accuracy of any reports
generated by the Servicer's third party agents) that such servicing was
conducted in compliance with those sections of this Agreement and each such
Supplement during the period covered by such report (which shall be the prior
calendar year, or the portion thereof falling after the Initial Closing Date),
except for such exceptions, errors or irregularities as such firm shall believe
to be immaterial to the assets of the Trust and such other exceptions, errors or
irregularities as shall be set forth in such reports. Unless otherwise provided
with respect to any Series in the related Supplement, a copy of such report may
be obtained by any Investor Holder by a request in writing to the Trustee
addressed to the Corporate Trust Office. Nothing shall require the Trustee to
execute any engagement letter in respect of such report unless instructed to in
writing by the Servicer, it being understood that the Trustee shall not be
obligated to review, nor be deemed to express any opinion regarding the
sufficiency of, the agreed upon procedures or any other matter described in such
engagement letter or report.
(b) On or before March 31 of each calendar year, beginning with March
31, 2002, the Servicer shall cause a firm of nationally recognized independent
certified public accountants (who may also render other services to the Servicer
or the Transferor) to furnish, as provided in Section 13.5, a report, prepared
using generally accepted auditing standards, to the Servicer and each Rating
Agency to the effect that they have compared the mathematical calculations of
each amount set forth in a random selection of four of the monthly certificates
forwarded by the Servicer pursuant to subsection 3.4(b) during the period
covered by such report (which shall be the prior calendar year, or the portion
thereof falling after the Initial Closing Date), with the Servicer's computer
reports which were the source of such amounts and that on the basis of such
comparison, such firm is of the opinion that such amounts are in agreement,
except for such exceptions as it believes to be immaterial to the assets of the
Trust and such other exceptions as shall be set forth in such report. A copy of
such report may be obtained by any Investor Holder by a request in writing to
the Trustee addressed to the Corporate Trust Office. The Trustee shall promptly
notify the Servicer in writing of any such request and the Servicer shall send a
copy of such report to the address specified in writing by the Trustee.
SECTION 3.7. TAX TREATMENT. The Transferor has structured this
Agreement and the Investor Certificates with the intention that the Investor
Certificates will qualify under applicable Federal, state, local and foreign tax
law as indebtedness. The Transferor, the Servicer, each Investor Holder, and
each Certificate Owner, agree to treat and to take no action inconsistent with
the treatment of the Investor Certificates (or beneficial interest therein) as
indebtedness for purposes of Federal, state, local and foreign income or
franchise taxes and any other tax imposed on or measured by income. Each
Investor Holder, by acceptance of its Certificate and each Certificate Owner, by
acquisition of a beneficial interest in a Certificate, agrees to be bound by the
provisions of this Section 3.7. Nothing contained in the foregoing or elsewhere
in this Agreement shall, however, be deemed to prohibit the Transferor from
making any election that may in the future be available to it under the Internal
Revenue Code to have the Trust or any Series treated as a "financial asset
securitization investment trust" (or similar entity), so long as prior to the
effectiveness of that election the Transferor delivers to the Trustee an Opinion
of Counsel to the effect that the election (a) will not cause the Trust to be
classified, for Federal income tax purposes, as an association (or publicly
traded partnership) taxable as a corporation and (b) will not cause or
constitute an event in which gain or loss would be recognized by any Investor
Holder.
SECTION 3.8. NOTICES TO TRANSFEROR. The Servicer or any Successor
Servicer pursuant to Section 10.2 shall deliver or make available to the
Transferor each certificate and report required to be prepared, forwarded or
delivered thereafter pursuant to Sections 3.4, 3.5 and 3.6.
SECTION 3.9. REPORTS TO THE COMMISSION. The Servicer (or the
Transferor if a Successor Servicer is Servicer, shall, on behalf of itself and
on behalf of the Trust, cause to be filed with the Securities and Exchange
Commission any registration statement required pursuant to the Securities Act
and any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934, as amended, and, in each case, the rules and
regulations of the Securities and Exchange Commission thereunder. The Transferor
shall, at the expense of the Servicer (or at its own expense, if a Successor
Servicer is Servicer), cooperate in any reasonable request of the Servicer in
connection with such filings, including signing such registration statement or
periodic report on behalf of the Issuer.
SECTION 3.10. Covenants of Servicer. (a) (i) The Servicer shall not
take any action which would impair, with respect to each Receivable, the Trust's
first priority perfected security interest in the Unearned Premiums, if any,
securing such Receivable, (ii) the Servicer shall not impair the rights of the
Certificateholders in any Receivable, (iii) so long as the Originators are
Servicer, the Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due and the Servicer (including the Back-up Servicer, if
Servicer), shall follow such collection procedures as it follows with respect to
all comparable insurance premium finance loans that it services and (iv) the
Servicer will not voluntarily (a) decrease the amount of any scheduled payment
or payments for a Receivable unless such adjustment is in consequence of and
equal to the amount of an interim return premium or other prepayment received
with respect to such Receivable (subject to any interest adjustment required by
law); (b) extend the payment date of any scheduled payment with respect to any
Premium Finance Agreement, after the date that it has been transferred to the
Trust; (c) decrease the annual percentage rate of any Account, or, if a variable
rate Account, the spread on such Account, prior to its maturity; (d) extend the
term of any Receivable beyond the maturity of its related insurance policies; or
(e) otherwise rewrite, reprice or modify the payment terms of any Receivable in
such a manner as would materially adversely affect the Trust or the Holders.
(b) REMOVAL AFTER CURE PERIOD. In the event of a breach of any of the
covenants set forth in (i) subsections 3.10(a)(ii), (iii) and (iv) and as a
result of such breach the related Receivable becomes a Defaulted Receivable or
the Trust's rights in, to or under such Receivable in such Account or its
proceeds are impaired or the proceeds of such Receivable are not available for
any reason to the Trust free and clear of any Lien, upon the expiration of 60
days (or such longer period as may be agreed to by the Trustee in its sole
discretion, but in no event later than 120 days) from the earlier to occur of
the discovery of any such event by either the Transferor or the Servicer, or
receipt by the Servicer of written notice of any such event given by the Trustee
or (ii) subsection 3.10(a)(i), upon the expiration of 15 days from the earlier
to occur of the discovery of any such event by either the Transferor or the
Servicer, or receipt by the Servicer of written notice of any such event given
by the Trustee, then, subject to subsection 3.10(d), such Receivable shall be
removed from the Trust on the terms and conditions set forth in subsection
3.10(c).
(c) PROCEDURES FOR REMOVAL. When the provisions of subsection 3.10(b)
or subsection 3.13(b) require removal of a Receivable, the Servicer shall,
subject to subsection 3.13(c), accept assignment of such Receivable (a "SERVICER
INELIGIBLE RECEIVABLE") by depositing into the Collection Account on the
applicable Determination Date an amount equal to the principal portion of each
such Receivable and deducting such amount from the Principal Receivables in the
Trust (to the extent previously included therein). Deposits of any amounts into
the Collection Account pursuant to this subsection 3.10(c) shall be treated for
all purposes of this Agreement as Principal Collections. Upon the removal of
such Servicer Ineligible Receivables (and the making of any deposit required
above), the Trust shall automatically and without further action be deemed to
transfer, assign, and otherwise convey to the Servicer, without recourse,
representation or warranty, all the right, title and interest of the Trust in
and to each Servicer Ineligible Receivable all monies due or to become due with
respect to each Servicer Ineligible Receivable and all proceeds of such Servicer
Ineligible Receivable and Recoveries relating to such Servicer Ineligible
Receivable. Such reassigned Receivables shall be treated by the Trust as
collected in full as of the date on which it was transferred. The Trustee shall
execute such documents and instruments of transfer or assignment and take other
actions as shall reasonably be requested by the Servicer to evidence the
conveyance of each Servicer Ineligible Receivable pursuant to this subsection
3.10(c) in each case without recourse, representation or warranty. The
obligation of the Servicer set forth in this subsection 3.10(c), shall
constitute the sole remedy respecting any breach set forth in the
above-referenced subsections with respect to such Receivable available to the
Holders or the Trustee on behalf of the Holders.
(d) INDEMNITY. If the Back-up Servicer is Servicer and the provisions
of subsection 3.10(c) would, but for this subsection 3.10(d), require it to
accept assignment of any Receivable, the Back-up Servicer shall indemnify the
Trust from and against any losses suffered or sustained by the Trust by reason
of the related breach of subsection 3.10(a) and deposit the amount of this
indemnification into the Collection Account, to be treated as Principal
Collections. The related Receivable will not be removed from the Trust.
SECTION 3.11. REPRESENTATIONS AND WARRANTIES OF BACK-UP SERVICER. PFSI
and PFSIC, as initial Back-up Servicer, hereby makes, and any successor Back-up
Servicer by its appointment hereunder shall make the following representations
and warranties, on which the Trustee has relied in accepting the Receivables in
trust and in authenticating the Certificates issued on the Initial Closing Date
or any other Closing Date:
(a) ORGANIZATION AND GOOD STANDING. The Back-up Servicer is duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and has full corporate power, authority and legal right to own
its properties and conduct its premium finance loan business as such properties
are presently owned and as such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement.
(b) DUE QUALIFICATION. The Back-up Servicer is qualified to do
business as a foreign corporation in good standing in any state where the
conduct of its business (including the servicing of insurance premium finance
contracts in the Permitted Jurisdictions) would require such qualification and
has obtained all licenses and approvals (including any licensing or approvals
under the Licensing Laws of a Permitted Jurisdiction) necessary in order to
service the Receivables as required under Federal, state or local law. If the
Back-up Servicer shall be required by any Requirement of Law (including any
Licensing Law of a Permitted Jurisdiction) to so qualify or register or obtain
such license or approval, then it shall do so as soon as possible.
(c) DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement has been duly authorized by the Back-up Servicer by all necessary
corporate action on the part of the Back-up Servicer and this Agreement will
remain, from the time of its execution, an official record of the Back-up
Servicer.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Back-up Servicer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereinafter
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).
(e) NO VIOLATION. The execution and delivery of this Agreement by the
Back-up Servicer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Back-up
Servicer, will 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
Back-up Servicer, or any indenture, contract, agreement, mortgage, deed of trust
or other instrument to which the Back-up Servicer is a party or by which it is
bound.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the best knowledge of the Back-up Servicer, threatened against the
Back-up 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, seeking any determination or ruling that, in the reasonable
judgment of the Back-up Servicer, would materially and adversely affect the
performance by the Back-up Servicer, of its obligations under this Agreement, or
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement.
SECTION 3.12. BACK-UP SERVICER COVENANT. The Back-up Servicer hereby
covenants and agrees that it will use its best efforts to be licensed under or
exempt from the Licensing Laws of the Permitted Jurisdictions in which it is
licensed as of the Initial Closing Date or any other Closing Date. Upon the
discovery by the Back-up Servicer that it is not licensed under or exempt from
the Licensing Laws of any Permitted Jurisdiction for a period of 30 days, the
Back-up Servicer shall deliver written notice of such fact to the Transferor,
the Servicer and the Trustee. The Transferor shall terminate the Back-up
Servicer 15 days after receipt of such notice, unless prior to such time the
Transferor is furnished with an opinion of counsel which states that the absence
of such license or exemption would not, if the Back-up Servicer were the
Servicer on such date, (x) cause any of the Receivables in such state to be
unenforceable, (y) subject the Trust or the Trustee to any civil or criminal
penalties, sanctions or taxes or (z) materially and adversely affects the
ability of the Transferor, the Trustee or the Back-up Servicer to perform their
obligations under this Agreement.
SECTION 3.13. SERVICER LICENSING COVENANT. (a) The Servicer (so long
as an Originator is a Servicer) hereto covenants and agrees to comply with the
Licensing Laws of each State where the stated address of any borrower under the
Receivables conveyed to the Trust is located (excluding receivables with zero
balances, Defaulted Receivables or receivables that have been removed from the
Trust) and to cause Mellon Bank, the Transferor, the Trustee and the Trust to at
all times be in compliance with such Licensing Laws.
(b) In the event of a breach of Section 3.13(a) that (x) results in
Receivables in such state being unenforceable, (y) results in the Transferor,
the Trustee or the Trust being subjected to any civil or criminal penalties,
sanctions or taxes or (z) materially and adversely affects the ability of the
Servicer, the Transferor, the Trustee or the Trust to perform their respective
obligations under this Agreement, then either the Servicer shall remove such
Receivables within 15 days from the earlier to occur of the discovery of the
breach by either the Transferor or the Servicer or receipt by the Servicer of
written notice of the breach from the Trustee in the manner provided in Section
3.10(c) or indemnify the Transferor, the Trustee and the Trust for any losses
suffered by any of them as a result of such noncompliance within 15 days from
receipt of notice of any such loss from the Transferor or the Trustee.
(c) In the event for administrative reasons the Servicer is unable to
identify or segregate Servicer Ineligible Receivables from other Receivables in
the related Account (a "SERVICER INELIGIBLE ACCOUNT"), then all the Receivables
in such Servicer Ineligible Account shall be treated as Servicer Ineligible
Receivables and the Servicer will be obligated to remove all of the Receivables
in such Servicer Ineligible Account.
SECTION 3.14. CUSTODY OF PREMIUM FINANCE AGREEMENTS. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Trust, upon the execution and delivery of this Agreement, revocably appoints the
Servicer, and the Servicer accepts such appointment, to act as the agent of the
Trust and as custodian of the Premium Finance Agreements conveyed to the Trust,
each of which is hereby constructively delivered to the Trust.
SECTION 3.15. DUTIES OF SERVICER AS CUSTODIAN. (a) SAFEKEEPING. The
Servicer, in its capacity as custodian, shall hold the Premium Finance
Agreements conveyed to the Trust on behalf of the Trust for the use and benefit
of the Trust and maintain such accurate and complete accounts, records and
computer systems pertaining to the Receivables as shall enable the Trustee to
comply with its obligations pursuant to this Agreement.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer, in its
capacity as custodian, agrees to maintain the Premium Finance Agreements
conveyed to the Trust at the office(s) listed in Schedule I, or at such of its
offices as shall from time to time be identified to the Trustee by written
notice. The Servicer, in its capacity as custodian, may temporarily move
individual Premium Finance Agreements without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures, but shall promptly return such Premium Finance
Agreements as soon as practicable after it is no longer needed for such purpose
to such office or office(s).
The Servicer, in its capacity as custodian, shall make available to
the Trustee, or its duly authorized representatives, attorneys or auditors, the
Premium Finance Agreements conveyed to the Trust and the related accounts,
records and computer systems maintained by the Servicer at such times during
normal operating hours as the Trust shall reasonably instruct which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations.
(c) Release of Documents. Upon written instruction from the Trust, the
Servicer, in its capacity as custodian, shall release or cause to be released
any Premium Finance Agreements conveyed to the Trust, the Trust's agent or the
Trust's designee, as the case may be, at such place or places as the Trust may
designate, as soon as practicable. The Servicer, in its capacity as custodian,
shall not be responsible for any loss occasioned by the failure of the Trust,
its agent or its designee to return any document or any delay in doing so.
SECTION 3.16. INSTRUCTION; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions from the Trustee with respect to the
Premium Finance Agreements upon its receipt of written instructions signed by a
Responsible Officer. A certified copy of a by-law or of a resolution of the
board of directors of the Trustee, as applicable, shall constitute conclusive
evidence of the authority of such Responsible Officer to act and shall be
considered in full force and effect until receipt by the Servicer of written
notice to the contrary given by the Trust.
SECTION 3.17. EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian shall become effective as of the Initial Closing Date
and shall continue in full force and effect until the earlier of the termination
of the Servicer pursuant to Section 10.2 or such appointment is terminated
pursuant to this Section 3.17 or until this Agreement shall be terminated. The
Servicer may perform its duties as custodian through one or more agents, which
agents may maintain physical possession of Premium Finance Agreements as agent
for the Servicer acting as custodian. The Trust may terminate the Servicer's
appointment as custodian at any time with cause upon written notification to the
Servicer. As soon as practicable after any termination of such appointment, the
Servicer shall deliver the Premium Finance Agreements to the Trust or the
Trust's agent at such place or places as the Trust may reasonably designate. The
Servicer shall cooperate with the Trust in making the transfer and shall bear
all of the Servicer's costs and expenses with respect to such transfer, but the
Trust shall bear the actual costs and expenses of packing and transporting the
Premium Financing Agreements to the location designated by the Trust.
Notwithstanding the termination of the Servicer as custodian, the Trust agrees
that upon any such termination, the Trust shall provide, or cause its agent to
provide, access to the Premium Finance Agreements to the Servicer for the
purpose of carrying out its duties and responsibilities with respect to the
servicing of the Premium Finance Agreements hereunder.
Sections 3.14, 3.15, 3.16 and 3.17 shall not apply to the Back-up
Servicer, if it is Servicer.
SECTION 3.18. AFCO CREDIT TO ACT AS SERVICER. AFCO Credit may act on
behalf of AFCO Acceptance in the performance of the duties of Servicer under
this Agreement in all cases except for the servicing of the Receivables which
have Obligors with a stated address in the applicable Premium Finance Agreement
located in California or Hawaii.
ARTICLE IV
RIGHTS OF HOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS
SECTION 4.1. RIGHTS OF HOLDERS. Each Series of Investor Certificates
shall represent Undivided Interests in the Trust, including the benefits of any
Credit Enhancement issued with respect to such Series and the right to receive
the Collections and other amounts at the times and in the amounts specified in
this Article IV to be deposited in the Investor Accounts and any other Series
Account (if so specified in the related Supplement) or to be paid to the
Investor Holders of such Series. The aggregate interest represented by such
Certificates in the Principal Receivables at any time shall not exceed an amount
equal to the Investor Interest at such time. The Transferor shall own the
remaining undivided interest in the Trust, including the right to receive the
Collections and other amounts at the times and in the amounts specified in this
Article IV to be paid on account of the Transferor Interest. The Transferor' s
aggregate interest in the Principal Receivables at any time shall not exceed the
Transferor Interest at such time and the Transferor shall not have any interest
in the Investor Accounts, except as provided in this Agreement, or the benefits
of any Credit Enhancement issued with respect to any Series.
SECTION 4.2. ESTABLISHMENT OF ACCOUNTS. (a) The Collection Account.
The Servicer, for the benefit of the Holders, shall establish and maintain in
the name of the Trustee, on behalf of the Trust, a non-interest bearing
segregated account (the "COLLECTION ACCOUNT") bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Holders, or shall cause such Collection Account to be established and
maintained, with an office or branch of (i) a depository institution or trust
company (which may include the Trustee, the Servicer or an Affiliate of the
Servicer) organized under the laws of the United States of America or any one of
the states thereof or the District of Columbia and with deposit insurance
provided by BIF or SAIF; provided that at all times the certificates of deposit,
short-term deposits or commercial paper or the long-term unsecured debt
obligations (other than such obligation whose rating is based on collateral or
on the credit of a Person other than such institution or trust company) of such
depository institution or trust company shall have a credit rating from Moody's
and Standard & Poor's of at least P-1 and A-1, respectively, in the case of the
certificates of deposit, short-term deposits or commercial paper, or a rating
from Moody's of at least Aa3 and from Standard & Poor's of at least AA- in the
case of the long-term unsecured debt obligations, or (ii) a depository
institution, which may include the Trustee, which is acceptable to each Rating
Agency (any of the foregoing being a "QUALIFIED INSTITUTION"). Pursuant to
authority granted to it pursuant to subsection 3.1(b), the Servicer shall have
the revocable power to withdraw funds from the Collection Account for the
purposes of carrying out its duties hereunder. Any account established with a
Qualified Institution pursuant to this Section 4.2 or the provisions of any
Supplement which is no longer a Qualified Institution shall, on the fifth
Business Day after such Qualified Institution is no longer a Qualified
Institution, be moved to a Qualified Institution.
(b) THE FINANCE CHARGE AND EXCESS FUNDING ACCOUNTS. The Trustee, for
the benefit of the Investor Holders, shall establish and maintain with the
Trustee in the name of the Trust two segregated trust accounts (the "FINANCE
CHARGE ACCOUNT" and the "EXCESS FUNDING ACCOUNT," respectively) bearing a
designation clearly indicating that the funds therein are held for the benefit
of the Investor Holders, or shall cause such Finance Charge Account or Excess
Funding Account to be established and maintained with an office or branch of a
Qualified Institution. The Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Finance Charge Account and the
Excess Funding Account and in all proceeds thereof. The Finance Charge Account
and the Excess Funding Account shall be under the sole dominion and control of
the Trustee for the benefit of the Investor Holders. Pursuant to authority
granted to it hereunder, the Servicer shall have the revocable power to instruct
the Trustee to withdraw funds from the Finance Charge Account and to withdraw or
instruct the Person maintaining the Excess Funding Account to withdraw, as the
case may be, funds from the Excess Funding Account, in each case for the purpose
of carrying out the Servicer's duties hereunder. The Trustee at all times shall
maintain accurate records reflecting each transaction in the Finance Charge
Account and, if maintained with the Trustee, the Excess Funding Account, and
that funds held therein shall at all times be held in trust for the benefit of
the Investor Holders.
(c) THE DISTRIBUTION ACCOUNT. The Trustee, for the benefit of the
Investor Holders, shall cause to be established and maintained in the name of
the Trust, a non-interest bearing segregated trust account (the "DISTRIBUTION
ACCOUNT") bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Investor Holders, or shall
cause such Distribution Account to be established and maintained with an office
or branch of a Qualified Institution (other than the Transferor). The Trustee
shall possess all right, title and interest in all funds on deposit from time to
time in the Distribution Account and in all proceeds thereof. The Distribution
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Investor Holders.
(d) SERIES ACCOUNTS. If so provided in the related Supplement, the
Trustee, for the benefit of the Investor Holders, shall cause to be established
and maintained in the name of the Trust, one or more Series Accounts. Each such
Series Account shall bear a designation clearly indicating that the funds
deposited therein are held for the benefit of the Investor Holders of such
Series. Each such Series Account will be a trust account, if so provided in the
related Supplement and will have the other features and be applied as set forth
in the related Supplement.
(e) ADMINISTRATION OF THE FINANCE CHARGE AND EXCESS FUNDING ACCOUNTS.
Funds on deposit in the Excess Funding Account and the Finance Charge Account
shall at all times be invested by the Trustee in Permitted Investments only at
the written direction of the Servicer. Any such investment shall mature and such
funds shall be available for withdrawal on or prior to the Transfer Date related
to the Monthly Period in which such funds are processed for collection, or if so
specified in the related Supplement, immediately preceding a Distribution Date.
The Trustee shall maintain for the benefit of the Investor Holders possession of
any negotiable instruments or securities evidencing Permitted Investments from
the time of purchase thereof until the time of sale or maturity; provided, that
no such investment shall be disposed of prior to its maturity date. At the end
of each month, all interest and earnings (net of losses and investment expenses)
on funds on deposit in the Excess Funding Account, the Finance Charge Account
and, unless otherwise specified in the related Supplement, each Series Account
shall be deposited by the Trustee in a separate deposit account with a Qualified
Institution in the name of the Transferor, or a Person designated in writing by
the Transferor, which shall not constitute a part of the Trust, or shall
otherwise be turned over by the Trustee to the Transferor not less frequently
than monthly. Subject to the restrictions set forth above, the Servicer, or a
Person designated in writing by the Servicer (or the Transferor, if a Successor
Servicer is Servicer) of which the Trustee shall have received written
notification thereof, shall have the authority to instruct the Trustee with
respect to the investment of funds on deposit in the Excess Funding Account and
the Finance Charge Account. For purposes of determining the availability of
funds or the balances in the Finance Charge Account and the Excess Funding
Account for any reason under this Agreement, all investment earnings on such
funds shall be deemed not to be available or on deposit.
SECTION 4.3. COLLECTIONS AND ALLOCATIONS. (a) COLLECTIONS. Except as
provided below, the Servicer shall deposit all Collections in the Collection
Account as promptly as possible after the Date of Processing of such
Collections, but in no event later than the second Business Day following such
Date of Processing. The exception described in the third paragraph of this
subsection 4.3(a) shall not apply to Principal Collections.
The Servicer shall allocate such amounts to each Series of Investor
Certificates and to the Holder of the Transferor Interest in accordance with
this Article IV and shall withdraw the required amounts from the Collection
Account or pay such amounts to the Holder of the Transferor Interest in
accordance with this Article IV, in both cases as modified by any Supplement.
The Servicer shall make such deposits or payments on the date indicated therein
by wire transfer or as otherwise provided in the Supplement for any Series of
Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary, for so
long as, and only so long as, the Originators shall remain the Servicer
hereunder, and (a) (i) the Servicer provides to the Trustee a letter of credit
or other credit enhancement covering the risk of commingling of Finance Charge
Collections by the Servicer acceptable to the Rating Agencies, and (ii) the
Transferor shall have received a notice from any Rating Agency that reliance on
such a letter of credit or other credit enhancement would not result in the
lowering of such Rating Agency's then-existing rating of the Investor
Certificates, (b) the Originator is a wholly-owned subsidiary of Mellon Bank and
the certificate of deposit or unsecured short-term debt obligations of Mellon
Bank are rated P-1 by Moody's (or, if neither such certificates of deposit nor
such obligations of Mellon Bank are rated by Moody's, and so long as Moody's has
not notified the Servicer that reliance upon Mellon Financial Corporation's
ratings for this purpose would result in a lowering of Moody's then-existing
rating of the Investor Certificates, then the counterparty risk or long-term
unsecured debt of Mellon Financial Corporation are rated at least A2 by
Moody's), at least A-1 by Standard & Poor's and insured by BIF or SAIF or (c)
the Servicer makes other arrangements satisfactory to each Rating Agency, the
Servicer need not deposit Finance Charge Collections into the Collection
Account, the Excess Funding Account, the Finance Charge Account or any Series
Account, as provided in any Supplement, or make payments to the Transferor, on
or before the second Business Day following the Date of Processing of such
Receivables as provided in this Article IV, but may make such deposits, payments
and withdrawals on each Transfer Date or as specified in the related Supplement
in an amount equal to the net amount of such deposits, payments and withdrawals
which would have been made but for the provisions of this paragraph. If such
deposits, payments or withdrawals are made on each Transfer Date or as otherwise
specified in the related Supplement in reliance on clause (b) of the immediately
preceding sentence, the Transferor shall indemnify the Trust for any losses
sustained as a result of commingling of Finance Charge Collections by the
Servicer as provided in this paragraph.
Notwithstanding anything else in this Agreement to the contrary, with
respect to any Monthly Period, whether the Servicer is required to make
quarterly, monthly or daily deposits of Finance Charge Collections into the
Collection Account, the Finance Charge Account, the Excess Funding Account or
any Series Account, as provided in any Supplement, (i) the Servicer will only be
required to deposit Finance Charge Collections into the Collection Account, the
Finance Charge Account, the Excess Funding Account or any Series Account up to
the required amount to be deposited into any such deposit account or, without
duplication, distributed on or prior to the related Distribution Date to
Investor Holders or to any Credit Enhancement Provider pursuant to the terms of
any Supplement or agreement relating to such Credit Enhancement, and (ii) if at
any time prior to such Distribution Date the amount of Finance Charge
Collections deposited in the Collection Account exceeds the amount required to
be deposited pursuant to clause (i), the Servicer may withdraw the excess from
the Collection Account.
(b) ALLOCATIONS FOR TRANSFEROR INTEREST. Throughout the existence of
the Trust, unless otherwise stated in any Supplement, the Servicer shall
allocate to the Transferor an amount equal to the product of (A) the applicable
Transferor Percentage and (B) the aggregate amount of Collections allocated to
Principal Receivables and Finance Charge 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 Transferor pursuant to any Supplement into
the Collection Account and shall pay, or be deemed to pay, such amounts as
collected to the Transferor, provided, however, that the Servicer shall, upon
written notice from the Trustee, pay to the Trustee out of any amounts allocable
to the Transferor hereunder, any amounts owed to the Trustee pursuant to the Fee
Agreement and not paid by Mellon Bank when due, to the extent such amounts
remain unpaid on any Distribution Date, following any application of funds
pursuant to each Supplement to the payment thereof.
SECTION 4.4. SHARED PRINCIPAL COLLECTIONS. On each Distribution Date,
(a) the Servicer shall allocate Shared Principal Collections to each Principal
Sharing Series, pro rata, in proportion to the Principal Shortfalls, if any,
with respect to each such Series, and any remainder may, at the option of the
Transferor, be applied as principal with respect to any Variable Interest
(provided that in such allocation, all other Series will have priority over any
Series whose terms permit the Servicer to extend the Initial Principal Payment
Date, and then only to the extent that the Principal Shortfall for such Series
is greater than such Principal Shortfall would otherwise have been due to the
election by the Transferor not to extend the Initial Principal Payment Date) and
(b) the Servicer shall withdraw from the Collection Account or applicable Series
Account and pay to the Transferor an amount equal to the excess, if any, of (x)
the aggregate amount for all outstanding Series of Collections of Principal
Receivables which the related Supplements or this Agreement specify are to be
treated as "SHARED PRINCIPAL COLLECTIONS" for such Distribution Date over (y)
the aggregate amount for all outstanding Principal Sharing Series which the
related Supplements specify are "PRINCIPAL SHORTFALLS" for such Distribution
Date; provided that, to the extent that, on any Distribution Date the Transferor
Interest (determined after giving effect to any transfer of Principal
Receivables to the Trust on such date) is less than or equal to zero, the
Servicer shall not distribute such Shared Principal Collections to the
Transferor, but shall deposit such funds in the Excess Funding Account.
SECTION 4.5. EXCESS FINANCE CHARGE COLLECTIONS. On each Distribution
Date, (a) for each Group, the Servicer shall apply the aggregate amount for all
outstanding Series in such Group of the amounts which the related Supplements
specify are to be treated as "EXCESS FINANCE CHARGE COLLECTIONS" for such
Distribution Date to each Series in such Group, pro rata, in proportion to the
Finance Charge Shortfalls, if any, with respect to each such Series, and (b) the
Servicer shall withdraw (or shall instruct the Trustee to withdraw) from the
Collection Account and pay to the Transferor an amount equal to the excess, if
any, of (x) the aggregate amount for all outstanding Series in a Group of the
amounts which the related Supplements specify are to be treated as "EXCESS
FINANCE CHARGE COLLECTIONS" for such Distribution Date over (y) the aggregate
amount for all outstanding Series in such Group which the related Supplements
specify are "FINANCE CHARGE SHORTFALLS," for such Distribution Date; provided
that the sharing of Excess Finance Charge Collections among Series in a Group
will continue only until such time, if any, at which the Transferor shall
deliver to the Trustee an Officer's Certificate to the effect that, in the
reasonable belief of the Transferor, the continued sharing of Excess Finance
Charge Collections among Series in any Group would have adverse regulatory
implications with respect to the Transferor. Following the delivery by the
Transferor of such an Officer's Certificate to the Trustee, there will not be
any further sharing of Excess Finance Charge Collections among Series in any
Group.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES.]
ARTICLE V
[ARTICLE IS RESERVED AND SHALL BE SPECIFIED
IN THE SUPPLEMENT WITH RESPECT TO ANY SERIES.]
ARTICLE VI
THE CERTIFICATES
SECTION 6.1. THE CERTIFICATES. Subject to Sections 6.10 and 6.13, the
Investor Certificates of each Series and any Class thereof may be issued in
fully registered form (the "REGISTERED CERTIFICATES"), and shall be
substantially in the form of the exhibits with respect thereto attached to the
related Supplement. The Investor Certificates shall, upon issue pursuant hereto
or to Section 6.9 or Section 6.10, be executed and delivered by the Transferor
to the Trustee for authentication and redelivery as provided in Sections 2.1 and
6.2. Any Investor Certificate shall be issuable in a minimum denomination of
$1,000 Undivided Interest and integral multiples thereof, unless otherwise
specified in any Supplement. Each Certificate shall be executed by manual or
facsimile signature on behalf of the Transferor by its authorized signatory.
Certificates bearing the manual or facsimile signature of the individual who
was, at the time when such signature was affixed, authorized to sign on behalf
of the Transferor or the Trustee shall not be rendered invalid, notwithstanding
that such individual has 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 Certificate 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 upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
SECTION 6.2. AUTHENTICATION OF CERTIFICATES. On the Initial Closing
Date, the Trustee shall authenticate and deliver the initial Series of Investor
Certificates, upon the written order of the Transferor, to the underwriters for
the sale of the Book-Entry Certificates evidenced by such Investor Certificates,
and against payment to the Transferor of the Initial Investor Interest (net of
any purchase or underwriting discount). Upon the receipt of such payment and the
issuance of the Investor Certificates, such Investor Certificates shall be fully
paid and nonassessable. Upon an Issuance as provided in Section 6.9 and the
satisfaction of certain other conditions specified therein, the Trustee shall
authenticate and deliver the Investor Certificates of additional Series (with
the designation provided in the related Supplement), upon the order of the
Transferor, to the Persons designated in such Supplement. Upon the order of the
Transferor, the Certificates of any Series shall be duly authenticated by or on
behalf of the Trustee, in authorized denominations. If specified in the related
Supplement for any Series, the Trustee shall authenticate and deliver outside
the United States the Global Certificate that is issued upon original issuance
thereof, upon the written order of the Transferor, to the Depository against
payment of the purchase price therefor. If specified in the related Supplement
for any Series, the Trustee shall authenticate Book-Entry Certificates that are
issued upon original issuance thereof, upon the written order of the Transferor,
to a Clearing Agency or its nominee as provided in Section 6.10 against payment
of the purchase price thereof.
SECTION 6.3. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall cause to be kept at the office or agency to be maintained
by a transfer agent and registrar (the "TRANSFER AGENT AND REGISTRAR"), in
accordance with the provisions of Section 11.16, a register (the "CERTIFICATE
REGISTER") in which, subject to such reasonable regulations as it may prescribe,
the Transfer Agent and Registrar shall provide for the registration of the
Investor Certificates of each Series (unless otherwise provided in the related
Supplement) and of transfers and exchanges of the Investor Certificates as
herein provided. The Trustee is the initial Transfer Agent and Registrar. If any
Investor Certificate is issued as a Global Certificate, with the consent of the
Trustee, the Transferor may, or if and so long as any Series of Investor
Certificates are listed on the Luxembourg Stock Exchange and such exchange shall
so require, the Transferor shall, appoint a co-transfer agent and co-registrar
in Luxembourg or another European city. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar unless the context otherwise requires. The Trustee shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' written notice
to the Servicer. In the event that the Trustee shall no longer be the Transfer
Agent and Registrar, the Trustee shall appoint a successor Transfer Agent and
Registrar.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Transfer Agent and Registrar, the Transferor shall
execute, subject to the provisions of subsection 6.3(c), and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of like
aggregate Undivided Interests.
At the option of an Investor Holder, Investor Certificates may be
exchanged for other Investor Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests, upon surrender of the
Investor Certificates to be exchanged at any such office or agency. At the
option of any Holder of Registered Certificates, Registered Certificates may be
exchanged for other Registered Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests in the Trust, upon surrender
of the Registered Certificates to be exchanged at any office or agency of the
Transfer Agent and Registrar maintained for such purpose.
Whenever any Investor Certificates of any Series are so surrendered
for exchange, the Transferor shall execute, and the Trustee shall authenticate
and (unless the Transfer Agent and Registrar is different than the Trustee, in
which case the Transfer Agent and Registrar shall) deliver, the Investor
Certificates of such Series which the Holder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent and Registrar duly
executed by the Holder thereof or his attorney-in-fact duly authorized in
writing.
The preceding provisions of this Section 6.3 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange any Investor Certificate of any
Series for a period of 15 days preceding the due date for any payment with
respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no service charge
shall be made for any registration of transfer or exchange of 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
transfer or exchange of Certificates.
All Investor Certificates surrendered for registration of transfer and
exchange shall be canceled by the Transfer Agent and Registrar and disposed of
in a manner satisfactory to the Trustee. The Trustee shall cancel and destroy
the Global Certificates upon its exchange in full for Definitive Certificates
and shall deliver a certificate of destruction to the Transferor. Such
certificate shall also state that a certificate or certificates of each Foreign
Clearing Agency to the effect referred to in Section 6.13 was received with
respect to each portion of the Global Certificate exchanged for Definitive
Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Registered Certificates in such
amounts and at such times as are necessary to enable the Trustee to fulfill its
responsibilities under this Agreement and the Certificates.
(b) Except as provided in Section 6.9 or 7.2 or this subsection
6.3(b), the Transferor shall not transfer the Transferor Interest or any
interest therein. The Transferor may from time to time transfer a portion of the
Transferor Interest by causing the issuance of one or more Certificates (each a
"SUPPLEMENTAL CERTIFICATE"), the terms of which shall be defined in a Supplement
(which Supplement shall be subject to Section 13.1(a) to the extent that it
amends any of the terms of this Agreement), to be delivered to or upon the order
of the Transferor (or the Holder of a Supplemental Certificate, in the case of
the transfer or exchange thereof, as provided below), upon satisfaction of the
following conditions:
(i) the Transferor Interest shall not be less than the Minimum
Transferor Interest, in each case as of the date of, and after giving
effect to, such exchange;
(ii) the Rating Agency Condition shall have been satisfied with
respect to such exchange (or transfer or exchange as provided below);
and
(iii) the Transferor shall have delivered to the Trustee and each
Rating Agency a Tax Opinion, dated the date of such exchange (or
transfer or exchange as provided below), with respect thereto.
Any Supplemental Certificate may be transferred or exchanged only upon
satisfaction of the conditions set forth in clauses (ii) and (iii).
(c) Unless otherwise provided in the related Supplement, registration
of transfer of Registered Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates (which legend shall be
set forth in the Supplement relating to such Investor Certificates) shall be
effected only if the conditions set forth in such related Supplement are
satisfied.
Whenever a Registered Certificate containing the legend set forth in
the related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
instructions from the Servicer (or the Transferor, if a Successor Servicer is
Servicer) regarding such transfer. The Transfer Agent, Registrar and the Trustee
shall be entitled to receive written instructions signed by a Servicing Officer
(or an officer of the Transferor, if a Successor Servicer is Servicer) prior to
registering any such transfer or authenticating new Registered Certificates, as
the case may be. The Servicer (or the Transferor, if a Successor Servicer is
Servicer) shall indemnify the Transfer Agent and Registrar and the Trustee and
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 reliance on any such written
instructions furnished pursuant to this subsection 6.3(c).
(d) [Reserved].
SECTION 6.4. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any mutilated Certificate is surrendered to the Transfer Agent and Registrar, or
the Transfer Agent and Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Transfer Agent and Registrar 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 Transferor shall execute and the Trustee shall authenticate and
(unless the Transfer Agent and Registrar is different from the Trustee, in which
case the Transfer Agent and Registrar shall) deliver (in compliance with
applicable law), in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Certificate, a new Certificate of like tenor and aggregate
Undivided Interest. In connection with the issuance of any new Certificate under
this Section 6.4, the Trustee or the Transfer Agent and Registrar may require
the payment 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 the Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 6.4 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 6.5. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the Person
in whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Article V (as described in
any Supplement) and for all other purposes whatsoever, and neither the Trustee,
the Paying Agent, the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary; provided that in determining
whether the holders of Investor Certificates evidencing the requisite Undivided
Interests have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Investor Certificates owned by the Transferor, the
Servicer or any Affiliate thereof shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Investor Certificates which a Responsible Officer knows
to be so owned shall be so disregarded. Investor Certificates so owned that have
been pledged in good faith shall not be disregarded as outstanding, if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Investor Certificates and that the pledgee is not the
Transferor, the Servicer or an Affiliate thereof.
SECTION 6.6. APPOINTMENT OF PAYING AGENT. (a) The Paying Agent shall
make distributions to Investor Holders from the appropriate account or accounts
maintained for the benefit of Holders as specified in this Agreement or the
related Supplement for any Series pursuant to Articles IV and V. Any Paying
Agent shall have the revocable power to withdraw funds from such appropriate
account or accounts for the purpose of making distributions referred to above.
The Trustee (or the Servicer or the Transferor, if a Successor Servicer is
Servicer, if the Trustee is the Paying Agent) may revoke such power and remove
the Paying Agent, if the Trustee (or the Servicer, or the Transferor, if a
Successor Servicer is Servicer, if the Trustee is the Paying Agent) determines
in its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect or for other good
cause. The Trustee (or the Servicer, or the Transferor, if a Successor Servicer
is Servicer, if the Trustee is the Paying Agent) shall notify each Rating Agency
of the removal of any Paying Agent. The Paying Agent, unless the Supplement with
respect to any Series states otherwise, shall initially be the Trustee. If any
form of Investor Certificate is issued as a Global Certificate, or if and so
long as any Series of Investor Certificates are listed on the Luxembourg Stock
Exchange and such exchange shall so require, the Trustee shall appoint a
co-paying agent in Luxembourg or another European city. The Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Servicer. In the event that the Trustee shall no longer be the Paying Agent, the
Trustee shall appoint a successor to act as Paying Agent (which shall be a bank
or trust company). The provisions of Sections 11.1, 11.2 and 11.3 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.
If specified in the related Supplement for any Series, so long as the
Investor Certificates of such Series are outstanding, the Transferor shall
maintain a co-paying agent in New York City (for Registered Certificates only)
or any other city designated in such Supplement which, if and so long as any
Series of Investor Certificates is listed on the Luxembourg Stock Exchange or
other stock exchange and such exchange so requires, shall be in Luxembourg or
the location required by such other stock exchange.
(b) The Trustee shall cause the Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Holders in trust for the benefit of the Holders
entitled thereto until such sums shall be paid to such Holders and shall agree,
and if the Trustee is the Paying Agent it hereby agrees, that it shall comply
with all requirements of the Internal Revenue Code regarding the withholding by
the Trustee of payments in respect of Federal income taxes due from Certificate
Owners.
SECTION 6.7. ACCESS TO LIST OF HOLDERS' NAMES AND ADDRESSES. The
Trustee shall 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 from the Servicer or the Paying
Agent, respectively, in writing, a list in such form as the Servicer or the
Paying Agent may reasonably require, of the names and addresses of the Investor
Holders as of the most recent Record Date for payment of distributions to
Investor Holders. Unless otherwise provided in the related Supplement, Holders
of the Investor Certificates evidencing Undivided Interests aggregating not less
than 10% of the Investor Interest of the Investor Certificates of any Series
(the "APPLICANTS") may apply in writing to the Trustee, and if such application
states that the Applicants desire to communicate with other Investor Holders of
any Series with respect to their rights under this Agreement 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 Holders held by
the Trustee and shall give the Servicer notice that such request has been made,
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. Every Holder, by receiving and holding a 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 as to the names and addresses
of the Holders hereunder, regardless of the source from which such information
was obtained.
SECTION 6.8. AUTHENTICATING AGENT. (a) The Trustee may appoint one or
more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. Whenever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent must be acceptable to the Transferor.
(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 paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Transferor. The Trustee may at
any time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Transferor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an authenticating agent shall cease to be acceptable to the Trustee or the
Transferor, the Trustee 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 Transferor.
(d) The Trustee agrees to pay each authenticating agent from time to
time reasonable compensation for its services under this Section 6.8, and the
Trustee shall be entitled to be reimbursed and the Servicer shall reimburse the
Trustee for such reasonable payments actually made, subject to the provisions of
Section 11.5.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be applicable
to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, 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 Amended and Restated
Pooling and Servicing Agreement.
-------------------------------------
as Authenticating Agent for Trustee,
By:
-----------------------------------
Authorized Officer."
SECTION 6.9. NEW ISSUANCES. (a) Upon request by the Transferor from
time to time, the Trustee shall issue to the Transferor under Section 6.1, for
execution and redelivery to the Trustee for authentication under Section 6.2,
one or more new Series of Investor Certificates. Any such Series shall be
substantially in the form specified in the related Supplement and shall bear,
upon its face, the designation for such Series to which it belongs, as selected
by the Transferor. Except as specified in any Supplement for a related Series,
all Investor Certificates of any Series shall rank pari passu and be equally and
ratably entitled as provided herein to the benefits hereof (except that the
Credit Enhancement provided for any Series shall not be available for any other
Series) without preference, priority or distinction on account of the actual
time or times of authentication and delivery, all in accordance with the terms
and provisions of this Agreement and the related Supplement.
(b) The Transferor may require the Trustee to issue to the Transferor
under Section 6.1, for execution and redelivery to the Trustee for
authentication under Section 6.2, one or more newly issued Series of Investor
Certificates or in connection with a Paired Series, interests in such Series,
in exchange for a reduction in the Transferor Interest (any such transaction, an
"ISSUANCE"). The Transferor may initiate an Issuance by notifying the Trustee,
in writing at least three days in advance (an "ISSUANCE NOTICE") of the date
upon which the Issuance is to occur (an "ISSUANCE DATE"). Any Issuance Notice
shall state the designation of any Series (and Class thereof, if applicable) to
be issued on the Issuance Date and, with respect to each such Series, its
Initial Investor Interest (or the method for calculating such Initial Investor
Interest), the applicable interest rate (or the method for allocating interest
payments or other cash flows to such Series), if any, and the Credit Enhancement
Provider, if any, with respect to such Series. On the Issuance Date, the Trustee
shall authenticate and deliver any such Series of Investor Certificates only
upon delivery to it of the following: (1) a Supplement satisfying the criteria
set forth in subsection 6.9(c) executed by the Transferor and specifying the
Principal Terms of such Series, (2) the applicable Credit Enhancement, if any,
(3) the agreement, if any, pursuant to which the Credit Enhancement Provider
agrees to provide the Credit Enhancement, if any, (4) a Tax Opinion, (5)
evidence that the Rating Agency Condition has been satisfied with respect to the
Issuance, and (6) an Officer's Certificate signed by a Vice President (or any
more senior officer) of the Transferor, that on the Issuance Date after giving
effect to such Issuance, the Transferor Interest would be at least equal to the
Minimum Transferor Interest. Upon satisfaction of such conditions, the Trustee
shall issue as provided above, such Series of Investor Certificates, dated the
Issuance. There is no limit to the number of Issuances that may be performed
under this Agreement.
(c) In conjunction with an Issuance, the parties hereto shall execute
a Supplement (on terms and conditions reasonably acceptable to the Trustee),
which shall specify the relevant terms with respect to any newly issued Series
of Investor Certificates, which may include: (i) its name or designation, (ii)
an Initial Investor Interest or the method of calculating the Initial Investor
Interest, (iii) the method of determining any adjusted Investor Interest, if
applicable, (iv) the applicable interest rate (or formula for its
determination), (v) the Closing Date, (vi) each rating agency rating such
Series, (vii) the name of the Clearing Agency, if any, (viii) the rights of the
Transferor that have been transferred to the Holders of such Series pursuant to
such Issuance (including any rights to allocations of Collections of Finance
Charge Receivables and Principal Receivables), (ix) the interest payment date or
dates and the date or dates from which interest shall accrue, (x) the periods
during which or dates on which principal will be paid or accrued, (xi) the
method of allocating Collections with respect to Principal Receivables for such
Series and, if applicable, with respect to other Series and the method by which
the principal amount of Investor Certificates of such Series shall amortize or
accrete and the method for allocating Collections with respect to Finance Charge
Receivables and Defaulted Receivables, (xii) any other Collections with respect
to Receivables or other amounts available to be paid with respect to such
Series, (xiii) the names of any accounts to be used by such Series and the terms
governing the operation of any such account and use of moneys therein, (xiv) the
Series Servicing Fee and the Series Servicing Fee Percentage, (xv) the Minimum
Transferor Interest and, the Series Termination Date, (xvi) the terms of any
Credit Enhancement with respect to such Series, and the Credit Enhancement
Provider, if applicable, (xvii) the base rate applicable to such Series, (xviii)
the terms on which the Certificates of such Series may be repurchased or
remarketed to other investors, (xix) any deposit into any account provided for
such Series, (xx) the number of Classes of such Series, and if more than one
Class, the rights and priorities of each such Class, (xxi) the priority of any
Series with respect to any other Series, (xxii) the rights, if any, of the
Transferor that have been transferred to the holders of such Series, (xxiii) the
Minimum Aggregate Principal Receivables, (xxiv) whether such Series will be part
of a Group, (xxv) whether such Series will or may be a Paired Series and the
Series with which it will be paired, if applicable and (xxvi) any other relevant
terms of such Series (including whether or not such Series will be pledged as
collateral for an issuance of any other securities, including commercial paper)
(all such terms, the "PRINCIPAL TERMS" of such Series). The terms of such
Supplement may modify or amend the terms of this Agreement solely as applied to
such new Series.
(d) Upon satisfaction of the above conditions, the Transferor may also
cause the Trustee (on behalf of the Trust) to enter into one or more agreements
pursuant to which the Trustee (on behalf of the Trust) shall sell purchased
interests in the Receivables and other Trust Assets to one or more purchasers.
Such agreement(s) shall specify terms similar to Principal Terms for any such
purchased interests and may grant the purchaser(s) of such interests, or an
agent or other representative of such purchaser(s), notice and consultation
rights with respect to any rights or actions of the Trustee.
SECTION 6.10. Book-Entry Certificates. Unless otherwise provided in
any related Supplement, the Investor Certificates, upon original issuance, shall
be issued in the form of typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the depository specified in such Supplement
(the "DEPOSITORY") for the Clearing Agency or Foreign Clearing Agency for such
Series. The Investor Certificates of each Series shall, unless otherwise
provided in the related Supplement, initially be registered on the Certificate
Register in the name of the nominee of the Clearing Agency or Foreign Clearing
Agency. No Certificate Owner will receive a definitive certificate representing
such Certificate Owner's interest in the related Series of Investor
Certificates, except as provided in Section 6.12. Unless and until definitive,
fully registered Investor Certificates of any Series ("DEFINITIVE CERTIFICATES")
have been issued to Certificate Owners pursuant to Section 6.12:
(i) the provisions of this Section 6.10 shall be in full force
and effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent, the Transfer
Agent and Registrar and the Trustee may deal with the Clearing Agency
and the Clearing Agency Participants for all purposes (including the
making of distributions on the Investor Certificates of each such
Series) as the authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10
conflict with any other provisions of this Agreement, the provisions
of this Section 6.10 shall control with respect to each such Series;
and
(iv) the rights of Certificate Owners of each such Series shall
be exercised only through the Clearing Agency or Foreign Clearing
Agency and the applicable Clearing Agency Participants and shall be
limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency or Foreign Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository
Agreement applicable to a Series, unless and until Definitive
Certificates of such Series are issued pursuant to Section 6.12, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal and interest on the Investor Certificates to such Clearing
Agency Participants.
SECTION 6.11. NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Holders is required under this Agreement, unless and until
Definitive Certificates shall have been issued to Certificate Owners pursuant to
Section 6.12, the Trustee shall give all such notices and communications
specified herein to be given to Holders of the Investor Certificates to the
Clearing Agency or Foreign Clearing Agency for distribution to Holders of
Investor Certificates.
Neither the Transferor, the Servicer, the Back-up Servicer or the
Trustee will have any responsibility or obligation to any Clearing Agency,
Clearing Agency Participant, or Certificate Owner with respect to (i) the
accuracy of any records maintained by the Clearing Agency or any Clearing Agency
Participant; (ii) the payment by the Clearing Agency or any Clearing Agency
Participant of any amount due to any Certificate Owner in respect of the
Certificates; (iii) the delivery of any notice by the Clearing Agency or any
Clearing Agency Participant; (iv) the selection of the Certificate Owners to
receive payment in the event of any partial payment of the Certificates; or (v)
any other action taken by the Clearing Agency or any Clearing Agency
Participant.
SECTION 6.12. DEFINITIVE CERTIFICATES. If (i) (A) the Transferor
advises the Trustee in writing that the Clearing Agency or Foreign Clearing
Agency is no longer willing or able to discharge properly its responsibilities
under the applicable Depository Agreement, and (B) the Trustee or the Transferor
is unable to locate a qualified successor, (ii) the Transferor, at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or Foreign Clearing Agency with respect to any
Series of Certificates or (iii) after the occurrence of a Servicer Default,
Certificate Owners of a Series representing beneficial interests aggregating not
less than 50% of the Investor Interest of such Series advise the Trustee and the
applicable Clearing Agency or Foreign Clearing Agency through the applicable
Clearing Agency Participants in writing that the continuation of a book-entry
system through the applicable Clearing Agency or Foreign Clearing Agency is no
longer in the best interests of the Certificate Owners, the Trustee shall notify
all Certificate Owners of such Series, through the applicable Clearing Agency
Participants, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such series requesting the
same. Upon surrender to the Trustee of the Investor Certificates of such Series
by the applicable Clearing Agency or Foreign Clearing Agency, accompanied by
registration instructions from the applicable Clearing Agency or Foreign
Clearing Agency for registration, the Trustee shall issue the Definitive
Certificates of such Series. Neither the Transferor 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 Definitive Certificates of such Series all references herein to obligations
imposed upon or to be performed by the applicable Clearing Agency or Foreign
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 the Definitive Certificates of such
series as Holders of such Series hereunder.
SECTION 6.13. GLOBAL CERTIFICATE; EURO-CERTIFICATE EXCHANGE DATE. If
specified in the related Supplement for any Series, the Investor Certificates
may be initially issued in the form of a single Temporary Global Certificate
(the "GLOBAL CERTIFICATE") in definitive, fully registered form, without
interest coupons, in the denomination of the Initial Investor Interest and
substantially in the form attached to the related Supplement. Unless otherwise
specified in the related Supplement, the provisions of this Section 6.13 shall
apply to such Global Certificate. The Global Certificate will be authenticated
by the Trustee upon the same conditions, in substantially the same manner and
with the same effect as the Definitive Certificates. The Global Certificate may
be exchanged in the manner described in the related Supplement for Registered
Certificates in definitive form.
ARTICLE VII
MATTERS RELATING TO TRANSFEROR
SECTION 7.1. LIABILITY OF TRANSFEROR. The Transferor shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Transferor.
SECTION 7.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, TRANSFEROR. (a) The Transferor shall not consolidate or merge
with or into any other Person, unless:
(i) the Person (if other than the Transferor) formed by or
surviving such consolidation or merger shall (i) be a Person organized
and existing under the laws of the United States of America or any
state or the District of Columbia, (ii) be licensed or exempt from
licensing under the Licensing Laws of any Permitted Jurisdiction and
(iii) expressly assume, by a supplement hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the performance
or observance of every agreement and covenant of this Agreement, any
Supplement and the Second Tier Receivables Purchase Agreement on the
part of the Transferor to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no Pay
Out Event shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Transferor and each Rating Agency shall have received an
Opinion of Counsel (and shall have delivered copies thereof to the
Trustee) to the effect that such transaction will not have any
material adverse tax consequence to the Trust, any Holder or any
Credit Enhancement Provider;
(v) any action as is necessary to maintain the lien and security
interest created by this Agreement shall have been taken; and
(vi) the Transferor shall have delivered to the Trustee an
Opinion of Counsel stating that such consolidation or merger and such
supplement comply with this Article VII and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing under the Exchange Act).
(b) Except as specifically contemplated in this Agreement or in any
Supplement, the Transferor shall not convey or transfer all or substantially all
of its properties or assets, including Trust Assets, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Transferor the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any state, (B) expressly assume, by a supplement hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the performance or observance of every agreement and covenant
of this Agreement, any supplement and the Second Tier Receivables
Purchase Agreement on the part of the Transferor to be performed or
observed, all as provided herein, (C) expressly agree by means of such
supplement that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of the
Holders, (D) unless otherwise provided in such Supplement, expressly
agree to indemnify, defend and hold harmless the Transferor against
and from any loss, liability or expense arising under or related to
this Agreement, any Supplement, the Second Tier Receivables Purchase
Agreement and the Certificates and (E) expressly agree by means of
such supplement that such Person (or if a group of persons, then one
specified Person) shall prepare (or cause to be prepared) and make all
filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Certificates;
(ii) immediately after giving effect to such transaction, no Pay
Out Event shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Transferor shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Trustee) to the effect
that such transaction will not have any material adverse tax
consequence to the Trust, any Holder or any Credit Enhancement
Provider;
(v) any action as is necessary to maintain the lien and security
interest created by this Agreement shall have been taken; and
(vi) the Transferor shall have delivered to the Trustee an
Opinion of Counsel each stating that such conveyance or transfer and
such supplement comply with this Article VII and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
(c) The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the Transferor
hereunder except as described in subsections (a) and (b).
SECTION 7.3. LIMITATION ON LIABILITY. The trustees, directors,
officers, employees or agents of the Transferor shall not be under any liability
to the Trust, the Trustee, the Holders, any Credit Enhancement Provider or any
other Person hereunder or pursuant to any document delivered hereunder, it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as consideration for, the execution of this Agreement and
any Supplement and the issuance of the Certificates; provided that this
provision shall not protect the officers, directors, employees, or agents of the
Transferor against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. Except as
provided in Section 7.4, the Transferor shall not be under any liability to the
Trust, the Trustee, the Holders, any Credit Enhancement Provider or any other
Person for any action taken or for refraining from the taking of any action in
its capacity as the Transferor pursuant to this Agreement whether arising from
express or implied duties under this Agreement; provided, however, that this
provision shall not protect the Transferor against any liability which would
otherwise be imposed by reason of any breach of representation or covenant,
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Transferor
and any director, officer, employee or agent may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder.
SECTION 7.4. LIABILITIES. Notwithstanding any other provision herein,
including Section 7.3, the Transferor shall indemnify and hold harmless any
injured party (including, without limitation, the Trustee) from and against any
reasonable loss, liability, expense, damage or injury arising out of or based
upon the arrangement created by this Agreement or any Supplement, as though this
Agreement or such Supplement created a partnership under the Delaware Uniform
Partnership Law in which the Transferor was a general partner; provided that the
Transferor shall not indemnify the Trust, the Investor Holders or the
Certificate Owners as to any losses, claims or damages incurred by any of them
in their capacities as investors, including losses incurred as a result of
Defaulted Receivables or Receivables which are written off as uncollectible; and
provided, further, that the Transferor shall not indemnify the Trust, the
Investor Holders or the Certificate Holders for any liabilities, costs or
expenses of the Trust, the Investor Holders or the Certificate Owners arising
under any tax law, including any Federal, state, local or foreign income,
withholding 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 Holders or the
Certificate Owners in connection herewith to any taxing authority. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof.
SECTION 7.5. No Other Business. The Transferor shall not engage in any
business other than the financing, purchasing, owning and managing of the
Receivables in the manner contemplated by this Agreement, the Second Tier
Receivables Purchase Agreement, any Supplement and the Trust Agreement, holding
the Transferor Interest, performing its obligations under this Agreement, any
Supplement and the Second Tier Receivables Purchase Agreement, and activities
incidental thereto.
SECTION 7.6. NO BORROWING. The Transferor shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except as contemplated by this Agreement, the Second Tier
Receivables Purchase Agreement, any Supplement and the Trust Agreement.
SECTION 7.7. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by this Agreement, the Second Tier Receivables Purchase
Agreement, any Supplement and the Trust Agreement, the Transferor shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance of any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so), any stock, obligations, assets or other securities of,
or any other interest in, or make any capital contribution to, any other Person.
SECTION 7.8. CAPITAL EXPENDITURES. The Transferor shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 7.9. COMMINGLING OF FUNDS OR ASSETS. The Transferor shall not
commingle its funds or other assets (including any such funds or assets held for
the benefit of the Holders) with any other person, including any affiliate of
the Transferor, other than in accordance with this Agreement, any Supplement and
the Second Tier Receivables Purchase Agreement.
The obligations of the Transferor hereunder shall survive the
termination of the Trust, the resignation or removal of the Trustee, and the
appointment of a Successor Servicer.
ARTICLE VIII
OTHER MATTERS RELATING TO SERVICER
SECTION 8.1. LIABILITY OF SERVICER. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
SECTION 8.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. The Servicer shall not consolidate with or merge into
any other Person or convey or transfer its properties and assets (not including
assets conveyed or transferred through a financing or securitization program)
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Servicer substantially as an
entirety shall be a Person 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, shall expressly
assume, by an agreement supplemental hereto, executed and delivered to
the Trustee, the performance of every covenant and obligation of the
Servicer hereunder (to the extent that any right, covenant or
obligation of the Servicer, as applicable hereunder, is inapplicable
to the successor entity, such successor entity shall be subject to
such covenant or obligation, or benefit from such right, as would
apply, to the extent practicable, to such successor entity);
(ii) the Servicer shall have delivered to the Trustee an
Officer's Certificate that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 8.2
and that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that
such supplemental agreement is legal, valid and binding with respect
to the Servicer; and
(iii) the Servicer shall have delivered notice to the Rating
Agency of such consolidation, merger, conveyance or transfer.
SECTION 8.3. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. The
directors, officers, stockholders, employees or other affiliates or agents of
the Servicer shall not be under any liability to the Trust, the Trustee, the
Holders, any Credit Enhancement Provider or any other Person hereunder or
pursuant to any document delivered hereunder, it being expressly understood that
all such liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates. Except as provided in Section 8.4 with respect to
the Trust and the Trustee, its officers, directors, employees and agents, the
Servicer shall not be under any liability to the Trust, the Trustee, its
officers, directors, employees and agents, the Holders, any Credit Enhancement
Provider or any other Person for any action taken or for refraining from the
taking of any action in its capacity as the Servicer pursuant to this Agreement
or any Supplement; provided that this provision shall not protect the Servicer
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of its reckless disregard of its obligations and duties hereunder or under any
Supplement. The Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person 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 to
service the Receivables in accordance with this Agreement which in its
reasonable opinion may involve it in any expense or liability.
SECTION 8.4. SERVICER INDEMNIFICATION OF THE TRUST AND TRUSTEE. The
Servicer shall indemnify and hold harmless the Trust and the Trustee, 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 or alleged acts or omissions which constitute negligence or misconduct
on the part of the Servicer with respect to activities of the Trust or the
Trustee pursuant to this Agreement or any Supplement, including, but not limited
to any judgment, award, settlement, reasonable attorneys' fees and other costs
or expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided that (a) the Servicer shall not indemnify
the Trustee if such acts, omissions or alleged acts or omissions constitute or
are caused by fraud, negligence, or willful misconduct by the Trustee, (b) the
Servicer shall not indemnify the Trust, the Investor Holders 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 Holders, (c) the
Servicer shall not indemnify the Trust, the Investor Holders or the Certificate
Owners as to any losses, claims or damages incurred by any of them in their
capacities as investors, including losses incurred as a result of Defaulted
Receivables and (d) that the Servicer shall not indemnify the Trust, the
Investor Holders or the Certificate Owners for any liabilities, costs or
expenses of the Trust, the Trustee, the Investor Holders or the Certificate
Owners arising under any tax law, including 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 Holders or the
Certificate Owners in connection herewith to any taxing authority. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof.
SECTION 8.5. SERVICER NOT TO RESIGN. The Servicer shall not resign
from the obligations and duties hereby imposed on it except upon determination
that (i) the performance of its duties hereunder is no longer permissible under
applicable law and (ii) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (i) by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Back-up Servicer or another Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.2.
SECTION 8.6. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE RECEIVABLES. The Servicer shall provide the Trustee access to the
documentation regarding the Accounts and the Receivables when the Trustee is
required in connection with the enforcement of its rights or the rights of the
Investor Holders, or by applicable law, to review such documentation, such
access being afforded without charge but only upon reasonable request, during
normal business hours, subject to the Servicer's normal security and
confidentiality procedures and at offices designated by the Servicer. Nothing in
this Section 8.6 shall derogate from the obligation of the Transferor, the
Trustee or 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 8.6 as a result of such obligations shall not
constitute a breach of this Section 8.6.
SECTION 8.7. 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 Guidelines. Any such
delegations shall not relieve the Servicer of its liability and responsibility
with respect to such duties, and shall not constitute a resignation within the
meaning of Section 8.5 hereof. If any such delegation is to a party other than
an Affiliate of the Transferor notification thereof shall be given to each
Rating Agency.
SECTION 8.8. EXAMINATION OF RECORDS. The Servicer shall clearly and
unambiguously identify each Eligible Receivable (including any Additional
Receivables) conveyed to the Trust pursuant to Section 2.1(b) in its computer or
other records to reflect that the Receivables have been conveyed to the Trust
pursuant to this Agreement. The Servicer shall, prior to the sale or transfer to
a third party of any receivable held in its custody, examine its computer and
other records to determine that such receivable is not a Receivable.
SECTION 8.9. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, BACK-UP SERVICER. The Back-up Servicer shall not consolidate
with or merge into any other Person or convey or transfer its properties and
assets (not including assets conveyed or transferred through a financing or
securitization program) substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation (if such Person is
other than the Back-up Servicer) or into which the Back-up Servicer is
merged (if the surviving Person of such merger is other than the
Back-up Servicer) or the Person which acquires by conveyance or
transfer the properties and assets of the Back-up Servicer
substantially as an entirety shall be a Person organized and existing
under the laws of the United States of America or any State or the
District of Columbia, and, if the Back-up Servicer is not the
surviving entity, shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, the performance of
every covenant and obligation of the Back-up Servicer hereunder (to
the extent that any right, covenant or obligation of the Back-up
Servicer, as applicable hereunder, is inapplicable to the successor
entity, such successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to the extent
practicable, to such successor entity);
(ii) the Back-up Servicer shall have delivered to the Trustee an
Officer's Certificate that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 8.9
and that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that
such supplemental agreement is legal, valid and binding with respect
to the Back-up Servicer; and
(iii) the Back-up Servicer shall have delivered notice to the
Rating Agency of such consolidation, merger, conveyance or transfer.
SECTION 8.10. BACK-UP SERVICER NOT TO RESIGN. (a) The Back-up Servicer
shall not resign from its obligations and duties under this Agreement, except
upon the assumption of such duties and obligations by a successor Back-up
Servicer and the Rating Agency Condition having been satisfied with respect to
the appointment of such successor Back-up Servicer; provided that the Servicer
and the Transferor shall use their best efforts to replace the Back-up Servicer
if the Back-up Servicer provides written notice to the Transferor of its desire
to resign as Back-up Servicer.
(b) Notwithstanding anything contained in clause (a) above, if the
Back-up Servicer has delivered to the Transferor, the Servicer and the Trustee a
Sale Notice on a date which is six months after the Closing Date with respect to
Series 2001-1, the Back-up Servicer's obligations and duties under this
Agreement shall be terminated upon the earlier to occur of (x) the Series
Termination Date with respect to Series 2001-1 or (y) the appointment of a
successor Back-up Servicer that assumes the obligations of the Back-up Servicer
hereunder and under each Series Supplement and the Rating Agency Condition
having been satisfied. Upon the receipt by the Transferor, the Servicer and the
Trustee of a Sale Notice delivered pursuant to this subsection 8.10(b), the
Servicer and the Transferor shall use their best efforts to replace the Back-up
Servicer as soon as possible.
(c) If the Back-up Servicer enters into a transaction contemplated by
Section 8.9 and the surviving Person in such transaction assumes the obligations
of the Back-up Servicer in accordance with Section 8.9, such surviving Person
may terminate its duties and obligations as Back-up Servicer under this
Agreement, if on or prior to 10 days after the consummation of such transaction
such surviving Person delivers a Successor Back-up Servicer Termination Notice
to the Transferor, the Servicer and the Trustee. Such termination shall become
effective upon the earlier to occur of (x) the initial Series Termination Date
or (y) the appointment of a successor Back-up Servicer that assumes the
obligations of Back-up Servicer hereunder and under each Series Supplement and
the Rating Agency Condition having been satisfied. Upon receipt by the
Transferor, the Servicer and the Trustee of a Successor Back-up Servicer
Termination Notice delivered pursuant to this subsection 8.10(c), the Servicer
and the Transferor shall use their best efforts to replace the Back-up Servicer
as soon as possible. If a Sale Notice has been delivered to the Transferor
pursuant to subsection 8.10(b), it will not be necessary for a Successor Back-up
Servicer Termination Notice to be delivered with respect to the transaction
referenced in such Sale Notice.
SECTION 8.11. COOPERATION AMONG SERVICER AND BACK-UP SERVICER. The
Servicer agrees to provide the Back-up Servicer reasonable access to the
Servicer's premises and management upon reasonable notice during normal business
hours, to the purpose and effect of facilitating the ability of the Back-up
Servicer promptly to undertake the responsibilities of the Servicer if required
hereunder. The Back-up Servicer agrees to keep all information so obtained
confidential. If the Servicer ceases to be such for any reason, and the Back-up
Servicer becomes a Successor Servicer hereunder, the former Servicer shall
afford the Successor Servicer full and complete access without charge to all
books, records, computer databases, systems and personnel of the former Servicer
and shall cooperate with the Successor Servicer so as to facilitate the
Successor Servicer's performance of its obligations hereunder.
ARTICLE IX
TRUST PAY OUT EVENTS
SECTION 9.1. TRUST PAY OUT EVENT. Each of the following events (each,
a "TRUST PAY OUT EVENt") shall constitute a Pay Out Event with respect to all
Series of Certificates, immediately upon the occurrence of such event, and
without any notice or other action on the part of the Trustee or the Investor
Holders:
(a) The Transferor, Mellon Bank or any Originator shall consent to the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to all or substantially all of its property, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Transferor, Mellon Bank or any
Originator; or the Transferor, Mellon Bank or any Originator shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations; or the Transferor, Mellon Bank or any
Originator shall become unable for any reason to transfer Receivables to the
Trust in accordance with the provisions of this Agreement or to Mellon Bank in
accordance with the provisions of the First Tier Receivables Purchase Agreement
or to the Transferor in accordance with the provisions of the Second Tier
Receivables Purchase Agreement, respectively;
(b) the Trust shall become an "investment company" within the meaning
of the Investment Company Act;
(c) the Back-up Servicer (i) becomes legally unable to act as
Successor Servicer or (ii) has been terminated as Back-up Servicer and within 90
days of such event, a successor Back-up Servicer or Successor Servicer has not
assumed the obligations of the Back-up Servicer and the Rating Agency Condition
has not been satisfied with respect to the appointment of such Back-up Servicer
or Successor Servicer;
(d) the failure to transfer Additional Receivables (i) by either
Originator, when required by the First Tier Receivables Purchase Agreement, (ii)
by Mellon Bank when required under the Second Tier Receivables Purchase
Agreement or (iii) by the Transferor as required by Section 2.1;.
(e) the Originators cease to be the Servicer under the Agreement;
(f) the failure to appoint a successor Back-up Servicer by a date
which is ninety days after the receipt by the Servicer, the Trustee and the
Transferor of either a Sale Notice or Successor Back-up Servicer Termination
Notice in accordance with subsections 8.10(b) and 8.10(c), respectively; or
(g) the failure of the Servicer (so long as the Originator is a
Servicer) to remove Receivables from the Trust or indemnify the Trust for
certain losses resulting from the breach of subsection 3.13(a).
SECTION 9.2. Additional Rights Upon the Occurrence of Certain Events.
(a) If the Transferor shall consent to the appointment of a conservator or
receiver or liquidator for the winding-up or liquidation of its affairs, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver or
liquidator for the winding-up or liquidation of its affairs shall have been
entered against the Transferor (an "INSOLVENCY EVENT"), the Transferor shall on
the day of such Insolvency Event (the "APPOINTMENT DAY") immediately cease to
transfer Principal Receivables to the Trust and shall promptly give notice to
the Trustee of such Insolvency Event. Notwithstanding any cessation of the
transfer to the Trust of additional Principal Receivables, Finance Charge
Receivables, whenever created, accrued in respect of Principal Receivables which
have been transferred to the Trust shall continue to be a part of the Trust, and
Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV. Within 15 days of the Appointment Day, the Trustee
shall (i) publish a notice in an Authorized Newspaper that an Insolvency Event
has occurred and that the Trustee intends to sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and (ii) send
written notice to the Investor Holders describing the provisions of this Section
9.2 and requesting instructions from such Holders. Unless within 90 days from
the day notice pursuant to clause (i) is first published, the Trustee shall have
received written instructions of Holders of Investor Certificates evidencing
more than 50% of the Investor Interest of each Series issued and outstanding
(or, if any such Series has two or more Classes, each Class) to the effect that
such Holders disapprove of the liquidation of the Receivables and wish to
continue having Principal Receivables transferred to the Trust as before such
Insolvency Event, the Trustee shall 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 for any such conservator, receiver or liquidator
that the terms and manner of any proposed sale, disposition or liquidation are
commercially reasonable. The provisions of Sections 9.1 and 9.2 shall not be
deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) shall be treated as Collections on the
Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV; provided, that the Trustee shall determine
conclusively in its sole discretion the amount of such proceeds which are
allocable to Finance Charge Receivables and the amount of such proceeds which
are allocable to Principal Receivables. Unless the Trustee receives written
instructions from Investor Holders as provided in subsection (a), on the day
following the last Distribution Date in the Monthly Period during which such
proceeds are distributed to the Investor Holders of each Series, the Trust shall
terminate.
(c) The Trustee may appoint an agent or agents (at the expense of the
Transferor) to assist with its responsibilities pursuant to this Article IX with
respect to competitive bids.
ARTICLE X
SERVICER DEFAULTS
SECTION 10.1. SERVICER DEFAULTS. If any one of the following events (a
"SERVICER DEFAULT") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to Article IV
or to instruct the Trustee to make any required drawing, withdrawal, or payment
under any Credit Enhancement on or before the date occurring ten Business Days
after the date such payment, transfer, deposit withdrawal or drawing or such
instruction or notice is required to be made or given, as the case may be, under
the terms of this Agreement;
(b) (i) failure on the part of the Servicer duly to observe or perform
in any respect any other covenants or agreements of the Servicer set forth in
this Agreement, if such failure has a material adverse effect on the Investor
Holders of any Series and continues unremedied for a period of 60 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 Undivided Interests
aggregating not less than 25% of the Investor Interest of any Series adversely
affected thereby, and during which time such failure continues to have a
material adverse effect on such Investor Holders for such period (provided,
however, that breach of a covenant that results in a Receivable becoming a
Servicer Ineligible Receivable shall not constitute a Servicer Default, if such
Receivable is repurchased in accordance with Section 3.10(c)); or (ii)
delegation by the Servicer of its duties under this Agreement, except as
permitted pursuant to Section 8.7;
(c) any representation, warranty or certification made by the Servicer
in this Agreement or in any certificate delivered pursuant to this Agreement
shall prove to have been incorrect when made, which has a material adverse
effect on the Investor Holders of any Series and which continues to be incorrect
in any material respect for a period of 60 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 Undivided Interests aggregating not
less than 25% of the Investor Interest of any Series adversely affected thereby
and continues to materially adversely affect such Investor Holders for such
period; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property, or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidating of its affairs, shall
have been entered against the Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make any assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Investor Interest, by notice then
given in writing to the Servicer (and to the Trustee if given by the Investor
Holders) (a "TERMINATION NOTICE"), may terminate all of the rights and
obligations of the Servicer as Servicer under this Agreement.
After receipt by the Servicer of such Termination Notice, and on the
date that the Back-up Servicer or another Successor Servicer becomes Servicer
pursuant to Section 10.2, all authority and power of the Servicer under this
Agreement shall pass to and be vested in such Successor Servicer; and 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 purpose of such transfer of servicing rights and obligations. The Servicer
agrees to cooperate with the Trustee and such Successor Servicer in effecting
the termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder including the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under this
Agreement, including 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, the Finance Charge Account, the Excess
Funding Account, and any Series Account, or which shall thereafter be received
with respect to the Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Unearned Premiums applicable to the Trust. The Servicer
shall promptly transfer its electronic records or electronic copies thereof
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 10.1 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. The Servicer shall, on the date of any
servicing transfer, transfer all of its rights and obligations under the Credit
Enhancement with respect to any Series to the Successor Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 10.1(a) for a period of 30 Business Days or under
subsection 10.1(b) or (c) for a period of 60 Business Days, shall not constitute
a Servicer Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or the public enemy, acts of declared or undeclared war,
public disorder, rebellion, riot or sabotage, epidemics, landslides, lightning,
fire, hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns,
floods, power outages or similar causes. The preceding sentence shall not
relieve the Servicer from using its best efforts to perform its obligations in a
timely manner in accordance with the terms of this Agreement and Servicer shall
provide the Trustee, any Credit Enhancement Provider, the Transferor and the
Holders of Investor Certificates with an Officer's Certificate giving prompt
notice of such failure or delay by it, together with a description of the cause
of such failure or delay and its efforts so to perform its obligations.
SECTION 10.2. BACK-UP SERVICER, TRUSTEE TO ACT, APPOINTMENT OF
SUCCESSOR. (a) On and after receipt by the Servicer of a Termination Notice
pursuant to Section 10.1, unless a later date is specified in the Termination
Notice, the Back-up Servicer shall automatically be appointed and become
Successor Servicer. Notwithstanding the foregoing, if the Back-up Servicer is
legally unable or unwilling to act as Successor Servicer, the Trustee shall use
its best efforts to appoint another entity acceptable to each Credit Enhancement
Provider (which consent shall not be unreasonably withheld), or petition a court
of competent jurisdiction to appoint another entity as Successor Servicer,
provided that the Rating Agency Condition shall have been satisfied with respect
to such appointment. Until such time as such Successor Servicer shall have been
appointed, the Servicer shall continue to act as Servicer until the earlier of
the Trust Termination Date or the date that a Successor Servicer shall have been
appointed in accordance with the terms hereof. No Successor Servicer shall be
entitled to any compensation in excess of the Servicing Fee without the prior
consent of each Credit Enhancement Provider and satisfaction of the Rating
Agency Condition. Upon appointment of such Successor Servicer, the Trustee shall
give prompt written notice thereof to the Holders. At the time the Servicer
shall cease to act as Servicer pursuant to this Section 10.2 or Section 8.5,
such Servicer shall deliver to each insurance carrier which on such date has
premiums financed by the Receivables an assignment of Power of Attorney to the
Back-up Servicer (or any other Successor Servicer) which would allow the Back-up
Servicer (or such other Successor Servicer) to cancel the related insurance
policies on behalf of the Trust. Prior to the termination of the Servicer
pursuant to Section 10.1 or the resignation of the Servicer pursuant to Section
8.5, the Servicer shall have the right to remove the Back-up Servicer and
appoint a new Back-up Servicer at any time as long as the Rating Agency
Condition is satisfied with respect to such action.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. Any Successor Servicer, by its
acceptance of its appointment, will automatically agree to be bound by the terms
and provisions of each Credit Enhancement. Notwithstanding the above, or
anything in this Section 10.2 or Section 3.1 to the contrary, the Back-up
Servicer if it becomes Servicer pursuant to this Section 10.2 shall have no
responsibility or obligation for (i) any representation or warranty made by a
predecessor Servicer hereunder, and (ii) any act or omission of either a
predecessor or a Successor Servicer other than such Back-up Servicer. Neither
the Back-up Servicer nor any other Successor Servicer shall be deemed to be in
default hereunder due to any act or omission of a predecessor Servicer,
including but not limited to failure to timely deliver to the Trustee any
Monthly Servicer's Certificate, any funds required to be deposited to the Trust,
or any breach of its duty to cooperate with a transfer of servicing as required
by Section 10.01.
(c) In connection with such appointment and assumption, the Trustee
shall make such arrangements for the compensation of the Successor Servicer out
of Collections, as it and such Successor Servicer shall agree; provided that no
such compensation shall be in excess of the Servicing Fee and any other amounts
payable to the Servicer hereunder. The Transferor agrees that if the Servicer is
terminated hereunder, it will agree to deposit the portion of the Collections in
respect of Finance Charge Receivables that it is entitled to receive pursuant to
Article IV to pay its share of the compensation of the Successor Servicer. The
Servicer being terminated (or the Transferor, if the Servicer is a Successor
Servicer) shall bear all costs of a Successor Servicer being appointed
hereunder.
(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 12.1 and shall pass to and be vested in the Transferor
and the Transferor is hereby authorized and empowered to execute and deliver, on
behalf of the Successor Servicer, as attorney-in-fact or otherwise, all
documents and other instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of such transfer of
servicing rights. The Successor Servicer agrees to cooperate with the Transferor
in effecting the termination of the responsibilities and rights of the Successor
Servicer to conduct servicing on the Receivables. The Successor Servicer shall
transfer its electronic records relating to the Receivables to the Transferor in
such electronic form as the Transferor may reasonably request and shall transfer
all other records, correspondence and documents to the Transferor in the manner
and at such times as the Transferor shall reasonably request. To the extent that
compliance with this Section 10.2 shall require the Successor Servicer to
disclose to the Transferor information of any kind which the Successor Servicer
deems to be confidential, the Transferor shall be required to enter into such
customary licensing and confidentiality agreements as the Successor Servicer
shall deem necessary to protect its interests.
SECTION 10.3. NOTIFICATION TO HOLDERS. Within two Business Days after
the Servicer becomes aware of any Servicer Default, the Servicer shall give
prompt written notice thereof to the Trustee, any Credit Enhancement Provider
and the Rating Agencies. Upon any termination or appointment of a Successor
Servicer pursuant to this Article X, the Trustee shall give prompt written
notice thereof to Investor Holders at their respective addresses appearing in
the Certificate Register.
SECTION 10.4. WAIVER OF PAST DEFAULTS. The Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Investor Interest of each Series adversely affected by any default by the
Servicer or the Transferor may, on behalf of all Holders of such Series, waive
any default by the Servicer or the Transferor in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits or payments of interest or principal relating to such
Series pursuant to Article IV which default does not result from the failure of
the Paying Agent to perform its obligations to make any required deposits or
payments of interest and principal in accordance with Article IV. 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.
ARTICLE XI
TRUSTEE
SECTION 11.1. DUTIES OF TRUSTEE. (a) The Trustee, prior to the
occurrence of any Servicer Default and after the remedying or waiver 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, no duties
shall be implied against the Trustee, and its permissive rights shall not be
construed as duties. If a Responsible Officer has received written notice that a
Servicer Default has occurred (which has not been remedied 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) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
substantially conform on their face to the requirements of this Agreement.
(c) Subject to subsection 11.1(a), no provision of this Agreement
shall be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct; provided
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 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 Undivided Interests aggregating more than 50%
of the Investor Interest of any Series relating to 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
in relation to such Series, under this Agreement and the Trustee shall
not be liable for any action taken, suffered, or omitted to be taken
by it in good faith at the direction of the Servicer, the Transferor
or the Back-up Servicer; and
(iii) the Trustee shall not be charged with knowledge of, or be
responsible for taking any action with respect to, any Servicer
Default or Trust Pay Out Event unless a Responsible Officer of the
Trustee has or obtains actual knowledge thereof or has received
written notice thereof from the Servicer or any Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than
10% of the Investor Interest of any Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it has
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, monitor 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 shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Servicer in accordance with
the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to impair the interests of the
Trust in any Receivable now existing or hereafter created or to impair the value
of any Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.1(f), the Trustee shall
have no power to vary the corpus of the Trust including the power to (i) accept
any substitute obligation for a Receivable initially assigned to the Trust under
Section 2.1, (ii) add any other investment, obligation or security to the Trust,
except for an addition permitted under Section 2.1(b) or (iii) withdraw from the
Trust any Receivables, except for a withdrawal permitted under Sections 9.2,
10.2, 12.1 or 12.2 or subsections 2.4(d), 2.4(e) or Article IV.
(g) If 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, then, subject to subsection
11.1(d), the Trustee shall be obligated promptly to perform such obligation,
duty or agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of its insurance
premium finance receivables (other than the Receivables) to another Person, upon
the written request of the Transferor, the Trustee shall, upon prior written
notice to ▇▇▇▇▇'▇, enter into such intercreditor agreements with the transferee
of such receivables as are customary and necessary to identify separately the
rights, if any, of the Trust and such other Person in the Transferor's insurance
premium finance receivables; provided that the Trustee shall not be required to
enter into any intercreditor agreement which could adversely affect its own
interests or the interests of the Holders and, upon the request of the Trustee,
the Transferor will deliver an Opinion of Counsel on any matters relating to
such intercreditor agreement, reasonably requested by the Trustee without
separately verifying the accuracy of the contents or calculations therein.
(i) Every provision of this Agreement that in any way relates to the
Trustee is subject to Article XI.
SECTION 11.2. CERTAIN MATTERS AFFECTING TRUSTEE. Except as otherwise
provided in Section 11.1:
(a) the Trustee may conclusively rely on and shall be protected in
acting on, or in refraining from acting in accord with, any assignment of
Receivables in Supplemental Accounts, the initial report, the monthly Servicer's
certificate, the annual Servicer's certificate, the monthly payment instructions
and notification to the Trustee, the monthly Holder's statement, any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it 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 Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
with such 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 Credit Enhancement, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Holders or any Credit Enhancement
Provider, pursuant to the provisions of this Agreement, unless such Holders or
Credit Enhancement Provider 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 remedied or waived), to exercise such of the rights and
powers vested in it by this Agreement and any Credit Enhancement, and to 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 his 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 bound to make any investigation into the
facts of matters stated in any assignment of Receivables as of the Initial
Closing Date, the initial report, any daily Servicer's report, the monthly
Servicer's certificate, the annual Servicer's certificate, the monthly payment
instructions and notification to the Trustee, the monthly Holder's statement,
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
offered reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred thereby and requested in writing so to do by
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Investor Interest of any Series which could be adversely
affected if the Trustee does not perform such acts;
(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 (i) any
misconduct or negligence on the part of any such agent, attorney or custodian
(including any Registrar or Paying Agent) appointed with due care by it
hereunder or (ii) the supervision of those agents, attorneys, custodians, or
nominees appointed with due care; and
(g) except as may be required by subsection 11.1(a), the Trustee shall
not be required to make any initial or periodic examination of any documents or
records related to the Receivables or the Accounts for the purpose of
establishing the presence or absence of defects, the compliance by the
Transferor with its representations and warranties or for any other purpose.
SECTION 11.3. TRUSTEE NOT LIABLE FOR RECITALS OR ISSUANCE OF
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 of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. The Trustee shall
not be accountable for the use or application by the Transferor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Transferor in respect of the Receivables or
deposited in or withdrawn from the Collection Account, the Excess Funding
Account or the Finance Charge Account, or any Series Account by the Servicer.
SECTION 11.4. TRUSTEE MAY NOT OWN CERTIFICATES. The Trustee in its
individual capacity or otherwise may become the owner of Investor Certificates.
In connection with any such ownership, the Trustee, shall have the same rights
as it would have if it were not the Trustee. The Trustee may otherwise transact
banking business with the other parties hereto with the same right it would have
were it not the Trustee.
SECTION 11.5. TRANSFEROR TO PAY TRUSTEE'S FEES AND EXPENSES;
INDEMNIFICATION OF TRUSTEE. (a) The Transferor shall (or shall cause Mellon Bank
to) pay to the Trustee from time to time, and the Trustee shall be entitled to
receive the compensation described in the Fee Agreement (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 Transferor shall (or shall cause Mellon
Bank to) pay or reimburse the Trustee (without reimbursement from any Investor
Account, any Series Account or otherwise) upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement or the Fee Agreement,
except any such expense, disbursement or advance as may arise from its own
negligence or bad faith.
(b) The Transferor shall (or shall cause Mellon Bank to) indemnify the
Trustee, its officers, directors and agents against any loss, liability,
expense, damage or injury suffered or sustained without fraud, negligence or
willful misconduct on its part (other than any such loss, liability, expense,
damage or injury relating to any violation by the Trustee of the terms of this
Agreement) arising in connection with the acceptance or administration of this
Trust, including the reasonable costs and expenses of defending itself against
any claim or liability resulting from the exercise or performance of any of its
powers or duties under this Agreement.
The obligations of the Transferor under this Section 11.5 shall
survive the termination of the Trust and the resignation or removal of the
Trustee.
SECTION 11.6. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or any state thereof authorized under
such laws to exercise corporate trust powers, having a long-term unsecured debt
rating of at least Baa3 by ▇▇▇▇▇'▇ and BBB- by Standard & Poor's, having, in the
case of an entity that is subject to risk-based capital adequacy requirements,
risk-based capital of at least $50,000,000 or, in the case of an entity that is
not subject to risk-based capital adequacy requirements, having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by Federal or state authority. If such corporation or trust company
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 11.6, the combined capital and surplus of such
corporation or trust company shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. The
Trustee shall at all times be licensed or be exempt from licensing under the
Licensing Laws of each Permitted Jurisdiction. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
11.6, the Trustee shall resign immediately in the manner and with the effect
specified in Section 11.7.
SECTION 11.7. RESIGNATION OR REMOVAL OF TRUSTEE. (a) The Trustee may
at any time resign and be discharged from the Trust hereby created by giving
written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer (or the Transferor, if a Successor Servicer is
Servicer) shall 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. 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 11.6 hereof and shall fall to resign
after written request therefor by the Transferor, 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, then the
Transferor may, but shall not be required to, remove the Trustee and 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 11.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.8 hereof and any liability of the Trustee arising
hereunder prior to any such resignation or removal shall survive such
appointment of a successor trustee.
SECTION 11.8. SUCCESSOR TRUSTEE. (a) Any successor trustee appointed
as provided in Section 11.7 hereof shall execute, acknowledge and deliver to the
Transferor 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 the Trustee herein. The predecessor
Trustee shall deliver to the successor trustee all documents and statements held
by it hereunder, and the Transferor and the predecessor Trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor trustee
all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.8, such successor trustee shall mail notice of such
succession hereunder to all Holders and Credit Enhancement Providers at their
addresses as shown in the Certificate Register or set forth in any Supplement.
SECTION 11.9. 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 Person shall be eligible under Section 11.6,
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 Holders, such title to the trust, or any part
thereof, and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.6 and no notice to Holders of the appointment of any co-trustee or separate
trustee shall be required under Section 11.8 hereof.
(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 ,
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 constitute the
Trustee as 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 RETURNS. If the Trust shall be required to file tax
returns, the Servicer (or the Transferor, if a Successor Servicer is Servicer)
shall prepare or cause to be prepared any tax returns required to be filed by
the Trust and shall remit such returns to the Trustee for signature and, to the
extent possible, file such returns at least five days before such returns are
due to be filed. The Trustee is hereby authorized to sign any such return on
behalf of the Trust. The Servicer (or the Transferor, if a Successor Servicer is
Servicer) shall prepare or shall cause to be prepared all tax information
required by law to be distributed to Holders and shall deliver such information
to the Trustee at least five days prior to the date it is required by law to be
distributed to Holders. the Trustee, upon request, shall furnish the Servicer
(or the Transferor, if a Successor Servicer is Servicer) with all such
information known to the Trustee as may be reasonably required in connection
with the preparation of all tax returns of the Trust, and shall cause such tax
returns to be signed in the manner required by law. In no event shall the
Trustee, the Transferor, a Successor Servicer or the Servicer be liable for any
liabilities, costs or expenses of the Trust, the Investor Holders or the
Certificate Owners arising under any tax law, including Federal, state, local or
foreign income or excise taxes or any other tax imposed on 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 any Series
of 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 any Series of Holders 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 Section 10.1, proceed to protect and enforce its rights and the
rights of any Series of Holders 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 any Series of Holders.
SECTION 11.14. RIGHTS OF HOLDERS TO DIRECT TRUSTEE. Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Aggregate Investor Interest (or, with respect to any remedy, trust or
power that does not relate to all Series, 50% of the Aggregate Investor Interest
of the Investor Certificates of all Series to which such remedy, trust or power
relates) shall have the right to direct 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; provided that (a) subject to Section 11.1,
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 Holders not parties to such direction and (b)
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 of such Holders of Investor Certificates.
SECTION 11.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee
represents and warrants that:
(i) the Trustee is a national banking association organized,
existing and authorized to engage in the business of banking under the
laws of the United States;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement, and has taken all necessary action
to authorize the execution, delivery and performance by it of this
Agreement; and
(iii) this Agreement has been duly executed and delivered by the
Trustee.
SECTION 11.16. MAINTENANCE OF OFFICE OR AGENCY. The Trustee will
maintain at its expense an office or offices, or agency or agencies, where
notices and demands to or upon the Trustee in respect of the Certificates and
this Agreement may be served. The Trustee initially appoints the Corporate Trust
Office as its office for such purposes. The Trustee will give prompt written
notice to the Servicer and to Holders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 11.17. OBLIGOR CLAIMS. In connection with any offset defenses,
or affirmative claim for recovery, asserted in legal actions brought by Obligors
under one or more Receivables based upon provisions therein or upon other rights
or remedies arising from any Requirements of Law applicable to the Receivables:
(a) The Trustee is the holder of the Receivables only as trustee on
behalf of the holders of the Certificates, and not as principal or in any
individual or personal capacity.
(b) The Trustee shall not be personally liable for, or obligated to
pay Obligors, any affirmative claims asserted thereby, or responsible to holders
of the Certificates for any offset defense amounts applied against Receivable
payments, pursuant to such legal actions.
(c) The Trustee will pay, solely from available Trust money,
affirmative claims for recovery by Obligors only pursuant to final judicial
orders or judgments, or judicially approved settlement agreements, resulting
from such legal actions.
(d) The Trustee will comply with judicial orders and judgments which
require its actions or cooperation in connection with Obligors' legal actions to
recover affirmative claims against holders of the Certificates.
(e) The Trustee will cooperate with and assist the Transferor, the
Servicer, or holders of the Certificates in their defense of legal actions by
Obligors to recover affirmative claims if such cooperation and assistance is not
contrary to the interest of the Trustee as a party to such legal actions and if
the Trustee is satisfactorily indemnified for all liability, costs and expenses
arising therefrom.
(f) The Transferor hereby agrees to indemnify, hold harmless and
defend the Trustee from and against any and all liability, loss, costs and
expenses of the Trustee resulting from any affirmative claims for recovery
asserted or collected by Obligors under their Receivables.
SECTION 11.18. LIABILITIES TO OBLIGORS. No liability to any Obligor
under any of the Receivables arising out of any act or omission to act of the
Servicer or the Transferor in servicing the Receivables shall be assumed by the
Trust or the Trustee under, or as a result of, this Agreement and the
transactions contemplated hereby and, to the maximum extent permitted and valid
under applicable provisions of law, the Trust and the Trustee expressly disclaim
such assumption and to the same extent the Back-up Servicer or another Successor
Servicer shall not be liable for any acts or omissions of the Transferor or any
predecessor Servicer.
SECTION 11.19. MONEY HELD IN TRUST. Any money held by the Trustee in
trust under this Agreement need not be segregated from any other funds held by
the Trustee in trust under this Agreement except to the extent required by this
Agreement. Except to the extent it otherwise agrees in writing, the Trustee
shall not be responsible for any earnings, gains or losses in respect of funds
invested in Permitted Investments in compliance with written instructions from
the Servicer as set forth in Section 4.1(e) and shall have no obligation to
invest such funds except to the extent it receives such instructions.
ARTICLE XII
TERMINATION
SECTION 12.1. TERMINATION OF TRUST. (a) Subject to Section 7.4 and
Section 8.4, the respective obligations and responsibilities of the Transferor,
the Servicer and the Trustee created hereby (other than the obligation of the
Trustee to make payments to Holders as hereafter set forth) shall terminate,
except with respect to the duties described in Section 11, Section 7.4 and
Section 8.4 and subsections 2.4(c) and 12.3(b), on the Trust Termination Date.
(b) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Series Termination Date
with respect to such Series. Unless otherwise provided in a Supplement, in the
event that the Investor Interest of any Series of Certificates is greater than
zero on its Series Termination Date (after giving effect to all transfers,
withdrawals, deposits and drawings to occur on such date and the payment of
principal to be made on such Series on such date), the Trustee will sell or
cause to be sold, and pay the proceeds first, to all Holders of such Series pro
rata in final payment of all principal of and accrued interest on such Series of
Certificates, and second, as provided in the related Supplement, an amount of
Principal Receivables and the related Finance Charge Receivables (or interests
therein) up to 110% of the Investor Interest of such Series at the close of
business on such date (but in no event in excess of the applicable Investor
Percentages of Principal Receivables and Finance Charge Receivables on such
date). The Trustee shall notify each Credit Enhancement Provider and each Rating
Agency of the proposed sale of such Receivables and shall provide each Credit
Enhancement Provider an opportunity to bid on such Receivables. The Transferor
shall be permitted to purchase such Receivables in such case and shall have a
right of first refusal with respect thereto. Any proceeds of such sale in excess
of such principal and interest paid shall be paid to the Transferor. Upon such
Series Termination Date with respect to the applicable Series of Certificates,
final payment of all amounts allocable to any Investor Certificates of such
Series shall be made in the manner provided in Section 12.3.
SECTION 12.2. OPTIONAL PURCHASE. (a) If so provided in any Supplement,
the Transferor may, but shall not be obligated to, cause a final distribution to
be made in respect of the related Series of Certificates on a Distribution Date
specified in such Supplement by depositing into the Distribution Account or the
applicable Series Account, not later than the Transfer Date preceding such
Distribution Date, for application in accordance with Section 12.3, the amount
specified in such Supplement.
(b) The amount deposited pursuant to subsection 12.2(a) shall be paid
to the Investor Holders of the related Series pursuant to Section 12.3 on the
related Distribution Date following the date of such deposit. All Certificates
of a Series which are purchased by the Transferor pursuant to subsection 12.2(a)
shall be delivered by the Transferor upon such purchase to, and be canceled by,
the Transfer Agent and Registrar and be disposed of in a manner satisfactory to
the Trustee and the Transferor. The Investor Interest of each Series which is
purchased by the Transferor pursuant to subsection 12.2(a) shall, for the
purposes of the definition of "Transferor Interest," be deemed to be equal to
zero on the Distribution Date following the making of the deposit, and the
Transferor Interest shall thereupon be deemed to have been increased by the
Investor Interest of such Series.
SECTION 12.3. FINAL PAYMENT WITH RESPECT TO ANY SERIES. (a) Written
notice of any termination, specifying the Distribution Date upon which the
Investor Holders of any Series may surrender their Certificates for payment of
the final distribution with respect to such Series and cancellation, shall be
given (subject to at least two Business Days' prior notice from the Servicer to
the Trustee) by the Trustee to Investor Holders of such Series mailed not later
than the fifth day of the month of such final distribution (or in the manner
provided by the Supplement relating to such Series) specifying (i) the
Distribution Date (which shall be the Distribution Date in the month (x) in
which the deposit is made pursuant to subsection 2.4(e), 9.2(a), 10.2(a), or
subsection 12.2(a) of this Agreement or such other section as may be specified
in the related Supplement, or (y) in which the related Series Termination Date
occurs) upon which final payment of such Investor Certificates will be made upon
presentation and surrender of such Investor Certificates 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 Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Investor Certificates at the office or offices therein specified. The Servicer's
notice to the Trustee in accordance with the preceding sentence shall be
accompanied by an Officers' Certificate setting forth the information specified
in Article V of this Agreement covering the period during the then current
calendar year through the date of such notice and setting forth the date of such
final distribution. The Trustee shall give such notice to the Transfer Agent and
Registrar and the Paying Agent at the time such notice is given to such Investor
Holders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.1(a) or the occurrence of the Series Termination Date with respect
to any Series, all funds then on deposit in the Finance Charge Account, the
Excess Funding Account, the Distribution Account or any Series Account
applicable to the related Series shall continue to be held in trust for the
benefit of the Holders of the related Series and the Paying Agent or the Trustee
shall pay such funds to the Holders of the related Series upon surrender of
their Certificates. In the event that all of the Investor Holders of any Series
shall not surrender their Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Investor Holders of such Series upon
receipt of the appropriate records from the Transfer Agent and Registrar to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within one and one-half years after the second notice
with respect to a Series, all the Investor Certificates of such Series 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
Investor Holders of such Series concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds in the Distribution Account or
any Series Account held for the benefit of such Investor Holders. The Trustee
and the Paying Agent shall pay to the Transferor upon request any monies held by
them for the payment of principal or interest which remains unclaimed for two
years. After payment to the Transferor, Investor Holders entitled to the money
must look to the Transferor for payment as general creditors unless applicable
abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be canceled by the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Transferor.
SECTION 12.4. TERMINATION RIGHTS OF TRANSFEROR. Upon the termination
of the Trust pursuant to Section 12.1, and after payment of all amounts due
hereunder on or prior to such termination, the Trustee shall execute a written
reconveyance substantially in the form of Exhibit D pursuant to which it shall
reconvey to the Transferor (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 with respect to such
Receivables (including all accrued interest theretofore posted as Finance Charge
Receivables and Recoveries) and all proceeds of such Receivables and Unearned
Premiums relating to such Receivables, and all proceeds thereof, except for
amounts held by the Trustee pursuant to subsection 12.3(b). The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, representation or warranty as shall be reasonably requested by
the Transferor to vest in the Transferor all right, title and interest which the
Trust had in the Receivables.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1. AMENDMENT. (a) Subject to subsection 2.1(h), this
Agreement or any Supplement may be amended in writing from time to time by the
Servicer, the Transferor and the Trustee, without the notice to or consent of
any of Holders; provided that such action shall not, as evidenced by an Opinion
of Counsel for the Transferor addressed and delivered to the Trustee, adversely
affect in any material respect the interests of any Investor Holder; provided
further that the Rating Agency Condition shall have been satisfied with respect
to such action. This Agreement or any Supplement may be amended in writing by
the Servicer, the Transferor and the Trustee, without the notice to or consent
of any of the Holders to provide for additional Credit Enhancement or substitute
Credit Enhancement with respect to a Series, or to change the definition of
Eligible Receivable; provided that such action shall not, in the reasonable
belief of the Transferor, as evidenced by an Officer's Certificate, adversely
affect in any material respect the interests of any Investor Holders; provided
further that the Rating Agency Condition shall have been satisfied with respect
to such action.
(b) Subject to subsection 2.1(h), this Agreement or any Supplement may
also be amended in writing from time to time by the Servicer, the Transferor and
the Trustee with the consent of the Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 66-2/3% of the Investor Interest
of each outstanding Series adversely affected by such amendment 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 modifying in any manner the
rights of Investor Holders of any Series then issued and outstanding; provided
that no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, distributions which are required to be made on any Investor
Certificates of such Series without the consent of each Investor Holder of such
Series, (ii) change the definition of or the manner of calculating the Investor
Interest or the Investor Percentage of such Series without the consent of each
Investor Holder of such Series or (iii) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of each Investor Holder of
all Series adversely affected. 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) Notwithstanding anything in this Section 13.1 to the contrary, the
Supplement with respect to any Series may be amended on the terms and in
accordance with the procedures provided in such Supplement.
(d) Promptly after the execution of any such amendment (other than an
amendment pursuant to subsection (a)), the Trustee shall furnish notification of
the substance of such amendment to each Investor Holder of each Series adversely
affected and to each Rating Agency providing a rating for such Series.
(e) It shall not be necessary for the consent of Investor Holders
under this Section 13.1 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 Holders shall be subject to
such reasonable requirements as the Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to Section 6.9 and
any amendments regarding the addition to or removal of Receivables from the
Trust as provided in Section 2.1(b), executed in accordance with the provisions
hereof, shall not be considered amendments to this Agreement for the purpose of
subsections 13.1(a) and (b).
(g) In connection with any amendment, the Trustee may request an
Opinion of Counsel from the Transferor or the Servicer to the effect that the
amendment complies with all requirements of this Agreement.
(h) Notwithstanding anything to the contrary contained in this Section
13.1, the provisions of this Agreement or any Supplement which affect the rights
or obligations of the Back-up Servicer may only be amended with the further
written consent of the Back-up Servicer.
SECTION 13.2. PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST. (a)
The Servicer (or the Transferor, if a Successor Servicer is Servicer) shall
cause this Agreement, all amendments hereto and/or all financing statements and
continuation statements and any other necessary documents covering the Holders
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 Holders or the
Trustee, as the case may be, hereunder to all property comprising the Trust. 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 Transferor 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 subsection 13.2(a).
(b) Within 30 days after the Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with subsection (a) seriously
misleading within the meaning of Section 9-402(7) of the UCC as in effect in the
States of Delaware and/or New York, the Transferor 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. In addition, if the UCC as in effect in
the States of Delaware and/or New York shall have been revised, within 30 days
of such revision, the Transferor shall (i) give the Trustee notice thereof and
(ii) 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) Each of the Transferor and the Servicer will give the Trustee
prompt written 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 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 continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof. Each of the Transferor and the Servicer
will at all times maintain each office from which it services Receivables and
its principal executive office within the United States of America.
SECTION 13.3. LIMITATION ON RIGHTS OF HOLDERS. (a) The death or
incapacity of any Holder shall not operate to terminate this Agreement or the
Trust, nor shall such death or incapacity entitle such Holder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
(b) No Holder shall have any right to vote (except with respect to the
Investor Holders as provided in Section 13.1 hereof) or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Holders from time to
time as partners or members of an association; nor shall any Holder be under any
liability to any third person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
(c) No Holder 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 Holder previously shall
have given written notice to the Trustee, and unless the Holders of Certificates
evidencing Undivided Interests aggregating more than 50% of the Investor
Interest of any Series which may be adversely affected but for the institution
of such suit, action or proceeding, shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as the
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 its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Holder with every other Holder and the
Trustee, that no one or more Holders shall have the right in any amount 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 Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit of
all Holders. For the protection and enforcement of the provisions of this
Section 13.3, each and every Holder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
SECTION 13.4. 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 13.5. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at, sent by facsimile to, sent by courier or mailed by
registered mail, return receipt requested, to (a) in the case of the Transferor,
to Mellon Premium Finance Loan Owner Trust, c/o Chase Manhattan Bank USA,
National Association, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administrator, with a copy to Mellon Bank, N.A., One
Mellon Center, Suite 1910, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Financial Officer and General Counsel, (b) in the case of the
Servicer, to AFCO Credit Corporation, Two Mellon Center, Room 152-0300,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇, Chief Financial
Officer, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., Senior Vice President, General
Counsel and Secretary, AFCO Credit Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (c) in the case of the Trustee, to the Corporate Trust
Office, (d) in the case of the Credit Enhancement Provider for a particular
Series, the address, if any, specified in the Supplement relating to such
Series, (e) in case of the Back-up Servicer, to Premium Financing Specialists,
Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
and (f) in the case of the Rating Agency for a particular Series, the address,
if any, specified in the Supplement relating to such Series; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party. Unless otherwise provided with respect to any Series
in the related Supplement any notice required or permitted to be mailed to a
Holder shall be given by first class mail, postage prepaid, at the address of
such Holder as shown in the Certificate Register. If and so long as any Series
or Class is listed on the Luxembourg Stock Exchange and such Exchange shall so
require, any Notice to Investor Holders shall be published in an authorized
newspaper of general circulation in Luxembourg within the time period prescribed
in this Agreement. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Holder receives such notice.
SECTION 13.6. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Holders thereof.
SECTION 13.7. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.2, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Investor Interest of each Series on a Series by Series basis and notice to
each Rating Agency.
SECTION 13.8. CERTIFICATES NON-ASSESSABLE AND FULLY PAID. It is the
intention of the parties to this Agreement that the Holders shall not be
personally liable for obligations of the Trust, that the Undivided Interests
represented by the Certificates shall be non-assessable for any losses or
expenses of the Trust or for any reason whatsoever, and that Certificates upon
authentication thereof by the Trustee pursuant to Sections 2.1 and 6.2 are and
shall be deemed fully paid.
SECTION 13.9. FURTHER ASSURANCES. The Transferor 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 for
filing under the provisions of the UCC of any applicable jurisdiction.
SECTION 13.10. NO WAIVER, CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Trustee, any Credit Enhancement
Provider or the Investor Holders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 13.11. 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 13.12. NO PETITION. The Transferor (with respect to the
Trust), the Servicer, the Back-up Servicer, the Trustee, each Holder and each
Credit Enhancement Provider covenant and agree that they will not, until one
year and one day following the Trust Termination Date, institute against the
Trust or the Transferor, or join in any institution against the Trust or the
Transferor of, any bankruptcy proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Investor Holders, this Agreement or any Supplement.
SECTION 13.13. THIRD PARTY BENEFICIARIES. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Holders and, to the
extent provided in the related Supplement, to the Credit Enhancement Provider
named therein, and their respective successors and permitted assigns. Except as
otherwise provided in this Article XIII, no other Person will have any right or
obligation hereunder.
SECTION 13.14. ACTIONS BY HOLDERS. (a) Wherever in this Agreement a
provision is made that an action may be taken or a notice, demand or instruction
given by Investor Holders, such action, notice or instruction may be taken or
given by any Investor Holder, unless such provision requires a specific
percentage of Investor Holders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Holder shall bind such Holder and every subsequent
holder of such 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. RULE 144A INFORMATION. For so long as any of the
Investor Certificates of any Series or any Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each of the
Transferor, the Servicer, the Trustee and the Enhancement Provider for such
Series agree to cooperate with each other to provide to any Investor Holders of
such Series or Class and to any prospective purchaser of Certificates designated
by such an Investor Holder upon the request of such Investor Holder 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 Securities Act.
SECTION 13.16. 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 13.17. HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 13.18. NO LIABILITY OF OWNER TRUSTEE. It is expressly
understood and agreed by the parties hereto that (i) this Agreement has been
executed and delivered on behalf of the Transferor by Chase Manhattan Bank USA,
National Association, not in its individual capacity, but solely as owner
trustee of the Transferor, in the exercise of the powers and authority vested in
it pursuant to the Trust Agreement, (ii) each of the representations,
undertakings and agreements made herein by the Transferor is not made or
intended as a personal representation, undertaking or agreement by Chase
Manhattan Bank USA, National Association, but is made and intended for the
purpose of binding only the Transferor and (iii) under no circumstances shall
Chase Manhattan Bank USA, National Association be liable for the payment of any
indebtedness or expenses of the Transferor or for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Transferor under this Agreement, any Supplement or the Second Tier Receivables
Purchase Agreement.
IN WITNESS WHEREOF, the Transferor, the Servicer, the Back-up 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.
MELLON PREMIUM FINANCE LOAN OWNER
TRUST, Transferor
By: Mellon Bank, N.A., as
Administrator
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇ ▇. Au
--------------------------
Name: ▇▇▇ ▇. Au
Title: Attorney-in-Fact
AFCO CREDIT CORPORATION, Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
AFCO ACCEPTANCE CORPORATION, Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
PREMIUM FINANCING SPECIALISTS, INC.,
Back-up Servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
PREMIUM FINANCING SPECIALISTS OF
CALIFORNIA, INC.,
Back-up Servicer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, Trustee
By: /s/ ▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
AGREED AND ACCEPTED AS TO ARTICLE IA:
MELLON BANK, N.A.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇ ▇. Au
----------------------------
Name: ▇▇▇ ▇. Au
Title: Attorney-in-Fact
SCHEDULE I
AFCO
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AFCO
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE II
[SCHEDULE OF PERMITTED JURISDICTIONS]
LIST OF PERMITTED JURISDICTIONS
California
New York
Pennsylvania
Florida
Colorado
Illinois
New Jersey
Ohio
Georgia
Massachusetts
Utah
Washington
Virginia
Connecticut
Nevada
Michigan
Louisiana
Mississippi
North Carolina
Oregon
Indiana
Arkansas
Oklahoma
Arizona
Maryland
Kentucky
Alaska
West Virginia
Alabama
South Carolina
Iowa
Minnesota
Idaho
Wisconsin
Kansas
Hawaii
Nebraska
Maine
New Hampshire
District of Columbia
Rhode Island
Montana
Wyoming
South Dakota
SCHEDULE III
[RECEIVABLES SCHEDULE]
[DELIVERED TO THE TRUSTEE]
EXHIBIT A
[FORM OF MONTHLY SERVICER'S CERTIFICATE]
[AVAILABLE UPON REQUEST]
EXHIBIT B
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before
March 31 beginning with March 31, 2002,
pursuant to Section 3.5 of the Pooling and
Servicing Agreement referred to below)
AFCO CREDIT CORPORATION
MELLON BANK PREMIUM FINANCE LOAN MASTER TRUST
The undersigned, a duly authorized representative of AFCO Credit
Corporation ("AFCO"), as Servicer, pursuant to the Pooling and Servicing
Agreement dated as of June 15, 2001 (as may be amended and supplemented from
time to time, the "Agreement"), among Mellon Premium Finance Loan Owner Trust,
as Transferor, AFCO Credit Corporation, as Servicer, AFCO Acceptance
Corporation, as Servicer, Premium Financing Specialists, Inc., as Back-up
Servicer, Premium Financing Specialists of California, Inc., as Back-up Servicer
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association , as Trustee, does hereby
certify that:
1. AFCO is, as of the date hereof, 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 Trustee.
3. A review of the activities of Servicer during the fiscal year ended
_______________, _____, and of its performance under the Agreement was conducted
under my supervision.
4. Based on such review, 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.
5. The following is a description of each default in the performance of
Servicer's obligations under the provisions of the Agreement known to me to have
been made by Servicer during the fiscal year ended ________________, ____, which
sets forth in detail (i) the nature of each such default, (ii) the action taken
by Servicer, if any, to remedy each such default and (iii) the current status of
each such default: [if applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this
__ day of ___________, 2001.
AFCO CREDIT CORPORATION, as Servicer
By: ______________________________
Name:
Title:
EXHIBIT C
FORM OF RECONVEYANCE OF RECEIVABLES
RECONVEYANCE of RECEIVABLES, dated as of ____________ __, 2001, pursuant to
the Pooling and Servicing Agreement dated as of June 15, 2001 (as may be amended
and supplemented from time to time, the "Agreement") among Mellon Premium
Finance Loan Owner Trust, as transferor (the "Transferor"), AFCO Credit
Corporation and AFCO Acceptance Corporation, as servicer (collectively, the
"Servicer" and in their capacity as originator, the "Originator"), Premium
Financing Specialists, Inc. and Premium Financing Specialists of California,
Inc., as back-up servicer (collectively, the "Back-up Servicer") and ▇▇▇▇▇ Fargo
Bank Minnesota, National Association , as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the Agreement;
WHEREAS, pursuant to the Agreement, the Transferor wishes to cause the
Trustee to reconvey all of the Receivables and proceeds thereof, whether now
existing or hereafter created, from the Trust to the Transferor pursuant to the
terms of Section 12.4 of Agreement upon termination of the Trust pursuant to
Section 12.1 of the Agreement (as each such term is defined in the Agreement);
WHEREAS, the Trustee is willing to reconvey the Receivables subject to the
terms and conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree as follow:
1. Defined Terms. All terms defined in the Agreement and used herein shall
have such defined meanings when used herein, unless otherwise defined herein.
"Reconveyance Date" shall mean ____________ __, 2001.
2. Return of Lists of Accounts. The Trustee shall deliver to the Transferor
or the bailee of the Transferor, not later then three Business Days after the
Reconveyance Date, each and every computer file or microfiche list of
Receivables delivered to the Trustee pursuant to the terms of the Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby reconvey to the
Transferor, without recourse, representation or warranty, on and after the
Reconveyance Date, all right, title and interest of the Trust in and to the
Receivables, all monies due or to become due with respect thereto, and all
proceeds (as defined in Section 9-306 of the UCC as in effect in the [Relevant
UCC State]) of such Receivables and Insurance Proceeds relating to such
Receivables [and Interchange (if any) allocable to the Trust pursuant to any
Supplement,] except for amounts, if any, held by the Trustee pursuant to
subsection 12.3(b) of the Agreement.
(b) In connection with such transfer, the Trustee agrees to execute and
deliver to the Transferor on or prior to the date of this Reconveyance , such
UCC termination statements as the Transferor may reasonably request, evidencing
the release by Trust of its lien on the Receivables.
4. Counterparts. This Reconveyance 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.
5 Governing Law. THIS RECONVEYANCE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF _____________, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this Reconveyance of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
MELLON PREMIUM FINANCE LOAN OWNER TRUST,
as Transferor
By: Mellon Bank, N.A., as Administrator
By: ___________________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By: ___________________________________
Name:
Title:
EXHIBIT D
AFCO
AFCO Acceptance Corporation
NOTICE OF FINANCED PREMIUM
REFER TO THIS ACCOUNT NO. IN ALL CORRESPONDENCE
INSURED (NAME AND ADDRESS)
DATE OF NOTICE & ACCEPT
ANTICIPATED CHECK RELEASE DATE
ACCOUNT MATURITY MO. YR.
DAY DUE
NO. & FREQ. OF INSTS.
SCHEDULE OF POLICIES
POLICY PREFIX AND NUMBER
EFFECTIVE DATE OF POLICY OR ANNUAL INSTALLMENT
FULL NAME OF INSURER AND GENERAL AGENT(S) OTHER THAN SUBMITTING PRODUCER TO WHOM
COPY OF THIS NOTICE WAS SENT
COVERAGE FIRE, AUTO MAR., I.M., CAS
POLICY TERM IN MONTHS COVERED BY PREM.
PREMIUM FINANCED
IF NO OTHER AGENT IS SHOWN UNDER THE INSURANCE COMPANY NAME, THE SUBMITTING
PRODUCER ----->>>>> IS SHOWN ON OUR RECORDS AS THE ISSUING AGENT OR THE BROKER
OF RECORD. ----->>>>>
AGENT OR BROKER SUBMITTING AGREEMENT
Premium check will be sent to following payee:
PLEASE NOTIFY AFCO IF OTHERWISE --- AS PREMIUM WILL BE PAID ACCORDINGLY
TO THE INSURER:
AFCO has acquired a contract with your insured to advance the premiums on the
policy described above subject to the conditions herein. The insured has
assigned to us any and all unearned premiums and dividends which may become
payable under the policy. Upon default in payment of any installment, AFCO will
cancel the policy in accordance with authority given us by the insured to cancel
on his behalf.
AFCO MUST BE NOTIFIED BEFORE CHECK RELEASE DATE SHOWN ABOVE IF:
1. The policy is NOT in full force and effect or if the premium has been fully
earned.
2. The policy description differs from your records or is written for a period
less than one year.
3. The policy requires more than ten (10) days notice of cancellation by any
party.
4. The deposit or provisional premium on an audit or reporting form policy is
NOT at least equal to the premium anticipated to be earned in accordance
with the policy term set forth above (See Section A through C opposite for
insurer's undertaking).
5. The policy is subject to a minimum earned premium or includes a fully
earned policy fee.
6. You wish the premium paid other than as indicated.
7. A general agent or any other agent than indicated herein should be
notified.
The policy description and names of agents, insureds, etc. were provided by the
submitting producer. The insurer and general agent or managing general agent,
etc., if any, who have been designated by insurers to receive notices of finance
transactions and who have received copies of this notice as indicated herein
should NOTIFY US OF ANY DISCREPANCIES PRIOR TO CHECK RELEASE DATE. If AFCO
receives no advice of discrepancies it will pay the premium as set forth above
in the absence of other contingencies.
AFCO has sold to Mellon Bank, N.A. ("Mellon") which has in turn sold to Mellon
Premium Finance Loan Owner Trust which has in turn sold to Mellon Bank Premium
Finance Loan Master Trust (the "Trust") all of AFCO's right title and interest
in, to and under the premium finance agreement pursuant to which the premium
payment on the policy(ies) described above will be advanced (the "PFA")
including (without limitation) the
Unearned premium and the rights described herein. AFCO, for the Trust, will
continue to service the PFA, will have the right to cancel the PFA and to
collect all sums due the Trust from insureds and insurance companies and their
agents. All unearned premiums are to be paid to, and rights hereunder shall be
exercised by, AFCO, unless the insurer is notified to the contrary by the Trust.
IN CONSIDERATION OF AFCO ADVANCING THE PREMIUM THE INSURER AGREES THAT:
A. If the insured fails to comply with any terms of the Premium Finance
Agreement and if AFCO cancels the policy or, if the insured cancels the policy
it will pay AFCO the gross unearned premium with or without surrender of the
policy.
B. If the policy is for any reason cancelled by the insurer or authorized agent
it will pay AFCO the gross pro rata unearned premium with or without surrender o
the policy. Unearned premiums on deposit or provisional premium policies will be
computed on a gross pro rata basis irrespective of the actual premium earned by
audit, report of retrospective rating as if the premium were fixed.
C. It will pay AFCO (a) all gross unearned premiums which may become payable
resulting from endorsement and (b) loss payments which reduce the unearned
premium up to the unpaid balance of the account, subject to any mortgagee or
loss payee interest and (c) all dividends which may become payable under the
policy.
AFCO ACCEPTANCE CORPORATION
10 AAmsjv (06/01) Copr. 2001