PURCHASE AND CONTRIBUTION AGREEMENT
(SELLER PURCHASE AGREEMENT)
Dated as of September 30, 1997
between
▇. ▇. ▇▇▇▇▇▇▇▇▇ S.S.C. LIMITED PARTNERSHIP
as the Seller
and
▇. ▇. ▇▇▇▇▇▇▇▇▇ RECEIVABLES II LLC
as the Purchaser
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
1.01. Certain Definitions.....................................................2
1.02. Accounting Terms........................................................7
1.03. Other Terms.............................................................7
1.04. Computation of Time Periods.............................................8
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
2.01. Purchases of Receivables; Agreement to Purchase.........................8
2.02. Payment for the Purchases..............................................10
2.03. Payments and Computations, Etc.........................................11
2.04. Transfer of Records to the Purchaser...................................12
ARTICLE III
CONDITIONS PRECEDENT
3.01. Conditions Precedent to Agreement......................................13
3.02. Conditions Precedent to Ongoing Purchases..............................14
3.03. Effect of Payment of Purchase Price and/or Contribution................14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Seller...........................14
4.02. Representations and Warranties of the Seller Relating to
the Receivables......................................................17
4.03. Representations and Warranties of the Purchaser........................18
ARTICLE V
GENERAL COVENANTS OF THE SELLER
5.01. Affirmative Covenants of the Seller....................................19
5.02. Negative Covenants of the Seller.......................................22
ARTICLE VI
ADMINISTRATION AND COLLECTION
6.01. Collection of Receivables..............................................25
6.02. Servicing of Receivables...............................................26
6.03. Responsibilities of the Seller.........................................26
6.04. Further Action Evidencing Purchases....................................27
ARTICLE VII
INDEMNIFICATION
7.01. Indemnities by the Seller..............................................27
ARTICLE VIII
MISCELLANEOUS
8.01. Waivers; Amendments....................................................30
8.02. Notices................................................................30
8.03. Effectiveness; Binding Effect; Assignability...........................30
8.04. GOVERNING LAW; WAIVER OF JURY TRIAL....................................31
8.05. Costs and Expenses.....................................................32
8.06. Execution in Counterparts; Severability................................32
8.07. Purchase Termination...................................................32
8.08. No Proceedings.........................................................32
8.09. Entire Agreement.......................................................33
8.10. Limitations on Liability...............................................33
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EXHIBITS AND SCHEDULES
Exhibit A - Form of Subordinated Intercompany Revolving Loan Note
Exhibit B - Form of Seller Transfer Report
Exhibit C - List of Closing Documents
Schedule I - Addresses and Locations of Books and Records of the Seller
Schedule II - ERISA Matters
Schedule III - Lock-Box Banks; Lock-Box Accounts; Lock-Box Numbers;
Deposit Account Banks; Deposit Account Numbers
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PURCHASE AND CONTRIBUTION AGREEMENT
(SELLER PURCHASE AGREEMENT)
Dated as of September 30, 1997
This PURCHASE AND CONTRIBUTION AGREEMENT (the "Agreement"), dated as
of September 30, 1997, is made by and between ▇.▇. ▇▇▇▇▇▇▇▇▇ S.S.C. LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Seller"), and ▇.▇. ▇▇▇▇▇▇▇▇▇
RECEIVABLES II LLC, a Delaware limited liability company (the "Purchaser").
WITNESSETH:
WHEREAS, the Seller has purchased, and from time to time hereafter
may purchase, "Settlements" (or portions thereof) from various "Claimants"
pursuant to various "Settlement Agreements" (each as defined in the Indenture
referred to below) between the Seller and each such Claimant;
WHEREAS, the Seller may from time to time desire to sell, transfer
or otherwise convey to the Purchaser, and the Purchaser may from time to time
desire to purchase or otherwise acquire or accept from the Seller, all of the
Seller's right, title and interest in the Receivables relating to certain such
Settlements (or portions thereof) now owned or hereafter acquired by the Seller,
in each case, on the terms and conditions provided herein; and
WHEREAS, in order to finance purchases of Receivables and the
Related Assets relating thereto, the Purchaser, as successor to the Seller by
assignment, has entered into that certain Amended and Restated Credit Agreement,
dated as of February 11, 1997 (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement") among the Purchaser (as
successor to the Seller by assignment), the lenders from time to time parties
thereto (the "Lenders"), ING (U.S.) Capital Corporation, as a Lender and as
contractual representative (the "Agent") on behalf of itself and the other
Lenders, and PNC Bank, National Association, as a Lender and as servicing agent
(the "Servicing Agent"), pursuant to which the Lenders, the Agent and the
Servicing Agent from time to time may make advances and other financial
accommodations for the benefit of the Purchaser secured by specified Receivables
and the Related Assets related thereto;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Definitions. For all purposes of this
Agreement, as used in this Agreement (including in the recitals hereto), the
following terms shall have the following meanings:
"Aggregate Discounted Receivables Balance" means, for purposes of
this Agreement with respect to any designated group of Receivables, at any time,
the sum at such time of the respective Discounted Receivables Balances of such
Receivables.
"Annuity Contract" means an annuity contract issued to fund the
obligations of an Obligor under a Settlement Agreement, including, without
limitation, a Qualified Annuity Contract.
"Applicable Discount Rate" means, with respect to any Receivable,
the "Discount Rate" specified in the applicable Seller Transfer Report.
"Assumption Agreement" means that certain Assumption Agreement and
Amendment No. 2 to the Credit Agreement dated as of even date herewith by and
among the Seller, the Purchaser and the Lenders.
"Business Day" means any day other than a Saturday or Sunday or any
other day on which national banking associations or state banking institutions
in New York, New York or Philadelphia, Pennsylvania are authorized or obligated
by law, executive order or governmental decree to be closed; provided, however,
that as it relates to any specific Series, the term "Business Day" may have such
other meaning, if any, as may be specified in the related Supplement.
"Claimant" means any Person (or such Person's heir) entitled to
receive the Settlement under the terms of a Settlement Agreement.
"Closing Date" means September 30, 1997.
"Collateral Trustee" means the Person acting in such capacity under
the Intercreditor Agreement.
"Collections" means all cash payments by or on behalf of the
Obligors (including, without limitation, pursuant to any "Annuity Contract" (as
defined in the Credit Agreement)) in respect of the Receivables or the Related
Property relating thereto, whether in the form of cash, checks, wire transfers,
electronic transfers or any other form of cash payment (including, without
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limitation, from the Seller in connection with any repurchase of any such
Receivables from the Purchaser pursuant hereto).
"Collection Date" means that date following the Purchase Termination
Date upon which the Aggregate Discounted Receivables Balance of the Receivables
transferred to the Purchaser hereunder has been reduced to zero.
"Contributed Assets" has the meaning assigned to it in Section
2.01(a).
"Cut-Off Date" means, with respect to any Receivable described in
any Seller Transfer Report, the date on which the Discounted Receivables Balance
thereof was calculated for purposes of computing the Purchase Price under
Section 2.02(b).
"Designated Supplement" has the meaning assigned to such term in the
Issuer Purchase Agreement.
"Discounted Receivables Balance" means, at any time with respect to
any Receivable, the sum of (i) the discounted present values of the remaining
Scheduled Payments due under such Receivable at such time discounted at the
Purchase Discount Rate and (ii) the principal amount of any past due Scheduled
Payments outstanding on such Receivable at such time.
"Eligible Receivable" means, with respect to this Agreement, a
Receivable which, as of the date of its sale or conveyance to the Purchaser by
the Seller hereunder, would constitute an "Eligible Settlement" under and
pursuant to the Revolving Credit Facility.
"Governmental Authority" means any country or nation, any political
subdivision of such country or nation, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government of any country or nation or political subdivision thereof.
"Indenture" means that certain Master Trust Indenture and Security
Agreement dated as of September 30, 1997 by and among the Issuer, Wentworth, as
the initial Master Servicer and PNC Bank, National Association, as trustee.
"Intercreditor Agreement" means that certain Amended and Restated
Collateral Trust and Intercreditor Agreement, dated as of September 30, 1997,
among the Agent, the Lenders, the Servicing Agent, PNC Bank, National
Association, as servicing agent (the "Servicing Agent") and as a Lender, the
Trustee, PNC Bank, National Association, as Collateral Trustee, the Issuer, the
Seller, the Purchaser, the Master Servicer, ▇.▇. ▇▇▇▇▇▇▇▇▇ Receivables I LLC, as
the Seller under the Pooling and Servicing Agreement, Wentworth, as initial
Master Servicer under the Pooling and Servicing Agreement and the Indenture, and
PNC Bank, National Association, as Trustee under the Pooling and Servicing
Agreement and as Trustee under the
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Indenture (as such intercreditor agreement may be amended, restated,
supplemented or otherwise modified from time to time).
"Issuer" means ▇.▇. ▇▇▇▇▇▇▇▇▇ Receivables, III LLC, a Delaware
limited liability company.
"Issuer Purchase Agreement" means that certain Purchase and
Contribution Agreement as of even date herewith and between the Purchaser and
the Issuer, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Material Adverse Effect" means, with respect to any Person, the
occurrence or existence of any event or condition which has a material adverse
effect (v) on such Person's ability to perform under the Operative Documents,
(w) on the businesses, properties or condition (financial or otherwise) of such
Person, (x) on the ability of the Purchaser or any of its designees and/or
assigns to enforce this Agreement or any of the other Operative Documents, (y)
on the rights of the Purchaser or any of its designees and/or assigns in the
Purchased Assets.
"Noncomplying Receivable" shall mean any Receivable (i) which, as of
the date of origination thereof, did not meet the criteria for an Eligible
Receivable as of such date or (ii) as to which any representation or warranty,
determined as of the date of origination thereof and made or deemed made by the
Seller under Section 5.01(m), was materially incorrect .
"Obligor" shall have the meaning set forth in the Indenture.
"Operative Documents" shall mean this Agreement, the Credit
Agreement, the "Security Agreement" as defined in the Credit Agreement, the
Intercreditor Agreement, the Issuer Purchase Agreement, and any instruments,
agreements or documents executed by or on behalf of the Seller in connection
therewith.
"Permitted Liens" shall mean with respect to any Receivable or the
Related Asset relating thereto which are sold, transferred, contributed or
otherwise conveyed to the Purchaser hereunder, "Liens" (as defined in the Credit
Agreement) created under this Agreement in favor of the Purchaser or by the
Purchaser under the Revolving Credit Facility in favor of the Agent or by the
Purchaser under the Issuer Purchase Agreement in favor of the Issuer.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Authority or any other entity of similar nature.
"Pooling and Servicing Agreement" shall mean that certain Pooling
and Servicing Agreement, dated as of June 13, 1997 (as amended, restated,
supplemented (including by way of any "Supplement" (as defined in the Pooling
and Servicing Agreement thereto) or otherwise modified from time to time among
▇.▇. ▇▇▇▇▇▇▇▇▇ Receivables I LLC, as Seller, Wentworth, as
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Master Servicer, and PNC Bank, National Association, as trustee for SSC Master
Trust I (the "Trust").
"Purchase" means, on any Purchase Date, the sale, assignment,
contribution, transfer and/or other conveyance of any Receivable from the Seller
to the Purchaser for which the Purchase Price has not been previously paid
(including by increasing the outstanding balance of the Subordinated
Intercompany Revolving Loan Note) and which have not previously been sold,
assigned, contributed, transferred or otherwise conveyed to the Purchaser by the
Seller, in either case, in accordance with the terms of Sections 2.01 and 2.02
hereof; and "Purchased" means the past tense of Purchase.
"Purchase Date" means, with respect to any Receivable, the date such
Receivable is Purchased by the Purchaser.
"Purchase Discount Rate" means, with respect to any Receivable, a
per annum rate equal to the Applicable Discount Rate for such Receivable, which
rate shall be specified in the Seller Transfer Report; it being understood and
agreed that such rate may be determined as a weighted average which may apply to
all Receivables being Purchased on any given Purchase Date.
"Purchase Price" has the meaning specified in Section 2.02(b)
hereof.
"Purchase Termination Date" means the earliest to occur of (i) the
date upon which the Seller shall cease to sell Receivables to the Purchaser in
accordance with the provisions of Section 8.07 of this Agreement, (ii) the date
upon which the ability of the Seller to permit Purchases hereunder has been
terminated (and cannot be reinstated) pursuant to Section 2.01(c), and (iii) or
the date upon which the Seller breaches its repurchase or substitution
obligation as set forth in Section 5.02(b).
"Purchase Yield" means, with respect to any Receivable, the per
annum discount rate, as calculated by the Seller on the date the Settlement
underlying such Receivable was originally purchased by the Seller from the
Claimant, at which the present value of all Scheduled Payments (or portions
thereof) to be received by the Seller equals the sum of the purchase price paid
by the Seller to the Claimant therefor plus the estimated closing costs and
commissions incurred by the Seller and directly allocated to such Receivable in
accordance with the Seller's customary past business practices.
"Purchased Assets" shall mean all Receivables and Related Assets
purchased hereunder pursuant to Section 2.01.
"Qualified Annuity Contract" shall mean an Annuity Contract which
qualifies as a "qualified funding asset" under Section 130(d) of the Internal
Revenue Code.
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"Receivable" shall mean those Scheduled Payments (or portions
thereof) due to a Claimant under a Settlement Agreement and the rights to which
Scheduled Payments (or such portion thereof) have heretofore been or which are
hereafter transferred by such Claimant to the Seller pursuant to a Settlement
Purchase Agreement and by the Seller to the Purchaser pursuant to this
Agreement, whether such Scheduled Payments (or such portions thereof) constitute
accounts, general intangibles, investment property, chattel paper, instruments,
documents, securities, cash, or any other kind of property.
"Related Assets" has the meaning specified in Section 2.01(a)
hereof.
"Related Property" means with respect to any Receivable: all of the
Seller's rights, title, interests, remedies, powers and privileges (a) under the
Settlement Purchase Agreement pursuant to which such Receivable was purchased by
the Seller and under the related "Power of Attorney" (as defined in the
Indenture), (b) all security interests or liens and property subject thereto
from time to time purporting to secure payment of such Receivable, if any,
whether pursuant to the Settlement Purchase Agreement related to such Receivable
or otherwise, (c) under the "Back-up Servicing Agreement" (as defined in the
Indenture), (d) all "Lock-Box Accounts" (as defined in the Indenture),
lock-boxes and other bank accounts, in each case, into which (but only to the
extent of) any Collections are deposited or concentrated; all monies and other
items of payment therein (but only to the extent relating to the Receivables);
and "Eligible Investments" (as defined in the Indenture) purchased with any of
the foregoing funds and any investment income thereon, (e) all "Life Insurance
Contracts" (as defined in the Indenture) relating to any "Non-Guaranteed
Settlements" (as defined in the Indenture) or "Commutable Settlements" (as
defined in the Indenture) included as a Receivable, (f) any interest rate
hedging instruments or agreements entered into by the Seller in respect of any
such Receivable, (g) any other agreements or arrangements of whatever character
(including guaranties, letters of credit, annuity contracts (including,
"Qualified Annuity Contracts") or other credit support from time to time
supporting or securing payment of such Receivable whether pursuant to any
related Settlement Agreement, "Qualified Assignment" (as defined in the
Indenture), Qualified Annuity Contract, Settlement Purchase Agreement or any
other agreement related to such Receivable or otherwise, (h) all UCC (financing
statements filed by the Seller against the Claimants under such Receivable; and
(j) all "Records" (as defined in the Indenture) and all other instruments and
rights relating to such Receivable.
"Revolving Credit Facility" means the revolving credit facility
evidenced by the Credit Agreement otherwise modified from time to time) and all
documents, instruments and agreements executed and/or delivered in connection
therewith.
"Scheduled Payments" has the meaning assigned to such term in the
Indenture and shall include, without limitation, all "Periodic Payments" as such
term is defined in the Credit Agreement.
"Seller Loans" has the meaning specified in Section 2.02(c) hereof.
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"Seller Transfer Report" means a report to be delivered by the
Seller to the Purchaser and accepted by the Purchaser on each Purchase Date
setting forth for each such Receivable so Purchased, the file number by which
the company can identify the Claimant, the present and future values of the
assigned Scheduled Payments, the "Annuity Provider" (as defined in the
Indenture), if any, the Purchase Price thereof, the Purchase Discount Rate
thereof, and the Designated Supplement, if any, under which such Receivable is
intended to be an Eligible Receivable.
"Series" means any Series of Notes issued under the Indenture.
"Series Specific Lock-Box" has the meaning specified in Section
6.01(a) of the Issuer Purchase Agreement.
"Series Specific Lock-Box Account" has the meaning specified in
Section 6.01(a) of the Issuer Purchase Agreement.
"Subordinated Intercompany Revolving Loan Note" has the meaning
specified in Section 2.02(d) hereof.
"Subsequent Issuances" means any issuance by the Issuer of new
"Notes" (as defined in the Indenture) on any date after the Closing Date.
"Transferred Assets" has the meaning specified in Section 2.01(a).
"Trustee" shall mean the "Trustee" under the Indenture.
"UCC" shall mean the Uniform Commercial Code as amended from time to
time, as in effect in any specified jurisdiction.
"U.S. Dollars" or "Dollars" means dollars of the United States of
America.
"Wentworth" shall mean ▇.▇. ▇▇▇▇▇▇▇▇▇ & Company, Inc., a
Pennsylvania corporation.
SECTION 1.02. Accounting Terms. Under this Agreement, all accounting
terms not specifically defined herein shall be interpreted, all accounting
determinations made, and all financial statements prepared, in accordance with
GAAP.
SECTION 1.03. Other Terms. All other undefined terms contained in
this Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or defined therein. The
words "herein," "hereof," and "hereunder" and other words of similar import
refer to this Agreement as a whole, including the exhibits and schedules hereto,
as the same may from time to time be amended or supplemented
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and not to any particular section, subsection, or clause contained in this
Agreement, and all references to Sections, Exhibits and Schedules shall mean,
unless the context clearly indicates otherwise, the Sections hereof and the
Exhibits and Schedules attached hereto, the terms of which Exhibits and
Schedules are hereby incorporated into this Agreement. Whenever appropriate, in
the context, terms used herein in the singular also include the plural, and vice
versa.
SECTION 1.04. Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding", and the word "within" means "from and excluding a
specified date and to and including a later specified date".
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Purchases of Receivables; Agreement to Purchase. (a)
Subject to the terms and conditions hereinafter set forth (including the
conditions set forth in Article III), at any time prior to the Purchase
Termination Date (provided such Purchases are permitted pursuant to Section
2.01(d) hereof) upon at least one Business Days' prior notice by the Seller to
the Purchaser, the Purchaser shall purchase from the Seller, and the Seller
shall sell, transfer, assign and otherwise convey to the Purchaser all of the
Seller's right, title and interest in the Receivables described on the Seller
Transfer Reports from time to time delivered by the Seller to the Purchaser on
or prior to the proposed respective Purchase Dates therefor (as such dates shall
be specified in such notices), in each case together with all of the Related
Property relating to such Receivables and all Collections with respect to and
other proceeds of such Receivables received on or after the applicable Cut-Off
Date and "Related Security" (as defined in the Credit Agreement) (such Related
Property, Collections and proceeds, collectively, the "Related Assets"); it
being agreed that the first such Purchase Date shall be on the Closing Date (and
the execution and delivery of this Agreement shall suffice as notice thereof by
the Seller for purposes of this Agreement). On any Purchase Date on which the
Seller and Purchaser agree to effect a sale or transfer of Receivables preceding
the Purchase Termination Date, the Purchaser shall pay for the Purchases
described in the preceding sentence no later than 5:00 p.m. (New York time) on
such Purchase Date by making available to the Seller the payment of the Purchase
Price in the manner required under Section 2.02. To the extent that any such
Receivables and Related Assets shall have been or are to be contributed to the
Purchaser's capital at or prior to such time in accordance with Section 2.02,
the Purchaser shall increase the Seller's aggregate investment in the Purchaser
accordingly in accordance with Delaware law. Prior to paying the Purchase Price
hereunder, the Purchaser may request of the Seller, and the Seller shall
deliver, such approvals, opinions, information, reports or documents as the
Purchaser may reasonably request. As used in this Agreement, (i) the term
"Purchased Assets" shall mean all Receivables which are paid for
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through cash and/or Seller Loans under this Agreement and all Related Assets
relating thereto, (ii) the term "Contributed Assets" shall mean all Receivables
which are contributed to the Purchaser's capital and all Related Assets relating
thereto and (iii) the term "Transferred Assets" shall mean, collectively, all
Purchased Assets and all Contributed Assets.
(b) It is the intention of the parties hereto that (i) each Purchase
of Receivables and the associated Related Assets made hereunder shall constitute
a "sale" from the Seller to the Purchaser and (ii) each contribution of
Receivables and the associated Related Assets made hereunder shall constitute an
absolute assignment or transfer from the Seller to the Purchaser, in each case,
under applicable state law and Federal bankruptcy law, which sales are, in each
case, absolute and irrevocable and provide the Purchaser with all indicia and
rights of ownership of the Receivables and such Related Assets. Neither the
Seller nor the Purchaser intends the transactions contemplated hereunder to be,
or for any purpose to be characterized as, loans from the Purchaser to the
Seller secured by such property. Except for certain indemnities pursuant to
Section 7.01, each sale or absolute transfer of Receivables and the associated
Related Assets by the Seller to the Purchaser is made without recourse to the
Seller; provided, however, that (i) the Seller shall be liable to the Purchaser
for all representations, warranties and covenants made by the Seller pursuant to
the terms of this Agreement, and (ii) such sale or absolute transfer does not
constitute and is not intended to result in an assumption by the Purchaser or
any assignee thereof of any obligation of the Seller or any other person to any
Claimant, Obligor, or any other Person in connection with the Receivables, the
Related Assets and/or the related Settlement Purchase Agreements, or any other
obligations of the Seller thereunder or in connection therewith, other than to
return (or provide for the return of) any Scheduled Payments (or any portion
thereof) not covered under the Settlement Purchase Agreement and not sold or
transferred to the Purchaser hereunder back to such Claimant (it being
understood and agreed that the applicable "Master Servicer" (as defined in the
Indenture) and/or the Collateral Trustee shall remit or cause to be remitted all
amounts in respect of "Split Payments" (as defined in the Indenture) in
accordance with Section 5.01(f)). In view of the intention of the parties hereto
that the Purchases of Receivables and the associated Related Assets made
hereunder shall constitute sales or absolute transfers of such Receivables and
such Related Assets rather than a loan secured by such Receivables and such
Related Assets, the Seller agrees to note on its financial statements and in its
books and records that such Receivables and the associated Related Assets have
been sold or transferred to the Purchaser and to respond to any inquiries made
by third parties as to the ownership of such Receivables and such Related Assets
so sold or transferred that such Receivables and such Related Assets have been
sold or transferred to the Purchaser.
(c) Notwithstanding any other provision of this Agreement to the
contrary, the Purchaser shall not Purchase from the Seller nor shall the Seller
sell or contribute to the Purchaser any Receivable from and after the time of
any bankruptcy filing by or against the Seller or the Purchaser, provided,
however, that should any such bankruptcy or insolvency proceeding instituted
against the Seller (as distinguished from by the Seller) be withdrawn or
dismissed prior to the occurrence of an "Event of Default" under the Credit
Agreement, then the Purchaser shall
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be entitled to resume Purchasing Receivables from the Seller after the
withdrawal or dismissal of such filing or proceeding.
(d) If, notwithstanding the provisions of the immediately preceding
clause (b), a court of competent jurisdiction were to hold that any Purchase of
Receivables hereunder does not constitute a valid sale or transfer of the
affected Receivables and the Related Assets as set forth above but instead
constitutes a loan in the amount of the Purchase Price or otherwise of such
Receivables, then this Agreement shall be deemed a present grant of a security
interest (within the meaning of Articles 8 and 9 of the UCC as in effect in all
applicable jurisdictions) in favor of the Purchaser in all of the Seller's
rights, title and interest in, to and under the Transferred Assets to secure
such loan in the amount of the Purchase Price (together with interest thereon to
be computed at the Purchase Discount Rate) effective upon each such Purchase,
and the Seller hereby grants such a security interest to the Purchaser in the
Transferred Assets which are the subject of such Purchase, and this Agreement
shall constitute a security agreement within the meaning of Article 8 and
Article 9 of the UCC of all applicable jurisdictions.
SECTION 2.02. Payment for the Purchases. (a) Except as otherwise
provided below in this Section 2.02, the Purchase Price for the Receivables sold
by the Seller under this Agreement shall be payable in full in cash by the
Purchaser to the Seller, in each case on the Purchase Date relating to such
Purchase; provided, to the extent that the Purchaser has insufficient funds and
availability under the Subordinated Intercompany Revolving Loan Note to pay the
Purchase Price for any Receivables to be purchased by it on any date, such
remaining portion of the Receivables of the Seller for which the Purchase Price
has not been received (either in cash or by an increase to the Seller's
Subordinated Intercompany Revolving Loan Note) shall be contributed to the
capital of the Purchaser by the Seller; provided, however, that with respect to
the Purchase made on the Closing Date, (i) $86,018,722.70 of the Purchase Price
due on the Closing Date shall be paid by the Purchaser's assumption of
outstanding debt under the Revolving Credit Facility and (ii) $2,391,093.86 of
the Purchase Price due on the Closing Date shall be paid by the issuance of the
Subordinated Intercompany Revolving Loan Note.
(b) On each Purchase Date with respect to any Receivables being sold
on such date, the Seller shall deliver to the Purchaser a Seller Transfer Report
in the form of that attached hereto as Exhibit B. The Purchaser, if it agrees to
purchase all such Receivables set forth on such report, shall signify its
acceptance thereof by signing such report and returning a copy, as accepted, to
the Seller on such date, together with payment of the aggregate Purchase Price
for such Receivables, by no later than 5:00 p.m. (New York time) on such date.
To the extent that the Purchaser disputes any of the information in such report
with respect to any Receivable described therein, the Seller and the Purchaser
shall reconcile such report as promptly as possible and if unable to reconcile
and agree on the content of such report prior to 4:30 p.m. (New York time) on
the proposed Purchase Date therefor, the Seller and the Purchaser shall exclude
any Receivables therefrom until such report is acceptable to both parties (and
such excluded Receivables shall be deemed not sold on such date). The aggregate
Purchase Price (as hereinafter defined) payable on any Purchase Date shall be
calculated to equal the sum of the
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respective Purchase Prices of the new Receivables noted on such Seller Transfer
Report. The "Purchase Price" for any Receivable shall be equal to the Discounted
Receivables Balance of such Receivable on such date as calculated without giving
effect to any past due Scheduled Payments thereon which are outstanding on such
date.
(c) On each Business Day, to the extent that the Purchaser receives
proceeds from any sale under the Issuer Purchase Agreement (including repayment
of any intercompany notes issued thereunder) or has available funds under the
Revolving Credit Facility, then the Purchaser shall remit such funds to the
Seller in the following order of priority and application: first to pay the
Purchase Price for any Receivables Purchased from the Seller on such Business
Day to the extent it is a Purchase Date; and second to pay amounts owed by the
Purchaser to the Seller under the Subordinated Intercompany Revolving Loan Notes
described in Section 2.02(d) below. If, on any Purchase Date, the amount of cash
available to pay for all Purchases of Receivables to be made on such date is
less than the Purchase Price owing therefor, then the Purchaser shall, with
notice to the Seller, pay such remaining part of the Purchase Price by borrowing
a revolving loan (each a "Seller Loan") under its Subordinated Intercompany
Revolving Loan Note issued in favor of the Seller, and the Seller shall have
irrevocably agreed to advance, and shall be deemed to have advanced, a Seller
Loan in the amount so specified by the Purchaser; provided, however, that such
Seller Loan shall be made to the Purchaser only to the extent that, at the time
of such Seller Loan, or immediately thereafter and after giving effect to such
Seller Loan, the Purchaser would, in the reasonable determination of the
Purchaser, continue to be able to pay its debts as they become due.
(d) The Seller Loans shall be subordinated to the prior right and
payment in full of all amounts required to be paid by the Purchaser under the
Issuer Purchase Agreement and any other "Indebtedness" (as defined in the Credit
Agreement) of the Purchaser which is specified in any document relating thereto
as having priority over the Seller Loans. The Seller Loans advanced by the
Seller shall be evidenced by, and payable in accordance with the terms and
provisions of, a promissory note (a "Subordinated Intercompany Revolving Loan
Note") payable to the Seller in the form of Exhibit A attached hereto.
(e) Unless and until the Purchase Termination Date has occurred, if,
after giving effect to all allocations of cash and Seller Loans provided for in
Section 2.02(c), the Purchase Price payable by the Purchaser to the Seller on
any Business Day is not paid in full as a result of the limitation on the amount
of the Subordinated Intercompany Revolving Loan Note, then the Seller shall be
deemed to have contributed to the Purchaser's capital Receivables having a
Purchase Price equal to the otherwise unpaid portion of the total Purchase Price
owed to the Seller on such day.
SECTION 2.03. Payments and Computations, Etc. All amounts to be paid
by the Seller to the Purchaser hereunder shall be paid in accordance with the
terms hereof no later than 1:00 P.M. (New York time) on the day when due in
Dollars in immediately available funds to the "Master Collection Account" (as
defined in the Indenture). All amounts to be paid by the
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Purchaser to the Seller hereunder shall be paid in accordance with the terms
hereof no later than 5:00 P.M. (New York time) to such account as may be
specified therefor by the Seller from time to time by notice to the Purchaser.
Payments received by the Purchaser or the Seller after such times shall be
deemed to have been received on the next Business Day. In the event that any
payment becomes due on a day which is not a Business Day, then such payment
shall be made on the next succeeding Business Day. The Seller shall, to the
extent permitted by law, pay to the Purchaser, on demand, interest on all
amounts not paid when due hereunder (whether owing by the Seller individually or
as Master Servicer) at 2% per annum above the per annum rate designated by PNC
Bank, National Association as its "prime rate" for commercial borrowers (such
rate not necessarily being the lowest rate offered by such bank) as in effect on
the date such payment was due; provided, however, that such interest rate shall
not at any time exceed the maximum rate permitted by applicable law. All
computations of interest payable hereunder shall be made on the basis of a year
of 360 days for the actual number of days (including the first but excluding the
last day) elapsed.
SECTION 2.04. Transfer of Records to the Purchaser. (a) In
connection with the Purchases of Receivables hereunder, the Seller hereby sells,
transfers, assigns and otherwise conveys to the Purchaser all of the Seller's
right and title to and interest in the Records relating to all Receivables
included in the Transferred Assets, without the need for any further
documentation in connection with any Purchase. In connection with such transfer,
the Seller hereby represents and warrants that the Seller and/or Wentworth
either itself owns, or has taken such action as may be necessary (including,
without limitation, obtaining any necessary consents from licensors or other
Persons) to provide the Purchaser and its assigns, including the Issuer, the
Trustee, the "Master Servicers", the "Back-up Servicer" and any "Successor
Servicer" (each as defined in the Indenture) with such licenses, sublicenses
and/or assignments of contracts as the Issuer, the Master Servicers, the Trustee
or any Successor Servicer shall from time to time require for its use of all
services and computer hardware or software that relate to the servicing of the
Receivables or the other Purchased Assets. The Seller hereby grants the
Purchaser, the Issuer, Master Servicers, the Back-up Servicer, the Trustee and
each Successor Servicer an irrevocable license (with respect to the services,
and computer hardware and software that it owns) or sublicense (with respect to
all other such services, hardware and software) to use such services, hardware
or software in connection with the servicing, collection and monitoring of the
Receivables (subject to reasonable confidentiality restrictions and restrictions
limiting such use to the collection, servicing and monitoring of the
Receivables, which restrictions have already been established with respect to
the Back-up Servicer and, with respect to any other Person other than the
Back-up Servicer, shall be determined at such time as such Person is charged
with the servicing of the Receivables). As of the Closing Date, all such
computer software and hardware is currently owned by Seller and/or Wentworth and
is licensed to the Back-up Servicer irrevocably until the termination of the
Back-up Servicing Agreement. From and after the Closing Date, the Seller or
Wentworth, as applicable, shall deliver to the Purchaser a copy of each consent
(or evidence that such consent is not required) from all necessary parties with
respect to any such services, hardware or software prior to the date the Seller
or Wentworth enters into any license to use such service or software to service,
monitor and collect any
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Receivables. The license granted hereby shall be irrevocable, and shall
terminate on the Business Day following the Collection Date.
(b) The Seller shall take such action requested by the Purchaser (or
its assignees) or any Master Servicer (including any successor Master Servicer
appointed in accordance with the Indenture), from time to time hereafter, that
may be reasonably necessary or appropriate to ensure that the Purchaser (and its
assignees, including, without limitation, the Issuer, the Trustee, the
Collateral Trustee and the Noteholders) has an enforceable ownership or security
interest, as applicable, in the Records relating to the Receivables purchased
from the Seller hereunder.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to Agreement. This Agreement is
subject to the conditions precedent that (i) each of the conditions precedent to
the execution, delivery and effectiveness of each other Operative Document
(other than a condition precedent in any such other Operative Document relating
to the effectiveness of this Agreement) shall have been fulfilled, and (ii) the
Purchaser shall have received each of the following, on or before the Closing
Date, each (unless otherwise indicated) dated as of the Closing Date or such
other recent date acceptable to the Purchaser and each in form and substance
satisfactory to the Purchaser:
1. Resolutions. A copy of the resolutions of the Board of Directors
of the general partner of the Seller, certified by its Secretary or
Assistant Secretary, approving for and on behalf of the Seller this
Agreement and the other Operative Documents to be delivered by it
hereunder and the transactions contemplated hereby and thereby and
addressing such other matters as may be reasonably required by the
Purchaser;
2. Good Standing Certificates of the Seller; Certificates as to
Foreign Qualification of the Seller. Good standing or qualification
certificates for the Seller issued by the Secretaries of State of Delaware
and Pennsylvania and of any other state in which the Seller transacts
business and is required to be in good standing;
3. Incumbency Certificate. A certificate of the Secretary or
Assistant Secretary of the general partner of the Seller certifying the
names and true signatures of the officers authorized on the general
partner's behalf to sign this Purchase Agreement for and on behalf of the
Seller and the other Operative Documents to be delivered by the Seller
hereunder (on which certificate the Purchaser, the Trustee, the Agent and
the Master Servicers may conclusively rely until such time as the
Purchaser shall receive from the Seller (with a copy to the Trustee, each
Master Servicer and the Agent), a revised certificate meeting the
requirements of this subsection (3);
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4. Other Operative Documents. Original copies, executed by each of
the parties thereto in such reasonable number as shall be specified by the
Purchaser, of each of the other Operative Documents to be executed and
delivered in connection herewith;
5. Opinions of Counsel. The following opinions of counsel, each in
form and substance satisfactory to the Purchaser as to (i) general
corporate and UCC matters, (ii) true sale and non-consolidation, (iii)
federal and Delaware income tax matters, (iv) assignability and priority
of the Receivables, (v) federal securities law issues, and (vi)
enforceability of Powers of Attorney; and
6. Other Documents. Such other documents as are set forth on the
List of Closing Documents attached hereto as Exhibit C.
SECTION 3.02. Conditions Precedent to Ongoing Purchases. The
obligation of the Purchaser on any Purchase Date to accept and pay the Purchase
Price for the transfers of Receivables under this Agreement is subject to the
conditions precedent that the representations and warranties contained in
Article IV are true and correct in all material respects as of such Business
Day. The Seller, by accepting the Purchase Price paid for each Purchase of
Receivables and Related Assets hereunder (including by way of increase in the
principal balance of the Subordinated Intercompany Revolving Loan Note or the
equity interest of the Seller in the Purchaser), shall be deemed to have
certified, with respect to the Receivables and the Related Assets paid for on
such day, that its representations and warranties contained in Article IV are
true and correct on and as of such day, with the same effect as though made on
and as of such day.
SECTION 3.03. Effect of Payment of Purchase Price and/or
Contribution. Upon the payment of the Purchase Price for any Purchase, (whether
in cash or by an increase in the Seller's Subordinated Intercompany Revolving
Loan Note pursuant to Section 2.02(c)), or by the contribution of any
Receivables and Related Assets by the Seller to the capital of the Purchaser
pursuant to Section 2.02(a), title to the Receivables and the Related Assets
included in such Purchase shall vest in the Purchaser. Upon the purchase and
payment by the Purchaser of the Purchase Price for any Purchase, each of the
conditions set forth in Section 3.02 shall be irrevocably deemed to have been
satisfied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller. The
Seller hereby represents and warrants that as of the Closing Date and (except
for representations and warranties which relate to a specific date only) and on
each Purchase Date thereafter until the Purchase Termination Date:
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(a) Organization and Good Standing. The Seller is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full power and authority to own its
properties and conduct its business as presently owned or conducted, and to
execute, deliver and perform its obligations under this Agreement, the
Settlement Purchase Agreements, and each of the other Operative Documents to
which it is a party.
(b) Due Qualification. The Seller is duly qualified to do business
and is in good standing as a foreign limited partnership, and has obtained all
necessary licenses and approvals, in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals would have, or could reasonably
be expected to have a Material Adverse Effect.
(c) Due Authorization; Conflicts. The execution, delivery and
performance by the Seller of this Agreement, the Settlement Purchase Agreements
and each of the other Operative Documents to which it is a party are within the
Seller's powers, have been duly authorized by all necessary partnership action,
and do not contravene (i) the Seller's Agreement of Limited Partnership, (ii)
any law, rule, regulation, order, decree or contractual restriction binding on,
or affecting, the Seller and the violation of which would have, or could
reasonably be expected to have, a Material Adverse Effect, or (iii) any
agreement, contract, credit agreement, mortgage, or other instrument, document
or agreement to which the Seller or any of its assets are subject or may be
effected and the violation of which would have, or could reasonably be expected
to have, a Material Adverse Effect.
(d) Consents. No authorization or approval or other action by, and
no notice to or registration of or filing with, any Governmental Authority or
other regulatory body is required to be made by the Seller for the due
execution, delivery and performance by the Seller, or to insure the legality,
validity, binding effect or enforceability of, this Agreement, the Settlement
Purchase Agreements or any of the other Operative Documents to which it is a
party, except for the filing of UCC financing statements against the Seller in
respect of the transactions contemplated herein, all of which that need to be
filed to perfect the interest of the Purchaser in the Purchased Assets (as
comprised as of the date of the making or remaking of this representation and
warranty) have been so made.
(e) Enforceability. This Agreement, the Settlement Purchase
Agreements or any of the other Operative Documents to which it is a party is and
will be the legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally or general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
(f) Proceedings. There are no judgments or other judicial or
administrative orders outstanding against the Seller nor is there any pending
or, to the best of the Seller's knowledge,
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threatened action or proceeding affecting the Seller before any court,
governmental agency or arbitrator, which would have, or could reasonably be
expected to have, a Material Adverse Effect.
(g) Compliance with Laws, Etc. The Seller is not in violation of any
law, rule, regulation, order, writ, judgment, decree, determination or award
applicable to it or any of its properties or any indenture, lease, loan or other
agreement to which it is a party or by which it or its assets may be bound or
affected, the violation of which, in any of the foregoing cases, would have, or
could reasonably be expected to have, a Material Adverse Effect.
(h) Locations. The principal place of business and chief executive
office of the Seller are located at the address of the Seller set forth on the
signature page hereof, and the offices where the Seller keeps all of its records
relating to the Receivables are located at the addresses set forth on Schedule I
hereto, or, in each case, at such other locations notified to the Purchaser, the
Issuer, the Trustee and each Master Servicer, and the Agent, in jurisdictions
with respect to which all applicable actions required by Section 5.02(f) hereof
have been taken and completed.
(i) Lock-Box Banks. The names and addresses of all the "Lock-Box
Banks" (as defined in the Credit Agreement), and the account numbers of all
"Lock-Box Accounts" (as defined in the Credit Agreement) and related lock-boxes
maintained at such Lock-Box Banks, are in each case specified in Schedule III
hereto or have been notified to the Purchaser, the Trustee and the Collateral
Trustee and with respect to which all action required to be taken pursuant to
Section 5.02(h) has been taken. The Lock-Box Banks are the only institutions
holding any Lock-Box Accounts or lock-boxes for the receipt of Scheduled
Payments in respect of the Receivables. All annuity providers have been directed
to make payments on the Annuity Contracts relating to the Receivables to a
Lock-Box Account (or a related lock-box) covered by a "Lock-Box Notice" (as
defined in the Indenture), and such instructions are in full force and effect.
(j) Financial Statements. The annual audited financial statements of
the Seller for the fiscal year ended December 31, 1996, and the unaudited
quarterly financial statements of the Seller for the fiscal quarter ended June
30, 1997, copies of which have been provided to the Purchaser, the Trustee and
the Agent, present fairly the financial condition of the Seller as of such date.
(k) Accuracy of Information. Each certificate, information, exhibit,
financial statement, document, book, record, report or disclosure furnished by
the Seller to the Purchaser, the Trustee, any Master Servicer or the Agent is
accurate in all material respects and contains no untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading.
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(l) Investment Company Act Matters. The Seller is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act.
(m) Title to Property. The Seller, with respect to any Receivables
immediately prior to the Purchase thereof by the Purchaser hereunder, had good,
indefeasible, and merchantable title to and ownership of such Receivables, free
and clear of all Liens.
(n) Tradenames. The Seller has no tradenames, fictitious names,
assumed names or "doing business as" names and since its incorporation, the
Seller (i) has not been the subject of any merger or other corporate
reorganization that resulted in a change of name, identity or corporate
structure or (ii) had any other name.
(o) Solvency. After giving effect to each Purchase of Transferred
Assets hereunder, the Seller is and will be solvent and able to pay its debts as
they come due, and has and will have adequate capital.
(p) Valid Transfer. This Agreement constitutes a valid sale,
transfer and assignment in the case of Purchased Assets, or, in the case of
Contributed Assets, a valid transfer and assignment, to the Purchaser of all
right, title and interest of the Seller in and to the Receivables now or
hereafter Purchased hereunder and in and to all other Transferred Assets and the
proceeds thereof free and clear of any Lien, other than any Permitted Lien or,
if a court of competent jurisdiction were to hold that any Purchase of
Receivables hereunder does not constitute a valid sale or absolute transfer of
the affected Receivables and the Related Assets as set forth herein but instead
constitutes a loan in the amount of the Purchase Price of such Receivables,
constitutes a valid grant to the Purchaser of a "security interest" (as defined
in the UCC of the jurisdiction the law of which governs the perfection of the
interest in the Receivables and other Purchased Assets or Contributed Assets
created hereunder), which is and shall be a first priority perfected security
interest to secure such loan in the amount of the Purchase Price, free and clear
of any Lien (other than any Permitted Lien) in all right, title and interest of
the Seller in and to the Receivables now or hereafter Purchased by the Purchaser
pursuant hereto and in and to all other Transferred Assets and the proceeds
thereof which will be enforceable by the Purchaser (and its assignees or
pledgees) upon such creation of such security interest.
(q) Originator Receivables. The Purchaser has given reasonably
equivalent value to the Seller (which may include additional indebtedness of the
Purchaser under the Subordinated Intercompany Revolving Loan Note) in
consideration for the Purchase by the Purchaser from the Seller of the
Receivables and Related Property pursuant hereto, and no such transfer has been
made for or on account of an antecedent debt owed by the Seller to the
Purchaser.
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SECTION 4.02. Representations and Warranties of the Seller Relating
to the Receivables. The Seller hereby represents and warrants to the Purchaser,
with respect to each Receivable Purchased by the Purchaser pursuant hereto,
that:
(a) From and after the Closing Date, the "Credit Policy Manual" (as
defined in the Indenture) shall provide that, upon the receipt of payment of
less than the full amount of any Scheduled Payments in respect of any Receivable
in respect of which there is a concurrent obligation of the Seller to remit a
Split Payment to the Claimant thereon, such Scheduled Payment shall be remitted
to the Seller and the applicable Claimant pro rata based on the relative
percentages of the full amount of such Scheduled Payment which each would be
entitled to receive (had the full payment been received) in accordance with the
terms of the applicable Settlement Purchase Agreement.
The representations and warranties made pursuant to this Section
4.02 on the date of any Purchase of Receivables by the Purchaser shall survive
such Purchase.
SECTION 4.03. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants that as of the Closing Date and (except for
representations and warranties which relate to a specific date only) as of each
Purchase Date:
(a) Corporate Existence and Power. The Purchaser is a limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate power and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its business is
now conducted. The Purchaser is duly qualified to do business in, and is in good
standing in, every other jurisdiction in which the nature of its business
requires it to be so qualified, except where the failure to be so qualified or
in good standing would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Purchaser of this Agreement and the
other Operative Documents to which it is a party (i) are within the Purchaser's
limited liability company powers, (ii) have been duly authorized by all
necessary limited liability company action, (iii) require no action by or in
respect of, or filing with, any Governmental Authority or official thereof, or
(iv) do not contravene, or constitute a default under, any provision of
applicable law, rule or regulation or of the Purchaser's organizational
documents or of any agreement, judgment, injunction, order, writ, decree or
other instrument binding upon the Purchaser the contravention of which, in any
of the foregoing cases would have, or could reasonably be expected to have, a
material adverse effect on the Purchaser's ability to perform hereunder or on
the enforceability hereof.
(c) Binding Effect. Each of this Agreement and the Subordinated
Intercompany Revolving Loan Notes constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency,
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moratorium or other similar laws affecting the rights of creditor generally or
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller. At all times from
the date hereof to the Collection Date, Seller will, unless the Purchaser shall
otherwise consent in writing:
(a) Compliance with Law. The Seller will comply in all material
respects with all Requirements of Law applicable to the Transferred Assets.
(b) Preservation of Existence. The Seller will preserve and maintain
its existence, rights, franchises and privileges as a limited partnership (or
other legal entity, provided the Seller shall have complied with the
requirements of Section 5.02(f)) in the jurisdiction of its organization, and
qualify and remain qualified in good standing as a foreign business entity in
each jurisdiction where the failure to maintain such qualification would have,
or could reasonably be expected to have, a Material Adverse Effect.
(c) Inspection of Books and Records. The Purchaser, the Agent, their
respective assigns (or designated representative thereof) and independent
accountants appointed by, or other agents of, any of the foregoing, shall have
the right, upon reasonable prior written notice to the Seller, to visit the
Seller, to discuss the affairs, finances and accounts of the Seller with, and to
be advised as to the same by, its officers, and to examine the books of account
and records of the Seller, and to make or be provided with copies and extracts
therefrom, all at such reasonable times and intervals (but not more than once in
any six month period) and to such reasonable extent during regular business
hours as the Purchaser, the Agent, their respective assigns (or designated
representative thereof) or such accountants or agents appointed by any of the
foregoing, as applicable, may desire.
(d) Keeping of Records and Books of Account. (i) The Seller itself
or through its agents will keep proper books of record and account, which shall
be maintained or caused to be maintained by the Seller and shall be separate and
apart from those of any Affiliate of the Seller, in which full and correct
entries shall be made of all financial transactions and the assets and business
of the Seller in accordance with generally accepted accounting principles
consistently applied, and (ii) maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing the Receivables in the event of the destruction of the
originals thereof) and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit the daily
identification of all Collections of and adjustments to each existing
Receivable).
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(e) Location of Records. The Seller will keep its principal place of
business and chief executive office at the address of the Seller referred to in
Section 4.01(h) and shall keep the other offices where it keeps the books,
records and documents regarding the Transferred Assets at the addresses of the
Seller referred to on Schedule I, or in either case, upon 30 days' prior written
notice to the Purchaser, or its assigns, including the Issuer, the Trustee and
each Master Servicer and the Agent, at any other location within the United
States with respect to which all applicable action required by Section 5.02(f)
hereof shall have been taken and completed.
(f) Settlement Purchase Agreement. The Seller will at its expense
timely perform and comply in all material respects with all provisions,
covenants and other promises required to be observed by it under each Settlement
Purchase Agreement, maintain each Settlement Purchase Agreement in full force
and effect, enforce each Settlement Purchase Agreement in accordance with its
respective terms, and, at the request of the Purchaser or its assigns, including
the Issuer, the Trustee, any applicable Master Servicer and the Agent, make to
the Claimant such reasonable demands and requests for information and reports or
for action as, the Trustee, or any applicable Master Servicer and the Agent, may
request to the extent that the Seller is entitled to do the same thereunder; it
being agreed however that with respect to the obligations of the Seller to remit
Split Payments to the Claimant pursuant to the Settlement Purchase Agreements
relating to the Purchased Assets, such obligation shall hereafter be performed
by the Master Servicer and/or the Collateral Trustee, in each case, under and
pursuant to the Credit Agreements and/or the Indenture, as applicable.
(g) Payment of Taxes, Etc. The Seller will pay promptly when due all
material taxes, assessments and governmental charges or levies imposed upon it
in respect of the Transferred Assets, or in respect of its income or profits
therefrom, and any and all material claims of any kind (including, without
limitation, claims for labor, materials and supplies) in respect of the
Purchased Assets, except where such tax, assessment, charge or levy is being
contested in good faith and by proper proceedings and adequate reserve have been
set up and are being maintained in respect thereof on the Seller's books and
records.
(h) Collections. In the event that the Seller or any other Affiliate
receives any Collections, the Seller agrees to hold, or cause such Affiliate to
hold, all such Collections in trust and to deposit such Collections to a
Lock-Box Account or the Master Collection Account, in each case, as soon as
practicable, but in no event later than two Business Days after its receipt
thereof.
(i) Fidelity Insurance. The Seller shall maintain, at its own
expense, a fidelity insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting on behalf of the
Seller in any capacity with regard to the Receivables in handling documents and
papers related thereto. Any such fidelity insurance shall protect and insure the
Seller against losses, including forgery, theft, embezzlement, and fraud, and
shall be maintained in an amount of at least $10,000,000 or such lower amount as
the Purchaser or any of
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its assigns may in their commercially reasonable credit judgment designate to
the Seller from time to time. No provision of this Section 5.01(i) requiring
such fidelity insurance shall diminish or relieve the Seller from its duties and
obligations as set forth in this Agreement or any of the other Operative
Documents. The Seller shall be deemed to have complied with this provision if
one of its respective Affiliates has such fidelity policy coverage and, by the
terms of such fidelity policy, the coverage afforded thereunder extends to the
Seller. Upon the request of the Purchaser or any of its assigns, the Seller
shall cause to be delivered to the Purchaser or such assigns, as applicable, a
certification evidencing coverage under such fidelity policy. Any such insurance
policy shall contain a provision or endorsement providing that such policy may
not be canceled or modified in a materially adverse manner without ten (10)
days' prior written notice to the Purchaser and such assigns.
(j) Protection of Right, Title and Interest to Purchaser and
Assignees.
(i) The Seller shall cause all financing statements and continuation
statements and any other necessary documents covering the Purchaser's and
its assignees' right, title and interest in and to the Transferred Assets
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 to preserve and protect fully the right, title and
interest of the Purchaser and its assignees in and to all such Transferred
Assets. The Seller shall cooperate fully with the Master Servicers, Agent,
the Issuer and Trustee and take such actions as any such Person shall
reasonably request, in order to carry out the objectives of this Agreement
and the other Operative Documents.
(ii) Within 30 days after the Seller makes any change in its name,
identity or corporate structure which would make any financing statement
or continuation statement filed in accordance with the terms of this
Agreement seriously misleading within the meaning of Section 9-402(7) (or
any comparable provision) of the UCC as in effect in the jurisdiction the
law of which governs the perfection of the interest in the Purchased
Assets created hereunder, the Seller shall give the Purchaser, the Issuer,
the Agent and the Trustee notice of such change and shall file such
financing statements or amendments as may be necessary to continue the
perfection of the Purchaser's and its assignees' interest in the
Transferred Assets and the proceeds thereof.
(iii) Notwithstanding anything contained herein to the contrary, the
Seller shall not be required to file assignments in favor of the Purchaser
or the Trustee, respectively, with respect to the UCC financing statements
filed by the Seller against each of the Claimants in connection with the
respective Settlement Purchase Agreements, but the Seller hereby covenants
to file continuation statements thereof as and when necessary to maintain
the effectiveness of such statements; it being understood and agreed that
the Seller shall not have any duty to monitor the continued effectiveness
of the financing statements originally filed against such Claimants (other
than with respect to the lapse thereof due to time).
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(k) Corporate Separateness. The Seller shall at all times deal with
the Purchaser in a manner consistent with Section 5.2(e) of the Credit Agreement
and shall at all times deal with the Issuer in a manner consistent with Section
2.06(m) of the Indenture.
(l) Accounting For Purchases and Contributions. The Seller shall
treat all Purchases hereunder by the Purchaser, and contributions hereunder to
the Purchaser, as sales and/or absolute transfers thereof for all tax,
accounting and other purposes.
(m) Sales Under Issuer Purchase Agreement. In connection with any
sales by the Purchaser of Transferred Assets under the Issuer Purchase
Agreement, the Purchaser may request written confirmation from the Seller as to
whether the representations and warranties set forth in the Issuer Purchase
Agreement (including any representation or warranty set forth in the Designated
Supplement relating to such Receivable which is incorporated into the Issuer
Purchase Agreement by reference), shall be true and correct in all material
respects. The Seller shall advise the Purchaser in writing with respect to such
representations and warranties and, except to the extent that the Seller has
advised the Purchaser that any such representations and warranties are not
correct, such representations and warranties shall be deemed incorporated herein
by this reference hereto.
SECTION 5.02. Negative Covenants of the Seller. From the date hereof
until the Collection Date, without the written consent of the Purchaser:
(a) No Liens. The Seller will not sell, pledge, assign or transfer
to any Person, or grant, create, incur, assume or suffer to exist any Lien
(other than a Permitted Lien) on, any Transferred Asset, whether now existing or
hereafter created, or any interest therein, and the Seller shall defend the
right, title and interest of the Purchaser in and to the Transferred Assets,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Seller.
(b) Extension or Amendment of Receivables; Repurchase Obligations.
The Seller will not extend, amend or otherwise modify (or consent to any such
extension, amendment or modification of) the terms of any Receivable or rescind
or cancel, or permit the rescission or cancellation of, any Receivable, except
as ordered by a court of competent jurisdiction or other Governmental Authority.
To the extent that any representation or warranty of the Seller with
respect to any Receivable constituting a Transferred Asset under Section 4.02 or
set forth in any certificates delivered by or on behalf of the Seller or its
general partner in connection with any Purchase or in connection with any
opinions of counsel delivered on any Purchase Date was incorrect when made or
remade or deemed made or remade (it being agreed that the incorrectness of any
such representation or warranty, and the substitution or repurchase obligation
of the Seller pursuant to this clause (b) resulting therefrom, shall in each
case, be determined without giving effect to any limitation on the "knowledge,"
"best of knowledge" or other similar limitation on the knowledge
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of the Seller contained in any such representation or warranty), the Seller
shall, within five Business Days after learning thereof, either (X) convey to
the Purchaser in exchange for the affected Receivable, one or more additional
Receivables to be described on a Seller Transfer Report delivered to the
Purchaser and having a Discounted Receivables Balance (as calculated without
giving effect to any past due Scheduled Payments thereon which are outstanding
on such date) approximately equal to, but not less than, the Discounted
Receivables Balance of the Receivable being so replaced (as calculated by
treating any past-due Scheduled Payments then due as if such Scheduled Payments
were due on the date of such calculation) or (Y) in the event the Seller lacks
sufficient Receivables to substitute or replace the affected Receivables,
repurchase in cash delivered to the Purchaser as aforesaid, in an amount equal
to the Discounted Receivables Balance (as calculated by treating any past-due
Scheduled Payments then due as if such Scheduled Payments were due on the date
of such calculation) of such affected Receivable at such time, whereupon the
Receivable being replaced or repurchased shall cease to be a "Receivable"
hereunder.
(c) Change in Credit Policy Manual. The Seller will not make, or
consent or fail to object to, any change in the "Credit Policy Manual" (as
defined in the Indenture) which change could be reasonably likely to materially
impair or delay the collectibility of any Receivable or result in a
deterioration in the creditworthiness of the Obligors generally.
(d) Deposits to Lock-Box Accounts or the Master Collection Account.
The Seller will not deposit or otherwise credit, or cause to be so deposited or
credited, or consent or fail to object to any such deposit or credit, to any
Lock-Box Account or the Master Collection Account of cash proceeds other than
Collections of Receivables and other Transferred Assets; provided that to the
extent any such other amounts are so deposited on any date, it shall not
constitute a breach hereunder if such other funds are identified and are removed
from such account within two Business Days after such amounts were so deposited
in such account.
(e) Receivables Not To Be Evidenced by Promissory Notes. The Seller
will take no action to cause any Receivable to be evidenced by any "instrument"
(as defined in the UCC of the jurisdiction the law of which governs the
perfection of the interest in such Receivable created hereunder), except in
connection with its enforcement, in which event the Seller shall deliver such
instrument to the Collateral Trustee, for the benefit of the Person entitled
thereto or secured thereby in accordance with the Intercreditor Agreement.
(f) Change in Name. The Seller will not (i) make any change to its
name, principal place of business, partnership structure or location of books
and records or use any tradenames, fictitious names, assumed names or "doing
business as" names unless, at least 30 days prior to the effective date of any
such name change, change in principal place of business, change in partnership
structure, change in location of its books and records, or change in trade or
fictitious names, the Seller notifies the Purchaser, the Issuer, the Agent, the
Trustee and each Master Servicer thereof and delivers to the Purchaser or its
designees such financing statements (Forms UCC-1 and UCC-3) executed by the
Seller which the Purchaser may reasonably request
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to reflect such name change, location change, change in partnership structure or
fictitious name change or use, together with such other documents and
instruments that the Purchaser or may reasonably request in connection therewith
and has taken all other steps to ensure that the Purchaser and its assigns
continue to have a first priority, perfected ownership or security interest in
the Transferred Assets, or (ii) change its jurisdiction of organization unless
the Purchaser, the Issuer, the Agent and the Trustee shall have received from
the Seller (A) written notice of such change at least 10 days prior to the
effective date thereof, and (B) prior to the effective date thereof if the
Purchaser shall so request, an Opinion of Counsel, in form and substance
reasonably satisfactory to the Purchaser, the Issuer, the Agent and the Trustee,
as to such organization and the Seller's valid existence and good standing and
as to the matters referred to in the first sentence of Section 4.01(a).
(g) Merger. The Seller shall not consolidate with or merge into any
other Person or convey or transfer its properties and assets substantially as an
entirety to any Person unless:
(i) (X) the Person formed by such consolidation or into which
the Seller is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Seller substantially as an
entirety shall be, if the Seller is not the surviving entity, a
corporation, limited partnership or limited liability company organized
and existing under the laws of the United States of America or any State
or the District of Columbia, and such entity shall have expressly assumed,
by an agreement supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Purchaser and the Trustee
the performance of every covenant and obligation of the Seller hereunder
and (Y) the Seller shall have delivered to the Purchaser, the Issuer, the
Agent and the Trustee an Officer's Certificate and an Opinion of Counsel
each in form reasonably satisfactory to the Purchaser and stating that
such consolidation, merger, conveyance or transfer complies with this
Section 5.02(g) and that all conditions precedent herein provided for
relating to such transaction have been complied with;
(ii) each "Rating Agency" (as defined in the Indenture) rating
any Series of Notes issued thereunder shall have notified the Purchaser,
the Agent, the Issuer and the Trustee, in writing, that such merger or
consolidation or conveyance or transfer, as the case may be, will not
result in a reduction or withdrawal of the rating of any such outstanding
Series or "Class" (as defined in the Indenture) of such Series; and
(iii) the corporation, limited partnership or limited
liability company formed by such consolidation or into which the Seller is
merged or which acquires by conveyance or transfer the properties and
assets of the Seller substantially as an entirety shall have all licenses
and approvals to perform its obligations hereunder and under the other
Operative Documents to which the Seller is a party, except to the extent
the failure to have any such license would not have, and could not
reasonably be expected to have, a material adverse effect on its ability
to perform the obligations of the Seller hereunder and/or any such other
Operative Document.
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(h) Change in Lock-Box Accounts and Instructions to Obligors. The
Seller will not add or terminate any institution as a Lock-Box Bank or terminate
or substitute any Lock-Box Account or any related lock-box from those listed in
Schedule III hereto, except as otherwise permitted hereunder or unless the
Purchaser, the Agent, the Issuer, the Trustee and the Collateral Trustee shall
have received notice of such addition, termination or change and executed copies
of Lock-Box Notices covering any such new Lock-Box Bank, Lock-Box Account or any
new lock-box relating thereto. The Seller will not instruct any Obligor to remit
Collections to any Person, address or account other than a Lock-Box Account or
the related lock-box to which the underlying Receivables or Transferred Assets
relates.
(i) Ownership of Seller. Unless and until the Seller elects to be
treated as a corporation for federal income tax purposes, the number of
individuals and entities (other than Flow-Through Entities (as such term is
defined below)) that are beneficial owners of a direct interest in the Seller,
plus the number of individuals and entities (other than Flow-Through Entities)
that are beneficial owners of an indirect ownership in the Seller through one or
more Flow Through Entities will never exceed seventy-five. As used herein,
"Flow-Through Entity" shall mean an entity that, for federal income tax
purposes, is a partnership, a grantor trust, an S corporation, or other entity
which is not treated for such purposes as a separate entity.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Collection of Receivables. (a) The Seller and the
Purchaser each hereby acknowledges and agrees that (i) the Collateral Trustee
has the exclusive ownership, dominion and control of any and all Lock-Boxes and
Lock-Box Accounts, other than any Series Specific Lock-Box and/or Series
Specific Lock-Box Account described under the Issuer Purchase Agreement and (ii)
the Trustee has the exclusive ownership and control of each Series Specific
Lock-Box and Series Specific Lock-Box Account and in either case, the Seller
hereby agrees to take any further action necessary or that the Trustee, the
Collateral Trustee, the Agent or the Purchaser may reasonably request to
evidence and/or effect such ownership and control. Unless instructed otherwise
by the Collateral Trustee or the Trustee, as applicable, pursuant to either such
Person's authority under the Intercreditor Agreement and the Indenture, each
Lock-Box Bank shall be instructed to remit, on a daily basis, via overnight or
same day transfer, all amounts deposited in its Lock-Box Accounts to the Master
Collection Account in accordance with the terms of a Lock-Box Notice
substantially in the form of Exhibit B to the Indenture. The Master Servicer (or
any successor Master Servicer (including the Back-Up Servicer) appointed for any
such Master Servicer) and the Seller, pursuant to each Daily Report shall advise
the Purchaser daily of the amount of Collections received into the Master
Collection Account on such day with respect to the Receivables and the
allocations thereof as among the Series, the Split Payments, and the Revolving
Credit Facility. If the Seller or its agents or representatives shall at any
time
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receive any cash, checks or other instruments constituting Collections, such
recipient shall segregate such payment and hold such payment in trust for and in
a manner acceptable to the Purchaser and shall, promptly upon receipt (and in
any event within one Business Day following receipt), remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments of
transfer, to a Lock-Box Account or Series Specific Lock-Box Account, as the case
may be, or the Master Collection Account. The Seller hereby authorizes the
Purchaser (and its designees and assigns), and gives each of the Purchaser, such
designees and/or such assigns its irrevocable power of attorney, with full power
of substitution, which authorization shall be coupled with an interest, to take
any and all steps in the Seller's name and on behalf of the Seller, which steps
are necessary or desirable, in the reasonable determination of the Purchaser,
such designees and/or such assigns, to collect all amounts due under the
Transferred Assets, including, without limitation, endorsing the Seller's name
on checks and other instruments representing Collections and enforcing such
Receivables and the related Settlement Purchase Agreements.
(b) The Purchaser shall, following notification that collections of
any receivable or other intangible owed to the Seller, which is not a
Transferred Asset, have been deposited into the Lock-Box Accounts or Series
Specific Lock-Box Accounts, as the case may be, segregate all such collections
and, after such misapplied collections have been reasonably identified to the
Purchaser, the Purchaser shall turn over to the Seller, as applicable, all such
collections less all reasonable and appropriate out-of-pocket costs and
expenses, if any, incurred by the Purchaser in collecting such receivables.
SECTION 6.02. Servicing of Receivables. (a) From and after the
Purchase of any Receivable by the Purchaser from the Seller, the Purchaser (or
its designees or assignees) shall have the sole right to service, administer and
monitor the Receivables and the Seller shall cease to have any rights whatsoever
in connection with such Receivables constituting Transferred Assets. In
connection therewith, the Seller shall deliver all books and records relating to
the Receivables to the Purchaser (or its agent or assign as so designated by the
Purchaser) promptly after the Purchase thereof by the Purchaser, and shall take
such other action as shall be reasonably requested by the Purchaser (or its
agents or assigns) to further evidence such assignment or to assist in the
servicing, monitoring, collecting and administering the Receivables sold
hereunder.
(b) Grant of Power of Attorney. The Seller hereby authorizes the
Purchaser (and its designees and assigns), and gives each of the Purchaser and
such designees and/or assigns its irrevocable power of attorney, with full power
of substitution, which authorization shall be coupled with an interest, to take
any and all steps in the Seller's name and on behalf of the Seller, which steps
are necessary or desirable in the reasonable determination of the Purchaser,
such designees and/or assigns to endorse, negotiate, deposit or otherwise
realize on any Receivable or any writing of any kind in connection with any
Receivable or Transferred Asset.
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SECTION 6.03. Responsibilities of the Seller. Anything herein to the
contrary notwithstanding:
(a) Subject to the allocation of the obligations in respect of Split
Payments pursuant to Section 5.01(f), the Seller shall perform all of its
obligations under the Settlement Purchase Agreements related to the Receivables
sold or contributed by it hereunder with the same standard of care as it would
exercise for assets maintained for its own account, and the exercise by the
Purchaser (or any of its assignees) of its respective rights hereunder shall not
relieve the Seller from such obligations.
(b) The Purchaser and its assignees shall have no obligation or
liability with respect to any Receivable or related Settlement Purchase
Agreement, nor shall the Purchaser or any such assignee be obligated to perform
any of the obligations of the Seller thereunder.
(c) The Seller shall, upon the request of the Purchaser (or its
agents or assigns) deliver to the Purchaser, such agents and/or assigns, as
directed, all Records that evidence or relate to the Receivables and other
Purchased Assets or Contributed Assets conveyed to the Purchaser under this
Agreement.
SECTION 6.04. Further Action Evidencing Purchases. (a) The Seller
agrees that at any time and from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action that may be reasonably necessary to perfect, protect or more fully
evidence the Purchaser's and its assignees' respective interests in the
Transferred Assets, or to enable the Purchaser and/or such assignees (or any
agent or designee of any of the foregoing) to exercise or enforce any of their
respective rights hereunder. Without limiting the generality of the foregoing,
the Seller will (i) execute and file such financing or continuation statements,
or amendments thereto or assignments thereof, and such other instruments and
notices, as may be necessary or appropriate or as the Purchaser or its assignees
may reasonably request, and (ii) ▇▇▇▇ its master data processing records
evidencing such Receivables and related Settlement Purchase Agreements with a
legend indicating that such assets have been sold or transferred to the
Purchaser, and (iii) indicate on its financial statements that its Receivables
have been sold or transferred to the Purchaser pursuant to this Agreement.
(b) If the Seller fails to perform any of its agreements or
obligations under this Agreement, following expiration of any applicable cure
period, the Purchaser (or any assignee thereof) may (but shall not be required
to) perform, or cause performance of, such agreement or obligation, and the
reasonable expenses of the Purchaser (or any such assignee) incurred in
connection therewith shall be payable by the Seller upon the Purchaser's (or any
such assignee's) written demand therefor (which demand shall itemize such
expenses in reasonable detail).
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ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Indemnities by the Seller. Without limiting any other
rights which the Purchaser may have hereunder or under applicable law, but
without duplication, the Seller hereby agrees to indemnify the Purchaser and its
permitted successors and assigns and all officers, directors, agents and
employees of the foregoing (each of the foregoing Persons being individually
referred to herein as an "Indemnified Party") from and against any and all
damages, losses, claims, judgments, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements, awarded against or
incurred by any Indemnified Party relating to or resulting from or in connection
with any of the following (collectively, the "Indemnified Losses", and each an
"Indemnified Loss"), other than any such Indemnified Loss (x) constituting
recourse for Receivables which are uncollectible for credit reasons or (y) which
arise solely from the gross negligence or willful misconduct of the affected
Indemnified Party:
(i) the sale or transfer of any Noncomplying Receivable to the
Purchaser pursuant hereto;
(ii) reliance on any representation or warranty made in writing by
the Seller (or any of its officers) under or in connection with this
Agreement, any Seller Transfer Report or any "Monthly Report" (as defined
in the Credit Agreement and/or the Indenture, as applicable), or reliance
on any other information or report delivered by the Seller or by the
Master Servicer with respect to the Seller (to the extent based on
information provided by the Seller) pursuant hereto, which shall have been
false, incorrect or materially misleading in any respect when made (it
being agreed that the incorrectness of any such representation or warranty
or the determination that any such representation or warranty was
materially misleading, and the obligations of the Seller pursuant to this
clause (ii) resulting therefrom, shall in each case, be determined without
giving effect to any limitation on the "knowledge," "best of knowledge" or
other similar limitation on the knowledge of the Seller contained in any
such representation or warranty);
(iii) the failure by the Seller to comply with any term, provision
or covenant contained in this Agreement, or any agreement executed in
connection with this Agreement or with any applicable law, rule or
regulation with respect to any Receivable, the related Settlement Purchase
Agreement or the "Related Security" (as defined in the Credit Agreement),
or the nonconformity of any Receivable, the related Settlement Purchase
Agreement or the Related Security with any such applicable law, rule or
regulation;
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(iv) the failure to vest and maintain vested in the Purchaser or to
transfer to the Purchaser, legal and equitable title to, and first
priority perfected ownership of, the Receivables and other Transferred
Assets which are, or are purported to be, sold or otherwise transferred by
the Seller hereunder, free and clear of any Lien (other than Liens created
in favor of the Purchaser hereunder and Liens created under the other
Operative Documents);
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Receivables and other Transferred Assets which are, or are purported to
be, sold or otherwise transferred by the Seller hereunder, whether at the
time of any Purchase or at any subsequent time;
(vi) the failure by the Seller to be duly qualified to do business,
to be in good standing or to have filed appropriate fictitious or assumed
name registration documents in any jurisdiction;
(vii) the failure of the Seller to pay when due any sales taxes or
other governmental fees or charges imposed in connection with the transfer
of the Purchased Assets hereunder;
(viii) the failure of the Seller or any of its agents, employees or
representatives to remit to the Purchaser, Collections of Transferred
Assets remitted to the Seller or any such agent, employees or
representatives in accordance with the terms hereof;
(ix) the assignment by a Claimant or the Seller under a Settlement
Agreement of the rights to Scheduled Payments (or any portion thereof)
under a Settlement Purchase Agreement in contravention of an
anti-assignment provision in such Settlement Agreement that prohibits the
transfer of the rights to such Scheduled Payments (or any such thereof);
and
(x) any Indemnified Loss arising under a Receivable, the Settlement
Agreement underlying which was not the subject of a Qualified Assignment,
to the extent such Indemnified Loss would not have been incurred had such
Settlement Agreement been the subject of a Qualified Assignment (without
regard to whether there may have been a different Annuity Provider had
there been a Qualified Assignment and disregarding any rights against any
Person which would have been an Assignee had there been a Qualified
Assignment).
Any Indemnified Amounts payable under this Section 7.01 shall, be paid by the
Seller to the Purchaser within five (5) Business Days following the Purchaser's
written demand therefor, setting forth in reasonable detail the basis for such
demand. The agreements of the Seller
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contained in this Section 7.01 shall survive the Collection Date. In addition,
in no event shall Indemnified Losses include any consequential, special or
punitive damages. The provisions of this Section 7.01 shall survive the
termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Waivers; Amendments. No failure or delay on the part
of the Purchaser or the Seller (or any assignee thereof) in exercising any
power, right or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy
preclude any other further exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any provision of this
Agreement may be amended if, but only if, (a) such amendment is in writing and
is consented to by the Seller, the Purchaser, the Agent, the Issuer and the
Trustee and (b) the Trustee shall have received from each Rating Agency
confirmation that such amendment will not result in the downgrading or
withdrawal of the then current ratings of any Series.
SECTION 8.02. Notices. Except as provided below, all communications
and notices provided for hereunder shall be in writing and shall be given to the
other party at its address set forth below its name on the signature pages
hereto or at such other address as such party may hereafter specify for the
purposes of notice to such party. Each such notice or other communication shall
be effective (i) if given by mail, three (3) Business Days following such
posting, postage prepaid, U.S. certified or registered, (ii) if given by
overnight courier, one (1) Business Day after deposit thereof with a national
overnight courier service, or (iii) if given by any other means, when received
at the address specified on the signature pages hereof.
SECTION 8.03. Effectiveness; Binding Effect; Assignability. (a) This
Agreement shall become effective on the Closing Date and shall, from and after
such date, be binding upon and inure to the benefit of the Seller and the
Purchaser and their respective successors and permitted assigns. The Seller may
not assign any of its rights or delegate any of its duties hereunder without the
prior written consent of the Purchaser, the Agent, the Issuer and the Trustee.
No provision of this Agreement shall in any manner restrict the ability of the
Purchaser (or any Person claiming by or though the Purchaser as an assignee of
the Purchaser) to assign, participate, grant security interests in, or otherwise
transfer any of their rights or remedies hereunder.
(b) Without limiting the foregoing, the Seller hereby acknowledges
that, contemporaneously herewith, (i) the Purchaser is granting, assigning,
transferring and conveying to the Agent, for its benefit and for the benefit of
the Lenders under the Credit Agreement, a
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security interest in all of the Purchaser's right and title to and interest in,
among other things, the Transferred Assets and this Agreement; (ii) the
Purchaser is and may hereafter be selling, assigning transferring and conveying
to the Issuer, all of its right and title and interest in and under, among other
things, certain of the Transferred Assets and this Agreement to the extent
relating to any "Transferred Assets" as defined in the Issuer Purchase
Agreement; and (iii) the Issuer is granting, assigning, transferring and
conveying to the Trustee, for its benefit and for the benefit of the
"Noteholders" (as defined in the Indenture), and the Trustee's assignees, under
the Indenture, all of the Purchaser's right and title to and interest in and
under, among other things, the Transferred Assets and this Agreement to the
extent relating to any "Pledged Assets" (as defined in the Indenture), and that
each such grant, assignment, transfer or conveyance includes all of the
Purchaser's rights, remedies, powers and privileges, and all claims of the
Purchaser against the Seller, under or with respect to this Agreement (whether
arising pursuant to the terms of this Agreement or otherwise available at law or
in equity), including (x) the right of the Purchaser and the obligations of the
Seller hereunder and (y) the right, at any time, to give or withhold consents,
requests, notices, directions, approvals, demands, extensions or waivers under
or with respect to this Agreement or the obligations in respect of the Seller
hereunder to the same extent as the Purchaser may do, subject, however, in the
case of clauses (ii) and (iii) above, to the extent relating to the "Transferred
Assets" under the Issuer Purchase Agreement and/or the "Pledged Assets" under
the Indenture. The Seller hereby consents to such grants, sales, transfers,
assignments and conveyances described above and acknowledges and agrees that
each of (i) the Agent, as the assignee of the Purchaser for the benefit of the
Lenders, (ii) the Issuer, as assignee of the Purchaser under the Issuer Purchase
Agreement and (iii) the Trustee, as the holder of a security interest for the
benefit of the Noteholders and each of its assignees, shall be a third party
beneficiary of the rights of the Purchaser arising hereunder.
(c) The Seller hereby agrees to execute all agreements, instruments
and documents, and to take all other action, that the Purchaser, the Agent or
the Trustee reasonably determines is necessary or appropriate to evidence the
assignments described in clause (b) immediately above. To the extent that the
Purchaser has granted or grants powers of attorney to the Agent under the Credit
Agreement or to the Issuer or its assigns under the Issuer Purchase Agreement,
the Seller hereby grants a corresponding power of attorney on the same terms to
the Purchaser. The Seller hereby acknowledges and agrees that the Purchaser, in
all of its capacities, shall assign to the Agent for the benefit of the Lenders
and to the Issuer, and that the Issuer shall in turn assign to the Trustee for
the benefit of the Noteholders and each of its assignees, such powers of
attorney and other rights and interests granted by the Seller to the Purchaser
hereunder and agrees to cooperate fully with each of the Agent, the Issuer and
the Trustee in the exercise of such rights.
(d) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the Collection Date; provided, however, that (i)
the indemnification and payment provisions of Article VII and Section 8.05 and
(ii) the provisions of Sections 8.08 and 8.10, shall, in each case, be
continuing and shall survive any termination of this Agreement.
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SECTION 8.04. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE.
(b) EACH OF THE SELLER AND THE PURCHASER HEREBY WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE BETWEEN EITHER OF THEM ARISING OUT OF, CONNECTED WITH,
RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH
THIS AGREEMENT OR THE OTHER OPERATIVE DOCUMENTS.
SECTION 8.05. Costs and Expenses. In addition to the rights of
indemnification under Article VII hereof, the Seller agrees to pay the Purchaser
(and its agents' and assignees') within 30 days after demand all reasonable
out-of-pocket costs and expenses (including without limitation, reasonable
counsel fees and expenses) in connection with the enforcement of the covenants,
agreements, liabilities and obligations of the Seller under this Agreement.
SECTION 8.06. Execution in Counterparts; Severability. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 8.07. Purchase Termination. (a) The agreements of the Seller
to sell Receivables hereunder may be terminated at any time by the Seller by
giving written notice thereof to the Purchaser, the Agent, the Issuer and the
Trustee of the Seller's election to terminate this Agreement, in which event the
Purchase Termination Date shall thereafter occur on the date specified therefor
by the Seller in such notice, but in any event not less than 60 days after the
Trustee's receipt of such notice.
(b) Notwithstanding any such termination described under paragraph
(a) above, all other provisions of this Agreement shall remain in full force and
effect as provided in Section 8.03.
SECTION 8.08. No Proceedings. The Seller hereby agrees that it will
not institute against the Purchaser, or join any other Person in instituting
against the Purchaser, any proceeding of the type referred to in the definition
of "Insolvency Event" in the Credit Agreement, so long as there shall not have
elapsed one year plus one day since the last day on which any amounts owing
under the Notes of the last outstanding Series shall have been
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indefeasibly paid in full in cash. The foregoing shall limit the rights of the
Seller under any and all agreements it may have with the Purchaser but shall not
limit the right of the Seller to file any claim in or otherwise take any action
with respect to any insolvency proceeding that was instituted against the
Purchaser by any Person other than the Seller or any Affiliate thereof. The
provisions of this Section 8.08 shall survive the termination of this Agreement.
SECTION 8.09. Entire Agreement. This Agreement, together with the
other Operative Documents, including the exhibits and schedules hereto and
thereto, contains a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all previous oral statements and other
writings with respect thereto.
SECTION 8.10. Limitations on Liability. None of the members,
managers, partners, officers, employees, agents, shareholders, directors or
holders of limited liability company interests of or in (x) the Purchaser or the
Seller or (y) the general or limited partners of the Seller, past, present or
future, shall be under any liability to the Seller or the Purchaser,
respectively, any of their successors or assigns, or any other Person for any
action taken or for refraining from the taking of any action in such capacities
or otherwise pursuant to this Agreement or for any obligation or covenant under
this Agreement, it being understood that this Agreement and the obligations
created hereunder shall be, to the fullest extent permitted under applicable
law, with respect to the Seller, solely the limited partnership obligation of
the Seller and with respect to the Purchaser, solely the limited liability
company obligation of the Purchaser. The Seller, the Purchaser and any member,
manager, partner, officer, employee, agent, shareholder, director or holder of a
limited liability company interest of or in (x) the Seller or the Purchaser and
(y) any general or limited partner of the Seller, may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
(other than the Seller or any Affiliate thereof) respecting any matters arising
hereunder.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
▇. ▇. ▇▇▇▇▇▇▇▇▇ S.S.C. LIMITED
PARTNERSHIP
By: ▇.▇. ▇▇▇▇▇▇▇▇▇ Structured Settlement
Funding Corporation, its General Partner
By:
-----------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇▇▇ RECEIVABLES II LLC
By: ▇.▇. ▇▇▇▇▇▇▇▇▇ S.S.C. Limited Partnership,
a member
By: ▇.▇. ▇▇▇▇▇▇▇▇▇ Structured Settlement
Funding Corporation, its General Partner
By:
-----------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:____________________
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇