EXHIBIT 10.25
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PURCHASE AND SERVICING AGREEMENT
DATED AS OF DECEMBER 1, 1996
among
TNI FUNDING COMPANY I, L.L.C.,
as Issuer
and
TNI FUNDING I, INC.,
as Seller
and
TRANSMEDIA NETWORK INC.,
as Servicer
and
▇▇▇▇▇ ▇▇▇▇▇ ASSOCIATES, LTD.,
as Back-up Servicer
and
THE CHASE MANHATTAN BANK,
as Trustee
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................1
Section 1.01. Definitions.................................1
ARTICLE II PURCHASE OF CONTRACT ASSETS; CONSIDERATION AND
PAYMENT.........................................1
Section 2.01. Purchase of Contract Assets.................1
Section 2.02. Purchase Price..............................2
Section 2.03. Payment of Purchase Price...................3
Section 2.04. Purchase of Ineligible Contract Assets......3
Section 2.05. Chargebacks.................................4
ARTICLE III CONDITIONS TO PURCHASES OF CONTRACT ASSETS.......4
Section 3.01. Conditions Precedent to All of the
Issuer's Payments for Contract Assets.......4
Section 3.02. Condition Precedent to the Seller's
Obligations on Initial Purchase Date........6
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................6
Section 4.01. Representations and Warranties of the
Parties.....................................6
Section 4.02. Additional Representations of Transmedia
and the Seller.............................10
Section 4.03. Representations of Back-up Servicer........14
ARTICLE V COVENANTS.........................................15
Section 5.01. Affirmative Covenants of the Seller and
Servicer...................................15
Section 5.02. Negative Covenants of the Seller and
Servicer...................................22
Section 5.03. Negative Covenants of the Seller...........23
Section 5.04. Covenants of Back-up Servicer .............26
ARTICLE VI ADMINISTRATION AND SERVICING OF PURCHASED CONTRACT
ASSETS...........................................27
Section 6.01. Appointment of and Acceptance by the
Servicer of Servicing Obligations..........27
Section 6.02. Servicing Compensation.....................28
Section 6.03. Independent Public Accountant's Reports....28
Section 6.04. Compliance Statements......................29
Section 6.05. Collection Procedures......................29
Section 6.06. Daily Report...............................31
Section 6.07. Allocations and Applications of
Collections................................32
Section 6.08. Settlement Statement.......................32
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Section 6.09. Termination...............................33
Section 6.10. Limitation on Liability of the Seller
and Others................................33
Section 6.11. Servicer Resignation......................33
Section 6.12. Access to Certain Documentation and
Information Regarding the Contract
Assets....................................34
Section 6.13. Delegation of Duties......................34
Section 6.14. Responsibilities of the Seller............34
Section 6.15. Servicer Termination Notice...............34
Section 6.16. Successor Servicer........................34
Section 6.17. Appointment of Successor Servicer.........35
Section 6.18. Maintenance of Property; Insurance........37
Section 6.19. Duties of the Back-up Servicer............37
Section 6.20. Grant of License..........................37
ARTICLE VII PURCHASE TERMINATION EVENTS ....................38
Section 7.01. Purchase Termination Events................38
Section 7.02. Remedies...................................39
ARTICLE VIII INDEMNIFICATION................................40
Section 8.01. Indemnities by the Seller and the
Servicer...................................40
Section 8.02. Servicer Indemnification...................41
Section 8.03. Issuer Indemnification.....................41
ARTICLE IX THE SUBORDINATED NOTE; SELLER NOTES; CAPITAL
CONTRIBUTION.....................................41
Section 9.01. Subordinated Note .........................41
Section 9.02. Restrictions on Transfer of
Subordinated Note..........................43
ARTICLE X MISCELLANEOUS....................................43
Section 10.01. Amendments, etc...........................43
Section 10.02. Notices, etc..............................43
Section 10.03. No Waiver; Remedies ......................45
Section 10.04. Binding Effect............................45
Section 10.05. Governing Law ............................45
Section 10.06. Headings..................................45
Section 10.07. Reserved..................................45
Section 10.08. Acknowledgment of Assignment..............45
Section 10.09. Waiver of Jury Trial......................46
Section 10.10. Severability..............................46
Section 10.11. No Petition in Bankruptcy ................46
Section 10.12. Counterparts..............................46
Section 10.13. Third Party Beneficiaries.................46
Section 10.14. Jurisdiction; Consent to Service of
Process...................................46
Section 10.16. Confirmation of Intent....................47
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Section 10.17. Power of Attorney.........................47
Section 10.18. Collateral Agent Appointed
Attorney-in-Fact..........................47
EXHIBITS
Exhibit A - Form of Confirmation of Sale and Assignment
Exhibit B - Form of Settlement Statement
Exhibit C - Form of Daily Report
Exhibit D - Form of Subordinated Note
Exhibit E - Form of Contract
Exhibit F - Scope of Agreed-Upon Procedures
SCHEDULES
Schedule I - Contract Schedule
Schedule II - Trade Names
Schedule III - Bank Accounts and Post Office Boxes
Schedule IV - [Intentionally Omitted]
Schedule V - Cardmember Agreements
Schedule VI - [Intentionally Omitted]
Schedule VII - Computer Software
ANNEXES
Annex I - Glossary of Terms
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PURCHASE AND SERVICING AGREEMENT (the "AGREEMENT"), dated as of
December 1, 1996, among TNI FUNDING COMPANY I, L.L.C., a Delaware limited
liability company (the "ISSUER" ), TNI FUNDING I, INC., a Delaware special
purpose corporation (the "SELLER"), TRANSMEDIA NETWORK INC., a Delaware
corporation (the "SERVICER" or "TRANSMEDIA"), ▇▇▇▇▇ ▇▇▇▇▇ ASSOCIATES, LTD., a
New Jersey corporation (the "Back-up Servicer"), and THE CHASE MANHATTAN BANK, a
New York banking corporation (the "TRUSTEE").
WITNESSETH:
WHEREAS, the Issuer is in the business of purchasing certain assets and
issuing Notes secured by such assets;
WHEREAS, the Seller on the Closing Date has purchased certain assets
from Transmedia Restaurant Company Inc. and Transmedia Service Company Inc. (the
"INITIAL SELLERS") and will in the future purchase additional assets under the
purchase agreement between TNI Funding I, Inc., Transmedia and the Initial
Sellers dated as of December 1, 1996 (the "PURCHASE AGREEMENT");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged, the Issuer, the Seller
and the Servicer agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. As used in this Agreement, capitalized terms
used herein but not defined herein shall have the meanings assigned to such
terms in Annex I.
ARTICLE II
PURCHASE OF CONTRACT ASSETS; CONSIDERATION AND PAYMENT
SECTION 2.01. PURCHASE OF CONTRACT ASSETS. (a) The Seller hereby sells,
assigns, transfers and conveys to the Issuer on each Purchase Date on the terms
and subject to the conditions specifically set forth herein, all of its right,
title and interest, in, to and under (i) all rights to receive food and
beverages ("MEALS") or Meal credits (the "CREDITS") purchased by any Subsidiary
of Transmedia from any of the Assigned Restaurants pursuant to any Contract;
(ii) all rights of the Seller to, in and under any Contract with an Assigned
Restaurant; (iii) all rights of the Seller, whether now existing or hereafter
arising, under the Cardmember Agreements to authorize charges to and recover
payments from Cardmembers' Credit Card Accounts in connection with the purchase
of Meals by any Cardmember at any Assigned Restaurant (the "RECEIVABLES"); (iv)
all Recoveries; (v) all other accounts, contract
rights, chattel paper, instruments, Contract Files, general intangibles and
other obligations of any Restaurant with respect to any of the foregoing, now or
hereafter existing, whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and the right to payment of any
Receivables, Recoveries, Credits or other obligations of a Restaurant or any
Credit Card Company with respect to any of the foregoing; (vi) all rights in and
to all security agreements and other contracts securing or otherwise relating to
any of the foregoing; (vii) all guarantees, insurance and other agreements or
arrangements of whatever character from time to time supporting payment of any
of the foregoing; (viii) all rights and interest of the Seller under the
Purchase Agreement ((i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) are
collectively referred to as the "CONTRACT ASSETS"); and (ix) cash in the amount
of the Reserve Amount, if any.
(b) On each Purchase Date, all of the Seller's right, tide and interest
in and to all existing and all newly created Contract Assets relating to the
Assigned Restaurants shall be sold, assigned, transferred and conveyed to the
Issuer upon the delivery to the Collateral Agent (either electronically or on
paper) of the Daily Report on such date in accordance with Section 6.06.
(c) All sales of Contract Assets by the Seller hereunder shall be
without recourse to, or representation or warranty of any kind (express or
implied) by, the Seller, except as otherwise specifically provided herein.
(d) It is understood and agreed that no purchases of Contract Assets
hereunder shall occur after the Purchase Termination Date.
(e) On each Purchase Date, the Seller shall transmit to the Trustee via
electronic or paper transmission, or by such other means as may be agreeable to
the Issuer, the Trustee and the Majority Noteholders, the Daily Report, which
shall include the list of Contracts and Cardmember Agreements sold to the Issuer
and pledged to the Trustee pursuant to the Security Agreement on such date. The
electronic delivery by the Seller or made on the Seller's behalf of such Daily
Report shall be deemed conclusive evidence of an assignment by the Seller to the
Issuer of all of Seller's right, title and interest in and to the Cardmember
Agreements and Contracts listed in such Daily Report. On each Note Payment Date,
the Seller and the Issuer will confirm in writing the list of Contract Assets
sold to the Issuer pursuant to this Agreement by delivery to the Collateral
Agent of a Confirmation of Sale and Assignment in the form attached hereto as
Exhibit A.
SECTION 2.02. PURCHASE PRICE. The amount payable by the Issuer (the
"PURCHASE PRICE"), on the initial Purchase Date and on any Purchase Date
thereafter, for Contract Assets sold to the Issuer by the Seller on such date,
shall be equal to the aggregate of the Contract Prices of each Contract
constituting such Contract Assets not previously paid for by the Issuer, as
adjusted pursuant to Sections 2.04(a) and 2.05. On the Closing Date, the Seller
shall deposit, or cause to be deposited into the Reserve Account, cash in an
amount equal to the Reserve Amount, if any.
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SECTION 2.03. PAYMENT OF PURCHASE PRICE. (a) The Purchase Price for
Contract Assets shall be paid to the Seller in the manner provided below on the
Closing Date and each day thereafter that a Daily Report is prepared and
delivered to the Issuer in accordance with Section 6.06 (each a "PURCHASE
DATE"). The Purchase Price shall be paid by the Issuer to the Seller on the
initial Purchase Date in the form of cash and the Subordinated Note. On each
Purchase Date thereafter the Purchase Price shall be paid by the Issuer to the
Seller as follows:
(i) in cash, up to an amount equal to the lesser of (1) the
Purchase Price and (2) the Available Cash on such Purchase Date; and
(ii) to the extent that any portion of the Purchase Price
remains unpaid, by means of an addition to the principal amount of the
Subordinated Note.
(b) Unless otherwise specified herein, all payments under this
Agreement shall be made not later than the end of business on the date specified
therefor in lawful money of the United States of America in same day funds and
(i) if to the Seller, to the respective bank account designated in writing by
the Seller to the Issuer and (ii) if to the Issuer, to the Collateral Account.
Amounts not paid by the Seller when due under this Agreement shall bear interest
at a rate equal at all times to the lesser of (i) the Note Rate and (ii) the
maximum rate permitted by applicable law, payable on demand.
(c) Whenever any payment to be made under this Agreement shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day.
SECTION 2.04. PURCHASE OF INELIGIBLE CONTRACT ASSETS. (a) If at any
time it is determined that any portion of the Contracts constituting Contract
Assets was an Ineligible Contract Asset on its Purchase Date, (i) the Seller
shall be obligated to pay for the repurchase of such Purchased Contract Assets
affected directly or indirectly by such ineligibility on the next Purchase Date
and (ii) the Contract Price of such Ineligible Contract Assets as of the next
Purchase Date (the "REPURCHASE AMOUNT") shall be subtracted from the aggregate
Contract Prices of the Purchased Contract Assets appearing on the related Daily
Report but not previously paid for by the Issuer pursuant to Section 2.03 (to
the extent that such Repurchase Amount has not already been subtracted on the
related Daily Report in determining the cash Purchase Price of Purchased
Contract Assets previously paid for pursuant to Section 2.03). In the event that
the Repurchase Amount exceeds the aggregate Contract Prices of such unpaid-for
Purchased Contract Assets on such Daily Report, the Seller shall immediately pay
such excess in cash to the Issuer.
(b) The Issuer and the Seller agree that after payment of the
Repurchase Amount for Ineligible Contract Assets as provided in clause (a)
above, the Seller shall be entitled to all Collections received thereafter with
respect to such Ineligible Contract Assets, and such Contract Assets shall no
longer constitute Purchased Contract Assets for purposes of this Agreement.
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(c) Except as expressly set forth in this Agreement, the Seller shall
not have any right under this Agreement, by implication or otherwise, to
repurchase from the Issuer any Purchased Contract Assets or to rescind or
otherwise retroactively affect any purchase of any Purchased Contract Assets
after the Purchase Date relating thereto.
SECTION 2.05. CHARGEBACKS. (a) The Servicer, acting on behalf of the
Issuer, may accept chargebacks for full or partial credit or make a daily
adjustment in the Credits with respect to a Restaurant under a Contract (a
"CREDIT ADJUSTMENT"), PROVIDED, that such adjustment is permitted by and made in
accordance with the Restaurant Guidelines. Each Credit Adjustment (including any
adjustment required by any Requirements of Law) shall be made by the Servicer on
each Date of Processing.
(b) On each Daily Report, the Servicer, on behalf of the Issuer, shall
add the Credits corresponding to such Credit Adjustment (to the extent not added
pursuant to a prior Daily Report) to the Purchased Contract Assets appearing on
such Daily Report.
ARTICLE III
CONDITIONS TO PURCHASES OF CONTRACT ASSETS
SECTION 3.01. CONDITIONS PRECEDENT TO ALL OF THE ISSUER'S PAYMENTS FOR
CONTRACT ASSETS. The obligation of the Issuer to accept and pay for Contract
Assets on each Purchase Date (including the initial Purchase Date) from Seller
shall be subject to the conditions precedent that on such Purchase Date:
(a) The following statements shall be true (and delivery by
the Seller or the Servicer of the Daily Report and the acceptance by
the Seller of the Purchase Price for any Contract Assets on any
Purchase Date shall constitute a representation and warranty by the
Seller that on such Purchase Date such statements are true):
(i) the representations and warranties of the Seller,
the Servicer and the Back-up Servicer contained in Sections
4.01, 4.02 and 4.03 shall be true and correct in all material
respects on and as of such Purchase Date as though made on and
as of such date (except to the extent that such
representations or warranties expressly relate to an earlier
date, in which case such representations or warranties shall
be true and correct in all material respects as of such
earlier date);
(ii) no Servicer Termination Event, Potential
Purchase Termination Event or Purchase Termination Event shall
have occurred and be continuing; and
(iii) all of the Eligibility Criteria shall have been
satisfied for all Purchased Contract Assets transferred on
such date.
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(b) No material change shall have occurred after the initial
Purchase Date with respect to the Seller's and the Servicer's systems,
computer programs, related materials, computer tapes, disks and
cassettes, procedures and record keeping relating to and required for
the collection of the Purchased Contract Assets by the Servicer which
makes them not sufficient and satisfactory in order to permit the
purchase and administration and collection of the Purchased Contract
Assets by the Servicer in accordance with the terms and intent of this
Agreement.
(c) The Seller shall have received and delivered a copy of
such other approvals, opinions or documents as the Issuer, Trustee,
Collateral Agent or any Initial Noteholder may reasonably request.
(d) The Seller and the Servicer shall have complied in all
material respects with all the covenants and satisfied all its
obligations under this Agreement required to be complied with or
satisfied as of such date.
(e) On or prior to the initial Purchase Date the Seller and
the Servicer shall have delivered to the Issuer:
(1) a copy of duly adopted resolutions of the Board
of Directors of the Seller and the Servicer, as applicable,
authorizing this Agreement, the documents to be delivered
hereunder and the transactions contemplated hereby, certified
by an officer of the Seller or the Servicer, as applicable;
and
(2) a duly executed certificate of an officer of the
Seller or the Servicer, as applicable, certifying the names
and true signatures of the Person authorized on the behalf to
sign this Agreement and the other documents to be delivered by
the Seller or the Servicer hereunder;
(f) On or prior to each Purchase Date, the Seller and the
Servicer shall have delivered to the Issuer:
(1) a supplement to Schedule I hereto identifying
Contracts being assigned to the Issuer on such day and
additional Assigned Restaurants whose Credits and Contracts
have not previously been sold to the Issuer;
(2) a supplement to Schedule V hereto, identifying
the Cardmember Agreements which are being assigned on such
Purchase Date;
(3) a Daily Report substantially in the form of
Exhibit B hereto, which Daily Report will identify, among
other things, (i) the aggregate Contract Price of all existing
and newly created Contract Assets relating to the Contract
Assets to be sold to the Issuer by the Seller on such date and
not previously paid for by the Issuer, (ii) the aggregate
amount of unfunded liabilities under any Contract Assets to be
sold to the Issuer by the Seller on such date, (iii) the
aggregate Repurchase Amount for such date, if any, (iv) the
aggregate Returned Credits
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for such date, if any, (v) the aggregate amount of cash to
be paid to Seller on such date, and (vi) the aggregate
addition to the principal amount of the Subordinated Note on
such date.
(4) all Contract Files, in whatever form, including
an original counterpart of the Contracts constituting part of
the Purchased Contract Assets.
SECTION 3.02. CONDITION PRECEDENT TO THE SELLER'S OBLIGATIONS ON
INITIAL PURCHASE DATE. The obligations of the Seller on the initial Purchase
Date shall be subject to the condition precedent that the Seller shall have
received on or before such Purchase Date the following, each (unless otherwise
indicated) dated the day of such Purchase Date and in form and substance
satisfactory to the Seller:
(a) a copy of duly adopted resolutions of each Member of the
Issuer authorizing this Agreement, the documents to be delivered by the
Issuer hereunder and the transactions contemplated hereby, certified by
an officer of such Member of the Issuer; and
(b) a duly executed certificate of an officer of the
Independent Member of the Issuer certifying the names and true
signatures of the Person authorized on the Issuer's behalf to sign this
Agreement and the other documents to be delivered by the Issuer
hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE PARTIES. The
Issuer, the Servicer and the Seller each represents and warrants as to itself,
as follows:
(a) ORGANIZATION AND GOOD STANDING. (1) As to the Issuer, that
it (i) is a limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
formation and is duly qualified as a foreign company and is in good
standing in each jurisdiction in which the failure to so qualify would
have a material adverse effect on its condition, operations or
properties, (ii) has the requisite power and authority to execute,
deliver and perform its obligations under and effect the transactions
contemplated by this Agreement and (iii) has all requisite power and
authority and all necessary leases and permits and the legal right to
own, pledge, mortgage and operate its properties, and to conduct its
business as now or currently proposed to be conducted.
(2) As to the Seller, that it (i) is a special
purpose corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of itS
incorporation and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on
its condition (financial or otherwise),
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operations, properties or prospects, (ii) has the
requisite corporate power and authority to execute, deliver
and perform its obligations under and effect the transactions
contemplated by this Agreement and (iii) has all requisite
corporate power and authority and all necessary leases and
permits and the legal right to own, pledge, mortgage and
operate its properties, and to conduct its business.
(3) As to the Servicer, that it (i) is a corporation
duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and is duly
qualified as a foreign corporation and is in good standing in
each jurisdiction in which the failure to so qualify would
have a material adverse effect on its condition (financial or
otherwise), operations, properties or prospects, (ii) has the
requisite corporate power and authority to execute, deliver
and perform its obligations under and effect the transactions
contemplated by this Agreement and (iii) has all requisite
corporate power and authority and all necessary leases and
permits and the legal right to own, pledge, mortgage and
operate its properties, and to conduct its business.
(b) DUE AUTHORIZATION AND NO CONFLICT. The execution, delivery
and performance by it of this Agreement, and all instruments and
documents to which it is a party and to be delivered hereunder by it,
and the transactions contemplated hereby and thereby, (i) are within
its powers or corporate powers (as the case may be), have been duly
authorized by all necessary action or corporate action (as the case may
be), including the consent of shareholders or members where required,
and do not (A) contravene its charter, by-laws or other organizational
documents, (B) violate any law or regulation (including, without
limitation, Regulations G, T, U or X) or any order or decree of any
court or governmental instrumentality the effect of which would be to
cause a Material Adverse Change, (C) conflict with or result in the
breach of, or constitute a default under, any indenture, mortgage or
deed of trust enforceable against it or any lease, agreement or other
instrument binding on or affecting it or any of its Subsidiaries or any
of its properties which conflict, breach or default would have or could
reasonably be expected to have a material adverse effect on the rights
of any of the Secured Parties under the Transaction Documents or (D)
result in or require the creation or imposition of any Lien upon any of
its property, including without limitation pursuant to any agreement or
instrument referred to in clause (C) above, EXCEPT as created or
imposed hereunder or under the Security Agreement, and no transaction
contemplated hereby requires compliance on its part with any bulk sales
act or similar law, and (ii) do not require the consent, authorization
by, approval of, notice to or filing or registration with, any
governmental body, agency, authority, regulatory body or any other
Person other than those which have been obtained. This Agreement and
the other Transaction Documents to which it is a party have been
validly executed and delivered by it and this Agreement and the other
Transaction Documents to which it is a party constitute its legal,
valid and binding obligation, enforceable against it in accordance with
its terms subject to general principles of equity and subject to
bankruptcy, insolvency,
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reorganization, moratorium and similar laws now or hereafter in
effect relating to creditors' rights generally.
(c) NO PROCEEDINGS. There is no action, suit, investigation,
injunctive order or proceeding pending or, to its knowledge, threatened
against or affecting it or any of its Subsidiaries before any court,
governmental agency or arbitrator that (i) is reasonably likely to be
determined adversely to it and that, if so decided, would adversely
affect its condition (financial or otherwise), operations, properties
or prospects, or (ii) that purports to affect the legality, validity or
enforceability of this Agreement, any of the other Transaction
Documents or the transactions contemplated hereby or thereby. None of
the Issuer, Transmedia or any Subsidiary of Transmedia is and, by
entering into this Agreement and performing the transactions
contemplated herein, they will not be in default with respect to any
injunction, writ or order of any court, governmental authority or
agency or arbitration board or tribunal.
(d) Transmedia, the Seller and the Issuer have not concealed
and will not conceal from any interested party any transfers
contemplated by the Transactions. Transmedia, the Seller and the Issuer
have not themselves removed or concealed, and will not themselves
remove or conceal, from creditors any of their assets and have not
participated and will not participate in removing or concealing the
assets of any other entity. Seller does not transfer the Contract Asset
with the intent to hinder, delay or defraud any person or entity.
(e) The sole principal business of the Issuer is primarily to
(i) acquire and hold the Contract Assets, and (ii) to issue and pay the
Notes, which business is not the sole principal business of Transmedia,
the Initial Sellers or the Seller.
(f) Transmedia, the Initial Sellers, the Seller and the Issuer
can and do independently conduct their respective business activities
without the aid of any of the other entities.
(g) Transmedia and the Seller are not primarily or secondarily
liable for the Issuer's debts, whether by guarantee, agreement to
purchase assets, agreement to maintain the solvency of the Issuer or
otherwise, except as provided in Section 2.04 of this Agreement, and
the Issuer is not primarily or secondarily liable for Transmedia's or
any of its Affiliates' debts, whether by guarantee, agreement to
purchase assets, agreement to maintain the solvency of Transmedia or
any of its Affiliates or otherwise.
(h) The Issuer does not finance the ongoing operations of
Transmedia or any of its Affiliates, and without limiting the
generality of the foregoing, does not pay and is not liable to pay
salaries, expenses or losses of Transmedia or any of its Affiliates,
and Transmedia and the Seller do not finance the ongoing operations of
the Issuer, and without limiting the foregoing, do not pay and are not
liable to pay salaries, expenses or losses of the Issuer, except for
advances as provided in Section 6.05 of this
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Agreement and certain indemnities set forth in Sections 8.01 and
8.02 of this Agreement.
(i) Transmedia, the Initial Sellers, the Seller and the Issuer
do not and will not maintain joint bank or depository accounts to which
any of the other entities has independent access.
(j) Transmedia, the Initial Sellers, the Seller and the Issuer
do not and will not pool or commingle any of their respective funds
with the funds of any of the other entities, and their individual
assets are and will be segregated.
(k) Transmedia, the Initial Sellers, the Seller and the Issuer
and their respective assets are and will be maintained in such a manner
that it will not be difficult or costly to segregate, ascertain or
otherwise identify their respective individual assets.
(l) Transmedia's and the Seller's books of account and
official corporate records have been and will be separately maintained
from those of the Issuer, and the Issuer's and the Initial Sellers'
books of account and official corporate records will be separately
maintained from those of Transmedia and any of Transmedia's Affiliates.
(m) The resolutions, agreements and other instruments
underlying the Transactions will be continuously maintained by the
Issuer, Transmedia and the Seller as official corporate records.
(n) The Issuer does not refer and has not referred to itself
as a "department" or "division" of Transmedia or any of Transmedia's
Affiliates. Transmedia and the Seller do not refer and have not
referred to the Issuer or the Seller as a "department" or "division" of
Transmedia or any Affiliate of Transmedia.
(o) The creditors of the Issuer are not substantially similar
to the creditors of Transmedia or the Seller.
(p) Transmedia, the Seller and the Issuer have not taken any
action to effect a merger or a consolidation of the Issuer or the
Seller with Transmedia or any affiliate of Transmedia.
(q) The Issuer, the Initial Sellers, Transmedia and the Seller
all have separate telephone numbers and mailing addresses and do not
occupy common office space.
(r) All transactions between or among Transmedia, the Initial
Sellers, the Seller and the Issuer are and will be fully and separately
documented and will reflect arm's-length transactions. These
transactions are and will be undertaken in good faith by the respective
entities for their BONA FIDE business purposes.
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(s) Transmedia, the Seller and the Issuer represent that all
the transfers of the Contract Assets will occur only pursuant to the
Transaction Documents, which fully document the relationships and the
expectations of the parties thereto. There are and will be no other
agreements between or among Transmedia, the Initial Sellers, TNI, the
Issuer, the Trustee or the Noteholders relating to the Contract Assets
or the Tradenames, other than the Transaction Documents and the
documents referred to therein. The Transactions reflect BONA FIDE
transactions to be undertaken in good faith for legitimate business
purposes.
(t) Transmedia and the Seller acknowledge that the Issuer is
entering into the Transactions in reliance on the others' identities as
separate, independent and distinct legal entities, and that the
Noteholders are entering into the Transactions based on the separate
legal identity, and limited purpose nature, of the Issuer and the
Seller.
(u) Each of Transmedia, the Seller and the Issuer has complied
with all formalities required by Delaware law, including, without
limitation, in the case of the Seller and the Issuer, the holding of
board of directors' meetings and stockholders' meetings.
(v) Each of Transmedia, the Seller and the Issuer has and will
conduct its business solely in its own respective name and in such a
separate manner as not to mislead others with whom it is dealing as to
its identity. All oral and written communications, including, without
limitation, letters, invoices, purchase orders, contracts, statements,
and applications relating to the Issuer or the Seller, are made solely
in the name of the Issuer or the Seller, respectively, and not in the
name of Transmedia or any Affiliate of Transmedia. Likewise, all oral
and written communications, including, without limitation, letters,
invoices, purchase orders, contracts, statements, and applications
relating to Transmedia are made solely in the name of Transmedia and
not in the name of the Issuer.
(w) Transmedia and the Seller cannot, do not and will not
exercise control over the decisions of the Issuer with respect to its
daily business and affairs. The Issuer cannot, does not and will not
exercise control over the decisions of Transmedia or the Seller with
respect to their daily business and affairs.
(x) Each of Servicer, Issuer and Seller do not and will not
make any payments to each other in connection with the Contract Assets
or the Tradenames, except pursuant to the Transaction Documents.
(y) Each of Servicer, Issuer and Seller do not and will not
receive any payments in connection with the Contract Assets or the
Tradenames, except pursuant to the Transaction Documents.
SECTION 4.02. ADDITIONAL REPRESENTATIONS OF TRANSMEDIA AND THE SELLER.
The Seller, with respect to itself and the Contract Assets sold hereunder, and
Transmedia, with respect
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to itself, the Seller and such Contract Assets, each additionally represents
and warrants as follows:
(a) ELIGIBLE CONTRACT ASSETS. All Contract Assets sold by the
Seller hereunder is, at its respective Purchase Date, Eligible Contract
Assets.
(b) SALE OF CONTRACT ASSETS. On the initial Purchase Date and
on each Purchase Date thereafter, the Seller is the sole legal and
beneficial owner of the Contract Assets being sold by it. Upon the sale
of the Purchased Contract Assets by the Seller, the Issuer will become
the sole legal and beneficial owner of the Purchased Contract Assets
and the Collections with respect thereto, free and clear of any Liens,
and no effective financing statement or other instrument similar in
effect covering all or any part of such Purchased Contract Assets or
Collections with respect thereto will at such time be on file in any
filing or recording office except such as have been filed in favor of
the Issuer in accordance with this Agreement, in favor of the
Collateral Agent in accordance with the terms of the Security Agreement
or with respect to which the Collateral Agent has received effective
UCC termination statements.
(c) FINANCIAL STATEMENTS. Any financial statements delivered
pursuant hereto or in connection with the transactions contemplated
hereby, taken as a whole and in light of the circumstances in which
made, at the time so furnished contained no untrue statement of a
material fact and did not omit to state a material fact necessary to
make such financial statements not misleading.
(d) LOCATION OF OFFICE AND RECORDS. The chief place of
business and chief executive office of the Seller is located at the
address listed in Section 10.02, and the office where the Seller keeps
all its original books, records and documents evidencing Purchased
Contract Assets is located at such address.
(e) TRADE NAMES. Set forth in Schedule II (which shall be
delivered prior to the Closing Date) is a complete and accurate list of
the trade names of, or licensed by, the Seller for the six-year period
preceding and including the date of this Agreement.
(f) FINANCIAL STATEMENTS. The Seller has heretofore furnished
to the Issuer copies of the audited consolidated financial statements
of Transmedia and its consolidated Subsidiaries for the fiscal year
ended September 30, 1995. Such financial statements present, and each
financial statement presented and delivered pursuant to Sections
12(e)(2) and (3) of the Security Agreement will present fairly in all
material respects the financial condition and results of operations of
Transmedia and its consolidated Subsidiaries as of such dates and for
such periods; such balance sheets and the notes thereto disclose all
liabilities, direct or contingent, of Transmedia and its consolidated
Subsidiaries as of the dates thereof required to be disclosed by GAAP
and such financial statements were prepared in accordance with GAAP
applied on a consistent basis.
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(g) ACCURACY OF INFORMATION. Each Daily Report and Settlement
Statement prepared by the Seller or the Servicer, each exhibit,
financial statement, book, record, report or other document and any
other information furnished at any time by the Seller or the Servicer
to the Issuer, the Collateral Agent, the Trustee or the Noteholders or
in connection with this Agreement as of its date and as of the date so
furnished, will be accurate in all material respects and will not
contain any material misstatement of fact or omit to state a material
fact or any fact necessary to make the statements contained therein not
misleading.
(h) NO CONSENT. No action, authorization, qualification,
license, permit, consent or approval of, registration or filing with or
any other action by any Governmental Authority is or will be required
in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement by the Seller, the Servicer or the Issuer, except such as
have been made or obtained and are in full force and effect.
(i) UCC CLASSIFICATION. As to each Contract, each of the
Credits, the rights under the Contracts, the rights under the
Cardmember Agreements to authorize charges and recover payments from
Cardmembers' Credit Card Accounts in connection with the purchase of
Meals by a Cardmember at an Assigned Restaurant; rights in and to
security agreements securing or otherwise relating to any of the
foregoing, the rights and interests of the Purchaser under the Purchase
Agreement and the rights and interests of the Issuer in the Purchase
and Servicing Agreement; and the tradenames, service marks and
trademarks transferred to TNI and licensed to the Issuer constitute an
"account" or "general intangible" within the meaning of Section 9-106
of the UCC as in effect in the State of Florida.
(j) NO ADVERSE CHANGE. No Material Adverse Change in the
business, assets, operations, prospects or conditions, financial or
otherwise, of the Seller or Servicer has occurred from September 30,
1995.
(k) COMPUTER HARDWARE AND SOFTWARE. All of the computer
hardware and software necessary to collect the Contract Assets is
listed on Schedule VII.
(l) CONTRACT SCHEDULE. On the Closing Date, the Contract
Schedule lists all Contracts purchased by the Issuer as of the initial
Purchase Date.
(m) NO DEFAULTS. No Potential Purchase Termination Event,
Purchase Termination Event, Servicer Termination Event, Early
Amortization Event or Potential Early Amortization Event has occurred
or is occurring or, with the giving of notice, passage of time, or
both, would occur.
(n) USE OF PROCEEDS. None of the transactions contemplated
herein (including, without limitation thereof, the use of the proceeds
from the sale of the Purchased Contract Assets) will violate or result
in a violation of Section 7 of the
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Securities Exchange Act of 1934, as amended, or any regulations
issued pursuant thereto, including, without limitation,
Regulation U.
(o) CAPITAL OF THE SELLER. At and immediately after the
Closing Date, the Seller will be adequately capitalized to conduct its
business and affairs as a going concern, considering the size and
nature of its business and intended purposes; be solvent; and be able
to pay its debts as they come due. At and immediately after the Closing
Date, as a result, the Seller will be able to survive as a stand alone
entity, independent of financial assistance of any Person.
(p) RESTRICTIONS ON SELLER. Neither the Seller nor the
Servicer is a party to any contract or agreement, or subject to any
charter or other corporate restriction, which, individually or in the
aggregate, materially and adversely affects its business.
(q) NO OTHER EXISTING CREDITS. Except for the Initial Sellers
and the Seller, no Subsidiary of Transmedia has acquired any Credits
from any of the Assigned Restaurants.
(r) NO OTHER AGREEMENTS WITH CARDMEMBERS. Except for rights of
the Initial Sellers and the Seller (certain of which rights are being
transferred to the Issuer hereunder) no Subsidiary of Transmedia has
any rights under any agreements with any Cardmember to authorize
charges to and recover payments from Cardmembers' Credit Card Accounts
in connection with the purchase of Meals by any Cardmember at any
Assigned Restaurant.
(s) NO CONTRACTS WITH AFFILIATES. No Restaurant is an
Affiliate of Seller, Transmedia or Issuer or any officer or director of
Transmedia or any Affiliate of Transmedia.
(t) ALL CONTRACTS OF ASSIGNED RESTAURANTS SOLD TO ISSUER. On
each Purchase Date, the Contract Assets included in making the
calculations set forth in such Daily Report includes all Credits
purchased by any of Transmedia's Subsidiaries from each of the Assigned
Restaurants on or prior to such Purchase Date.
(u) FAIR CONSIDERATION. The consideration to be received by
the Seller, in exchange for each transfer of Contracts and other
Contract Assets (including the right to receive all Collections due or
to become due thereunder or in respect thereto), is fair consideration
having value reasonably equivalent to or in excess of the value of the
assets being transferred by it.
(v) REAL PROPERTY. No Contracts represent a debt obligation
(including participations or certificates of beneficial ownership
therein) that is principally secured, directly or indirectly, by an
interest in real property.
(w) The Seller has not made and will not make any untrue
statement of a material fact or omitted to state a material fact
necessary to make any statement not
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misleading and has not provided any document to the Initial Purchasers
or the Rating Agency which contains any untrue statement of a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
SECTION 4.03. REPRESENTATIONS OF BACK-UP SERVICER. The Back-up Servicer
makes the following representations and warranties as of the date hereof and as
of each Purchase Date:
(a) The Back-up Servicer has been duly organized and is
validly existing as a Delaware corporation in good standing under the
laws of its state of incorporation, with power and authority to own its
properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted.
(b) The Back-up Servicer has the power and authority to
execute and deliver this Agreement and to carry out its terms; and the
execution, delivery, and performance of this Agreement have been duly
authorized by the Back-up Servicer by all necessary corporate action.
(c) This Agreement constitutes a legal, valid, and binding
obligation of the Back-up Servicer enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights in general and by general principles
of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law.
(d) The consummation of the transactions contemplated by this
Agreement, and the fulfillment of the terms hereof shall not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of the Back-up Servicer, or
any indenture, agreement, or other instrument to which the Back-up
Servicer is a party or by which it shall be bound; nor result in the
creation or imposition of any lien upon any of its properties pursuant
to the terms of any such indenture, agreement, or other instrument; nor
violate any law or any order, rule, or regulation applicable to the
Back-up Servicer of any court or of any Federal or state regulatory
body, administrative agency, or other governmental instrumentality
having jurisdiction over the Back-up Servicer or its properties.
(e) There are no proceedings or investigations pending or, to
the Back-up Servicer's best knowledge, threatened before any court,
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Back-up Servicer or its
properties (i) asserting the invalidity of this Agreement, (ii) seeking
to prevent the consummation of any of the transactions contemplated by
this Agreement, (iii) seeking any determination or ruling that might
materially and adversely affect the ability of the Back-up Servicer to
perform its obligations under, or the validity or enforceability of,
this Agreement.
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(f) All approvals, authorizations, consents, orders or other
actions of any Person, corporation or other organization, or of any
court, governmental agency or body or official, required in connection
with the execution and delivery of this Agreement and the performance
of the duties and obligations hereunder by the Back-up Servicer have
been taken or obtained on or prior to the date hereof.
(g) No Restaurant is an Affiliate of the Back-up Servicer or
any officer or director of the Back-up Servicer or any Affiliate of the
Back-up Servicer.
ARTICLE V
COVENANTS
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE SELLER AND SERVICER. So long
as the Issuer or the Collateral Agent shall have any interest in any Purchased
Contract Assets, each of the Seller and the Servicer shall, unless the Issuer
and the Collateral Agent acting at the direction of the Trustee acting at the
direction of the Majority Noteholders otherwise consent in writing:
(a) FINANCIAL STATEMENTS, REPORTS, ETC. Deliver or cause to be
delivered to the Issuer, the Collateral Agent, the Trustee and each of
the Noteholders:
(i) as soon as possible but not later than 90 days
after the end of each fiscal year, the Servicer's consolidated
balance sheet and related statements of income and cash flows,
showing the financial condition of the Servicer and its
consolidated Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of its
consolidated Subsidiaries during such year, all audited by
independent public accountants of recognized national standing
reasonably acceptable to the Majority Noteholders and
accompanied by an opinion of such accountants (which shall not
be qualified in any material respect other than as may be
approved by the Collateral Agent and the Trustee acting at the
direction of the Majority Noteholders) to the effect that such
consolidated financial statements fairly present the financial
condition and results of operations of it and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(ii) as soon as possible but not later than 45 days
after the end of each of the first three fiscal quarters, the
Servicer's unaudited consolidated balance sheets and related
statements of income and cash flows, showing the financial
condition of the Servicer and its consolidated Subsidiaries as
of the close of such fiscal quarter and the results of its
operations and the operations of its consolidated Subsidiaries
during such fiscal quarter and the then elapsed portion of
such fiscal year, all certified by a Financial Officer as
fairly presenting the financial condition and results of
operations of it and its consolidated Subsidiaries on a
consolidated and consolidating basis in accordance with GAAP
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consistently applied, subject to normal year-end audit
adjustments without GAAP footnotes;
(iii) concurrently with any delivery of financial
statements under (i) and (ii) above, a certificate of a
Financial Officer of each of the Seller and the Servicer
certifying such statements and certifying that no Purchase
Termination Event or Potential Purchase Termination Event has
occurred, or, if such a Purchase Termination Event or
Potential Purchase Termination Event has occurred, specifying
the nature and extent thereof and any corrective action taken
or proposed to be taken with respect thereto;
(iv) concurrently with any delivery of financial
statements under (i) and (ii) above, a list of the Cardmember
Rebate options together with the number of Cardmembers
entitled to each Cardmember Rebate;
(v) promptly after the same are available, copies of
each annual report, proxy or financial statement or other
report or communication, if any, sent to the stockholders of
Transmedia generally and copies of all annual, regular,
periodic and special reports and registration statements which
Transmedia may file or be required to file with the Securities
and Exchange Commission under Sections 13 and 15(d) of the
Securities Exchange Act of 1934, as amended;
(vi) promptly after the commencement thereof, notice
of any action, suit and proceeding before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, against Transmedia or
any of its Subsidiaries, (A) which, if determined adversely to
Transmedia or such Subsidiary, would have a Materially Adverse
Effect, or (B) commenced by any creditor or lessor under any
written credit agreement with respect to borrowed money or
material lease which asserts a default thereunder on the part
of Transmedia or any of its Subsidiaries;
(vii) promptly upon the filing thereof and at any
time upon the reasonable request of the Issuer, the Trustee,
the Collateral Agent or any Noteholder, permit such Person the
opportunity to review copies of all reports, including annual
reports, and notices which Transmedia or any Subsidiary files
with or receives from the PBGC or the U.S. Department of Labor
under ERISA; and as soon as practicable and in any event
within fifteen (15) days after Transmedia or any of its
Subsidiaries knows or has reason tO know that any Reportable
Event or Prohibited Transaction has occurred with respect to
any Plan or that the PBGC or Transmedia or any such Subsidiary
has instituted or will institute proceedings under Title IV of
ERISA to terminate any Plan, Transmedia will deliver to the
Issuer, the Trustee, the Collateral Agent and each Noteholder
a certificate of the President, any Vice President or a
Financial Officer setting forth details as to such Reportable
Event or Prohibited Transaction or Plan termination and the
action it proposes to take with respect thereto;
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(viii) promptly upon receipt thereof, copies of any
reports or management letters relating to the internal
financial controls and procedures delivered to Transmedia or
any of its Subsidiaries by any independent certified public
accountant in connection with examination of the financial
statements of Transmedia or any such Subsidiary; and
(ix) such additional information as the Issuer, the
Trustee, the Collateral Agent or any Noteholder may reasonably
request concerning Transmedia and its Subsidiaries.
If at any time Transmedia is not the Servicer, Transmedia shall have
the same obligation to provide reports as the Servicer under this Section
5.01(a).
(b) COMPLIANCE WITH LAWS, ETC. Comply in all material respects
with all applicable laws, rules, regulations, directions of any
Governmental Authority and orders applicable to the Purchased Contract
Assets, including, without limitation, rules and regulations relating
to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy, where
failure to so comply could reasonably be expected to have an adverse
impact on the amount of Collections thereunder; PROVIDED, HOWEVER, that
it may contest any act, regulation, order, decree or direction in any
reasonable manner which shall not materially and adversely affect the
rights of the Issuer and the Collateral Agent in the Purchased Contract
Assets. It will comply, in all material respects, with its obligations
under the Contracts with Restaurants relating to the Purchased Contract
Assets.
(c) PRESERVATION OF CORPORATE EXISTENCE. Do or cause to be
done all things necessary (i) to preserve, renew and keep in full force
and effect its legal existence and (ii) to maintain such legal
existence separate from that of the Issuer and of the Servicer.
(d) INSPECTION RIGHTS. At any reasonable time during normal
business hours and from time to time permit (i)(A) each of the Issuer,
the Trustee and the Collateral Agent or any Noteholder or any of its
agents, representatives or assignees pursuant to the Security
Agreement, to examine and make copies of and abstracts from the
records, books of account and documents (including, without limitation,
computer tapes and disks) of the Seller and the Servicer relating to
the Purchased Contract Assets hereunder (PROVIDED that so long as no
Early Amortization Event or Potential Early Amortization Event has
occurred and is continuing, such assignees shall give at least two
Business Days' notice prior to any examination) and (B) the Issuer, the
Collateral Agent or the Trustee or any Noteholder or any of their
agents or representatives following the termination of the appointment
of Transmedia as Servicer with respect to the Purchased Contract
Assets, to be present at the offices and properties of the Seller and
the Servicer to administer and control the collection of the Purchased
Contract Assets and (ii) each of the Issuer, the Trustee and the
Collateral Agent or any Noteholder or any of its agents,
representatives or assignees pursuant to the Security Agreement, to
visit the properties of the Seller and the Servicer for the
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purpose of determining compliance under the Transaction Documents and
examining such records, books of account and documents, and to discuss
the affairs, finances and accounts of the Seller and the Servicer
relating to the Purchased Contract Assets or the Seller's or the
Servicer's performance hereunder with any of its senior officers or
directors and with its independent certified public accountants and
consultants (PROVIDED that so long as no Early Amortization Event or
Potential Early Amortization Event has occurred and is continuing, such
assignees shall give at least two Business Days' notice prior to any
visit).
(e) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and
implement, or cause to be maintained and implemented, administrative
and operating procedures reasonably necessary or advisable for the
transfer, administration, servicing and collection of amounts owing on
all Purchased Contract Assets, and, until delivery to the Issuer, keep
and maintain, or cause to be kept and maintained, all documents, books,
records and other information reasonably necessary or advisable for the
transfer, administration, servicing and collection of amounts owing on
all such Purchased Contract Assets.
(f) LOCATION OF RECORDS. Keep its chief place of business and
chief executive office and the offices where it keeps the records
concerning Purchased Contract Assets and all underlying Contracts (and
all original documents relating thereto) at the location specified in
Section 4.02(d), or upon 30 days' prior written notice to the Issuer,
the Trustee and the Collateral Agent, at such other locations in a
jurisdiction where all action required by Section 5.01(n) shall have
been taken and completed and be in full force and effect.
(g) COMPUTER FILES. The Seller will direct the Servicer to,
and the Servicer will, at its own cost and expense, (i) retain the
electronic ledger used by the Seller and the Servicer as a master
record of the Purchased Contract Assets and copies of all documents
relating to the Purchased Contract Assets as custodian for the Issuer
and the Collateral Agent and other Persons with interests in the
Purchased Contract Assets and (ii) clearly and conspicuously ▇▇▇▇ or
cause to be marked with a legend describing the Issuer's and the
Collateral Agent's interest, in form and substance reasonably
satisfactory to the Trustee, all computer tapes or disks and use its
best efforts to ▇▇▇▇ all books, records, and credit files pertaining to
the Related Contracts and all file cabinets or other storage facilities
where information is maintained pertaining to the Purchased Contract
Assets to the effect that interests in the Purchased Contract Assets
and the Related Contracts have been conveyed tO the Issuer and that the
Collateral Agent has a security interest in such Purchased Contract
Assets for the benefit of the Secured Parties pursuant to the Security
Agreement.
(h) CONTRACTS AND RESTAURANT GUIDELINES. The Seller and the
Servicer will comply with and perform their obligations in accordance
with the Restaurant Guidelines, except insofar as any failure so to
comply or perform would not materially and adversely affect the
Collections or the rights of the Issuer, the Collateral Agent or the
Noteholders, or if such failure to comply is necessary under
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any Requirement of Law and which would materially and adversely affect
the collections or the rights of the Issuer, the Collateral Agent or
the Noteholders. The Seller and the Servicer agree that prior to making
any material change in the Restaurant Guidelines in effect on the
Closing Date, they shall give 30 days' written notice to the Rating
Agency, the Trustee, the Issuer and each Noteholder of any such
changes; PROVIDED, HOWEVER, that in the case of any material change in
its Restaurant Guidelines made pursuant to any Requirement of Law as to
which it is unable to give 30 days' written notice, the Seller and the
Servicer shall give written notice to the Trustee, the Issuer and each
Noteholder of such changes as soon as reasonably practicable prior to
the implementation of such changes. If the Initial Sellers change the
Restaurant Guidelines to lengthen the time (currently six months) in
which Credits from any Restaurant are expected to be used, such change
shall be, deemed to be a material adverse change. In the event that any
such changes (except changes that are necessary under any Requirement
of Law), could reasonably be expected to materially and adversely
affect the rights of the Noteholders, then such changes shall not
become effective without the prior written consent of the Majority
Noteholders; any such notice shall state in reasonable detail the
reasons the changes will have such effect.
(i) DAILY REPORTS AND SETTLEMENT STATEMENTS. Furnish, or if
Transmedia is not the Servicer, provide such information as may be
required by the Servicer to furnish, the Seller, the Issuer and the
Collateral Agent and the Trustee with the Daily Reports and Settlement
Statements in accordance with Sections 6.06 and 6.08 and financial
statements, cash flow reports and other records that show the
performance of the Purchased Contract Assets and such other reports as
may be reasonably requested by the Issuer, the Collateral Agent, or any
Noteholder.
(j) INSURANCE. Except to the extent failure to do so neither
causes nor could reasonably be expected to cause a Material Adverse
Change with respect to the Seller, Servicer or Issuer, (i) keep its
insurable properties adequately insured at all times by financially
sound and responsible insurers; maintain such other insurance, to such
extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies of the
same or similar size in the same or similar businesses; (ii) maintain
in full force and effect public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about
or in connection with the use of any properties owned, occupied or
controlled by it or any Subsidiary, as the case may be, in such amounts
and with such deductibles as are customary with companies of the same
or similar size in the same or similar businesses and in the same
geographic area; and (iii) maintain such other insurance as may be
required by law; and will cause each of its Subsidiaries so to do.
(k) OBLIGATIONS AND TAXES. (i) Pay any material obligations
enforceable against or binding on it promptly and in accordance with
the terms thereof and (ii) pay and discharge promptly when due all
sales tax and all material taxes, assessments and governmental charges
or levies imposed upon, and enforceable against or binding on, it or
upon itS income or profits or in respect of its property, before the
same shall become in default, as well as all material lawful claims
enforceable against
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or binding on it for labor, materials and supplies or otherwise which,
if unpaid, might become a Lien or charge upon such properties or any
part thereof; PROVIDED, HOWEVER, that it shall not be required to pay
and discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings and
the Seller or the Servicer shall have set aside on its books adequate
reserves with respect thereto and such contest shall not involve any
risk of loss of any of the Contract Assets.
(l) FURNISHING COPIES, ETC. Furnish to the Rating Agency, the
Issuer, the Trustee, Structured Funding, L.L.C., the Noteholders and
the Collateral Agent (i) within five Business Days of any such Person's
request, a certificate of a Financial Officer of the Seller and the
Servicer certifying, as of the date thereof, that no Purchase
Termination Event or Potential Purchase Termination Event referred to
in Section 7.01(b) or otherwise has occurred and is continuing, and
setting forth the computations used by such Financial Officer in making
such determination; (ii) as soon as possible and in any event within
five days after the occurrence of any Purchase Termination Event or
Potential Purchase Termination Event, a statement of a Financial
Officer of the Seller and the Servicer setting forth details of such
Purchase Termination Event or Potential Purchase Termination Event and
the action that the Seller and the Servicer proposes to take or has
taken with respect thereto; and (iii) promptly following request
therefor, such other information, documents, records or reports with
respect to the Purchased Contract Assets, the Cardmembers (to the
extent permitted by law), the Restaurants or the conditions or
operations, financial or otherwise, of the Seller or the Servicer as
the Issuer, the Collateral Agent, the Noteholders or the Trustee may
from time to time reasonably request.
(m) OBLIGATIONS WITH RESPECT TO PURCHASED CONTRACT ASSETS.
Duly fulfill all obligations on its part to be fulfilled under or in
connection with each Contract, except where the failure to fulfill such
obligations would not materially and adversely affect the Collections
or the rights of the Issuer, the Trustee, the Collateral Agent or the
Noteholders, or if such failure is necessary under any Requirement of
Law, and do nothing to impair the rights of the Issuer, the Trustee,
the Collateral Agent or the Noteholders in the Purchased Contract
Assets or under the Contracts.
(n) CONTINUING COMPLIANCE WITH THE UCC. At its expense,
preserve, continue and maintain or cause to be preserved, continued and
maintained the Issuer's valid and properly protected and perfected
title to all Purchased Contract Assets, including, without limitation,
filing or recording UCC financing statements in each relevant
jurisdiction.
(o) FURTHER ACTION EVIDENCING PURCHASES. At the Seller's
expense, promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or
desirable or that the Issuer may reasonably request, in order to
protect or more fully evidence the Issuer's right, title and interest
in the Purchased Contract Assets and its rights under the Contracts
with respect thereto, or to enable
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the Issuer to exercise or enforce any such rights. Without limiting the
generality of the foregoing, (i) the Seller will upon the request of
the Issuer, the Trustee and the Collateral Agent execute and file such
financing or continuation statements, or amendments thereto, and such
other instruments or notices as may be necessary or, in the opinion of
the Issuer, advisable, (ii) the Seller hereby irrevocably authorizes
each of the Issuer, the Trustee and the Collateral Agent to file one or
more financing or continuation statements, and amendments thereto,
relating to all or any part of the Purchased Contract Assets sold or to
be sold by the Seller, or the underlying Contracts with respect
thereto, without the signature of the Seller, (iii) if the Seller or
the Servicer fails to perform any of its agreements or obligations
under this Agreement, the Issuer may (but shall not be required to)
perform, or cause performance of, such agreements or obligations, and
the costs and expenses of the Issuer incurred in connection therewith
shall be payable by the Servicer and (iv) each of the Seller and the
Servicer agrees that from time to time, at its expense, it will (A)
indicate on its books and records that the Purchased Contract Assets
has been sold and assigned to the Issuer and pledged by the Issuer to
the Collateral Agent, and provide to the Issuer, the Collateral Agent
and the Trustee, upon request, copies of such records, (B) obtain the
agreement of any Person having a Lien in and to any Purchased Contract
Assets owned by the Seller (other than any Lien created or imposed
hereunder or under the Security Agreement) to release such Lien upon
the transfer of any such Purchased Contract Assets to the Issuer and
(C) notify the Issuer promptly after obtaining knowledge that any
Purchased Contract Assets has become subject to a Lien other than any
Lien created or imposed hereunder or under the Security Agreement.
(p) CONTRACT ASSETS PROCESSING FACILITY; STORAGE FACILITY. The
Servicer shall maintain its facility from which it services the
Purchased Contract Assets in its present condition, ordinary wear and
tear excepted, or such other facility of similar quality, security and
safety as the Servicer may select from time to time. The Servicer shall
make all property tax payments, lease payments and all other payments
with respect to such facility, including any indebtedness secured by
such facility, whether Transmedia shall be the Servicer or a Successor
Servicer shall have been appointed. The Servicer shall (i) ensure that
any Successor Servicer shall have complete and unrestricted access
subject to paragraph (d) of this Section 5.01, at the Servicer's
expense, to such facility and all computers and other systems relating
to the servicing of the Purchased Contract Assets, (ii) use its best
efforts to retain the employees based at such facility to provide
assistance to any Successor Servicer after the appointment of such
Successor Servicer and (iii) continue to store on a daily basis all
back-up files relating to the Purchased Contract Assets and the
servicing of the Purchased Contract Assets at ▇▇▇▇▇ ▇▇▇▇▇ Associates,
Ltd., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or such
other storage facility of similar quality, security and safety as the
Servicer may select from time to time and which shall be reasonably
satisfactory to the Collateral Agent, in the case of each of clauses
(i), (ii) and (iii) until the earlier of (A) the indefeasible payment
in full in cash of the principal and interest of the Notes, (B) the
receipt by the Collateral Agent of all Collections in respect of all
Purchased Contract Assets and (C) the Successor Servicer being able to
perform its obligations under this Agreement without the assistance of
the Servicer. The Servicer will not
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make any material changes to its backup procedures without thirty (30)
days prior written notice to the Trustee and the Noteholders.
(q) TRADE NAMES. Promptly notify the Issuer and the Collateral
Agent of any new trade names of the Seller or Transmedia.
(r) SALE TREATMENT. The Seller and the Servicer will perform
the transactions contemplated hereby in a manner that is consistent
with the Issuer's ownership interest in the Purchased Contract Assets
under applicable law (including without limitation the Federal
Bankruptcy Code) other than federal income tax law.
(s) Transmedia will pay any taxes owed under any consolidated
tax return and the Seller will pay to Transmedia its portion of any
such taxes that are paid.
(t) OWNERSHIP OF SELLER. Transmedia will own, directly or
indirectly, all of the issued and outstanding shares of stock of the
Seller at all times while the Notes remain outstanding.
SECTION 5.02. NEGATIVE COVENANTS OF THE SELLER AND SERVICER. So long as
the Issuer or the Collateral Agent shall have any interest in any Purchased
Contract Assets, neither the Seller nor the Servicer shall, unless the Issuer
and the Collateral Agent at the direction of the Trustee acting at the direction
of the Majority Noteholders otherwise consent in writing:
(a) LIENS. Except as otherwise herein provided, sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create
or suffer to exist any Lien upon or with respect to, any Contract
Assets or assign any right to receive proceeds in respect thereof
EXCEPT for Liens created or imposed hereunder or under the Transaction
Documents.
(b) CHANGE IN BUSINESS. Make any material change in the type
of business it conducts on the date hereof.
(c) CHANGE IN PAYMENT INSTRUCTIONS. Instruct Restaurants or
credit card companies to make any payments with respect to Purchased
Contract Assets other than as described in Article VI hereof or the
Security Agreement.
(d) CHANGE IN NAME. Change its name, identity or corporate
structure in any manner which would, could or might make any financing
statement or continuation statement relating to this Agreement or the
Security Agreement, seriously misleading within the meaning of Section
9-402(7) of the UCC as in effect in the applicable jurisdiction.
(e) MODIFICATION OF LEDGER. Delete or otherwise modify any
marking on the electronic ledger referred to in Section 5.01(g).
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(f) EXTENSION OR AMENDMENT OF CONTRACT ASSETS. Extend, amend
or otherwise modify, or attempt or purport to extend, amend or
otherwise modify, the terms of any Purchased Contract Assets, or amend
or otherwise modify or waive any term or condition of any Contract with
respect thereto other than in accordance with its Restaurant Guidelines
or in accordance with a Requirement of Law.
(g) PRIORITY OF COLLECTION. Collect any payment for its own
account, or for the account of any Person other than the Issuer or its
assigns, arising under or out of any Contract with an Assigned
Restaurant while the Purchased Contract Assets contains Credits to be
provided by that Restaurant.
(h) Without the prior written consent of the Issuer and its
assignees (including the Collateral Agent) and the Rating Agency, sell
on any Purchase Date after the Closing Date any Contract relating to
any Restaurant not designated as of the Closing Date as an Assigned
Restaurant (an "ADDED RESTAURANT CONTRACT") if (i) during any calendar
quarter, such sale would cause the aggregate Contract Price (calculated
as of the Purchase Date applicable for each Added Restaurant Contract)
of all such Added Restaurant Contracts sold to the Issuer during such
calendar quarter to exceed 10% of the Net Note Principal Amount on such
Purchase Date and (ii) during any calendar year, such sale would cause
the aggregate Contract Price (calculated as of the Purchase Date
applicable for each Added Restaurant Contract) of all such Added
Restaurant Contracts sold to the Issuer during such calendar year to
exceed 25% of the Net Note Principal Amount on such Purchase Date.
SECTION 5.03. NEGATIVE COVENANTS OF THE SELLER. The Seller covenants
and agrees that, so long as the principal of or interest on any Notes, any
Expenses or any other expenses or amounts payable under any Transaction Document
shall be unpaid, unless the Trustee (as directed by the Majority Noteholders)
shall otherwise consent in writing, the Seller will not:
(a) INDEBTEDNESS. Incur, create, assume or permit to exist any
Indebtedness, except Indebtedness representing fees, expenses and
indemnities payable pursuant to and in accordance with the Transaction
Documents.
(b) LIENS. Incur, create, assume or permit to exist any Lien
on any property or assets (including stock or other securities) now
owned or hereafter acquired by it or on any income or revenues or
rights in respect of any thereof, except the Liens, if any, created
hereunder and any Lien created in connection with any repurchase
obligation which is an Eligible Investment; PROVIDED, HOWEVER, that
nothing in this subsection (b) shall prevent or be deemed to prohibit
the Seller from suffering to exist upon any of its assets any Liens for
municipal, local or state taxes if such taxes shall not at the time be
due and payable or if the Seller shall currently be contesting the
validity thereof in good faith by appropriate proceedings and shall
have set aside on its books adequate reserves with respect thereto.
(c) GUARANTEES. Incur, create, assume or permit to exist any
Guarantees.
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(d) CREDITORS. Create or permit to exist any creditors other
than the holders of Indebtedness permitted by Section 5.03(a) and the
other parties expressly contemplated and permitted by the Transaction
Documents.
(e) BUSINESS OF SELLER. Engage at any time in any business or
business activity other than the acquisition of Assets pursuant to the
Purchase Agreement and the activities incidental to the purchase and
ownership of the Assets, the sale of the Contract Assets pursuant to
this Agreement, the issuance of Notes and the other Transactions, and
the making of any investments permitted under paragraph (f) below and
other incidental and related transactions expressly permitted
hereunder.
(f) INVESTMENTS, LOANS AND NOTES. Purchase, hold or acquire
any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to
exist any investment or any other interest in, any other Person except
for Purchased Assets and Eligible Investments or engage in any
transactions involving commodity options or futures contracts or
similar transactions.
(g) MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND ACQUISITIONS.
Merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of
transactions) any of its assets, including the Purchased Assets
(whether now owned or hereafter acquired), or purchase, lease or
otherwise acquire (in one transaction or a series of transactions) any
of the assets of any other Person, other than the acquisition of Assets
by the Seller pursuant to, and in accordance with the terms of, the
Purchase Agreement, the sale of the Contract Assets pursuant to this
Agreement.
(h) LEASE OBLIGATIONS. Incur, create, assume or permit to
exist any Lease Obligations, except as are necessary for the permitted
operations of the Seller.
(i) DIVIDENDS AND DISTRIBUTIONS. Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction
of capital or otherwise), whether in cash, property, securities or a
combination thereof, with respect to any capital ("RESTRICTED
PAYMENTS,") or directly or indirectly redeem, purchase, retire or
otherwise acquire for value any of its capital or set aside any amount
for any such purpose, except from amounts received from the Issuer that
were released or distributed to the Issuer pursuant to Section
7(a)(iii) FOURTH of the Security Agreement.
(j) TRANSACTIONS WITH AFFILIATES. Sell or transfer any
property or assets to, or purchase or acquire any property or assets
from, or otherwise engage in any other transactions with, any of its
Affiliates except as set forth in the Transaction Documents.
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(k) ACCOUNTING CHANGES. Make any change (i) in accounting
treatment and reporting practices except as required by GAAP or (ii) in
tax reporting treatment except as required by law and, in each case, as
disclosed to the Trustee and the Collateral Agent.
(1) EQUITY INTERESTS. Issue any equity to any entity or
Person, other than the equity issued to the initial stockholders upon
formation of the Seller, permit any of its equity to be transferred to
any Person or otherwise change its equity structure in any manner.
(m) CAPITAL EXPENDITURES. Incur or make any Capital
Expenditures (whether for cash or the incurrence or assumption of
Indebtedness).
(n) AMENDMENTS. (i) Amend its Certificate of Incorporation or
by-laws without the consent of the Trustee acting at the direction of
the Majority Noteholders; or (ii) amend, modify or waive (or permit to
be amended, modified or waived), without the consent of the Trustee
acting at the direction of the Majority Noteholders, this Agreement or
any of the other Transaction Documents to which the Seller is a party.
(o) OTHER AGREEMENTS. Enter into or be a party to any
agreement, instrument or transaction other than the Transaction
Documents and the documents related thereto and any documents relating
to the establishment of bank accounts and investment accounts including
without limitation an agreement for the deposit of funds into an
account with ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ and Co., other than de minimus
agreements.
(p) NO POWERS OF ATTORNEY. Grant any powers of attorney to any
Person for any purposes except (i) for the purpose of permitting any
Person to perform any ministerial functions on behalf of the Seller
that are not prohibited by or inconsistent with the terms of the
Transaction Documents, (ii) to the Collateral Agent in connection with
this Agreement or (iii) as expressly permitted by the Transaction
Documents.
(q) MAINTENANCE OF SEPARATE EXISTENCE. (i) Fail to do all
things necessary to maintain its existence separate and apart from the
Issuer, Transmedia and any Affiliate thereof, including, without
limitation, holding regular meetings of its stockholders and its Board
of Directors and maintaining appropriate books and records (including a
current minute book); (ii) except as required by law or the Transaction
Documents, suffer any limitation on the authority of its Board of
Directors to conduct itS business and affairs in accordance with the
independent business judgment of their officers and directors or
authorize or suffer any Person other than its own stockholders to act
on itS behalf with respect to matters (other than matters customarily
delegated to others under powers of attorney) for which a corporation's
own stockholders would customarily be responsible; (iii) fail to (A)
maintain or cause to be maintained by an agent of the Seller under the
Seller's control physical possession of all its books and
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records, (B) maintain capitalization adequate for the conduct of its
business, (C) account for and manage all its liabilities separately
from those of any other Person, including payment by it of all payroll,
administrative expenses and taxes, if any, from its own assets, (D)
segregate and identify separately all of its assets from those of any
other Person, (E) to the extent any such payments are made, pay its
directors, employees, stockholders and agents for services performed
for the Seller or (F) maintain separate offices with a separate
telephone number from those of the Issuer, Transmedia or any Affiliate
of the Issuer; or (iv) commingle its funds with those of the Issuer or
any Affiliate of the Issuer or use its funds for other than the
Seller's uses except as permitted by this Agreement.
(r) Voluntarily commence any voluntary bankruptcy. or
insolvency proceedings without the unanimous consent of its Board of
Directors (including, without limitation, the affirmative vote or
consent of its Independent Director).
(s) ELECTION TO TERMINATE LICENSE UPON REJECTION. In the event
Transmedia or the Initial Sellers becomes a debtor in a proceeding
under the Bankruptcy Code, if any such debtor determines to reject the
License in accordance with Bankruptcy Code Section 365, the Seller and
Transmedia will not elect under Bankruptcy Code Section 365(n)(1)(A) to
treat the License as terminated.
SECTION 5.04. COVENANTS OF BACK-UP SERVICER. The Back-up Servicer
hereby agrees that during the term of this Agreement:
(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The
Back-up Servicer shall perform each of its obligations under this
Agreement in good faith and comply with all material requirements of
any law, rule or regulation or any provision of any Contract or any
related agreement applicable to its performance of such obligations;
(b) ACCESS TO RECORDS, DISCUSSIONS WITH OFFICERS AND
ACCOUNTANTS. The Back-up Servicer shall, upon the reasonable written
request of the Servicer, the Trustee, any Noteholder or the Issuer,
permit the Servicer, the Trustee, any Noteholder or the Issuer, as the
case may be, or their respective authorized designees to inspect during
normal business hours the books and records of the Back-up Servicer as
they may relate to the Contract Assets and the obligations of the
Back-up Servicer under this Agreement; and
(c) NOTICES. The Back-up Servicer shall promptly notify the
Trustee, the Servicer, each Noteholder and the Issuer in writing of any
event, circumstance or occurrence which constitutes a Servicer
Termination Event under Section 6.15 hereof.
(d) Within 30 days of the Closing, the Back-up Servicer will
(i) deliver to the Trustee executed copies of software licenses or
sublicenses, in a form reasonably acceptable to the Trustee, which
grant to the Trustee the right to utilize any of the software owned or
licensed by the Back-up Servicer that is necessary or desirable to
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perform the collection and administrative functions to be performed by
the Trustee under the Transaction Documents and (ii) deliver to the
Trustee executed copies of any landlord waivers in a form reasonably
acceptable to the Trustee, that may be necessary to grant to the
Trustee access to any leased premises of any of the Back-up Servicer
for which the Trustee may require access to perform the collection and
administrative functions to be performed by the Trustee under the
Transaction Documents.
ARTICLE VI
ADMINISTRATION AND SERVICING OF PURCHASED CONTRACT ASSETS
SECTION 6.01. APPOINTMENT OF AND ACCEPTANCE BY THE SERVICER OF
SERVICING OBLIGATIONS. (a) The Issuer hereby appoints Transmedia as Servicer of
the Purchased Contract Assets. Transmedia agrees to act as the Servicer under
this Agreement on behalf of the Issuer, the Trustee and the Collateral Agent, it
being understood that the relationship of the Servicer (and any Successor
Servicer) to the Collateral Agent and the Trustee is intended by the parties to
be that of an independent contractor and not that of a joint venturer, partner
or agent. The Servicer shall manage and administer the Purchased Contract Assets
and collect the Collections due thereunder, shall, except as otherwise limited
herein, exercise all discretionary powers involved in such management,
administration and collection and shall bear all costs and expenses incurred in
connection therewith that may be necessary or advisable and permitted for
carrying out the transactions contemplated by this Agreement, the Indenture and
the Security Agreement. In the management and administration of the Purchased
Contract Assets due thereunder, the Servicer shall exercise the same care that
it has exercised in servicing Contract Assets of the Servicer and its Affiliates
which has not been sold to others, and the Servicer shall comply and perform in
accordance with the Restaurant Guidelines, except insofar as any failure so to
comply or perform would not materially and adversely affect the Collections or
the rights of the Issuer, the Collateral Agent or the Noteholders or if such
failure to comply is necessary under any Requirement of Law. In connection with
the foregoing, the Servicer shall be permitted to subcontract its obligations
under this Section 6.01 to any Person satisfactory to the Issuer, the Trustee
and the Collateral Agent who agrees to perform such obligations in accordance
with the terms of this Agreement and the Restaurant Guidelines; PROVIDED,
HOWEVER, that the Servicer shall remain fully responsible to the Issuer, the
Collateral Agent and the Trustee for any and all acts or failures to act of any
such subcontractor to the same extent as if the Servicer were fully and directly
responsible for such subcontractor's duties and responsibilities; PROVIDED
FURTHER in the event the Servicer shall for any reason no longer be the
Servicer, (A) the Successor Servicer shall thereupon assume all of the rights
and obligations of the Servicer under each subcontract that the Servicer may
have entered into, unless the Successor Servicer elects to terminate any
subcontract in accordance with its terms, (B) the Servicer at its expense and
without right of reimbursement therefor, shall, pay any fee relating to the
termination of a subcontract, (C) the Servicer at its expense and without right
of reimbursement therefor, shall, upon request of the Successor Servicer,
deliver to the assuming party all documents and records relating to each
subcontract and (D) the Servicer
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shall otherwise use its best efforts to effect the orderly and efficient
transfer of the subcontract to the assuming party.
(b) The Servicer shall notify the Issuer promptly after obtaining
knowledge that any Purchased Contract Assets has become subject to a Lien other
than any Lien created or imposed hereunder or under the Transaction Documents.
SECTION 6.02. SERVICING COMPENSATION. As compensation for its servicing
activities hereunder and reimbursement for its expenses incurred as the
Servicer, the Servicer shall be entitled to receive a Monthly Servicing Fee
Amount in respect of any Settlement Period (or portion thereof), payable monthly
in arrears on each Note Payment Date, equal to the product of (i) 5% per annum,
(ii) one twelfth and (iii) the Net Note Principal Amount as of the previous Note
Payment Date, after the payment of principal on the Notes, if any (or in the
case of the first Note Payment Date, the Net Note Principal Amount on the
Closing Date). The Servicer shall bear all costs and expenses (without right of
reimbursement other than the Monthly Servicing Fee Amount) incurred in
connection with performing its activities hereunder, including fees and
disbursements of independent accountants, fees and expenses incurred in
collecting Receivables and generating Recoveries, all fees and expenses of the
Back-up Servicer, and all other expenses incurred by the Servicer in connection
with its activities hereunder; PROVIDED, HOWEVER that in no event shall the
Servicer be liable for any federal, State or local income or franchise tax, or
any interest or penalties with respect thereto, assessed on the Trustee, the
Collateral Agent or any Noteholder. The Servicer shall be required to pay such
expenses for its own account, and shall not be entitled to any payment therefor
other than the Monthly Servicing Fee Amount and any indemnification specifically
provided in the Transaction Documents.
SECTION 6.03. INDEPENDENT PUBLIC ACCOUNTANT'S REPORTS. (a) The Servicer
shall no later than January 15 of each year (commencing January 15, 1997), cause
a firm of nationally recognized independent certified public accountants (who
may also render other services to the Servicer or the Seller) to furnish a
report, as of September 30 of the immediately preceding calendar year, to the
Rating Agency, the Issuer, the Collateral Agent, the Noteholders and the Trustee
performing such agreed upon procedures with respect to the Servicer's servicing
procedures and internal control system as may be reasonably requested by the
Majority Noteholders. The scope of the review shall be as put forth in Exhibit F
hereto.
(b) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (who may also render other services to
the Servicer or the Seller) to furnish a report to the Rating Agency, the
Collateral Agent, the Trustee, the Noteholders and the Seller on or before 45
days after the end of each fiscal year of the Issuer using generally accepted
auditing standards to the effect that they have compared the mathematical
calculations of each amount set forth in five Daily Reports and three Settlement
Statements in a sample randomly chosen during such annual period and delivered
by the Servicer pursuant to Sections 6.06 and 6.08 respectively during the
period covered by such report with the Servicer's computer reports that were the
source of such amounts and that on the basis of such comparison, such
accountants are of the opinion that such amounts are in
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agreement, except for such exceptions as they believe to be immaterial and such
other exceptions as shall be set forth in such statement.
(c) Within 30 days of the Closing Date, the Issuer shall cause a firm
of nationally recognized independent certified public accountants (who may also
render other services to the Issuer) to furnish a report to the Noteholders
based on a review of the Purchased Contract Assets; the scope of the review
shall be as set forth on Exhibit F hereto.
SECTION 6.04. COMPLIANCE STATEMENTS. The Seller and the Servicer will
deliver to the Issuer, the Collateral Agent, the Noteholders and the Trustee on
or before 45 days after the end of each fiscal quarter of such Seller and the
Servicer (beginning March 31, 1997) a certificate signed by its Authorized
Officer stating that (i) a review of its activities relating to the servicing of
the Contract Assets during the prior fiscal quarter (or since the Closing Date
in the case of the first such certificate which is required to be delivered) and
performance under this Agreement and the Security Agreement has been made under
such officer's supervision, and (ii) to the best of such Authorized Officer's
knowledge, based on such review, such party has fulfilled all its obligations
under this Agreement and the Security Agreement throughout the period covered by
such review, or, if there has been a default in the fulfillment of any such
obligations, specifying each such default known to such officers and the nature
and status thereof.
SECTION 6.05. COLLECTION PROCEDURES. (a) On or before the Closing Date,
the Servicer, the Seller and the Issuer shall have established and shall
maintain thereafter the system of collecting and processing Collections of
Purchased Contract Assets set forth in this Section 6.05 to be in effect on and
after the Closing Date. The Servicer shall instruct the Assigned Restaurants to
send Mail Payments or Recoveries only to Post Office Boxes listed on Schedule
III hereof and to the Collection Deposit Account. The Servicer shall cause each
Assigned Restaurant to transmit all Point-of-Sale Payments directly to computer
systems owned and operated by the Back-up Servicer, and, so long as Transmedia
is acting as the Servicer, the Back-up Servicer agrees to forward electronically
data related to such Point-of-Sale Payments to the Servicer.
(b) The Servicer shall process Payments by recording the amount of the
Collections received from the Cardmember, the taxes and tips related to such
Payments, the Cardmember Rebate, the Processing Fee, the applicable Restaurant
number and the amount of Credits to be deducted from the account of the
applicable Restaurant.
(c) The Servicer shall process all requests from the Assigned
Restaurants for transaction authorizations in connection with the use of a
Transmedia Card in the same manner as it processes such requests from all other
Restaurants. Servicer shall not authorize any such transactions that have not
been properly authorized by a Credit Card Company for payment.
(d) Not later than the Business Day following the receipt of any Mail
Payments, the Servicer shall cause such Mail Payments to be processed and
forwarded to the appropriate Credit Card Company using the Issuer's individual
merchant identification number, and, so
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long as Transmedia is acting as the Servicer, the Servicer agrees to forward
electronically all data related to such Mail Payments to the Back-up Servicer.
(e) Not later than the same day of receipt of any Point-of-Sale
Payment, the Servicer shall cause such Point-of-Sale Payments to be processed
and forwarded to the appropriate credit card company using the Issuer's
individual merchant identification number, and, so long as Transmedia is acting
as the Servicer, the Servicer agrees to forward electronically all data related
to such Point-of-Sale Payments to the Back-up Servicer.
(f) The Credit Card Companies will be directed to deposit Collections
directly into the Collection Deposit Account. In the event that any of the
Servicer, the Seller or the Issuer shall receive any Collections from the Credit
Card Companies or otherwise, such Person agrees that it is holding such amounts
in trust for the Collateral Agent and shall initiate the deposit of such
Collections into the Collection Deposit Account within one Business Day of
receipt thereof. On the Business Day following receipt of any Collections from
the applicable Credit Card Company in the Collection Deposit Account, the
Servicer will cause the Collateral Agent to transfer from such Collections, in
immediately available funds, an amount equal tO all such Collections received by
the Servicer, net of the taxes and tips related to such Collections, the
Processing Fees not already paid and the Cardmember Rebates, to the Collateral
Account.
(g) If any such payments cannot be made in the time period specified in
clause (e) above as a result of an event of Force Majeure, so long as such
payments are made promptly after the cessation of such event of Force Majeure,
but in no event later than two Business Days after such time period, the
provisions of such clauses shall be deemed to have been complied with. The
Issuer, the Seller and the Servicer agree to take any reasonable actions
necessary to correct or overcome such event as soon as possible.
(h) The Servicer shall deposit all Recoveries into the Collateral
Account no later than the Business Day following the day of such receipt.
(i) Any funds held by the Issuer, the Seller or the Servicer
representing Collections of Purchased Contract Assets shall, until deposited in
the Collection Deposit Account or the Collateral Account, be held in trust by
the Servicer, the Seller and the Issuer for and as the Collateral Agent's
property and shall not be commingled with the Servicer's, the Seller's or the
Issuer's other funds or property.
(j) As each Payment is processed and forwarded to the Credit Card
Companies for payment, the Servicer will forward the Cardmember Rebate to the
Cardmember who generated such Payment. If the Cardmember Rebate is in a
nonmonetary form, such as airline credits, the Servicer will make such payment
as described in Section 6.05(m).
(k) No later than the Business Day following the receipt of
confirmation from a credit card company that it will pay amounts related to Mail
Payments or Point-of-Sale Payments, the Servicer shall advance out of its own
funds the amount of taxes and tips related to such Payment to the Restaurant
from which such Payment was received.
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(1) No later than the Business Day following the receipt of Collections
from a Credit Card Company related to a Payment, the Servicer shall cause to be
paid to itself from the Collection Deposit Account the amount of taxes and tips,
without interest, related to such Payment in reimbursement for funds advanced
under Section 6.05(j).
(m) If the Cardmember Rebate was in a nonmonetary form, no later than
the Business Day following the receipt of Collections from a Credit Card Company
related to a Payment, the Servicer shall cause to be paid from the Collection
Deposit Account an amount equal to the actual cash amount paid by the Servicer
to any Person (other than an Affiliate or an employee of the Servicer or any
Affiliate of the Servicer) to acquire such nonmonetary Cardmember Rebate and
shall provide out of its own inventory such nonmonetary Cardmember Rebate to the
Cardmembers who generated such Payment.
(n) To the extent not previously paid out of Collections, no later than
the due date on an invoice therefore, the Servicer shall cause to be paid from
the Collection Deposit Account any Processing Fee owed to a Credit Card Company.
(o) The Servicer irrevocably waives any right to set off against, or
otherwise deduct from, any Collections. The Servicer acknowledges that the
Collection Deposit Account and the Collateral Account are solely the property of
the Collateral Agent and in no way represent property or funds of the Servicer.
The Servicer's access to the Collection Deposit Account under this Section 6.05
is in its capacity as Servicer only and for the convenience of the Collateral
Agent in furtherance of the purposes of this Agreement and the Transaction
Documents; such access does not in any way imply ownership or any right to
direct funds except as provided for in this Agreement.
SECTION 6.06. DAILY REPORT. (a) On each Business Day, the Servicer
shall prepare a Daily Report in substantially the form attached hereto as
Exhibit B. The Daily Report shall report for the Applicable Day, among other
things, the dollar amount of Contract Assets created since the preceding Daily
Report, the dollar amount of Collections received on the Applicable Day, the
Borrowing Base, the amount of Available Cash, the balance of the Collateral
Account, and a current list of Purchased Contracts.
(b) The Servicer shall deliver to the Seller, the Collateral Agent, the
Trustee and the Issuer and, upon request, the Noteholders, and, for the first 30
days after the Closing Date to a designee of the Noteholders, the Daily Report,
which shall be deemed to have been certified by a Financial Officer, by 12:00
Noon (New York City time) on each Business Day with respect to activity in the
Purchased Contract Assets for the Applicable Day covered by such Daily Report
(or, in the case of a Daily Report delivered on a day following a Saturday,
Sunday or other non-Business Day, the aggregate activity for the preceding
Business Day and such non-Business Days); PROVIDED, HOWEVER, that if a "system
failure" or other similar technical failure shall occur in the operations of the
Servicer that produce data included in the Daily Report, the Servicer shall use
its best efforts to recreate Daily Reports for each Applicable Day missed due to
a "system failure" or, if the Servicer is unable to recreate such Daily Reports,
the Servicer shall prepare a composite Daily Report for each such missed
Applicable Day and, in either case, such Daily Reports shall be telecopied to
the
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Collateral Agent, the Trustee and the Issuer and, upon request, the Noteholders
within two Business Days of the date such Daily Report(s) were otherwise
required to be prepared and telecopied to the Trustee.
(c) The Servicer shall prepare each Daily Report as promptly as
possible each Business Day on the basis of the "pre-audit" sales and collections
figures transmitted the previous day to the Servicer's central computer
processing center.
(d) Upon discovery of any error by the Issuer, the Collateral Agent,
the Servicer or the Seller in any Daily Report, the Collateral Agent, the
Issuer, the Servicer, the Trustee and the Seller shall confer and shall agree
upon any necessary adjustments to correct any such errors. Until correction of
such error, all Collections relating to such errors shall be retained in the
Collateral Account. Unless the Collateral Agent has received actual notice of
any discrepancy, the Collateral Agent, the Trustee and the Issuer may rely on
such Daily Report for all purposes hereunder.
SECTION 6.07. ALLOCATIONS AND APPLICATIONS OF COLLECTIONS. Collections
shall be allocated and distributed in accordance with the provisions of the
Security Agreement.
SECTION 6.08. SETTLEMENT STATEMENT. (a) On each Settlement Date? the
Servicer shall, prior to 12:00 Noon, New York City time, deliver to the Seller,
the Collateral Agent, the Rating Agency, the Trustee, the Noteholders and the
Issuer the Settlement Statement for the related Settlement Period certified by
the President, any Vice President or any Financial Officer; PROVIDED, HOWEVER,
that if a "system failure" or other similar technical failure shall occur in the
operations of the Servicer that produce data included in the Settlement
Statement, a Settlement Statement containing all information for each day
required to be included therein shall be prepared and delivered to the Seller,
the Collateral Agent, the Rating Agency, the Trustee, the Noteholders and the
Issuer within two Business Days of the date such Settlement Statement was
otherwise required to be prepared and delivered. On each Settlement Date, the
Seller shall deliver to the Issuer a confirmation of the assignment of the
Purchased Contract Assets transferred in the prior month, including a list of
Contracts and Cardmember Agreements, signed by the Seller.
(b) The Servicer shall include with the Settlement Statement furnished
to the Seller, the Collateral Agent, the Noteholders and the Trustee in October,
January, April and July (commencing in April 1997) of each year a report of the
Servicer covering the Servicer's servicing of the Purchased Contract Assets
during the prior fiscal quarter (or from the Closing Date through the end of
such prior quarter in the case of the first such report).
(c) Notwithstanding the foregoing, the Seller and the Servicer agree
that the Trustee or the Collateral Agent shall have the right, at any time upon
at least 24 hours notice, to initiate an audit of the Servicer and the Seller
with respect to the servicing of Purchased Contract Assets. Prior to initiating
such an audit, the Collateral Agent shall consult with the Servicer to ascertain
whether the information sought may be derived without the necessity of such an
audit; PROVIDED, that if the Collateral Agent determines in its sole discretion
at any time that such an audit is desirable for any reason whatsoever, it shall
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have the right to initiate such an audit at any time in accordance with the
first sentence of this Section 6.08(c).
SECTION 6.09. TERMINATION. The Seller's obligation to sell Contract
Assets under this Agreement shall terminate on the date (the "PURCHASE
TERMINATION DATE") which is the earlier of (i) the Issuer Final Termination or
(ii) the date on which the Issuer's obligation to purchase Contract Assets shall
terminate pursuant to Section 7.01.
SECTION 6.10. LIMITATION ON LIABILITY OF THE SELLER AND OTHERS. No
recourse under or upon any obligation or covenant of this Agreement, or the
Contract Assets, or for any claim based thereon or otherwise in respect thereof,
shall be had against any incorporator, stockholder, shareholder, member,
employee, officer or director, in its capacity as such, past, present or future,
of any party hereto or of any successor corporation or company, either directly
or through such party, whether by virtue of any constitution or statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that this Agreement and the obligations issued
hereunder are solely corporate obligations, and that no such personal liability
whatever shall attach to, or is or shall be incurred by the incorporators,
stockholders, shareholders, members, employees, officers or directors, as such,
of such party or of any successor corporation or company, or any of them,
because of the creation of the obligations hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Agreement
or in the Contract Assets or implied therefrom; and that any and all such
personal liability, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, stockholder, shareholder, member, employee, officer or director,
as such, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations or covenants contained in this Agreement or in
the Contract Assets or implied therefrom, are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Agreement; PROVIDED, HOWEVER, that the foregoing shall not be interpreted to
limit or affect the express undertakings of Transmedia or the Initial Sellers as
set forth in any of the Transaction Documents. Anything to the contrary herein
notwithstanding, the Issuer's liability to any party hereunder shall be limited
to amounts from Secured Collateral and an amount equal to the amount in the
Settlement Account. The Seller, the Servicer, the Trustee and the Collateral
Agent and any director or officer or employee of the Seller, the Servicer, the
Trustee or the Collateral Agent may rely in good faith on any document of any
kind PRIMA FACIE properly executed and submitted by any Person respecting any
matters arising hereunder.
SECTION 6.11. SERVICER RESIGNATION. The Servicer shall not resign from
the obligations and duties under this Agreement hereby imposed on it except upon
a determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
opinion of counsel to such effect delivered to the Rating Agency, the Issuer,
the Seller, the Trustee, the Noteholders and the Collateral Agent. No such
resignation shall
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become effective until a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with this
Section and Sections 6.16 and 6.17.
SECTION 6.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE CONTRACT ASSETS. The Servicer and the Seller shall provide the Issuer, the
Collateral Agent, each Noteholder and the Trustee and their respective
representatives access to the documentation regarding the Purchased Contract
Assets in such cases where the Issuer is required in connection with the
enforcement of the rights of the Issuer, the Collateral Agent, the Trustee or
any Noteholder, or by applicable statutes or regulations, to review such
documentation, such access being afforded without charge but only (i) upon two
Business Days prior notice, (ii) during normal business hours, (iii) subject to
the Servicer's normal security and confidentiality procedures and (iv) at
offices designated by the Servicer. The obligation of the Servicer and the
Seller to provide access to such information shall survive the Servicer's
termination as Servicer.
SECTION 6.13. DELEGATION OF DUTIES. In the ordinary course of business,
the Servicer may at any time delegate any of its duties hereunder to any Person
who agrees to conduct such duties in accordance with the Restaurant Guidelines
and this Agreement. Such delegation shall not relieve the Servicer of its
liabilities and responsibilities with respect to such duties, and shall not
constitute a resignation within the meaning of Section 6.11.
SECTION 6.14. RESPONSIBILITIES OF THE SELLER. Notwithstanding anything
herein to the contrary, the exercise by the Issuer of any of its rights
hereunder shall not relieve either the Seller or the Servicer from such of its
obligations with respect to such Purchased Contract Assets.
SECTION 6.15. SERVICER TERMINATION NOTICE. If (i) an Early Amortization
Event or a Purchase Termination Event shall have occurred and be continuing or
(ii) there has been a failure by the Servicer to perform its obligations as
Servicer and such failure could reasonably be expected to have a material
adverse effect on the collection of the Purchased Contract Assets taken as a
whole, the value of the Purchased Contract Assets or the ability of the
Collateral Agent to exercise its remedies under the Security Agreement (a
"SERVICER TERMINATION EVENT"), the Issuer may and, upon the direction of the
Majority Noteholders, the Issuer or the Trustee shall, by notice given in
writing to the Servicer, the Issuer or Trustee, as applicable, and the
Collateral Agent (a "SERVICER TERMINATION NOTICE") terminate all of the rights
and, except as expressly provided in this Agreement, obligations of the Servicer
under this Agreement. Notwithstanding any termination of the rights and
obligations of the Servicer, such terminated Servicer shall remain responsible
for any acts or omissions to act by it as Servicer prior to such termination.
SECTION 6.16. SUCCESSOR SERVICER. (a) With respect to a Servicer
resignation pursuant to Section 6.11, after receipt by the Issuer and the
Collateral Agent of the opinion of counsel required by such section, and with
respect to a Servicer termination pursuant to Section 6.15, after receipt by the
Servicer of a Servicer Termination Notice, and, with respect to both such a
Servicer resignation and a Servicer termination, on the date that the Successor
Servicer shall have been appointed by the Issuer pursuant to Section 6.17, all
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authority and power of the Servicer under this Agreement shall pass to and be
vested in the Successor Servicer; and, without limitation, the Collateral Agent
is hereby authorized and empowered to execute and deliver, on behalf of the
Servicer as attorney-in-fact or otherwise, all documents and other instruments,
and to do and accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights.
(b) The Servicer agrees to cooperate with the Collateral Agent and the
Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer to conduct servicing hereunder, including, without
limitation, the transfer to the Successor Servicer of all authority of the
Servicer to service the Purchased Contract Assets provided for under this
Agreement, including, without limitation, all authority over all Collections
which shall on the date of transfer be held by the Servicer for deposit, or
which shall thereafter be received with respect to the Purchased Contract
Assets.
(c) The Servicer shall promptly transfer its electronic records
relating to the Purchased Contract Assets therein to the Successor Servicer in
such electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary or desirable for the continued servicing of the
Purchased Contract Assets in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section shall require the Servicer to disclose to the Successor Servicer
information of any kind which the Servicer reasonably deems to be confidential,
the Successor Servicer shall, at no charge to the Successor Servicer or the
Issuer, be required to enter into such customary licensing and confidentiality
agreements as the Servicer shall deem reasonably necessary to protect its
interest. All costs and expenses incurred in connection with a transfer of
servicing shall be borne by the outgoing Servicer. The Seller shall, upon
request at all times, provide such information and assistance to the Servicer or
the Successor Servicer as shall be required for the Servicer or the Successor
Servicer to perform its obligations hereunder.
SECTION 6.17. APPOINTMENT OF SUCCESSOR SERVICER. (a) On and after the
receipt by the Servicer of a Servicer Termination Notice pursuant to Section
6.15, the Servicer shall continue to perform all servicing functions under this
Agreement until the date specified in the Servicer Termination Notice or
otherwise specified by the Issuer in writing or, if no such date is specified in
the Servicer Termination Notice, or otherwise specified by the Issuer, until a
date mutually agreed upon by the Servicer and the Issuer. As promptly as
possible after the giving of a Servicer Termination Notice, or after the receipt
of an opinion of counsel under Section 6.11, as the case may be, the Trustee
shall serve as successor servicer (the "SUCCESSOR SERVICER") and all authority,
power, obligations and responsibilities of the Successor Servicer under this
Agreement, whether in respect to the Notes, the Contract Assets or otherwise,
automatically shall pass to, be vested in and become obligations and
responsibilities of the Trustee without any further action; PROVIDED, HOWEVER,
that the Trustee shall not be required to become the Successor Servicer if it is
unable to act according to law and it provides to the Issuer an opinion of
counsel to such effect. The Trustee as Successor Servicer shall have no
responsibility for any acts or omissions of any prior Servicer or any liability
with respect to any obligation which was
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required to be performed by any prior Servicer prior to the date that the
Trustee becomes the Servicer or any claim of a third party based on any alleged
action or inaction of any prior Servicer. The Trustee is authorized and
empowered by this Agreement, as Successor Servicer, to execute and deliver, on
behalf of any prior Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination.
If the Trustee shall be legally unable so to act, the Trustee may appoint, or
petition a court of competent jurisdiction to appoint, as the successor to the
Servicer under this Agreement, any established institution having a net worth of
not less than $10,000,000 and whose regular business shall include the servicing
of receivables. No party other than the initial Trustee (or a successor to the
business of the Trustee) may serve as Successor Servicer without the written
consent of the Rating Agency.
(b) Upon the date of its appointment, the Successor Servicer, shall be
the successor in all respects to the Servicer with respect to servicing
functions under this Agreement and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof from such date onward, and all references in this Agreement to
the Servicer shall be deemed to refer to the Successor Servicer
(c) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of this
Agreement and the Security Agreement and shall pass to and be vested in the
Seller and, without limitation, the Seller is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Successor Servicer agrees to cooperate with
the Issuer, the Servicer and the Seller in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Purchased Contract Assets. To the extent that compliance with this Section
6.17 shall require the Successor Servicer to disclose to the Issuer or the
Seller information of any kind which the Successor Servicer deems to be
confidential, the Issuer or the Seller shall be required to enter into such
customary licensing and confidentiality agreements as the Successor Servicer
shall deem reasonably necessary to protect its interests.
(d) The parties hereto understand and agree that the Back-up Servicer
has pursuant to this Agreement agreed to service the Purchased Contract Assets
should the Trustee be appointed Successor Servicer. However, the Trustee
acknowledges that as the Successor Servicer, it shall remain responsible for the
servicing of the Purchased Contract Assets by itself or any designee, including
the Back-up Servicer. If a Successor Servicer has assumed the duties of Servicer
hereunder, the Successor Servicer may remove the Back-up Servicer for any
reason.
(e) The Successor Servicer's duties shall include all of the duties of
the Servicer, including but not limited to, the following: (i) take control of
the Post Office Box; (ii) establish a toll free number to receive phone calls by
Restaurants and Cardmembers; (iii) prepare and send compliance letters, as
necessary, to Restaurants that are not complying with
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the terms of the Contracts; (iv) obtain the services of any persons necessary
for performing the services hereunder; (v) ensure that the Restaurant
directories are being printed and distributed.
SECTION 6.18. MAINTENANCE OF PROPERTY; INSURANCE. The Servicer will (i)
keep all property and assets useful and necessary in its business as Servicer in
good working order and condition (normal wear and tear excepted), (ii) maintain,
with financially sound and reputable insurance companies, insurance on all its
property and assets necessary in its business as Servicer in at least such
amounts and against at least such risks (and with such risk retention) as are
usually insured against in the same general area by companies of established
repute engaged in the same or a similar business and reasonably satisfactory to
the Issuer, (iii) furnish to the Issuer, the Trustee and the Collateral Agent
upon written request, full information as to the insurance carried, (iv) within
five days of receipt of notice from any insurer, furnish the Issuer with a copy
of any notice of cancellation or material change in coverage from that existing
on the Closing Date and (v) forthwith, furnish the Issuer, the Trustee and the
Collateral Agent with notice of any cancellation or nonrenewal of coverage by
the Servicer. The Servicer will (A) maintain disaster recovery systems and
back-up computer and other information management systems that, in the
Servicer's reasonable judgment, are sufficient to protect its business as
Servicer against material interruption or loss in the event of damage to, or
loss or destruction of, its primary computer and information management systems
and (B) furnish to the Collateral Agent, the Noteholders and the Trustee, upon
written request, full information as to such disaster recovery systems and
back-up computer and information management systems.
SECTION 6.19. DUTIES OF THE BACK-UP SERVICER. The Back-up Servicer
shall, for the benefit of the Trustee and Collateral Agent, (i) receive daily
data from the Servicer relating to the Purchased Contract Assets, the
Restaurants, Mail Payments, Point-of-Sale Payments and the Credit Card Accounts;
(ii) keep and maintain all such data received and all other records,
correspondence and documents necessary or desirable for the servicing of the
Purchased Contract Assets; (iii) maintain its existing computer system and any
other information management systems necessary for servicing the Purchased
Contract Assets; and (iv) provide the Issuer, the Collateral Agent, each
Noteholder and the Trustee and their respective representatives access to
offices of the Back-up Servicer used in connection with performing its duties
hereunder and to the documentation in its possession regarding the Purchased
Contract Assets, such access being afforded without charge but only (1) upon two
Business Days prior notice, (2) during normal business hours, and (3) subject to
the Back-up Servicer's normal security and confidentiality procedures. All fees
of the Back-up Servicer in connection with its duties hereunder shall be paid by
the Servicer out of the Servicer's own funds. If the Trustee is Successor
Servicer, however, the Back-up Servicer shall be paid out of the Monthly
Servicing Fee Amount.
SECTION 6.20. GRANT OF LICENSE. For the purpose of enabling the Issuer,
the Trustee or a Successor Servicer to perform the functions of servicing and
collecting the Purchased Contract Assets upon a Purchase Termination Event, the
Servicer and the Seller hereby (i) assigns to the Issuer and the Trustee and
shall be deemed to assign to the Issuer and the Trustee and any Successor
Servicer all rights owned or hereinafter acquired by the Seller or
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the Servicer (by license, sublicense, lease, easement or otherwise) in and to
any equipment together with a copy of any software listed on Schedule VII; (ii)
agrees to use its best efforts to assist the Issuer and the Trustee to arrange
licensing agreements with all software vendors and other applicable persons in a
manner and to the extent reasonably appropriate to effectuate the servicing of
the Purchased Contract Assets; and (iii) deliver to the Trustee executed copies
of any landlord waivers in a form reasonably acceptable to the Trustee, that may
be necessary to grant to the Trustee access to any leased premises of any of the
Servicer for which the Trustee may require access to perform the collection and
administrative functions to be performed by the Trustee under the Transaction
Documents. The Purchaser may assign, license, pledge, grant or otherwise
encumber or transfer (including, without limitation by means of change of
control) the license granted in this Section 6.04, or all or part of its rights
under the license granted in this Section 6.04, to a joint venture of which the
Purchaser is a party, a related or affiliated company, a subsidiary, or a third
party with which it may merge or that acquires all or substantially all of the
assets of the Purchaser, without the prior, written consent of Transmedia or the
Initial Sellers.
ARTICLE VII
PURCHASE TERMINATION EVENTS
SECTION 7.01. PURCHASE TERMINATION EVENTS. If any of the following
events (each; a "PURCHASE TERMINATION EVENT") shall occur and be continuing:
(a) any written representation or warranty made or deemed made
or any oral representation made prior to the Closing Date by or on
behalf of the Seller or the Servicer under or in connection with this
Agreement or any Daily Report, Cash Allocation Report or Settlement
Statement or other information or report delivered by the Seller or the
Servicer pursuant hereto shall prove to have been false or incorrect in
any material respect when made or deemed made, except with respect to
the representation and warranty set forth in Section 4.02(a) with
respect to any Purchased Contract Assets so long as the Seller has
complied with its obligations in respect of such Purchased Contract
Assets pursuant to Section 2.04;
(b) the Seller shall have failed to (i) perform or observe any
term, covenant or agreement contained in Subsection 5.01(c), 5.01(f),
5.01(g), 5.01(h), 5.01(i), 5.01(1), 5.01(m), 5.01(n), 5.01(o), or
5.01(p), Section 5.02 or Section 7.02, or (ii) make any payment or
deposit to be made by it hereunder when the same becomes due and
payable;
(c) the Seller, the Servicer or Back-up Servicer shall have
failed to perform or observe any other term, covenant or agreement
contained in this Agreement on its part to be performed or observed and
any such failure shall have remained unremedied for ten days following
notification by the Issuer, the Servicer or the Trustee or otherwise
becoming aware thereof;
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(d) the Indenture or the Security Agreement shall have ceased
to be in full force and effect;
(e) an Amortization Commencement Date, Early Amortization
Event or Potential Early Amortization Event shall have occurred;
(f) the Servicer shall have failed to make any payment or
deposit to be made by it hereunder when the same becomes due and
payable; or
(g) any Purchase Termination Event under the Purchase
Agreement shall have occurred.
then, and in any such event, the Trustee or the Collateral Agent may, or, in the
case of an event set forth in clause (e) above, shall, by notice to the Seller
declare the Issuer's obligation to acquire Contract Assets from the Seller to be
terminated, whereupon such obligation shall forthwith be terminated.
SECTION 7.02. REMEDIES. If a Purchase Termination Event has occurred
and is continuing, PROVIDED the Issuer provides the Seller and the Servicer with
ten Business Days' notice prior to taking any action set forth in clause (c)(ii)
below:
(a) The Issuer, the Collateral Agent and the Trustee shall
have all of the rights and remedies provided to a secured creditor or a
purchaser of accounts under the UCC as in effect in the applicable
jurisdiction or other applicable law in respect thereof.
(b) The Issuer, the Collateral Agent and the Trustee may at
any time (i) notify the respective Restaurants and Credit Card
Companies of the Issuer's ownership of the Purchased Contract Assets
and may direct that payment of all amounts due or to become due under
the Purchased Contract Assets be made directly to the Collateral Agent
or its designee or (ii) give notice, or require that the Seller, at the
Seller's expense, give notice of such ownership to each such Restaurant
and Credit Card Company and direct that all payments be made directly
to the Collateral Agent or its designee.
(c) The Seller and the Servicer shall, upon the Issuer's,
Collateral Agent's or the Trustee's request, and at the Seller's or the
Servicer's expense, (i) assemble all the Seller's or the Servicer's
documents, instruments and other records (including, without
limitation, credit files and computer tapes or disks) that (A) evidence
or will evidence or record Purchased Contract Assets sold by the Seller
(B) evidence the underlying Contracts relating to such Purchased
Contract Assets and (C) are otherwise necessary or desirable to effect
Collections of such Purchased Contract Assets (collectively, the
"DOCUMENTS") and (ii) deliver the Documents to the Issuer or its
designee at a place designated by the Issuer.
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(d) Each of the Servicer and the Seller hereby irrevocably
authorizes the Issuer, the Collateral Agent and the Trustee to take any
and all steps in the Seller's or the Servicer's name and on the
Seller's or the Servicer's behalf necessary or desirable, in the
reasonable opinion of the Issuer, the Collateral Agent and the Trustee
to collect all amounts due under the Purchased Contract Assets,
including, without limitation, opening mail received at the Post Office
Boxes, endorsing the Seller's name on checks and other instruments
representing Collections, enforcing the Purchased Contract Assets and
exercising all rights and remedies in respect thereof.
(e) The Seller and the Servicer will (i) deliver to the
Issuer, the Collateral Agent and the Trustee, all computer programs,
material and data necessary or desirable to the immediate collection of
the Purchased Contract Assets by the Issuer, the Collateral Agent and
the Trustee or a party designated by the Collateral Agent or the
Trustee, with or without the participation of the Seller and the
Servicer and (ii) make such arrangements with respect to the collection
of the Purchased Contract Assets as may be reasonably required by the
Collateral Agent or the Trustee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. INDEMNITIES BY THE SELLER AND THE SERVICER. Each of
Transmedia and the Seller agrees to indemnify, defend and hold the Issuer and
its assignees (including the Trustee, the Collateral Agent and each Noteholder)
and the members of the Issuer, for the benefit of each such Person harmless from
and against any and all loss, liability, damage, judgment, claim, deficiency or
expense (including interest, penalties, reasonable attorney's fees and amounts
paid in settlement) that is caused by (i) a material breach at any time by the
Seller or Transmedia of its representations, warranties and covenants contained
in Section 3.01 hereof or Sections 4.01 or 4.02 or (ii) any material information
furnished by the Seller or Transmedia which is set forth in any schedule
delivered hereunder, being untrue in any material respect when any such
representation was made or schedule delivered, or (iii) breach of any covenant
in Sections 5.02 or 5.03 hereof, PROVIDED that neither Transmedia nor the Seller
shall have any liability with respect to a representation or warranty as to any
specific Contract, Receivable or the related Credits other than to purchase the
Contract Assets in accordance with Section 2.04 hereof. Transmedia shall also
indemnify the Trustee, the Collateral Agent each Noteholder, the Issuer and each
Member and the Servicer for any cost or expenses incurred by them in the
enforcement of this Agreement. The obligations of Transmedia under this Section
8.01 shall be considered to have been relied upon by the Issuer and its
assignees and shall survive the execution, delivery and performance of this
Agreement, regardless of any investigation made by or on behalf of the Issuer,
until termination of the Indenture. If either Transmedia or the Seller has made
any indemnity payments pursuant to this Section 8.01 and thereafter the
recipient collects any of such amounts from others, such party will promptly
repay the amount collected to either Transmedia or the Seller, as applicable,
without interest.
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SECTION 8.02. SERVICER INDEMNIFICATION. (a) The Servicer shall
indemnify and hold harmless the Trustee, the Collateral Agent, the Seller, the
Issuer, each Member and the Noteholders, from and against any loss, liability,
claim, expense, damage or injury suffered or sustained to the extent that such
loss, liability, claim, expense, damage or injury arose out of or was imposed by
reason of the failure by the Servicer to perform its duties under this Agreement
or are attributable to errors or omissions of the Servicer related to such
duties; PROVIDED, HOWEVER, that the Servicer shall not indemnify any party to
the extent that acts of fraud, gross negligence or breach of fiduciary duty by
such party contributed to such loss, liability, claim, expense, damage or
injury.
(b) Indemnification under this Section 8.02 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation
reasonably incurred. If the Servicer has made any indemnity payments to the
Trustee or the Noteholders pursuant to this Section and such party thereafter
collects any of such amounts from others, such party will promptly repay such
amounts collected to the Servicer without interest. The provisions of this
Section 8.02 shall survive any expiration or termination of this Agreement.
SECTION 8.03. ISSUER INDEMNIFICATION. The Issuer shall indemnify and
hold harmless the Servicer (but solely from the amounts to be distributed to the
Issuer as set forth in Sections 7 and 8 of the Security Agreement) from and
against any loss, liability, expense, damage or injury suffered or sustained by
the Servicer, including but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other costs and expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim, which
arises out of the Servicer's activities hereunder; PROVIDED, HOWEVER, that the
Issuer shall not indemnify the Servicer if the Servicer's activities constituted
fraud, willful misconduct, negligence (which includes negligence with respect to
the duties of the Servicer which are explicitly set forth in this Agreement) or
breach of fiduciary duty by the Servicer or for any amounts for which the
Servicer is obligated to indemnity the Issuer or other Persons pursuant to
Section 8.02 hereof.
ARTICLE IX
THE SUBORDINATED NOTE; SELLER NOTES; CAPITAL CONTRIBUTION
SECTION 9.01. SUBORDINATED NOTE. (a) On the Closing Date, the Issuer
shall issue a subordinated note substantially in the form of Exhibit C (the
"SUBORDINATED NOTE"). The Subordinated Note shall be issued in the name of the
Seller and shall be executed by the Issuer and delivered to the Seller on the
Closing Date. The outstanding principal amount of the Subordinated Note shall be
calculated pursuant to the Daily Report; PROVIDED, HOWEVER, that the principal
amount of the Subordinated Note shall be fixed on and not be recalculated after
the Purchase Termination Date. Anything to the contrary notwithstanding, the
Issuer shall have the right (but not the obligation) to offset or adjust the
Subordinated Note by any amounts owed by the Seller to the Issuer under this
Agreement.
(b) Interest on the principal amount of the Subordinated Note shall
accrue at a rate of 10% per annum. Payments of principal and interest under the
Subordinated Note shall
-41-
only be made to the extent amounts are available pursuant to clause FOURTH of
Section 7(a)(iii) of the Security Agreement and the Seller shall not have
recourse to any other assets of the Issuer. The Seller agrees not to demand or
▇▇▇ for amounts due under the Subordinated Note until after the date that is one
year and one day after the Final Issuer Termination. The Seller agrees upon any
distribution of all or any of the assets of the Issuer to creditors of the
Issuer upon the dissolution, winding up, total or partial liquidation,
arrangement, reorganization, adjustment, protection, relief, or composition of
the Issuer or its debts, any payment or distribution of any kind (including,
without limitation, cash, property, securities and any payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Issuer being subordinated to the payment of the Subordinated
Note) in respect of the Subordinated Note that otherwise would be payable or
deliverable upon or with respect to the Subordinated Note, directly or
indirectly, by set-off or in any other manner, including, without limitation,
from or by way of contract assets, shall be paid or delivered directly to the
Collateral Agent for application (in the case of cash) to or as contract assets
(in the case of non-cash property or securities) for the payment or prepayment
in full of, the obligations under the Notes until the obligations and all
principal and interest under the Notes shall have been indefeasibly paid in full
in cash. The Collateral Agent is irrevocably authorized and empowered (in its
own name or in the name of the Seller or otherwise), but shall have no
obligation, to demand, ▇▇▇ for, collect and receive every payment or
distribution referred to in the preceding sentence and give acquittance therefor
and to file claims and proofs of claim and take such other action (including,
without limitation, voting the Subordinated Note and enforcing any security
interest or other lien securing payment of the Subordinated Note) as the
Collateral Agent may deem necessary or advisable for the exercise or enforcement
of any of the rights or interest of the Noteholders. The Seller shall duly and
promptly take such action as the Collateral Agent may request to (i) collect the
Subordinated Note for the account of the Noteholders and to file appropriate
claims or proofs of claim in respect of the Subordinated Note, (ii) execute and
deliver to the Collateral Agent such powers of attorney, assignments or other
instruments as the Collateral Agent may request in order to enable the
Collateral Agent to enforce any and all claims with respect to, and any security
interests and other liens securing payment of, the Subordinated Note and (iii)
collect and receive any and all payments or distributions which may be payable
or deliverable upon or with respect to the Subordinated Note. All payments or
distributions upon or with respect to the Subordinated Note that are received by
the Seller contrary to the provisions of the Indenture, the Security Agreement,
this Agreement or the Subordinated Note shall be received in trust for the
benefit of the Noteholders, shall be segregated from other funds and property
held by the Seller and shall be forthwith paid over to the Collateral Agent in
the same form as so received (with any necessary endorsement) to be applied (in
the case of cash) to, or held as contract assets (in the case of non-cash
property or securities) for the payment or prepayment in full of, the
Obligations until the Obligations shall have been indefeasibly paid in full in
cash. The Seller agrees that no payment or distribution to the Noteholders
pursuant to the provisions of the Subordinated Note shall entitle the Seller to
exercise any rights or subrogation in respect thereof against the Issuer until
the Obligations and all principal and interest under the Issuer's Notes shall
have been indefeasibly paid in full in cash. The Seller and the Issuer each
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Obligations and the Subordinated
-42-
Note and any requirement that the Collateral Agent protect, secure, perfect or
insure any security interest or lien on any property subject thereto or exhaust
any right or take any action against the Issuer or any other Person or any
Contract Assets.
(c) The Seller agrees and confirms that the Subordinated Note represent
solely the right to receive certain amounts from funds available under the
Security Agreement and only to the extent, in the manner and at the times set
forth in this Agreement and the Security Agreement and that the Subordinated
Note does not represent a security interest in the Contract Assets or their
proceeds. No payments may be received, directly or indirectly, by the Seller
(and if received, the Seller agrees to return such payments to the Issuer) on
the Subordinated Note unless the Issuer has paid all amounts required pursuant
to this Agreement and the Security Agreement to be paid prior to any payments in
respect of the Subordinated Note.
(d) The Seller agrees and confirms that the Collateral Agent shall not
have any duty whatsoever to the Seller as holder of the Subordinated Note and
that the Collateral Agent shall not be liable to the Seller for any action taken
or omitted to be taken with respect to the Subordinated Note.
SECTION 9.02. RESTRICTIONS ON TRANSFER OF SUBORDINATED NOTE. Neither
the Subordinated Note nor any right of the Seller to receive payments
thereunder, shall be assigned, transferred, exchanged, pledged, hypothecated,
participated or otherwise conveyed.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, or consent to any departure by the Seller or the Servicer
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Issuer and the Collateral Agent (acting at the direction of
the Trustee acting at the direction of the Majority Noteholders) and, if
required pursuant to Section 9(c) of the Indenture, the Trustee (acting at the
direction of the Majority Noteholders), and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. Notice of any such amendment or waiver shall be given to the Rating
Agency ten Business Days before taking effect.
SECTION 10.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telex,
facsimile or cable communication) and telegraphed, telexed, transmitted, cabled
or delivered,
(a) If to the Issuer, to it at: TNI Funding Company I, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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(b) If to the Seller, to it at: TNI Funding I, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
(c) If to the Servicer, to it at: Transmedia Network Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: 305/▇▇▇-▇▇▇▇
Telecopy: 305/892-3342
(d) If to the Trustee, to it at: The Chase Manhattan Bank
Advance Structured Products
Group - ABS
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Telecopy: 212/946-3240
(e) If to the Back-up Servicer, to it at: ▇▇▇▇▇ ▇▇▇▇▇ Associates, Ltd.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
(f) If to the Rating Agency, to it at: Standard & Poor's Rating Services
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Asset Backed Surveillance
Department
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt if delivered by hand
or overnight courier service or sent by telex, telecopy or other telegraphic
communications equipment of the sender, in each case delivered, sent to such
party as provided in this Section or in accordance with the latest unrevoked
direction from such party given in accordance with this Section, except that
notices to the Issuer pursuant to Article II shall not be effective until
received by the Issuer, the Collateral Agent and the Trustee.
-44-
SECTION 10.03. NO WAIVER; REMEDIES. No failure on the part of the
Issuer to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10.04. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Issuer, the Seller, the Trustee, the
Back-up Servicer and the Servicer. From and after the date this Agreement shall
have so become effective, this Agreement shall be binding upon and inure to the
benefit of the Issuer and the Seller, the Servicer and their respective
successors and assigns (including, without limitation, the Trustee and the
Collateral Agent), except that none of the Seller, the Back-up Servicer or the
Servicer shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Issuer and the Collateral Agent
(acting at the direction of the Majority Noteholders). 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 such
time, after the Purchase Termination Date, as the Issuer and the Collateral
Agent shall not have any interest in any Purchased Contract Assets; PROVIDED,
HOWEVER, that the indemnification provisions of Article VIII (and any guarantee
with respect thereto) shall be continuing and shall survive any termination of
this Agreement.
SECTION 10.05. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS AND EXCEPT TO THE EXTENT THAT THE
VAL1DITY OR PROTECTION OF THE ISSUER'S INTEREST IN THE CONTRACT ASSETS, OR
REMEDIES HEREUNDER IN RESPECT THEREOF, MAY BE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 10.06. HEADINGS. Section headings and the Table of Contents
used in this Agreement are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
SECTION 10.07. RESERVED.
SECTION 10.08. ACKNOWLEDGMENT OF ASSIGNMENT. The Seller, the Servicer
and the Back-up Servicer hereby (i) acknowledge and consent to the security
interest granted by the Issuer in the Purchased Contract Assets and the rights
of the Issuer under this Agreement pursuant to the Security Agreement and (ii,1
acknowledge that, pursuant to the Security Agreement, the Collateral Agent,
acting at the direction of the Trustee acting at the direction of the Majority
Noteholders, has, among other rights, the exclusive right (except as expressly
provided in the Security Agreement) to take any action, exercise any remedy,
make any decision and agree, subject to the consent of the Seller, to amend,
waive or modify any provision of this Agreement as if the Collateral Agent were
the Issuer (regardless of whether an Early Amortization Event has occurred or is
continuing).
-45-
SECTION 10.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 10.10. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 10.11. NO PETITION IN BANKRUPTCY. Each of the parties to this
Agreement, other than the Issuer, hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of all outstanding
Notes, it will not institute against, or join any other Person in instituting
against, the Issuer any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any State of the United States.
SECTION 10.12. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract.
SECTION 10.13. THIRD PARTY BENEFICIARIES. Each of the Secured Parties
shall be a third-party beneficiary of this Agreement. Without limiting the
foregoing, it is agreed and understood that each Secured Party shall be entitled
to rely on and entitled to all the benefits of each of the representations,
warranties and covenants set forth herein.
SECTION 10.14. JURISDICTION; CONSENT TO SERVICE OF PROCESS. Each of the
Issuer, the Seller, the Back-up Servicer and the Servicer hereby irrevocably and
unconditionally:
(a) submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United
States of America for the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement
of any judgment;
(b) agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or,
to the extent permitted by law, federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law;
(c) consents to any such action or proceeding being brought in
such courts and waives any objection it may now or hereafter have to
the laying of venue of any
-46-
suit, action or proceeding arising out of or relating to this Agreement
in any New York State or federal court or that such action or
proceeding was brought in an inconvenient court, and agrees not to
plead or claim the same;
(d) consents to service of process in the manner provided for
notices in Section 10.02. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other
manner permitted by law; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
SECTION 10.16. CONFIRMATION OF INTENT. It is the express intent of the
parties hereto that the transfer and conveyance of the Contract Assets to the
Issuer pursuant to Section 2.01, in each case and at all times shall be treated
under applicable State law and federal bankruptcy law as a sale by the Seller to
the Issuer. If, after the Closing Date, it is determined that all or any portion
of the assets described in Sections 2.01(a) and 2.01(b) hereof continue to be
property of the Seller, then the Seller shall have been deemed to have hereby
granted to the Issuer a security interest in all of such party's right, title
and interest in, to and under all such assets, and this Agreement shall
constitute a security agreement under applicable law.
SECTION 10.17. POWER OF ATTORNEY. The Issuer hereby grants a power of
attorney to the Servicer and the Collateral Agent to make any recording or
filing of any financing statement or continuation statement evidencing an
interest in the Contract Assets.
SECTION 10.18. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. The Seller
appoints as of the date hereof the Collateral Agent its respective
attorney-in-fact with full authority in the place and stead of the Seller and in
the name of the Seller or otherwise, from time to time in the discretion of the
Trustee acting at the direction of the Majority Noteholders, to take any action
and to execute any instrument that the Trustee may deem necessary or advisable
to accomplish the purposes of this Agreement, including, without limitation,
after an Early Amortization Event or Purchase Termination Event has occurred and
is continuing to ask, demand, collect, ▇▇▇ for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Contract Assets, to settle, compromise, compound, prosecute
or defend any action or proceeding with respect to the Contract Assets, to
receive, endorse and collect all drafts or other instruments and documents made
payable to the Seller in connection therewith or representing any payment,
dividend or other distribution in respect of the Contract Assets or any part or
proceeds thereof and to give full discharge for the same or to extend the time
of payment of or to make any allowance or adjustment with respect to any or all
of the Contract Assets, or to replace the Servicer, and if an Early Amortization
Event has occurred and is continuing, the Collateral Agent may, as such
attorney-in-fact, file any claims or take any action or institute any
proceedings which the Trustee may deem to be necessary or desirable for the
collection thereon or to enforce compliance with the terms and conditions of the
Purchase and Servicing Agreement or the Purchase Agreement.
-47-
IN WITNESS WHEREOF, each of the parties hereto has caused this Purchase
and Servicing Agreement to be duly executed and delivered by its proper and duly
authorized officers as of the date first above written.
TNI FUNDING COMPANY I, L.L.C., as Issuer
By_______________________________________
Name:
Title:
TNI FUNDING I, INC., as Seller
By_______________________________________
Name:
Title:
TRANSMEDIA NETWORK INC., for itself and
as Servicer
By_______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Trustee
By_______________________________________
Name:
Title:
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇ ASSOCIATES, LTD., as Back-up
Servicer
By_______________________________________
Name:
Title:
-49-
FORM OF
SUBORDINATED NOTE
December_, 1996
TNI FUNDING COMPANY I, L.L.C., a Delaware limited liability company
(the "ISSUER"), hereby promises to pay to the order of TNI FUNDING I, INC., a
Delaware special purpose corporation (the "SELLER"), the principal amount of
this Subordinated Note, determined as described below, together with interest
thereon at a rate of 10% per annum in lawful money of the United States of
America. Capitalized terms used herein but not defined herein shall have the
meanings assigned to such terms in the Indenture dated as of December 1, 1996,
between the Issuer and The Chase Manhattan Bank, as trustee (the "TRUSTEE")
(such agreement, as it may from time to time be amended, supplemented or
otherwise modified in accordance with its terms, the "INDENTURE").
The principal amount of this Subordinated Note at any time shall be
determined in accordance with the provisions of Article IX of the Purchase and
Servicing Agreement among the Issuer, the Seller, the Trustee, ▇▇▇▇▇ ▇▇▇▇▇
Associates, Ltd. (as Back-up Servicer) and Transmedia Network, Inc. (as
Servicer) dated as of December 1, 1996 (the "PURCHASE AND SERVICING AGREEMENT").
All principal of and interest on this Subordinated Note shall be due and payable
at the times provided in Section 9.01 of the Purchase and Servicing Agreement.
This Subordinated Note represents solely the right to receive certain amounts
from funds available under the Security Agreement and only to the extent, in the
manner and at times set forth in the Indenture and the Security Agreement and
this Subordinated Note does not represent a security interest in the Contract
Assets or their proceeds. No payments may be received, directly or indirectly,
by the Seller (and if received, the Seller agrees to return such payments to the
Issuer) on this Subordinated Note unless the Issuer has paid all amounts
required pursuant to the Indenture and the Security Agreement to be paid prior
to any payment in respect of this Subordinated Note.
Payments of principal on this Subordinated Note shall be made by wire
transfer of immediately available funds to such account of the Seller as the
Seller may designate in writing.
This Subordinated Note is subordinate and junior in right of payment in
full to all the Obligations to the extent and in the manner provided in Article
1X of the Purchase and Servicing Agreement; and the holder by acceptance hereof
agrees that payments on this Subordinated Note may be made only from the Secured
Collateral and the proceeds thereof and agrees to be bound by all the provisions
of Article IX of the Purchase and Servicing Agreement.
The Issuer hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
It is the intention of the Issuer and the Seller to conform strictly to
applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including the laws of the State of New
York and the laws of the United States of America), then, in that event,
notwithstanding anything to the contrary in any agreement entered into in
connection with this Subordinated Note, it is agreed as follows: (i) the
aggregate of all consideration that constitutes interest, if any, under
applicable law that is taken, reserved, contracted for, charged or received
under this Subordinated Note or any other agreement or document executed in
connection with this Subordinated Note shall under no circumstances exceed the
maximum amount of interest allowed by applicable law, and any excess shall be
credited to other amounts due under this Subordinated Note by the holder hereof
(or if this Subordinated Note shall have been paid in full, refunded to the
Issuer); and (ii) in the event that maturity of this Subordinated Note is
accelerated by reason of any election by the holder hereof resulting from any
default hereunder or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the maximum amount allowed by applicable law, and excess interest, if
any, provided for in this Subordinated Note or otherwise shall be cancelled
automatically as of the date of such acceleration or prepayment and, if
theretofore prepaid, shall be credited to other amounts due under this
Subordinated Note (or if this Subordinated Note shall have been paid in full,
refunded to the Issuer). In the event that applicable law provides for a ceiling
on the rate of interest, if any, chargeable hereunder, that ceiling shall be the
indicated rate ceiling.
The holder hereof agrees that it shall have no right to cause, by way
of acceleration or otherwise, any payment of principal hereunder to become due
or payable, prior to the times provided in the Security Agreement.
The holder hereof agrees to be bound by all of the provisions of the
Transaction Documents, including, without limitation, the covenant that prior to
the date which is one year and one day after the payment in full of all
outstanding Notes it will not institute against, or join any other Person in
instituting against, the Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the law
of the United States or any State.
This Subordinated Note shall not be assigned, transferred, exchanged,
pledged, hypothecated, participated or otherwise conveyed except as otherwise
provided in the Transaction Documents.
D-2
THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
TNI FUNDING COMPANY I, L.L.C.
By___________________________________
Title:_____________________________
D-3
EXHIBIT A
FORM OF CONFIRMATION OF
SALE AND ASSIGNMENT
EXHIBIT B
FORM OF SETTLEMENT STATEMENT
Effective on the date reflected above and upon transmission of the
attached Daily Report to The Chase Manhattan Bank, TNJ Funding I, Inc. ("TNI")
hereby absolutely transfers all of its right, title and interest in the Contract
Assets identified pursuant to the terms and conditions of the Purchase
Agreement, dated as of December 1, 1996, among TNI, TNI Funding I, LLC, ▇▇▇▇▇
▇▇▇▇▇ Associates, Ltd., The Chase Manhattan Bank and Transmedia Network Inc.
TNI FUNDING I, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[See Attached Form]
EXHIBIT C
FORM OF DAILY REPORT
Effective on the date reflected above and upon transmission of the
attached Daily Report to The Chase Manhattan Bank, TNJ Funding I, Inc. ("TNI")
hereby absolutely transfers all of its right, title and interest in the Contract
Assets identified pursuant to the terms and conditions of the Purchase
Agreement, dated as of December 1, 1996, among TNI, TNI Funding I, LLC, ▇▇▇▇▇
▇▇▇▇▇ Associates, Ltd., The Chase Manhattan Bank and Transmedia Network Inc.
TNI FUNDING I, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[See Attached Form]
EXHIBIT D
FORM OF SUBORDINATED NOTE
December __, 1996
TNI FUNDING COMPANY 1, L.L.C., a Delaware limited liability company
(the "ISSUER"), hereby promises to pay to the order of TNI FUNDING 1, INC., a
Delaware special purpose corporation (the "SELLER"), the principal amount of
this Subordinated Note, determined as described below, together with interest
thereon at a rate of 10% per annum in lawful money of the United States of
America. Capitalized terms used herein but not defined herein shall have the
meanings assigned to such terms in the Indenture dated as of December 1, 1996,
between the Issuer and The Chase Manhattan Bank, as trustee (the "TRUSTEE")
(such agreement, as it may from time to time be amended, supplemented or
otherwise modified in accordance with its terms, the "INDENTURE").
The principal amount of this Subordinated Note at any time shall be
determined in accordance with the provisions of Article IX of the Purchase and
Servicing Agreement among the Issuer, the Seller, the Trustee, ▇▇▇▇▇ ▇▇▇▇▇
Associates, Ltd. (as Back-up Servicer) and Transmedia Network, Inc. (as
Servicer) dated as of December 1, 1996 (the "PURCHASE AND SERVICING AGREEMENT").
All principal of and interest on this Subordinated Note shall be due and payable
at the times provided in Section 9.01 of the Purchase and Servicing Agreement.
This Subordinated Note represents solely the right to receive certain amounts
from funds available under the Security Agreement and only to the extent, in the
manner and at times set forth in the Indenture and the Security Agreement and
this Subordinated Note does not represent a security interest in the Contract
Assets or their proceeds. No payments may be received, directly or indirectly,
by the Seller (and if received, the Seller agrees to return such payments to the
Issuer) on this Subordinated Note unless the Issuer has paid all amounts
required pursuant to the Indenture and the Security Agreement to be paid prior
to any payment in respect of this Subordinated Note.
Payments of principal on this Subordinated Note shall be made by wire
transfer of immediately available funds to such account of the Seller as the
Seller may designate in writing.
This Subordinated Note is subordinate and junior in right of payment in
full to all the Obligations to the extent and in the manner provided in Article
IX of the Purchase and Servicing Agreement; and the holder by acceptance hereof
agrees that payments on this Subordinated Note may be made only from the Secured
Collateral and the proceeds thereof and agrees to be bound by all the provisions
of Article IX of the Purchase and Servicing Agreement.
The Issuer hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
It is the intention of the Issuer and the Seller to conform strictly to
applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including the laws of the State of New
York and the laws of the United States of America), then, in that event,
notwithstanding anything to the contrary in any agreement entered into in
connection with this Subordinated Note, it is agreed as follows: (i) the
aggregate of all consideration that constitutes interest, if any, under
applicable law that is taken, reserved, contracted for, charged or received
under this Subordinated Note or any other agreement or document executed in
connection with this Subordinated Note shall under no circumstances exceed the
maximum amount of interest allowed by applicable law, and any excess shall be
credited to other amounts due under this Subordinated Note by the holder hereof
(or if this Subordinated Note shall have been paid in full, refunded to the
Issuer); and (ii) in the event that maturity of this Subordinated Note is
accelerated by reason of any election by the holder hereof resulting from any
default hereunder or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the maximum amount allowed by applicable law, and excess interest, if
any, provided for in this Subordinated Note or otherwise shall be cancelled
automatically as of the date of such acceleration or prepayment and, if
theretofore prepaid, shall be credited to other amounts due under this
Subordinated Note (or if this Subordinated Note shall have been paid in full,
refunded to the Issuer). In the event that applicable law provides for a ceiling
on the rate of interest, if any, chargeable hereunder, that ceiling shall be the
indicated rate ceiling.
The holder hereof agrees that it shall have no right to cause, by way
of acceleration or otherwise, any payment of principal hereunder to become due
or payable, prior to the times provided in the Security Agreement.
The holder hereof agrees to be bound by all of the provisions of the
Transaction Documents, including, without limitation, the covenant that prior to
the date which is one year and one day after the payment in full of all
outstanding Notes it will not institute against, or join any other Person in
instituting against' the Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the law
of the United States or any State.
This Subordinated Note shall not be assigned, transferred, exchanged,
pledged, hypothecated, participated or otherwise conveyed except as otherwise
provided in the Transaction Documents.
THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
TNI FUNDING COMPANY 1, L.L.C.
By__________________________________
Title:___________________________
D-2
EXHIBIT E
FORM OF CONTRACT
[See Attached Forms)
EXHIBIT F
SCOPE OF AGREED-UPON PROCEDURES
[See Attached Form]
SCHEDULE I
CONTRACT SCHEDULE
[delivered to the Trustee on the Closing Date]
SCHEDULE II
TRADE NAMES
Transmedia
Transmedia Network Inc.
Transmedia Restaurant Company Inc.
Transmedia Service Company Inc.
SCHEDULE III
BANK ACCOUNTS AND POST OFFICE BOXES
TITLE OF ACCOUNT BANK ACCT. NO.
Collateral Account The Chase Manhattan Bank 507-868226
Collection Deposit Account The Chase Manhattan Bank 507-869052
POST ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
33261-9400
1
SCHEDULE V
CARDMEMBER AGREEMENTS
[delivered to the Trustee on the Closing Date]
1
SCHEDULE VII
COMPUTER SOFTWARE
RPG 400 Proprietary Software
1