Exhibit 10.17
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WESCO RECEIVABLES CORP.,
as Company,
WESCO DISTRIBUTION, INC.,
as Servicer,
and
THE CHASE MANHATTAN BANK,
as Trustee
on behalf of the Holders
WESCO RECEIVABLES MASTER TRUST
POOLING AGREEMENT
Dated as of June 5, 1998
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
1.1. Definitions.................................................... 1
1.2. Other Definitional and Calculation Provisions.................. 31
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
2.1. Conveyance of Receivables...................................... 33
2.2. Acceptance by Trustee.......................................... 37
2.3. Representations and Warranties of the Company
Relating to the Company.................................... 37
2.4. Representations and Warranties of the Company
Relating to the Receivables................................ 41
2.5. Repurchase of Ineligible Receivables Cash Dilution Payments.... 42
2.6. Purchase of Investor Certificateholders' Interest
in Trust Portfolio......................................... 44
2.7. Affirmative Covenants of the Company........................... 45
2.8. Negative Covenants of the Company.............................. 50
ARTICLE III
RIGHTS OF HOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
3.1. Rights of Holders.............................................. 54
ARTICLE IV
ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO THE SERIES RELATING THERETO
ARTICLE V
THE CERTIFICATES AND INTERESTS
5.1. The Certificates............................................... 63
5.2. Authentication of Certificates................................. 64
5.3. Registration of Transfer and Exchange
of Certificates............................................ 64
5.4. Mutilated, Destroyed, Lost or Stolen
Certificates............................................... 68
5.5. Persons Deemed Owners.......................................... 68
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5.6. Appointment of Paying Agent.................................... 69
5.7. Access to List of Investor Certificateholders'
Names and Addresses........................................ 70
5.8. Authenticating Agent........................................... 70
5.9. Tax Treatment.................................................. 72
5.10. Company Exchanges.............................................. 72
5.11. Book-Entry Certificates........................................ 75
5.12. Notices to Clearing Agency..................................... 76
5.13. Definitive Certificates........................................ 76
ARTICLE VI
OTHER MATTERS RELATING
TO THE COMPANY
6.1. Limitation on Liability........................................ 76
6.2. Liabilities.................................................... 77
ARTICLE VII
EARLY AMORTIZATION EVENTS
7.1. Early Amortization Events...................................... 77
7.2. Additional Rights Upon the Occurrence of
Certain Events............................................. 79
ARTICLE VIII
THE TRUSTEE
8.1. Duties of Trustee.............................................. 80
8.2. Rights of the Trustee.......................................... 83
8.3. Trustee Not Liable for Recitals in Certificates................ 85
8.4. Trustee May Own Certificates................................... 85
8.5. Trustee's Fees and Expenses.................................... 86
8.6. Eligibility Requirements for Trustee........................... 87
8.7. Resignation or Removal of Trustee.............................. 87
8.8. Successor Trustee.............................................. 88
8.9. Merger or Consolidation of Trustee............................. 88
8.10. Appointment of Co-Trustee or Separate Trustee.................. 89
8.11. Tax Returns.................................................... 90
8.12. Trustee May Enforce Claims Without Possession
of Certificates............................................ 91
8.13. Suits for Enforcement.......................................... 91
8.14. Rights of Investor Certificateholders to
Direct Trustee............................................. 91
8.15. Representations and Warranties of Trustee...................... 92
8.16. Maintenance of Office or Agency................................ 92
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8.17. Limitation of Liability....................................... 92
ARTICLE IX
TERMINATION
9.1. Termination of Trust; Liquidation of Receivables.............. 93
9.2. Clean-Up Call and Final Termination Date of
Investor Certificates of any Series....................... 93
9.3. Final Payment with Respect to Any Series...................... 95
9.4. Company's Termination Rights.................................. 96
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Amendment..................................................... 96
10.2. Protection of Right, Title and Interest to Trust.............. 98
10.3. Limitation on Rights of Holders............................... 99
10.4. Governing Law................................................ 100
10.5. Notices...................................................... 100
10.6. Severability of Provisions................................... 101
10.7. Assignment................................................... 101
10.8. Certificates Nonassessable and Fully Paid.....................101
10.9. Further Assurances........................................... 101
10.10. No Waiver; Cumulative Remedies................................102
10.11. Counterparts................................................. 102
10.12. Third-Party Beneficiaries.................................... 102
10.13. Actions by Holders........................................... 102
10.14. Merger and Integration....................................... 102
10.15. Headings..................................................... 102
10.16. Construction of Agreement.................................... 103
10.17. No Set-Off................................................... 103
10.18. No Bankruptcy Petition....................................... 103
10.19. Limitation of Liability...................................... 103
10.20. Canadian Taxes ............................................. 104
10.21. Certain Information.......................................... 105
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EXHIBITS
Exhibit A Form of Lockbox Agreement
Exhibit B Form of Eligible Segregated Account Bank Acknowledgment
Exhibit C Form of Annual Opinion of Counsel
Exhibit D Internal Operating Procedures Memorandum
Exhibit E Form of Required Currency Hedge Assignment
SCHEDULES
Schedule 1 Receivables
Schedule 1A Construction Receivables
Schedule 1B BEAR Receivables
Schedule 2 Identification of the Trust Accounts
Schedule 3 Actions with respect to Chattel Paper
Schedule 4 Location of Chief Executive Office
Schedule 5 [Reserved]
Schedule 6 Form of Legend for Receivables Computer Files
Schedule 7 Conditions Precedent to becoming Eligible Receivable
POOLING AGREEMENT, dated as of June 5, 1998, among WESCO Receivables
Corp., a Delaware corporation (the "Company"); WESCO Distribution, Inc., a
Delaware corporation ("WESCO"), in its capacity as servicer (the "Servicer");
and The Chase Manhattan Bank, a New York banking corporation, not in its
individual capacity, but solely as trustee (in such capacity, the "Trustee").
W I T N E S S E T H :
WHEREAS, as of the date hereof, (i) the Company, the Servicer and
the Sellers (as hereinafter defined) are entering into a U.S. Receivables Sale
Agreement (as amended, supplemented or otherwise modified from time to time, the
"U.S. Receivables Sale Agreement") and a Canadian Receivables Sale Agreement (as
amended, supplemented or otherwise modified from time to time, the "Canadian
Receivables Sales Agreement", collectively with the U.S. Receivables Sale
Agreement, the "Receivables Sale Agreements") and (ii) the Company, the
Servicer, the Sellers, in their capacities as servicers of the Receivables (in
such capacities, the "Sub-Servicers"), and the Trustee are entering into a
Servicing Agreement (as amended, supplemented or otherwise modified from time to
time, the "Servicing Agreement"); and
WHEREAS, the parties hereto wish to enter into this Agreement in
order to create a master trust to which the Company will transfer all of its
right, title and interest in, to and under the Receivables and other Trust
Assets now or hereafter owned by the Company, or in which the Company has an
interest, and such master trust shall, from time to time at the direction of the
Company, issue one or more Series of Investor Certificates which shall represent
interests in the Receivables and such other Trust Assets as specified herein and
in the Supplement related to such Series.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Accounts" shall have the meaning specified in subsection 2.1(a)(v)
of this Agreement.
"Adjusted Invested Amount" shall have, with respect to any
Outstanding Series, the meaning assigned to such term in the related
Supplement for such Series.
"Affiliate" shall mean, with respect to any specified Person, any
other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person; provided that
a Person shall not be deemed an Affiliate of another Person solely by
reason of an individual serving as an officer or director of
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such other Person. For purposes of this definition, "control" of a Person
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Aged Receivable" shall mean, as of any date of determination, any
Receivable (a) which is unpaid in whole or in part, (i) in the case of a
Receivable other than a Construction Receivable or a BEAR Receivable, for
more than 121 days after its original invoice date, (ii) in the case of a
Construction Receivable, for more than 151 days after its original invoice
date or (iii) in the case of a BEAR Receivable, for more than 91 days
after its original invoice date or (b) which is, as of such date of
determination, a Charged-Off Receivable.
"Agent" shall mean, with respect to any Series, the Person or
Persons, if any, so designated in the related Supplement.
"Aggregate Adjusted Invested Amount" shall mean, with respect to any
date of determination, the sum of the Adjusted Invested Amounts with
respect to all Outstanding Series on such date of determination.
"Aggregate Allocated Receivables Amount" shall mean, with respect to
any date of determination, the sum of the Allocated Receivables Amounts
with respect to all Outstanding Series on such date of determination.
"Aggregate Daily Collections" shall mean, with respect to any
Business Day, the aggregate amount of all Collections deposited into the
Collection Accounts which first became Available Funds after 1:00 p.m.,
New York City time, on the prior Business Day and prior to 1:00 p.m., New
York City time, on such Business Day; provided, that during the first
three Business Days following the Issuance Date for Series 1998-1
Certificates, Aggregate Daily Collections will not include Collections
which have become Available Funds from deposits made prior to such
Issuance Date.
"Aggregate Invested Amount" shall mean, at any date of
determination, the sum of the Invested Amounts with respect to all
Outstanding Series on such date of determination.
"Aggregate Overconcentration Amount" shall mean, with respect to any
date of determination, the sum of the Overconcentration Amounts of all
Eligible Obligors at the end of the preceding Business Day.
"Aggregate Receivables Amount" shall mean, with respect to any date
of determination, (i) the aggregate Principal Amount of all Eligible
Receivables in the Trust at the end of the Business Day immediately
preceding such date minus (ii) the Aggregate Overconcentration Amount for
such date plus (iii) the Aggregate Uncleared Funds Amount; provided that
for purposes of calculating the amounts in (i), (ii) and (iii) above,
Canadian Dollar amounts will be converted into U.S. Dollars using the
Valuation Price in lieu of the Canadian Exchange Percentage.
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"Aggregate Target Receivables Amount" shall mean, with respect to
any date of determination, the sum of the Target Receivables Amounts with
respect to all Outstanding Series on such date of determination.
"Aggregate Uncleared Funds Amount" shall mean on any date, any
amounts on deposit in any Eligible Segregated Account or Lockbox Account
which were not Available Funds as of the last time that funds were
transferred from such accounts to the Collection Accounts.
"Agreement" shall mean this Pooling Agreement and all amendments and
modifications hereof and supplements hereto, and including, unless
expressly stated otherwise, each Supplement.
"Allocable Charged-Off Amount" shall have, with respect to any
Series, the meaning specified in subsection 3.1(e).
"Allocable Recoveries Amount" shall have, with respect to any
Series, the meaning specified in subsection 3.1(e).
"Allocated Receivables Amount" shall mean, with respect to any
Outstanding Series, the meaning assigned to such term in the related
Supplement for such Series.
"Amortization Period" shall mean, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"Authorized Foreign Exchange Dealer" shall mean any foreign exchange
dealer authorized by applicable law to deal and engage in foreign exchange
transactions relating to Canadian Dollars selected by the Servicer and
reasonably acceptable to the Trustee.
"Available Funds" shall mean any funds which are immediately
available funds on the applicable date of determination.
"BEAR Receivables" shall mean the Receivables described on Schedule
1B, the composition of which may change over time as provided in such
Schedule.
"Book-Entry Certificates" shall mean the Certificates issued to a
Clearing Agency to facilitate the use of book entries by such Clearing
Agency to evidence ownership of beneficial interests in the Certificates,
transfers of which beneficial interests shall be made through book entries
by such Clearing Agency, all as described in Section 5.11; provided,
however, that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer permitted and Definitive
Certificates are issued to the Certificate Book-Entry Holders, such
Certificates shall no longer be "Book-Entry Certificates".
"Business Day" shall mean any day other than (i) a Saturday or a
Sunday or (ii) another day on which commercial banking institutions or
trust companies in the State of New York or in the city where the
Corporate Trust Office is located, are authorized or
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obligated by law, executive order or governmental decree to be closed;
provided that, when used in connection with the calculation of Certificate
Rates which are determined by reference to the Eurodollar Rate, "Business
Day" shall mean any Business Day on which dealings in Dollars between
banks may be carried on in both London, England and New York, New York.
The term "Business Day", as applied in Canada, shall not include any day
on which commercial banking institutions or trust companies in Canada are
authorized or obligated by law, executive order or governmental decree to
be closed.
"Business Day Received" shall have the meaning specified in
subsection 2.3(e) of the Servicing Agreement.
"Canada/Canadian Dollar Collection Account" shall have the meaning
specified in subsection 3.1(b)(i).
"Canada/Canadian Dollar Collection Concentration Account" shall have
the meaning specified in subsection 3.1(b)(i).
"Canada/U.S. Dollar Collection Account" shall have the meaning
specified in subsection 3.1(b)(i).
"Canada/U.S. Dollar Collection Concentration Account" shall have the
meaning specified in subsection 3.1(b)(i).
"Canadian Dollars" shall mean dollars in lawful currency of Canada.
"Canadian Dollar Receivables" shall mean Receivables payable in
Canadian Dollars sold to the Company pursuant to the Canadian Receivables
Sale Agreement and then transferred to the Trustee pursuant to this
Agreement.
"Canadian Exchange Percentage" shall mean, at any date of
determination, the rate at which Canadian Dollars may be exchanged into
U.S. Dollars (expressed as the percentage of Canadian Dollars per U.S.
Dollars), as reported in The Wall Street Journal on the immediately
preceding Business Day. In the event that such rate does not appear in The
Wall Street Journal on such immediately preceding Business Day, the
Canadian Exchange Percentage shall be determined by reference to the
relevant Bloomberg currency page (or, if such rate does not appear on any
Bloomberg currency page, on the relevant page of the Reuters Monitor Money
Rates Service) as of the close of business of the immediately preceding
Business Day. In the event that such rate does not appear on any Bloomberg
page or the relevant page of the Reuters Monitor Money Rates Service, the
Canadian Exchange Percentage shall be determined by reference to such
other publicly available service for displaying exchange rates with
respect to Canadian Dollars as may be selected by the Trustee.
"Canadian Governmental Obligor" shall mean the government of Canada
or the government of any province or other political subdivision thereof,
and any agency,
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authority, bureau, commission or instrumentality of, or any Person owned
or controlled by, any thereof.
"Cash Dilution Payment" shall have the meaning specified in
subsection 4.6(a) of the Servicing Agreement.
"Certificate" shall mean any Series of Investor Certificates.
"CBRS" shall mean CBRS Inc. or its successor.
"Certificate Book-Entry Holder" shall mean, with respect to a
Book-Entry Certificate, the Person who is listed on the books of the
Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency, as the beneficial owner of such Book-Entry
Certificate (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
"Certificate Rate" shall mean, with respect to any Series and Class
of Certificates, the percentage interest rate (or formula on the basis of
which such interest rate shall be determined) stated in the applicable
Supplement.
"Certificate Register" shall mean the register maintained pursuant
to Section 5.3, providing for the registration of the Certificates and
transfers and exchanges thereof.
"Certificateholders' Interest" shall have the meaning specified in
subsection 3.1(b).
"Charged-Off Receivables" shall mean all Receivables (or portions
thereof) which, in accordance with the Policies of the applicable Seller,
have or should have been written off as uncollectible, including without
limitation the Receivables of any Obligor which becomes the subject of any
voluntary or involuntary bankruptcy proceeding.
"Class" shall mean, with respect to any Series, any one of the
classes of Certificates of that Series as specified in the related
Supplement.
"Clean-Up Call Percentage" shall have, with respect to any Series,
the meaning specified in the related Supplement for such Series.
"Clean-Up Call Repurchase Price" shall have the meaning specified in
Section 9.2.
"Clearing Agency" shall mean each organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act
of 1934, as amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency
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effects book-entry transfers and pledges of securities deposited with such
Clearing Agency.
"Collection Accounts" shall mean the collective reference to the
U.S. Dollar Collection Account, the Canada/U.S. Dollar Collection Account
and the Canada/Canadian Dollar Collection Account and shall include,
without limitation, all subaccounts thereof.
"Collection Concentration Accounts" shall have the meaning specified
in subsection 3.1(b)(i).
"Collections" shall mean all collections, including the Aggregate
Uncleared Funds Amount, and all amounts received in respect of the
Receivables, including Recoveries, Seller Repurchase Payments, Seller
Adjustment Payments, Servicer Indemnification Amounts paid by the Servicer
and any other payments received in respect of Dilution Adjustments,
together with all collections received in respect of the Related Property
in the form of cash, checks, wire transfers or any other form of cash
payment, and all proceeds of Receivables and collections thereof
(including, without limitation, collections constituting an account or
general intangible or evidenced by a note, instrument, letter of credit,
security, contract, security agreement, chattel paper or other evidence of
indebtedness or security, whatever is received upon the sale, exchange,
collection or other disposition of, or any indemnity, warranty or guaranty
payable in respect of, the foregoing and all "proceeds", as defined in
Section 9-306 of the UCC as in effect in the State of New York, of the
foregoing or, if applicable, as defined under the PPSA as in effect in the
Province of Ontario).
"Collector" shall mean any branch or employee of the Servicer or any
Sub-Servicer authorized to collect payments in respect of Receivables in
accordance with the Policies of the Seller which generated such
Receivables.
"Company" shall mean WESCO Receivables Corp., a Delaware
corporation.
"Company Collection Subaccount" shall have the meaning specified in
subsection 3.1(a).
"Company Exchange" shall have the meaning specified in subsection
5.10(a).
"Company Interest" shall have the meaning specified in subsection
3.1(b).
"Construction Receivables" shall mean the Receivables described on
Schedule 1A.
"Contractual Obligation" shall mean, as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any of
its property is bound.
"Corporate Trust Office" shall mean the principal office of the
Trustee at which at any particular time its corporate trust business shall
be administered, which office at
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the date of the execution of this Agreement is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: Structured Finance Services).
"Counterparty" shall mean a Person who is a party to a Required
Currency Hedge with the Company.
"Credit Enhancer" shall mean, with respect to any Outstanding
Series, that Person, if any, designated as such in the applicable
Supplement.
"Cut-Off Date" shall mean the close of business on [May 28] [June
1], 1998.
"Daily Report" shall have the meaning specified in subsection 4.1 of
the Servicing Agreement.
"DBRS" shall mean Dominion Bond Rating Service Limited, or its
successor.
"Definitive Certificates" shall have the meaning specified in
Section 5.11.
"Deposit Date" shall have the meaning specified in subsection
3.1(d).
"Depository" shall mean, with respect to any Series, the Clearing
Agency designated as the "Depository" in the related Supplement.
"Depository Agreement" shall mean, with respect to any Series, an
agreement among the Company, the Trustee and a Clearing Agency, or a
letter of undertaking to a Clearing Agency by the Company and the Trustee,
in each case in a form reasonably satisfactory to the Trustee and the
Company.
"Dilution Adjustments" shall mean any rebates, administrative fees,
discounts, credit memos, refunds, non-cash payments or other adjustments
(including, without limitation, as a result of the application of any
special or other discounts or any reconciliations) in respect of any
Receivable, the amount owing for any returns (including, without
limitation, as a result of the return of any defective goods) or
cancellations and the amount of any other reduction in the amount owing
under any Receivable (including, without limitation, any elimination of
service charges), in each case granted, permitted or made by the
applicable Seller or the Servicer to the related Obligor, provided that a
"Dilution Adjustment" does not include any Charged-Off Receivable.
"Distribution Date" shall mean, except as otherwise set forth in the
applicable Supplement, the 20th day of each calendar month, beginning on
July 20th, 1998, or if such 20th day is not a Business Day, the next
succeeding Business Day.
"Dollars," "U.S. Dollars", "U.S. $" and "$" shall mean dollars in
lawful currency of the United States of America.
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"Early Amortization Event" shall have, with respect to any Series,
the meaning specified in Section 7.1 of this Agreement (without taking
into account any Supplements) and in any Supplement for such Series.
"Early Amortization Period" shall have, with respect to any Series,
the definition assigned to such term in Section 7.1 of this Agreement
(without taking into account any Supplements) and in any Supplement for
such Series.
"Early Termination" shall have the meaning assigned to such term in
the Receivables Sale Agreement.
"Eligible Counterparty" shall mean a Counterparty with commercial
paper or short-term deposit ratings of A-1 or P-1, or such other rating as
shall be required in the Supplement setting forth the terms of the
applicable Series of Investor Certificates. The initial Eligible
Counterparty shall be The Chase Manhattan Bank.
"Eligible Institution" shall mean (a) with respect to accounts in
the United States a depository institution or trust company (which may
include the Trustee and its affiliates) organized under the laws of the
United States of America or any one of the states thereof or the District
of Columbia; provided, however, that at all times (i) such depository
institution or trust company is a member of the Federal Deposit Insurance
Corporation, (ii) the certificates of deposit or unsecured and
uncollateralized debt obligations of such depository institution or trust
company are rated in one of the two highest long-term rating categories or
in the highest short-term rating category by each Rating Agency and (iii)
such depository institution or trust company has a combined capital and
surplus of at least $50,000,000, and (b) with respect to accounts in
Canada a bank within the meaning of the Bank Act (Canada) or a trust
company licensed under the laws of Canada or any province thereof;
provided, however, that at all times (i) the certificates of deposit or
unsecured and uncollateralized debt obligations of such depository
institution or trust company are rated in one of the two highest long-term
rating categories or in the highest short-term rating category by each
Rating Agency and (ii) such depository institution or trust company has a
combined capital and surplus of at least $50,000,000.
"Eligible Investments" shall mean any deposit accounts, book-entry
securities, negotiable instruments or securities represented by
instruments in bearer or registered form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) federal funds, demand deposits, time deposits or certificates of
deposit of an Eligible Institution;
(c) commercial paper rated, at the time of the investment or
contractual commitment to invest therein, in the highest rating category
by each Rating Agency rating such commercial paper;
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(d) investments in money market funds (including funds for which the
Trustee or any of its Affiliates is investment manager or adviser) rated
in one of the two highest rating category by each Rating Agency rating
such money market fund (provided, that if such Rating Agency is S&P, such
rating shall be AAAm-G);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with a depository institution or trust company
(acting as principal) described in clause (b) above; or
(g) any other investment upon satisfaction of the Rating Agency
Condition with respect thereto.
"Eligible Obligor" shall mean, as of any date of determination, each
Obligor in respect of a Receivable that satisfies the following
eligibility criteria:
(a) (i) it is a resident of the United States, its territories or
possessions, or of Canada; provided, however, that if an Obligor is
located in the Canadian Provinces of Newfoundland or the Northwest
Territories, it shall not be deemed to be an Eligible Obligor until, as
evidenced by an Opinion of Counsel, all actions are taken that are
required to perfect the Company's and the Trust's ownership/security
interest in the Receivables of such Obligor;
(b) if it is a Federal Government Obligor or a State/Local
Government Obligor, then such Obligor shall be subject to the first
proviso contained in the definition of "Overconcentration Amount";
(c) it is not a Seller or an Affiliate of a Seller;
(d) it is not a Canadian Governmental Obligor; and
(e) it is not the subject of any voluntary or involuntary bankruptcy
proceeding;
provided, however, that (i) if 40% or more of the Principal Amount of
Receivables, other than Construction Receivables or BEAR Receivables, of
an Obligor (measured by the Principal Amount of Receivables of such
Obligor in the Trust) is reported as being aged 151 days or more after the
respective original invoice dates of such Receivables as at the end of the
Settlement Period immediately preceding the most recent Settlement Report
Date (commencing with the Settlement Report Date occurring on June 15,
1998), such Obligor shall not be deemed an Eligible Obligor until such
time as the Servicer furnishes the Trustee with a report (which may be
part of a Daily Report or a Monthly Settlement Statement) demonstrating
that less than 40% of the Principal Amount of Receivables of such Obligor
then in the Trust are aged 151 days or more after the respective original
invoice dates of such Receivables, (ii) if 40% or more of
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the Principal Amount of Receivables that are BEAR Receivables of an
Obligor (measured by the Principal Amount of Receivables of such Obligor
in the Trust) is reported as being aged 121 days or more after the
respective original invoice dates of such Receivables as at the end of the
Settlement Period immediately preceding the most recent Settlement Report
Date (commencing with the Settlement Report Date occurring on June 15,
1998), such Obligor shall not be deemed an Eligible Obligor until such
time as the Servicer furnishes the Trustee with a report (which may be
part of a Daily Report or a Monthly Settlement Statement) demonstrating
that less than 40% of the Principal Amount of Receivables of such Obligor
then in the Trust are aged 121 days or more after the respective original
invoice dates of such Receivables and (iii) if 40% or more of the
Principal Amount of Receivables that are Construction Receivables of an
Obligor (measured by the Principal Amount of Receivables of such Obligor
in the Trust) is reported as being aged 181 days or more after the
respective original invoice dates of such Receivables as at the end of the
Settlement Period immediately preceding the most recent Settlement Report
Date (commencing with the Settlement Report Date occurring on June 15,
1998), such Obligor shall not be deemed an Eligible Obligor until such
time as the Servicer furnishes the Trustee with a report (which may be
part of a Daily Report or a Monthly Settlement Statement) demonstrating
that less than 40% of the Principal Amount of Receivables of such Obligor
then in the Trust are aged 181 days or more after the respective original
invoice dates of such Receivables.
"Eligible Receivable" shall mean, as of any date of determination,
each Receivable owing by an Eligible Obligor that as of such date
satisfies the following eligibility criteria:
(a) it constitutes either (i) an account within the meaning of
Section 9-106 of the UCC of the State the law of which governs the
perfection of the interest granted in it, (ii) chattel paper within the
meaning of Section 9-105 of such UCC, subject, in the case of chattel
paper, to compliance with the procedures set forth in Schedule 3 hereto;
or (iii) a general intangible (to the extent that such Receivable includes
interest, finance charges, returned check or late charges or sales or
similar taxes) within the meaning of Section 9-106 of such UCC or, if
applicable, one of either (i), (ii) or (iii), each under the PPSA of the
pertinent province of Canada;
(b) it is not evidenced by an "instrument" (other than an instrument
which constitutes or together with a security agreement constitutes
"chattel paper" (each as defined in the UCC as in effect in any state, or
as defined in similar Canadian provincial legislation, in which the
Company's or the applicable Seller's chief executive office or books and
records relating to such Receivable are located)) or any title in bearer
form;
(c) it is not an Aged Receivable;
(d) the goods related to it shall have been shipped or the services
related to it shall have been performed and such Receivable shall have
been billed to the related Obligor;
(e) it is denominated and payable in U.S. Dollars or Canadian
Dollars in the United States or Canada; provided that if (i) on any
Distribution Date, the Required
11
Currency Hedge is not in place for the full Required Hedge Period or (ii)
a Counterparty ceases to be an Eligible Counterparty and is not replaced
with an Eligible Counterparty within 30 days, then Canadian Dollar
Receivables will not be included for purposes of this subsection (e); and
provided further that if on any Distribution Date, the Required Currency
Hedge is for a notional amount less than the Required Hedge Notional
Amount, then the Principal Amount of Canadian Dollar Receivables included
for purposes of this subsection (e) will be limited to the actual notional
amount of the Required Currency Hedge calculated using the Valuation
Price.
(f) it arose in the ordinary course of business from the sale of
goods, products or services of the relevant Seller and in accordance with
the Policies of such Seller and, at such date of determination, no Early
Termination has occurred with respect to such Seller;
(g) (i) it does not contravene any applicable law, rule or
regulation and the applicable Seller is not in violation of any law, rule
or regulation in connection with it, in each case which in any way renders
such Receivable unenforceable or would otherwise impair in any material
respect the collectibility of such Receivable and (ii) it is not subject
to any investigation or proceeding known by such Seller that would
reasonably be expected to adversely affect the payment or enforceability
thereof;
(h) it is an account receivable representing all or part of the
sales price of merchandise, insurance or services within the meaning of
Section 3(c)(5) of the 1940 Act;
(i) (i) it is not a Receivable of a Seller Division which has not
become a New Division or (ii) it is not a Receivable purchased by a Seller
from any Person other than a Receivable purchased in connection with the
acquisition by a Seller of the business unit or operating assets of
another Person, so long as the Seller Division consisting of such business
unit or operating assets has become a New Division and the conditions set
forth on Schedule 7 hereto have been satisfied;
(j) it is not a Receivable for which the applicable Seller has
established an offsetting specific reserve; provided that a Receivable
subject only in part to the foregoing shall be an Eligible Receivable to
the extent not so subject;
(k) it is not a Receivable, other than a Construction Receivable,
with original payment terms in excess of 60 days from its original invoice
date or a Construction Receivable with original payment terms in excess of
90 days, or in respect of which the applicable Seller has (i) altered the
basis of the aging from the initial due date for payment such that the
final due date extends to a date more than 60 days, in the case of a
Receivable other than a Construction Receivable, or to a date more than 90
days, in the case of a Construction Receivable, from its original invoice
date or (ii) otherwise made any modification except in the ordinary course
of business and consistent with the Policies of such Seller;
(l) all required consents, approvals or authorizations necessary for
the creation and enforceability of such Receivable and the effective
assignment and sale thereof by
12
the applicable Seller to the Company and by the Company to the Trust shall
have been obtained with respect to such Receivable;
(m) the applicable Seller is not in default in any material respect
under the terms of the contract, if any, from which such Receivable arose;
provided that if a series of Receivables arise under a single contract
Receivables not subject to such default shall be an Eligible Receivable to
the extent not so subject;
(n) all right, title and interest in it has been validly sold to the
Company by the applicable Seller pursuant to the Receivables Sales
Agreements;
(o) the Company or the Trust will have legal and beneficial
ownership therein free and clear of all Liens other than such Liens
described in clause (i) of the definition of Permitted Liens and such
Receivable has been the subject of either a valid transfer from the
Company to the Trust or, alternatively, the grant of a first priority
perfected security interest therein to the Trust free and clear of all
Liens other than such Liens described in clause (i) of the definition of
Permitted Liens;
(p) it is not subject to any dispute in whole or in part or to any
offset, counterclaim, defense, rescission, recoupment or subordination;
provided that a Receivable subject only in part to any of the foregoing
shall be an Eligible Receivable to the extent not so subject;
(q) it is at all times the legal, valid and binding obligation of
the Obligor thereon, enforceable against such Obligor to pay the full
Principal Amount thereof in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or law);
(r) each of the representations and warranties with respect thereto
made in the Receivables Sale Agreements by the applicable Seller with
respect to such Receivable is true and correct in all material respects;
and
(s) at the time such Receivable was sold by the applicable Seller to
the Company (i) under the U.S. Receivables Sale Agreement, no event
described in subsection 6.01(f) (other than clause (v) thereof) of the
U.S. Receivables Sale Agreement (without giving effect to any requirement
as to the passage of time) had occurred with respect to such Seller or
(ii) under the Canadian Receivables Sale Agreement, no event described in
subsection 6.1(f) (other than clause (v) thereof) of the Canadian
Receivables Sale Agreement (without giving effect to any requirement as to
passage of time) had occurred with respect to such Seller.
"Eligible Segregated Account" shall mean (a) a segregated account or
accounts maintained with a depository institution or trust company whose
long-term unsecured debt obligations are rated in one of the three highest
long-term or short-term rating categories by each Rating Agency rating
such depository institution or trust company at the time of any deposit
therein, provided, however, that if such obligations are only
13
rated by one of S&P or Moody's, such rating shall suffice, or (b) a
segregated account or accounts maintained with a federal of state
chartered depository institution subject to regulations regarding
fiduciary funds on deposit substantially similar to 12 C.F.R. Section
9.10(b).
"Eligible Segregated Account Bank" shall mean any bank or depository
institution with which an Eligible Segregated Account has been
established.
"Eligible Segregated Account Bank Acknowledgment" shall have the
meaning specified in subsection 2.3(b)(ii) of the Servicing Agreement.
"Eligible Successor Servicer" shall mean a Person which, at the time
of its appointment as Servicer, (i) is legally qualified and has the
corporate power and authority to service the Receivables transferred to
the Trust, (ii) has demonstrated the ability to service a portfolio of
similar receivables in accordance with the standards set forth in
subsection 6.2(c) of the Servicing Agreement and (iii) has a combined
capital and surplus of at least $5,000,000.
"Enhancement" shall mean, with respect to any Series, (i) the funds
on deposit in or credited to any bank account (or subaccount thereof) of
the Trust for the benefit of any Holders of such Series, (ii) any surety
arrangement, any letter of credit, guaranteed rate agreement, maturity
guaranty facility, tax protection agreement, interest rate swap, currency
swap or other contract, agreement or arrangement, in each case for the
benefit of any Holders of such Series, as designated in the applicable
Supplement and (iii) the subordination of one Class of Certificates in a
Series to another class in such Series or the subordination of any
Certificate held or interest owned by the Company to the Investor
Certificates of such Series.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchangeable Company Interest" shall have the meaning specified in
subsection 3.1(a) and shall be exchangeable as provided in Section 5.10.
"Exchange Date" shall have the meaning, with respect to any Series
issued pursuant to a Company Exchange, specified in Section 5.10.
"Exchange Notice" shall have the meaning, with respect to any Series
issued pursuant to a Company Exchange, specified in Section 5.10.
"Federal Government Obligor" shall mean the United States federal
government or any subdivision thereof or any agency, department or
instrumentality thereof.
"Filing Trust Assets" shall have the meaning specified in subsection
2.1(e).
"Force Majeure Delay" shall mean, with respect to any Servicing
Party, any cause or event which is beyond the control and not due to the
negligence of such
14
Servicing Party which delays, prevents or prohibits the Servicer's
delivery of Daily Reports and/or Monthly Settlement Statements, including,
without limitation, acts of God or the elements and fire, but excluding
strikes by any Servicing Party's employees; provided that no such cause or
event shall be deemed to be a Force Majeure Delay unless the Servicer
shall have given the Company and the Trustee written notice promptly after
the beginning of such delay.
"Fractional Undivided Interest" shall mean the fractional undivided
interest in the Certificateholders' Interest evidenced by an Investor
Certificate.
"GAAP" shall mean generally accepted accounting principles in the
United States of America and, where pertinent, in Canada as in effect from
time to time.
"General Opinion" shall mean, with respect to any action, an Opinion
of Counsel to the effect that (A) such action has been duly authorized by
all necessary corporate action on the part of the Servicer, the applicable
Seller or Sellers or the Company, as the case may be, (B) any agreement
executed in connection with such action constitutes a legal, valid and
binding obligation of the Servicer, the applicable Seller or Sellers or
the Company, as the case may be, enforceable in accordance with the terms
thereof, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors' rights and
except as such enforceability may be limited by general principles of
equity (whether considered in a proceeding at law or in equity), (C) such
action does not violate any Requirement of Law or require any consent or
filing thereunder, (D) such action does not result in a breach of, or
default under any contractual obligation, or creation of any Lien,
pursuant thereto and (E) any condition precedent to any such action
specified in the applicable agreement, if any, has been complied with,
which opinion in the case of clauses (D) or (E) may, to the extent that
such opinion concerns questions of fact, rely on an Officer's Certificate
with respect to such questions of fact.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government.
"Holders" shall mean the collective reference to (i) the Investor
Certificateholders, (ii) the owner of the Exchangeable Company Interest
and (iii) if applicable, the owner of each Series Subordinated Interest.
"Indebtedness" shall mean, with respect to any Person at any date,
(a) all indebtedness of such Person for borrowed money, (b) any obligation
owed for the deferred purchase price of property or services which
purchase price is evidenced by a note or similar written instrument, (c)
notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (d) that
portion of obligations of such Person under capital leases which is
properly classified as a liability on a balance sheet in conformity with
GAAP and (e) all Indebtedness referred to in clauses (a) through (d) above
of another Person secured by
15
any Lien on any property owned by such Person even though such Person has
not assumed or otherwise become liable for the payment thereof.
"Independent Public Accountants" means any independent certified
public accountants of nationally recognized standing which constitute one
of the accounting firms commonly referred to as the "big six" accounting
firms (or any successor thereto); provided that such firm is independent
with respect to the Servicer within the meaning of Rule 2-01(b) of
Regulation S-X under the Securities Act.
"Ineligible Receivable" shall have the meaning specified in Section
2.5.
"Initial Closing Date" shall mean June 5, 1998.
"Initial Invested Amount" shall mean, with respect to any
Outstanding Series, the meaning assigned to such term in the related
Supplement for such Series.
"Insolvency Event" shall mean the occurrence of any one or more of
the Early Amortization Events specified in paragraph (a) of Section 7.1.
"Internal Operating Procedures Memorandum" shall mean the internal
operating procedures memorandum prepared by the Trustee as set forth in
Exhibit D hereto.
"Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
"Invested Amount" shall mean, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"Invested Percentage" shall mean, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"Investment Earnings" shall have the meaning specified in subsection
3.1(c).
"Investor Certificateholder" shall mean the registered holder of, or
the bearer of, an Investor Certificate.
"Investor Certificates" shall mean the Certificates executed by the
Company and authenticated by or on behalf of the Trustee, substantially in
the form attached to the applicable Supplement, but shall not include any
Certificate held by the Company.
"Issuance Date" shall mean, with respect to any Series, the date of
issuance of such Series, or the date of any issuance of additional
certificates representing any increase to the Invested Amount of such
Series, as specified in the related Supplement.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, deemed trust, hypothecation, encumbrance, charge
or security interest in or on such asset, (b) the interest of a vendor or
a lessor under any conditional sale agreement, capital lease or title
retention agreement relating to such asset and (c) in the
16
case of securities, any purchase option, call or other similar right of a
third party with respect to such securities; provided, however, that if a
lien is imposed under Section 412(n) of the Internal Revenue Code or
Section 302(f) of ERISA for a failure to make a required installment or
other payment to a plan to which Section 412(n) of the Internal Revenue
Code or Section 302(f) of ERISA applies, then such lien shall not be
treated as a "Lien" from and after the time any Person who is obligated to
make such payment pays to such plan the amount of such lien determined
under Section 412(n)(3) of the Internal Revenue Code or Section 302(f)(3)
of ERISA, as the case may be, and provides to the Trustee, any Agent and
each Rating Agency written evidence reasonably satisfactory to the Rating
Agencies of the release of such lien, or such lien expires pursuant to
Section 412(n)(4)(B) of the Internal Revenue Code or Section 302(f)(4)(B)
of ERISA.
"Lockbox" shall mean the post office boxes listed on the applicable
schedule to the Receivables Sale Agreements to which the Obligors are
instructed to remit payments on the Receivables and/or such other post
office boxes as may be established pursuant to Section 2.3 of the
Servicing Agreement.
"Lockbox Account" shall mean each intervening bank account of the
Company used by a Lockbox Processor for deposit of funds received in a
Lockbox prior to their transfer to the Collection Accounts, which account
may also be used by Collectors and other employees of the Servicing
Parties for deposit of Collections received by such persons or direct
payment by Obligors.
"Lockbox Agreement" shall mean, with respect to each Lockbox
Processor, a lockbox agreement in substantially the form set forth as
Exhibit A hereto, or such other form of lockbox agreement with a Lockbox
Processor acceptable to each Agent, or if there are no Agents, which upon
execution thereof the Rating Agency Condition is satisfied.
"Lockbox Bank" shall mean the depository institution that holds a
Lockbox Account.
"Lockbox Processor" shall mean the depository institution or
processing company (which may be the Trustee) which processes payments on
the Receivables sent by the Obligors thereon forwarded to a Lockbox.
"Material Adverse Effect" shall mean (a) a material impairment of
the ability of a Seller, a Servicing Party or the Company, as the case may
be, to perform its obligations under the Transaction Documents, (b) a
materially adverse effect on the business, operations, property or
condition (financial or otherwise) of the Company, (c) a material
impairment of the validity or enforceability of any of the Transaction
Documents against a Seller, a Servicing Party or the Company, (d) a
material impairment of the collectibility of the Receivables taken as a
whole or (e) a material impairment of the interests, rights or remedies of
the Trustee or the Investor Certificateholders under or with respect to
the Transaction Documents or the Receivables taken as a whole.
17
"Monthly Servicing Fee" shall have the meaning specified in
subsection 2.5(a) of the Servicing Agreement.
"Monthly Settlement Statement" shall have the meaning specified in
Section 4.2 of the Servicing Agreement.
"New Division" shall mean any Seller Division which has satisfied
the criteria for the addition of a Seller Division specified in any
Pooling and Servicing Agreement.
"1940 Act" shall mean the Investment Company Act of 1940, as
amended.
"Obligor" shall mean, with respect to any Receivable, the party
obligated to make payments with respect to such Receivable, including any
guarantor thereof.
"Officer's Certificate" shall mean, unless otherwise specified in
this Agreement, a certificate signed by the President, Chief Financial
Officer, Treasurer, Controller, or any Vice President of the Servicer or
the Company, as the case may be, or, in the case of a Successor Servicer,
a certificate signed by a Vice President and the financial controller (or
an officer holding an office with equivalent or more senior
responsibilities) of such Successor Servicer.
"Opinion of Counsel" shall mean a written opinion or opinions of one
or more counsel (who, unless otherwise specified in this Agreement, may be
internal counsel) to the Company or the Servicer, designated by the
Company or the Servicer, as the case may be, which is reasonably
acceptable to the Trustee.
"Optional Termination Notice" shall have, with respect to any
Series, the meaning specified in the related Supplement for such Series.
"Outstanding Series" shall mean, at any time, a Series issued
pursuant to an effective Supplement for which the Series Termination Date
for such Series has not occurred.
"Overconcentration Amount" shall mean, at any date with respect to
an Eligible Obligor, the Principal Amount of Eligible Receivables due from
such Obligor at such date which, expressed as a percentage of the
Principal Amount of all Eligible Receivables in the Trust at such date,
exceeds the percentage set forth below for the applicable category of that
Obligor at such date (or such higher percentage after giving effect to
which the Rating Agency Condition is satisfied).
18
Minimum Rating
--------------
S&P Moody's Percentage
--- ------- ----------
A-1+ or AA P-1 or Aa2 15%
A-1 or A+ P-1 or A1 10%
A-2 or BBB+ P-2 or Baa1 7.5%
A-3 or BBB- P-3 or Baa3 2.5%
Not rated/other Not rated/other 2%
/Not rated
; provided, however, (i) that all Eligible Obligors that are Affiliates of
each other shall be deemed to be a single Eligible Obligor to the extent
the Servicer knows or has reason to know of the affiliation and in that
case, the applicable debt rating for such group of Obligors shall be the
debt rating of the ultimate parent of the group, (ii) that with respect to
all Eligible Obligors that are Federal Government Obligors or State/Local
Government Obligors, such Obligors shall, notwithstanding the foregoing,
be deemed to be a single Eligible Obligor for which the applicable
percentage set forth under the column headed "Percentage" above shall be
2%.
The percentage applicable to any Obligor (or the ultimate parent of
the affiliated group of which such Obligor is a member, as the case may
be) will be the percentage associated with the lowest of such Obligor's
(or such ultimate parent's, as the case may be) short-term and long-term
senior debt rating issued by S&P and ▇▇▇▇▇'▇; provided that, if S&P or
▇▇▇▇▇'▇ issues no rating with respect to the debt of such Obligor (or such
ultimate parent, as the case may be), then the percentage applicable to
such Obligor (or such ultimate parent, as the case may be) shall be the
percentage associated with the category "Not rated/other." The ratings
specified in the table are minimums for each percentage category, so that
a rating not shown in the table falls in the category associated with the
highest rating shown in the table that is lower than that rating.
"Paying Agent" shall mean any paying agent and co-paying agent
appointed pursuant to Section 5.6 and, unless otherwise specified in the
related Supplement of any Outstanding Series and with respect to such
Series, shall initially be the Trustee.
"Permitted Liens" shall mean, at any time, for any Person:
(i) Liens created pursuant to this Agreement or the
Receivables Sale Agreements;
(ii) Liens for taxes, assessments or other governmental
charges or levies not yet due and payable or if such Person shall
currently be contesting the validity thereof in good faith by
appropriate proceedings and with respect to
19
which reserves in conformity with GAAP have been provided on the
books of such Person; and
(iii) Liens on a Receivable arising as a result of offsetting
specific reserves and rights of set-off, counterclaim or other
defenses with respect to such Receivable.
"Person" shall mean any individual, partnership, limited liability
company, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Policies" shall mean, with respect to each Seller, the credit and
collection policies and the returned goods policies of such Seller, copies
of which have been delivered to the Trustee, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
the Transaction Documents.
"Pooling and Servicing Agreements" shall mean, collectively, this
Agreement, the Servicing Agreement and each Supplement for an Outstanding
Series.
"Potential Early Amortization Event" shall mean an event which, with
the giving of notice and/or the lapse of time, would constitute an Early
Amortization Event hereunder or under any Supplement for an Outstanding
Series.
"Potential Servicer Default" shall mean an event which, with the
giving of notice and/or the lapse of time, would constitute a Servicer
Default.
"PPSA" shall have the meaning specified in the Canadian Receivables
Sale Agreement.
"Prepayment Request" shall have, with respect to any Series, the
meaning specified in the related Supplement.
"Principal Amount" shall mean, with respect to any Receivable
payable in U.S. Dollars, the amount due thereunder and in the case of any
Receivables payable in Canadian Dollars the amount of Canadian Dollars
multiplied by the applicable Canadian Exchange Percentage.
"Principal Terms" shall have, with respect to any Series issued
pursuant to a Company Exchange, the meaning specified in subsection
5.10(c).
"Rating Agency" shall mean, with respect to each Outstanding Series,
any rating agency or agencies designated as such in the related
Supplement; provided that in the event that no Outstanding Series has been
rated, then for purposes of the definitions of "Eligible Institution",
"Eligible Investments" and Section 2.3(b) of the Servicing Agreement,
"Rating Agency" shall mean S&P and references to "each Rating Agency"
shall refer solely to S&P.
20
"Rating Agency Condition" shall mean, subject to the applicable
Supplement, with respect to any action, that each Rating Agency shall have
notified the Company, the Servicer, any Agent and the Trustee in writing
that such action will not result in a reduction or withdrawal of the
rating of any Outstanding Series or any Class of any such Outstanding
Series with respect to which it is a Rating Agency.
"Receivable" shall mean the indebtedness and payment obligations of
any Person to a Seller or acquired by a Seller (including, without
limitation, obligations constituting an account or general intangible or
evidenced by a note, instrument, contract, security agreement, chattel
paper or other evidence of indebtedness or security) arising from a sale
of merchandise or the provision of services by such Seller or the Person
from whom such indebtedness and payment obligation was acquired by a
Seller, including, without limitation, any right to payment for goods sold
or for services rendered, and including the right to payment of any
interest, sales taxes, finance or service charges, returned check or late
charges and other obligations of such Person with respect thereto.
"Receivables Purchase Date" shall mean, with respect to any
Receivable, the Business Day on which the Company purchases such
Receivable from the applicable Seller and transfers such Receivable to the
Trust.
"Receivables Sale Agreements" shall have the meaning specified in
the recitals hereto.
"Record Date" shall mean, with respect to any Series, the dates
specified as such in the applicable Supplement.
"Recoveries" shall mean all amounts collected (net of out-of-pocket
costs of collection) in respect of Charged-Off Receivables.
"Related Property" shall mean, with respect to each Receivable:
(a) all of the applicable Seller's interest in the goods
(other than returned goods), if any, sold and delivered to an
Obligor relating to the sale which gave rise to such Receivable;
(b) all other security interests or Liens, and the applicable
Seller's interest in the property subject thereto, from time to time
purporting to secure payment of such Receivable, together with all
financing statements signed by an Obligor describing any collateral
securing such Receivable; and
(c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable;
in the case of clauses (b) and (c), without limitation, whether pursuant
to the contract related to such Receivable or otherwise or pursuant to any
obligations evidenced by a
21
note, instrument, contract, security agreement, chattel paper or other
evidence of indebtedness or security and the proceeds thereof.
"Reported Day" shall have the meaning specified in Section 4.1 of
the Servicing Agreement.
"Repurchase Obligation Date" shall have the meaning specified in
subsection 2.5(a).
"Required Currency Hedge" shall mean one or more currency options,
exercisable at any time, with an Eligible Counterparty providing for the
delivery by such Eligible Counterparty of U.S. Dollars in exchange for the
receipt of Canadian Dollars.
"Required Hedge Period" shall mean six months from the Initial
Closing Date or from the Distribution Date on which such period is being
determined.
"Required Hedge Notional Amount" shall mean an amount denominated in
U.S. Dollars, which represents the portion of the Target Receivables
Amount allocable to the Canadian Dollar Receivables, as calculated in the
most recent Monthly Settlement Statement.
"Requirement of Law" for any Person shall mean the certificate or
articles of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer" shall mean (i) when used with respect to the
Trustee, any officer within the Corporate Trust Office of the Trustee
including any Vice President, any Assistant Vice President, Trust Officer
or Assistant Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the
administration of this Agreement and (ii) when used with respect to any
other Person, the Chairman or Vice Chairman of the Board, President, Chief
Financial Officer, any Vice President, Treasurer, Controller, Assistant
Treasurer or Secretary of such Person.
"Revolving Period" shall mean, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"S&P" shall mean Standard & Poor's Ratings Services, or any
successor thereto.
"Securities Act" shall mean the United States Securities Act of
1933, as amended.
"Seller Adjustment Payments" shall have the meaning specified in
Section 2.05 of the Receivables Sale Agreements.
22
"Seller Division" shall mean any business unit or operating assets
acquired by a Seller which is made part of an existing division of a
Seller or made a new division (but not a subsidiary) of a Seller.
"Seller Notes" shall mean the notes, collectively as specified in
Section 8.01 of the U.S. Receivables Sale Agreement and in Section 8.01 of
the Canadian Receivables Sale Agreement.
"Seller Repurchase Payments" shall have the meaning specified in
Section 2.06 of the Receivables Sale Agreements.
"Sellers" shall mean the collective reference to (i) WESCO, in its
capacity as a Seller under the U.S. Receivables Sale Agreement, (ii) WESCO
Equity Corporation, a Delaware corporation, in its capacity as a Seller
under the U.S. Receivables Sale Agreement, (iii) WESCO
Distribution-Canada, Inc., an Ontario corporation, in its capacity as a
Seller under the Canadian Receivables Sale Agreement, and (iv) any wholly
owned Subsidiaries of WESCO which have been added as Sellers in accordance
with the provisions of the Receivables Sale Agreements and the other
Transaction Documents (but, in each case, excluding any such Subsidiaries
which have been terminated as Sellers in accordance with the provisions
thereof and of the other Transaction Documents), all of the foregoing in
their capacities as Sellers under the Receivables Sale Agreements; each,
individually, a "Seller".
"Series" shall mean any series of Investor Certificates, the terms
of which are set forth in a Supplement.
"Series Account" shall mean any deposit, trust, escrow, reserve or
similar account maintained by the Trustee for the benefit of the Investor
Certificateholders of any Series or Class, as specified in any Supplement.
"Series Canada/Canadian Dollar Collection Subaccount" shall have the
meaning specified in subsection 3.1(b)(i).
"Series Canada/U.S. Dollar Collection Subaccount" shall have the
meaning specified in subsection 3.1(b)(i).
"Series Collection Subaccount" shall have the meaning specified in
subsection 3.1(b)(i).
"Series Collection Sub-subaccounts" shall have the meaning specified
in subsection 3.1(b)(i).
"Series Non-Principal Collection Sub-subaccount" shall have the
meaning specified in subsection 3.1(b)(i).
"Series Principal Collection Sub-subaccount" shall have the meaning
specified in subsection 3.1(b)(i).
23
"Series Subordinated Interest" shall mean, with respect to any
Series, the interest of the Company in the Trust Assets, if any, which is
subordinated to the Certificateholders' Interest of such Series, as set
forth in the Supplement for such Series.
"Series Termination Date" shall mean, with respect to any
Outstanding Series, the meaning assigned to such term in the related
Supplement for such Series.
"Service Transfer" shall have the meaning specified in Section 6.1
of the Servicing Agreement.
"Servicer" shall initially mean WESCO in its capacity as Servicer
under the Transaction Documents and, after any Service Transfer, the
Successor Servicer.
"Servicer Default" shall have, with respect to any Series, the
meaning specified in Section 6.1 of the Servicing Agreement and, if
applicable, as supplemented by the related Supplement for such Series.
"Servicer Indemnification Amounts" shall have the meaning specified
in Section 5.2(c) of the Servicing Agreement.
"Servicer Site Review" shall mean a review performed by the Trustee
of the servicing operations of the Servicer at its offices.
"Servicing Agreement" shall have the meaning specified in the
recitals hereto.
"Servicing Fee" shall have the meaning specified in subsection
2.5(a) of the Servicing Agreement.
"Servicing Fee Percentage" shall mean 1% per annum.
"Servicing Party" shall mean the collective reference to the
Servicer and each Sub-Servicer.
"Settlement Period" shall mean (i) initially, the period commencing
May 1, 1998 and ending on the last day of the May 1998 fiscal month of the
Servicer, and (ii) thereafter, each fiscal month of the Servicer.
"Settlement Report Date" shall mean, except as otherwise set forth
in the applicable Supplement, the 15th day of each calendar month (or if
such 15th day is not a Business Day, the next succeeding Business Day),
"Special Allocation Settlement Report Date" shall have the meaning
specified in subsection 3.1(e).
"Specified Bankruptcy Opinion Provisions" shall mean the factual
assumptions and the actions to be taken by any Seller or the Company, in
each case as specified in
24
the legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ relating to
non-substantive consolidation and delivered on the Initial Closing Date.
"Standby Liquidation System" shall mean a system satisfactory to the
Trustee by which the Trustee will receive and store electronic information
regarding Receivables from the Servicer and each Sub-Servicer which may be
utilized in the event of a liquidation of the Receivables to be carried
out by the Trustee.
"State/Local Government Obligor" shall mean any state or local
government in the United States or any subdivision thereof or any agency,
department or instrumentality thereof.
"Sub-Servicer" shall have the meaning specified in the recitals
hereto.
"Subsidiary" shall mean, as to any Person, a corporation,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
"Successor Servicer" shall have the meaning specified in Section 6.2
of the Servicing Agreement.
"Supplement" shall mean, with respect to any Series, a supplement to
this Agreement complying with the terms of Section 5.10(c), executed in
conjunction with the issuance of any Series.
"Target Receivables Amount" shall mean, with respect to any
Outstanding Series, the meaning assigned to such term in the related
Supplement for such Series.
"Tax Opinion" shall mean, with respect to any action, an Opinion of
Counsel of one or more outside law firms (a) to the effect that, for
federal income tax purposes, (i) such action will not adversely affect the
characterization as debt or as an interest in a partnership (other than a
partnership taxable as a corporation), as the case may be, of any Investor
Certificates of any Outstanding Series or Class not retained by the
Company, (ii) following such action, the Trust will not be classified as
an association or a publicly traded partnership taxable as a corporation,
(iii) such action will not cause or constitute a taxable event in which
gain or loss would be recognized by any Investor Certificateholder or the
Trust and (iv) in the case of Section 5.9, the Investor Certificates of
the new Series which are not retained by the Company will be characterized
as debt or as an interest in a partnership (other than a partnership
taxable as a corporation) and (b) with respect to state taxation issues,
in substantially the form delivered on the Initial Closing Date.
"Termination Notice" shall have the meaning specified in Section 6.1
of the Servicing Agreement.
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"Transaction Documents" shall mean the collective reference to this
Agreement, the Servicing Agreement, each Supplement with respect to any
Outstanding Series, the Receivables Sale Agreements, the Lockbox
Agreements, the Eligible Segregated Account Bank Acknowledgments, the
Certificates and any other documents delivered pursuant to or in
connection therewith.
"Transfer Agent and Registrar" shall have the meaning specified in
Section 5.3 and shall initially be the Trustee.
"Transfer Deposit Amount" shall have the meaning specified in
subsection 2.5(b).
"Transferred Agreements" shall have the meaning specified in
subsection 2.1(b).
"Trust" shall mean the WESCO Receivables Master Trust created by
this Agreement.
"Trust Account" shall have the meaning, with respect to any Series,
specified in the applicable Supplement for such Series.
"Trust Assets" shall have the meaning specified in Section 2.1.
"Trust Termination Date" shall have the meaning specified in
subsection 9.1(a).
"Trustee" shall mean the institution executing this Agreement as
trustee, or its successor in interest, or any successor trustee appointed
as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time
to time, as in effect in any specified jurisdiction or if no jurisdiction
is specified, as in effect in the State of New York and, with respect to
the Receivables sold pursuant to the Canadian Receivables Sale Agreement,
the PPSA, as amended from time to time, as in effect in any specified
jurisdiction of Canada or if no jurisdiction is specified, as in effect in
the Province of Ontario.
"U.S. Dollar Collection Account" shall have the meaning specified in
subsection 3.1(b)(i).
"U.S. Dollar Collection Concentration Account" shall have the
meaning specified in subsection 3.1(b)(i).
"Valuation Price" shall mean, as of any date of determination, the
strike price of any outstanding Required Currency Hedge that would require
the highest amount of Canadian Dollars to purchase one (1) U.S. Dollar.
"WESCO" shall mean WESCO Distribution, Inc., a Delaware corporation.
26
Section 1.2. Other Definitional and Calculation Provisions. (a) All
terms defined in this Agreement, the Servicing Agreement or in any Supplement
shall have such defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partly defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under GAAP. To the
extent that the definitions of accounting terms herein are inconsistent with the
meanings of such terms under GAAP, the definitions contained herein shall
control.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and Section,
subsection, Schedule and Exhibit references contained in this Agreement are
references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(d) All references herein to any agreement or instrument shall be
deemed references to such agreement or instrument as amended, supplemented or
otherwise modified from time to time in which case such reference shall be to
the agreement or instrument.
(e) The definitions contained in Section 1.1 are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Where a definition contained in Section 1.1 specifies that such
term shall have the meaning set forth in the related Supplement, the definition
of such term set forth in the related Supplement may be preceded by a prefix
indicating (or include in its definition) the specific Series or Class to which
such definition shall apply.
(g) Where reference is made in this Agreement or any related
Supplement to the amount of Receivables, such reference shall, unless explicitly
stated otherwise, be deemed a reference to the Principal Amount (as such term is
defined in Section 1.1) of such Receivables.
(h) Any reference herein or in any other Transaction Document to a
provision of the Internal Revenue Code or ERISA shall be deemed a reference to
any successor provision thereto.
(i) To the extent that any provision of this Agreement or any other
Transaction Document requires that a calculation be performed with respect to a
date occurring prior to the effective date of such Transaction Document, such
calculation shall be performed as provided therein as though such Transaction
Document had been effective on and as of such prior date.
(j) In calculating the Principal Amount of Receivables on any day,
the Principal Amount of Receivables shall be reduced by the amount of
collections received on such day (whether or not such Collections have resulted
in Available Funds); provided, that to the
27
extent that a Collection is subsequently dishonored by the bank on which such
Collection is drawn, the Principal Amount of Receivables shall be reinstated by
the amount of such dishonored Collection. In addition, for purposes of making
the allocations required by Article III of this Agreement, as supplemented by
the Supplements, on any day, the Servicer shall only direct, and the Trustee
shall only be required to transfer, Available Funds.
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1. Conveyance of Receivables.
(a) By execution and delivery of this Agreement, the Company does
hereby transfer, assign, set over and otherwise convey to the Trustee for the
benefit of the Holders, without recourse (except as specifically provided
herein), all of its present and future right, title and interest in, to and
under:
(i) all Receivables, including those existing at the close of
business on the Initial Closing Date and all Receivables thereafter
arising from time to time until but not including the Trust Termination
Date;
(ii) the Related Property;
(iii) all Collections;
(iv) the Required Currency Hedge;
(v) all payment, enforcement and other rights (including rescission,
replevin or reclamation), but none of the obligations, relating to any
Receivable or arising therefrom;
(vi) the Collection Accounts, the Collection Concentration Accounts,
each Eligible Segregated Account, each Lockbox and each Lockbox Account
(collectively, the "Accounts"), including (A) all funds and other
evidences of payment held therein and all certificates and instruments, if
any, from time to time representing or evidencing any of such Accounts or
any funds and other evidences of payment held therein, (B) all investments
of such funds held in such Accounts and all certificates and instruments
from time to time representing or evidencing such investments, (C) all
notes, certificates of deposit and other instruments from time to time
hereafter delivered or transferred to, or otherwise possessed by, the
Trustee for and on behalf of the Company in substitution for any of the
then existing Accounts and (D) all interest, dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any and all of the then
existing Accounts;
(vii) all monies due or to become due and all amounts received with
respect to the items listed in clauses (i) through (vi) and all proceeds
(including, without
28
limitation, whatever is received upon the sale, exchange, collection or
other disposition of the foregoing and all "proceeds" as defined in
Section 9-306 of the UCC as in effect in the State of New York or, if
applicable, as defined under the PPSA as in effect in the Province of
Ontario) thereof, including all Recoveries relating thereto;
(b) The Company, to secure its obligations hereunder, hereby
transfers, assigns, sets over and otherwise conveys to the Trustee for the
benefit of the Holders, and grants to the Trustee, for the benefit of the
Holders, a first priority perfected security interest in, all its right, title
and interest in, to and under the following: each of the Receivables Sale
Agreements and the Servicing Agreement, including in respect of each agreement,
(A) all property assigned thereunder and all rights of the Company to receive
monies due and to become due under or pursuant to such agreement, whether
payable as fees, expenses, costs or otherwise, (B) all rights of the Company to
receive proceeds of any credit or similar types of insurance, indemnity,
warranty or guaranty with respect to such agreement, (C) claims of the Company
for damages arising out of or for breach of or default under such agreement, (D)
the right of the Company to amend, waive or terminate such agreement, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder, (E) all other rights, remedies, powers, privileges and claims of the
Company under or in connection with such agreement (whether arising pursuant to
such agreement or otherwise available to the Company at law or in equity),
including the rights of the Company to enforce such agreement and to give or
withhold any and all consents, requests, notices, directions, approvals,
extensions or waivers under or in connection therewith and (F) all monies due or
to become due and all amounts received with respect to the items listed in
clauses (A) through (F) and all proceeds (including, without limitation,
whatever is received upon the sale, exchange, collection or other disposition of
the foregoing and all "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of New York or, if applicable, as defined under the PPSA as
in effect in the Province of Ontario) thereof, including all Recoveries relating
thereto (all of the foregoing set forth in subclauses (A)-(F), inclusive, the
"Transferred Agreements");
Such property described in the foregoing paragraphs (a) and (b),
together with all investments and all monies on deposit in any other bank
account or accounts maintained for the benefit of any Holders and all monies
available under any Enhancement to be provided by any Enhancement Provider for
any Series for payment to Holders shall constitute the assets of the Trust (the
"Trust Assets").
Subject to Section 5.9, although it is the intent of the parties to
this Agreement that the conveyance of the Company's right, title and interest
in, to and under the Receivables and the other Trust Assets described in
paragraph (a) pursuant to this Agreement shall constitute a purchase and sale
and not a loan, in the event that such conveyance is deemed to create a loan,
the Company hereby grants to the Trustee, for the benefit of the Investor
Certificateholders, a perfected first priority security interest in all of the
Company's present and future right, title and interest in, to and under the
Receivables and such other Trust Assets to secure the payment of the applicable
Invested Amounts, interest thereon and the other fees and expenses payable to
the Investor Certificateholders, and that this Agreement shall constitute a
security agreement under applicable law in favor of the Trustee, for the benefit
of the Investor Certificateholders.
29
(c) The assignment, set over and conveyance to the Trust pursuant to
Section 2.1(a) shall be made to the Trustee, on behalf of the Trust, and each
reference in this Agreement to such assignment, set over and conveyance shall be
construed accordingly. In connection with the foregoing assignment, except as
expressly provided otherwise in the Transaction Documents, the Company, the
Servicer and each Sub-Servicer agree to deliver to the Trustee each Trust Asset
(including any original documents or instruments included in the Trust Assets as
are necessary to effect such assignment) in which the transfer of an interest is
perfected under the UCC or otherwise solely by possession and not by filing a
financing statement or similar document.
Notwithstanding the assignment of the Transferred Agreements set
forth in Section 2.1(b), the Company does not hereby assign or delegate any of
its duties or obligations under the Transferred Agreements to the Trust or the
Trustee and neither the Trust nor the Trustee accepts such duties or
obligations, and the Company shall continue to have the right and the obligation
to purchase Receivables from the Sellers thereunder from time to time. The
foregoing assignment, set-over and conveyance does not constitute and is not
intended to result in a creation or an assumption by the Trust, the Trustee, any
Investor Certificateholder or the Company, in its capacity as a Holder, of any
obligation of the Servicer, the Company, any Seller or any other Person in
connection with the Receivables or under any agreement or instrument relating
thereto, including, without limitation, any obligation to any Obligor.
In connection with such assignment, the Company agrees to record,
file and register, or cause to be recorded, filed or registered, at its own
expense, any assignment, notice, application thereof, financing statements (and
continuation statements with respect to such financing statements when
applicable) or registrations in the appropriate records, each where applicable,
(i) with respect to the Receivables now existing and hereafter created and (ii)
with respect to any other Trust Assets a security interest in which may be
perfected, obtained or protected under the relevant UCC, PPSA, legislation or
similar statute by such filing or registration, as the case may be, in each case
meeting the requirements of applicable law in such manner and in such
jurisdictions as are necessary to perfect and protect and maintain perfection
and protection of the assignment of the Receivables and such other Trust Assets
to the Trust, and to deliver a file-stamped copy or certified statement of such
financing statement or registration or other evidence of such filing or
registration to the Trustee on or prior to the date of issuance of any
Certificates (the items described in clauses (i) and (ii), the "Filing Trust
Assets"). The Trustee shall be under no obligation whatsoever to file such
financing statement, or a continuation statement to such financing statement, or
to make any other filing or other registration under the UCC, other relevant
legislation or similar statute in connection with such transfer. The Trustee
shall be entitled to conclusively rely on the filings or registrations made by
or on behalf of the Company without any independent investigation and the
Company's obligation to make such filings as evidence that such filings have
been made.
In connection with such assignment, the Company further agrees, at
its own expense, on or prior to the Initial Closing Date (a) to indicate, or to
cause to be indicated, in its computer files (but not on individual invoices or
individual collection files) relating to such Receivables (by means of a general
legend, substantially in the form described on Schedule 6 hereto, that will
automatically appear each time a Person enters the Sellers' Receivables program
that unless otherwise specifically identified as a receivable not so sold,
transferred,
30
assigned and conveyed, all Receivables (and any such other receivables) included
therein and all other Receivables Property (and any other similar related
property) have been sold, transferred, assigned and conveyed pursuant to the
Receivables Sale Agreements or this Agreement, respectively, to the Company or
the Trust for the benefit of the Holders, as the case may be, and (b) to
deliver, or cause to be delivered, to the Trustee computer files, microfiche
lists or typed or printed lists (the "Receivables Lists") containing true and
complete lists of all such Receivables transferred to the Trust, identified by
Obligor and setting forth the Receivables balance for each such Receivable, as
of the Cut-Off Date. Such tapes or disks shall be marked as Schedule 1 to this
Agreement and are hereby incorporated into and made a part of this Agreement.
Section 2.2. Acceptance by Trustee. (a) The Trustee hereby
acknowledges its acceptance on behalf of the Trust of all right, title and
interest to the property, now existing and hereafter created, assigned to the
Trust pursuant to Section 2.1 and declares that it shall maintain such right,
title and interest, upon the trust herein set forth, for the benefit of all
Holders. The Trustee further acknowledges that prior to, or simultaneously with,
the execution and delivery of this Agreement, the Company delivered or caused to
be delivered to the Trustee the computer file printout or microfiche list
described in the last paragraph of Section 2.1.
(b) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3. Representations and Warranties of the Company Relating
to the Company. The Company hereby represents and warrants to the Trustee and
the Trust, for the benefit of the holders of Certificates of each Outstanding
Series, as of the Issuance Date of such Series, that:
(a) Corporate Existence; Compliance with Law. The Company (i) is a
corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) has all requisite
corporate power and authority and all legal right to own and operate its
properties, to lease the properties it operates as lessee and to conduct
its business as now conducted, (iii) is duly qualified as a foreign
corporation to do business and is in good standing under the laws of each
jurisdiction where such qualification is necessary and (iv) is in
compliance with its certificate or articles of incorporation and by-laws
or other organizational or governing documents and, in all material
respects, any other Requirements of Law. The Company does not engage in
activities prohibited by the Transaction Documents or its certificate or
articles of incorporation.
(b) Corporate Power; Authorization; Consents. The Company has the
corporate power and authority, and the legal right, to execute, deliver
and perform this Agreement and the other Transaction Documents to which it
is a party and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party. No consent or authorization
of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement and the
31
other Transaction Documents to which it is a party by or against the
Company other than (i) those which have duly been obtained or made and are
in full force and effect on the Initial Closing Date, (ii) any filings of
UCC-1 financing statements or similar documents necessary to perfect the
Company's or the Trust's interest in the Trust Assets and (iii) those that
may be required under the state securities or "blue sky" laws in
connection with the offering or sale of certificates. This Agreement and
each other Transaction Document to which the Company is a party have been
duly executed and delivered on behalf of the Company.
(c) Enforceability. This Agreement and each of the other Transaction
Documents to which the Company is a party (i) constitute the legal, valid
and binding obligations of the Company enforceable against it in
accordance with their terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights generally and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity) and (ii) are effective to, and all action
has been taken to, cause compliance with paragraph (n) of the definition
of Eligible Receivables.
(d) No Legal Bar. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Company is a
party will not violate its certificate or articles of incorporation and
by-laws or other organizational or governing documents and, any other
Requirement of Law in any material respect, and will not result in, or
require, the creation or imposition of any Lien (other than Liens
contemplated or permitted hereby) on any of its properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation.
(e) No Conflict. The execution and delivery of this Agreement and
the other Transaction Documents to which the Company is a party, the
performance of the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not conflict with, result
in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default
under, any indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which the Company is a party or by which it or any of
its property is bound.
(f) No Material Litigation. There are no actions, suits,
investigations or proceedings at law or in equity (including, without
limitation, injunctions, writs or restraining orders) by or before any
arbitrator, court or Governmental Authority now pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any properties, revenues or rights of the Company which (i) involve this
Agreement or any of the other Transaction Documents or any of the
transactions contemplated hereby or thereby, (ii) which could reasonably
be expected to affect adversely the income tax or franchise tax attributes
of the Trust under the United States federal or any state or franchise tax
systems or (iii) would be reasonably likely to have a Material Adverse
Effect. The transactions contemplated hereunder and the use of the
proceeds thereof will not violate any Requirement of Law.
32
(g) No Default. The Company is not in default, in any material
respect, under or with respect to any of its Contractual Obligations. No
Early Amortization Event or Potential Early Amortization Event has
occurred and is continuing.
(h) Compliance with Law. The Company has complied with all
applicable provisions of its certificate or articles of incorporation and
by-laws or other organizational or governing documents and has complied in
all material respects with any other Requirements of Law with respect to
the Company, its business and properties and the Trust Assets.
(i) Tax Returns. The Company has filed or caused to be filed all tax
returns which are required to have been filed by it and has paid or caused
to be paid all taxes shown thereon to be due and payable, and any
assessments made against it or any of its property. No tax Lien has been
filed, and, to the best knowledge of the Company, no claim is being
asserted, with respect to any taxes. For purposes of this paragraph,
"taxes" shall mean any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any Governmental Authority.
(j) Location of Records; Chief Executive Office. The offices at
which the Company keeps its records concerning the Receivables either (x)
are located at the addresses set forth for the Sellers on the relevant
schedule of the Receivables Sale Agreements or (y) have been reported to
the Trustee in accordance with the provisions of subsection 2.8(l) of this
Agreement. The chief executive office of the Company is located at the
address set forth on Schedule 4 (as such location may be changed from time
to time in accordance with Section 2.8(1) of the Agreement) and is the
place where the Company is "located" for the purposes of Section
9-103(3)(d) of the UCC as in effect in the State of New York, or, if
applicable, for purposes of the relevant provincial laws of Canada. The
state and county where the chief executive office of the Company is
"located" for the purposes of Section 9-103(3)(d) of the UCC as in effect
in the State of New York has not changed in the past four months.
(k) Solvency. Both prior to and after giving effect to the
transactions occurring on each Issuance Date, (i) the fair value of the
assets of the Company at a fair valuation will exceed the debts and
liabilities, subordinated, contingent or otherwise, of the Company; (ii)
the present fair salable value of the property of the Company will be
greater than the amount that will be required to pay the probable
liability of the Company on its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; (iii) the Company will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (iv) the Company will not have
unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and is proposed to be
conducted. For all purposes of clauses (i) through (iv) above, the amount
of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an
actual or matured liability. Both prior to and after giving effect to the
transactions occurring on each Issuance Date, the Company does not intend
to, nor does it believe that it will,
33
incur debts beyond its ability to pay such debts as they mature, taking
into account the timing of and amounts of cash to be received by it and
the timing of and amounts of cash to be payable in respect of its debt.
(l) Investment Company. Neither the Company nor the Trust (before
and after giving effect to the issuance of Certificates on such Issuance
Date) is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or is exempt from all provisions of such
act.
(m) Ownership; Subsidiaries. All of the issued and outstanding
capital stock of the Company is owned, legally and beneficially, by WESCO.
The Company has no Subsidiaries.
(n) Names. The legal name of the Company is as set forth in this
Agreement. The Company has not had, nor has, any trade names, fictitious
names, assumed names or "doing business as" names.
(o) Liabilities. Other than, (i) the liabilities, commitments or
obligations (whether absolute, accrued, contingent or otherwise) arising
under or in respect of the Transaction Documents and (ii) immaterial
amounts due and payable in the ordinary course of business of a
special-purpose company, the Company does not have any liabilities,
commitments or obligations (whether absolute, accrued, contingent or
otherwise), whether due or to become due.
(p) Use of Proceeds; Federal Reserve Board Regulation. No proceeds
of the issuance of any Investor Certificates will be used by the Company
to purchase or carry any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System, as in effect from time
to time). The Company is in compliance with all applicable regulations of
the Board of Governors of the Federal Reserve System (including, without
limitation, Regulations U and G with respect to "margin stock").
(q) Collection Procedures. The Company and each Seller have in place
procedures pursuant to the Policies which are either necessary or
advisable to ensure the timely collection of Receivables in accordance
with the Transaction Documents.
(r) Lockbox Accounts; Eligible Segregated Accounts. The Lockbox
Banks and Eligible Segregated Account Banks are the only institutions
holding any Lockbox Accounts or Eligible Segregated Accounts for the
receipt of payments from Obligors in respect of Receivables and no Persons
other than Obligors have been instructed to make payments to Lockbox
Accounts or Eligible Segregated Accounts. (i) Each Lockbox Agreement to
which the Company is party is in full force and effect, (ii) each Lockbox
Account is free and clear of any Lien (other than any right of set-off
expressly provided for in the applicable Lockbox Agreement), (iii) each
Eligible Segregated Account Agreement to which the Company is party is in
full force and effect and (iv) each Eligible Segregated Account
established pursuant to subsection 2.3(b) of the Servicing Agreement is
free and clear of any Lien.
34
(s) Bulk Sales. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" law by the
Company.
The representations and warranties set forth in this Section 2.3
shall survive after the date made and the transfer and assignment of the Trust
Assets to the Trust. Upon discovery by a Responsible Officer of the Company or
the Servicer or by a Responsible Officer of the Trustee of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other parties and to each Agent with
respect to all Outstanding Series. The Trustee's obligations in respect of any
breach are limited as provided in subsection 8.2(g).
Section 2.4. Representations and Warranties of the Company Relating
to the Receivables. The Company hereby represents and warrants to the Trustee
and the Trust, for the benefit of the holders of Certificates of each
Outstanding Series, (x) as of the Issuance Date of such Series, and (y) with
respect to each Receivable transferred to the Trust after such Issuance Date, as
of the related Receivables Purchase Date, unless, in either case, otherwise
stated in the applicable Supplement or unless such representation or warranty
expressly relates only to a prior date, that:
(a) Schedule 1 to this Agreement sets forth an accurate and complete
listing as of the Cut-Off Date of all Receivables to be transferred to the
Trust as of the Initial Closing Date and the information contained therein
with respect to the identity of the Obligor of, and Principal Amount of,
each such Receivable is true and correct in all material respects as of
the Cut-Off Date. As of the Cut-Off Date, the aggregate amount of
Receivables owned by the Company is accurately set forth in all material
respects in Schedule 1 hereto.
(b) Each Receivable existing on the Initial Closing Date or, in the
case of Receivables transferred to the Trust after the Initial Closing
Date, on the date that each such Receivable shall have been transferred to
the Trust, has been conveyed to the Trust free and clear of any Lien,
except for Permitted Liens specified in clauses (i) and (iv) of the
definition thereof.
(c) On the Initial Closing Date, each Receivable transferred to the
Trust that is included in the calculation of the initial Aggregate
Receivables Amount is an Eligible Receivable and, in the case of
Receivables transferred to the Trust after the Initial Closing Date, on
the date such Receivable shall have been transferred to the Trust, each
such Receivable that is included in the calculation of the Aggregate
Receivables Amount on such date is an Eligible Receivable.
The representations and warranties set forth in this Section 2.4
shall survive after the date made and the transfer and assignment of the Trust
Assets to the Trust. Upon discovery by a Responsible Officer of the Company or
the Servicer or a Responsible Officer of the Trustee of a breach of any of the
representations and warranties, the party discovering such breach shall give
prompt written notice to the other parties and to each Agent with respect to all
Outstanding Series. The Trustee's obligations in respect of any breach are
limited as provided in Section 8.2(g).
35
Section 2.5. Repurchase of Ineligible Receivables and Cash Dilution
Payments. (a) Repurchase Obligation. If (i) any representation or warranty under
subsections 2.4(a), (b) or (c) is not true and correct in any material respect
as of the date specified therein with respect to any Receivable transferred to
the Trust, (ii) there is a breach of any covenant under subsection 2.8(c) with
respect to any Receivable in any material respect or (iii) the Trust's interest
in any Receivable is not a first priority perfected ownership or security
interest at any time as a result of any action taken by, or any failure to take
action by, the Company (any Receivable as to which the conditions specified in
any of clauses (i), (ii) or (iii) of this subsection 2.5(a) exists is referred
to herein as an "Ineligible Receivable") then, upon the earlier (the date on
which such earlier event occurs, the "Repurchase Obligation Date") of the
discovery by the Company of any such event which continues unremedied or receipt
by the Company of written notice given by the Trustee or the Servicer of any
such event which continues unremedied, the Company shall become obligated to
repurchase or cause to be repurchased such Ineligible Receivable on the terms
and conditions set forth in subsection 2.5(b).
(b) Repurchase of Receivables. Subject to the last sentence of this
subsection 2.5(b), the Company shall repurchase, or cause to be repurchased,
each Ineligible Receivable required to be repurchased pursuant to subsection
2.5(a) by depositing in the Collection Accounts in immediately available funds
no later than the Business Day following the related Repurchase Obligation Date
an amount equal to the lesser of (x) the amount by which the Aggregate Target
Receivables Amount exceeds the Aggregate Receivables Amount (after giving effect
to the reduction thereof by the Principal Amount of such Ineligible Receivable)
and (y) the aggregate outstanding Principal Amount of each such Ineligible
Receivable (the "Transfer Deposit Amount"). Upon transfer or deposit of the
Transfer Deposit Amount, the Trust shall automatically and without further
action be deemed to sell, transfer, assign, set over and otherwise convey to the
Company, without recourse, representation or warranty, all the right, title and
interest of the Trust in and to such Ineligible Receivable, all monies due or to
become due with respect thereto and all proceeds thereof; and such repurchased
Ineligible Receivable shall be treated by the Trust as collected in full as of
the date on which it was transferred. The Trustee shall execute such documents
and instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Company to effect the conveyance of such
Receivables pursuant to this subsection. Except as otherwise specified in any
Supplement, the obligation of the Company to repurchase any Ineligible
Receivable shall constitute the sole remedy respecting the event giving rise to
such obligation available to Investor Certificateholders (or the Trustee on
behalf of Investor Certificateholders) unless such obligation is not satisfied
in full in accordance with the terms of this Agreement.
(c) Dilution Adjustments. If, as a result of a Dilution Adjustment
pursuant to Section 4.6 of the Servicing Agreement, the Aggregate Receivables
Amount is less than the Aggregate Target Receivables Amount, the Company (in
addition to but without duplication of the obligation of the applicable Seller
under the Receivables Sale Agreements in respect of such Dilution Adjustment)
shall be required to pay into the Series Principal Collection Sub-subaccount
with respect to each Outstanding Series in immediately available funds within
one Business Day of such determination such Series' pro rata share of the lesser
of the amount of such Dilution Adjustment and the amount (the "Cash Dilution
Payment") by which the Aggregate Target Receivables Amount exceeds the Aggregate
Receivables Amount.
36
Section 2.6. Purchase of Investor Certificateholders' Interest in
Trust Portfolio. (a) In the event of any breach of any of the representations
and warranties set forth in Section 2.3, which breach has a material adverse
effect on the interests of the holders of an Outstanding Series (without giving
effect to any Enhancement) under or with respect to the Transaction Documents,
then the Trustee, at the written direction of holders of Certificates evidencing
more than 50% of the Invested Amount of such Outstanding Series shall notify the
Company to purchase such Outstanding Series and the Company shall be obligated
to make such purchase on the next Distribution Date occurring at least five
Business Days after receipt of such notice on the terms and conditions set forth
in subsection 2.6(b) below; provided, however, that no such purchase shall be
required to be made if, by such Distribution Date, the representations and
warranties contained in Section 2.3 shall be satisfied in all material respects
and any material adverse effect on the holders of such Outstanding Series caused
thereby shall have been cured.
(b) As required under subsection 2.6(a) above, the Company shall
deposit into the U.S. Dollar Collection Account for credit to the applicable
subaccount of the U.S. Dollar Collection Account on the Business Day preceding
such Distribution Date an amount equal to the purchase price (as described in
the next succeeding sentence) for the Certificateholders' Interest for such
Outstanding Series on such day. The purchase price for any such purchase will be
equal to (i) the Adjusted Invested Amount of such Outstanding Series on the date
on which the purchase is made plus (ii) an amount equal to all interest accrued
but unpaid on such Series up to the Distribution Date on which the distribution
of such deposit is scheduled to be made pursuant to Section 9.2 plus (iii) any
other amount required to be paid in connection therewith pursuant to any
Supplement. Notwithstanding anything to the contrary in this Agreement, the
entire amount of the purchase price deposited in the U.S. Dollar Collection
Account (together with amounts on deposit in the applicable Series Principal
Collection Sub-subaccount) shall be distributed to the related Investor
Certificateholders on such Distribution Date pursuant to Section 9.2. If the
Trustee gives notice directing the Company to purchase the Certificates of an
Outstanding Series as provided above, except as otherwise specified in any
Supplement, the obligation of the Company to purchase such Certificates pursuant
to this Section 2.6 shall constitute the sole remedy respecting an event of the
type specified in the first sentence of this Section 2.6 available to the
applicable Investor Certificateholders (or the Trustee on behalf of such
Investor Certificateholders) unless such obligation is not satisfied in full in
accordance with the terms of this Agreement.
Section 2.7. Affirmative Covenants of the Company. The Company
hereby covenants that, until the Trust Termination Date occurs, the Company
shall:
(a) Financial Statements. (i) Furnish to the Trustee, each Agent and
the Rating Agencies, within 120 days after the end of each fiscal year,
the balance sheet and related statements of income, stockholders' equity
and cash flows showing the financial condition of the Company as of the
close of such fiscal year and the results of its operations during such
year, certified by an appropriate Responsible Officer of the Company to
the effect that such financial statements fairly present the financial
condition and results of operations of the Company in accordance with GAAP
consistently applied;
37
(ii) Furnish to the Trustee, each Agent and the Rating
Agencies, within 60 days after the end of each of the first three
fiscal quarters of each fiscal year, the Company's balance sheet and
related income statement showing the financial condition of the
Company as of the close of such fiscal quarter and the results of
its operations during such fiscal year (and, beginning with the
second fiscal year, showing, on a comparative basis, such
information as of and for the corresponding dates and periods of the
preceding fiscal year), all certified by a Responsible Officer of
such Person as fairly presenting the financial condition and results
of operations of the Company in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments; and
(iii) Furnish to the Trustee and each Agent, promptly, from
time to time, such other information regarding the operations,
business affairs and financial condition of the Company, or
compliance with the terms of any Transaction Document, in each case
as any Agent or the Trustee may reasonably request.
(b) Annual Opinion. Deliver to the Trustee an Opinion of Counsel,
substantially in the form of Exhibit C, by January 31 of each year, the
first such delivery hereunder to occur in January 1999.
(c) Payment of Obligations; Compliance with Obligations. Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its obligations of whatever nature
(including, without limitation, all taxes, assessments, levies and other
governmental charges imposed on it), except where the amount or validity
thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the Company. The Company shall defend the
right, title and interest of the Trustee and the Holders in, to and under
the Receivables and the other Trust Assets, whether now existing or
hereafter created, against all claims of third parties claiming through or
under the Company, any Seller, any Sub-Servicer or the Servicer.
(d) Inspection of Property; Books and Records; Discussions. Keep
proper books of records and accounts in which full, true and correct
entries in conformity in all material respects with GAAP and all
Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities; and permit representatives of the
Trustee or any Agent for any Outstanding Series upon reasonable advance
notice to visit and inspect any of its properties and examine and make
abstracts from any of its books and records during normal business hours
on any Business Day and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other
condition of the Company with officers and employees of the Company and
with its Independent Public Accountants; provided, that the Trustee shall
notify the Company prior to any contact with such accountants and, prior
to the occurrence of an Early Amortization Event, shall permit
representatives of the Company to be present during such discussions.
38
(e) Compliance with Law and Policies. (i) Comply in all material
respects with all Requirements of Law applicable to the Company.
(ii) Cause each Seller to perform its obligations in
accordance with, and comply in all material respects with, the
Policies, as amended from time to time in accordance with the
Transaction Documents, in regard to the Receivables and the Related
Property.
(f) Purchase of Receivables. Purchase Receivables solely pursuant to
(i) the Receivables Sale Agreements or (ii) this Agreement.
(g) Delivery of Collections. In the event that the Company receives
Collections directly from Obligors, deposit such Collections into the
applicable Lockbox Account, Eligible Segregated Account or a Collection
Account within one Business Day after receipt thereof by the Company.
(h) Notices. (a) Promptly (and, in any event, within five Business
Days after a Responsible Officer of the Company becomes aware of such
event) give written notice to the Trustee, each Rating Agency and each
Agent for any Outstanding Series of:
(i) the occurrence of any Early Amortization Event; and
(ii) any Lien not permitted by subsection 2.8(c) on any
Receivable or any other Trust Assets.
(b) Promptly (and, in any event, within five Business Days
after a Responsible Officer of the Company becomes aware of such
event) give written notice to the Trustee and each Agent for any
Outstanding Series of the occurrence of any Potential Early
Amortization Event
(i) Lockboxes; Eligible Segregated Accounts. (i) Maintain, and keep
in full force and effect, each Lockbox Agreement and Eligible Segregated
Account Agreement to which the Company is a party, and not amend or
otherwise modify each such agreement, except in each case to the extent
otherwise permitted under the terms of this Agreement and the other
Transaction Documents; provided, however, that the Company may enter into
any amendments or modifications of a Lockbox Agreement or Eligible
Segregated Account Agreement that the Company reasonably deems necessary
to conform such Lockbox Agreement or Eligible Segregated Account Agreement
to the cash management system of the Servicer and that are reasonably
acceptable to the Trustee and each Agent, (ii) ensure that each related
Lockbox Account and each related Eligible Segregated Account shall be free
and clear of, and defend each such Lockbox Account and Eligible Segregated
Account against any writ, order, stay, judgment, warrant of attachment or
execution or similar process.
(j) Separate Corporate Existence.
(i) Maintain its own deposit account or accounts, separate
from those of any Affiliate, with commercial banking institutions
and ensure that the funds
39
of the Company will not be diverted to any other Person or for other
than corporate uses of the Company, nor will such funds be
commingled with the funds of any Seller or any other Subsidiary or
Affiliate of any Seller;
(ii) To the extent that it shares the same officers or other
employees as any of its stockholders or Affiliates, the salaries of
and the expenses related to providing benefits to such officers and
other employees shall be fairly allocated among such entities, and
each such entity shall bear its fair share of the salary and benefit
costs associated with all such common officers and employees;
(iii) To the extent that it jointly contracts with any of its
stockholders or Affiliates to do business with vendors or service
providers or to share overhead expenses, the costs incurred in so
doing shall be allocated fairly among such entities, and each such
entity shall bear its fair share of such costs. To the extent that
the Company contracts or does business with vendors or service
providers where the goods and services provided are partially for
the benefit of any other Person, the costs incurred in so doing
shall be fairly allocated to or among such entities for whose
benefit the goods or services are provided, and each such entity
shall bear its fair share of such costs. All material transactions
between the Company and any of its Affiliates, whether currently
existing or hereafter entered into, shall be only on an arm's-length
basis, it being understood and agreed that the transactions
contemplated in the Transaction Documents meet the requirements of
this clause (iii);
(iv) Maintain an office space separate from offices of WESCO
and its Affiliates (but which may be located at the same address as
WESCO). To the extent that the Company and any of its stockholders
or Affiliates have offices in the same location, there shall be a
fair and appropriate allocation of overhead costs among them, and
each such entity shall bear its fair share of such expenses;
(v) Issue separate financial statements prepared not less
frequently than quarterly and prepared in accordance with GAAP;
(vi) Conduct its affairs in its own name and strictly in
accordance with its articles of incorporation and observe all
necessary, appropriate and customary corporate formalities,
including, but not limited to, holding all regular and special
stockholders' and directors' meetings appropriate to authorize all
corporate action, keeping separate and accurate minutes of its
meetings, passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate
books, records and accounts, including, but not limited to, payroll
and intercompany transaction accounts;
(vii) Not assume or guarantee any of the liabilities of any
Seller, any Servicing Party or any Affiliate of any thereof; and
40
(viii) Take, or refrain from taking, as the case may be, all
other actions that are necessary to be taken or not to be taken in
order to (x) ensure that the assumptions and factual recitations set
forth in the Specified Bankruptcy Opinion Provisions remain true and
correct in all material respects with respect to the Company and (y)
comply in all material respects with those procedures described in
such provisions which are applicable to the Company.
(k) Preservation of Corporate Existence. (i) Preserve and maintain
its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation and (ii) qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises,
privileges and qualification would, if not remedied within 30 days, be
reasonably likely to have a Material Adverse Effect.
(l) Net Worth. Maintain at all times a consolidated net worth, as
determined in accordance with GAAP, of at least $50,000,000.
(m) Maintenance of Property. Keep all property and assets useful and
necessary to permit the monitoring and collection of Receivables.
(n) Further Assurances. File, or cause to be filed, at the
applicable Seller's expense and in accordance with the provisions of the
UCC or PPSA of the applicable jurisdiction, duly completed and executed
continuation statements with respect to all financing statements filed in
connection with the transactions contemplated by the Receivables Sale
Agreements.
(o) Required Currency ▇▇▇▇▇▇. (i) On the Initial Closing Date and on
each Distribution Date thereafter, the Company shall have the Required
Currency Hedge in place for the Required Hedge Period and the Required
Hedge Notional Amount. The Company agrees that at any time that it enters
into any Required Currency Hedge, it shall have funds available to make
payment of fees or other amounts due in connection with the purchase of
such Required Currency Hedge at the time that such payments are due and
payable thereunder.
(ii) The Company agrees that at any time that it enters into
any Required Currency Hedge, it shall execute and deliver to the
Trustee an assignment of all amounts payable to the Company under
such Required Currency Hedge substantially in the form of Exhibit E
(each, a "Required Currency Hedge Assignment").
(iii) If any time the commercial paper or short term deposit
ratings from any Rating Agency assigned to a Counterparty is such
that the Counterparty is no longer an Eligible Counterparty, the
Company shall (x) to the extent permitted under the Required
Currency Hedge to which such Counterparty is a party, require such
Counterparty to secure its obligations under such Required Currency
Hedge or take such other actions as shall satisfy the Rating Agency
Condition or (y) replace the Counterparty with an Eligible
Counterparty within 30 days.
41
Section 2.8. Negative Covenants of the Company. The Company hereby
covenants that, until the Trust Termination Date occurs, it shall not directly
or indirectly:
(a) Accounting of Transfers. Prepare any consolidating financial
statements which shall account for the transactions contemplated by the
Receivables Sale Agreement in any manner other than as a sale of
Receivables by the Sellers to the Company or in any other respect account
for or treat the transactions under the Receivables Sale Agreements
(including for financial accounting purposes, except as required by law)
in any manner other than as transfers of Receivables by the Sellers to the
Company; provided, however, that this subsection shall not apply for any
tax or tax accounting purposes.
(b) Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except: (i) Indebtedness evidenced by the Seller
Note; (ii) Indebtedness representing fees, expenses and indemnities
payable pursuant to and in accordance with the Transaction Documents; and
(iii) Indebtedness for services supplied or furnished to the Company in an
amount not to exceed $100,000 at any one time outstanding; provided that
any payments made by the Company pursuant to this subsection shall be made
solely from funds available to the Company which are not otherwise
required to be applied to the payment of any amounts (other than amounts
payable to the Company) pursuant to any Pooling and Servicing Agreements,
shall be non-recourse other than with respect to such funds, and shall not
constitute a claim against the Company to the extent that insufficient
funds exist to make such payment.
(c) Limitation on Liens and Sales. Except for the conveyance
hereunder or as otherwise contemplated hereby, the Company will not sell,
pledge, assign or transfer to any Person, or create, incur, assume or
suffer to exist any Lien upon any Receivables or any of its property,
assets or revenues, whether now owned or hereafter acquired, except for
Permitted Liens, it being understood that no Permitted Lien under clause
(ii) of the definition thereof shall cover any of the Trust Assets.
(d) Limitation on Guarantee Obligations. Become or remain liable,
directly or contingently, in connection with any Indebtedness or other
liability of any other Person, whether by guarantee, endorsement (other
than endorsements of negotiable instruments for deposit or collection in
the ordinary course of business), agreement to purchase or repurchase,
agreement to supply or advance funds, or otherwise, except in connection
with indemnification obligations of the Company to the limited extent
provided in the Company's articles of incorporation and by-laws; provided
that any payments made by the Company pursuant to this subsection shall be
made solely from funds available to the Company which are not otherwise
required to be applied to the payment of any amounts (other than amounts
payable to the Company) pursuant to any Pooling and Servicing Agreements,
shall be non-recourse other than with respect to such funds, and shall not
constitute a claim against the Company to the extent that insufficient
funds exist to make such payment.
(e) Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or
42
dissolution), or make any material change in its present method of
conducting business (other than as contemplated by the Transaction
Documents), or convey, sell, lease, assign, transfer or otherwise dispose
of, all or substantially all of its property, business or assets other
than the assignments and transfers contemplated hereby.
(f) Limitation on Dividends and Other Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of capital
stock of the Company, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Company (any of the
foregoing, a "restricted payment"), or make, directly or indirectly,
payments in any form in respect of the Seller Notes unless (i) at the date
such restricted payment or payment in respect of the Seller Notes is made,
the Company shall have made all payments in respect of its repurchase
obligations pursuant to this Agreement outstanding at such date, (ii) at
the date any restricted payment is made, the outstanding principal amount
of the Seller Notes shall be zero, and (iii) any such restricted payment
is made in accordance with all corporate and legal formalities applicable
to the Company; provided, however, that (A) no restricted payment shall be
made on any date if (x) a Potential Early Amortization Event of a type
referred to in clause (a)(ii) or (iii) of Section 7.1 or (y) an Early
Amortization Event has occurred and is continuing (or would occur as a
result of such payment) on such date, (B) no payment in respect of the
Seller Notes shall be made in contravention of the subordination
provisions contained therein and (C) all restricted payments, and payments
in respect of the Seller Notes, made on any date shall be payable by the
Company solely from funds available to the Company in accordance with the
terms of any Pooling and Servicing Agreement.
(g) Business of the Company. Engage at any time in any business or
business activity other than the acquisition of Receivables pursuant to
the Receivables Sale Agreements, the assignments and transfers hereunder
and the other transactions contemplated by the Transaction Documents, and
any activity incidental to the foregoing and necessary or convenient to
accomplish the foregoing, or enter into or be a party to any agreement or
instrument other than in connection with the foregoing, except those
agreements or instruments permitted under subsection 2.8(i).
(h) Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any
Person, except for any Exchangeable Company Interest, any Series
Subordinated Interest, the Receivables and the other Trust Assets or as
otherwise permitted by the Transaction Documents.
(i) Agreements. (A) Become a party to, or permit any of its
properties to be bound by, any indenture, mortgage, instrument, contract,
agreement, lease or other undertaking, except the Transaction Documents,
leases of office space, equipment or other facilities for use by the
Company in its ordinary course of business, employment agreements, service
agreements, agreements relating to shared employees and the other
Transaction Documents and agreements necessary to perform its obligations
under the
43
Transaction Documents, (B) issue any power of attorney (except to the
Trustee or the Servicer or except for the purpose of permitting any Person
to perform any ministerial functions on behalf of the Company that are not
prohibited by or inconsistent with the terms of the Transaction
Documents), or (C) amend, supplement, modify or waive any of the
provisions of the Receivables Sale Agreements or any Lockbox Agreement or
Eligible Segregated Account Agreement or request, consent or agree to or
suffer to exist or permit any such amendment, supplement, modification or
waiver or exercise any consent rights granted to it thereunder unless such
amendment, supplement, modification or waiver or such exercise of consent
rights would not be reasonably likely to have a Material Adverse Effect
and, in the case of the Receivables Sale Agreements, the Rating Agency
Condition shall have been satisfied with respect to any such amendments,
supplements, modifications or waivers.
(j) Policies; Amendments to Receivables. (i) Make any change or
modification (or permit any change or modification to be made) in any
material respect to the Policies, except (x) if such changes or
modifications are necessary under any Requirement of Law, (y) if such
changes or modifications would not reasonably be likely to have a Material
Adverse Effect or (z) if the Rating Agency Condition is satisfied with
respect thereto; provided, however, that if any change or modification,
other than a change or modification permitted pursuant to clause (x) or
(y) above, would be reasonably likely to have a material adverse effect on
the interests of the Investor Certificateholders of a Series which is not
rated by a Rating Agency, the consent of the applicable Agent (or as
specified in the related Supplement) shall be required to effect such
change or modification.
(ii) Take any action with respect to the Receivables of the
type which if taken by the Servicer would violate the provisions of
Section 4.6 of the Servicing Agreement.
(k) Receivables Not To Be Evidenced by Promissory Notes. Subject to
the delivery requirement set forth in subsection 2.1(c), take any action
to cause any Receivable to be evidenced by any "instrument" other than,
provided that the procedures set forth in Schedule 3 are fully implemented
with respect thereto, an instrument which alone or together with a
security agreement constitutes "chattel paper" (each as defined in the UCC
as in effect in any state in which the Company's or the applicable
Seller's chief executive office or books and records relating to such
Receivable are located, or as defined under the relevant provincial laws
of Canada), except in connection with its enforcement or collection of an
Aged Receivable.
(l) Offices. Move outside or within the state where such office is
now located the location of its chief executive office or of any of the
offices where it keeps its records with respect to the Receivables without
(i) in the case of moves outside such state, giving 30 days' prior written
notice to the Trustee and each Rating Agency, (ii) in the case of moves
within such state, giving the Trustee prompt notice of a change within the
state where such office is now located of the location of its chief
executive office or any office where it keeps its records with respect to
the Receivables and (iii) taking all actions reasonably requested by the
Trustee (including but not limited to all filings and other acts necessary
or advisable under the UCC or similar statute of
44
each relevant jurisdiction) in order to continue the Trust's first
priority perfected ownership or security interest in all Receivables now
owned or hereafter created; provided, however, that the Company shall not
change the location of its chief executive office to outside of the United
States, or to a state which is within the Tenth Circuit unless it delivers
an Opinion of Counsel reasonably acceptable to the Rating Agencies to the
effect that Octagon Gas Systems, Inc. ▇. ▇▇▇▇▇▇, 995 F.2d 948 (10th Cir.
1993), is no longer controlling precedent in the Tenth Circuit.
(m) Change in Name. Change its name, identity or corporate structure
in any manner which would or might make any financing statement or
continuation statement (or other similar instrument) filed in accordance
herewith seriously misleading within the meaning of Section 9-402(7) of
the UCC as in effect in any applicable jurisdiction in which UCC filings
have been made in respect of the Trust Assets without 30 days' prior
written notice to the Trustee and each Rating Agency.
(n) Charter. Amend or make any change or modification to its
certificate of incorporation or by-laws without first satisfying the
Rating Agency Condition (other than an amendment, change or modification
made pursuant to changes in law of the state of its incorporation or
amendments to change the Company's name (subject to compliance with clause
(m) above), resident agent or address of resident agent).
(o) Addition of Sellers. Agree to the addition of any Subsidiary of
WESCO as an additional Seller pursuant to Section 9.12 of the Receivables
Sale Agreements without (i) such Subsidiary complying with all conditions
precedent set forth in the Receivables Sale Agreements, or such
Subsidiary's being simultaneously added as a Sub-Servicer (or without
another Subsidiary's simultaneously agreeing to act as a Sub-Servicer in
respect of such additional Seller) under the Transaction Documents
pursuant to Section 2.6 of the Servicing Agreement.
ARTICLE III
RIGHTS OF HOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
THE FOLLOWING PORTION OF THIS ARTICLE III
IS APPLICABLE TO ALL SERIES.
Section 3.1. Rights of Holders. (a) Each Series of Investor
Certificates shall represent Fractional Undivided Interests in the Trust
(including any Enhancement applicable to such Series as specified in the related
Supplement) relating to such Series and the right to receive Collections and
other amounts at the times and in the amounts specified in this Article III (as
supplemented by the Supplement related to such Series) to be deposited in the
Collection Accounts and any other accounts maintained for the benefit of the
Investor Certificateholders or paid to the Investor Certificateholders (with
respect to each outstanding Series, the "Certificateholders' Interest"). The
"Exchangeable Company Interest" shall be the interest in the Trust not
represented by any Series of Investor Certificates then outstanding or Series
Subordinated Interests then in existence, including the right to receive
Collections and
45
other amounts at the times and in the amounts specified in this Article III to
be paid to the Company (the "Company Interest"), and each Series Subordinated
Interest, if any, shall be the interest specified as such pursuant to the
related Supplement; provided, however, that no such Exchangeable Company
Interest or Series Subordinated Interest shall include any interest in any Trust
Account or any other accounts maintained for the benefit of the Investor
Certificateholders or the benefit of any Enhancement Provider, except as
specifically provided in this Article III.
(b) Establishment of Collection Accounts and the Collection
Concentration Accounts; Authority of the Trustee in Respect of the Collection
Accounts and the Collection Concentration Accounts and Holders' Interests
Therein. (i) The Trustee, for the benefit of the Investor Certificateholders,
shall cause to be established and maintained in the name of the Trust with an
Eligible Institution or with the corporate trust department of the Trustee or an
affiliate of the Trustee, the following three segregated trust accounts
(collectively, the "Collection Accounts"), each bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Investor Certificateholders: (i) an account in the United States to hold all
Collections received in the United States (the "U.S. Dollar Collection
Account"), (ii) an account in Canada to hold all Collections received in Canada
that are paid in U.S. Dollars (the "Canada/U.S. Dollar Collection Account") and
(iii) an account in Canada to hold all Collections received in Canada that are
paid in Canadian Dollars (the "Canada/Canadian Dollar Collection Account").
Schedule 2, which is hereby incorporated into and made a part of this Agreement,
identifies the Collection Accounts by setting forth the account number of each
such account, the account designation of such account and the name of the
institution with which such account has been established. The U.S. Dollar
Collection Account shall be divided into individual subaccounts for each
Outstanding Series (each, respectively, a "Series Collection Subaccount" and,
collectively, the "Series Collection Subaccounts") and for the Company (the
"Company Collection Subaccount"). For administrative purposes only, the Trustee
shall establish or cause to be established for each Series, so long as such
Series is an Outstanding Series, sub-subaccounts of the Series Collection
Subaccounts with respect to such Series (respectively, the "Series Principal
Collection Sub-subaccount" and "Series Non-Principal Collection Sub-subaccount"
and, collectively, the "Series Collection Sub-subaccounts"). For administrative
purposes only, the Trustee shall also establish or cause to be established for
each Series, so long as such Series is an Outstanding Series, subaccounts of the
Canada/U.S. Dollar Collection Account and subaccounts of the Canada/Canadian
Dollar Collection Account (each, respectively, a "Series Canada/U.S. Dollar
Collection Subaccount" and a "Series Canada/Canadian Dollar Collection
Subaccount"). The Company shall also establish intervening deposit accounts
(each as defined below, collectively, the "Collection Concentration Accounts"),
in the name of the Company, which accounts shall be used for the receipt of
Collections transferred from the Lockbox Accounts and the Eligible Segregated
Accounts (to the extent so provided in the Servicing Agreement) prior to the
deposit of such Collections, as appropriate, (A) into the U.S. Dollar Collection
Account (the "U.S. Dollar Collection Concentration Account"), (B) into the
Canada/Canadian Dollar Collection Account (the "Canada/Canadian Dollar
Collection Concentration Account") or (C) into the Canada/U.S. Dollar Collection
Account (the "Canada/U.S. Dollar Collection Concentration Account").
(ii) The Trustee, on behalf of the Investor
Certificateholders, shall possess all right, title and interest in all funds on
deposit from time to time in the Collection
46
Accounts and in all proceeds thereof. The Collection Accounts shall be under the
sole dominion and control of the Trustee for the benefit of the Investor
Certificateholders and, to the extent set forth in any Supplement, any
Enhancement Provider set forth therein. If, at any time, the Servicer has actual
notice or knowledge that any institution holding any of the Collection Accounts
is other than the corporate trust department of the Trustee or an affiliate of
the Trustee, or that any other institution holding any of the Collection
Accounts has ceased to be an Eligible Institution, the Servicer shall direct the
Trustee in writing to establish within 30 days a substitute account therefor
with an Eligible Institution, transfer any cash and/or any Eligible Investments
to such new account and from the date any such substitute accounts are
established, such account shall be the Collection Account. Neither the Company
nor the Servicer, nor any person or entity claiming by, through or under the
Company or Servicer, shall have any right, title or interest in, except to the
extent expressly provided under the Transaction Documents, or any right to
withdraw any amount from, the Collection Accounts. Pursuant to the authority
granted to the Servicer in subsection 2.2(a) of the Servicing Agreement, the
Servicer shall have the power, revocable by the Trustee, to instruct the Trustee
in writing to make withdrawals from and payments to the Collection Accounts for
the purposes of carrying out the Servicer's or the Trustee's duties hereunder.
(c) Administration of the Collection Accounts. At the written
direction of the Servicer, funds on deposit in the Collection Accounts available
for investment shall be invested by the Trustee in Eligible Investments selected
by the Servicer. All such Eligible Investments shall be held by the Trustee for
the benefit of the Investor Certificateholders. Amounts on deposit in each
Series Non-Principal Collection Sub-subaccount shall, if applicable, be invested
in Eligible Investments that will mature, or that are payable or redeemable upon
demand of the holder thereof, so that such funds will be available on or before
the Business Day immediately preceding the next Distribution Date. None of such
Eligible Investments shall be disposed of prior to the maturity date with
respect thereto unless the Trustee is directed in writing by the Servicer (such
direction shall specify the investments to be disposed) and such disposition is
reasonably necessary to prevent a loss. All interest and investment earnings
(net of losses and investment expenses) (the "Investment Earnings") on funds
deposited in a Series Non-Principal Collection Sub-subaccount shall be deposited
in such sub-subaccount. Amounts on deposit in the Series Principal Collection
Sub-subaccounts and any other sub-subaccounts as specified in the related
Supplement shall be invested in Eligible Investments that mature, or that are
payable or redeemable upon demand of the holder thereof, so that such funds will
be available not later than the date which is specified in any Supplement. The
Trustee, or its nominee or custodian, shall maintain possession of the
instruments or securities, if any, evidencing any Eligible Investments from the
time of purchase thereof until the time of sale or maturity. Any Investment
Earnings on such invested funds in a Series Principal Collection Sub-subaccount
and any other sub-subaccounts as specified in the related Supplement will be
deposited in the related Series Non-Principal Collection Sub-subaccount. If the
Servicer fails to give such written instruction, the amounts in the Collection
Accounts available for investment shall remain uninvested.
(d) Daily Collections. (i) Promptly following its receipt of
Collections in the form of available funds in the Lockbox Accounts or Eligible
Segregated Accounts, but in no event later than the Business Day following such
receipt, the Servicer shall transfer, or cause to be transferred, all
Collections on deposit (less the aggregate amount of set-offs permitted to be
retained pursuant to any applicable Lockbox Agreement or Eligible Segregated
Accounts
47
Agreement) in the form of available funds in the Lockbox Accounts, or Eligible
Segregated Accounts directly to the applicable Collection Concentration Account
as follows:
(A) all funds which are deposited in the United States, to the U.S.
Dollar Collection Concentration Account;
(B) all funds which are deposited in Canada in U.S. Dollars, to the
Canada/U.S. Dollar Collection Concentration Account; and
(C) all funds which are deposited in Canada in Canadian Dollars, to
the Canada/Canadian Dollar Collection Concentration Account.
All such transfers to the U.S. Dollar Collection Concentration
Account and the Canada/U.S. Dollar Collection Concentration Account shall be
made in U.S. Dollars. All such transfers to the Canada/Canadian Dollar
Collection Concentration Account shall be made in Canadian Dollars.
(ii) Promptly, but in no event later than the date of deposit
(unless received after 3:00 p.m. New York City time, on such date, then on the
next Business Day), the Trustee shall transfer amounts on deposit (a) in the
U.S. Dollar Collection Concentration Account into the U.S. Dollar Collection
Account, (b) in the Canada/U.S. Dollar Collection Concentration Account into the
Canada/U.S. Dollar Collection Account and (c) in the Canada/Canadian Dollar
Collection Concentration Account into the Canada/Canadian Dollar Collection
Account.
(iii) On the date funds become available in the U.S. Dollar
Collection Account (unless received after 1:00 p.m., New York City time, on such
date, then on the next Business Day) (the "Deposit Date"), the Trustee shall (in
accordance with the written directions received from the Servicer pursuant to
subsection (h) below, upon which the Trustee may conclusively rely) transfer
from Aggregate Daily Collections for such Deposit Date, to the respective Series
Collection Subaccount for each Outstanding Series, an amount equal to the
product of (x) the applicable Invested Percentage for such Outstanding Series
and (y) such Aggregate Daily Collections.
(iv) On each Deposit Date, the Trustee shall (in accordance
with the written directions received from the Servicer pursuant to subsection
(h) below, upon which the Trustee may conclusively rely) allocate funds
transferred to the Series Collection Subaccount for each Outstanding Series
pursuant to subsection (d)(ii) above to the Series Non-Principal Collection
Sub-subaccount, the Series Principal Collection Sub-subaccount and such other
Sub-subaccounts of each such Series in accordance with the related Supplement
for such Series.
(v) On each Deposit Date, except as otherwise provided in a
Supplement, the Trustee shall (in accordance with the written directions
received from the Servicer pursuant to subsection (h) below, upon which the
Trustee may conclusively rely) transfer to the Company Collection Subaccount
from Aggregate Daily Collections deposited into the Collection Accounts pursuant
to subsection (d)(i) above on such Deposit Date, the remaining funds (less an
amount equal to the costs and expenses, if any, incurred by the Trustee with
respect to the sale of the Receivables pursuant to subsection 7.2(a) or 9.1(b)
and
48
reimbursable to the Trustee as provided in Section 8.5), if any, on deposit in
the Collection Account on such date after giving effect to transfers to be made
pursuant to subsection (d)(iii) above.
(vi) No later than the Business Day following each Deposit
Date, the Servicer shall direct the Trustee in writing to transfer with respect
to the Aggregate Daily Collections deposited into the Canada/U.S. Dollar
Collection Account and the Canada/Canadian Dollar Collection Account to the
respective Series Canada/U.S. Dollar Collection Subaccount and the respective
Series Canada/Canadian Dollar Collection Subaccount, as the case may be, for
each Outstanding Series, an amount equal to the product of (x) the applicable
Invested Percentage for such Outstanding Series and (y) such Aggregate Daily
Collections.
(vii) No later than the Business Day following each Deposit
Date, except as otherwise provided in a Supplement, (A) if in the amounts
deposited in a Series Collection Subaccount or Sub-subaccount, as the case may
be, of an Outstanding Series in accordance with this Section 3.1 and the related
Supplement are less than the amounts required to be on deposit therein on such
Business Day or (B) if a Supplement requires or permits funds on deposit in the
respective Series Canada/U.S. Dollar Collection Subaccount or the respective
Series Canada/Canadian Dollar Collection Subaccount to be transferred to another
Collection Subaccount or Sub-subaccount of such Series, as the case may be, the
Servicer shall direct the Trustee in writing to transfer to the applicable
Series Collection Subaccount or Sub-subaccounts, as the case may be, first,
from amounts on deposit in the Series Canada/U.S. Dollar Collection Subaccount
for such Series and second, from amounts on deposit in the Series
Canada/Canadian Dollar Collection Subaccount for such Series, an amount up to
the amount of any such shortfall or required or permitted transfer.
(e) Certain Allocations Following an Amortization Period. (i) If, on
any Settlement Report Date, an Amortization Period has occurred and is
continuing with respect to any Outstanding Series and at such Settlement Report
Date, a Revolving Period is still in effect with respect to any other
Outstanding Series (a "Special Allocation Settlement Report Date"), then the
Servicer shall make the following calculations:
(A) the amount (the "Allocable Charged-Off Amount") equal to the
excess, if any, of (I) the aggregate Principal Amount of Charged-Off
Receivables for the related Settlement Period over (II) the aggregate
amount of Recoveries received during the related Settlement Period;
(B) the amount (the "Allocable Recoveries Amount") equal to the
excess, if any, of (I) the aggregate amount of Recoveries received during
the related Settlement Period over (II) the aggregate Principal Amount of
Charged-Off Receivables for the related Settlement Period; and
(ii) If, on any Special Allocation Settlement Report Date, any
of the Allocable Charged-Off Amount or the Allocable Recoveries Amount is
greater than zero for the related Settlement Period, the Trustee shall (in
accordance with written directions received pursuant to subsection (h) below,
upon which the Trustee may conclusively rely) make (A) a pro rata allocation to
each Outstanding Series (based on the Invested Percentage for such
49
Series) of a portion of each such positive amount and (B) an allocation to the
Exchangeable Company Interest of the remaining portion of each such positive
amount; provided, that the aggregate Allocable Recoveries Amount allocated
pursuant to this subsection 3.1(e)(ii) shall never exceed the Allocable
Charged-Off Amount previously allocated pursuant to this subsection 3.1(e)(ii).
(iii) With respect to each portion of the Allocable
Charged-Off Amount and the Allocable Recoveries Amount which is allocated to an
Outstanding Series pursuant to subsection 3.1(e)(ii), the Trustee shall apply
each such amount to such Series in accordance with the related Supplement for
such Series.
(f) Allocations for the Exchangeable Company Interest. Until the
occurrence and continuance of a Potential Early Amortization Event or an Early
Amortization Event, in each case set forth in Section 7.1 of the Agreement, or
an Early Amortization Period with respect to all Outstanding Series, on each
Business Day and, after the occurrence and continuance of a Potential Early
Amortization Event or an Early Amortization Event, in each case set forth in
Section 7.1 of the Agreement, or an Early Amortization Period with respect to
all Outstanding Series, and until the Trust Termination Date, on each
Distribution Date, after making all allocations required pursuant to subsection
3.1(d), the Trustee shall (in accordance with the written direction of the
Servicer, upon which the Trustee may conclusively rely) transfer to the owner of
the Exchangeable Company Interest the remaining amount on deposit in the Company
Collection Subaccount as well as all amounts on deposit in the Canada/U.S.
Dollar Collection Account and the Canada/Canadian Dollar Collection Account (and
any subaccounts thereof) not otherwise required to be retained therein or
otherwise distributed pursuant to the terms of a Supplement.
(g) Set-Off. (i) In addition to the provisions of Section 8.5, if
the Company shall fail to make a payment as provided in this Agreement or any
Supplement, the Servicer or the Trustee may set off and apply any amounts
otherwise payable to the Company under any Pooling and Servicing Agreement,
including without limitation any amounts allocable to the Exchangeable Company
Interest or any Series Subordinated Interest. The Company hereby waives demand,
notice or declaration of such set-off and application; provided, however, that
notice will promptly be given to the Company of such set-off; provided, further,
that failure to give such notice shall not affect the validity of such set-off.
(ii) In addition to the provisions of Section 8.5, in the
event the Servicer shall fail to make a payment as provided in any Pooling and
Servicing Agreement, the Trustee may set off and apply any amounts otherwise
payable to the Servicer in its capacity as Servicer under the Transaction
Documents on account of such obligation. The Servicer hereby waives demand,
notice or declaration of such set-off and application; provided that notice will
promptly be given to the Servicer of such set-off; provided, further, that
failure to give such notice shall not affect the validity of such set-off.
(h) Allocation and Application of Funds. The Servicer shall in a
timely manner direct the Trustee in writing (which shall be given in the form of
the Daily Report and Monthly Settlement Statement) to apply all Collections with
respect to the Receivables in accordance with this Article III and in the
Supplement with respect to each Outstanding Series. The Servicer shall direct
the Trustee in writing to pay Collections to the owner of the
50
Exchangeable Company Interest to the extent such Collections are allocated to
the Exchangeable Company Interest under subsection 3.1(f) and as otherwise
provided in Article III. Notwithstanding anything in this Agreement, any
Supplement or any other Transaction Document to the contrary, to the extent that
the Trustee receives any Daily Report prior to 2:00 p.m., New York City time, on
any Business Day, the Trustee shall make any applications of funds required
thereby on the same Business Day and otherwise on the next succeeding Business
Day.
(i) Exchange of Canadian Dollars into U.S. Dollars. All amounts
transferred from a Series Canada/Canadian Dollar Collection Subaccount to the
U.S. Dollar Collection Account (or any Subaccount or Sub-subaccount thereof)
shall be exchanged by the Trustee into U.S. Dollars at the written direction of
the Servicer. Subject to the last paragraph in this Section 3.1(i), the Servicer
shall solicit offer quotations from at least two Authorized Foreign Exchange
Dealers for effecting such exchange and shall compare such offer quotations to
the Required Currency Hedge and select the execution which will require the
least amount of Canadian Dollars to purchase one (1) U.S. Dollar. The Servicer
shall then direct the Trustee in writing to effect such exchange with the
Authorized Foreign Exchange Dealer or the Eligible Counterparty as soon
thereafter as is reasonably practicable.
The Servicer shall notify the Trustee in writing of the name and
payment instructions of the Authorized Foreign Exchange Dealer or Eligible
Counterparty, and shall direct the Trustee in writing to execute the trade. The
Trustee shall withdraw the portion of the Canadian Dollars from the appropriate
Series Canada/Canadian Dollar Collection Subaccount required to be paid pursuant
to such agreement or agreements and make the payments described in the payment
instructions provided pursuant to the preceding sentence, all in accordance with
the written instructions of the Servicer.
The Servicer shall maintain written records of any quotations
received in response to any solicitations made pursuant to this Section 3.1(i)
and shall make the same available to the Trustee promptly upon request.
If, as a result of changes in customary market practice in, or other
changes relating to, the currency exchange markets in Canada, the Servicer is
unable to comply with the terms thereof in respect of the purchase of U.S.
Dollars with Canadian Dollars, then the parties hereto will use all reasonable
efforts to agree on the terms of an amendment hereto and to amend the terms
hereof in order to permit such compliance with the terms hereof or to reflect
such customary market practice.
The foregoing shall be the exclusive method by which amounts may be
transferred from a Series Canada/Canadian Dollar Collection Subaccount to the
U.S. Dollar Collection Account (or any Subaccount or Sub-subaccount thereof);
provided, however, as an alternate transfer method, the Servicer may transfer
the required amount of U.S. Dollars, calculated in accordance with the Canadian
Exchange Percentage, to the U.S. Dollar Collection Account (or any Subaccount or
Sub-subaccount thereof) and upon completion of such transfer, the Trustee shall
distribute from such Series Canada/Canadian Dollar Collection Subaccount the
corresponding amount of Canadian Dollars to or upon the order of the Servicer;
and provided further that the amount of U.S. Dollars transferred is not less
than the amount of U.S. Dollars that would have been transferred using the
Valuation Price. The
51
Trustee shall, in no event whatsoever, be responsible for any loss or damages
arising out of or with respect to any currency exchange pursuant to this Article
III except to the extent provided in Article VIII.
THE REMAINDER OF ARTICLE III SHALL BE SPECIFIED
IN THE SUPPLEMENT WITH RESPECT TO EACH SERIES.
SUCH REMAINDER SHALL BE APPLICABLE ONLY TO THE
SERIES RELATING TO THE SUPPLEMENT IN WHICH
SUCH REMAINDER APPEARS.
ARTICLE IV
ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO THE SERIES RELATING THERETO
ARTICLE V
THE CERTIFICATES AND INTERESTS
Section 5.1. The Certificates. The Investor Certificates of each
Series and any Class thereof shall be in fully registered form and shall be
substantially in the form of the exhibits with respect thereto attached to the
applicable Supplement. The Certificates shall, upon issue, be executed and
delivered by the Company to the Trustee for authentication and redelivery as
provided in Section 5.2. The Investor Certificates shall be issued in minimum
denominations of $1,000,000 and in integral multiples of $100,000 in excess
thereof unless otherwise specified in any Supplement for any Series and Class.
Unless otherwise specified in any Supplement for any Series, the Investor
Certificates of any Series or Class shall be issued upon initial issuance as one
or more global certificates in an aggregate original principal amount equal to
the Initial Invested Amount with respect to such Series or Class. The Company is
hereby authorized to execute and deliver each Certificate on behalf of the
Trust. Each Certificate shall be executed by manual or facsimile signature on
behalf of the Company by a Responsible Officer. Certificates bearing the manual
or facsimile signature of the individual who was, at the time when such
signature was affixed, authorized to sign on behalf of the Company or the
Trustee shall not be rendered invalid, notwithstanding that such individual has
ceased to be so authorized prior to or on the date of the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by or on behalf of the Trustee by the manual signature of a duly
authorized signatory, and such certificate of authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication but failure to do
so shall not render them invalid.
52
Section 5.2. Authentication of Certificates. Contemporaneously with
the execution and delivery of this Agreement, the Trustee shall authenticate and
deliver the initial Series of the Investor Certificates that is issued upon
original issuance, upon the written order of the Company in a form reasonably
satisfactory to the Trustee, to the holders of the initial Series of Investor
Certificates, against payment to the Company of the Initial Invested Amount. The
Investor Certificates shall be duly authenticated by or on behalf of the Trustee
in authorized denominations equal to (in the aggregate) the Initial Invested
Amount and the interests evidenced thereby, and together with any Series
Subordinated Interest and the Exchangeable Company Interest, shall constitute
the entire ownership of the Trust. Upon a Company Exchange as provided in
Section 5.10 and the satisfaction of certain other conditions specified therein,
the Trustee shall authenticate and deliver the Certificates of additional Series
(with the designation provided in the applicable Supplement) (or, if provided in
any Supplement, the additional Investor Certificates of an existing Series),
upon the written order of the Company, to the Persons designated in such
Supplement or order (if no additional Supplement is required). Upon the order of
the Company, the Investor Certificates of any Series shall be duly authenticated
by or on behalf of the Trustee, in authorized denominations equal to (in the
aggregate) the Initial Invested Amount of such Series (or, if provided in any
Supplement, the additional Investor Certificates of an existing Series), of
Investor Certificates.
Section 5.3. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be maintained
by a transfer agent and registrar (which may be the Trustee) (the "Transfer
Agent and Registrar") in accordance with the provisions of Section 8.16 a
register (the "Certificate Register") in which, subject to such reasonable
regulations as the Trustee may prescribe, the Transfer Agent and Registrar shall
provide for the registration of the Investor Certificates and of transfers and
exchanges of the Investor Certificates as herein provided. The Company hereby
appoints the Trustee as Transfer Agent and Registrar for the purpose of
registering the Investor Certificates and transfers and exchanges of the
Investor Certificates as herein provided. The Trustee shall be permitted to
resign as Transfer Agent and Registrar upon 30 days' written notice to the
Company and the Servicer; provided, however, that such resignation shall not be
effective and the Trustee shall continue to perform its duties as Transfer Agent
and Registrar until the Trustee has appointed a successor Transfer Agent and
Registrar reasonably acceptable to the Company and such successor Transfer Agent
and Registrar has accepted such appointment. The provisions of Sections 8.1,
8.2, 8.3, 8.5 and 10.19 shall apply to the Trustee also in its role as Transfer
Agent or Registrar, as the case may be, for so long as the Trustee shall act as
Transfer Agent or Registrar, as the case may be.
The Company hereby agrees to provide the Trustee from time to time
sufficient funds, on a timely basis and in accordance with and subject to
Section 8.5, for the payment of any reasonable compensation payable to the
Transfer Agent and Registrar for their services under this Section 5.3. The
Trustee hereby agrees that, upon the receipt of such funds from the Company, it
shall pay the Transfer Agent and Registrar such amounts.
Upon surrender for registration of transfer of any Investor
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Company shall execute, and, upon the written
request of the Company, the Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Investor
Certificates in authorized denominations of the same Series (and Class)
53
representing like aggregate Fractional Undivided Interests and which bear
numbers that are not contemporaneously outstanding.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the same Series
(and Class) in authorized denominations of like aggregate Fractional Undivided
Interests, bearing numbers that are not contemporaneously outstanding, upon
surrender of the Investor Certificates to be exchanged at any such office or
agency of the Transfer Agent and Registrar maintained for such purpose.
Whenever any Investor Certificates of any Series are so surrendered
for exchange, the Company shall execute, and, upon the written request of the
Company, the Trustee shall authenticate and (unless the Transfer Agent and
Registrar is different from the Trustee, in which case the Transfer Agent and
Registrar shall) deliver, the Investor Certificates of such Series which the
Investor Certificateholder making the exchange is entitled to receive. Every
Investor Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer substantially
in the form attached to the form of such Investor Certificate and duly executed
by the holder thereof or his attorney-in-fact duly authorized in writing
delivered to the Trustee (unless the Transfer Agent and Registrar is different
from the Trustee, in which case to the Transfer Agent and Registrar) and
complying with any requirements set forth in the applicable Supplement.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require any Investor Certificateholder that is transferring or exchanging one or
more Certificates to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of
Investor Certificates.
All Investor Certificates surrendered for registration of transfer
and exchange shall be canceled and disposed of in a customary manner
satisfactory to the Trustee.
The Company shall execute and deliver Certificates to the Trustee or
the Transfer Agent and Registrar in such amounts and at such times as are
necessary to enable the Trustee and the Transfer Agent and Registrar to fulfill
their respective responsibilities under this Agreement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense in
the Borough of Manhattan, The City of New York and, subject to subsection
5.3(a), if specified in the related Supplement for any Series, any other city
designated in such Supplement, an office or offices or agency or agencies where
Investor Certificates may be surrendered for registration or transfer or
exchange.
(c) Unless otherwise stated in any related Supplements, registration
of transfer of Certificates containing a legend relating to restrictions on
transfer of such Certificates (which legend shall be set forth in the Supplement
relating to such Investor Certificates) shall be effected only if the conditions
set forth in the related Supplement are complied with.
Certificates issued upon registration or transfer of, or in exchange
for, Certificates bearing the legend referred to above shall also bear such
legend unless the
54
Company, the Servicer, the Trustee and the Transfer Agent and Registrar receive
an Opinion of Counsel satisfactory to each of them, to the effect that such
legend may be removed.
(d) (i) The Company may not transfer, assign, exchange or otherwise
pledge or convey the Series Subordinated Interest of any Series (or any interest
therein) or the Exchangeable Company Interest (or any interest therein) except,
with respect to the Exchangeable Company Interest, pursuant to Section 5.10.
(ii) Neither the Company nor the Servicer shall at any time
participate in the listing of any Targeted Investor Certificate (as
defined below) on an "established securities market" within the meaning of
Section 7704(b)(1) of the Internal Revenue Code and any proposed,
temporary or final treasury regulation thereunder as of the date hereof,
including, without limitation, an over-the-counter or interdealer
quotation system that regularly disseminates firm buy or sell quotations.
"Targeted Investor Certificate" shall mean any Certificate representing a
right to receive interest or principal with respect to any Class or Series
of Investor Certificates with respect to which an Opinion of Counsel has
not been rendered that such Certificates will be treated as debt for
federal income tax purposes (it being understood that any Certificate with
respect to which an Opinion of Counsel has been rendered that such
Certificate will be treated either as debt or as an interest in a
partnership for federal income tax purposes shall be a Targeted Investor
Certificate).
(e)(i) No transfer of a Targeted Investor Certificate or grant of a
participation therein shall be permitted if (A) such transfer or grant would
cause the number of Targeted Holders (as defined below) to exceed 90 or (B) the
transferee or grantee, as the case may be, is a trust, partnership or "S
corporation" (within the meaning of Section 1361(a) of the Code) (a
"flow-through entity"), unless such flow-through entity represents that less
than 50% of the aggregate value of such flow-through entity's assets consist of
Targeted Investor Certificates. "Targeted Holder" shall mean each holder of a
Targeted Investor Certificate; provided, however, that any Person holding more
than one interest with respect to the Investor Certificates or the Trust, each
of which separately would cause such Person to be a Targeted Holder, shall be
treated as a single Targeted Holder.
(ii) Any determination by the Transfer Agent and Registrar (in
accordance with the information contained in the Certificate Register and the
certifications made by each transferee and participant pursuant to the
applicable Supplement, upon which information the Transfer Agent and Registrar
may conclusively rely) that the event described in either clause (i)(A) or
(i)(B) of this subsection 5.3(e) would occur as the result of a transfer of a
Targeted Investor Certificate or the grant of a participation therein shall be
(X) communicated in writing to the transferring or granting Investor
Certificateholder prior to the effective date set out in the notice of transfer
or participation required by, or otherwise provided for under, the related
Supplement and (Y) binding upon the parties absent manifest error.
(iii) Except as specified in any Supplement for a related
Series, all Investor Certificates of any Series shall be equally and ratably
entitled as provided herein to the benefits hereof without preference, priority
or distinction on account of the actual time or times of
55
authentication and delivery, all in accordance with the terms and provisions of
this Agreement and the applicable Supplement.
Section 5.4. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence in the form of
a certification by the holder thereof of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be required by them to save the
Trust and each of them harmless, then, in the absence of actual notice to the
Trustee or Transfer Agent and Registrar that such Certificate has been acquired
by a bona fide purchaser, the Company shall execute and, upon the written
request of the Company, the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like tenor and aggregate Fractional Undivided Interest and
bearing a number that is not contemporaneously outstanding. In connection with
the issuance of any new Certificate under this Section 5.4, the Trustee or the
Transfer Agent and Registrar may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental expenses (including the fees
and expenses of the Trustee and Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 5.4 shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.5. Persons Deemed Owners. At all times prior to due
presentation of a Certificate for registration of transfer, the Company, the
Trustee, the Paying Agent, the Transfer Agent and Registrar, any Agent and any
agent of any of them may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Article IV of the related Supplement and for all other
purposes whatsoever, and neither the Trustee, the Paying Agent, the Transfer
Agent and Registrar, any Agent nor any agent of any of them shall be affected by
any notice to the contrary. Notwithstanding the foregoing provisions of this
Section 5.5, in determining whether the holders of the requisite Fractional
Undivided Interests have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Certificates (or interests therein) owned
by the Company, the Servicer or any Affiliate thereof shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Certificates which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Certificates (or interests therein) so owned by the Company, the Servicer or any
Affiliate thereof which have been pledged in good faith shall not be disregarded
and may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Certificates (or interests therein) and that the pledgee is not the Company, the
Servicer or an Affiliate thereof.
Section 5.6. Appointment of Paying Agent. The Paying Agent shall
make distributions to Investor Certificateholders from the Collection Account to
the extent of available funds (and/or any other account or accounts maintained
for the benefit of the Investor Certificateholders as specified in the related
Supplement for any Series) pursuant to Articles III and IV. The Trustee may
revoke such power and remove the Paying Agent if the Trustee determines in its
sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. Unless otherwise
specified in the
56
related Supplement for any Series and with respect to such Series, the Paying
Agent shall initially be the Trustee and, if the Trustee so chooses, any
co-paying agent chosen by the Trustee. Each Paying Agent shall have a combined
capital and surplus of at least $50,000,000. The Paying Agent shall be permitted
to resign upon 30 days' written notice to the Trustee. In the event that the
Paying Agent shall so resign, the Trustee shall appoint a successor to act as
Paying Agent (which shall be a depository institution or trust company)
reasonably acceptable to the Company which appointment shall be effective on the
date on which the Person so appointed gives the Trustee written notice that it
accepts the appointment. Any resignation or removal of the Paying Agent and
appointment of successor Paying Agent pursuant to this Section 5.6 shall not
become effective until acceptance of appointment by the successor Paying Agent,
as provided in this Section 5.6. The Trustee shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Trustee to execute and
deliver to the Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustee that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Investor Certificateholders in trust for the
benefit of the Investor Certificateholders entitled thereto until such sums
shall be paid to such Holders. The Paying Agent shall return all unclaimed funds
to the Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Trustee. The provisions of Sections
8.1, 8.2, 8.3, 8.5 and 10.19 shall apply to the Trustee also in its role as
Paying Agent, for so long as the Trustee shall act as Paying Agent. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent, if any, unless the context requires otherwise.
The Company hereby agrees to provide the Trustee from time to time
sufficient funds, on a timely basis and in accordance with and subject to
Section 8.5, for the payment of any reasonable compensation payable to the
Paying Agent for its services under this Section 5.6. The Trustee hereby agrees
that, upon the receipt of such funds from the Company, it shall pay the Paying
Agent such amounts.
Section 5.7. Access to List of Investor Certificateholders' Names
and Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Company, the Servicer or the Paying Agent, within ten
Business Days after receipt by the Trustee of a written request therefor from
the Company, the Servicer or the Paying Agent, respectively, in writing, a list
of the names and addresses of the Investor Certificateholders as then recorded
by or on behalf of the Trustee. If three or more Investor Certificateholders of
record or any Investor Certificateholder of any Series or a group of Investor
Certificateholders of record representing Fractional Undivided Interests
aggregating not less than 10% of the Invested Amount of the related Outstanding
Series (the "Applicants") apply in writing to the Trustee, and such application
states that the Applicants desire to communicate with other Investor
Certificateholders of any Series with respect to their rights under this
Agreement or under the Investor Certificates and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Trustee, after
having been adequately indemnified by such Applicants for its costs and
expenses, shall transmit or shall cause the Transfer Agent and Registrar to
transmit, such communication to the Investor Certificateholders reasonably
promptly after the receipt of such application.
Every Investor Certificateholder, by receiving and holding an
Investor Certificate, agrees with the Trustee that neither the Trustee, the
Transfer Agent and ▇▇▇▇▇▇▇▇▇,
▇▇
nor any of their respective agents, officers, directors or employees shall be
held accountable by reason of the disclosure or mailing of any such information
as to the names and addresses of the Investor Certificateholders hereunder,
regardless of the sources from which such information was derived.
As soon as practicable following each Record Date, the Trustee shall
provide to the Paying Agent or its designee, a list of Investor
Certificateholders in such form as the Paying Agent may reasonably request.
Section 5.8. Authenticating Agent. (a) The Trustee may appoint one
or more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. Whenever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent must be acceptable to the Company.
(b) Any institution succeeding to the corporate trust business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee. Upon the receipt by the Trustee of any
such notice of resignation and upon the giving of any such notice of termination
by the Trustee, the Trustee shall immediately give notice of such resignation or
termination to the Company. Any resignation of an authenticating agent shall not
become effective until acceptance of appointment by the successor authenticating
agent as provided in this Section 5.8. The Trustee may at any time terminate the
agency of an authenticating agent by giving notice of termination to such
authenticating agent. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to be
acceptable to the Trustee, the Trustee promptly may appoint a successor
authenticating agent. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent (other than an Affiliate
of the Trustee) shall be appointed unless reasonably acceptable to the Trustee
and the Company.
(d) The Company hereby agrees to provide the Trustee from time to
time sufficient funds, on a timely basis and in accordance with and subject to
Section 8.5, for the payment of any reasonable compensation payable to each
authenticating agent for its services under this Section 5.8. The Trustee hereby
agrees that, upon the receipt of such funds from the Company it shall pay each
authenticating agent such amounts.
(e) The provisions of Sections 8.1, 8.2, 8.3 and 8.5 shall be
applicable to any authenticating agent.
58
(f) Pursuant to an appointment made under this Section 5.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
"This is one of the Certificates described in the Pooling Agreement
dated as of June 5, 1998, among WESCO Receivables Corp., WESCO
Distribution, Inc., as Servicer, and The Chase Manhattan Bank, as Trustee.
------------------------
as Authenticating Agent
for the Trustee
By
---------------------------
Authorized Signatory"
Section 5.9. Tax Treatment. It is the intent of the Servicer, the
Company, the Investor Certificateholders and the Trustee that, for federal,
state and local income and franchise tax purposes, the Investor Certificates be
treated as evidence of indebtedness secured by the Trust Assets and the Trust
not be characterized as an association taxable as a corporation. The Company,
the Servicer and the Trustee, by entering into this Agreement, and each Investor
Certificateholder, by its acceptance of its Investor Certificate, agree to treat
the Investor Certificates for federal, state and local income and franchise tax
purposes as indebtedness. The provisions of this Agreement and all related
Transaction Documents shall be construed to further these intentions of the
parties. This Section 5.9 shall survive the termination of this Agreement and
shall be binding on all transferees of any of the foregoing persons.
Section 5.10. Company Exchanges. (a) The Company may, in accordance
with the procedures set forth below, call for an adjustment of the Exchangeable
Company Interest in exchange for (i) an increase in the Invested Amount of
Investor Certificates of an Outstanding Series (or a Class thereof) and an
increase in the related Series Subordinated Interest or (ii) one or more newly
issued Series of Investor Certificates and the related newly created Series
Subordinated Interest (a "New Series") (any such exchange, a "Company
Exchange"). The Company may perform a Company Exchange by notifying the Trustee,
in writing at least five days in advance (an "Exchange Notice") of the date upon
which the Company Exchange is to occur (an "Exchange Date"). Any Exchange Notice
shall state the designation of any Series (and/or Class, if applicable) to be
issued (or increased) on the Exchange Date and, with respect to each such Series
(and/or Class, if applicable): (a) its additional or Initial Invested Amount, as
the case may be, if any, which in the aggregate at any time may not be greater
than the current value of the Exchangeable Company Interest, if any, at such
time, (b) its Certificate Rate (or the method for allocating interest payments
or other cash flow to such Series), if any, and (c) whether such New Series will
be a companion series to an Outstanding Series as described in paragraph (d)
below (an "Existing Companion Series"; and together with the New Series, a
"Companion Series"). On the Exchange Date, the Trustee shall, upon the written
order of the Company, authenticate and deliver any
59
Certificates evidencing an increase in the Invested Amount of Investor
Certificates of an Outstanding Series (or a Class thereof) or a newly issued
Series only upon delivery by the Company to the Trustee of the following
(together with the delivery by the Company to the Trustee of any additional
agreements, instruments or other documents as are specified in the related
Supplement): (a) a Supplement executed by the Company and specifying the
Principal Terms of such Series (provided that no such Supplement shall be
required for any increase in the Invested Amount of an Outstanding Series (or
Class thereof) of Investor Certificates unless it is so required by the related
Supplement; provided that if the Certificate Rate for the new Certificates is
different from the Certificate Rate applicable to the outstanding Certificates
of such Series (or Class thereof) the new Certificate Rate shall be set forth in
an Officer's Certificate of the Company delivered to the Trustee), (b) a Tax
Opinion addressed to the Trustee and the Trust, (c) a General Opinion addressed
to the Trustee and the Trust, (d) an agreement pursuant to which the Enhancement
Provider, if any, agrees to provide Enhancement, (e) an Officer's Certificate
that the Exchange will not result in the occurrence of a Potential Early
Amortization Event or Early Amortization Event with respect to any Outstanding
Series and that all conditions precedent to the Exchange contained in the
Pooling and Servicing Agreements have been complied with, and (f) written
confirmation from each Rating Agency that the Company Exchange will not result
in the Rating Agency's reducing or withdrawing its rating on any then
Outstanding Series rated by it. Upon the delivery of the items listed in clauses
(a) through (f) above, the existing Exchangeable Company Interest and the
applicable Series Subordinated Interests, as the case may be, shall be deemed
adjusted as of the Exchange Date, and the new Series Subordinated Interests, if
any, shall be deemed duly created as of the Exchange Date, in each case as
provided above. There is no limit to the number of Company Exchanges that the
Company may perform under this Agreement. If the Company shall, on any Exchange
Date, retain any Investor Certificates issued on such Exchange Date, it shall,
prior to transferring any such Certificates to another Person, obtain a Tax
Opinion. Additional restrictions relating to a Company Exchange may be set forth
in any Supplement.
(b) Upon any Company Exchange, the Trustee, in accordance with the
written directions of the Company, shall issue to the Company under Section 5.1,
for execution and redelivery to the Trustee for authentication under Section
5.2, (i) one or more Certificates representing an increase in the Invested
Amount of an Outstanding Series (or Class thereof) or (ii) one or more new
Series of Investor Certificates. Any such Certificates shall be substantially in
the form specified in the applicable Supplement and each shall bear, upon its
face, the designation for such Series (and Class thereof) to which each such
certificate belongs so selected by the Company.
(c) In conjunction with a Company Exchange, the parties hereto
shall, except as otherwise provided in subsection (a) above, execute a
Supplement to this Agreement, which shall define, with respect to any additional
Investor Certificates or newly issued Series, as the case may be: (i) its name
or designation, (ii) its additional or initial principal amount, as the case may
be (or method for calculating such amount), (iii) its coupon rate (or formula
for the determination thereof), (iv) the interest payment date or dates and the
date or dates from which interest shall accrue, (v) the method for allocating
Collections to Holders, including the applicable Investor Percentage, (vi) the
names of any accounts to be used by such Series and the terms governing the
operation of any such accounts, (vii) the issue and terms of a letter of credit
or other form of Enhancement, if any, with respect thereto, (viii) the terms, if
any, on
60
which the Certificates of such Series may be repurchased by the Company or may
be remarketed to other investors, (ix) the Series Termination Date, (x) any
deposit account maintained for the benefit of Holders, (xi) the number of
Classes of such Series, and if more than one Class, the rights and priorities of
each such Class, (xii) the rights of the owner of the Exchangeable Company
Interest that have been transferred to the holders of such Series, (xiii) the
designation of any Series Accounts and the terms governing the operation of any
such Series Accounts, (xiv) provisions reasonably acceptable to the Trustee
concerning the payment of the Trustee's fees and expenses and (xv) other
relevant terms (all such terms, the "Principal Terms" of such Series). The
Supplement executed in connection with the Company Exchange shall contain
administrative provisions which are reasonably acceptable to the Trustee.
(d) In order for a New Series to be part of a Companion Series, the
Supplement for the related Existing Companion Series must provide for or permit
the Amortization Period to commence on the Issuance Date for such New Series,
and on or prior to the Issuance Date for the New Series the Servicer and the
Company shall take all actions, if any, necessary to cause the Amortization
Period for such Existing Companion Series to commence on such Issuance Date. The
proceeds from the issuance of the New Series shall be deposited in the
applicable Series Principal Collection Sub-subaccount and the Company shall, on
the Issuance Date for such New Series, deposit into the applicable Series
Non-Principal Collection Sub-subaccount the amount of interest that will accrue
on the New Series over a period specified in the related Supplement for such New
Series. On each day on which principal is paid to the holders of the Existing
Companion Series, the Trustee shall distribute to the Company from the
applicable Series Principal Collection Sub-subaccount of the New Series an
amount (up to the amount of available funds in such account) equal to the amount
distributed on such day to the Investor Certificateholders of any Existing
Companion Series; provided that, after giving effect to such distributions, the
Aggregate Receivables Amount shall equal or exceed the sum of (i) the Target
Receivables Amount with respect to such Existing Companion Series on such day,
plus (ii) the Target Receivables Amount with respect to the New Series on such
day, plus (iii) the Target Receivables Amount with respect to any other
Outstanding Series on such day; provided further that the Trustee may
conclusively rely on the calculations of the Servicer of such amounts.
Section 5.11. Book-Entry Certificates. If specified in any related
Supplement, the Investor Certificates, or any portion thereof, upon original
issuance, shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to the depository
specified in such Supplement (the "Depository") which shall be the Clearing
Agency, specified by, or on behalf of, the Company for such Series. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the nominee of such Clearing Agency, and no Certificate Book-Entry
Holder will receive a definitive certificate representing such Certificate
Book-Entry Holder's interest in the Investor Certificates, except as provided in
Section 5.13. Unless and until definitive, fully registered Investor
Certificates ("Definitive Certificates") have been issued to Holders pursuant to
Section 5.13 or the related Supplement:
(a) the provisions of this Section 5.11 shall be in full force and
effect;
(b) the Company, the Servicer and the Trustee may deal with each
Clearing Agency for all purposes (including the making of distributions on
the Investor
61
Certificates) as the Holder without respect to whether there has been any
actual authorization of such actions by the Certificate Book-Entry Holders
with respect to such actions;
(c) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Agreement, the provisions of this
Section 5.11 shall control; and
(d) the rights of Certificate Book-Entry Holders shall be exercised
only through the Clearing Agency and the related Clearing Agency
Participants and shall be limited to those established by law and
agreements between such related Certificate Book-Entry Holders and the
Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Investor Certificates to
such Clearing Agency Participants.
Notwithstanding the foregoing, no Class or Series of Investor Certificates may
be issued as Book Entry Certificates (but, instead, shall be issued as
Definitive Certificates) unless at the time of issuance of such Class or Series
the Company and the Trustee receive an opinion of independent counsel that the
Certificates of such Class or Series will be treated as indebtedness for federal
income tax purposes.
Section 5.12. Notices to Clearing Agency. Whenever notice or other
communication to the Holders is required under this Agreement, unless and until
Definitive Certificates shall have been issued to Certificate Book-Entry Holders
pursuant to Section 5.13, the Trustee shall, give all such notices and
communications specified herein to be given to the Investor Certificateholders
to the Clearing Agencies.
Section 5.13. Definitive Certificates. If (a)(i) the Company advises
the Trustee in writing that any Clearing Agency is no longer willing or able to
properly discharge its responsibilities under the applicable Depository
Agreement, and (ii) the Company is unable to locate a qualified successor, (b)
the Company, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (c) after the
occurrence of a Servicer Default or an Early Amortization Event, Certificate
Book-Entry Holders representing Fractional Undivided Interests aggregating more
than 50% of the Invested Amount held by such Certificate Book-Entry Holders of
each affected Series then issued and outstanding advise the Clearing Agency
through the Clearing Agency Participants in writing, and the Clearing Agency
shall so notify the Trustee, that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of the
Certificate Book-Entry Holders, the Trustee shall notify the Clearing Agency,
which shall be responsible to notify the Certificate Book-Entry Holders, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Book-Entry Holders requesting the same. Upon surrender to the
Trustee of the Book-Entry Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration, the Company
shall execute and the Trustee shall authenticate the Definitive Certificates.
Neither the Company nor the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions.
62
ARTICLE VI
OTHER MATTERS RELATING
TO THE COMPANY
Section 6.1. Limitation on Liability. None of the Company's
directors or officers or employees or agents, shall be under any liability to
the Trust, the Trustee, the Holders or any other Person for any action taken or
for refraining from the taking of any action pursuant to this Agreement, whether
or not such action or inaction arises from express or implied duties under this
Agreement; provided, that this provision shall not protect any such director,
officer, employee or agent against any liability which would otherwise be
imposed on such Person by reason of wilful misconduct, bad faith or gross
negligence in the performance of such Person's duties or by reason of reckless
disregard of such Person's obligations and duties hereunder.
Section 6.2. Liabilities. By entering into this Agreement, the
Company agrees to be liable, directly to the injured party, for the entire
amount of any losses, claims, damages or liabilities, arising out of or based on
the arrangement created by any Pooling and Servicing Agreement or the actions of
the Servicer taken pursuant hereto or thereto (except those losses, claims,
damages or liabilities incurred by an Investor Certificateholder in the capacity
of an investor in the Investor Certificates as a result of the performance of
the Receivables, market fluctuations or other similar market or investment
risks) as though the Pooling and Servicing Agreements created a partnership
under the New York Uniform Limited Partnership Act with the Company as a general
partner thereof. The Company agrees to pay, indemnify and hold harmless each
Investor Certificateholder against and from any and all such losses, claims,
damages and liabilities, except to the extent they arise from any action or
omission by such Investor Certificateholder; provided that any payments made by
the Company in respect of any of the foregoing items shall be made solely from
funds available to the Company which are not otherwise required to be applied to
the payment of any amounts pursuant to any Pooling and Servicing Agreements
(other than to the Company), shall be non-recourse other than with respect to
such funds and shall not constitute a claim against the Company to the extent
that insufficient funds exist to make such payment. In the event of a Service
Transfer, the Successor Servicer (except for the Trustee in its capacity as
Successor Servicer) will indemnify and hold harmless the Company for any losses,
claims, damages and liabilities of the Company arising under this Section 6.2
from the actions or omissions of such Successor Servicer.
ARTICLE VII
EARLY AMORTIZATION EVENTS
Section 7.1. Early Amortization Events. Unless modified with respect
to any Series of Investor Certificates by any related Supplement, if any one of
the following events (each, an "Early Amortization Event") shall occur:
(a)(i) the Company shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent,
63
or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or the Company shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Company any
case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Company any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the
entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 such days from
the entry thereof; or (iv) the Company shall take any action in
furtherance of any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Company shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due;
(b) the Trust or the Company shall become an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(c) the Trust is characterized for federal income tax purposes as a
"publicly traded partnership" or as an association taxable as a
corporation; or
(d) the Trustee shall be appointed as Successor Servicer pursuant to
subsection 6.2(b) of the Servicing Agreement;
then, an "Early Amortization Period" with respect to all Outstanding Series
shall commence without any notice or other action on the part of the Trustee or
any Investor Certificateholder immediately upon the occurrence of such event.
The Servicer shall notify each Rating Agency, each Agent and the Trustee in
writing of the occurrence of any Early Amortization Period, specifying the cause
thereof. Further, upon the commencement against the Company of a case,
proceeding or other action described in clause (a)(ii) or (iii) above, the
Company shall not purchase Receivables from any Seller, or transfer Receivables
to the Trust, until such time, if any, as such case, proceeding or other action
is vacated, discharged, or stayed or bonded pending appeal.
Additional Early Amortization Events and the consequences thereof
may be set forth in each Supplement with respect to the Series relating thereto.
Section 7.2. Additional Rights Upon the Occurrence of Certain
Events. (a) If an Insolvency Event with respect to the Company occurs, the
Company shall immediately cease to transfer Receivables to the Trust and shall
promptly give notice to the Trustee of such occurrence. Notwithstanding any
cessation of the transfer to the Trust of additional Receivables, Receivables
transferred to the Trust prior to the occurrence of such Insolvency Event and
Collections in respect of such Receivables and interest, whenever created,
accrued in respect of such Receivables, shall continue to be a part of the
Trust. Within 15 days of the Trustee's receipt of notice of the occurrence of an
Insolvency Event in accordance with Section 7.1, if the Aggregate Invested
Amount and all accrued and unpaid interest thereon have not
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been paid to the Investor Certificateholders, then the Trustee shall (i) publish
a notice in a newspaper with a national circulation (an "Authorized Newspaper")
that an Insolvency Event has occurred and that the Servicer, on behalf of the
Trustee, intends to sell, dispose of or otherwise liquidate the Receivables and
the other Trust Assets in a commercially reasonable manner and (ii) send written
notice to the Investor Certificateholders and request instructions from such
holders, which notice shall request each Investor Certificateholder to advise
the Trustee in writing that it elects one of the following options: (A) the
Investor Certificateholder wishes the Trustee to instruct the Servicer not to
sell, dispose of or otherwise liquidate the Receivables and the other Trust
Assets, or (B) the Investor Certificateholder wishes the Trustee to instruct the
Servicer to sell, dispose of or otherwise liquidate the Receivables and the
other Trust Assets and to instruct the Servicer to reconstitute the Trust upon
the same terms and conditions set forth herein. If after 60 days from the day
notice pursuant to clause (i) above is first published (the "Publication Date"),
the Trustee shall not have received written instructions of (x) holders of
Certificates representing undivided interests in the Trust aggregating in excess
of 50% of the related Invested Amount of each Series (or in the case of a series
having more than one Class of Investor Certificates, each Class of such series)
selecting option (A) above and (y) if the owners of the Exchangeable Company
Interest do not include the Company (and following the delivery of written
notice in the form referred to above by the Company to such owners), the owners
thereof representing undivided interests in the Trust aggregating in excess of
50% of the Company Interest, the Trustee shall instruct the Servicer to proceed
to sell, dispose of, or otherwise liquidate the Receivables and the other Trust
Assets in a commercially reasonable manner and on commercially reasonable terms,
which shall include the solicitation of competitive bids, and the Servicer shall
proceed to consummate the sale, liquidation or disposition of the Receivables
and the other Trust Assets as provided above with the highest bidder therefor;
provided, however, that if the allocable sale price, less all reasonable fees,
expenses and other amounts due hereunder to the Trustee, its agents and counsel
to the Trustee, to be realized from such sale, liquidation or disposition would
be less than the Aggregate Invested Amount plus accrued and unpaid interest
thereon through the Distribution Date next succeeding the date of such sale, the
Trustee must receive the prior unanimous consent of all the Investor
Certificateholders to such sale, liquidation or disposition. The Company or any
of its Affiliates shall be permitted to bid for the Receivables and the other
Trust Assets. In addition, the Company or any of its Affiliates shall have the
right to match any bid by a third person and be granted the right to purchase
the Receivables and the other Trust Assets at such matched bid price. The
Servicer, on behalf of the Trustee, may obtain a prior determination from any
such conservator, receiver or liquidator that the terms and manner of any
proposed sale, disposition or liquidation are commercially reasonable. The
provisions of Sections 7.1 and 7.2 shall be cumulative and not mutually
exclusive. The costs and expenses incurred by the Trustee in such sale shall be
reimbursable to the Trustee as provided in Section 8.5.
(b) The proceeds from the sale, liquidation or disposition of the
Receivables and the other Trust Assets pursuant to subsection (a) above shall be
treated as Collections on the Receivables and such proceeds will be distributed
to any Servicers who are not Affiliates of the Company for the payment of
servicing fees and to the Trustee in an amount equal to the amount of any
expenses incurred by the Trustee acting in its capacity either as Trustee or as
liquidating agent pursuant to subsection 7.2(a) above which have not otherwise
been reimbursed prior thereto. Thereafter, the remaining funds, if any, shall be
distributed (i) to holders of each Series after immediately being deposited in
the Collection Accounts, in
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accordance with the provisions of subsection 3.1(d) and the related Supplement
for such Series and (ii) after giving effect to the transfer to be made pursuant
to the preceding clause (i), the remainder, if any, shall be allocated to the
Company Interest and shall be released to the owner of the Exchangeable Company
Interest upon cancelation thereof.
ARTICLE VIII
THE TRUSTEE
Section 8.1. Duties of Trustee. (a) The Trustee, prior to the
occurrence of a Servicer Default or an Early Amortization Event of which a
Responsible Officer of the Trustee has actual knowledge and after the curing of
all Servicer Defaults and Early Amortization Events which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in the Pooling and Servicing Agreements and no implied covenants or
obligations shall be read into such Pooling and Servicing Agreements against the
Trustee. If a Servicer Default or Early Amortization Event to the actual
knowledge of a Responsible Officer of the Trustee has occurred (which has not
been cured or waived), the Trustee shall exercise the rights and powers vested
in it in its capacity as Trustee by any Pooling and Servicing Agreement and
shall use the same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs. The provisions of this Section shall be applicable to the
Trustee in its capacity as Trustee hereunder. If the Trustee shall have
succeeded to the obligations of the Servicer, the provisions of the Servicing
Agreement shall govern the actions of the Trustee as Successor Servicer.
(b) The Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein upon
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee and believed by it to be genuine and
to have been signed or presented to it pursuant to any Pooling and Servicing
Agreement by the proper party or parties; but in the case of any of the above
which are specifically required to be furnished to the Trustee pursuant to any
provision of the Pooling and Servicing Agreements, the Trustee shall, subject to
Section 8.2, examine them to determine whether they substantially conform to the
requirements of this Agreement; provided, that the Trustee shall not be
responsible for the accuracy or content of any document furnished pursuant to
any Pooling and Servicing Agreement.
(c) Subject to subsection 8.1(a), no provision of any Pooling and
Servicing Agreement shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own
misconduct; provided, however, that:
(i) The Trustee shall not be liable in its individual capacity for
an error of judgment unless it shall be proved that the Trustee was
negligent, or acted in bad faith, in ascertaining the pertinent facts;
(ii) The Trustee shall not be liable in its individual capacity with
respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the Pooling and Servicing Agreement or at the
direction of the Servicer or the holders
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of Investor Certificates evidencing in excess of 50% (or such lesser
percentage as set forth in any applicable provision) of the Aggregate
Invested Amount;
(iii) The Trustee shall not be charged with knowledge of any failure
by the Servicer to comply with any of its obligations, unless a
Responsible Officer of the Trustee obtains actual knowledge of such
failure or the Trustee receives written notice of such failure from the
Servicer, any Agent or any Investor Certificateholder. In the absence of
written notice, the Trustee may conclusively rely that there is no
Servicer Default or Early Amortization Event;
(iv) The Trustee shall not be charged with knowledge of a Servicer
Default or Early Amortization Event unless a Responsible Officer of the
Trustee obtains actual knowledge of such event or the Trustee receives
written notice of such default or event from the Servicer, any Agent or
any Investor Certificateholder. In the absence of written notice received
by a Responsible Officer of the Trustee, the Trustee may conclusively rely
that there is no Servicer Default or Early Amortization Event;
(v) The Trustee shall not be liable for any investment losses
resulting from any investments of funds on deposit in the Accounts or any
subaccounts thereof; and
(vi) The Trustee shall have no duty to monitor the performance of
the Servicer, nor shall it have any liability in connection with
malfeasance or nonfeasance by the Servicer. The Trustee shall have no
liability in connection with compliance of the Servicer or the Company
with statutory or regulatory requirements related to the Receivables.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties under any Pooling and Servicing Agreement or in the exercise of any
of its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in any
Pooling and Servicing Agreement shall in any event require the Trustee to
perform, or be responsible for the manner of performance of, any obligations of
the Servicer under such Agreement except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties, powers
and privileges of, the Servicer in accordance with the terms of such Agreement.
(e) Except as expressly provided in any Pooling and Servicing
Agreement, the Trustee shall have no power to vary the corpus of the Trust.
(f) Provided that the Servicer and the Company shall have provided
to the Trustee promptly upon request all books, records and other information
reasonably requested by the Trustee and shall have provided the Trustee with all
necessary access to the properties, books and records of the Servicer and the
Company which the Trustee may reasonably require, then within 90 days following
the Initial Closing Date, the Trustee shall have (i) completed the Servicer Site
Review and (ii) established the Standby Liquidation System, and shall have
notified and delivered descriptions to the Servicer, each Rating Agency and each
Agent of such events.
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(g) The Trustee shall deliver the Internal Operating Procedures
Memorandum to the Company and the Servicer on the Initial Closing Date. From and
after such date, the Trustee shall take such actions as are set forth in the
Internal Operating Procedures Memorandum unless prevented from doing so through
no fault of the Trustee.
Section 8.2. Rights of the Trustee. Except as otherwise provided in
Section 8.1:
(a) The Trustee may conclusively rely on and shall be protected in
acting on, or in refraining from acting in accord with, any resolution,
Officer's Certificate, opinion of counsel, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, appraisal, bond, note or other paper
or document believed by it to be genuine and to have been signed or
presented to it pursuant to any Pooling and Servicing Agreement by the
proper party or parties;
(b) The Trustee may consult with counsel (at the Company's expense)
and any Opinion of Counsel or any advice of such counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with
such Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by any Pooling and Servicing Agreement, or
to institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Holders, pursuant
to the provisions of any Pooling and Servicing Agreement, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein
or thereby; provided, however, that nothing contained herein shall relieve
the Trustee of liability for its own negligence or willful misconduct or
of the obligation, upon the occurrence of a Servicer Default or Early
Amortization Event (which the Trustee has written notice thereof and which
has not been cured), to exercise such of the rights and powers vested in
it by any Pooling and Servicing Agreement, and to use the same degree of
care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs. The
right of the Trustee to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or wilful misconduct in the
performance of any such act;
(d) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by any Pooling and Servicing Agreement;
(e) The Trustee shall not be bound to make any investigation into
the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, direction, order,
approval, bond, note or other paper or document, or to recompute the
amount of any allocations or distributions contained in any direction from
the Servicer provided for under the Agreement, unless requested in writing
so to do by the holders of Investor Certificates evidencing Fractional
Undivided
68
Interests aggregating more than 10% of the Invested Amount of any Series
which could be adversely affected if the Trustee does not perform such
acts; provided, however, that such holders of Investor Certificates shall
provide the Trustee with indemnity reasonably satisfactory to it for any
expense expected to result from any such investigation requested by them
to the extent the Trustee is not otherwise reimbursed hereunder; provided,
further, that the Trustee shall be entitled to make such further inquiry
or investigation into such facts or matters as it may reasonably see fit,
and if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books and records of
the Company, personally or by agent or attorney, at the sole cost and
expense of the Company;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through affiliates,
agents or attorneys or a custodian or nominee, and the Trustee shall not
be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such affiliate, agent, attorney, custodian or nominee
appointed with due care by it hereunder;
(g) The Trustee shall not be required to make any initial or
periodic examination of any documents or records related to the
Receivables for the purpose of establishing the presence or absence of
defects, the compliance by the Company with its representations and
warranties or for any other purpose;
(h) In the event that the Trustee is also acting as Paying Agent,
Transfer Agent, Liquidating Agent or Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article VIII shall
also be afforded to such Paying Agent, Transfer Agent, Liquidating Agent
and Registrar;
(i) The Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust created hereby or the powers granted
hereunder;
(j) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by Trustee unless it is determined by a
court of competent jurisdiction that the Trustee's negligence or willful
misconduct was the primary cause of such insufficiency;
(k) The Trustee shall not in any way be liable by reason of any
insufficiency in the Collateral Account resulting from any investment loss
on any Eligible Investment invested pursuant to Section 3.1(c) of this
Agreement; and
(l) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.
Section 8.3. Trustee Not Liable for Recitals in Certificates. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 8.15, the Trustee makes no
representations as to the validity or sufficiency of any
69
Pooling and Servicing Agreement or of the Certificates (other than the
certificate of authentication on the Certificates) or of any Receivable or
related document. The Trustee shall not be accountable for the use or
application by the Company of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Company in
respect of the Receivables or from the Accounts or other accounts hereafter
established to effectuate the transactions contemplated herein and in accordance
with the terms of any Pooling and Servicing Agreement.
The Trustee shall not be accountable for the use or application by
the Servicer of any of the Certificates or of the proceeds of such Certificates,
or for the use or application of any funds paid to the Servicer or any
Sub-Servicer in respect of the Receivables or deposited in or withdrawn from the
Accounts or any Lockbox by or at the direction of the Servicer, any Sub-Servicer
or the Lockbox Processor, in each case unless the Trustee, acting in its
capacity as Successor Servicer, itself makes such use or application. The
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable.
Section 8.4. Trustee May Own Certificates. The Trustee in its
individual or any other capacity (a) may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee
and (b) may transact any banking and trust business with the Company, the
Servicer, any Sub-Servicer or any Seller as it would were it not the Trustee.
Section 8.5. Trustee's Fees and Expenses. The Trustee shall be
entitled to a fee (which shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust) for all services rendered
by the Trustee in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Trustee. The
Servicer covenants and agrees to pay, but only from funds available to it as the
Servicing Fee paid under the Servicing Agreement, to the Trustee an annual fee
agreed upon in writing between the Servicer and the Trustee, payable in advance
on the Initial Closing Date and on each one-year anniversary thereof. The
Trustee also shall be entitled to reimbursement from the Servicer or the Company
upon the Trustee's request for all reasonable expenses (including, without
limitation, expenses incurred in connection with notices, requests for
documentation or other communications to or directions from Holders),
disbursements, losses, liabilities, damages and advances incurred or made by the
Trustee in accordance with any of the provisions of any Pooling and Servicing
Agreement or by reason of its status as Trustee under any Pooling and Servicing
Agreement (including the reasonable fees and expenses of its agents, any
co-trustee and counsel) except any such expense, disbursement, loss, liability,
damage or advance as may arise from its negligence or willful misconduct;
provided that any payments made by the Company in respect of any of the
foregoing items shall be made solely from funds available to the Company which
are not otherwise required to be applied to the payment of any amounts pursuant
to any Pooling and Servicing Agreements (other than to the Company), shall be
non-recourse other than with respect to such funds, and shall not constitute a
claim against the Company to the extent that insufficient funds exist to make
such payment. To the extent that the Trustee has not been paid for any of the
foregoing items (including pursuant to the first sentence of this Section 8.5),
the Trustee shall be entitled to be paid for such items from amounts which
otherwise would be distributable to the Company under Article III of this
Agreement. The Trustee shall be entitled to reimbursement
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for any reasonable out-of-pocket costs or expenses incurred in connection with
the review, negotiation, preparation, execution and delivery of any of the
Transaction Documents or in connection with the issuance of any Certificates on
the Initial Closing Date solely as specified in a separate writing between the
Company and the Trustee. If the Trustee is appointed Successor Servicer in
accordance with the Servicing Agreement, the Trustee, in its capacity as
Successor Servicer, shall also be entitled to be paid the Servicing Fee and any
other compensation to which the Servicer is expressly entitled under any Pooling
and Servicing Agreement. The provisions of this Section 8.5 shall apply to the
reasonable expenses, disbursements and advances made or incurred by the Trustee,
or any other Person, in its capacity as liquidating agent, to the extent not
otherwise paid. The covenants and agreements contained in this Section 8.5
(including, without limitation, the covenants to pay the expenses,
disbursements, losses, liabilities, damages and advances provided for in this
Section 8.5) shall survive the termination of any Pooling and Servicing
Agreement and shall be binding, as applicable, on (i) the Servicer and any
Successor Servicer and (ii) the Company.
Section 8.6. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or any state thereof and authorized
under such laws to exercise corporate trust powers, having (or having a holding
company parent with) a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purpose of this Section 8.6, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.6, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.7.
Section 8.7. Resignation or Removal of Trustee. (a) Subject to
paragraph (c) below, the Trustee may at any time resign and be discharged from
the trust hereby created by giving written notice thereof to the Company, the
Servicer, each Agent and the Rating Agencies. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee, and
the expenses for such petition shall be paid pursuant to Section 8.5.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.6 hereof and shall fail to resign
after written request therefor by the Servicer, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
if a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Company may remove the Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
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(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 8.8.
(d) The obligations of the Company described in Sections 6.3 and 8.5
hereof and the obligations of the Servicer described in Section 8.5 hereof and
Section 5.1 of the Servicing Agreement shall survive the removal or resignation
of the Trustee as provided in this Agreement.
(e) No Trustee under this Agreement shall be personally liable for
any action or omission of any successor trustee.
Section 8.8. Successor Trustee. (a) Any successor trustee appointed
as provided in Section 8.7 shall execute, acknowledge and deliver to the Company
and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents or copies thereof, at the expense of the Servicer, and
statements held by it hereunder; and the Company and the predecessor Trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor trustee all such rights, power, duties and obligations. The Servicer
shall immediately and, in any event, no less than ten days prior to any such
resignation or removal, give notice to each Rating Agency upon the appointment
of a successor trustee.
(b) No successor trustee shall accept appointment as provided in
this Section 8.8 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.6.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 8.8, such successor trustee shall mail notice of such
succession hereunder to all Holders at their addresses as shown in the
Certificate Register.
Section 8.9. Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 8.6, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee (unless the Trustee is The Chase Manhattan
Bank) shall promptly give notice (except to the extent prohibited under any
Requirement of Law or Contractual Obligation), but in no event less than ten
days prior to any such merger or consolidation, to the Company, the Servicer and
the Rating Agencies upon any such merger or consolidation of the Trustee.
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Section 8.10. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of any Pooling and Servicing Agreement, at
any time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust may at the time be located, the Trustee shall
have the power and may execute and deliver all instruments to appoint one or
more persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person
or Persons, in such capacity and for the benefit of the Holders, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.6 and no notice to Holders of the appointment of any co-trustee or
separate trustee shall be required under Section 8.8. The Trustee shall promptly
notify each Rating Agency of the appointment of any co-trustee.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any statute of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of any Pooling and Servicing Agreement, specifically including every provision
of any Pooling and Servicing Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee and a copy thereof given to the Servicer and the
Company.
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(d) Any separate trustee or co-trustee may at any time constitute
the Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to any
Pooling and Servicing Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. Tax Returns. In the event the Trust shall be required
to file tax returns, the Company shall prepare and file or shall cause to be
prepared and filed (including, without limitation, by the Servicer) any tax
returns required to be filed by the Trust and shall remit such returns to the
Trustee for signature at least five Business Days before such returns are due to
be filed. The Trustee is hereby authorized to sign any such return on behalf of
the Trust. The Company shall also prepare or shall cause to be prepared
(including, without limitation, by the Servicer) all tax information required by
law to be distributed to Holders and shall deliver such information to the
Trustee at least five Business Days prior to the date it is required by law to
be distributed to the Holders. The Trustee, upon written request, will furnish
the Company, or the Company's designee, with all such information known to the
Trustee as may be reasonably required in connection with the preparation of all
tax returns of the Trust, and shall, upon request, execute such returns. In no
event shall the Trustee in its individual capacity be liable for any
liabilities, costs or expenses of the Trust, the Holders, the Company or the
Servicer arising under any tax law or regulation, including, without limitation,
federal, state or local income or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with respect thereto or arising
from any failure to comply therewith).
Section 8.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under any Pooling and Servicing
Agreement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders in respect of which such judgment has been
obtained.
Section 8.13. Suits for Enforcement. If a Servicer Default shall
occur and be continuing, the Trustee may, as provided in Section 6.1 of the
Servicing Agreement, proceed to protect and enforce its rights and the rights of
the Holders under this Agreement or any other Transaction Document by suit,
action or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or any
other Transaction Document or in aid of the execution of any power granted in
this Agreement or any other Transaction Document or for the enforcement of any
other legal, equitable or other remedy as the Trustee, being advised by counsel,
shall deem most effectual to protect and enforce any of the rights of the
Trustee or the Holders. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Investor Certificateholder any plan of reorganization, arrangement, adjustment
or composition affecting the Certificates or the rights of any holder thereof,
or
74
authorize the Trustee to vote in respect of the claim of any Investor
Certificateholder in any such proceeding.
Section 8.14. Rights of Investor Certificateholders to Direct
Trustee. Investor Certificateholders evidencing more than 50% of the Invested
Amount of any Series affected by the conduct of any proceeding or the exercise
of any right conferred on the Trustee shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that, subject to Section 8.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Responsible Officers of
the Trustee, determine that the proceedings so directed would be illegal or
expose it to personal liability or be unduly prejudicial to the rights of
Investor Certificateholders not party to such direction; and provided, further,
that nothing in any Pooling and Servicing Agreement shall impair the right of
the Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction of the Investor Certificateholders.
Section 8.15. Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(a) the Trustee is a banking corporation organized, existing and in
good standing under the laws of the United States or any of its fifty
states and is duly authorized and empowered to exercise trust powers under
applicable law;
(b) the Trustee has the power and authority to enter into this
Agreement and any Supplement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement
and any Supplement; and
(c) each Pooling and Servicing Agreement and each of the Transaction
Documents executed by it have been duly executed and delivered by the
Trustee and, in the case of all such Transaction Documents, are legal,
valid and binding obligations of the Trustee, enforceable in accordance
with their respective terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights generally and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).
Section 8.16. Maintenance of Office or Agency. The Trustee will
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where notices and demands to or upon the
Trustee in respect of the Certificates and the Pooling and Servicing Agreements
may be served. The Trustee will give prompt written notice to the Company, the
Servicer and the Holders of any change in the location of the Certificate
Register or any such office or agency.
Section 8.17. Limitation of Liability. The Certificates are executed
by the Trustee, not in its individual capacity but solely as Trustee of the
Trust, in the exercise of the powers and authority conferred and vested in it by
this Agreement. Each of the undertaking
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and agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.
ARTICLE IX
TERMINATION
Section 9.1. Termination of Trust; Liquidation of Receivables. (a)
The Trust and the respective obligations and responsibilities of the Company,
the Servicer, the Sub-Servicers and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Holders as hereafter set forth and
any indemnification obligations hereunder) shall terminate, except with respect
to any such obligations or responsibilities expressly stated to survive such
termination, on the earliest of (i) June 5, 2016, (ii) at the option of the
Company, at any time where the Aggregate Invested Amount is zero (unless an
Early Amortization Event as specified in Section 7.1 of this Agreement shall
have occurred and be continuing, in which case the Company shall be deemed to
elect to terminate the Trust pursuant to this clause (ii)) and (iii) upon
completion of distribution of the amounts referred to in subsection 7.2(b) (the
"Trust Termination Date").
(b) If on the Distribution Date in the month immediately preceding
the month in which the Trust Termination Date occurs (after giving effect to all
transfers, withdrawals, deposits and drawings to occur on such date and the
payment of principal on any Series of Certificates to be made on the related
Distribution Date pursuant to Article III) the Invested Amount of any Series
would be greater than zero, the Trustee, at the written direction of the
Servicer, shall sell within 30 days of such Distribution Date all of the
Receivables and other Trust Assets. The proceeds of such sale shall be treated
as Collections on the Receivables and shall be allocated in accordance with
Article III. During such 30-day period, the Servicer shall continue to collect
Collections on the Receivables and allocate Collections in accordance with the
provisions of Article III. The costs and expenses incurred by the Trustee in
such sale shall be reimbursable to the Trustee as provided in Section 8.5.
Section 9.2. Clean-Up Call and Final Termination Date of Investor
Certificates of any Series. (a) On the Distribution Date during the Amortization
Period with respect to any Series on which the Invested Amount (or such other
amount as may be set forth in the related Supplement) of such Series is reduced
to an amount equal to or less than the Clean-Up Call Percentage of the Invested
Amount for such Series as of the day preceding the beginning of such
Amortization Period (or such other amount as may be set forth in the related
Supplement), the Company shall have the option to repurchase, and to the extent
set forth in the related Supplement, shall repurchase, the entire
Certificateholders' Interest of such Series, at a purchase price equal to (i)
the outstanding Invested Amount of the Investor Certificates of such Series plus
(ii) accrued and unpaid interest through the date of such purchase (after giving
effect to any payment of principal and monthly interest on such date of
purchase) plus (iii) all other amounts payable to all Investor
Certificateholders of such Series under the related Supplement (such purchase
price, the "Clean-Up Call Repurchase Price"). The amount of the Clean-Up Call
Repurchase Price will be deposited into the Collection Account for credit to the
Series Collection Subaccount for such Series on the Business Day prior to such
Distribution
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Date in immediately available funds and will be passed through in full to the
applicable Investor Certificateholders. Following any such repurchase, such
Certificateholders' Interest in the Trust Assets shall terminate and such
interest therein will be allocated to the Company Interest and such Holders will
have no further rights with respect thereto. In the event that the Company fails
for any reason to deposit the Clean-Up Call Repurchase Price for such
Receivables, the Certificateholders' Interest in the Receivables and the other
Trust Assets will continue and monthly payments will continue to be made to the
Holders.
(b) The amount deposited pursuant to subsection 9.2(a) shall be paid
to the Investor Certificateholders of the related Series pursuant to Article III
on the Distribution Date following the date of such deposit. All Certificates of
a Series which are purchased by the Company pursuant to subsection 9.2(a) shall
be delivered by the Company upon such purchase to, and be canceled by (in
accordance with the written directions of the Company), the Transfer Agent and
Registrar and be disposed of in a manner satisfactory to the Trustee and the
Company.
(c) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Series Termination Date
with respect to such Series. Unless otherwise provided in a Supplement, in the
event that the Invested Amount of any Series of Certificates is greater than
zero on its Series Termination Date (after giving effect to all transfers,
withdrawals, deposits and drawings to occur on such date and the payment of
principal to be made on such Series on such date), the Servicer, on behalf of
the Trustee, will sell or cause to be sold, in accordance with the directions of
Investor Certificateholders representing more than 50% of the Invested Amount of
such Series, and pay the proceeds to all Holders of such Series pro rata (except
that unless expressly provided to the contrary in the related Supplement, no
payment shall be made to Holders of any Class of any Series that is by its terms
subordinated to any other Class until such senior Class of Certificates has been
paid in full) in final payment of all principal of and accrued interest on such
Series of Certificates, an amount of Receivables or interests in Receivables up
to the Invested Amount of such Series at the close of business on such date.
Absent such direction from Investor Certificateholders representing more than
50% of the Invested Amount of such Series, the Trustee shall continue to hold
the Trust Assets in respect of such Series in accordance with the terms of the
Pooling and Servicing Agreements until the Trust Termination Date (or until
Investor Certificateholders representing more than 50% of the Invested Amount of
such Series shall otherwise direct the Trustee); provided that the terms of this
Agreement, the related Supplement and the Servicing Agreement shall be deemed to
remain in full force and effect, except that no additional Receivables shall be
allocated with respect to such Series. The reasonable costs and expenses
incurred by the Trustee in such sale shall be reimbursable to the Trustee as
provided in Section 8.5. Any proceeds of such sale in excess of such principal
and interest paid shall be paid to the owner of the Exchangeable Company
Interest, unless and to the extent otherwise specified in any applicable
Supplement. Upon such Series Termination Date with respect to the applicable
Series of Certificates, final payment of all amounts allocable to any Investor
Certificates of such Series shall be made in the manner provided in this Section
9.2.
Section 9.3. Final Payment with Respect to Any Series. (a) Written
notice of any termination, specifying the Distribution Date upon which the
Investor Certificateholders of any Series may surrender their Investor
Certificates for payment of the final distribution with
77
respect to such Series and cancelation, shall be given (subject to at least 30
days' (or such shorter period as is acceptable to the Trustee) prior written
notice from the Servicer to the Trustee containing all information required for
the Trustee's notice) by the Trustee to Investor Certificateholders of such
Series, mailed not later than the fifth day of the month of such final
distribution and specifying (i) the Distribution Date upon which final payment
of the Investor Certificates will be made upon presentation and surrender of
Investor Certificates at the office or offices therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Investor Certificates at the office or
offices therein specified. The Servicer's notice to the Trustee in accordance
with the preceding sentence shall be accompanied by an Officer's Certificate
setting forth the information specified in Section 4.3 of the Servicing
Agreement covering the period during the then current calendar year through the
date of such notice. The Trustee shall give such notice to the Transfer Agent
and Registrar and the Paying Agent at the time such notice is given to such
Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 9.1(a) or the occurrence of the Series Termination Date with respect
to any Series pursuant to Section 9.2, all funds then on deposit in the
Collection Accounts (but only to the extent necessary to pay all outstanding and
unpaid amounts to Holders) shall continue to be held in trust for the benefit of
the Holders, and the Paying Agent or the Trustee shall pay such funds to the
Holders upon surrender of their Certificates in accordance with the terms
hereof. Any Certificate not surrendered on the date specified in subsection
9.3(a)(i) shall cease to accrue any interest provided for such Certificate from
and after such date. In the event that all of the Investor Certificateholders
shall not surrender their Certificates for cancelation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Investor Certificateholders of such
Series to surrender their Certificates for cancelation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Investor Certificates of such Series shall not have been surrendered for
cancelation, the Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Investor Certificateholders of
such Series concerning surrender of their Certificates, and the cost thereof
shall be paid out of the funds in the Collection Accounts held for the benefit
of such Investor Certificateholders. The Trustee and the Paying Agent shall pay
to the Company upon request any monies held by them for the payment of principal
or interest that remains unclaimed for two years. After payment to the Company,
Holders entitled to the money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancelation shall be canceled
by the Transfer Agent and Registrar and be disposed of in a customary manner
satisfactory to the Trustee.
Section 9.4. Company's Termination Rights. Upon the termination of
the Trust pursuant to Section 9.1 and the cancelation of the Exchangeable
Company Interest and payment to the Trustee (in its capacity as such and/or in
its capacity as Successor Servicer) of all amounts owed to it under any Pooling
and Servicing Agreement, the Trustee shall assign and convey to the Company
(without recourse, representation or warranty) in exchange for the Exchangeable
Company Interest all right, title and interest of the Trust in the Trust Assets,
78
whether then existing or thereafter created, and all proceeds thereof except for
amounts held by the Trustee pursuant to subsection 9.3(b). The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, representation or warranty, as shall be reasonably requested
by the Company to vest in the Company all right, title and interest which the
Trust had in the Trust Assets.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Amendment. (a) Any Pooling and Servicing Agreement,
including any schedule or exhibit thereto, may be amended in writing from time
to time by the Servicer, the Company and the Trustee, without the consent of any
holder of any outstanding Certificate, to cure any ambiguity, to correct or
supplement any provisions herein or therein which may be inconsistent with any
other provisions herein or therein or to add any other provisions hereto to
change in any manner or eliminate any of the provisions with respect to matters
or questions raised under any Pooling and Servicing Agreement which shall not be
inconsistent with the provisions of any Pooling and Servicing Agreement;
provided, however, that such action shall not, as evidenced by an Officer's
Certificate from the Company and, to the extent, in the reasonable view of the
Company, a question of law exists, supported by an Opinion of Counsel delivered
to the Trustee, adversely affect in any material respect the interests of the
Investor Certificateholders. The Trustee may, but shall not be obligated to,
enter into any such amendment pursuant to this paragraph or paragraph (b) below
which affects the Trustee's rights, duties or immunities under any Pooling and
Servicing Agreement or otherwise.
(b) Any Pooling and Servicing Agreement and any schedule or exhibit
thereto may also be amended in writing from time to time by the Servicer, the
Company and the Trustee with the consent of Investor Certificateholders
evidencing more than 50% of the Invested Amount of any Series adversely affected
by the amendment (or, if any such Series shall have more than one Class of
Investor Certificates adversely affected by the amendment, 50% or more of the
Invested Amount of each such Class) for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of such Pooling
and Servicing Agreement or of modifying in any manner the rights of holders of
any Series then issued and outstanding; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate of such
Series without the consent of such Investor Certificateholder of such Series;
(ii) change the definition of or the manner of calculating the interest of any
Investor Certificateholder of such Series without the consent of such Investor
Certificateholder; or (iii) reduce the aforesaid percentage of Fractional
Undivided Interests the holders of which are required to consent to any such
amendment, in each case without the consent of all Holders of each Series
adversely affected in any material respect.
(c) Notwithstanding anything in this Section 10.1 to the contrary,
the Supplement with respect to any Series may be amended on the terms and with
the procedures provided in such Supplement.
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(d) The Company or the Servicer shall deliver any proposed amendment
to each Agent at least five days prior to the execution and delivery thereof.
The Servicer shall furnish written notification of the substance of such
amendment to each Rating Agency. No such amendment (including, without
limitation, the amendment of any Supplement, notwithstanding anything to the
contrary contained in any Supplement) shall be effective until the Rating Agency
Condition has been satisfied with respect thereto.
(e) Promptly after the execution of any such amendment or consent
the Trustee shall furnish written notification of the substance of such
amendment to each Holder of each Outstanding Series (or with respect to an
amendment of a Supplement, of the applicable Series).
(f) It shall not be necessary for the consent of Investor
Certificateholders under this Section 10.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor Certificate holders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(g) In executing or accepting any amendment pursuant to this Section
10.1, the Trustee shall, upon request, be entitled to receive and rely upon (i)
an Opinion of Counsel (A) stating that such amendment is authorized pursuant to
a specific provision of a Pooling and Servicing Agreement and complies with such
provision, (B) stating that all conditions precedent to the execution and
delivery of such amendment shall have been satisfied in full, which opinion in
the case of this clause (B) may, to the extent that such opinion concerns
questions of fact, rely on an Officer's Certificate with respect to such
questions of fact and (C) to the extent such amendment modifies Article I, II,
III or IV hereof, substantially in the form of Exhibit C, (ii) a certificate
from a Responsible Officer of the Company stating that such amendment shall not
adversely affect the interests of the holders of any outstanding Certificates in
any material respect except for holders of the Series whose consent to such
amendment has been obtained in accordance with clause (b) of this Section 10.1
and (iii) a Tax Opinion.
Section 10.2. Protection of Right, Title and Interest to Trust. (a)
The Servicer shall cause this Agreement, any Supplement, all amendments hereto
and/or all financing statements and continuation statements and any other
necessary documents covering the Certificateholders' and the Trustee's right,
title and interest to the Trust and the Trust Assets to be promptly recorded,
registered and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required by law fully to
preserve and protect the right, title and interest of the Trustee hereunder to
all property comprising the Trust. The Servicer shall deliver to the Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Company shall cooperate fully with the
Servicer in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this subsection
10.2(a).
(b) With respect to any prospective change in its name, identity or
corporate structure, the Company shall comply fully with subsection 2.8(m)
hereof and shall file such financing statements or amendments as may be
necessary to continue the perfection of the
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Trust's security interest in the Receivables and the proceeds thereof. If the
Company determines that no refiling is required, it shall provide to the Trustee
an Opinion of Counsel so stating.
Section 10.3. Limitation on Rights of Holders. (a) The death or
incapacity of any Holder shall not operate to terminate this Agreement or the
Trust, nor shall such death or incapacity entitle such Holder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
(b) Except with respect to the Investor Certificateholders as
expressly provided in any Pooling and Servicing Agreement, no Holder shall have
any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto. Nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Investor Certificateholder shall have any right by virtue of
any provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Investor Certificateholder previously shall have given to the Trustee written
request to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Investor Certificateholder with every other
Investor Certificateholder and the Trustee, that no one or more Holders shall
have any right in any manner whatever by virtue of or by availing itself or
themselves of any provisions of the Pooling and Servicing Agreements to affect,
disturb or prejudice the rights of any other of the Investor Certificateholders,
or to obtain or seek to obtain priority over or preference to any other such
Investor Certificateholder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit of
all Investor Certificateholders. For the protection and enforcement of the
provisions of this Section 10.3, each and every Investor Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
(d) By their acceptance of Certificates pursuant to this Agreement
and the applicable Supplement, the Holders agree to the provisions of this
Section 10.3.
Section 10.4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.5. Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless
81
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or three days after being deposited in the mail,
postage prepaid, or, in the case of facsimile notice, when received, (i)
addressed as follows in the case of the Company, the Servicer and the Trustee
and (ii) in the case of the Sub-Servicers, as set forth under their signatures
in the Receivables Sale Agreements, or, in either case, to such other address as
may be hereafter notified by the respective parties hereto:
The Company: WESCO Receivables Corp.
Commerce Court
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to the Servicer:
The Servicer: WESCO Distribution, Inc.
Commerce Court
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
The Trustee: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Services - ABS
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Any notice required or permitted to be mailed to an Investor Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Investor Certificateholder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in any Pooling and Servicing Agreement shall
be conclusively presumed to have been duly given, whether or not the Investor
Certificateholder receives such notice.
Section 10.6. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of any Pooling and Servicing
Agreement shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of such Pooling and Servicing
Agreement and shall in no way affect the validity or enforceability of the other
provisions of any Pooling and Servicing Agreement or of the Certificates or
rights of the Holders.
Section 10.7. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.3 of the Servicing Agreement,
no Pooling and Servicing Agreement, nor any rights or interests thereunder, may
be assigned by the Company
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or the Servicer without the prior written consent of the Trustee acting at the
direction of the holders of 66 2/3% of the Invested Amount of each Outstanding
Series and without the Rating Agency Condition's having been satisfied with
respect to such assignment.
Section 10.8. Certificates Nonassessable and Fully Paid. It is the
intention of the parties to each Pooling and Servicing Agreement that the
Investor Certificateholders shall not be personally liable for obligations of
the Trust, that the interests in the Trust represented by the Investor
Certificates shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever and that Investor Certificates upon authentication
thereof by the Trustee pursuant to Section 5.2 are and shall be deemed fully
paid.
Section 10.9. Further Assurances. The Company and the Servicer agree
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of each Pooling and Servicing Agreement, including,
without limitation, the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of the
UCC of any applicable jurisdiction.
Section 10.10. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee or the Investor
Certificateholders, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
Section 10.11. Counterparts. This Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
Section 10.12. Third-Party Beneficiaries. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the Holders and their
respective successors and permitted assigns. Except as otherwise provided in
Section 6.3 and this Article X and in any Supplement, no other Person will have
any right or obligation hereunder.
Section 10.13. Actions by Holders. (a) Wherever in any Pooling and
Servicing Agreement a provision is made that an action may be taken or a notice,
demand or instruction given by Investor Certificateholders, such action, notice
or instruction may be taken or given by any Investor Certificateholders of any
Series, unless such provision requires a specific percentage of Investor
Certificateholders of a certain Series or all Series.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Investor Certificateholder shall bind such Investor
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee, the Company or
the Servicer in reliance thereon, whether or not notation of such action is made
upon such Certificate.
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Section 10.14. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the Servicing Agreement sets forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this Agreement and
the Servicing Agreement. This Agreement and the Servicing Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
Section 10.15. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 10.16. Construction of Agreement. (a) The Company hereby
grants to the Trustee, for the benefit of the Holders, a perfected first
priority security interest in all of the Company's right, title and interest in,
to and under the Receivables and the other Trust Assets now existing and
hereafter created, all monies due or to become due and all amounts received with
respect thereto and all "proceeds" thereof (including Recoveries), to secure all
of the Company's and the Servicer's obligations hereunder, including, without
limitation, the Company's obligation to sell or transfer Receivables hereafter
created to the Trust.
(b) This Agreement shall constitute a security agreement under
applicable law.
Section 10.17. No Set-Off. Except as expressly provided in this
Agreement, the Trustee agrees that it shall have no right of set-off or banker's
lien against, and no right to otherwise deduct from, any funds held in the
Collection Accounts for any amount owed to it by the Company, the Servicer or
any Investor Certificateholder.
Section 10.18. No Bankruptcy Petition. Each of the Trustee and the
Servicer hereby covenants and agrees that, prior to the date which is one year
and one day after the date of the end of the Amortization Period with respect to
all Outstanding Series, it will not institute against, or join any other Person
in instituting against, the Company any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any federal or
state bankruptcy or similar law.
Section 10.19. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) each Pooling and Servicing Agreement
is executed and delivered by the Trustee, not individually or personally but
solely as Trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it, (b) except with respect to Section 8.15 hereof the
representations, undertakings and agreements herein made on the part of the
Trust are made and intended not as personal representations, undertakings and
agreements by the Trustee, but are made and intended for the purpose of binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability of the Trustee, individually or personally, to perform any covenant of
the Trust either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties who are signatories to this Agreement
and by any Person claiming by, through or under such parties; provided, however,
the Trustee shall be liable in its individual capacity for its own willful
misconduct or negligence and (d) under no circumstances shall the Trustee be
personally liable for the payment of any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under
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any Pooling and Servicing Agreement; provided further, that the foregoing
clauses (a) through (d) shall survive the resignation or removal of the Trustee.
The Company hereby agrees to indemnify and hold harmless the Trustee
and the Trust for the benefit of the Holders (each, an "indemnified person")
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of any acts, omissions or alleged acts or omissions arising
out of, or relating to, activities of the Company pursuant to any Pooling and
Servicing Agreement to which it is a party, including but not limited to any
judgment, award, settlement, reasonable attorneys' fees and other reasonable
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim, except to the extent such loss,
liability, expense, damage or injury resulted from the negligence, bad faith or
wilful misconduct of an indemnified person; provided that any payments made by
the Company pursuant to this subsection shall be made solely from funds
available to the Company which are not otherwise required to be applied to the
payment of any amounts pursuant to any Pooling and Servicing Agreements (other
than to the Company), shall be non-recourse other than with respect to such
funds, and shall not constitute a claim against the Company to the extent that
insufficient funds exist to make such payment.
Section 10.20. Canadian Taxes. The Company represents and warrants
to the Trustee for the benefit of the Certificateholders that it has not assumed
in any manner whatsoever any obligation of the Sellers under the Canadian
Receivables Sale Agreement (i) to make collections and remittances in respect of
any Canadian goods and services tax, any Canadian provincial sales tax or any
other similar Canadian tax or (ii) to file any returns in respect of such taxes
with Canadian tax authorities and that it was not contemplated by neither any
Seller under the Canadian Receivables Sale Agreement nor the Company that such
obligation was to be assumed by the Company. The parties hereto agree that the
Trust does not assume in any manner whatsoever any obligation of the Sellers
under the Canadian Receivables Sale Agreement to collect such taxes, make such
remittances and file such returns, and that it is not contemplated by the
parties hereto that any such obligation is hereby assumed by the Trust or the
Trustee. The Company hereby indemnifies the Trustee for the benefit of the
Certificateholders and holds it harmless from and against any assessments,
claims or other demands for payment of such taxes by Canadian tax authorities,
as well as interest and penalties; provided that any payments made by the
Company pursuant to this subsection shall be made solely from funds available to
the Company which are not otherwise required to be applied to the payment of any
amounts pursuant to any Pooling and Servicing Agreements (other than to the
Company), shall be non-recourse other than with respect to such funds, and shall
not constitute a claim against the Company to the extent that insufficient funds
exist to make such payment. It is understood that all of the invoices in respect
of the Receivables of the Sellers under the Canadian Receivables Sale Agreement
will bear the GST registration number of such Seller.
Section 10.21. Certain Information. The Servicer and the Company
shall promptly provide to the Trustee such information in computer tape, hard
copy or other form regarding the Receivables as the Trustee may reasonably
request to perform its obligations hereunder.
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IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
WESCO RECEIVABLES CORP., as Company
By: /s/ [Illegible]
---------------------------------
Name:
Title:
WESCO DISTRIBUTION, INC., as Servicer
By: /s/ [Illegible]
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: TRUST OFFICER