EXECUTION COPY
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STONE RECEIVABLES CORPORATION,
Issuer
and
STONE CONTAINER CORPORATION,
Servicer
MARINE MIDLAND BANK,
Trustee
and
BANKERS TRUST COMPANY,
Administrative Agent
MASTER TRUST INDENTURE AND
SECURITY AGREEMENT
Term and Revolving Notes
Dated as of March 14, 1995
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TABLE OF CONTENTS
SECTION PAGE
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ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.02 INCORPORATION BY REFERENCE TO TRUST
INDENTURE ACT. . . . . . . . . . . . . . . . . . . . . 3
Section 1.03 COMPLIANCE CERTIFICATES AND OPINIONS. . . . . . . . . . 3
Section 1.04 FORM OF DOCUMENTS DELIVERED TO TRUSTEE
AND/OR ADMINISTRATIVE AGENT. . . . . . . . . . . . . . 4
Section 1.05 ACTS OF NOTEHOLDERS . . . . . . . . . . . . . . . . . . 4
Section 1.06 CONFLICT WITH TRUST INDENTURE ACT . . . . . . . . . . . 5
Section 1.07 BENEFITS OF INDENTURE . . . . . . . . . . . . . . . . . 6
Section 1.08 INCORPORATION OF RECITALS . . . . . . . . . . . . . . . 6
ARTICLE II
CONVEYANCE OF CERTAIN ASSETS; ISSUANCE
OF NOTES
Section 2.01 ACCEPTANCE BY TRUSTEE . . . . . . . . . . . . . . . . . 6
Section 2.02 CERTAIN MATTERS REGARDING THE GRANT . . . . . . . . . . 6
Section 2.03 REPRESENTATIONS AND WARRANTIES OF THE
ISSUER RELATING TO THE PLEDGED ASSETS. . . . . . . . . 7
Section 2.04 NO ASSUMPTION OF OBLIGATIONS RELATING TO
RECEIVABLES, RELATED TRANSFERRED ASSETS
OR CONTRACTS . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 ACCEPTANCE OF APPOINTMENT AND OTHER
MATTERS RELATING TO THE SERVICER . . . . . . . . . . . 10
Section 3.02 DUTIES OF THE SERVICER AND THE ISSUE. . . . . . . . . . 11
Section 3.03 LOCKBOX ACCOUNTS; CONCENTRATION ACCOUNTS. . . . . . . . 13
Section 3.04 RECORDS OF THE SERVICER AND REPORTS TO BE
PREPARED BY THE SERVICER AND ISSUER. . . . . . . . . . 16
Section 3.05 MONTHLY SERVICER'S CERTIFICATE. . . . . . . . . . . . . 18
Section 3.06 ANNUAL SERVICING REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS; FORMS 10-Q AND 10-K. . . . . . . . 18
Section 3.07 RIGHTS OF THE TRUSTEE . . . . . . . . . . . . . . . . . 19
Section 3.08 ONGOING RESPONSIBILITIES OF STONE CONTAINER . . . . . . 21
Section 3.09 FURTHER ACTION EVIDENCING TRANSFER AND
GRANT. . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
RIGHTS OF NOTEHOLDERS; ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.01 ESTABLISHMENT OF TRUST ACCOUNTS . . . . . . . . . . . . 24
Section 4.02 DAILY CALCULATIONS AND FUNDS ALLOCATIONS. . . . . . . . 27
Section 4.03 INVESTMENT OF FUNDS IN TRUST ACCOUNTS . . . . . . . . . 34
Section 4.04 ATTACHMENT OF TRUST ACCOUNTS. . . . . . . . . . . . . . 35
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
NOTEHOLDERS
Section 5.01 DISTRIBUTIONS TO NOTEHOLDERS. . . . . . . . . . . . . . 35
Section 5.02 DISTRIBUTIONS TO THE ISSUER . . . . . . . . . . . . . . 38
Section 5.03 INFORMATION TO NOTEHOLDERS. . . . . . . . . . . . . . . 39
Section 5.04 NOTICE OF EARLY LIQUIDATION AT THE
SELLERS' ELECTION. . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
THE NOTES
Section 6.01 FORMS OF THE NOTES GENERALLY. . . . . . . . . . . . . . 40
Section 6.02 FORM OF ADMINISTRATIVE AGENT'S CERTIFICATE OF
AUTHENTICATION . . . . . . . . . . . . . . . . . . . . 40
Section 6.03 AMOUNT; ISSUABLE IN SERIES. . . . . . . . . . . . . . . 41
Section 6.04 EXECUTION, AUTHENTICATION AND DELIVERY. . . . . . . . . 42
Section 6.05 REGISTRATION OF TRANSFER AND EXCHANGE OF THE NOTES. . . 45
Section 6.06 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. . . . . . . 47
Section 6.07 AUTHENTICATING AGENT. . . . . . . . . . . . . . . . . . 48
Section 6.08 CHANGES IN AMOUNT OF REVOLVING NOTES. . . . . . . . . . 49
Section 6.09 BOOK-ENTRY NOTES. . . . . . . . . . . . . . . . . . . . 50
Section 6.10 NOTICES TO CLEARING AGENCY. . . . . . . . . . . . . . . 51
Section 6.11 DEFINITIVE NOTES. . . . . . . . . . . . . . . . . . . . 51
Section 6.12 TEMPORARY NOTES . . . . . . . . . . . . . . . . . . . . 52
Section 6.13 CANCELLATION. . . . . . . . . . . . . . . . . . . . . . 53
Section 6.14 CUSIP NUMBER. . . . . . . . . . . . . . . . . . . . . . 53
Section 6.15 LETTER OF REPRESENTATIONS . . . . . . . . . . . . . . . 53
Section 6.16 PERSONS DEEMED OWNERS . . . . . . . . . . . . . . . . . 53
Section 6.17 APPOINTMENT OF PAYING AGENT . . . . . . . . . . . . . . 54
ARTICLE VII
THE ISSUER
Section 7.01 REPRESENTATIONS AND WARRANTIES OF THE
ISSUER RELATING TO THE ISSUER AND THE
TRANSACTION DOCUMENTS. . . . . . . . . . . . . . . . . 55
Section 7.02 COVENANTS OF THE ISSUER . . . . . . . . . . . . . . . . 60
Section 7.03 INDEMNIFICATION BY THE ISSUER . . . . . . . . . . . . . 70
ARTICLE VIII
THE SERVICER
Section 8.01 REPRESENTATIONS AND WARRANTIES OF THE SERVICER. . . . . 73
Section 8.02 COVENANTS OF THE SERVICER . . . . . . . . . . . . . . . 76
Section 8.03 MERGER OR CONSOLIDATION OF, OR ASSUMPTION
OF THE OBLIGATIONS OF, THE SERVICER. . . . . . . . . . 76
Section 8.04 INDEMNIFICATION BY THE SERVICER . . . . . . . . . . . . 77
Section 8.05 SERVICER LIABILITY. . . . . . . . . . . . . . . . . . . 78
ARTICLE IX
LIQUIDATION EVENTS; EVENTS OF DEFAULT
Section 9.01 LIQUIDATION EVENTS. . . . . . . . . . . . . . . . . . . 79
Section 9.02 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . 80
Section 9.03 REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE X
SERVICER DEFAULTS
Section 10.01 SERVICER DEFAULTS. . . . . . . . . . . . . . . . . . . 82
Section 10.02 ADMINISTRATIVE AGENT TO ACT; APPOINTMENT
OF SUCCESSOR. . . . . . . . . . . . . . . . . . . . . 83
ARTICLE XI
THE TRUSTEE AND THE ADMINISTRATIVE AGENT
Section 11.01 DUTIES OF TRUSTEE AND THE ADMINISTRATIVE AGENT . . . . 86
Section 11.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE
ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . 90
Section 11.03 MAY HOLD NOTES . . . . . . . . . . . . . . . . . . . . 92
Section 11.04 MONEY HELD IN TRUST. . . . . . . . . . . . . . . . . . 92
Section 11.05 DISQUALIFICATION; CONFLICTING INTERESTS. . . . . . . . 92
Section 11.06 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER . . . 93
Section 11.07 LIMITATION ON LIABILITY OF TRUSTEE AND
ADMINISTRATIVE AGENT; ADMINISTRATIVE AGENT NOT
A FIDUCIARY . . . . . . . . . . . . . . . . . . . . . 93
Section 11.08 TRUSTEE AND ADMINISTRATIVE AGENT MAY DEAL WITH
OTHER PARTIES . . . . . . . . . . . . . . . . . . . . 95
Section 11.09 SERVICER TO PAY TRUSTEE'S AND THE ADMINISTRATIVE
AGENT'S FEES AND EXPENSES . . . . . . . . . . . . . . 95
Section 11.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. . . . . . . . 96
Section 11.11 RESIGNATION OR REMOVAL OF TRUSTEE OR
ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . 97
Section 11.12 SUCCESSOR TRUSTEE OR ADMINISTRATIVE
AGENT . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 11.13 MERGER OR CONSOLIDATION OF TRUSTEE OR
ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . 99
Section 11.14 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. . . . . 100
Section 11.15 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF NOTES. . . . . . . . . . . . . . . . . . . . . . . 101
Section 11.16 TRUSTEE MAY FILE PROOFS OF CLAIM.. . . . . . . . . . . 102
Section 11.17 SUITS FOR ENFORCEMENT. . . . . . . . . . . . . . . . . 103
Section 11.18 RIGHTS OF REQUIRED NOTEHOLDERS TO DIRECT TRUSTEE . . . 103
Section 11.19 REPRESENTATIONS AND WARRANTIES OF
TRUSTEE AND THE ADMINISTRATIVE AGENT. . . . . . . . . 103
Section 11.20 MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . 105
ARTICLE XII
LISTS OF NOTEHOLDERS
Section 12.01 ACCESS TO LIST OF NOTEHOLDERS. . . . . . . . . . . . . 105
ARTICLE XIII
SATISFACTION AND DISCHARGE
Section 13.01 SATISFACTION AND DISCHARGE OF INDENTURE. . . . . . . . 106
Section 13.02 DEPOSITED MONEYS, U.S. GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST . . . . . . . . . . . . . . . . . 107
Section 13.03 REPAYMENT TO THE ISSUER. . . . . . . . . . . . . . . . 107
Section 13.04 RELEASE OF LIENS . . . . . . . . . . . . . . . . . . . 108
ARTICLE XIV
SUPPLEMENTS AND AMENDMENTS TO INDENTURE
Section 14.01 SUPPLEMENTS AND AMENDMENTS TO INDENTURE
WITHOUT CONSENT OF NOTEHOLDERS. . . . . . . . . . . . 108
Section 14.02 SUPPLEMENTS AND AMENDMENTS TO INDENTURE
WITH CONSENT OF THE NOTEHOLDERS . . . . . . . . . . . 109
Section 14.03 CERTAIN MATTERS RELATING TO SUPPLEMENTS
AND AMENDMENTS. . . . . . . . . . . . . . . . . . . . 111
Section 14.04 EFFECT OF SUPPLEMENTS. . . . . . . . . . . . . . . . . 111
Section 14.05 CONFORMITY WITH TRUST INDENTURE ACT. . . . . . . . . . 112
Section 14.06 REFERENCE IN NOTES TO SUPPLEMENTS. . . . . . . . . . . 112
ARTICLE XV
REDEMPTIONS
Section 15.01 REDEMPTION ALLOWED . . . . . . . . . . . . . . . . . . 112
Section 15.02 ELECTION TO REDEEM; NOTICE TO TRUSTEE
AND ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . 112
Section 15.03 SELECTION OF SECURITIES TO BE REDEEMED . . . . . . . . 112
Section 15.04 NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . 113
Section 15.05 DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . 114
Section 15.06 NOTES PAYABLE ON REDEMPTION DATE . . . . . . . . . . . 115
Section 15.07 NOTES REDEEMED IN PART . . . . . . . . . . . . . . . . 115
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.01 LIMITATION ON RIGHTS OF NOTEHOLDERS. . . . . . . . . . 115
Section 16.02 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . 116
Section 16.03 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . 116
Section 16.04 SEVERABILITY OF PROVISIONS . . . . . . . . . . . . . . 117
Section 16.05 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . 117
Section 16.06 NONPETITION COVENANT . . . . . . . . . . . . . . . . . 117
Section 16.07 NO WAIVER; CUMULATIVE REMEDIES . . . . . . . . . . . . 118
Section 16.08 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . 18
Section 16.09 THIRD-PARTY BENEFICIARIES. . . . . . . . . . . . . . . 118
Section 16.10 INTEGRATION. . . . . . . . . . . . . . . . . . . . . . 119
Section 16.11 SURVIVAL OF PROVISIONS . . . . . . . . . . . . . . . . 119
Section 16.12 LIMITATION ON LIABILITY OF THE ISSUER AND
THE SERVICER . . . . . . . . . . . . . . . . . . . . . 119
Section 16.13 SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . 120
Section 16.14 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . 120
Section 16.15 CERTAIN PARTIAL RELEASES . . . . . . . . . . . . . . . 120
Section 16.16 UNDERTAKING FOR COSTS. . . . . . . . . . . . . . . . . 121
EXHIBITS
Exhibit A - Form of Daily Report
Exhibit B - Form of Settlement Statement
Exhibit C - Form of Monthly Servicer's Certificate
Exhibit D - Form of Summary Settlement Statement to be
Distributed to the Noteholders
Exhibit E - Form of Agreed Upon Procedures Letter
SCHEDULES
Schedule 7.01(i) Offices of the Issuer, the Servicer and the Sellers where
Records are maintained
Schedule 7.01(j) Account Banks
Schedule 7.01(o) Fictitious Names
APPENDIX
Appendix A Definitions
THIS MASTER TRUST INDENTURE AND SECURITY AGREEMENT dated as of March
14, 1995 (this "INDENTURE"), is by and among STONE RECEIVABLES CORPORATION, a
Delaware corporation, as issuer (the "ISSUER"), STONE CONTAINER CORPORATION, a
Delaware corporation ("STONE CONTAINER"), in its capacity as the initial
Servicer hereunder, MARINE MIDLAND BANK, as Trustee and BANKERS TRUST COMPANY,
as Administrative Agent.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and each of the
Noteholders to the extent provided herein:
RECITALS OF THE ISSUER
The Issuer has duly authorized the creation and issuance of each
Series of Notes, each Series to be of substantially the tenor and amount set
forth herein and in the respective Supplement relating to each such Series of
Notes. In order to provide for the foregoing, the Issuer has duly authorized
the execution and delivery of this Indenture.
The Notes shall each be limited recourse obligations of the Issuer and
shall be secured solely by the Noteholders' respective allocable shares of the
Pledged Assets as set forth herein. If and to the extent that such allocable
share is insufficient to pay all amounts owing with respect to such Notes, then,
except as otherwise expressly provided hereunder, the Noteholders of such Notes
shall have no Claim in respect of such insufficiency against the Issuer or any
of its other assets or properties (including, without limitation, any Pledged
Assets allocable to any other Notes in accordance with the terms hereof), and
the Noteholders, by their acceptance of the Notes, hereby waive any such Claim.
All things necessary to (a) make the Notes, when executed by the
Issuer and authenticated and delivered by the Administrative Agent hereunder and
duly issued by the Issuer, the valid obligations of the Issuer, and (b) make
this Indenture a valid agreement of the Issuer, in each case, in accordance with
their respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Issuer, in consideration of the premises herein contained and
of the purchase of the Notes by the Noteholders, and of other good and lawful
consideration, the receipt of which is hereby acknowledged, and to secure,
equally and ratably without prejudice, priority or distinction, except as
specifically otherwise set forth in this Indenture and in the respective
Supplement relating to such Notes, the payment of the Notes, the payment of all
other amounts due under or in connection with the Notes or with this Indenture,
and the performance and observance of all of the covenants and conditions
contained herein or in such Notes, has hereby executed and
delivered this Indenture and by these presents does hereby convey, grant,
assign, transfer and pledge a security interest, in each case, in and unto the
Trustee, its successors and assigns and its or their assigns forever, for the
benefit of the Noteholders, with power of sale, all and singular in the property
hereinafter described (said property being sometimes referred to as the "PLEDGED
ASSETS"), to wit:
GRANTING CLAUSE
All of the Issuer's right, title and interest in, to and under, (i)
each Receivable that has been or at anytime hereafter shall be transferred by
any of the Sellers to the Issuer pursuant to the Purchase Agreement at any time
on or prior to the date hereof and continuing hereafter up to but excluding the
Purchase Termination Date (including, without limitation in the case of Stone
Container, any Receivables acquired by Stone Container as a result of the Merger
and which have been or shall hereafter be conveyed to the Issuer pursuant to the
Purchase Agreement any time prior to the Purchase Termination Date), (ii) all
Related Assets, (iii) the Seller Transaction Documents and all of the rights and
remedies thereunder (all of the Issuer's right, title and interest in, to and
under such Seller Transaction Documents and the Related Assets being herein
called the "RELATED TRANSFERRED ASSETS"), (iv) all funds from time to time on
deposit in each of the Trust Accounts and all funds from time to time on deposit
in each of the Bank Accounts representing Collections on, or other proceeds of,
the foregoing and, in each case, all certificates and instruments, if any, from
time to time evidencing such funds, all investments made with such funds, all
claims thereunder or in connection therewith and all interest, dividends,
monies, instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing, and (v) all moneys due or to become due and all amounts
received or receivable with respect to any of the foregoing and all products and
proceeds of the foregoing.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the
parties hereto that all Notes are to be issued, countersigned and delivered and
that all of the Pledged Assets are to be held and applied, subject to the
further covenants, conditions, releases, uses and trusts hereinafter set forth,
and the Issuer and the Servicer, in each case, for itself and its successors,
does hereby covenant and agree to and with the Trustee, the Administrative Agent
and each of the foregoing's respective successors in said trust, for the benefit
of those who shall hold the Notes, or any of them, as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Whenever used in this Indenture,
capitalized terms, unless otherwise defined herein, have the meanings that
APPENDIX A assigns to such terms. In addition, this Indenture shall be
interpreted in accordance with the conventions set forth in PARTS B, C and D of
APPENDIX A.
Section 1.02 INCORPORATION BY REFERENCE TO TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms incorporated by reference in this
Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer or any other
obligor on the Notes, if any.
All other Trust Indenture Act terms used or incorporated by reference
in this Indenture that are defined by the Trust Indenture Act, defined by the
Trust Indenture Act's reference to another statute or defined by Commission rule
shall, in each case, have the meanings assigned to them therein.
Section 1.03 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or request by the Issuer to the Trustee
and/or the Administrative Agent to take any action under any provision of this
Indenture, the Issuer shall furnish to the Trustee and the Administrative Agent
(x) an Officer's Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, and (y) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent, if any, have been complied with;
PROVIDED, that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
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(b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the annual
certificate provided pursuant to SECTION 7.02(F)(V)) shall include:
(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, such Person
has made such examination or investigation as is necessary to enable it to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of
each such Person, such covenant or condition has been complied with.
Section 1.04 FORM OF DOCUMENTS DELIVERED TO TRUSTEE AND/OR
ADMINISTRATIVE AGENT. In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.05 ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by any Noteholders, or a specified
percentage or number of Noteholders, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Noteholders, in
person or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and/or the Administrative Agent, as
herein provided, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes
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referred to as the "ACT" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to SECTION 11.02) conclusive in favor of the Trustee, the
Administrative Agent and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by an acknowledgement of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than
such signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of the signer's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
and/or the Administrative Agent, as applicable, deems sufficient.
(c) The ownership of the Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of any Noteholder or the Noteholders of any Series of Notes
shall bind every future holder of the same Note or Series of Notes and the
holder of any Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, suffered or
omitted to be done by the Trustee, the Administrative Agent or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.
(e) The Issuer may, but shall not be obligated to, fix a record date
for the purpose of determining the Noteholders entitled to take any action under
this Indenture by vote or consent. Such record date shall be the later of 30
days prior to the first solicitation of such consent or vote or the date of the
most recent list of Noteholders, furnished by or to the Administrative Agent
pursuant to SECTION 12.01 prior to such solicitation. If a record date is
fixed, those persons who were Noteholders at such record date (or their duly
designated proxies), and only those persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such persons continue to be so after such record date.
Section 1.06 CONFLICT WITH TRUST INDENTURE ACT. If at any time this
Indenture becomes or is required to become qualified under the Trust Indenture
Act and any provision hereof limits, qualifies or conflicts with the duties
imposed by any of
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Sections 310 through 317, inclusive, of the Trust Indenture Act through the
operation of Section 318(c) thereof, such imposed duties shall control.
Section 1.07 BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person (other than the parties
hereto or thereto and their successors hereunder, any Paying Agent and the
Noteholders) any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 1.08 INCORPORATION OF RECITALS. The Recitals of the Issuer
set forth above in this Indenture are hereby incorporated by this reference
hereto as if, and to the same extent that, such Recitals were contained in the
body of this Indenture.
ARTICLE II
CONVEYANCE OF CERTAIN ASSETS; ISSUANCE
OF NOTES
Section 2.01 ACCEPTANCE BY TRUSTEE. The Trustee hereby acknowledges
its acceptance on behalf of the Noteholders of the security interest in all
Pledged Assets granted pursuant to the Granting Clause of this Indenture and
declares that it shall maintain such security interest upon the trust herein set
forth, for the benefit of all Noteholders on the terms and subject to the
conditions hereinafter set forth.
Section 2.02 CERTAIN MATTERS REGARDING THE GRANT. (a) In connection
with the grant to the Trustee as described in the Granting Clause above, the
Issuer and the Servicer have on or prior to the Closing Date recorded and filed
or caused to be recorded and filed, at the Issuer's expense, financing
statements (including assignments of pre-existing financing statements and
continuation statements with respect to any such financing statements when
applicable) with respect to the Pledged Assets (whether now existing or
hereafter created) meeting the requirements of applicable state law in such
manner and in such jurisdictions as the Issuer and the Servicer reasonably
determined were necessary or desirable to perfect, and maintain perfection of,
the security interests granted hereunder and the ownership interests of the
Issuer in the Receivables and Related Assets purchased from the Sellers.
Neither the Trustee nor the Administrative Agent shall be under any obligation
whatsoever to file such financing statements, or continuation statements to such
financing statements, or to make any other filing under the UCC in connection
with such transfer or grant. In connection with the grant to the Trustee as
described in the Granting Clause above, the Issuer and the Servicer further
agree to deliver to the Trustee each Pledged Asset (including any original
documents
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or instruments included in the Pledged Assets as are necessary to effect such
grant) in which the grant of a security interest is perfected under the UCC or
otherwise by possession. The Issuer or the Servicer shall deliver each such
Pledged Asset in its possession to the Trustee, at the Issuer's or the
Servicer's, as applicable, own expense, immediately upon the effectiveness of
the grant of the security interest in any such Pledged Asset to the Trustee
pursuant to the Granting Clause hereof.
(b) In connection with the grant to the Trustee as described in the
Granting Clause above, the Servicer shall, on behalf of the Issuer, on or prior
to the Closing Date, mark or cause to be marked, the master data processing
records of each Seller evidencing the Receivables with the following legend:
"THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD OR CONTRIBUTED
TO STONE RECEIVABLES CORPORATION PURSUANT TO A RECEIVABLES
PURCHASE AGREEMENT, DATED AS OF MARCH 14, 1995 AMONG [NAME OF
ORIGINATING SELLER] AND VARIOUS OTHER AFFILIATED CORPORATIONS, AS
THE SELLERS, AND STONE RECEIVABLES CORPORATION AS THE PURCHASER;
AND SUCH RECEIVABLES HAVE BEEN FURTHER PLEDGED AND ASSIGNED TO
MARINE MIDLAND BANK, AS TRUSTEE, PURSUANT TO A MASTER TRUST
INDENTURE AND SECURITY AGREEMENT, DATED AS OF MARCH 14, 1995,
AMONG STONE RECEIVABLES CORPORATION, STONE CONTAINER CORPORATION,
AS SERVICER, MARINE MIDLAND BANK, AS TRUSTEE, AND BANKERS TRUST
COMPANY, AS ADMINISTRATIVE AGENT."
Section 2.03 REPRESENTATIONS AND WARRANTIES OF THE ISSUER RELATING TO
THE PLEDGED ASSETS.
(a) REPRESENTATIONS AND WARRANTIES. The Issuer hereby represents and
warrants that:
(i) VALID GRANT. The grant in favor of the Trustee made by the
Issuer pursuant to this Indenture constitutes a valid grant, pledge and
hypothecation of a security interest in and lien on all of the Issuer's
right, title and interest in, to and under the Receivables and the Related
Transferred Assets, which lien and security interest is perfected and of
first priority under the UCC and otherwise, enforceable against creditors
of, and purchasers from, the Issuer and the applicable Seller, free and
clear of any Adverse Claim (other than any Permitted Adverse Claim).
(ii) QUALITY OF TITLE.
(A) Each Receivable and Related Transferred Asset included in
the Pledged Assets is owned by the Issuer free and clear of any
Adverse Claim (other than any
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Permitted Adverse Claim); and, on or prior to the Closing Date, the
Issuer and the Servicer have made, or have caused to be made, all
filings and have taken all other action under applicable law in each
relevant jurisdiction in order to protect and perfect the Issuer's and
the Trustee's respective interests in such Receivables, such Related
Transferred Assets and the funds in the Trust Accounts against all
creditors of, and purchasers from, the Issuer and the Sellers.
(B) No effective financing statement or other instrument similar
in effect that covers all or part of any Receivable included in the
Pledged Assets, any Related Transferred Asset, any other Pledged Asset
or any interest in any thereof is on file in any recording office
except such as may be filed (1) in favor of a Seller in accordance
with the Contracts, (2) in favor of the Issuer pursuant to the
Purchase Agreement (and assigned to the Trustee pursuant to this
Indenture), and (3) in favor of the Trustee, for the benefit of the
Noteholders, in accordance with this Indenture.
(C) No acquisition (including, without limitation, pursuant to
the Purchase Agreement, the Pre-Existing StoneFin Purchase Agreement,
the Pre-Existing StoneFin II Purchase Agreement, the Merger or
otherwise) of any Receivable or Related Transferred Asset by the
Issuer, StoneFin or StoneFin II nor any grant of security herein to
the Trustee constitutes a fraudulent transfer or fraudulent conveyance
under the United States Bankruptcy Code or applicable state bankruptcy
or insolvency laws or is otherwise void or voidable or subject to
subordination under similar laws or principles or for any other
reason.
(D) The transfers of such Receivables and Related Transferred
Assets (i) prior to the Merger, by each applicable Seller to StoneFin
pursuant to the Pre-Existing StoneFin Purchase Agreement (ii) prior to
the Merger, by each applicable Seller to StoneFin II pursuant to the
Pre-Existing StoneFin II Purchase Agreement, and (iii) by each
applicable Seller to the Issuer pursuant to the Purchase Agreement, in
each case, constitutes a true and valid assignment and transfer for
consideration of such Receivables and Related Transferred Assets under
applicable state law (and not merely a pledge of such Receivables and
Related Transferred Assets for security purposes), enforceable against
the creditors of the applicable Seller, and any Receivables and
Related Transferred Assets so transferred do not constitute property
of the Sellers.
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(iii) GOVERNMENTAL APPROVALS. With respect to each Receivable and
Related Transferred Asset, all consents, licenses, approvals or
authorizations of, or notices to or registrations, declarations or filings
with, any Governmental Authority required to be obtained, effected or made
by the Sellers, the Servicer, the Issuer, StoneFin or StoneFin II in
connection with (a) the conveyance of such Receivable and Related
Transferred Asset by (i) the Sellers to the Issuer or (ii) in the case of
the Receivables and Related Transferred Assets previously conveyed to
StoneFin or StoneFin II under the Pre-Existing StoneFin Purchase Agreement
or the Pre-Existing StoneFin II Purchase Agreement, respectively, by the
applicable Sellers to StoneFin or StoneFin II, respectively, and (b) the
grant of security in the Pledged Assets by the Issuer to the Trustee
pursuant to this Indenture, have, in each case, been duly obtained,
effected or given and are in full force and effect, except where the
failure to so obtain, effect or give or to so maintain in full force and
effect any such consent, license, approval, authorization, notice,
registration, declaration or filings would not, individually or in the
aggregate, have a Material Adverse Effect.
(iv) ELIGIBLE RECEIVABLES. (A) On the date on which a Seller
transfers a Receivable to the Issuer, and on the date upon which the Issuer
grants such Receivable to the Trustee as security hereunder, unless
otherwise identified by the Servicer in the Daily Report for such date,
such Receivable is an Eligible Receivable, and (B) on the date of each
Daily Report or Settlement Statement which identifies a Receivable as an
Eligible Receivable, such Receivable is an Eligible Receivable.
(b) NOTICE OF BREACH. The representations and warranties set forth
in this SECTION 2.03 shall survive the grant and assignment of the Receivables
and the Related Transferred Assets to the Trustee. Upon discovery by the
Issuer, the Servicer, the Trustee or the Administrative Agent of a breach of any
of the representations and warranties set forth in this SECTION 2.03, the party
discovering such breach shall give written notice to the other parties to this
Indenture within three Business Days following such discovery. The obligations
of the Trustee and the Administrative Agent in respect of discovering any such
breach are limited as provided in SECTION 11.02(g).
Section 2.04 NO ASSUMPTION OF OBLIGATIONS RELATING TO RECEIVABLES,
RELATED TRANSFERRED ASSETS OR CONTRACTS. The assignment, pledge, grant, setover
and conveyance described in the Granting Clause does not constitute and is not
intended to result in a creation or an assumption by the Trustee, the
Administrative Agent or any Noteholder of any obligation of the Servicer, the
Issuer, any Seller or any other Person in
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connection with the Receivables or the Related Transferred Assets or under the
related Contracts or any other agreement or instrument relating thereto,
including any obligation to any Obligors. None of the Trustee, the
Administrative Agent or any Noteholder shall have any obligation or liability to
any Obligor or other customer or client of the applicable Seller (including any
obligation to perform any of the obligations of such Seller to any Obligor under
any such Receivables, the related Contracts or any other related purchase orders
or other agreements or otherwise). No such obligation or liability is intended
to be assumed by the Trustee, the Administrative Agent or any Noteholder
hereunder, and any such assumption is hereby expressly disclaimed.
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
THE SERVICER. (a) The servicing, administering and enforcement of collection
of the Receivables and the Related Transferred Assets shall be conducted by the
Persons designated as Servicer under the Purchase Agreement from time to time.
Until the Trustee gives a Termination Notice to Stone Container pursuant to
SECTION 10.01, the Issuer hereby agrees that Stone Container will continue to be
designated by it as, and Stone Container hereby agrees to act as, the Servicer
under the Purchase Agreement and the other Transaction Documents with respect to
the Receivables and the Related Transferred Assets, and the Noteholders, by
their acceptance of the Notes, consent to Stone Container acting as the Servicer
on behalf of the Issuer.
(b) TERMINATION. The duties of the Servicer (and each Sub-Servicer)
under this Indenture shall automatically cease and terminate upon satisfaction
and discharge of this Indenture pursuant to SECTION 13.01. Notwithstanding the
satisfaction and discharge of this Indenture, the duties of the Servicer (and of
any Sub-Servicer) under the Purchase Agreement shall continue until otherwise
terminated as provided in the Purchase Agreement.
(c) RESIGNATION OF THE SERVICER. If the Servicer makes a
determination that it must resign for the reasons stated in SECTION 6.02(c) of
the Purchase Agreement, the Servicer shall, prior to the tendering of its
resignation, deliver to the Trustee and the Administrative Agent an Opinion of
Counsel for the Servicer, in form and substance reasonably satisfactory to the
Trustee and Administrative Agent, confirming the satisfaction of the conditions
set forth in such Section. No resignation by the Servicer shall become
effective until the Administrative Agent or a Successor Servicer shall have
assumed the responsibilities and
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obligations of the Servicer in accordance with SECTION 10.02 hereof. If the
Servicer has tendered its resignation and no Successor Servicer has been
appointed, the Trustee may appoint, or may petition a court of competent
jurisdiction to appoint, a Successor Servicer hereunder. The Trustee or the
Administrative Agent shall give prompt notice to the Applicable Rating Agencies
of the appointment of any Successor Servicer.
Section 3.02 DUTIES OF THE SERVICER AND THE ISSUER.
(a) DUTIES OF SERVICER IN GENERAL. The Servicer shall service and
administer the Receivables and the Related Transferred Assets in accordance with
SECTION 6.03 of the Purchase Agreement for the benefit of the Trustee and the
Noteholders to the same extent as if they were a party thereto. In addition to
the specific duties and powers granted thereunder, the Servicer or its designee
(including the Issuer) is hereby authorized and empowered, unless such power and
authority is revoked by the Trustee on account of the occurrence of a Servicer
Default pursuant to SECTION 10.01, (i) to instruct the Administrative Agent to
make withdrawals and payments from the Trust Accounts as set forth in this
Indenture and (ii) to make any filings, reports, notices, applications and
registrations with, and to seek any consents or authorizations from, the
Commission and any state securities authority on behalf of the Issuer as may be
necessary or appropriate to comply with any federal or state securities laws or
reporting requirements or other laws or regulations in connection with this
Indenture. So long as Stone Container or any other Stone Person acts as
Servicer, Stone Container, the Administrative Agent, the Trustee and the Issuer
hereby agree that the Issuer shall retain the power and authority to instruct
the Administrative Agent to make withdrawals and payments from the Trust
Accounts as described in clause (i) of the immediately preceding sentence unless
such power and authority is revoked by the Trustee pursuant to its rights
hereunder. The Administrative Agent shall promptly comply with the instructions
of the Issuer or the Servicer, as the case may be, to withdraw funds and make
payments from the Trust Accounts pursuant to the terms of this Indenture.
(b) IDENTIFICATION AND TRANSFER OF COLLECTIONS. Each of the Issuer
and the Servicer shall cause Collections and all other Pledged Assets that
consist of cash or cash equivalents to be deposited into the Bank Accounts and
the Trust Accounts pursuant to the terms and provisions of SECTION 3.03 and
ARTICLE IV and shall cause the Sellers to deposit all Collections into the Bank
Accounts and/or the Trust Accounts in accordance with the provisions of SECTION
6.01 of the Purchase Agreement. Following notification from a Seller to the
Servicer or the Issuer or discovery by the Servicer or the Issuer that
collections of any receivable or other intangible asset which is not a
Collection of a Receivable or a Related Transferred Asset have been deposited
into a Bank Account, the Master Collection
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Account or any Trust Account, the Servicer and the Issuer shall cause all such
collections to be segregated, apart and in different accounts, from the Bank
Accounts and the Trust Accounts. The Servicer and, to the extent applicable,
the Trustee and the Administrative Agent shall hold all such funds in trust,
separate and apart from such Person's other funds. On each Business Day, after
such misapplied collections have been reasonably identified by the Servicer or
the Issuer to the Administrative Agent, the Servicer and/or the Issuer shall
instruct the Administrative Agent to, and the Administrative Agent shall, turn
over to the appropriate Lockbox Bank, the Seller or any other applicable Stone
Person all such misapplied collections, LESS all reasonable and appropriate out-
of-pocket costs and expenses, if any, incurred by the Servicer and/or the Issuer
in collecting such receivables or other intangible assets.
Following notification from a Lockbox Bank that any item has been
returned or is uncollected and that such Lockbox Bank has not been otherwise
reimbursed pursuant to the terms of the applicable Lockbox Agreement for any
amounts it credited to the relevant Lockbox Account (and then transferred to the
Master Collection Account), the Servicer or the Issuer, as applicable shall
instruct the Administrative Agent to, and the Administrative Agent shall, turn
over to such Lockbox Bank Collections in such amount from Collections on deposit
in the Master Collection Account.
(c) MODIFICATION OF RECEIVABLES. The Servicer shall not, pursuant to
the authority granted to it under SECTION 6.03(b) of the Purchase Agreement,
extend, amend, or otherwise modify any Receivable except to the extent that such
extension, amendment or modification is permitted under this Indenture
(including, without limitation, SECTION 7.02(h)).
(d) DOCUMENTS AND RECORDS. At any time when Stone Container shall
not be the Servicer, the Issuer, to the extent that it is entitled to do so
under the Purchase Agreement, shall, upon the request of the then-acting
Servicer, cause each Seller to deliver to the Servicer, and the Servicer shall
hold in trust for the Issuer and the Trustee in accordance with their respective
interests, all Records that evidence or relate to the Receivables and Related
Transferred Assets of such Seller.
(e) IDENTIFICATION OF ELIGIBLE RECEIVABLES. The Servicer will (i)
establish and maintain such procedures as are necessary for determining no less
frequently than each Business Day whether each Receivable qualifies as an
Eligible Receivable, and for identifying, on any Business Day, all Receivables
which are not Eligible Receivables, and (ii) include in each Daily Report
information that shows whether, and to what extent, the Receivables described in
such Daily Report are Eligible Receivables.
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(f) AUTHORIZATION TO ACT AS THE ISSUER'S AGENT. Without limiting the
generality of SECTION 3.02(a), the Issuer hereby appoints the Servicer as its
agent for the following purposes: (i) specifying accounts to which payments are
to be made to the Issuer so long as such payments are made in accordance with
SECTION 3.03, (ii) to the extent the Servicer is not a Stone Person, making
transfers among, and deposits to and withdrawals from, all deposit accounts of
the Issuer for the purposes described in this Indenture, and (iii) to the extent
the Servicer is not a Stone Person, arranging payment by the Issuer of all fees,
expenses and other amounts payable by the Issuer pursuant to this Indenture
and/or the other Transaction Documents. The Issuer irrevocably agrees that (A)
it shall be bound by all actions taken by the Servicer pursuant to the preceding
sentence and (B) the Trustee, the Administrative Agent and the banks holding all
deposit accounts of the Issuer are entitled to accept and rely upon (without
liability) submissions, determinations, selections, specifications, transfers,
deposits and withdrawal requests, and payments from the Servicer on behalf of
the Issuer.
(g) REVOCATION OF POWER OF ATTORNEY. The power of attorney granted to
the Servicer by the Issuer hereunder and under the Purchase Agreement may be
revoked by the Trustee, and shall be revoked by the Issuer, on the date on which
the Trustee shall be entitled to exercise the powers granted to the Trustee
pursuant to SECTION 3.07(b) of this Indenture. In exercising its power granted
hereunder and under the Purchase Agreement, the Servicer shall take directions
from the Trustee, if any, arising out of the exercise of the rights granted
under SECTION 11.18 of this Indenture.
(h) TURNOVER OF COLLECTIONS. If the Servicer, the Issuer or any of
their respective agents or representatives shall at any time receive any cash,
checks or other instruments constituting Collections (including any payments
received by the Issuer on account of any Noncomplying Receivables Adjustment or
Dilution Adjustment), such recipient shall segregate such payments and hold such
payments in trust for the Trustee, on behalf of the Noteholders, and shall,
promptly upon receipt (and in any event within one Business Day following
receipt), remit all such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to a Bank Account or the Master
Collection Account.
Section 3.03 LOCKBOX ACCOUNTS; CONCENTRATION ACCOUNTS.
(a) Each Lockbox Account shall be subject to a Lockbox Agreement.
Each Lockbox Bank shall be instructed to remit, on a daily basis (but subject to
the Lockbox Bank's minimum deposit requirements and/or customary funds
availability schedule), all amounts deposited in the Lockbox Accounts maintained
with it to a Concentration Account or the Master Collection Account. Any
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Concentration Account shall be maintained as a segregated trust account pursuant
to a Concentration Account Agreement. Except as expressly provided in this
Indenture and the applicable Account Agreements, none of the Sellers, the
Issuer, the Servicer, or any Person claiming by, through or under either Seller,
the Issuer or the Servicer shall have any control over the use of, or any right
to withdraw any item or amount from, any Lockbox Account or Concentration
Account. The Trustee and the Administrative Agent are hereby irrevocably
authorized and empowered, each as the Issuer's attorney-in-fact, to endorse any
item deposited in a lockbox or presented for deposit in any Lockbox Account or
Concentration Account requiring the endorsement of the Issuer or any Seller,
which authorization is coupled with an interest and is irrevocable. Neither the
Trustee nor the Administrative Agent shall have any duties or liabilities with
respect to (x) the disposition of cash received in the Bank Accounts or (y) the
compliance by any Lockbox Bank or Concentration Account Bank with the terms of
the Account Agreements and, to the extent the terms and provisions of any
Account Agreement purport to impose any duties or liabilities on the
Administrative Agent and/or the Trustee, the terms and provisions of this
Indenture shall supersede the terms of such Account Agreements.
(b) Each of the Issuer and the Servicer shall instruct (or shall
cause each of the Sellers to instruct) all Obligors to make all payments due to
the Issuer or any such Seller relating to or constituting Collections (or any
proceeds thereof) (i) to lockboxes maintained at the Lockbox Banks for deposit
in a Lockbox Account or a Concentration Account or (ii) directly to a Lockbox
Account or a Concentration Account. If the Issuer, the Servicer or any of the
Sellers receives any Collections or any other payment of proceeds of any other
Related Transferred Asset, the Servicer shall cause such recipient to (x)
segregate such payment and hold such payment in trust for the benefit of the
Trustee and the Noteholders and (y) as soon as practicable, but no later than
the first Business Day following receipt of such item by such Person, deposit
such payment in a Bank Account or the Master Collection Account. The Servicer
shall, and shall cause the Issuer and the Sellers to, use reasonable efforts to
prevent the deposit of any amounts other than Collections in any Lockbox Account
or Concentration Account.
(c) (i) The Issuer and the Servicer may, from time to time after the
Closing Date, designate a new account as a Lockbox Account or a Concentration
Account, and such account shall become a Lockbox Account or Concentration
Account (and the bank at which such account is maintained shall become a Lockbox
Bank or a Concentration Bank for purposes of this Indenture); PROVIDED, HOWEVER,
that the Trustee and the Administrative Agent shall have received not less than
ten Business Days' prior written notice of the account and/or the bank that is
proposed to be added as a Bank Account or an Account Bank (as applicable) and,
not less than five Business Days prior to the effective date of any such
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proposed addition, the Trustee and the Administrative Agent shall have received
(x) counterparts of a Lockbox Agreement or a Concentration Account Agreement, as
applicable, with each new Account Bank, duly executed by such new Account Bank
and all other parties thereto and (y) copies of all other agreements and
documents signed by the new Account Bank or such other parties with respect to
any new Lockbox Account or Concentration Account, as applicable.
(ii) The Issuer and the Servicer may, from time to time after the
Closing Date, terminate an account as a Lockbox Account or a Concentration
Account or a bank as an Account Bank; PROVIDED, HOWEVER, that (x) no such
termination shall occur unless the Trustee and the Administrative Agent shall
have received, not less than five Business Days prior to such termination, (a)
written notice of the account and/or the bank that are proposed to be terminated
as a Bank Account or an Account Bank (as applicable) and (b) counterparts of an
agreement, duly executed by the applicable Account Bank and reasonably
satisfactory in form and substance to the Trustee and the Administrative Agent,
pursuant to which such Account Bank agrees that, if it receives any funds or
items that constitute Collections on or after the effective date of the
termination of the applicable Bank Account or the effective date of its
termination as an Account Bank (as the case may be), such Account Bank or former
Account Bank (as applicable) shall cause such funds and items to be delivered in
the form received to another Lockbox or transferred to another Lockbox Account,
Concentration Account or the Master Collection Account promptly after such
Account Bank or former Account Bank (as applicable) discovers that it has
received any such funds or items, and (y) notwithstanding the foregoing clause
(x), the Issuer and the Servicer may at any time establish alternative
collection procedures that do not require the use of Lockbox Accounts with the
prior consent of any Enhancement Provider and upon satisfaction of the Rating
Agency Condition. The Administrative Agent shall cooperate with the Servicer in
executing any acknowledgments required by an Account Bank under the terms of the
Account Agreements in connection with this Section 3.03(c)(ii).
(d) The Servicer shall instruct each Concentration Account Bank (if
any), to transfer on a daily basis in same day funds to the Master Collection
Account all collected funds on deposit in the Concentration Account maintained
with such Concentration Account Bank. All such transfers shall be made in
accordance with the relevant Concentration Account Agreement.
(e) The Trustee hereby appoints the Administrative Agent as its agent
and attorney-in-fact for purposes of executing any Account Agreements or any
amendments thereto or notices regarding the effectiveness thereof.
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Section 3.04 RECORDS OF THE SERVICER AND REPORTS TO BE PREPARED BY
THE SERVICER AND ISSUER.
(a) RECEIVABLES REVIEWS. The Servicer shall (and shall cause each of
the Sellers to) provide the Trustee access to the documentation regarding the
Receivables in such cases where the Trustee is required in connection with the
enforcement of the rights of Noteholders, by applicable statutes or regulations
or pursuant to the terms hereof, to review such documentation, such access being
afforded without charge but only (i) upon reasonable request, (ii) during normal
business hours, (iii) subject to the Servicer's (or, to the extent applicable,
any such Seller's) normal security and confidentiality procedures and (iv) at
reasonably accessible offices in the continental United States designated by the
Servicer (or, to the extent applicable, any such Seller) and reasonably
acceptable to the Trustee. In addition, the Servicer shall (and shall cause
each of the Sellers to) deliver to the Administrative Agent by no later than
10:00 a.m. (New York City time) on the Report Date for each month, computer
tapes containing the information necessary to facilitate the preparation by the
Administrative Agent of a Settlement Statement as provided in Section 3.04(c).
(b) DAILY REPORTS. Prior to 10:45 a.m., Chicago time, on each
Business Day, the Servicer and/or the Issuer shall prepare and deliver to the
Administrative Agent and the Paying Agent (if other than the Administrative
Agent) a report substantially in the form of EXHIBIT A (as the same may be
supplemented in accordance with any Supplement) or in such other form as is
reasonably acceptable to the Trustee, the Issuer and the Servicer (each such
report in the form of EXHIBIT A (as supplemented) or such other forms being
herein called a "DAILY REPORT").
(c) SETTLEMENT STATEMENT. On or prior to 10:45 a.m., Chicago time,
on each Report Date, the Servicer and/or the Issuer shall prepare and deliver to
the Trustee, the Administrative Agent, the Applicable Rating Agencies, and the
Paying Agent (if other than the Administrative Agent) a report substantially in
the form of EXHIBIT B (as the same may be supplemented in accordance with any
Supplement) or in such other form as is reasonably acceptable to the Trustee,
the Administrative Agent, the Issuer and the Servicer (each such report in the
form of EXHIBIT B (as supplemented) or such other forms being herein called a
"SETTLEMENT STATEMENT"). On each Report Date, the Administrative Agent will
verify the mathematical computations contained in such report and shall notify
the Servicer and each of the Applicable Rating Agencies of any discrepancies
therein, whereupon the Servicer shall deliver to the Applicable Rating Agencies
within 5 Business Days thereafter, a certificate describing the nature and cause
of such discrepancies and the actions that the Servicer proposes to take with
respect thereto.
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In addition, within 7 Business Days after the Payment Date, the Administrative
Agent (provided it has received the computer tapes described in the last
sentence of clause (a) above) shall generate a concurrent Settlement Statement
on its computer system utilizing the computer tapes provided by the Servicer and
the Seller. The Administrative Agent shall deliver a copy of such Settlement
Statement generated by it to each of the Applicable Rating Agencies and the
Servicer. The Servicer shall compare its Settlement Statement to the Settlement
Statement prepared by the Administrative Agent and shall deliver within 5 days
after its receipt of such report a certificate to the Applicable Rating Agencies
and the Administrative Agent describing the nature and cause of any such
discrepancies between such reports and setting forth the actions that the
Servicer proposes to take with respect thereto. Notwithstanding anything
contained herein to the contrary, the Administrative Agent shall have no
obligation to confirm the accuracy of any of the information provided to it on
the computer tapes or by it on the Settlement Statement generated by it, and
shall have no liability to any Person in connection therewith.
(d) NOTICE OF SELLER CHANGE EVENTS; SUPPLEMENTS TO SETTLEMENT
STATEMENTS. SECTIONS 2.06 and 2.07 of the Purchase Agreement describe
circumstances under which (i) Subsidiaries of Stone Container may be added to
the Program as Sellers and/or any Seller may add or terminate certain classes of
accounts receivable as Receivables to be sold to the Issuer and (ii) certain
Sellers may terminate their status as Sellers under the Purchase Agreement (each
event being herein called a "SELLER CHANGE EVENT"). Those Sections of the
Purchase Agreement require Stone Container to give written notice to the Issuer
and the Servicer (if other than Stone Container) of the occurrence of a Seller
Change Event not less than 30 days prior to the occurrence thereof, and each of
the Issuer and the Servicer (if other than Stone Container) hereby agrees to
give prompt written notice of its receipt of any such notice to the Trustee, the
Administrative Agent and the Applicable Rating Agencies. Within five Business
Days after its giving any such notice to the Trustee and the Administrative
Agent (or such later date, as specified in such notice, on which the applicable
Seller Change Event shall become effective), the Servicer shall deliver to the
Trustee and the Administrative Agent a supplement to the Settlement Statement
then in effect, which supplement shall show (A) the calculation or recalculation
of the Required Reserves and Subordination Deficits for each Series (together
with all component ratios thereof) reflecting the addition of accounts
receivable originated by any Seller or any such Subsidiary that is being added
to the Purchase Agreement as a Seller, or the exclusion of any Receivables
originated by any such Subsidiary that is terminating its status as a Seller or
eliminating specified accounts receivable (as applicable), and (B) the
calculation or recalculation of the Purchase Price Percentage (together with
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each component thereof) reflecting the addition of any such Subsidiary to the
Program as a Seller or any class of accounts receivable being added to or
eliminated from the Program. For purposes of all calculations hereunder and
under the Purchase Agreement, the recalculated Required Reserves and
Subordination Deficits for each Series and Purchase Price Percentage (together,
in each case, with the recalculated components thereof) shall supersede and/or
supplement the calculation of such items in the then outstanding Settlement
Statement, effective as of the fifth Business Day following the Servicer's
giving of such notice to the Trustee and the Administrative Agent (or such later
date, as specified in such notice, on which the applicable Seller Change Event
shall become effective).
(e) NOTICES TO APPLICABLE RATING AGENCIES. The Servicer shall notify
each of the Applicable Rating Agencies promptly after becoming aware of the
occurrence of any Pay-Out Event, Liquidation Event, Event of Default, Unmatured
Pay-Out Event, Unmatured Liquidation Event or Unmatured Event of Default.
Section 3.05 MONTHLY SERVICER'S CERTIFICATE. On each Report Date,
the Servicer shall deliver to the Trustee, the Administrative Agent, the Paying
Agent, the Issuer and the Applicable Rating Agencies a certificate of an
Authorized Officer of the Servicer substantially in the form of EXHIBIT C
hereto, with such additions as may be required by any Supplement.
Section 3.06 ANNUAL SERVICING REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS; FORMS 10-Q AND 10-K. (a) (i) On or before 180 days after the
Closing Date and annually thereafter (on the anniversary of such date after the
Closing Date, or if such date is not a Business Day, the next succeeding
Business Day), the Servicer shall, as an expense of the Servicer paid out of the
Servicing Fee, cause Price Waterhouse LLP or another firm of nationally
recognized independent public accountants (which may also render other services
to the Servicer, the Sellers or the Issuer) to furnish a report to the Trustee,
the Administrative Agent, the Servicer, the Applicable Rating Agencies and the
Issuer (which report shall be addressed to the Trustee and the Administrative
Agent). The report to be furnished by such accountants shall set forth the
results of such accountants' performance of certain procedures that have been
substantially determined prior to the Closing Date with respect to the
Settlement Statements and Daily Reports delivered to the Trustee and the
Administrative Agent pursuant to SECTION 3.04 during the prior year (or, in the
case of the first such report, such lesser period of time since the Closing
Date). Such procedures to be performed and reported upon will be substantially
consistent with those set forth on EXHIBIT E.
(ii) Each such accountants' report shall state that the accountants
have compared the amounts contained in the
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Settlement Statements and a sample randomly selected from all Daily Reports
delivered to the Administrative Agent during the period covered by such report
with the accounting records (including computer records) from which such amounts
were derived and that the amounts are in agreement with such documents and
records, except for such exceptions as shall be set forth in such report.
(b) Within 30 days after the date such reports are required to be
filed with the Commission under the Securities Exchange Act of 1934 (as amended)
(which dates, as of the Closing Date, are 45 days after the end of each of the
first three calendar quarters (in the case of Form 10-Q's) and 90 days after the
end of the calendar year (in the case of Form 10-K's)), the Servicer shall
provide the Trustee, the Administrative Agent, and each of the Applicable Rating
Agencies with copies of each Quarterly Report on Form 10-Q and each Annual
Report on Form 10-K of the Servicer.
Section 3.07 RIGHTS OF THE TRUSTEE.
(a) NOTICE TO ACCOUNT BANKS. The Trustee has (for the benefit of the
Noteholders) an exclusive lien on and in the Bank Accounts, and the Issuer shall
take any action that the Trustee may reasonably request to effect or evidence
such lien. Neither the Issuer nor the Servicer shall have any authority to make
withdrawals from, or to direct the Account Banks as to the disposition of any
amounts on deposit in, the Bank Accounts except as otherwise expressly provided
herein or in the Account Agreements. At any time following the occurrence of a
Servicer Default, the Trustee is hereby authorized to give notice to the Account
Banks, as provided in the Account Agreements, of the revocation of the Issuer's
and the Servicer's authority to give instructions or take any other actions with
respect to the Bank Accounts that the Issuer or the Servicer would otherwise be
authorized to give or to take pursuant to SECTIONS 3.02 and 3.03.
(b) RIGHTS UPON SERVICER DEFAULT. At any time following the
designation of a Servicer other than Stone Container pursuant to SECTION 10.01
until such time as a Successor Servicer (other than the Administrative Agent)
has been appointed pursuant to SECTION 10.02:
(i) The Trustee may direct any Obligors of Receivables to pay all
amounts payable under any Receivable or any Related Transferred Assets
directly to the Trustee or its designee (including, without limitation, the
Administrative Agent); PROVIDED, HOWEVER, that the Trustee shall provide
the Issuer and each Seller with a copy of such notice at least one Business
Day prior to sending it to any Obligor and consult in good faith with the
Issuer and the Sellers as to the text of such notice.
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(ii) The Trustee may direct any Seller to make payment of all amounts
payable to the Issuer under any Transaction Document to which such Seller
is a party directly to the Trustee or its designee (including, without
limitation, the Administrative Agent).
(iii) The Issuer and the Servicer (if a Stone Person) shall, at their
sole expense to be allocated between themselves as they deem appropriate,
give notice of the Trustee's interest in the Receivables and the Related
Transferred Assets to each Obligor and direct that payments be made
directly to the Trustee or its designee (including, without limitation, the
Administrative Agent).
(iv) The Issuer shall, and shall cause each Seller to, at the
Trustee's request and at such Seller's expense as provided in the Purchase
Agreement, (A) assemble all of the Records which are necessary or
appropriate to collect the Receivables and Related Transferred Assets, and
shall make the same available to the Trustee at one or more places selected
by the Trustee or its designee (including, without limitation, the
Administrative Agent), (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections in a manner
acceptable to the Trustee and shall, promptly upon receipt (and, subject to
SECTION 3.02(h), in no event later than the first Business Day following
receipt), remit all such cash, checks and instruments, duly endorsed or
with duly executed instruments of transfer, to the Trustee or its designee
(including, without limitation, the Administrative Agent) and (C) permit,
upon not less than two Business Days' prior written notice, the
Administrative Agent or any such interim Servicer and, in either case, any
of such Person's agents, employees and assignees access to the Issuer's
and/or the Seller's respective facilities and their respective Records.
(c) Each of the Issuer and the Servicer hereby authorizes the Trustee
(and its designees, including, without limitation the Administrative Agent) for
the benefit of the Noteholders, from time to time after the designation of a
Servicer other than Stone Container pursuant to SECTION 10.01 (including,
without limitation, the Administrative Agent), to take any and all steps in the
Issuer's name and on behalf of the Issuer and the Servicer which are necessary
or appropriate, in the reasonable determination of the Trustee or such designee
to collect all amounts due under any and all Receivables or Related Transferred
Assets, including endorsing the name of the Issuer or any of the Sellers on
checks and other instruments representing Collections and enforcing such
Receivables and the Related Transferred Assets.
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(d) The Issuer hereby irrevocably appoints the Trustee and its
designees (including, without limitation, the Administrative Agent) to act as
the Issuer's attorney-in-fact, with full authority in the place and stead of the
Issuer and in the name of the Issuer or otherwise, from time to time after the
designation of a Servicer other than Stone Container pursuant to SECTION 10.01,
to take (subject to SECTION 11.18 hereof) any action and to execute any
instrument or document that the Trustee or any such designee, in its reasonable
determination, may deem necessary to accomplish the purposes of this Indenture,
including:
(i) to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any Receivable or any Related Transferred Asset;
(ii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (i)
above;
(iii) to file any claims or take any action or institute any
proceedings which the Trustee or any such designee in its reasonable
determination may deem necessary or appropriate for the collection of any
of the Receivables or any Related Transferred Asset or otherwise to enforce
the rights of the Trustee and the Noteholders with respect to any of the
Receivables or any Related Transferred Asset; and
(iv) to perform the affirmative obligations of the Issuer under any
Transaction Document.
The Issuer hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this SECTION 3.07(d) is coupled with an interest and shall
be irrevocable.
(e) It is expressly understood and agreed that neither the Trustee
nor the Administrative Agent shall be under any duty to exercise the rights,
authorizations and powers vested in the Trustee (or its designees) under this
SECTION 3.07 absent the written direction of the Majority Noteholders and that
the Trustee shall be entitled to refrain from such exercise to the extent
provided in Article XI of this Indenture.
Section 3.08 ONGOING RESPONSIBILITIES OF STONE CONTAINER. Anything
herein to the contrary notwithstanding:
(a) If at any time Stone Container shall not be the Servicer, Stone
Container shall, and shall cause its Subsidiaries to, deliver all
Collections received or deemed received by it or its Subsidiaries to the
Successor Servicer will deposit such amounts into the Bank Accounts upon
its
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receipt thereof no later than one Business Day after receipt or deemed
receipt thereof and the Administrative Agent shall distribute such
Collections in accordance with the terms and provisions of Article IV of
this Indenture to the same extent as if such Collections had actually been
received from the related Obligor on the applicable dates. So long as
Stone Container or any of its Subsidiaries shall hold any Collections or
deemed Collections, each of them shall hold such amounts in trust (and
separate and apart from its own funds) and shall clearly mark its records
to reflect that such assets belong to the Issuer and are subject to the
collateral interest of the Trustee. Stone Container hereby grants to the
Trustee or the Administrative Agent (in each case, for the benefit of the
Noteholders) an irrevocable power of attorney, with full power of
substitution, coupled with an interest, upon the occurrence of a Servicer
Default at any time while Stone Container shall be acting as the Servicer
hereunder, to take in the name of Stone Container, in its capacity as
Servicer hereunder, all steps necessary or appropriate to endorse,
negotiate or otherwise realize on any writing or other right of any kind
held by or transmitted to Stone Container or transmitted to and received
by the Trustee or the Administrative Agent (whether or not from Stone
Container) in connection with any Receivable or Related Transferred Asset.
(b) Stone Container hereby irrevocably agrees that, if at any time it
shall cease to be the Servicer hereunder, it shall act (if the then current
Servicer so requests) as the data processing agent of the Servicer and, in
such capacity, Stone Container shall conduct (and shall cause any other
necessary Persons to conduct) the data processing functions of the
administration of the Receivables, the Related Transferred Assets and the
Collections thereon in substantially the same way that Stone Container (or
its Sub-Servicers) conducted such data processing functions while Stone
Container acted as the Servicer. Stone Container and each such other
Person shall be entitled to reasonable compensation for such service to be
paid from the Servicing Fee.
(c) Notwithstanding any termination of Stone Container as Servicer
hereunder, Stone Container shall continue to indemnify the Trustee and the
Administrative Agent on the terms set out in SECTION 11.09 with respect to
any matters arising at a time when Stone Container was acting as Servicer
hereunder.
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Section 3.09 FURTHER ACTION EVIDENCING TRANSFER AND GRANT.
(a) Each of the Issuer and the Servicer agrees that from time to
time, as an expense of the Servicer paid out of the Servicing Fee, it will
promptly execute and deliver (or cause the relevant Sub-Servicer to execute and
deliver) all further instruments and documents, and will promptly take all
further action (or cause the relevant Seller or Sub-Servicer to take all further
action) that may be reasonably required in order to perfect, protect or more
fully evidence (x) the ownership interest of the Issuer in the Transferred
Assets acquired pursuant to the Purchase Agreement and (y) the grant of security
hereunder, or to enable the Trustee (or its designees) and the Noteholders to
exercise or enforce any of their rights hereunder or under any other Transaction
Document. Without limiting the generality of the foregoing, each of the Issuer
and the Servicer shall, and shall cause each of the applicable Sellers to:
(i) execute and file such financing or continuation statements,
or amendments thereto or assignments thereof, and such other
instruments or notices, as may be required from time to time pursuant
to SECTIONS 2.03(a)(ii)(A) and 7.02(c); and
(ii) mark its master data processing records that evidence or
list Receivables or Related Transferred Assets as described in
SECTION 2.02(b).
The Servicer shall cause all financing statements, continuation statements
and all amendments and assignments relating thereto and any other necessary
documents relating to the rights and interests of the Trustee for the benefit of
the Noteholders in the Pledged 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, maintain
and protect the rights and interests of the Trustee hereunder for the benefit of
the Noteholders in all property comprising the Pledged Assets. The Servicer
shall deliver to the Trustee file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. The Issuer shall, and shall
cause each of the Sellers to, cooperate fully with the Servicer in connection
with the obligations set forth above and will execute any and all documents
which are reasonably required to fulfill the intent of this SECTION 3.09.
(b) If (i) The Issuer or the Servicer fails to perform any of its
agreements or obligations under any Transaction Document to which it is a party
and does not remedy such failure within the applicable cure period, if any, and
(ii) the Trustee
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in good faith reasonably believes that the performance of such agreements and
obligations is necessary or appropriate to protect the interests of the
Noteholders under this Indenture, then the Trustee or its designees may (but
shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the reasonable expenses of the Trustee or such
designee incurred in connection therewith shall be payable by the Servicer (if a
Stone Person) as provided in SECTION 11.09 and/or by the Issuer as provided in
SECTION 7.03, as applicable. If, at any time, the Issuer or the Servicer fails
to file or cause to be filed any financing statement or continuation statement,
or amendment thereto or assignment thereof, that is required to be filed
pursuant to this Indenture or any of the other Transaction Documents, the
Trustee may (but shall not be obligated to), and the Issuer and the Servicer
hereby authorize the Trustee to, file such financing or continuation statements,
and amendments thereto and assignments thereof, relative to all or any of the
Receivables or the Related Transferred Assets now existing or hereafter arising
in the name of the Issuer, the Servicer or, to the extent permitted under the
Purchase Agreement, any applicable Seller, in any case, at the expense of the
Servicer to be paid out of the Servicing Fee.
ARTICLE IV
RIGHTS OF NOTEHOLDERS; ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.01 ESTABLISHMENT OF TRUST ACCOUNTS. (a) The
Administrative Agent shall establish and maintain in the name of the Trustee for
the benefit of the Noteholders, the Master Collection Account and the other
segregated trust accounts referred to in CLAUSES (b) and (c) below and, to the
extent required, CLAUSES (e) and (f) below (and such additional accounts as may
be required by any Supplement). Each of the Trust Accounts shall be established
and maintained as a segregated trust account in the corporate trust department
of the Administrative Agent (or in a segregated trust account with any other
federal or state chartered depository institution subject to regulations
regarding fiduciary funds on deposit substantially similar to 12 C.F.R. Section
9.10(b) or whose long-term unsecured senior debt obligations are rated, at the
time of deposit, "AA" or better by S&P and "Aa2" or better by Moody's Investor
Services, Inc. (or, if only rated by one such rating agency, either such rating
by such rating agency). Each Trust Account shall bear a designation clearly
indicating that funds deposited therein are held for the benefit of the
Noteholders (or for any particular Noteholders as the case may be).
(b) All Collections and all other Pledged Assets consisting of cash
or cash equivalents shall be transferred from
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the Bank Accounts and deposited in a segregated trust account maintained by the
Administrative Agent (the "MASTER COLLECTION ACCOUNT"). In addition, on the
Liquidation Commencement Date, any funds in the Equalization Account will be
transferred to the Master Collection Account. Funds on deposit in the Master
Collection Account will be allocated as provided in SECTION 4.02. As described
in SECTION 4.02(e), certain funds in the Master Collection Account shall be
allocated from time to time prior to commencement of the Liquidation Period to
an administrative sub-account of the Master Collection Account or to a separate
trust account created by the Administrative Agent at the direction of the Issuer
(such sub-account or separate account being referred to herein as the "CARRYING
COST ACCOUNT"). Funds shall be withdrawn from the Carrying Cost Account to pay
interest on the Notes and other Carrying Costs when due. If on any day funds
allocated to the Carrying Cost Account are not sufficient to pay all Carrying
Costs then due and there are any funds on deposit in the Equalization Account or
the Defeasance Account, then such funds shall be withdrawn (in an amount equal
to the lesser of the amount of the deficiency and the amount of such funds) and
transferred to the Carrying Cost Account. On the Liquidation Commencement Date,
the Carrying Cost Account shall be closed and all funds in the Carrying Cost
Account shall be transferred to the Master Collection Account for disposition in
the same manner as other funds in the Master Collection Account, as provided in
SECTION 4.02(f).
(c) From time to time prior to the commencement of the Liquidation
Period, funds will be withdrawn from the Master Collection Account for deposit
into a segregated trust account maintained by the Administrative Agent (the
"EQUALIZATION ACCOUNT") and withdrawn from the Equalization Account for deposit
into the Master Collection Account, in either case, to compensate for
fluctuations in the Base Amount, as provided in SECTIONS 4.02(c), 4.02(d) and
4.02(e). On the Liquidation Commencement Date, the Equalization Account shall
be closed and all funds in the Equalization Account shall be transferred to the
Master Collection Account for disposition in the same manner as other funds in
the Master Collection Account, as provided in SECTION 4.02(f).
(d) Any Trust Accounts established pursuant to any Supplement shall
be maintained by the Administrative Agent in name of the Trustee in trust for
the benefit of only the Noteholders of such Series of Notes as are indicated in
such Supplement. Each of the Trust Accounts established pursuant to this
Indenture shall be maintained by the Administrative Agent, as specified herein,
in the name of the Trustee in trust for the benefit of all Noteholders, except
to the extent indicated in any Supplement with respect to the Series of Notes
issued pursuant to such Supplement.
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(e) At the times specified in SECTION 4.02(e), the Servicer shall
allocate funds pursuant to CLAUSES SECOND, FIFTH and SIXTH of SECTION 4.02(e)
an administrative sub-account of the Master Collection Account or to a separate
trust account created by the Administrative Agent at the direction of the Issuer
(such sub-account or separate account being herein called the "DEFEASANCE
ACCOUNT"). Funds shall be withdrawn from the Defeasance Account to make the
payments described in SECTION 4.02(e) to the Noteholders of the relevant Series
of Notes. If the Liquidation Commencement Date occurs at any time when funds
are being allocated to the Defeasance Account, the Servicer shall in the Daily
Report reallocate all funds that are on deposit or would otherwise be allocated
to the Defeasance Account to the Master Collection Account, within one Business
Day after the occurrence of the Liquidation Commencement Date, for allocation
therefrom pursuant to SECTION 4.02(f). On each Payment Date after the
commencement and during the continuation of the Accumulation Period for a
particular Series, the Administrative Agent (in accordance with the instructions
set forth in the Settlement Statement relating thereto) shall withdraw from the
Defeasance Account and deposit into a segregated trust account maintained by the
Administrative Agent (the "PRINCIPAL FUNDING ACCOUNT") an amount equal to the
lesser of (a) the applicable Principal Accumulation Amount for such Payment Date
and (b) the applicable Controlled Deposit Amount, if any, for such Payment Date
to be applied to the repayment of the Outstanding Principal Balance of such
Series on the Expected Final Payment Date for such Series as provided in SECTION
4.02(e).
(f) From time to time prior to the commencement of the Liquidation
Period, funds will be allocated to an administrative sub-account of the Master
Collection Account or to a separate trust account created by the Administrative
Agent at the direction of the Issuer (such sub-account or separate account being
herein called the "DEFERRED ALLOCATION ACCOUNT") for the purposes described in
SECTION 4.02(c)(iii).
(g) The Trustee shall possess (for its benefit and for the benefit of
the Noteholders) all right, title and interest in and to all funds on deposit
from time to time in each of the Trust Accounts and in all proceeds thereof,
PROVIDED, that the Administrative Agent shall be entitled to make withdrawals
therefrom as set forth herein. The Trust Accounts shall be under the exclusive
dominion and control of the Trustee and the Administrative Agent for the benefit
of the applicable Noteholders. Each of the Issuer and the Servicer agrees that
it shall have no right of setoff against, and no right otherwise to deduct from,
any funds held in any of the Trust Accounts for any amount owed to it by each
other or by the Trustee, the Administrative Agent or any Noteholder. Pursuant
to the authority granted to the Issuer in SECTION 3.02, the Issuer shall have
the power, revocable after the occurrence and during the
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continuance of a Servicer Default by the Trustee to instruct the Administrative
Agent to make withdrawals and payments from the Trust Accounts for the purposes
of carrying out the Issuer's, the Servicer's, the Trustee's or the
Administrative Agent's duties hereunder in accordance with and subject to the
terms hereof.
Section 4.02 DAILY CALCULATIONS AND FUNDS ALLOCATIONS.
(a) CALCULATION OF CARRYING COST RESERVE. On each Business Day prior
to the Liquidation Commencement Date, the Servicer will calculate an amount
equal to the Carrying Cost Reserve for such Business Day. The "CARRYING COST
RESERVE" means an amount equal to the sum of the Accrued Carrying Costs (as
defined below). As used herein, "ACCRUED CARRYING COSTS" means, at any time,
the sum of (1) the then accrued and unpaid Carrying Costs, and (2) the amount of
Carrying Costs that will, or are estimated to, have accrued by the next Payment
Date.
(b) CALCULATION OF THE BASE AMOUNT. On each Business Day prior to
the Liquidation Commencement Date, the Servicer will calculate the Base Amount
for such day. On any Business Day, the "BASE AMOUNT" will equal the result of
(i) the Net Eligible Receivables as reported in the Daily Report for that
Business Day, MINUS (ii) the Aggregate Required Reserves as of that Business
Day, MINUS (iii) the Discount Rate Reserve as of the opening of business on that
Business Day.
(c) VARIABLE AMOUNT.
(i) CALCULATION OF VARIABLE AMOUNT. On each Business Day prior to
the Liquidation Commencement Date, the Servicer shall calculate an amount
(whether positive or negative, the "VARIABLE AMOUNT") equal to (A) the Base
Amount at the opening of business on such day, MINUS (B) the Aggregate Net
Outstandings on such day. The Variable Amount on any Business Day, whether
positive or negative, will be allocated in the manner described hereinafter
and will be reported by the Servicer in the Daily Report for such day.
(ii) ALLOCATION OF POSITIVE VARIABLE AMOUNT. On any Business Day
occurring prior to the Liquidation Commencement Date when the Variable
Amount is zero or a positive number, the Administrative Agent shall, if so
directed by the Issuer, take one or more of the following actions:
(A) If there are funds on deposit in the Deferred Allocation
Account, then the Administrative Agent shall, before taking any of the
other actions referred to below, transfer all such funds to the Master
Collection Account for application along with other funds on deposit
in the Master Collection Account on that day, PROVIDED that there
would not be a negative
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Variable Amount after giving effect to such transfer and such
application(s).
(B) If the positive Variable Amount exceeds the amount on
deposit in the Deferred Allocation Account (or there are no funds on
deposit in the Deferred Allocation Account), the Issuer may direct the
Administrative Agent to (1) transfer funds (if any) on deposit in the
Equalization Account into the Master Collection Account for
application along with other funds on deposit in the Master Collection
Account on that day and/or (2) increase the principal amount of one or
more of the Revolving Notes specified by the Issuer such that the sum
of the amount of any such transfer and the amount(s) of any such
increase(s) equals not more than the remaining (or total) positive
Variable Amount and, after giving effect to any such transfer and/or
increase, the Variable Amount would equal or exceed zero; PROVIDED,
HOWEVER, that any such increase in any Revolving Note shall be subject
to SECTION 6.08.
(iii) ALLOCATION OF NEGATIVE VARIABLE AMOUNT. On any Business Day
occurring prior to the Liquidation Commencement Date when the Variable
Amount is a negative number, the Administrative Agent, at the direction of
the Issuer, shall take one or more of the following actions with respect to
Collections available in the Master Collection Account for applications on
such day:
(A) transfer a portion of such Collections to the Equalization
Account, pursuant to clause Fourth of SECTION 4.02(e); and/or
(B) allocate such Collections to one or more Revolving Notes in
reduction of the respective Outstanding Principal Balances of such
Revolving Notes or to the Defeasance Account in accordance with clause
Second of SECTION 4.02(e);
such that the aggregate amount of such transfer(s), such reduction(s) in
the Revolving Notes and/or allocation(s) to the Defeasance Account equals
the absolute value of the Variable Amount on such date; PROVIDED that if
the amount of Collections available for such purposes on such day, after
any required deposits to the Carrying Cost Account, is less than the
absolute value of the Variable Amount, then (x) any such allocation to any
Revolving Note or to the Defeasance Account shall not exceed an amount
equal to the Allocable Daily Collections of the Series of any such affected
Notes on such day and (y) if any allocation is made to any Revolving Note
or to the Defeasance Account, then the
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remainder of such available Collections shall be transferred to the
Deferred Allocation Account for the benefit of any holder who may be
entitled to receive such Collections pursuant to SECTION 5.01(h).
If, at any time when funds are being allocated to or are on deposit in
the Deferred Allocation Account, the Liquidation Commencement Date occurs,
all funds then allocated to or on deposit in the Deferred Allocation
Account shall be paid to the holders of the then-issued and outstanding
Notes on the next Payment Date in the manner described in SECTION 5.01(h).
(d) WITHDRAWALS FROM EQUALIZATION ACCOUNT AND DEFERRED ALLOCATION
ACCOUNT. On any Business Day prior to the Liquidation Commencement Date, the
Issuer may instruct the Administrative Agent to withdraw funds from the Deferred
Allocation Account and/or the Equalization Account and allocate such funds to:
(i) the reduction of the respective Outstanding Principal Balances of
one or more Revolving Notes (subject to the requirements of SECTION
6.08(b)); and/or
(ii) the Defeasance Account;
so long as (x) there would not be a negative Variable Amount after giving effect
to such transfer and such application(s) and (y) in the case of any such
withdrawal from the Equalization Account, (1) no funds are on deposit in the
Deferred Allocation Account (including as a result of transfers made on that
day), (2) any allocation of such funds from the Equalization Account to any
Revolving Note shall not exceed an amount equal to the applicable Revolving
Noteholder's pro rata share of such funds (prorating on the basis of such
Revolving Noteholder's Outstanding Principal Balance as a percentage of the sum
of the Outstanding Principal Balances of all then-outstanding Notes) and (3) if
any such allocation is made to any Revolving Note, then the remainder of such
funds in the Equalization Account shall be transferred to the Deferred
Allocation Account.
(e) DAILY ALLOCATION OF FUNDS IN THE MASTER COLLECTION ACCOUNT PRIOR
TO THE LIQUIDATION COMMENCEMENT DATE. On each Business Day prior to the
Liquidation Commencement Date, the Servicer shall allocate all collected funds
(including Collections attributable to all Receivables, whether or not such
Receivables are Eligible Receivables or constitute Excess Concentration
Balances) then on deposit in the Master Collection Account (other than funds
which are required to be returned to Stone Persons pursuant to SECTION 3.02(b)
or are required by the terms of any Supplement to be dealt with in some other
manner) to the following items, in the following order of priority, each of
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which (except as expressly provided otherwise below) shall be paid on the next
Payment Date:
FIRST, to the Carrying Cost Account until the amount allocated to the
Carrying Cost Account equals the Carrying Cost Reserve calculated pursuant
to SECTION 4.02(a);
SECOND, to the Defeasance Account in respect of any Series of Notes as
to which an Accumulation Period, Pay-Out Period or Prepayment Accumulation
Period has commenced, an amount on each Business Day equal to the product
of (i) the balance of collected funds on deposit in the Master Collection
Account after allocation to CLAUSE FIRST above and (ii) the applicable
Defeasance Allocation Percentage with respect to each such Series; until
the amount on deposit therein or deposited therein in accordance with this
CLAUSE SECOND in respect of each such Series equals:
(x) in the case of any Series in an Accumulation Period, the
Controlled Deposit Amount for such Series;
(y) in the case of any Series in a Pay-Out Period, the aggregate
Outstanding Principal Balance of such Series; and
(z) in the case of any Series in a Prepayment Accumulation
Period, the amount of principal to be prepaid with respect to such
Series,
PROVIDED, HOWEVER, that (1) funds deposited into the Defeasance Account
shall be payable on account of such Series in accordance with the terms of
the related Supplement and (2) any such allocation shall be subject to the
provisions of SECTION 4.02(c)(iii) if, on any day, the Variable Amount is a
negative number and the Collections to be deposited in the Defeasance
Account are less than the absolute value of such Variable Amount;
THIRD, to make payments on such Business Day (i) to the Revolving
Noteholders in respect of one or more of the Revolving Notes to reduce the
outstanding principal amount of such Revolving Notes, to the extent such
reduction is required or permitted by SECTION 4.02(c) or (d), and (ii)
under the circumstances described in SECTION 4.02(c) and (d), to the
Deferred Allocation Account;
FOURTH, to fund the Equalization Account, to the extent such funding
is required or permitted by SECTION 4.02(c);
FIFTH, to the Defeasance Account in respect of any repayment or
prepayment of any Series of Notes which is to occur during an Accumulation
Period, a Pay-Out Period or a
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Prepayment Accumulation Period in an amount equal to any amounts (other
than in respect of Carrying Costs and principal and amounts assigned to the
following CLAUSE SIXTH by the related Supplements) owed to the Noteholders
of such Series in connection with the Program;
SIXTH, to the Defeasance Account in respect of any other amounts that
are required to be paid as a result of repayments or prepayments of any
Series of Notes during an Accumulation Period, a Pay-Out Period or a
Prepayment Accumulation Period in accordance with the related Supplements;
SEVENTH, to the Carrying Cost Account for payment on the next
succeeding Payment Date of (i) other accrued and unpaid expenses of the
Program (including indemnification payments to be made pursuant to SECTION
7.03), and (ii) all other amounts payable to Noteholders pursuant to the
related Supplements; and
EIGHTH, with respect to any remaining amounts, to the Issuer on such
Business Day; PROVIDED, HOWEVER, that the Issuer may, from time to time,
direct the Administrative Agent to set aside all or any part of the funds
to be paid to the Issuer pursuant to this CLAUSE EIGHTH in order to (i) pay
all or part of such funds to one or more Revolving Noteholders, or (ii)
hold such funds in the Master Collection Account until the Administrative
Agent receives instructions from the Issuer concerning the application of
such funds; and, PROVIDED, FURTHER, that, no such distribution to the
Issuer will be made after a Liquidation Event described in CLAUSE (c) of
SECTION 9.01 has occurred (and has continued for the five Business Days
referred to in such clause).
If, on any day, the amount of Collections that is then allocated to the Carrying
Cost Account exceeds the amount of Collections that are then required to be
allocated to the Carrying Cost Account, the Servicer shall reallocate such
Collections on such day to one or more of the obligations described above in
CLAUSES SECOND through EIGHTH in that order of priority.
Collections in the Master Collection Account that are allocated to the
priority described above in CLAUSE SEVENTH shall be paid on the next Payment
Date; PROVIDED, HOWEVER, that, if the Collections available on such Payment Date
to pay the amount required to be paid pursuant to CLAUSE SEVENTH above are
insufficient to pay the full amount thereof, the portion of such amount that is
not paid on such Payment Date shall be paid on each Business Day following such
Payment Date on which Collections are available to pay such remaining amount
until it is paid in full.
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Payments to be made during a Pay-Out Period will commence on the
Payment Date that occurs in the month following the month in which the Pay-Out
Period Commencement Date occurs, and will be made on each Payment Date that
occurs thereafter until the respective Outstanding Principal Balances of the
Notes that are being paid during such Pay-Out Period have been paid in full.
During a Pay-Out Period with respect to any Series of Notes, the respective
Noteholders who are being paid out during such Pay-Out Period shall receive the
amounts allocated to the Defeasance Account pursuant to CLAUSES SECOND, FIFTH
and SIXTH above in payment of the amounts described in each such clause that are
payable with respect to such Series.
On the Expected Final Payment Date with respect to any Series, all
funds which have been deposited in the Principal Funding Account pursuant to
SECTION 4.01(e) with respect to such Series prior to the end of the most
recently ended Calculation Period shall be applied to the repayment of the
Outstanding Principal Balances of the Notes of such Series.
If, on any day prior to the Liquidation Commencement Date, funds on
deposit in the Master Collection Account and available for allocation under any
of CLAUSES FIRST through SEVENTH above are less than the amount of the
obligations described in such CLAUSE, then the available Collections shall be
allocated by the Servicer to the Persons designated in such CLAUSES with respect
to such obligations PRO RATA according to the respective amounts of such
obligations held by them. All other obligations in lower priority categories
shall remain unsatisfied until the obligations in the preceding category have
been satisfied.
(f) ALLOCATION OF FUNDS IN THE MASTER COLLECTION ACCOUNT DURING
LIQUIDATION. On the Liquidation Commencement Date, the Issuer shall no longer
have the right to increase the outstanding principal balance of any of the
Revolving Notes.
On each Business Day on and after the Liquidation Commencement Date,
the Servicer shall allocate to the Noteholders (i) all collected funds on
deposit in the Defeasance Account, Equalization Account, Deferred Allocation
Account and Carrying Cost Account as of the Liquidation Commencement Date and
(ii) all other collected funds (including Collections attributable to all
Receivables whether or not such Receivables are Eligible Receivables or
constitute Excess Concentration Balances) then on deposit in the Master
Collection Account (other than funds which are required to be returned to Stone
Persons or Lockbox Banks pursuant to SECTION 3.02(b) or are required by the
terms of any Supplement to be dealt with in any other manner). All Collections
which are allocated to the Noteholders as described in the immediately preceding
sentence shall be held in trust by the Administrative Agent on behalf of the
Trustee and, based upon
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and in accordance with the related Settlement Statement, paid to the relevant
Noteholders or other specified payees on the next Payment Date (commencing with
the first Payment Date falling after the Calculation Period during which the
Liquidation Period commences, except that distributions will be made pursuant to
CLAUSE FIRST below on each Payment Date in the Liquidation Period):
FIRST, to pay accrued Carrying Costs; PROVIDED, HOWEVER, that if any
Stone Person is the Servicer, then the allocation to be made pursuant to
this CLAUSE FIRST to pay the Servicing Fee shall equal only the portion of
the Servicing Fee that is to be paid to Persons other than a Stone Person;
SECOND, to make payments of the Principal Payment Amounts with respect
to (x) each outstanding Senior Class until (and only until) the respective
Outstanding Principal Balances thereof have been repaid in full and (y)
thereafter to each outstanding Subordinated Class in the direct order of
its relative priority (i.e., most to least prior) until the respective
Outstanding Principal Balances thereof have been repaid in full;
THIRD, to pay other Obligations owed to the Noteholders (as set forth
in the related Supplement);
FOURTH, to pay the accrued and unpaid Servicing Fee that has not been
paid pursuant to CLAUSE FIRST above;
FIFTH, to pay (i) all other accrued and unpaid expenses of the Program
(including indemnification payments to be made pursuant to SECTION 7.03,
but excluding any such expenses that have been paid pursuant to CLAUSE
THIRD) and (ii) all other amounts payable to the Noteholders pursuant to
the related Supplements; and
SIXTH, with respect to any remaining amounts, to the Issuer.
If, on any day during the Liquidation Period, the amount of funds on
deposit in the Master Collection Account and available for allocation to a
Series under any of CLAUSES FIRST, THIRD or FIFTH above is less than the amount
of the obligations to such Series described in such CLAUSE, then the available
Collections shall be allocated by the Servicer (1) to the holders of such
obligations relating to any Senior Class until the same have been paid in full
and (2) thereafter to the holders of such obligations relating to any
Subordinated Class in the direct order of their relative priority (i.e., most to
least senior) until the same have been paid in full. The allocation among
holders within each such class shall be made PRO RATA according
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to the respective amounts of such obligations held by them. All other
obligations in lower priority categories shall remain unsatisfied until the
obligations in the preceding category have been satisfied.
After the payment in full of all amounts described above in priority
categories FIRST through FIFTH, this Indenture shall be satisfied and discharged
in accordance with SECTION 13.01 and all remaining amounts in the Master
Collection Account and/or any of the other Trust Accounts shall be remitted to
the Issuer.
Section 4.03 INVESTMENT OF FUNDS IN TRUST ACCOUNTS. On any day when
funds on deposit in any Trust Account shall exceed $10,000 (after giving effect
to the allocations of such funds required by this ARTICLE IV), and at such other
times as investment is practicable, the Administrative Agent, at the direction
of the Issuer (or, if the Issuer shall so request, at the direction of the
Servicer on behalf of the Issuer), shall invest and reinvest monies on deposit
in such Trust Account (in the name of the Administrative Agent on behalf of the
Trustee for the benefit of the Noteholders) in such Eligible Investments as are
specified in a notice from the Issuer (or the Servicer, as applicable), subject
to the restrictions set forth hereinafter. The Administrative Agent shall, at
the direction of the Issuer (or, if the Issuer shall so request, at the
direction of the Servicer on behalf of the Issuer): (a) invest the funds in the
Trust Accounts (other than the Carrying Cost Account) in Eligible Investments
that mature not later than 30 days after the date of the initial investment
therein by the Administrative Agent (or, if earlier, the Business Day next
preceding the next Scheduled Accumulation Commencement Date or the next Expected
Final Payment Date); and (b) invest funds in the Carrying Cost Account in
Eligible Investments that mature not later than the earlier of (i) the 30th day
after the date of the initial investment therein by the Administrative Agent and
(ii) the Business Day next preceding the next day on which any such Carrying
Costs must be paid pursuant to SECTION 5.01. All Eligible Investments made from
funds in any Trust Account, and the interest, dividends and income received
thereon and therefrom and the net proceeds realized on the sale thereof, shall
be deposited in such Trust Account. The Administrative Agent may liquidate an
Eligible Investment prior to maturity if such liquidation would not result in a
loss of all or part of the principal portion of such Eligible Investment or if,
prior to the maturity of such Eligible Investment, a default occurs in the
payment of principal, interest or any other amount with respect to such Eligible
Investment. None of the Trustee, the Administrative Agent, or the Servicer
shall have any liability in connection with investment losses incurred on
Eligible Investments.
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Section 4.04 ATTACHMENT OF TRUST ACCOUNTS. If the Trustee or the
Administrative Agent receives written notice that any account designated as a
Trust Account has or will become subject to any writ, judgment, warrant of
attachment, execution or similar process, the Trustee or the Administrative
Agent shall (notwithstanding any other provision of the Transaction Documents)
promptly notify the Issuer, the Servicer, the Noteholders, and the Applicable
Rating Agencies and shall not deposit or transfer funds into such Trust Account
but shall cause funds otherwise required to be deposited into such Trust Account
to be held in another account pending distribution of such funds in the manner
required hereunder.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
NOTEHOLDERS
Payments on the Notes shall be made as provided in SECTIONS 5.01 and
5.02, except as otherwise provided in the applicable Supplement. All payments
made by the Paying Agent pursuant to SECTIONS 5.01 and 5.02 shall be made based
upon the information set forth in and pursuant to the applicable Daily Report or
Settlement Statement relating to such date and delivered to the Administrative
Agent and the Paying Agent (if different than the Administrative Agent).
Section 5.01 DISTRIBUTIONS TO NOTEHOLDERS.
(a) On each Payment Date and on each other day specified in any
Supplement for the payment of Carrying Costs to the holders of the Notes issued
thereunder, the Paying Agent shall distribute, in respect of the period from the
preceding Payment Date to (but excluding) the then-current Payment Date, to each
Noteholder of record on the Report Date immediately prior to the then-current
Payment Date such Noteholder's PRO RATA share (based on the aggregate amount of
accrued and unpaid Carrying Costs owed to such Noteholder) of the amounts that
(i) prior to the Liquidation Commencement Date, are allocated to the Carrying
Cost Account with respect to accrued but unpaid interest and other Carrying
Costs with respect to the Notes pursuant to CLAUSE FIRST of SECTION 4.02(e), and
(ii) on and after the Liquidation Commencement Date, are on deposit in the
Master Collection Account and allocated to accrued but unpaid interest and other
Carrying Costs with respect to the Notes pursuant to CLAUSE FIRST of (and
subject to the limitations of the penultimate paragraph of) SECTION 4.02(f).
(b) (i) On each Payment Date that occurs during a Pay-Out Period in
which one or more Series of Fixed Principal Notes is being repaid or during the
Liquidation Period (commenc
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ing with the first Payment Date falling after the Calculation Period during
which the Pay-Out Period Commencement Date or Liquidation Period Commencement
Date occurs), the Paying Agent shall distribute to each Noteholder of record of
Fixed Principal Notes of such Series as of the Record Date in respect of such
Payment Date such Noteholder's PRO RATA share (based on the respective aggregate
Outstanding Principal Balances of the Fixed Principal Notes held by such
Noteholder) of (A) in the case of Payment Dates that occur during a Pay-Out
Period, the amounts on deposit in the Defeasance Account that are allocated to
the Outstanding Principal Balance of the related Series pursuant to CLAUSE
SECOND of SECTION 4.02(e) during the most recently ended Calculation Period, (B)
in the case of Payment Dates that occur during the Liquidation Period, the
amounts on deposit in the Master Collection Amount that are allocated to the
Principal Payment Amount of the related Series pursuant to CLAUSE SECOND of (and
subject to the limitations set forth in the penultimate paragraph of) SECTION
4.02(f) and (C) in the case of the first Payment Date on which such
distributions are made in the Liquidation Period or any Pay-Out Period, in
addition to the amount described in CLAUSE (A) or (B) above, as applicable, the
amounts on deposit in the Principal Funding Account that are allocated to the
principal of the Fixed Principal Notes of the related Series.
(ii) On the Expected Final Payment Date with respect to any Series of
Fixed Principal Notes, the Paying Agent shall distribute, to each Noteholder of
record of Fixed Principal Notes of such Series as of the Record Date in respect
of such Payment Date such Noteholder's PRO RATA share (based on the respective
aggregate Outstanding Principal Balances of the Fixed Principal Notes held by
such Noteholder) of the amounts on deposit in the Principal Funding Account that
are allocated to the principal of the Fixed Principal Notes of the related
Series.
(iii) On each Payment Date during the Revolving Period for any Series
of Fixed Principal Notes on which any full or partial prepayment of the
principal amount of the Fixed Principal Notes of that Series is to be made in
accordance with the related Supplement, the Paying Agent shall distribute, to
each Noteholder of record of Fixed Principal Notes of such Series as of the
Record Date in respect of such Payment Date such Noteholder's PRO RATA share
(based on the respective aggregate Outstanding Principal Balances of the Fixed
Principal Notes held by such Noteholder) of the amounts on deposit in the
Defeasance Account that are allocated to the principal of such Fixed Principal
Notes and any other amounts (including any Prepayment Premium) payable under the
terms of the related Series.
(c) On each Business Day prior to the Liquidation Commencement Date,
the Paying Agent shall distribute to each Revolving Noteholder the amounts, if
any, which are allocated to
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reduce the outstanding principal amount thereof pursuant to SECTION 4.02(c) OR
(d) and CLAUSE THIRD or EIGHTH of SECTION 4.02(e).
(d) On each Business Day that occurs during a Pay-Out Period in which
one or more Series of Revolving Notes is being repaid or during the Liquidation
Period, the Paying Agent shall distribute to each Revolving Noteholder of record
of such Series as of such Business Day such Revolving Noteholder's PRO RATA
share (based on the respective aggregate Outstanding Principal Balances of the
Revolving Notes held by such Noteholder) of (i) in the case of Business Days
that occur during a Pay-Out Period, the amounts on deposit in the Defeasance
Account that are allocated to principal of the Revolving Notes of the related
Series pursuant to CLAUSE SECOND of SECTION 4.02(e) during the most recently
ended Calculation Period and (ii) in the case of Business Days that occur during
the Liquidation Period, the amounts on deposit in the Master Collection Account
that are allocated to the principal of the Revolving Notes of the related Series
pursuant to CLAUSE SECOND of (and subject to the limitations set forth in the
penultimate paragraph of) SECTION 4.02(f). On each Business Day during such a
Pay-Out Period, the Paying Agent shall distribute to each such Revolving
Noteholder such amounts as shall be directed by the Servicer in the applicable
Daily Report from amounts allocated to such Series as described in the preceding
sentence.
(e) On each Payment Date that occurs during a Pay-Out Period with
respect to one or more Series of Notes, the Paying Agent shall distribute, in
respect of the period from the preceding Payment Date to (but excluding) the
then-current Payment Date, to each Noteholder of record of the Notes of such
Series as of the Record Date in respect of such Payment Date such Noteholder's
PRO RATA share (based on the aggregate outstanding amount of Obligations owed to
such Noteholder, other than Obligations constituting the Outstanding Principal
Balance of or interest on such Notes, but giving effect to the priorities set
forth in CLAUSES FIFTH and SIXTH of SECTION 4.02(e)) of the amounts on deposit
in the Defeasance Account allocable to such Obligations owed to such Noteholders
pursuant to CLAUSES FIFTH and SIXTH of SECTION 4.02(e).
(f) On each Payment Date that occurs during the Liquidation Period,
the Paying Agent shall distribute, in respect of the period from the preceding
Payment Date to (but excluding) the then-current Payment Date, to each
Noteholder of record on the Record Date in respect of such Payment Date such
Noteholder's PRO RATA share (based on the aggregate outstanding amount of
Obligations owed to such Noteholder pursuant to CLAUSE THIRD of SECTION 4.02(f))
of the amounts on deposit in the Master Collection Account allocable to the
Obligations owed to Noteholders pursuant to CLAUSE THIRD of (and subject to the
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limitations set forth in the penultimate paragraph of) SECTION 4.02(f).
(g) Each distribution to the Noteholders hereunder shall be made by
the Paying Agent (i) by wire transfer of immediately available funds on the date
on which such distribution is required to be made, to an account at a bank or
other entity having appropriate facilities therefor which the Person entitled
thereto specifies in a written notice given to the Administrative Agent on or
prior to the Record Date with respect to the Payment Date on which such payment
is to be made, if such Person is the holder of Notes in an aggregate Stated
Amount or original principal amount equal to or in excess of $1,000,000, and
(ii) in all other cases, by check mailed to each such other Noteholder at such
Noteholder's address appearing in the Note Register, in either case without
presentation or surrender of any Note held by such Noteholder or the making of
any notation thereon; PROVIDED, HOWEVER, that, except as expressly provided
otherwise in SECTION 6.06, the final principal payment to be made on any Note in
connection with the retirement of a Series of Notes will be made to each
Noteholder of such Series only upon presentation and surrender by such
Noteholder of each of its Notes of such Series at the office or offices
specified in a notice of such final principal payment that the Administrative
Agent delivers or causes to be delivered to each such Noteholder not less than
fifteen Business Days prior to such final principal payment date.
(h) Notwithstanding the provisions of the penultimate paragraph of
SECTION 4.02(f), on the first Payment Date that occurs after the Calculation
Period during which the Liquidation Commencement Date occurs, the Paying Agent
shall distribute to each Noteholder of record on the Record Date with respect to
such Payment Date, such Noteholder's pro rata share (based on the respective
aggregate Outstanding Principal Balance of such Noteholder's Notes) of amounts
on deposit in the Deferred Allocation Account as of the Liquidation Commencement
Date in repayment of the aggregate Outstanding Principal Balance owed to such
Noteholder; PROVIDED, HOWEVER, that (i) such pro rata shares shall be calculated
by including in the aggregate amount to be distributed amounts that were
distributed to any Revolving Noteholder in connection with the deposit of such
amounts into the Deferred Allocation Account and (ii) the amounts previously so
distributed to such Noteholders shall be deducted from the amounts distributable
to them pursuant to this CLAUSE (h).
Section 5.02 DISTRIBUTIONS TO THE ISSUER.
(a) On each Business Day prior to the Liquidation Commencement Date,
the Paying Agent shall distribute to the Issuer the amounts payable to the
Issuer pursuant to CLAUSE EIGHTH of SECTION 4.02(e) to the extent that funds are
available to make such payments. On each Business Day after the occurrence
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of the Liquidation Commencement Date, the Paying Agent shall distribute to the
Issuer all amounts not otherwise allocated to the Noteholders pursuant to
SECTION 4.02(f) and all other amounts payable to the Issuer pursuant to CLAUSE
SIXTH of SECTION 4.02(f), in each case, only to the extent that funds are
available therefor.
(b) Distributions to the Issuer hereunder shall be made by the Paying
Agent on the date on which such distribution is required to be made by wire
transfer of immediately available funds, no later than 1:00 p.m., Chicago time
(or later, to the extent delayed by any circumstance outside of the Paying
Agent's reasonable control), on the date on which such distribution is required
to be made, to an account at a bank or other entity having appropriate
facilities therefor which the Issuer specifies in a written notice given to the
Administrative Agent on or prior to the Record Date in respect of the Payment
Date on which such payment is to be made.
Section 5.03 INFORMATION TO NOTEHOLDERS.
(a) SETTLEMENT STATEMENT. Within seven days after each Payment Date,
the Administrative Agent shall send to each Noteholder, upon its request
therefor made to the Administrative Agent, a copy of a monthly report prepared
by the Servicer (but not verified by the Administrative Agent) substantially in
the form of that attached hereto as EXHIBIT D summarizing certain of the
information contained in the Settlement Statement, and shall send to the
Applicable Rating Agencies without any request therefor by any of them, each
Settlement Statement by first-class mail, postage prepaid, to the address of
such Person as described in SECTION 16.03.
(b) ANNUAL TAX INFORMATION. On or before February 15, of each
calendar year, beginning with calendar year 1995, the Servicer (so long as it is
a Stone Person, and thereafter the Issuer), on behalf of the Administrative
Agent, shall furnish or cause to be furnished to each Person who at any time
during the preceding calendar year was a Noteholder such information for such
preceding calendar year, or the applicable portion thereof during which such
Person was a Noteholder of record, as is required to be provided by an issuer of
indebtedness under the Internal Revenue Code (as from time to time in effect) to
the holders of such issuer's indebtedness and such other customary information
as is necessary to enable the Noteholders to prepare their federal income tax
returns. Such obligation of the Servicer shall be deemed to have been satisfied
to the extent
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that substantially comparable information shall be provided by the Paying Agent
to such Noteholder pursuant to any requirements of the Internal Revenue Code as
from time to time in effect.
Section 5.04 NOTICE OF EARLY LIQUIDATION AT THE SELLERS' ELECTION.
If the Issuer shall receive a notice from the Sellers, pursuant to SECTION
8.09(a) or (b) of the Purchase Agreement, to the effect that the Sellers elect
to terminate their agreement to sell Receivables to the Issuer, the Issuer shall
deliver a copy of such notice to the Trustee and to the Administrative Agent
whereupon the Administrative Agent shall (notwithstanding any other provision
hereof to the contrary), within five Business Days after its receipt thereof,
deliver a copy of such notice to each Noteholder and each of the Applicable
Rating Agencies. Notwithstanding anything contained herein to the contrary, the
Liquidation Commencement Date shall occur (x) in the case of any such
termination by the Sellers pursuant to SECTION 8.09(a) of the Purchase
Agreement, on the Business Day immediately after the first Payment Date
occurring not less than 30 days after the Trustee's and the Administrative
Agent's receipt of such notice thereof from the Sellers and (y) in the case of
any such termination by the Sellers pursuant to SECTION 8.09(b) of the Purchase
Agreement, on the Business Day immediately after the first Payment Date
occurring at least 5 Business Days after the Trustee's and the Administrative
Agent's receipt of notice thereof from the Sellers.
ARTICLE VI
THE NOTES
Section 6.01 FORMS OF THE NOTES GENERALLY. The Notes of each Series
shall be substantially in the forms set forth as an Exhibit to the Supplements
pursuant to which such Notes are issued, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and/or the applicable Supplement, and such Notes may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or market, or as may, consistent herewith, be determined by
the officers executing such Notes, as evidenced by their execution thereof.
The Definitive Notes, if any, may be printed, lithographed, engraved
or otherwise produced in any manner, all as determined by the officers of the
Issuer executing such Notes, as evidenced by such officers' execution thereof.
Section 6.02 FORM OF ADMINISTRATIVE AGENT'S CERTIFICATE OF
AUTHENTICATION. The Administrative Agent's
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certificate of authentication on all Notes shall be in substantially the
following form:
"This is one of the Notes referred to in the within-mentioned
Indenture.
[NAME OF ADMINISTRATIVE AGENT]
----------------------------
BY
--------------------------
AUTHORIZED OFFICER";
---------------------
PROVIDED, that, if at any time the Administrative Agent shall appoint an
Authenticating Agent for any of the Notes or any Series of Notes, the Notes or
the Notes of such Series may bear, in the place of the Administrative Agent's
certificate of authentication, an alternate certificate of authentication which
shall be in substantially the following form:
"This is one of the Notes referred to in the within-mentioned
Indenture.
[NAME OF ADMINISTRATIVE AGENT]
----------------------------
By
-------------------------,
-------------------------
as Authenticating Agent
By
--------------------------
--------------------------
Authorized Officer".
Section 6.03 AMOUNT; ISSUABLE IN SERIES. (a) Except as otherwise set
forth in the applicable Supplement pursuant to which any Series of Notes shall
be issued, the aggregate principal amount of the Notes which may be
authenticated and delivered under this Indenture shall be unlimited.
(b) The Notes may be issued in one or more Series. The Issuer may
from time to time issue one or more new Series of Notes pursuant to a
Supplement. Except as may otherwise be provided herein or in any Supplement
pursuant to which any Series of Notes shall be issued, the Notes of all
outstanding Series shall be equally and ratably entitled as provided herein to
the benefits of this Indenture without preference, priority or distinction. All
Notes of each Series shall be substantially identical, except as to denomination
and except as may otherwise
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be provided by the applicable Supplement. All Notes of each Series shall be
denominated in Dollars, and shall be issued in such minimum amounts and in such
multiple integrals in excess of such amount or in such Stated Amounts as shall,
in each case, be set forth in the applicable Supplement pursuant to which such
Notes are to be issued. All Notes of Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if and to the extent so provided by or pursuant to the applicable
Supplement.
(c) On or before the Series Sale Date relating to any new Series, the
parties hereto will execute and deliver a Supplement which will specify the
Principal Terms of such new Series. The terms of such Supplement may modify or
amend the terms of this Indenture solely as applied to such new Series.
The Trustee and the Administrative Agent may, but shall not be
obligated to, enter into any such Supplement which affects the Trustee's or the
Administrative Agent's respective rights, duties or immunities under this
Indenture.
Section 6.04 EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall
be executed on behalf of the Issuer by any of the following officers of the
Issuer: its President, any of its Vice Presidents, its Treasurer or any of its
Assistant Treasurers, or by any attorney-in-fact duly authorized to execute such
Notes on behalf of the Issuer. The signature of any such officer on the Notes
may be manual or facsimile. The seal of the Issuer may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Notes. Typographical and other minor errors or defects in any
such reproduction of such seal or any such signature shall not affect the
validity or enforceability of any Note which has been duly authenticated and
delivered by the Administrative Agent.
In case any officer of the Issuer who shall have so executed any of
the Notes or of the Administrative Agent or any Authenticating Agent who shall
have authenticated any of the Notes shall, in either case, cease to be a proper
officer of such Person, such execution and/or authentication shall continue to
be valid for all purposes hereunder; and any Note may be so executed and/or
authenticated by such Persons as, at the actual date of such execution and/or
authentication, shall be the proper officers of the Issuer, the Administrative
Agent or any Authenticating Agent, although at the date of the execution and
delivery of this Indenture such Person was not such a proper officer.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Notes of any Series executed by the
Issuer to the Administrative Agent for authentication, together with an Issuer
Order for the
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authentication and delivery of such Notes and the other applicable documents
referred to below in this Section, whereupon the Administrative Agent shall
authenticate and deliver such Notes pursuant to such Issuer Order or pursuant to
procedures acceptable to the Administrative Agent specified from time to time by
an Issuer Order. The obligation of the Administrative Agent to authenticate the
Notes of such Series and of the Administrative Agent and the Trustee to accept
the additional responsibilities under this Indenture and the related Supplement
in respect of such Notes shall be subject to the satisfaction of the following
conditions (PROVIDED, that the conditions specified in clause (2)-(7) below need
only be satisfied on the initial Series Sales Date of any Series of Notes; and
PROVIDED, FURTHER, that the Trustee and the Administrative Agent, in accordance
with SECTION 11.02(a), shall be entitled to conclusively rely on any of the
following instruments, documents and agreements delivered to it pursuant to any
of the following clauses until such time as the Trustee and the Administrative
Agent shall have received written notice that any such instrument, document or
agreement shall have been superseded or revoked):
(1) On or before the 10th Business Day immediately preceding the
proposed Series Sales Date (or, in the case of the initial Series Sales
Date hereunder, no later than such initial Series Sale Date (but prior to
such issuance)), the Issuer shall have delivered to the Trustee, the
Administrative Agent, the Servicer, each Enhancement Provider, and each of
the Applicable Rating Agencies an Issuer Order requesting such
authentication of Notes and setting forth the proposed Series Sales Date
and delivery instructions if the Notes of such Series are not to be
delivered to the Issuer;
(2) The Issuer shall have delivered to the Trustee and the
Administrative Agent an executed Supplement referred to in SECTION 6.03 by
or pursuant to which the form or forms and the Principal Terms of the Notes
of such Series were established and an executed copy of any Enhancement
Agreement relating to such Series, if any;
(3) The Issuer shall have delivered to the Trustee, the
Administrative Agent and each Enhancement Provider an Officers' Certificate
(a) either setting forth the form or forms and the Principal Terms of the
Notes of such Series or stating that such form or forms and Principal Terms
have been established pursuant to SECTIONS 6.01 and 6.03 and comply with
this Indenture and any applicable Supplement relating thereto, (b)
certifying that all conditions to the issuance of such Notes as set forth
in this SECTION 6.04 and in the applicable Supplement shall have been
satisfied on and as of the Series Sales Date with respect to such Notes,
(c) certifying that no Liquidation
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Event, Unmatured Liquidation Event, Payout Event, Unmatured Payout Event, Event
of Default or Unmatured Event of Default has occurred and is continuing or would
result from the issuance of such Notes and (d) covering such other matters as
the Trustee or the Administrative Agent may reasonably request;
(4) the Issuer shall have delivered to the Trustee and the
Administrative Agent, at the option of the Issuer, either an Opinion of
Counsel or a letter addressed to the Trustee and the Administrative Agent
permitting it to rely on an existing Opinion of Counsel, which Opinion of
Counsel shall be substantially to the effect that:
(A) the form or forms of the Notes of such Series have been
duly authorized and established in conformity with the provisions of
this Indenture;
(B) in the case of an underwritten offering, the terms of
the Notes of such Series have been duly authorized and established in
conformity with the provisions of this Indenture; and in the case of
an offering which is not underwritten, certain terms of the Notes of
such Series have been authorized and established pursuant to a
Supplement in accordance with the provisions of this Indenture;
(C) when the Notes of such Series shall have been executed
by the Issuer and authenticated by the Administrative Agent in
accordance with the provisions of this Indenture and delivered to, and
duly paid for by, the Noteholders thereof, such Notes will have been
duly issued under this Indenture and will be valid and legally binding
obligations of the Issuer, enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting the
enforcement of creditors' rights and to general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law), and will be entitled to the benefits of this
Indenture;
(D) (i) no consent, approval, authorization, order,
registration or qualification of or with any Governmental Authority
having jurisdiction over the Issuer is required for the execution and
delivery of the Notes of such Series by the Issuer, except such as
have been obtained, but no opinion need be expressed as to state
securities or Blue Sky laws, and (ii) the execution, delivery and
performance of the Notes will not violate (1) the Issuer's Certificate
of Incorporation or By-Laws, (2) this Indenture, any Supplement, or
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to the best of such counsel's knowledge, any term of any other
indenture, loan agreement, mortgage, deed of trust or other
agreement, instrument or document to which the Issuer is a party or
by which its property is bound, the violation of which would have a
Material Adverse Effect, or (3) any law, rule, regulation or, to the
best of such counsel's knowledge, any writ, order, judgment or decree
of any court or governmental authority or agency applicable to the
Issuer or any of its property, the violation of which would have a
Material Adverse Effect; and
(E) that the issuance of such Notes will not cause the
Issuer to become subject to registration as an "investment company"
under and as defined in the Investment Company Act of 1940, as
amended;
(5) the Issuer shall have delivered to the Trustee, the
Administrative Agent, each Applicable Rating Agency and each Enhancement
Provider, a Tax Opinion dated as of the Series Sales Date;
(6) the Rating Agency Condition shall have been satisfied with
respect to such issuance; and
(7) the Trustee and the Administrative Agent shall have received
an Officer's Certificate to the effect that the issuance of the Notes of
such Series or Class will not dilute the benefit of the Required Reserves
to which any pre-existing Series is entitled prior to the effectiveness of
such Supplement.
Each Note shall be dated the date of its authentication.
In connection with each issuance of a Series of Notes, the Issuer will
determine whether such Notes may be purchased by employee benefit plans (as
defined in ERISA) and shall cause the Notes evidencing such Series to bear a
legend describing any restrictions on such purchases.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there shall appear on such Note a
certificate of authentication substantially in the form and executed as
hereinabove provided, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Section 6.05 REGISTRATION OF TRANSFER AND EXCHANGE OF THE NOTES. (a)
The Administrative Agent, as agent for the
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Issuer, shall keep, or shall cause to be kept, at the office or agency to be
maintained by it in accordance with the provisions of SECTION 11.20, a register
in written form or capable of being converted into written form within a
reasonable time (the "NOTE REGISTER"), in which register, subject to such
reasonable regulations as the Administrative Agent may prescribe, a transfer
agent and registrar (which may be the Administrative Agent) (the "TRANSFER AGENT
AND REGISTRAR") shall provide for the registration of the Notes and of transfers
and exchanges of the Notes as herein provided. The Issuer hereby appoints the
Administrative Agent as the initial Transfer Agent and Registrar.
The Issuer may at any time revoke such appointment of any Person as
Transfer Agent and Registrar and remove such Person as Transfer Agent and
Registrar if the Issuer (as applicable) determines, in its respective sole
discretion, that such Person has failed to perform its obligations as Transfer
Agent and Registrar under this Indenture in any material respect. In the event
of such removal, the Issuer shall appoint a successor Transfer Agent and
Registrar. Until such time as such successor shall have accepted such
appointment, the Administrative Agent shall act as the successor Transfer Agent
and Registrar. The then-acting Transfer Agent and Registrar shall be permitted
to resign as Transfer Agent and Registrar upon 30 days' prior written notice to
the Trustee, the Administrative Agent, the Issuer and the Servicer; PROVIDED,
HOWEVER, that such resignation shall not be effective and the then-acting
Transfer Agent and Registrar shall continue to perform its duties as Transfer
Agent and Registrar until the Issuer has appointed a successor Transfer Agent
and Registrar and the Person so appointed has given the Administrative Agent and
the Issuer written notice that it accepts the appointment. The provisions of
SECTIONS 11.01 through 11.06 shall apply to the Transfer Agent and Registrar as
if all references to "the Trustee" and "the Administrative Agent" in the
applicable provisions of SECTIONS 11.01 through 11.06 were references to the
Transfer Agent and Registrar.
It is intended that the registration of Notes which is described in
this SECTION 6.05(a) comply with the registration requirements contained in
Section 163 of the Internal Revenue Code.
(b) Subject to the requirements of the penultimate paragraph of
SECTION 6.04 and any restrictions on, or procedures for, the transfer of Notes
of any Series set forth in the applicable Supplement relating thereto, upon
surrender for registration of transfer of any Note at any office or agency of
the Transfer Agent and Registrar maintained for such purpose, the Issuer shall
execute, and the Administrative Agent shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of the
appropriate Class and Series which (i) in the case of the Fixed
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Principal Notes, are in authorized denominations of like tenor, terms and
principal amount and (ii) in the case of the Revolving Notes, are in authorized
denominations of like aggregate Stated Amount, tenor and terms, and, in the case
of each Note, which bear numbers that are not contemporaneously outstanding.
Except as expressly otherwise provided in the applicable Supplement
relating to any Series or Class of Notes, at the option of the Noteholder, such
Noteholder's Note may be exchanged for other Notes of the same Class and Series
(and bearing the same interest rate as the Note surrendered for registration of
exchange) of authorized denominations of like denomination (in the case of Fixed
Principal Notes), Stated Amount (in the case of Revolving Notes), tenor and
terms (as applicable) and bearing numbers that are not contemporaneously
outstanding, upon surrender of the Notes to be exchanged at any such office or
agency. Whenever any Notes are so surrendered for exchange, the Issuer shall
execute, and the Administrative Agent shall authenticate and deliver, the
appropriate number of Notes of the Class and Series which the Noteholder making
the exchange is entitled to receive. Every Note presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Administrative Agent or the
Transfer Agent and Registrar duly executed by the Noteholder thereof or his
attorney-in-fact duly authorized in a writing delivered to the Transfer Agent
and Registrar.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Transfer Agent and Registrar or any co-transfer agent
and co-registrar may require any Noteholder that is transferring or exchanging
one or more Notes to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall
be cancelled and disposed of in a manner satisfactory to the Administrative
Agent.
(d) The transfer and exchange of Global Notes or interests therein
shall be effected through the applicable Clearing Agency in accordance with this
Agreement, any applicable Supplement and the procedures of Clearing Agency
therefor.
(e) Notes may be surrendered for registration of transfer or exchange
at the office of the Transfer Agent and Registrar designated in SECTION 16.03.
Section 6.06 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (a) any
mutilated Note is surrendered to the Transfer Agent and Registrar, or the
Transfer Agent and Registrar receives
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evidence to its satisfaction of the destruction, loss or theft of any Note and
(b) there is delivered to the Transfer Agent and Registrar, the Administrative
Agent and the Trustee such security or indemnity as may be required by them and
the Issuer to hold each of them and the Issuer harmless, then, in the absence of
notice to the Trustee, the Administrative Agent or the Issuer that such Note has
been acquired by a BONA FIDE purchaser, the Issuer shall execute and, upon the
request of the Issuer, the Administrative Agent shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a new Note of like Class, Series, tenor, terms and principal amount or
Stated Amount and bearing a number that is not contemporaneously outstanding.
In connection with the issuance of any new Note under this SECTION 6.06, the
Trustee, the Administrative Agent or the Transfer Agent and Registrar may
require the payment by the Noteholder of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the reasonable fees and expenses of the Trustee, the
Administrative Agent and the Transfer Agent and Registrar) connected therewith.
Any duplicate Note issued pursuant to this SECTION 6.06 shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
Notes of the same Class and Series that are duly issued hereunder.
Section 6.07 AUTHENTICATING AGENT. (a) The Administrative Agent may
appoint one or more authenticating agents (each an "AUTHENTICATING AGENT") with
respect to the Notes which shall be authorized to act on behalf of the
Administrative Agent in authenticating the Notes in connection with the
issuance, delivery, registration of transfer, exchange or repayment of the
Notes. Either the Administrative Agent or the Authenticating Agent, if any,
then appointed and acting on behalf of the Administrative Agent shall
authenticate the Notes. Whenever reference is made in this Indenture to the
authentication of Notes by the Administrative Agent or the Administrative
Agent's certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Administrative Agent by an Authenticating Agent
and a certificate of authentication executed on behalf of the Administrative
Agent by an Authenticating Agent. Each authenticating agent must be acceptable
to the Issuer.
(b) Any institution succeeding to the corporate agency business of an
Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filing of any document or any further act on the part of the
Administrative Agent, such Authenticating Agent or any other Person.
(c) An Authenticating Agent may at any time resign by giving written
notice of resignation to the Administrative Agent and to the Issuer. The
Administrative Agent or the Issuer may at
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any time terminate the agency of an Authenticating Agent by giving notice of
termination to such Authenticating Agent and to the Issuer (in the case of such
termination by the Administrative Agent) or the Administrative Agent (in the
case of such termination by the Issuer). Upon receiving such a notice of
resignation or upon such a termination, the Administrative Agent may promptly
appoint a successor Authenticating Agent acceptable to the Issuer, PROVIDED,
that until a successor shall be so appointed, the duties of the Authenticating
Agent shall be performed by the Administrative 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.
(d) The provisions of SECTIONS 11.01 through 11.06 shall be
applicable to any Authenticating Agent as if the references in the applicable
provisions thereof to "the Trustee" and the "Administrative Agent" were
references to the Authenticating Agent.
Section 6.08 CHANGES IN AMOUNT OF REVOLVING NOTES.
(a) The Outstanding Principal Balance under any Revolving Note shall at no time
exceed the Stated Amount then applicable to such Note. The Stated Amount of a
Revolving Note may be increased or decreased from time to time by the Issuer,
with the prior written consent of the Noteholder holding such Revolving Note
and, in the case of any increase thereof, if the following conditions shall have
each been satisfied on or prior to the effective date of such proposed increase:
(i) the Issuer shall have delivered to the Trustee and the
Administrative Agent a Tax Opinion with respect to such proposed increase;
and
(ii) the Rating Agency Condition shall have been satisfied with
respect to such proposed increase.
(b) Notwithstanding the conditions precedent set forth in the
immediately preceding sentence, the Issuer may, pursuant to the Supplement that
applies to a particular Revolving Note, request the Noteholder of such Revolving
Note to provide funds to the Administrative Agent in respect of such Revolving
Note in order to increase the then-Outstanding Principal Balance under such Note
up to an amount not to exceed the Stated Amount thereof, which requested
increase shall be subject to the further provisions of this SECTION 6.08(b) and
to the provisions of such Supplement. Except as otherwise provided in the
related Supplement, all such increases to be made on any day shall be in an
aggregate amount not to exceed an amount which, after giving effect thereto,
would reduce the Variable Amount to zero. The Issuer may make such a request at
any time prior to the earlier
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of (x) the Liquidation Commencement Date and (y) the Pay-Out Period Commencement
Date for such Revolving Note, and shall make any such request in a writing that
is substantially in the form required by the applicable Supplement,
appropriately completed, and that is delivered to the holder of such Revolving
Note, the Trustee and the Administrative Agent at the time required by the
applicable Supplement. On the Business Day on which such Revolving Noteholder
provides the Administrative Agent, on behalf of the Issuer, immediately
available funds in the amount of the requested increase, the Outstanding
Principal Balance under such Noteholder's Revolving Note shall be increased by
an amount equal to the amount of such funds so advanced by such Noteholder.
Section 6.09 BOOK-ENTRY NOTES. If the Issuer shall establish
pursuant to any Supplement that the Notes to be issued thereunder are to be
issued in Book-Entry Form, then the Issuer shall execute and the Administrative
Agent shall, in accordance with this Section and the Issuer Order with respect
to such Series, authenticate and deliver one or more Global Notes, evidencing
the Notes of such Series which (i) shall be an aggregate original principal
amount equal to the aggregate original principal amount of such Notes to be
issued pursuant to the applicable Issuer Order, (ii) shall be registered in the
name of the Clearing Agency therefor or its nominee, which shall initially be
Cede & Co., as nominee for The Depositary Trust Company, the initial Clearing
Agency, (iii) shall be delivered by the Administrative Agent to such Clearing
Agency or such nominee pursuant to such Clearing Agency's or such nominee's
instructions, and (iv) shall bear a legend substantially to the following
effect: "Transfers of this Global Note shall be limited to transfers in whole,
but not in part, to the Clearing Agency or a nominee of the Clearing Agency or
to a successor thereof or such successor's nominee and transfers of portions of
this Global Note shall be limited to transfers made in accordance with the
restrictions set forth in this Indenture."
Each Clearing Agency designated pursuant to this SECTION 6.09 must, at
the time of its designation and at all times while it serves as Clearing Agency
hereunder, be a "clearing agency" registered under the Securities Exchange Act
of 1934, as amended, and any other applicable statute or regulation.
No Noteholder of any such Series of Notes issued in Book-Entry Form
shall receive a Definitive Note representing such Noteholder's interest in any
such Notes, except as provided in SECTION 6.11 or in the applicable Supplement
relating to such Notes. Unless (and until) certificated, fully registered Notes
of any Series (the "DEFINITIVE NOTES") have been issued to the Noteholders of
such Series pursuant to SECTION 6.11 or pursuant to any applicable Supplement
relating thereto:
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(a) the provisions of this SECTION 6.09 shall be in full force and
effect;
(b) the Issuer, the Servicer, the Paying Agent, the Transfer Agent
and Registrar, the Administrative Agent and the Trustee may deal with the
Clearing Agency for all purposes (including the making of distributions on
the Notes of such Series) as the authorized representatives of the
Noteholders of such Series;
(c) to the extent that the provisions of this SECTION 6.09 conflict
with any other provisions of this Indenture, the provisions of this
SECTION 6.09 shall control; and
(d) the rights of Noteholders of such Series shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and shall
be limited to those established by law and agreements between such
Noteholders and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Notes are issued pursuant to
SECTION 6.11, 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 Book-Entry Notes to such
Clearing Agency Participants.
Section 6.10 NOTICES TO CLEARING AGENCY. Unless and until Definitive
Notes shall have been issued to Noteholders of such Series pursuant to
SECTION 6.11 or the applicable Supplement relating to such Notes, whenever
notice, payment, or other communication to the holders of Book-Entry Notes of
any Series is required under this Indenture, the Trustee, the Administrative
Agent, the Servicer and the Paying Agent shall give all such notices and
communications specified herein to be given to Noteholders of such Series to the
Clearing Agency.
Section 6.11 DEFINITIVE NOTES. If (i)(A) the Issuer advises the
Trustee and the Administrative Agent in writing that the Clearing Agency is no
longer willing or able to properly discharge its responsibilities under any
Letter of Representations and (B) the Issuer is unable to locate a qualified
successor Clearing Agency, (ii) the Issuer, at its option, advises the Trustee
and the Administrative Agent in writing that, with respect to any Series, it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of a Servicer Default, Noteholders holding Notes
aggregating not less than 50% of the aggregate Outstanding Principal Balance of
any Series of Notes maintained as Book-Entry Notes advise the Trustee, the
Administrative Agent, and the Clearing Agency (through the Clearing Agency
Participants) in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of the Note-
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holders of such Series, the Administrative Agent shall notify the Clearing
Agency, the Trustee and all such Noteholders of such Series of the occurrence of
any such event and of the availability of Definitive Notes of such Series to the
Noteholders of such Series requesting the same. Upon surrender to the
Administrative Agent of the Global Notes of such Series by the Clearing Agency
accompanied by registration instructions from such Clearing Agency for
registration, the Administrative Agent shall authenticate and deliver Definitive
Notes of such Series. None of the Issuer, the Transfer Agent and Registrar, the
Administrative Agent or the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes of any
Series, all references herein to obligations with respect to such Series imposed
upon or to be performed by the Clearing Agency shall be deemed to be imposed
upon and performed by the Administrative Agent, to the extent applicable with
respect to such Definitive Notes and the Administrative Agent and the Trustee
shall recognize the holders of the Definitive Notes as the Noteholders
hereunder.
Section 6.12 TEMPORARY NOTES. Pending the preparation of Definitive
Notes of any Series to be issued in accordance with SECTION 6.11, the Issuer may
execute and, upon its receipt of an Issuer Order to such effect, the
Administrative Agent shall authenticate and deliver, temporary Notes for such
Series which are printed, lithographed, typewritten or otherwise produced and
are in any authorized denomination and substantially in the forms of the
Definitive Notes of such Series, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Issuer as evidenced by the execution thereof by the authorized officers
of the Issuer. Temporary Notes may contain such references to any provisions of
this Indenture as may be appropriate. Every temporary Note of any Series shall
be executed by the Issuer and authenticated by the Administrative Agent upon the
same conditions and in substantially the same manner, and with like effect, as
the Definitive Notes of such Series. If temporary Notes are issued, the Issuer,
without unreasonable delay, shall cause Definitive Notes to be executed and
delivered to the Administrative Agent for authentication; and thereupon the
temporary Notes of such Series shall be exchangeable for Definitive Notes
without charge at each office or agency to be maintained for such purpose in
accordance with SECTION 6.05. The Administrative Agent shall authenticate and
deliver in exchange for temporary Notes of such Series so surrendered Definitive
Notes of equal tenor, denomination (in the case of Fixed Principal Notes) and
Stated Amount (in the case of Revolving Notes). Until so exchanged, the
temporary Notes of any Series shall be entitled to the same benefits under this
Indenture as the Definitive Notes of such Series.
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Section 6.13 CANCELLATION. All Notes surrendered for payment,
redemption, registration of transfer or exchange, if surrendered to the Issuer,
the Paying Agent, the Transfer Agent and Registrar or any other agent of the
Issuer or any agent of the Administrative Agent, shall be delivered to the
Administrative Agent for cancellation or, if surrendered to the Administrative
Agent, shall be cancelled by it; and no Notes shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Administrative Agent shall dispose of cancelled Notes held by it and deliver a
certificate of disposition to the Issuer. If the Issuer or its agent shall
acquire any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Administrative Agent for cancellation. All cancelled
Notes delivered to the Administrative Agent for cancellation shall be retained
by the Administrative Agent unless the Issuer, by Issuer Order, shall direct the
Administrative Agent that such cancelled Notes are to be returned to the Issuer.
Section 6.14 CUSIP NUMBER. The Issuer in issuing any Note or Series
of Notes may use a "CUSIP" number and, if so used, the Trustee and the
Administrative Agent shall use the CUSIP number in any notices to the
Noteholders thereof as a convenience to such Noteholders; PROVIDED, that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Notes and that
reliance may be placed only on the other identification numbers printed on the
Notes. The Issuer shall promptly notify the Trustee and the Administrative
Agent of any change in the CUSIP number with respect to any Note.
Section 6.15 LETTER OF REPRESENTATIONS. Notwithstanding anything to
the contrary in this Indenture or any Supplement, the parties hereto shall
comply with the terms of each Letter of Representations.
Section 6.16 PERSONS DEEMED OWNERS. Prior to due presentation of a
Note for registration of transfer, the Issuer, the Trustee, the Administrative
Agent, the Paying Agent, the Transfer Agent and Registrar and any agent of any
such Persons may treat the Person in whose name any Note is registered in the
Note Register as the owner of such Note for the purpose of receiving
distributions pursuant to SECTIONS 5.01 and 5.02 and for all other purposes
whatsoever, and none of the Issuer, the Trustee, the Administrative Agent, the
Paying Agent, the Transfer Agent and Registrar or any agent of any such Persons
shall be affected by any notice to the contrary; PROVIDED, HOWEVER, that, in
determining whether the Noteholders of the requisite principal amount or Stated
Amount (as applicable) of Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Notes owned by the Issuer or any
other Stone
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Person shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee or the Administrative Agent shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes which the Trustee or the Administrative Agent
knows to be so owned shall be so disregarded.
Section 6.17 APPOINTMENT OF PAYING AGENT. The Paying Agent shall
initially be the Administrative Agent. The Issuer hereby appoints the Paying
Agent as its agent to make distributions to Noteholders from the Master
Collection Account pursuant to SECTIONS 5.01 and 5.02 and to report the amounts
of such distributions to the Administrative Agent. Any Paying Agent shall have
the revocable power to withdraw funds from the Master Collection Account for the
purpose of making the distributions referred to above. The Issuer may revoke
such power of the Paying Agent and remove the Paying Agent if the Issuer
determines, in its sole discretion, that the Paying Agent shall have failed to
perform its obligations under this Indenture in any material respect. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' prior
written notice to the Administrative Agent (if not then the Paying Agent), the
Trustee, the Issuer, the Servicer and the Applicable Rating Agencies. In the
event that the Administrative Agent shall no longer be the Paying Agent, the
Issuer shall appoint a successor Paying Agent (which shall be a bank or trust
company) which appointment shall be effective on the date on which the Person so
appointed gives the Issuer written notice that it accepts the appointment. The
Administrative Agent shall cause such successor Paying Agent or any additional
Paying Agent appointed by the Issuer to execute and deliver to the
Administrative Agent and the Trustee an instrument in which such successor
Paying Agent or additional Paying Agent shall acknowledge and agree 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 Noteholders in trust for the
benefit of the Noteholders entitled thereto until such sums shall be paid to
such Noteholders. The Paying Agent shall return all unclaimed funds to the
Trustee (or its designee), and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the or the Trustee (or its
designee). The provisions of SECTIONS 11.01 through 11.06 shall apply to the
Paying Agent as if all references in the applicable provisions thereof to "the
Trustee" and "the Administrative Agent" were references to the Paying Agent.
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ARTICLE VII
THE ISSUER
Section 7.01 REPRESENTATIONS AND WARRANTIES OF THE ISSUER RELATING TO
THE ISSUER AND THE TRANSACTION DOCUMENTS. On the date hereof and on each
Subsequent Issuance Date, the Issuer hereby represents and warrants that:
(a) ORGANIZATION AND GOOD STANDING. The Issuer is a corporation duly
organized and validly existing in good standing under the laws of the State
of Delaware and has full power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted. The Issuer had at all relevant times, and
now has, all necessary power, authority, and legal right to acquire, own
and grant a security interest in the Receivables and the Related
Transferred Assets and to issue the Notes.
(b) DUE QUALIFICATION. The Issuer is duly qualified to do business
and is in good standing as a foreign corporation, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires such
qualification, licenses or approvals and where the failure so to qualify,
to obtain such licenses and approvals or to preserve and maintain such
qualification, licenses or approvals would have a Material Adverse Effect.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. The Issuer has (i) all
necessary corporate power and authority to (A) execute and deliver this
Indenture and the other Transaction Documents to which it is a party, (B)
issue the Notes, (C) perform its obligations under this Indenture, the
other Transaction Documents to which it is a party and the Notes, (D)
convey, grant, transfer, assign, set-over, and pledge a security interest
in all of its right, title and interest in, to and under the Receivables,
the Related Transferred Assets and the funds in the Trust Accounts and the
Bank Accounts on the terms and subject to the conditions herein and therein
provided and (ii) duly authorized by all necessary corporate action such
grant, transfer, assignment, set-over and pledge and the execution,
delivery, and performance of this Indenture, the other Transaction
Documents to which it is a party, the issuance and sale of the Notes, and
the consummation of the transactions provided for in this Indenture, the
Notes and the other Transaction Documents to which it is a party.
(d) BINDING OBLIGATIONS. This Indenture and each other Transaction
Document to which the Issuer is a party,
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when executed and delivered, and the Notes, when executed and delivered by the
Issuer and authenticated by the Administrative Agent, will constitute, a legal,
valid and binding obligation of the Issuer, enforceable against the Issuer in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(e) NO CONFLICT OR VIOLATION. The execution, delivery and
performance of this Indenture and the other Transaction Documents to which
the Issuer is a party, the issuance and sale of the Notes by the Issuer,
the consummation of the transactions contemplated by this Indenture, the
other Transaction Documents to which the Issuer is a party and the Notes,
and the fulfillment of the terms hereof and thereof will not (i) conflict
with, violate, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default
under, (A) the Certificate of Incorporation or the Bylaws of the Issuer or
(B) any contract, indenture, loan agreement, mortgage, deed of trust, or
other agreement or instrument to which the Issuer is a party or by which it
or any of its properties is bound, (ii) result in the creation or
imposition of any Adverse Claim (other than a Permitted Adverse Claim) upon
any of the Issuer's properties pursuant to the terms of any such contract,
indenture, loan agreement, mortgage, deed of trust, or other agreement or
instrument, or (iii) conflict with or violate any federal, state, local or
foreign law or any decision, decree, order, rule, or regulation applicable
to the Issuer or any of its properties of any court or of any federal,
state, local or foreign regulatory body, administrative agency, or other
Governmental Authority having jurisdiction over the Issuer or any of its
properties, which conflict, violation, breach, default or Adverse Claim,
individually or in the aggregate, would have a Material Adverse Effect.
(f) NO PROCEEDINGS. (i) There is no action, suit, proceeding or
investigation pending or, to the best knowledge of the Issuer, threatened
against the Issuer before any court, regulatory body, arbitrator,
administrative agency, or other tribunal or Governmental Authority and (ii)
the Issuer is not subject to any order, judgment, decree, injunction,
stipulation or consent order of or with any court or other Governmental
Authority, that, in the case of each of foregoing CLAUSES (i) and (ii), (A)
asserts the invalidity of this Indenture, any other Transaction Document or
any of the Notes, (B) seeks to prevent (x) the grant of
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security interests in any Receivables or Related Transferred Assets to the
Trustee pursuant hereto, (y) the issuance and sale of the Notes or (z) the
consummation of any of the transactions contemplated by this Indenture, any
other Transaction Document to which the Issuer is a party or the Notes, (C)
seeks any determination or ruling that would materially and adversely affect the
performance by the Issuer of its obligations under this Indenture, any of the
other Transaction Document to which the Issuer is a party, or the Notes or the
validity or enforceability of this Indenture, any other Transaction Document to
which the Issuer is a party or the Notes, (D) seeks to affect adversely the
income tax attributes of the Notes as constituting anything other than
indebtedness of the Issuer for purposes of United States federal income taxes or
any state income taxes, or (E) individually or in the aggregate for all such
actions, suits, proceedings and investigations, would have a Material Adverse
Effect.
(g) BULK SALES ACTS. No transaction contemplated by this Indenture
or by any other Transaction Document requires compliance with, or will be
subject to avoidance under, any bulk sales act or similar law.
(h) GOVERNMENTAL APPROVALS. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by the Issuer, and all notices to and filings with
any Governmental Authority that are required to be made by the Issuer, in
the case of each of the foregoing in connection with grant of a security
interest in the Receivables and Related Transferred Assets to the Trustee,
the execution, delivery and performance by the Issuer of this Indenture and
any of the other Transaction Documents to which it is a party, the issuance
and sale of the Notes and the consummation of the transactions contemplated
by this Indenture, the other Transaction Documents to which the Issuer is a
party and the Notes have, in each case, been obtained or made and are in
full force and effect (including (i) the filing of the UCC financing
statements referred to in SECTION 2.03(a)(ii)(A), all of which, at the time
required in SECTION 2.03(a)(ii)(A), shall have been duly made and shall be
in full force and effect and (ii) the registration of all Notes required to
be registered under and in accordance with Section 5 of the Securities Act
and all similar state securities or "Blue Sky Laws"), except where the
failure to obtain or make any such authorization, consent, order, approval,
notice or filing, individually or in the aggregate for all such failures,
would not have a Material Adverse Effect.
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(i) OFFICES. The Issuer's principal place of business and chief
executive office is located at the address set forth under the Issuer's
signature hereto, and the offices where the Issuer, the Servicer and the
Sellers keep all Records and all Contracts, purchase orders and agreements
related to the Receivables and the Related Transferred Assets (and all
original documents relating thereto) are located at the addresses specified
in SCHEDULE 7.01(i) (or at such other locations, notified to the Servicer,
the Trustee and the Administrative Agent in accordance with SECTION
7.02(d), in jurisdictions where all action required by SECTION 7.02(d) has
been taken and completed).
(j) ACCOUNT BANKS. The names and addresses of all of the Account
Banks are specified in SCHEDULE 7.01(j) or, after the Closing Date, have
been provided by the Servicer to the Trustee and the Administrative Agent
pursuant to SECTION 3.03(c), and the account numbers of the Bank Accounts
at such Account Banks have been specified in a letter provided on or prior
to the Closing Date to the Trustee and the Administrative Agent or, after
the Closing Date, have been provided by the Servicer to the Trustee and the
Administrative Agent pursuant to SECTION 3.03(c). The Account Agreements
to which the Issuer is a party constitute the legal, valid and binding
obligations of the Issuer enforceable against the Issuer in accordance with
their respective terms subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally
and general equitable principles.
(k) INVESTMENT COMPANY ACT. The Issuer is not, and is not controlled
by, an "investment company" registered or required to be registered under
the Investment Company Act of 1940, as amended.
(l) SECURITY INTEREST. The grant of the security interest by the
Issuer to the Trustee in all of the Issuer's Receivables, the Related
Transferred Assets and the Collections pursuant to the Granting Clause
hereof constitutes a valid grant, pledge and assignment to the Trustee of a
security interest in all right, title and interest of the Issuer in, to and
under such Receivables, the Related Transferred Assets and the Collections;
and under the UCC (as in effect in Illinois) there exists a valid,
subsisting and enforceable first priority and perfected security interest
in all of the Issuer's now existing and hereafter acquired or arising
Receivables (and, to the extent such security interest can be perfected by
the filing of UCC financing statements in such jurisdictions, in the
Related Transferred Assets and the Collections relating to such
Receivables) in favor of the Trustee.
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(m) DISCLOSURE. Neither this Indenture, any of the other Transaction
Documents to which the Issuer is a party, or any document, certificate or
statement in writing furnished by or on behalf of the Issuer in connection
with the offering for sale or sale of the Notes hereunder contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained therein not misleading in light
of the circumstances under which they were made.
(n) REGULATION G. None of the proceeds of any of the sale of any
Notes issued and sold hereunder will be used, directly or indirectly, for
the purpose of purchasing or carrying "margin stock" (as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal
Reserve System), or for the purpose of maintaining, reducing or retiring
any indebtedness which was originally incurred to purchase or carry any
stock that is currently margin stock or for any other purpose which might
constitute the transactions contemplated hereunder a "purpose credit"
within the meaning of the above-described Regulation G.
(o) FICTITIOUS NAMES. Except as set forth on SCHEDULE 7.01(o)
hereto, neither the Issuer nor any of the Sellers has any tradenames,
fictitious names, assumed names or "doing business as" names or, within the
five years immediately prior to the Closing Date, (a) has been the subject
of any merger or other corporate reorganization that resulted in a change
of its name, identity or corporate structure or (b) had any other name.
(p) PAYMENT OF TAXES. The Issuer and each of its Consolidated
Affiliates with whom the Issuer shares consolidated tax liability has filed
or caused to be filed when due (giving effect to any extensions therefor)
all Federal, state and local tax returns which are reasonably believed to
be required to be filed by it.
(q) SOLVENCY. The Issuer, after giving effect to the initial
Purchase under the Purchase Agreement on the Closing Date, and after giving
effect to each subsequent Purchase under the Purchase Agreement, (i) is not
"insolvent" (as such term is defined in Section 101(31)(A) of the
Bankruptcy Code, (ii) is able to pay its debts as they mature, and (iii)
does not have unreasonably small capital for the business in which it is
engaged.
(r) NO SUBSIDIARIES. The Issuer has no subsidiaries.
(s) BUSINESS ACTIVITIES. Since its incorporation, the Issuer has
conducted no business other than the execution and delivery of the
Transaction Documents and the other
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instruments, documents and agreements contemplated thereby (in each case, as
constituted from time to time) and the performance of the Transactions
contemplated thereunder or which are reasonably incidental thereto (including,
without limitation, the Purchase and administration of Receivables and the
issuance of Notes).
(t) COMPLIANCE WITH LAWS, ETC. The Issuer is in compliance in all
material respects with all applicable laws, rules, regulations, judgments,
decrees and orders (including those relating to the Receivables, the
Related Transferred Assets, the funds in the Trust Accounts and the related
Contracts and any other agreements related thereto), except where the
failure to so to comply, individually or in the aggregate for all such
failures, would not have a Material Adverse Effect.
The representations and warranties set forth in this SECTION 7.01
shall survive the date of the making or the remaking thereof in accordance with
this Indenture and the grant and pledge of the Receivables and the other Pledged
Assets to the Trustee in accordance with the Granting Clause of this Indenture.
Upon discovery by the Issuer, the Servicer, the Trustee, or the Administrative
Agent of a breach of any of the foregoing representations and warranties, the
party discovering such breach shall give written notice to the other parties to
this Indenture within three Business Days following such discovery. The
Trustee's and the Administrative Agent's obligations in respect of discovering
any such breach are limited as provided in SECTION 11.02.
Section 7.02 COVENANTS OF THE ISSUER. From the Closing Date until
the date of the satisfaction and discharge of this Indenture, the Issuer hereby
covenants that:
(a) PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Issuer covenants
and agrees for the benefit of the Noteholders that it shall duly and
punctually pay the principal of (and premium, if any) and interest on the
Notes in accordance with the terms thereof and this Indenture.
(b) COMPLIANCE WITH LAWS, ETC. The Issuer shall comply in all
material respects with all applicable laws, rules, regulations, judgments,
decrees and orders (including those relating to the Receivables, the
Related Transferred Assets, the funds in the Trust Accounts and the related
Contracts and any other agreements related thereto), where the failure so
to comply, individually or in the aggregate for all such failures, would
have a Material Adverse Effect.
(c) PRESERVATION OF CORPORATE EXISTENCE. Except as otherwise
permitted pursuant to SECTION 7.02(i), the Issuer
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shall preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and 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 qualifications would have a Material Adverse Effect.
(d) LOCATION OF RECORDS AND OFFICES. The Issuer shall keep its
principal place of business and chief executive office, and the Issuer
shall cause the Servicer and the Sellers to keep substantially all Records,
Contracts, and other agreements related to the Receivables and the Related
Transferred Assets (and all original documents relating thereto), at the
addresses referred to in SCHEDULE 7.01(i) or, upon not less than 30 days'
prior written notice given by the Issuer to the Servicer, the Trustee, and
the Administrative Agent at such other locations in jurisdictions where all
action required pursuant to SECTION 3.09 shall have been taken and
completed (except that purchase orders may be located at the specific
plants where the goods giving rise to any Receivables were manufactured
and/or processed). The Issuer shall at all times maintain its chief
executive offices within the United States of America, and will cause the
Servicer to maintain at all times each office from which the Servicer
services, collects or administers Receivables and Related Transferred
Assets and the Servicer's chief executive offices within the United States
of America.
(e) USE OF FUNDS. The Issuer shall apply all cash payments made to
it hereunder to make payments in the order of priority set out in SECTIONS
2.03 and 6.01 of the Purchase Agreement.
(f) REPORTING REQUIREMENTS OF THE ISSUER. The Issuer shall furnish
to the Trustee, the Administrative Agent, and the Applicable Rating
Agencies:
(i) LIQUIDATION EVENTS, ETC. As soon as possible, and in any
event within five Business Days after an Authorized Officer of the
Issuer has obtained knowledge of the occurrence of any Liquidation
Event, Unmatured Liquidation Event, Pay-Out Event, Unmatured Pay-Out
Event, Event of Default, or Unmatured Event of Default, a written
statement of an Authorized Officer of the Issuer describing such event
and the action that the Issuer proposes to take with respect thereto,
in each case in reasonable detail;
(ii) MATERIAL ADVERSE EFFECT. As soon as possible and in any
event within five Business Days
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after an Authorized Officer of the Issuer has knowledge thereof, written notice
that describes in reasonable detail any Adverse Claim against the Pledged Assets
(other than those created hereunder in favor of the Trustee) or any other event
or occurrence which, individually or in the aggregate for all such events or
occurrences, has had, or would have a substantial likelihood of having, in the
reasonable, good faith judgment of the Issuer, a Material Adverse Effect;
(iii) PROCEEDINGS. As soon as possible and in any event within
five Business Days after an Authorized Officer of the Issuer has
knowledge thereof, written notice of (A) any litigation, investigation
or proceeding of the type described in SECTION 7.01(f) not previously
disclosed to the Trustee and the Administrative Agent and (B) any
material adverse development that has occurred with respect to any
such previously disclosed litigation, investigation or proceeding;
(iv) OPINIONS OF COUNSEL. (1) Promptly after the execution and
delivery of this Indenture, an Opinion of Counsel either stating that
in the opinion of such counsel this Indenture has been properly filed
and recorded so as to make effective the lien on the Pledged Assets
intended to be created hereby, and reciting the details of such
action, or stating that in the opinion of such counsel no such action
is necessary to make such lien effective and (2) on or prior to the
date of each one year anniversary of the execution and delivery of
this Indenture, an Opinion of Counsel either stating than in the
opinion of such counsel such action has been taken with respect to the
recording, filing, rerecording and refiling of this Indenture as is
necessary to make effective the lien on the Pledged Assets intended to
be created hereby, and reciting the details of such action, or stating
that in the opinion of such counsel no such action is necessary to
make such lien effective.
(v) ANNUAL COMPLIANCE CERTIFICATE. Within 120 days after the
end of each fiscal year of the Issuer (which on the date hereof is
December 31), a certificate from the principal executive officer,
principal financial officer or principal accounting officer of the
Issuer, stating whether or not, to the best knowledge of such officer,
the Issuer has complied with all conditions and covenants under this
Indenture, and, if any Pay-Out Event, Unmatured Pay-Out Event,
Liquidation Event, Unmatured Liquidation Event, Event of Default or
Unmatured Event of Default shall have
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occurred and be continuing, specifying all such events and the nature thereof of
which such officer may have knowledge. For the purposes of this clause (v),
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture or any applicable Supplement.
(vi) REPORTS. The Issuer shall deliver to the Trustee and the
Administrative Agent:
(1) promptly but in no event later than one hundred and
twenty (120) days after the end of each fiscal year of the
Issuer, a copy of the annual statement of operations, of cash
flows and of stockholders' equity of the Issuer for such fiscal
year, and the related balance sheet as at the end of such fiscal
year, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, if any, and
prepared in accordance with GAAP consistently applied (except for
such changes in application disclosed by the Issuer therein),
together with an opinion thereon by Price Waterhouse LLP or such
other independent certified public accountants of recognized
national standing selected by the Issuer, which opinion shall
state that said financial statements fairly present, in all
material respects, the financial position, results of operations
and cash flows of the Issuer as at the end of and for such fiscal
year in accordance with GAAP, (it being expressly understood that
this clause (1) may be satisfied by delivery to the above-named
parties of an annual report of the Issuer on Form 10-K to the
Commission for the appropriate fiscal year); and
(2) promptly but in no event later than fifty (50) days
after the end of the first three fiscal quarters of each fiscal
year of the Issuer, a copy of (A) the unaudited statement of
operations and retained earnings of the Issuer for such fiscal
quarter and for the period from the beginning of the respective
fiscal year to the end of such fiscal quarter; (B) the unaudited
statement of cash flows of the Issuer for such fiscal quarter,
and (C) an unaudited balance sheet of the Issuer as at the end of
such fiscal quarter, setting forth in each case in comparative
form the corresponding figures for the preceding fiscal year, if
any, and all of the foregoing to be prepared in accordance with
GAAP consistently applied (except for such changes in application
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which are disclosed by the Issuer therein) (it being expressly understood that
this CLAUSE (2) may be satisfied by delivery to the above-named parties of a
quarterly report of the Issuer on Form 10-Q to the Commission for the
appropriate fiscal quarter);
The Trustee shall have no duty with respect to the preparation,
delivery or review of any such reports. The Administrative Agent's
sole duty with respect to such reports shall be to maintain any such
reports received by it and make such reports available to any
Noteholder upon its request therefor.
(vii) OTHER. Promptly, from time to time, such other
information, documents, records or reports regarding the Receivables
or the Related Transferred Assets or such other information regarding
the condition or operations, financial or otherwise, of the Issuer, in
each case as the Trustee or the Administrative Agent may from time to
time reasonably request in order to protect the interests of the
Trustee, the Administrative Agent or the Noteholders under or as
contemplated by this Indenture.
(g) SALES, LIENS, ETC. Except for the grants, pledges and
conveyances hereunder and under the other Transaction Documents, the Issuer
will not (i)(A) sell, assign (by operation of law or otherwise) or
otherwise transfer to any Person, (B) pledge any interest in, (C) grant,
create, incur or assume or permit to exist any Adverse Claim (other than a
Permitted Adverse Claim) to or in favor of any Person upon or with respect
to, or (D) cause to be filed any financing statement or equivalent document
relating to perfection that covers any Receivable conveyed to the Issuer,
any related Contract, Related Transferred Asset or other Pledged Asset, or
any interest therein, or (ii) assign to any Person any right to receive
income from or in respect of any of the foregoing. The Issuer shall defend
the right, title and interest of the Trustee in, to and under the Pledged
Assets, whether now existing or hereafter created, against all claims of
third parties claiming through or under the Issuer.
In the event that the Issuer fails to keep any Pledged Assets free and
clear of any Adverse Claim (other than any Permitted Adverse Claim), the
Trustee may (without limiting its other rights with respect to the Issuer's
breach of its obligations hereunder) make reasonable expenditures necessary
to release such Adverse Claim. The Trustee shall be entitled to
indemnification for any such expenditures pursuant to the indemnification
provisions of SECTION 7.03.
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Alternatively, the Trustee may deduct such expenditures as an offset to any
amounts owed to the Issuer hereunder.
(h) EXTENSION OR AMENDMENT OF RECEIVABLES; CHANGE IN CREDIT AND
COLLECTION POLICY OR CONTRACTS. The Issuer will not (i) extend, amend or
otherwise modify the terms of any Receivable or Contract except as
permitted by the Credit and Collection Policy and in a manner that would
not have a material adverse effect on the Noteholders or (ii) permit the
Sellers to make any change in their respective Credit and Collection
Policies that would materially impair the collectibility of a significant
portion of the Receivables or result in a material delay in the collection
thereof or otherwise would have a material adverse effect on the
Noteholders; PROVIDED, HOWEVER, that the Issuer or the Servicer, as
applicable, may change the terms and provisions of the Credit and
Collection Policy if (x) with respect to any material change of collection
policies, the Rating Agency Condition is satisfied with respect thereto,
(y) with respect to any material change of collection procedures, no
material adverse effect on any Series of Notes would, in the reasonable,
good faith judgment of the Issuer, result therefrom, as evidenced by an
Officer's Certificate of the Issuer, and (z) with respect to any material
change in accounting policies relating to Receivables that become Charged-
Off Receivables, such change is made in accordance with GAAP.
(i) MERGERS, ACQUISITIONS, SALES, ETC. The Issuer shall not:
(i) (A) be a party to any merger or consolidation, or directly
or indirectly purchase or otherwise acquire all or substantially all
of the assets or any stock of any class of, or any partnership or
joint venture interest in, any other Person, or (B) except pursuant to
the Transaction Documents, directly or indirectly, sell, transfer,
assign, convey or lease, whether in one transaction or in a series of
transactions, all or substantially all of its assets, or sell or
assign with or without recourse any Receivables or Related Transferred
Assets (other than pursuant hereto) unless:
(x) (1) the corporation formed by such consolidation or into
which the Issuer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Issuer
substantially as an entirety shall be, if the Issuer is not the
surviving entity, organized and existing under the laws of the
United States of America or any state thereof or the District of
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Columbia, and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee and
the Administrative Agent, in form satisfactory to the Trustee,
the performance of every covenant and obligation of the Issuer
hereunder (including its obligations under SECTION 7.03) and
under each Supplement; and (2) the Issuer has delivered to the
Trustee and the Administrative Agent an Officer's Certificate
and an Opinion of Counsel each stating that (A) such
consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section, (B) such
supplemental agreement is a valid and binding obligation of
such surviving entity, enforceable against such surviving entity
in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), (C) all
actions necessary to maintain the perfection of the security
interests of the Trustee in connection with such consolidation,
merger, conveyance or transfer have been taken, and (D) all
conditions precedent herein provided for relating to such
transaction have been complied with;
(y) the Rating Agency Condition shall have been satisfied
with respect to such consolidation, merger, conveyance or
transfer; and
(z) the Issuer shall have delivered to the Trustee, the
Administrative Agent, each Applicable Rating Agency and each
Enhancement Provider, a Tax Opinion, dated the date of such
consolidation, merger, conveyance or transfer, with respect
thereto;
(ii) except as contemplated in the Purchase Agreement in
connection with the Issuer's purchases of Receivables and Related Assets
from the Sellers, (A) make, incur or suffer to exist an investment in,
equity contribution to, or payment obligation in respect of the deferred
purchase price of property or services from, any Person; PROVIDED, that
the Issuer may incur trade payables in respect of its reasonable and
customary operating expenses and may defer the payment thereof in
accordance with the terms of any such obligation, or (B) make any loan or
advance to any
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Person other than for reasonable and customary operating expenses; or
(iii) create any direct or indirect Subsidiary or otherwise
acquire direct or indirect ownership of any equity interests in any
other Person.
(j) CHANGE IN NAME. The Issuer shall not change its corporate name
or the name under or by which it does business, or permit any Seller to
change its corporate name or the name under or by which it does business,
unless the Issuer shall have given the Servicer, the Trustee and the
Administrative Agent 30 days' prior written notice thereof and unless,
prior to any such change in name, the Issuer shall have filed (or shall
have caused to be filed) such financing statements or amendments as the
Servicer, the Trustee, or the Administrative Agent determines may be
necessary to continue the perfection of the Trustee's interest in the
Receivables, the Related Transferred Assets and the proceeds thereof.
(k) AMENDMENT OF CERTIFICATE OF INCORPORATION; CHANGE IN BUSINESS.
The Issuer shall not amend its Certificate of Incorporation or Bylaws, or
engage in any business other than as contemplated by the Transaction
Documents, unless the Rating Agency Condition has been satisfied in
connection with any such amendment or engagement in business.
(l) AMENDMENTS TO PURCHASE AGREEMENT. Except as expressly provided
otherwise in this Indenture, no amendment or modification shall be made to
the Purchase Agreement nor shall any consent, approval or waiver be granted
thereunder that, in any case, would adversely affect in any material
respect the interests of the Noteholders or any Enhancement Provider.
(m) ENFORCEMENT OF PURCHASE AGREEMENT. The Issuer shall perform all
its obligations under, and otherwise comply with, the Purchase Agreement
and, if requested by the Trustee, will enforce, for the benefit of the
Trustee (on behalf of the Noteholders), the covenants and agreements of the
Sellers in the Purchase Agreement and/or the rights and remedies of the
Issuer thereunder.
(n) OTHER INDEBTEDNESS. The Issuer shall not (i) create, incur or
permit to exist any Indebtedness, Guaranty or liability or (ii) cause or
permit to be issued for its account any letters of credit or bankers'
acceptances, except for (A) Indebtedness incurred under the Notes and any
Enhancement therefor, (B) other liabilities specifically permitted to be
created, incurred or owed by the Issuer pursuant to or in connection with
the Transaction Documents
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and (C) reasonable and customary operating expenses in an amount not to
exceed $100,000 per month.
(o) SEPARATE CORPORATE EXISTENCE. The Issuer hereby acknowledges
that the Trustee, the Administrative Agent, and the Noteholders are, and
will be, entering into the transactions contemplated by the Transaction
Documents in reliance upon the Issuer's identity as a legal entity separate
from the Sellers, the Servicer and any other Person. Therefore, the Issuer
shall take all reasonable steps to continue its identity as a separate
legal entity and to make it apparent to third Persons that the Issuer is an
entity with assets and liabilities distinct from those of the Servicer, the
Sellers and any other Person, and that the Issuer is not a division of the
Servicer, any of the Sellers or any other Person. In that regard, and
without limiting the foregoing in any manner, the Issuer shall (i) maintain
its own board of directors, (ii) maintain at least two directors and one
principal corporate officer who is not a direct, indirect or beneficial
stockholder, officer, director, employee, affiliate, associate, customer or
supplier of any Stone Person nor a relative of any thereof, nor a trustee
in bankruptcy for any other Stone Person, (iii) maintain separate and
clearly delineated office space evidenced by a written lease, maintain its
assets in a manner which facilitates their identification and segregation
from those of any other Stone Person, and maintain a separate telephone
number which will be answered only in its own name, (iv) conduct all
intercompany transactions with other Stone Persons on terms which the
Issuer reasonably believes to be on an arm's-length basis, (v) not
guarantee any obligation of any other Stone Person, nor have any of its
obligations guaranteed by any Stone Person or hold itself out as
responsible for the debts of any Stone Person or for the decisions or
actions with respect to the business and affairs of any other Stone Person,
(vi) shall not, except as otherwise expressly acknowledged under the
Transaction Documents, permit the commingling or pooling of its funds or
other assets with the assets of any other Stone Person, (vii) maintain
separate deposit and other bank accounts to which no other Stone Person
(other than as Servicer) has any access, (viii) maintain financial records
which are separate from those of any other Stone Person, (ix) compensate
all employees, consultants and agents, or reimburse Stone, from the
Issuer's own funds, for services provided to the Issuer by such employees,
consultants and agents, (x) have agreed with Stone Container and the other
Sellers to allocate among themselves shared corporate operating services
and expenses which are not reflected in the Servicer Fee (including without
limitation the services of shared employees, consultants and agents and
reasonable legal and auditing
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expenses) on the basis of actual use or the value of services rendered, and
otherwise on a basis reasonably related to actual use or the value of
services rendered, (xi) pay directly for its own account for accounting and
payroll services, rent, lease and other expenses and not have such
operating expenses paid by any other Stone Person, (xii) conduct all of its
business (whether in writing or orally) solely in its own name, and (xiii)
otherwise practice and adhere to corporate formalities such as complying
with its By-laws and corporate resolutions and the holding of regularly
scheduled board of directors meetings.
(p) MAINTENANCE OF OFFICE OR AGENCY. The Issuer shall maintain in
the City of Chicago, Illinois an office or agency where the Notes may be
presented or surrendered for payment, where the Notes may be surrendered
for registration of transfer or exchange and where notices and demands to
or upon the Issuer in respect of the Notes and this Indenture may be
served. The Issuer shall give prompt written notice to the Trustee and the
Administrative Agent of the location, and any change in the location, of
such office or agency. If at any time the Issuer shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee and
the Administrative Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Administrative
Agent Corporate Trust Office. The Issuer hereby appoints the
Administrative Agent as its agent to receive all presentations, surrenders,
notices and demands.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside of the City of Chicago, Illinois) where
the Notes may be presented or surrendered for any or all of such purposes,
and may from time to time rescind such designations; PROVIDED, HOWEVER,
that no such designation or rescission shall in any manner relieve the
Issuer of its obligation to maintain an office or agency in the City of
Chicago, Illinois, for such purposes. The Issuer shall give prompt written
notice to the Trustee and the Administrative Agent of any such designation
and any change in the location of any such other office or agency.
(q) MONEY FOR THE PAYMENTS OF NOTES TO BE HELD IN TRUST. Whenever
the Issuer shall have one or more Paying Agents with respect to the Notes,
it shall cause all such Paying Agents to hold in trust all sums deposited
with it for the benefit of the Persons entitled thereto, and (unless such
Paying Agent is the Trustee or the Administrative Agent) the Paying Agent
shall promptly notify the Trustee and the Administrative Agent of its
action or failure so to act.
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(r) REPORTING OF EXCESS CONCENTRATION BALANCES. On or before April
30, 1995, the Issuer shall implement such procedures as shall be necessary
to enable it to calculate Excess Concentration Balances on a daily basis
and shall thereafter report such amounts on each Daily Report.
(s) PAYMENT OF TAXES, ETC. The Issuer will pay promptly when due all
taxes, assessments and governmental charges or levies imposed upon it, on
any of the Receivables or on any of the other Pledged Assets, or in respect
of its income or profits therefrom, and any and all other material claims
of any kind (including, without limitation, claims for labor, materials and
supplies), except that no such amount need be paid if (i) such nonpayment
would not subject the Trustee, the Administrative Agent, any Noteholder or
any Enhancement Provider to any civil or criminal penalty or liability or
involve any risk of the sale, forfeiture or loss of any of the Pledged
Assets hereunder or the Transferred Assets under the Purchase Agreement,
(ii) the charge or levy is being contested in good faith and by proper
proceedings and (iii) the obligations to pay such amount is adequately
reserved against in accordance with and to the extent required by generally
accepted accounting principles.
(t) ACCOUNTING OF PURCHASES. The Issuer will not prepare any
financial statements which shall account for the transactions contemplated
by the Purchase Agreement in any manner other than as sales of the
Receivables and the Related Assets thereunder (it being understood that
non-recognition of sale due to the consolidated reporting of the Issuer and
the Sellers for financial or tax purposes shall not be deemed a violation
of this covenant).
The covenants set forth in this SECTION 7.02 shall survive the
execution hereof and the grant of security in the Receivables and the other
Pledged Assets to the Trustee in accordance with the Granting Clause of this
Indenture. Upon discovery by the Issuer, the Servicer, the Trustee or the
Administrative Agent of a breach of any of the foregoing covenants, the party
discovering such breach shall give written notice to the other parties to this
Indenture within three Business Days following such discovery. The Trustee's
and the Administrative Agent's obligations in respect of discovering any such
breach are limited as provided in SECTION 11.02.
Section 7.03 INDEMNIFICATION BY THE ISSUER. (a) Without limiting any
other rights which any Indemnified Party (as hereinafter defined) may have
hereunder or under applicable law, the Issuer hereby agrees to indemnify the
Trustee, the Administrative Agent, each Noteholder and each of the successors,
permitted transferees and assigns of any such Person and all
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officers, directors, shareholders, controlling Persons, employees and agents of
any of the foregoing (each of the foregoing Persons being individually called an
"INDEMNIFIED PARTY"), from and against any and all damages, losses, claims
(whether on account of settlements or otherwise, and whether or not the relevant
Indemnified Party is a party to any action or proceeding that gives rise to any
Indemnified Losses (as defined below)), judgments, liabilities and related
reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) (all of the foregoing being collectively called "INDEMNIFIED
LOSSES") awarded against or incurred by any of them that arise out of or relate
to any of the following:
(i) reliance on any representation or warranty made by the
Issuer (or any of its officers) in writing under or in connection with
this Indenture, or reliance on any other information or report
(including any Daily Report, Settlement Statement or certificate of
the Servicer described in SECTION 3.05) delivered pursuant hereto
containing an untrue fact or a materially misleading omission;
(ii) the failure by the Issuer to comply with any term,
provision or covenant contained in this Indenture, any other
Transaction Document or with any applicable law, rule or regulation
with respect to any Receivable or Related Transferred Assets, or the
nonconformity of any Receivable or Related Transferred Asset with any
such applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in the Issuer,
legal and equitable title to and ownership of the Receivables and
other Transferred Assets which are, or are purported to be, sold or
otherwise transferred by the Sellers to the Issuer under the Purchase
Agreement, and the failure by the Issuer to vest in the Trustee a
first priority security interest in all of the Pledged Assets, in each
of the above cases, free and clear of any Adverse Claim (other than
Adverse Claims created under the Transaction Documents in favor of the
Issuer and/or the Trustee);
(iv) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Receivables and other Pledged Assets in which a security interest
is, or is purported to be, granted by the Issuer hereunder;
(v) the failure by the Issuer to be duly qualified to do
business, to be in good standing or to
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have filed appropriate fictitious or assumed name registration documents in any
jurisdiction;
(vi) any dispute, claim, offset or defense of an Obligor (other
than discharge in bankruptcy) to the payment of any Receivable
included in the Pledged Assets (including, without limitation, a
defense based on such Receivable or the related Contract not being a
legal, valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim resulting
from the sale of the merchandise related to such Receivable;
(vii) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever nature arising out of or in connection with the goods and/or
merchandise or services that are the subject of any Receivable or
related Contract included in the Pledged Assets;
(viii) the failure of the Issuer or any Seller to pay when due
(A) any taxes or charges imposed on the Issuer or such Seller or (B)
any sales taxes or other governmental fees or charges imposed in
connection with the transfer of the Transferred Assets under the
Purchase Agreement or the grant of security under this Indenture;
(ix) the failure of the Issuer or any of its agents or
representatives (including, without limitation, agents,
representatives and employees of the Servicer acting pursuant to
authority granted under SECTION 6.02 of the Purchase Agreement) to
remit to the Trustee or the Administrative Agent any Collections of
Pledged Assets as required under this Indenture; and
(x) the performance by any such Indemnified Party of its duties under
(and in accordance with the terms of) the Indenture, any Supplement or any
other Transaction Document.
Any Indemnified Losses shall be paid by the Issuer to the applicable
Indemnified Party within 5 Business Days following such Indemnified Party's
written demand therefor, setting forth, in reasonable detail, the calculation of
such amount and the basis of such demand. Payments to be made pursuant to this
SECTION 7.03 shall be paid to the extent that funds are available to make such
payments after all other amounts to be paid to the Noteholders pursuant to
SECTION 4.02(e) or (f) (as applicable) shall have been paid, and there shall be
no recourse to, and the Indemnified Party shall have no Claim against, the
Issuer for all or any part of any amounts payable pursuant to this SECTION 7.03
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if such funds are at any time insufficient to make all or part of any such
payments.
Notwithstanding the foregoing (and, with respect to CLAUSE (B) below,
without prejudice to the rights that the Trustee or the Administrative Agent may
have pursuant to the other provisions of this Indenture or the provisions of any
of the other Transaction Documents), in no event shall any Indemnified Party be
indemnified for any Indemnified Losses (A) resulting from the gross negligence
or wilful misconduct on the part of such Indemnified Party (or the gross
negligence or wilful misconduct on the part of any of such Indemnified Party's
officers, directors, employees or agents), (B) to the extent the same includes
Indemnified Losses in respect of Receivables and reimbursement therefor that
would constitute credit recourse to the Issuer for the amount of any Receivable
or Related Transferred Asset not paid by the related Obligor, (C) to the extent
such Indemnified Losses represent, or result from, lost profits, (D) to the
extent such Indemnified Losses are or result from taxes (including interest and
penalties thereon) asserted with respect to (1) payments of principal of,
interest on, or other amounts owed with respect to, the Notes, (2) franchise or
withholding taxes imposed on or payable by any Indemnified Party, or (3)
Federal, state, local or other income taxes on or measured by the gross or net
income or receipts of such Indemnified Party and costs and expenses in defending
against the same, or (e) to the extent such Indemnified Losses constitute
consequential, special or punitive damages.
(b) The agreements contained in this SECTION 7.03 shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee or the Administrative Agent, as the case may be.
ARTICLE VIII
THE SERVICER
Section 8.01 REPRESENTATIONS AND WARRANTIES OF THE SERVICER. On the
date hereof and on each Subsequent Issuance Date, the Servicer hereby makes, and
any Successor Servicer also shall be deemed to make by its acceptance of its
appointment hereunder, the following representations and warranties for the
benefit of the Trustee, the Administrative Agent, and the Noteholders:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a corporation
duly organized and validly existing in good standing under the laws of its
jurisdiction of incorporation and has full power and authority to own its
properties and
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to conduct its business as such properties are presently owned and as such
business is presently conducted.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals, in
all jurisdictions in which the servicing of the Receivables and the Related
Transferred Assets as required by this Indenture requires such
qualification, licenses or approvals and where the failure so to qualify,
to obtain such licenses and approvals or to preserve and maintain such
qualification, licenses or approvals would have a Material Adverse Effect.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. The Servicer has (i) all
necessary power and authority to (A) execute and deliver this Indenture and
the other Transaction Documents to which it is a party, and (B) perform its
obligations under this Indenture and the other Transaction Documents to
which it is a party, and (ii) duly authorized by all necessary action the
execution, delivery, and performance of this Indenture and the other
Transaction Documents to which it is a party and the consummation of the
transactions provided for in this Indenture and the other Transaction
Documents to which it is a party.
(d) BINDING OBLIGATIONS. This Indenture constitutes, and each other
Transaction Document to which the Servicer is party when executed and
delivered will constitute, a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless
of whether such enforceability is considered in a proceeding in equity or
at law.
(e) NO CONFLICT OR VIOLATION. The execution and delivery by the
Servicer of this Indenture and the other Transaction Documents to which it
is a party, the performance by the Servicer of its obligations hereunder
and thereunder and the fulfillment by the Servicer of the terms hereof and
thereof that are applicable to it will not (i) conflict with, violate,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, (A) the
Certificate of Incorporation or the Bylaws of the Servicer or (B) any
indenture, loan agreement, mortgage, deed of trust, or other material
agreement or instrument to which the Servicer is a party or by which it or
any of its properties is bound or (ii) conflict with or violate any
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federal, state, local or foreign law or any decision, decree, order,
rule, or regulation applicable to the Servicer or any of its
properties of any court or of any federal, state, local or foreign
regulatory body, administrative agency, or other Governmental
Authority having jurisdiction over the Servicer or any of its
properties, which conflict, violation, breach or default described in
CLAUSE (i) or CLAUSE (ii) immediately above, individually or in the
aggregate, would have a Material Adverse Effect.
(f) GOVERNMENTAL APPROVALS. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by the Servicer, and all notices to and filings
with any Governmental Authority that are required to be made by the
Servicer, in the case of each of the foregoing in connection with the
execution, delivery and performance by the Servicer of this Indenture and
any other Transaction Documents to which it is a party and the consummation
of the transactions contemplated by this Indenture and such other
Transaction Documents, have been obtained or made and are in full force and
effect (other than the filing of the UCC financing statements referred to
in SECTION 2.03(a)(ii)(A), all of which, at the time required in SECTION
2.03(a)(ii)(A), will be duly made), except where the failure to obtain or
make such authorization, consent, order, approval, notice or filing would
not have a Material Adverse Effect.
(g) NO PROCEEDINGS. (i) There is no action, suit, proceeding or
investigation pending or, to the best knowledge of the Servicer, threatened
against the Servicer before any court, regulatory body, arbitrator,
administrative agency, or other tribunal or governmental instrumentality
and (ii) the Servicer is not subject to any order, judgment, decree,
injunction, stipulation or consent order of or with any court or other
Governmental Authority, that, in the case of foregoing CLAUSES (i) and
(ii), (A) seeks to affect adversely the income tax attributes of the Notes
under the United States federal income tax system or any state income tax
system, or (B) individually or in the aggregate for all such actions,
suits, proceedings and investigations, would have a Material Adverse
Effect.
The representations and warranties set forth in this SECTION 8.01 shall survive
the date of the making thereof by the Servicer and the grant of the Receivables
and the other Pledged Assets to the Trustee in accordance with the Granting
Clause of this Indenture. Upon discovery by the Issuer, the Servicer, the
Trustee, or the Administrative Agent of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
written notice to the other parties to this Indenture within three Business Days
following such discovery. The
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Trustee's and the Administrative Agent's obligations in respect of discovering
any such breach are limited as provided in SECTION 11.02.
Section 8.02 COVENANTS OF THE SERVICER. From the Closing Date until
the date of the satisfaction and discharge of this Indenture, the Servicer
hereby covenants and agrees, and any Successor Servicer by its acceptance of its
appointment hereunder shall be deemed to covenant and agree, as follows for the
benefit of the Trustee, the Administrative Agent, and the Noteholders:
(a) COMPLIANCE WITH LAWS, ETC. The Servicer shall maintain in effect
all qualifications required under applicable law in order to service
properly the Receivables and shall comply in all material respects with all
applicable laws, rules, regulations, judgments, decrees and orders, in each
case to the extent the failure to comply with which, individually or in the
aggregate for all such failures, would have a Material Adverse Effect.
(b) PRESERVATION OF CORPORATE EXISTENCE. Except as otherwise
permitted pursuant to SECTION 8.03, the Servicer shall preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and 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 have a Material Adverse Effect.
(c) COMPLIANCE WITH TRANSACTION DOCUMENTS. The Servicer will comply
with the terms and provisions of each of the Transaction Documents to which
it is a party.
The covenants set forth in this SECTION 8.02 shall survive the date of the
making thereof by the Servicer and the grant of security in the Receivables and
the other Pledged Assets to the Trustee in accordance with the Granting Clause
of this Indenture. Upon discovery by the Issuer, the Servicer, the Trustee, or
the Administrative Agent of a breach of any of the foregoing covenants, the
party discovering such breach shall give written notice to the other parties to
this Indenture within three Business Days following such discovery. The
Trustee's and the Administrative Agent's obligations in respect of discovering
any such breach are limited as provided in SECTION 11.02.
Section 8.03 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. The Servicer shall not consolidate with or merge
into any other Person or convey, transfer or sell all or substantially all of
its properties and assets to any Person, unless:
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(a) (i) the Servicer is the surviving entity thereof or, if the
Servicer is not the surviving entity thereof, the Person formed by such
consolidation or into which the Servicer is merged or the Person which
acquires by conveyance, transfer or sale all or substantially all of the
properties and assets of the Servicer shall, in any such case, be a
corporation organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and, if the
Servicer is not the surviving entity, such corporation shall expressly
assume, by an agreement supplemental hereto, executed and delivered to the
Trustee and the Administrative Agent and in form and substance satisfactory
to the Trustee, the performance of every covenant and obligation of the
Servicer hereunder and under the other Transaction Documents to which the
Servicer is a party; and (ii) the Servicer shall have delivered to the
Trustee and the Administrative Agent an Officer's Certificate and an
Opinion of Counsel for the Servicer each stating that such consolidation,
merger, conveyance, transfer or sale and such supplemental agreement comply
with this SECTION 8.03(a), that such supplemental agreement is a valid and
binding obligation of such surviving entity enforceable against such
surviving entity in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity, and that all
conditions precedent in this SECTION 8.03(a) that relate to such
transaction have been complied with; and
(b) the Rating Agency Condition shall have been satisfied in
connection with such merger, consolidation or succession;
IT BEING ACKNOWLEDGED AND AGREED, that the foregoing restrictions shall not
apply to any merger of any subsidiary of the Servicer which was existing and was
wholly-owned by the Servicer as of the Closing Date with and into the Servicer,
which mergers shall be permitted hereunder without notice or consent so long as
the Servicer shall be the surviving entity thereof.
Section 8.04 INDEMNIFICATION BY THE SERVICER. Without limiting any
other rights which any Indemnified Party may have hereunder or under applicable
law, the Servicer hereby agrees to indemnify the Trustee, the Administrative
Agent, and the other Indemnified Parties from and against any and all
Indemnified Losses awarded against or incurred by any of them that arise out of
or relate to the Servicer's performance of, or failure to perform, any of its
obligations under or in connection with any Transaction Document while it was
acting as Servicer hereunder; PROVIDED, HOWEVER, that no Successor Servicer (if
other than a Stone Person) shall have any liability hereunder for any such
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Indemnified Loss except to the extent such loss was caused by such Successor
Servicer's own negligence or wilful misconduct in the performance of, or failure
to perform, its obligations under the Transaction Documents. Any Indemnified
Losses shall be paid by the Servicer to the applicable Indemnified Party within
5 Business Days following such Indemnified Party's written demand therefor,
setting forth, in reasonable detail, the calculation of such amount and the
basis of such demand.
Notwithstanding the foregoing (and, with respect to CLAUSE (b) below,
without prejudice to the rights that such Indemnified Party may have pursuant to
the other provisions of this Indenture or the provisions of any of the other
Transaction Documents), in no event shall any Indemnified Party be indemnified
against any Indemnified Losses (a) resulting from gross negligence or wilful
misconduct on the part of such Indemnified Party (or the gross negligence or
wilful misconduct on the part of any of such Indemnified Party's officers,
directors, employees or agents), (b) to the extent the same includes Indemnified
Losses in respect of Receivables and reimbursement therefore that would
constitute credit recourse to the Servicer for the amount of any Receivable or
Related Transferred Asset not paid by the related Obligor, (c) to the extent
such Indemnified Losses represent or result from lost profits, (d) to the extent
such Indemnified Losses are or result from taxes (including interest and
penalties thereon) asserted with respect to (i) payments of principal of,
interest on, or other amounts owed with respect to, the Notes, (ii) franchise or
withholding taxes imposed on or payable by any Indemnified Party or (iii)
Federal, state, local or other income taxes on or measured by the gross or net
income or receipts of such Indemnified Party and costs and expenses in defending
against the same, or (e) to the extent that such Indemnified Losses constitute
consequential, special or punitive damages.
The agreements of the Servicer contained in this SECTION 8.04 shall
survive (i) the replacement or termination of any Person acting as Servicer
hereunder with respect to any Indemnified Losses arising in connection with such
Person's acting as Servicer, (ii) the satisfaction and discharge of this
Indenture and (iii) the resignation or removal of the Trustee or the
Administrative Agent, as the case may be.
Section 8.05 SERVICER LIABILITY. The Servicer shall be liable in
accordance with this Indenture only to the extent of the obligations
specifically undertaken by the Servicer in such capacity herein and as set forth
herein.
The Servicer shall not be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties to service the
Receivables in accordance with this Indenture, any Supplement or any of the
other
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Transaction Documents to which it is a party, which in its reasonable opinion
may involve it in any expense or liability. The Servicer may, in its sole
discretion, undertake any such legal action relating to the servicing,
collection or administration of Receivables and Related Transferred Assets that
it may reasonably deem necessary or appropriate for the benefit of the
Noteholders with respect to this Indenture or any of the other Transaction
Documents to which it is a party, and the rights and duties of the parties
hereto and thereto and the interests of the Noteholders hereunder and
thereunder.
ARTICLE IX
LIQUIDATION EVENTS; EVENTS OF DEFAULT
Section 9.01 LIQUIDATION EVENTS. Any of the following events shall
constitute a "LIQUIDATION EVENT":
(a) an Event of Bankruptcy shall occur with respect to the Issuer or
any Seller, or any Seller shall become unable for any reason to, or shall
for any other reason cease to, transfer interests in the Receivables or
Related Transferred Assets to the Issuer in accordance with the Purchase
Agreement; PROVIDED, HOWEVER, that if, at any time prior to the Liquidation
Commencement Date, a Liquidation Event occurs pursuant to this SECTION
9.01(a) as a result of a bankruptcy proceeding being filed by or against
the Issuer or any Seller, then, notwithstanding anything to the contrary in
this SECTION 9.01(a) or in the definition of "LIQUIDATION COMMENCEMENT
DATE," on and after the day on which such a bankruptcy proceeding is filed,
the Issuer shall cease to purchase Receivables and the Related Purchased
Assets from all of the Sellers and the Purchase Termination Date shall be
deemed to have automatically occurred;
(b) the Issuer shall become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(c) the Aggregate Net Outstandings shall exceed the Base Amount for a
period of five or more consecutive Business Days;
(d) the occurrence and continuance of a Servicer Default; or
(e) any failure by the Issuer to make any payment, transfer or
deposit required by this Indenture or any Supplement to be made by it or to
give instructions or to give notice to the Trustee, the Administrative
Agent or the Paying Agent (if other than the Administrative Agent) to
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make such payment, transfer or deposit, which failure continues
unremedied (A) in the case of payments of interest on the Notes,
for five Business Days and (B) in the case of all payments not
included in CLAUSE (A) above, for seven Business Days after the
date on which an Authorized Officer of the Issuer has actual
knowledge of such failure.
Upon the occurrence of any event described in SUBSECTION (a) or (b) above, the
Liquidation Commencement Date and the Purchase Termination Date shall occur
without any notice or other action on the part of the Trustee or the
Noteholders, immediately upon the occurrence of such Liquidation Event. On the
tenth day after the Issuer receives notice of or becomes aware of (as evidenced
by the Daily Reports for the Business Days in question), the occurrence of the
event described in SUBSECTION (c) above, the Liquidation Commencement Date shall
occur without any notice or other action on the part of the Trustee or the
Noteholders. Upon the occurrence and during the continuance of any event
described in SUBSECTION (d) or (e) above, after the applicable grace period, if
any, set forth in such subsection, the Majority Noteholders may (or the Trustee,
at the direction of the Majority Noteholders, shall) by notice then given in
writing to the Issuer, the Administrative Agent, and the Servicer, declare that
the Liquidation Commencement Date and the Purchase Termination Date shall have
occurred as of the date of Issuer's receipt of such notice.
Notwithstanding the foregoing, a delay in or failure in performance
referred to in SUBSECTION (e) above for a period of 10 Business Days after the
applicable grace period shall not (unless such delay or failure continues after
such 10 Business Day period) constitute a Liquidation Event if such delay or
failure could not have been prevented by the exercise of reasonable diligence by
the Issuer and such delay or failure was caused by an act of God or the public
enemy, riots, acts of war, acts of terrorism, epidemics, flood, embargoes,
weather, landslides, fire, earthquakes or similar causes. The preceding
sentence shall not relieve the Issuer from using its best efforts to perform its
obligations in a timely manner in accordance with the terms hereof and of the
other Transaction Documents, and the Issuer shall promptly give the Trustee and
the Administrative Agent an Officer's Certificate notifying them of such failure
or delay by it.
Section 9.02 EVENTS OF DEFAULT. Any of the following events shall
constitute an "EVENT OF DEFAULT":
(a) an Event of Bankruptcy shall occur with respect to the Issuer;
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(b) a Liquidation Event described in SECTION 9.01(e) shall have
occurred and been continuing for thirty consecutive days;
(c) the Issuer shall have failed, as of any Payment Date and for any
reason, to have paid all accrued interest on the Notes, and such failure
shall not have been cured by the next succeeding Payment Date; and
(d) the Issuer shall have failed to pay in full the entire
Outstanding Principal Balance of any Note on or prior to the respective
Maturity Date therefor.
Upon the occurrence and during the continuance of an Event of Default, after the
applicable grace period, if any, set forth above in this SECTION 9.02, the
Trustee may (and, at the direction of the Required Noteholders, shall) by notice
then given in writing to the Issuer and the Servicer (with a copy thereof to the
Administrative Agent), declare that the Notes and all other obligations owed
hereunder to the Noteholders have become immediately due and payable, in the
event of which declaration the Purchase Termination Date and the Liquidation
Commencement Date shall occur as of the date of Issuer's receipt of such notice;
PROVIDED, however, that if an Event of Bankruptcy occurs with respect to the
Issuer, the Notes and all other obligations owed hereunder to the Noteholders
shall immediately and automatically become due and payable upon the occurrence
of such Event of Bankruptcy and the Purchase Termination Date and Liquidation
Commencement Date shall each occur, in each case without any notice or other
action on the part of the Trustee, the Administrative Agent or the Noteholders;
and PROVIDED, FURTHER, that, subject to the limitations on recourse set forth
herein, all unpaid principal and interest owing with respect to any Note shall
be due and payable on the Stated Maturity Date therefor without any notice or
action on the part of the Trustee, the Administrative Agent or the Noteholders
(other than the surrender of such Note by the holder thereof to the Paying
Agent).
Section 9.03 REMEDIES. Upon the occurrence of an Event of Default,
the Trustee shall have, in addition to all other rights and remedies available
to the Trustee under this Indenture or otherwise, (a) the right to apply
Collections to the payment of the Obligations of the Issuer and the Servicer
under this Indenture or under any of the other Transaction Documents, as
provided herein, and (b) all rights and remedies of a secured party under the
UCC and all other rights and remedies provided under any and all other
applicable laws, which rights, in the case of each and all of the foregoing,
shall be cumulative. The Trustee shall exercise such rights at the direction of
the Noteholders pursuant to (and subject to the limitations specified in)
SECTION 11.18; PROVIDED, that without the consent of all of
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the Noteholders, the Trustee shall not be permitted to sell, transfer or
otherwise convey the Pledged Assets to any third-party for an amount less than
the aggregate Outstanding Principal Balance of all of the Notes, together with
all accrued but unpaid interest thereon.
ARTICLE X
SERVICER DEFAULTS
Section 10.01 SERVICER DEFAULTS. Any of the following events shall
constitute a "SERVICER DEFAULT":
(a) any failure by the Servicer (in its capacity as Servicer) to make
any payment, transfer or deposit required by this Indenture or any of the
other Transaction Document to be made by it or to give instructions or to
give notice to the Trustee, the Administrative Agent, or the Paying Agent
(if other than the Administrative Agent) to make such payment, transfer or
deposit, which failure continues unremedied (A) in the case of payments of
interest on the Notes, for five Business Days and (B) in the case of all
payments not included in CLAUSE (A) above, for seven Business Days after
the date on which an Authorized Officer of the Servicer has actual
knowledge of such failure;
(b) failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set
forth in this Indenture or any other Transaction Document, which failure
has a material adverse effect on the Noteholders of any Series of Notes and
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee or the Administrative Agent,
or to the Servicer, the Trustee, and the Administrative Agent by any
Noteholder;
(c) the Servicer shall assign its duties under this Indenture, except
for delegations to Sub-Servicers contemplated under the Purchase Agreement
or as permitted by SECTIONS 3.01(c) and 8.03;
(d) any representation, warranty or certification made by the
Servicer hereunder or under any of the other Transaction Document or in any
certificate or other document or instrument delivered pursuant to this
Indenture or any of the other Transaction Document shall prove to have been
incorrect in any material respect when made or delivered and which has a
material adverse effect on the Noteholders of any Series of Notes which
material adverse effect continues
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unremedied for a period of 30 days after the date on which written
notice of such circumstance, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee or the Administrative
Agent, or to the Servicer, the Trustee, and the Administrative Agent
by any Noteholder; or
(e) any Event of Bankruptcy shall occur with respect to the Servicer.
Upon the occurrence and during the continuance of any Servicer Default or any
Event of Default, the Trustee, at the direction of the Majority Noteholders,
shall, by notice then given in writing to the Servicer (a "TERMINATION NOTICE"),
terminate all (but not less than all) the rights and obligations of the Servicer
as Servicer under this Indenture and in and to the Receivables, the Related
Transferred Assets and the proceeds thereof.
As soon as possible, and in any event within five Business Days, after
an Authorized Officer of the Servicer has obtained knowledge of the occurrence
of any Servicer Default, the Servicer shall furnish notice thereof to the
Trustee, the Administrative Agent, and the Applicable Rating Agencies, and the
Issuer and the Administrative Agent shall promptly upon receipt of such notice
furnish notice thereof to each Noteholder.
Notwithstanding the foregoing, a delay in or failure in performance
referred to in SUBSECTION (a) above for a period of 10 Business Days after the
applicable grace period, or in SUBSECTION (b) or (d) above for a period of 30
Business Days after the applicable grace period, shall not (unless such delay or
failure continues after such 10 or 30 Business Day period, as applicable)
constitute a Servicer Default if such delay or failure could not have been
prevented by the exercise of reasonable diligence by the Servicer and such delay
or failure was caused by an act of God or the public enemy, riots, acts of war,
acts of terrorism, epidemics, flood, embargoes, weather, landslides, fire,
earthquakes or similar causes. The preceding sentence shall not relieve the
Servicer from using its best efforts to perform its obligations in a timely
manner in accordance with the terms hereof and of the other Transaction
Documents, and the Servicer shall promptly give the Trustee, the Administrative
Agent, and the Issuer an Officer's Certificate notifying them of such failure or
delay by it.
Section 10.02 ADMINISTRATIVE AGENT TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the Servicer's receipt of a Termination Notice pursuant to
SECTION 10.01, the Servicer shall continue to perform all servicing functions
under this Indenture until the date specified in the Termination Notice or
otherwise specified by the Trustee in writing or, if no such date is specified
in such Termination Notice, or otherwise specified by the Trustee, until a date
mutually agreed upon by the Servicer
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and the Trustee. The Trustee shall, as promptly as possible after the giving of
a Termination Notice, nominate an Eligible Servicer as successor servicer (the
"SUCCESSOR SERVICER"). Any Person who is nominated to be a Successor Servicer
shall accept its appointment by a written assumption in form and substance
acceptable to the Trustee and which satisfies the Rating Agency Condition. In
the event that a Successor Servicer has not been appointed or has not accepted
its appointment at the time when the Servicer ceases to act as Servicer, the
Administrative Agent without further action shall automatically, upon its
receipt of notice thereof from the Trustee, be appointed the Successor Servicer.
If the Administrative Agent is prohibited by applicable law from performing the
duties of the Servicer hereunder or is unwilling or otherwise unable to act as
such, the Trustee may act as Servicer or may appoint, or petition a court of
competent jurisdiction to appoint, a Successor Servicer hereunder. The
Administrative Agent, or the Trustee, as applicable, may delegate any of its
servicing obligations to an affiliate or agent in accordance with SECTION
6.02(b) of the Purchase Agreement. The Trustee shall give prompt notice to the
Administrative Agent, the Issuer, the Applicable Rating Agencies and each
Noteholder upon the appointment of a Successor Servicer.
(b) After the Servicer's receipt of a Termination Notice, and on the
date that a Successor Servicer shall have been appointed by the Trustee and
shall have accepted such appointment pursuant to SECTION 10.02(a), all authority
and power of the Servicer under this Indenture shall pass to and be vested in
the Successor Servicer (a "SERVICE TRANSFER"); and the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and instruments, and to do and
accomplish all other acts or things that the Trustee reasonably determines are
necessary or appropriate to effect the purposes of such Service Transfer. Upon
the appointment of such Successor Servicer and its acceptance thereof, the
departing Servicer agrees that it will terminate its activities as Servicer
hereunder in a manner that the Trustee indicates will facilitate the transition
of the performance of such activities to the Successor Servicer. The departing
Servicer agrees that it shall use reasonable efforts to assist the Successor
Servicer in assuming the obligations to service and administer the Receivables
and the Related Transferred Assets, on the terms and subject to the conditions
set forth herein, and to effect the termination of the responsibilities and
rights of the departing Servicer to conduct servicing hereunder, including the
transfer to such Successor Servicer of all authority of the departing Servicer
to service the Receivables and Related Transferred Assets provided for under
this Indenture and all authority over all cash amounts which shall thereafter be
received with respect to the Receivables or the Related Transferred Assets. The
departing Servicer shall, within five Business Days after the designation of a
Successor
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Servicer, transfer its electronic records (including software) relating to the
Receivables, the related Contracts and the Related Transferred Assets to the
Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables and the Related Transferred Assets in the manner
and at such times as the Successor Servicer shall request. To the extent that
compliance with this SECTION 10.02(b) shall require the departing Servicer to
disclose to the Successor Servicer information of any kind which the departing
Servicer reasonably deems to be confidential, the Successor Servicer shall be
required to enter into such customary licensing and confidentiality agreements
as the departing Servicer shall reasonably deem necessary to protect its
interest prior to the transfer contemplated by the preceding sentence. All
reasonable costs and expenses (including attorneys' fees and disbursements)
incurred in connection with transferring the Receivables, the Related
Transferred Assets and all related Records (including the related Contracts) to
the Successor Servicer and amending this Indenture and the other Transaction
Documents to reflect such succession as Servicer pursuant to this SECTION
10.02(b) shall be paid by the departing Servicer (or, if the Administrative
Agent or the Trustee serves as Successor Servicer on an interim basis, the
departing Servicer in whose place the Administrative Agent or the Trustee was
then acting) within 15 days after presentation of reasonable documentation of
such costs and expenses.
(c) Upon its appointment and acceptance thereof, the Successor
Servicer shall be the successor in all respects to the departing Servicer with
respect to servicing functions under this Indenture and shall be subject to all
the responsibilities and duties relating thereto placed on the Servicer by the
terms and provisions hereof, and all references in this Indenture to the
Servicer shall be deemed to refer to the Successor Servicer.
(d) All authority and power granted to the Servicer under this
Indenture shall automatically cease and terminate upon satisfaction and
discharge of this Indenture pursuant to SECTION 13.01, and shall pass to and be
vested in the Issuer and, without limitation, the Issuer is hereby authorized
and empowered, on and after the effective date of such termination, to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all
documents and other instruments and to do and accomplish all other acts or
things that the Issuer reasonably determines are necessary or appropriate to
effect the purposes of such transfer of servicing rights. The Servicer agrees
to cooperate with the Issuer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing of the
Receivables and the Related Transferred Assets. The Servicer (if other than
Stone Container) shall, within five Business Days after such termination,
transfer its electronic
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records relating to the Receivables and the Related Transferred Assets to the
Issuer in such electronic form as the Issuer may reasonably request and shall
transfer all other records, correspondence and documents relating to the
Receivables and the Related Transferred Assets to the Issuer in the manner and
at such times as the Issuer shall reasonably request. To the extent that
compliance with this SECTION 10.02(d) shall require the Servicer (if other than
Stone Container) to disclose to the Issuer information of any kind which the
Servicer deems to be confidential, the Issuer shall be required to enter into
such customary licensing and confidentiality agreements as the Servicer shall
reasonably deem necessary to protect its interests. All reasonable costs and
expenses (including attorneys' fees and disbursements) incurred by the
Administrative Agent, if any, in its capacity as a Successor Servicer, in
connection with such termination shall be paid by the Issuer within 15 days
after presentation of reasonable documentation of such costs and expenses.
ARTICLE XI
THE TRUSTEE AND THE ADMINISTRATIVE AGENT
Section 11.01 DUTIES OF TRUSTEE AND THE ADMINISTRATIVE AGENT. (a)
Except after the occurrence of a Servicer Default or an Event of Default, each
of the Trustee and the Administrative Agent undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and/or the
other Transaction Documents, and no implied covenants, obligations or duties
shall be read in to this Indenture or any of the other Transaction Documents as
against such Person. The provisions of this ARTICLE XI shall apply to the
Administrative Agent solely in its capacity as Administrative Agent, and not in
its capacity as a Successor Servicer to the extent it acts as such in accordance
with SECTION 10.02. Following the occurrence of a Servicer Default or an Event
of Default of which a Responsible Officer of the Trustee has received written
notice, the Trustee shall exercise such of the rights and powers vested in it by
this Indenture and 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
his or her own affairs; PROVIDED, FURTHER, that if the Administrative Agent
shall assume the duties of the Servicer pursuant to SECTION 10.02, the
Administrative Agent in performing such duties shall use the degree of skill and
attention customarily exercised by a servicer with respect to trade receivables
that it services for itself or others. Neither the Trustee nor the
Administrative Agent shall have any power to create, assume or incur
indebtedness or other liabilities in the name of the Issuer or the Noteholders,
other than as contemplated in, or incidental to the performance of its duties
under, this Indenture.
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(b) Each of the Trustee or the Administrative Agent, upon its receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments which are specifically required to be furnished to
it pursuant to any provision of this Indenture or any of the other Transaction
Documents, shall examine them to determine whether they are complete and in the
form required by this Indenture or such other Transaction Document. The Trustee
or the Administrative Agent, as the case may be, shall give prompt written
notice to the Person who furnished any item of the type listed in the preceding
sentence of any lack of completeness or conformity of any such item to the
applicable requirements of this Indenture or such other Transaction Document.
In addition, the Trustee or the Administrative Agent, as the case may be, shall
give prompt written notice to the Noteholders of any material lack of
completeness or conformity of any such instrument to the applicable requirements
of this Indenture or any of the other Transaction Documents discovered by the
Trustee or the Administrative Agent, as the case may be, if such lack of
completeness or non-conformity would entitle all or a specified percentage of
the Noteholders of all or any Series of Notes to take any action pursuant to
this Indenture.
(c) Subject to SECTION 11.01(a), no provision of this Indenture shall
be construed to relieve the Trustee or the Administrative Agent from liability
for its own negligent action, its own negligent failure to act or its own wilful
misconduct; PROVIDED, HOWEVER, that:
(i) neither the Trustee nor the Administrative Agent shall be liable
for an error of judgment made in good faith by Responsible Officers of the
Trustee or the Administrative Agent, as the case may be, unless it shall be
proved that the Trustee or the Administrative Agent, as applicable, was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction (as applicable) of the Majority Noteholders, the Required
Noteholders, all Noteholders, or the Required Series Holders relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture or any of the other Transaction
Documents;
(iii) neither the Trustee nor the Administrative Agent shall be
charged with knowledge of (A) any failure by the Servicer (if other than
the Trustee or the Administrative Agent) to comply with the obligations of
the Servicer referred to in SUBSECTIONS (a), (b) or (c) of SECTION 10.01,
(B) any breach of the representations and warranties of the
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Issuer set forth in SECTION 2.03 or 7.01 or the representations and
warranties of the Servicer set forth in SECTION 8.01, (C) any breach of
the covenants of the Issuer set forth in SECTION 7.02 or the covenants
of the Servicer set forth in SECTION 8.02, (D) the ownership of any Note
for purposes of SECTION 6.16, or (E) the occurrence of any Liquidation
Event, Unmatured Liquidation Event, Pay- Out Event, Unmatured Pay-Out
Event, Event of Default, Unmatured Event of Default or Servicer Default,
in each case unless a Responsible Officer of the Trustee or the
Administrative Agent, as the case may be, receives written notice of
such matter from the Servicer, the Issuer or any Noteholder;
(iv) in the absence of bad faith on the part of the Trustee or the
Administrative Agent, the Trustee or the Administrative Agent, as the case
may be, may conclusively rely on the truth of the statements and the
correctness of the opinions expressed in any certificates or opinions that
are furnished to the Trustee or the Administrative Agent, as applicable,
and that conform to the requirements of this Indenture or the other
applicable Transaction Documents; and
(v) without limiting the generality of this SECTION 11.01 or SECTION
11.02, neither the Trustee nor the Administrative Agent shall have any duty
(A) to see to any recording, filing, or depositing of this Indenture or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest in the Receivables or the Related
Transferred Assets, or to see to the maintenance of any such recording or
filing or depositing or to any rerecording, refiling or redepositing of any
thereof, (B) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any Adverse Claim or encumbrance of any kind
owing with respect to, assessed or levied against, all or any of the
Pledged Assets, (C) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Trustee or the Administrative
Agent, as applicable, pursuant to this Indenture that are believed by the
Trustee or the Administrative Agent, as applicable, to be genuine and to
have been signed or presented by the proper party or parties or (D) to
ascertain or inquire as to the performance or observance of any of the
Issuer's or the Servicer's representations, warranties or covenants or the
Servicer's duties and obligations as Servicer.
(d) Neither the Trustee nor the Administrative Agent shall be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if the Trustee or the Administrative Agent, as the case
may be, reasonably believes that the repayment of such funds or adequate
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indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Indenture or any of the other
Transaction Documents shall in any event require the Trustee or the
Administrative Agent to perform, or be responsible for the manner of performance
of, any obligations of the Servicer under this Indenture or any of the other
Transaction Documents, except during such times, if any, as the Administrative
Agent or the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Indenture.
(e) Except for actions expressly authorized by this Indenture,
neither the Trustee nor the Administrative Agent shall take any action
reasonably likely to impair its or the Noteholders' interests in any of the
Pledged Assets which are now existing or hereafter created or to impair the
value of any Pledged Asset which are now existing or hereafter created.
(f) Except to the extent expressly otherwise provided in this
Indenture, the Trustee shall have no right to release its lien (for the benefit
of the Noteholders) on any of the Pledged Assets, to accept any other obligation
or property for any Pledged Assets, or to withdraw any Pledged Asset, except, in
each case, upon the satisfaction and discharge of this Indenture or with the
consent of each of the Noteholders.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar (in either case, if other than the Administrative Agent) shall fail to
perform any obligation, duty or agreement in the manner or on the day on which
such obligation, duty or agreement is required to be performed by the Paying
Agent or the Transfer Agent and Registrar, as the case may be, under this
Indenture, the Administrative Agent shall be obligated, promptly upon receipt by
a Responsible Officer of the Administrative Agent of written notice thereof, to
perform such obligation, duty or agreement in the manner so required.
(h) The Administrative Agent shall transmit by mail notice of any
Pay-Out Event, Liquidation Event or Event of Default with respect to the Notes
of any Series (i) within 10 Business Days after any Responsible Officer of the
Administrative Agent shall have received written notice of the occurrence
thereof, to all affected Noteholders, as their names and addresses appear in the
Note Register, unless such event shall have been cured or waived prior to such
time and (ii) within 5 Business Days after any Responsible Officer of the
Administrative Agent receives written notice of the occurrence thereof, to each
of the Applicable Rating Agencies.
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Section 11.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE
ADMINISTRATIVE AGENT. Except as otherwise provided in SECTION 11.01:
(a) each of the Trustee and the Administrative Agent may rely on and
shall be protected in acting on, or in refraining from acting in accordance
with, any resolution, Officer's Certificate, Opinion of Counsel,
certificate of auditors or any other certificate, statement, instrument,
instruction, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document and any information contained therein
believed by it to be genuine and to have been signed or presented to it
pursuant to this Indenture or any of the other Transaction Documents by the
proper party or parties including, but not limited to, reports and records
required by ARTICLE III;
(b) each of the Trustee and the Administrative Agent may consult with
counsel and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or permitted or
omitted by it hereunder or under any of the other Transaction Documents in
good faith and in accordance with such advice or Opinion of Counsel;
(c) neither the Trustee nor the Administrative Agent (including the
Administrative Agent in its role as Successor Servicer, to the extent that
it ever acts in such capacity) shall be under any obligation to exercise
any of the rights or powers vested in it by this Indenture, or to
institute, conduct or defend any litigation or other proceeding hereunder
or thereunder or in relation hereto or thereto, at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture or any of the other Transaction Documents, unless such
Noteholders shall have offered to the Trustee and/or the Administrative
Agent, as the case may be, 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 the obligation, upon the occurrence and continuance of a Servicer
Default which has not been cured, to exercise such of the rights and powers
vested in it by this Indenture 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 his or her own affairs;
(d) neither the Trustee nor the Administrative Agent shall be
personally liable for any action taken, permitted or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers
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conferred upon it by this Indenture or by any of the other Transaction
Documents;
(e) neither the Trustee nor the Administrative Agent shall be bound
to (but may in its sole discretion) make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by the Required
Noteholders; PROVIDED, HOWEVER, that if the payment within a reasonable
time to the Trustee or the Administrative Agent of the costs, expenses, or
liabilities likely to be incurred by it in connection with making such
investigation shall, in the opinion of the Trustee or the Administrative
Agent, not be reasonably assured to the Trustee or the Administrative
Agent, as the case may be, by the security afforded to it by the terms of
this Indenture, the Trustee or the Administrative Agent, as the case may
be, may require reasonable indemnity against such costs, expenses, or
liabilities as a condition to proceeding with such investigation. The
reasonable expense of every such examination shall be paid by the Issuer;
(f) the Trustee or the Administrative Agent may execute any of the
trusts, powers or rights hereunder or under any of the other Transaction
Documents or perform any duties hereunder or thereunder either directly or
by or through agents, representatives, attorneys or a custodian, and
neither the Trustee nor the Administrative Agent shall be responsible for
any misconduct or negligence on the part of any such agent, representative,
attorney or custodian appointed with due care by it hereunder;
(g) except as may be required by SECTION 11.01(b) hereof, neither the
Trustee nor the Administrative Agent shall be required to make any initial
or periodic examination of any documents or records related to the Pledged
Assets for the purpose of establishing the presence or absence of defects
or for any other purpose;
(h) whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee or the Administrative Agent shall be
subject to the provisions of SECTION 11.01 and this SECTION 11.02;
(i) neither the Trustee nor the Administrative Agent shall have any
liability with respect to the acts or omissions of the Servicer (except and
to the extent the Administrative Agent or the Trustee is the Servicer),
including, but not limited to, acts or omissions in connection with: the
servicing, management or
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administration of the Receivables or the Related Transferred Assets;
calculations made by the Servicer, whether or not reported to the
Trustee or the Administrative Agent; and deposits into or withdrawals
from any Bank Accounts or Trust Accounts established pursuant to the
terms of this Indenture;
(j) in the event that either of the Trustee or the Administrative
Agent is also acting as Paying Agent or Transfer Agent and Registrar
hereunder, the rights and protections afforded to the Trustee and the
Administrative Agent pursuant to this ARTICLE XI shall also be afforded to
the Trustee or the Administrative Agent, as the case may be, so acting as
Paying Agent or as Transfer Agent and Registrar; and
(k) whenever in the administration of this Indenture or any of the
other Transaction Documents the Trustee or the Administrative Agent shall
deem it desirable that a matter be proved or established prior to the
Trustee's or the Administrative Agent's taking, suffering or omitting any
action hereunder or thereunder, the Trustee or the Administrative Agent, as
the case may be, (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officers'
Certificate.
Section 11.03 MAY HOLD NOTES. The Trustee, the Administrative Agent,
any Paying Agent, the Transfer Agent and Registrar or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of the Notes and, subject to SECTIONS 11.05 through (and including) 11.07, may
otherwise deal with the Issuer with the same rights it would have if it were not
Trustee, Administrative Agent, Paying Agent, Transfer Agent and Registrar or
such other agent.
Section 11.04 MONEY HELD IN TRUST. Money held by the Trustee or the
Administrative Agent in trust hereunder need not be segregated from other funds
of such Person, except to the extent required by law or this Indenture. Neither
the Trustee nor the Administrative Agent shall be under any liability for
interest on any money received by it hereunder except as otherwise agreed in
writing with the Issuer.
Section 11.05 DISQUALIFICATION; CONFLICTING INTERESTS. If, at any
time after this Indenture has been qualified under the Trust Indenture Act, the
Trustee has or shall acquire any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act, the Trustee and the Issuer shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act. Without limiting the foregoing, if a conflicting interest is deemed to
arise under said Section 310(b)
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by virtue of the fact that the Trustee is acting as Trustee for more than one
Series of Notes outstanding concurrently, and such conflicting interest is not,
or is not reasonably expected to be, cured within ninety (90) days of its
occurrence, then, in such event, the Trustee may resign or assign to a separate
trustee such of its duties under the Transaction Documents as may be necessary
to eliminate any such conflicting interest in accordance with SECTION 11.14
hereof.
Section 11.06 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. At
all times after this Indenture becomes qualified under the Trust Indenture Act,
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act, and a Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent indicated therein.
Section 11.07 LIMITATION ON LIABILITY OF TRUSTEE AND ADMINISTRATIVE
AGENT; ADMINISTRATIVE AGENT NOT A FIDUCIARY. Neither the Trustee nor the
Administrative Agent shall at any time have any responsibility or liability for
or with respect to the correctness of the recitals contained herein, in any of
the other Transaction Documents, or in the Notes (other than the certificate of
authentication of the Administrative Agent on the Notes). Except as set forth
in SECTION 11.19, neither the Trustee nor the Administrative Agent makes any
representations as to the validity or sufficiency of this Indenture, any of the
other Transaction Documents, the Notes (other than the certificate of
authentication of the Administrative Agent on the Notes), any other Transaction
Document or any Pledged Asset or related document. Neither the Trustee nor the
Administrative Agent shall be accountable for the use or application by the
Issuer of any of the Notes, or of the proceeds of such Notes, or for the use or
application of any funds paid to the Issuer or the Servicer in respect of the
Pledged Assets or deposited by the Servicer in, or withdrawn by the Servicer
from, the Bank Accounts, the Trust Accounts or any other accounts hereafter
established to effectuate the transactions contemplated herein or in the other
Transaction Documents in accordance with the terms hereof or thereof.
Neither the Trustee nor the Administrative Agent shall at any time
have any responsibility or liability for or with respect to (A) the legality,
validity, or enforceability of any ownership or security interest in any Pledged
Asset, (B) the perfection or priority of such a security interest, (C) the
maintenance of any such perfection or priority, (D) the efficacy of the Granting
Clause hereunder, (E) the ability of the Pledged Assets to generate the payments
to be distributed to Noteholders under this Indenture, (F) the existence and
substance of any Pledged Asset or any related Record or any computer or other
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record thereof; (G) the validity of the grant of security in any Pledged Asset
to the Trustee as contemplated pursuant to the Granting Clause hereunder or of
any preceding or intervening grant pursuant thereto; (H) the performance or
enforcement of any Pledged Asset; (I) the compliance by the Issuer or the
Servicer with any warranty or representation made under this Indenture or in any
other Transaction Document and the accuracy of any such warranty or
representation prior to the Trustee's and the Administrative Agent's receipt of
actual notice of any noncompliance therewith or any breach thereof; (J) any
investment of monies pursuant to SECTION 4.03 or any loss resulting therefrom;
(K) the acts or omissions of the Issuer, the Servicer, or any Obligor; (L) any
action of the Servicer taken in the name of the Trustee or the Administrative
Agent; or (M) any action by the Trustee or the Administrative Agent taken at the
instruction of the Servicer; PROVIDED, HOWEVER, that the foregoing shall not
relieve either of the Trustee or the Administrative Agent of its obligation to
perform its duties under this Indenture and the other Transaction Documents in
accordance with the terms hereof and thereof.
Except with respect to a claim based on the failure of either of the
Trustee or the Administrative Agent to perform its respective duties under this
Indenture or under any of the other Transaction Documents or based on the
Trustee's or the Administrative Agent's negligence or wilful misconduct, no
recourse shall be had against the Trustee or the Administrative Agent in its
individual capacity for any claim based on any provision of this Indenture, any
other Transaction Document, the Notes, any Pledged Asset or any assignment
thereof. Neither the Trustee nor the Administrative Agent shall have any
personal obligation, liability, or duty whatsoever to any Noteholder or any
other Person with respect to any such claim, and any such claim shall be
asserted solely against the Pledged Assets, the Issuer or any indemnitor who
shall furnish indemnity to the Trustee or the Administrative Agent, as the case
may be, as provided in this Indenture. Any obligation of the Trustee or the
Administrative Agent to give any notice or statement to any rating agency
hereunder shall constitute only a best efforts obligation and such notice or
statement shall be so provided only as a matter of courtesy and accommodation.
Neither the Trustee nor the Administrative Agent shall have any liability to any
rating agency or any other Person for any failure to so provide such notice or
statement.
The Administrative Agent shall not have any duties or responsibilities
except those expressly set forth in this Indenture or in the other Transaction
Documents. The duties of the Administrative Agent shall be mechanical and
administrative in nature. Notwithstanding anything contained herein to the
contrary, the Administrative Agent shall not be deemed to have, by reason of
this Indenture or any of the other Transaction
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Documents to which it is a party thereto, a fiduciary relationship in
respect of any Noteholder. Nothing in this Indenture or any of the other
Transaction Documents, expressed or implied, is intended to or shall be
construed to impose upon the Administrative Agent any obligations in
respect of this Indenture or any of the other Transaction Documents, except
as expressly set forth herein or therein.
The provisions of this SECTION 11.07 shall survive and continue to
inure to the benefit of each of the Trustee and the Administrative Agent
notwithstanding the termination of this Indenture or the removal or
resignation of the Trustee or the Administrative Agent, as applicable.
Section 11.08 TRUSTEE AND ADMINISTRATIVE AGENT MAY DEAL WITH OTHER
PARTIES. Subject to any restrictions that may otherwise be imposed by
Section 406 of ERISA or Section 4975(e) of the Internal Revenue Code and/or
the Trust Indenture Act (if applicable), each of the Trustee and the
Administrative Agent, in its individual or any other capacity, may deal with
the other parties hereto (other than the Issuer) and their respective
affiliates, with the same rights as it would have if it were not the Trustee
or the Administrative Agent.
Section 11.09 SERVICER TO PAY TRUSTEE'S AND THE ADMINISTRATIVE
AGENT'S FEES AND EXPENSES. (a) To the extent not paid by the Servicer to
the Trustee or the Administrative Agent from funds constituting the Servicing
Fee, the Servicer covenants and agrees to pay to each of the Trustee and the
Administrative Agent from time to time, and each of the Trustee and the
Administrative Agent shall be entitled to receive, such reasonable
compensation as is agreed upon in writing between the Trustee and the
Servicer, in the case of any such fees payable to the Trustee, and between
the Administrative Agent and the Servicer, in the case of any such fees
payable to the Administrative Agent (which amount shall not, in either case,
be limited by any provision of law in regard to the compensation of a trustee
of an express trust) for all services rendered by it in the execution of the
trust hereby created and in the exercise and performance of any of the
powers and duties of the Trustee or the Administrative Agent, as applicable,
hereunder and under the other Transaction Documents, and the Servicer will
pay or reimburse each of the Trustee and the Administrative Agent upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee or the Administrative Agent, as the case may be, in
accordance with any of the provisions of this Indenture and the other
Transaction Documents to which it is a party (including the reasonable fees
and expenses of its agents, any co-trustee and counsel), except any such
expense, disbursement or advance as may arise from the Trustee's or the
Administrative Agent's own negligence or wilful
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misconduct and except as otherwise provided in the following subsection.
(b) In addition, the Servicer (if other than the Administrative Agent
or the Trustee) agrees to indemnify each of the Trustee and the Administrative
Agent from, and hold it harmless against, any and all losses, liabilities,
damages, claims or expenses (including, without limitation, the reasonable fees
and expenses of counsel) incurred by the Trustee or the Administrative Agent in
the exercise or performance of any of its powers or duties hereunder and the
other Transaction Documents or as a result of the Trustee's action as Trustee or
the Administrative Agent's action as Administrative Agent hereunder and/or
thereunder, in each case, other than those resulting from the gross negligence
or wilful misconduct of the Trustee or the Administrative Agent.
(c) If the Administrative Agent or the Trustee is appointed Successor
Servicer pursuant to SECTION 10.02, the provisions of this SECTION 11.09 shall
not apply to expenses, disbursements and advances made or incurred by the
Administrative Agent or the Trustee, as the case may be, in its capacity as
Successor Servicer, which accounts shall be paid out of the Servicing Fee. The
Servicer's covenant to pay the fees, expenses, disbursements and advances
provided for in this SECTION 11.09 shall survive the resignation or removal of
the Trustee or the Administrative Agent and the satisfaction and discharge of
this Indenture.
Section 11.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall
at all times be a Trustee hereunder which shall:
(a) be a corporation organized and doing business under the laws
of the United States of America, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise corporate trust
powers, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority; (b) not be an Enhancement
Provider; (c) have, in the case of an entity that is subject to risk-based
capital adequacy requirements, risk-based capital of at least $50,000,000 or,
in the case of an entity that is not subject to risk-based capital adequacy
requirements, a combined capital and surplus of at least $50,000,000; and (d)
with respect to any successor Trustee, have a long-term unsecured senior debt
rating of "BBB" or better from S&P and "Baa2" or better from Moody's
Investors Service, Inc. If such corporation or association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purpose of this
SECTION 11.10, the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of
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condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this SECTION 11.10, the Trustee shall
resign immediately in the manner and with the effect specified in SECTION 11.11.
Section 11.11 RESIGNATION OR REMOVAL OF TRUSTEE OR ADMINISTRATIVE
AGENT. (a)(i) The Trustee may at any time resign and be discharged from the
trust hereby created by giving at least 30 days' prior written notice thereof to
the Issuer, the Servicer, the Administrative Agent, the Applicable Rating
Agencies and the Noteholders. Upon receiving such notice of resignation, the
Issuer shall promptly appoint a successor trustee who meets the eligibility
requirements set forth in SECTION 11.10 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 shall have accepted such appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may, upon notice to
the Issuer, petition any court of competent jurisdiction to appoint a successor
trustee who meets the eligibility requirements set forth in SECTION 11.10.
(ii) If at any time:
(1) after this Indenture is qualified or required to be qualified
under the Trust Indenture Act, the Trustee shall fail to comply with
Section 310(b) of the Trust Indenture Act pursuant to SECTION 11.05 hereof
after written request therefor by the Issuer, the Servicer or any
Noteholder (unless the Trustee's duty to resign is stayed in accordance
with the provisions of Section 310(b) of the Trust Indenture Act); or
(2) the Trustee shall otherwise cease to be eligible under SECTION
11.10 hereof and shall fail to resign after written request therefor by the
Servicer, the Issuer or the Majority Noteholders; or
(3) the Trustee shall become incapable of acting or shall become the
subject of an Event of Bankruptcy,
then, in any such case, the Servicer may (or, at the request of the Issuer or
any Noteholder, shall) 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 being so removed (who shall send a copy thereof to
each of the Applicable Rating Agencies) and the other copy thereof shall be
delivered to the successor Trustee. If no successor trustee shall have been
appointed and shall have accepted such appointment within 30 days after the
Issuer's or any such Noteholder's giving of any such notice, the Issuer or any
such
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Noteholder may petition any court of competent jurisdiction to appoint a
successor trustee meeting the eligibility requirements set forth in SECTION
11.10.
(iii) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this SECTION 11.11 shall
not become effective until acceptance of appointment by the successor trustee as
provided in SECTION 11.12 hereof.
(b)(i) The Administrative Agent may at any time resign hereunder by
giving at least 30 days' prior written notice thereof to the Issuer, the
Servicer, the Trustee and the Applicable Rating Agencies. Upon receiving such
notice of resignation, the Issuer shall promptly appoint a successor
Administrative Agent who meets the eligibility requirements set forth in clauses
(a) and (c) of SECTION 11.10 by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Administrative Agent and
one copy to the successor Administrative Agent. Until such time as a successor
Administrative Agent shall be so appointed and shall have accepted such
appointment, the Trustee shall act as the Administrative Agent. If no such
successor Administrative Agent shall have been appointed and shall have accepted
its appointment within 30 days after the giving of such notice of resignation,
the Trustee may (but shall have no obligation to), petition any court of
competent jurisdiction to appoint a successor Administrative Agent which meets
such eligibility requirements.
(ii) If at any time the Administrative Agent shall become incapable
of acting or shall become the subject of an Event of Bankruptcy, then, in any
such case, the Servicer may (or, at the request of the Issuer or any Noteholder,
shall) remove the Administrative Agent. In addition, if the Administrative
Agent shall fail to perform any of its duties hereunder and such failure shall
remain unremedied for 60 days after its receipt of notice of such failure given
by any Noteholder, the Trustee, the Issuer or the Servicer in writing (with a
copy thereof to the Trustee), then the Servicer at the direction of the Issuer
or the Required Noteholders, shall remove the Administrative Agent. In either
of the foregoing cases, the Issuer shall promptly appoint a successor
Administrative Agent who meets the eligibility requirements set forth in clauses
(a) and (c) of SECTION 11.10 by written instrument, in duplicate, one copy of
which instrument shall be delivered to the terminated Administrative Agent and
one copy to the successor Administrative Agent. Until such time as a successor
Administrative Agent shall be so appointed and shall have accepted such
appointment, the Trustee shall act as the Administrative Agent. If no such
successor Administrative Agent shall have been appointed and accepted its
appointment within 30 days after the giving of such notice of resignation or
removal, the Trustee may (but shall have
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no obligation to), petition any court of competent jurisdiction to appoint a
successor Administrative Agent which meets such eligibility requirements.
(iii) Any resignation or removal of the Administrative Agent and
appointment of a successor Administrative Agent pursuant to any of the
provisions of this SECTION 11.11(b) shall not become effective until acceptance
of appointment by the successor Administrative Agent as provided in SECTION
11.12 hereof.
Section 11.12 SUCCESSOR TRUSTEE OR ADMINISTRATIVE AGENT. (a) Any
successor Trustee or Administrative Agent appointed as provided in SECTION 11.11
hereof shall execute, acknowledge and deliver to the Issuer, the Servicer, the
Noteholders and the predecessor Trustee or Administrative Agent, as the case may
be, an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee or Administrative Agent shall,
upon payment of its fees and expenses and other amounts owed to it pursuant to
SECTION 11.09, become effective and such successor Trustee or Administrative
Agent, as the case may be, 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 herein as Trustee
or the Administrative Agent, as the case may be. The predecessor Trustee or
Administrative Agent shall deliver to the successor Trustee or Administrative
Agent, as the case may be, at the expense of the Servicer, all documents or
copies thereof and statements held by it hereunder; and the Issuer and the
predecessor Trustee or Administrative Agent, as the case may be, shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully vesting and confirming in the successor Trustee or
Administrative Agent, as the case may be, all such rights, powers, duties and
obligations.
(b) No successor Trustee shall accept appointment as provided in this
SECTION 11.12 unless at the time of such acceptance such successor Trustee shall
be eligible to become the Trustee under the provisions of this Indenture.
(c) Upon acceptance of appointment by a successor Trustee or
Administrative Agent as provided in this SECTION 11.12, such successor Trustee
or Administrative Agent, as the case may be, shall mail notice of such
succession hereunder to each of the Applicable Rating Agencies, the Issuer, the
Servicer, the Trustee, the Administrative Agent and each of the Noteholders.
Section 11.13 MERGER OR CONSOLIDATION OF TRUSTEE OR ADMINISTRATIVE
AGENT. Any Person into which the Trustee or Administrative Agent may be merged
or converted or with which it
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may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee or Administrative Agent shall be a party, or
any Person succeeding to all or substantially all of the corporate trust
business of the Trustee or Administrative Agent, shall be the successor of the
Trustee or Administrative Agent hereunder, provided such Person meets the
requirements of this Indenture, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. The Trustee or the
Administrative Agent, as the case may be, shall promptly give notice to the
Applicable Rating Agencies, the Issuer, the Servicer, the Trustee (in the case
of a notice to be delivered by the Administrative Agent), the Administrative
Agent (in the case of a notice to be delivered by the Trustee) and the
Noteholders upon any such merger or consolidation of the Trustee or the
Administrative Agent, as the case may be.
Section 11.14 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Pledged Assets may at the time be located, or for the purpose of
compliance with the Trust Indenture Act (to the extent applicable), the Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons (which may be an employee or employees of the Trustee) to act as
a co-trustee or co-trustees, or separate trustee or separate trustees, with
respect to all or any part of its duties hereunder or with respect to the
Pledged Assets, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, subject to the other provisions of this SECTION
11.14, such powers, duties, obligations, rights and trusts and with respect to
the Pledged Assets, or any part thereof, as the Trustee may consider necessary
or appropriate. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility of a successor trustee under SECTION 11.10 and
no notice to the Noteholders or the Applicable Rating Agencies of the
appointment of any such co-trustee or separate trustee shall be required under
SECTION 11.12; PROVIDED, HOWEVER, that, in the event this Indenture is qualified
under the Trust Indenture Act, each separate "indenture trustee" must qualify
under the Trust Indenture Act. The Trustee shall give the Servicer and the
Issuer notice of any such appointment as promptly as practicable.
(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) except for any appointment of a separate Trustee pursuant to
SECTION 11.05 hereof, all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by
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the Trustee and such separate trustee or co-trustee jointly and such
separate trustee or co-trustee shall not be authorized to act separately
without the Trustee joining in any such act, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed (whether as the 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 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
(except with respect to a separate trustee appointed pursuant to SECTION
11.05 hereof) 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 Indenture and
the conditions of this ARTICLE XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording protection
or indemnity to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Indenture or any other Transaction Document 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 its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
Section 11.15 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture, the Notes and/or any of
the other Transaction Documents may be prosecuted and enforced by the Trustee
without the
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possession of any of the Notes 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
distributed to the Noteholders in respect of which such judgment has been
obtained in the manner specified in SECTION 4.02(e) or 4.02(f), as applicable.
Section 11.16 TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceedings, or any voluntary or involuntary case under the Bankruptcy Code or
any similar state bankruptcy or insolvency laws, in each case, as now or
hereafter constituted, relative to the Issuer, the Trustee (irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Issuer for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole Outstanding Principal
Balance (and premium, if any) and interest owing and unpaid in respect of
the Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Noteholders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) in any such proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under SECTION
11.09.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
of any Note
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holder, or to authorize the Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.
Section 11.17 SUITS FOR ENFORCEMENT. If a Liquidation Event, Event
of Default or a Servicer Default shall occur and be continuing, the Trustee, in
its discretion may, subject to the provisions of SECTIONS 11.01 and 11.18,
proceed to protect and enforce its rights and the rights of the Noteholders
under this Indenture and/or the other Transaction Documents 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 Indenture or any
other Transaction Document or in aid of the execution of any power granted in
this Indenture 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 Noteholders.
Section 11.18 RIGHTS OF REQUIRED NOTEHOLDERS TO DIRECT TRUSTEE. The
Required Noteholders shall have the right to direct the Trustee to perform any
of its duties as Trustee hereunder (including, without limitation, directing the
time, method and location for conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee);
PROVIDED, HOWEVER, that if any provision of this Indenture or any Supplement
requires the approval or other action of Noteholders holding a specified
percentage of any Class or Series of Notes, then the Trustee shall perform such
duty only at the direction of such requisite percentage of Noteholders as is
specified in such provision; and PROVIDED, FURTHER, that, subject to SECTION
11.01, the Trustee may 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 a Responsible Officer or Responsible Officers of the
Trustee shall determine, in good faith, that the proceedings so directed would
be illegal or involve the Trustee in personal liability or be unduly prejudicial
to the rights of the Noteholders not giving such direction; and, PROVIDED,
FURTHER that nothing in this Indenture 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 Required Noteholders or such other required percentage of
Noteholders, as applicable.
Section 11.19 REPRESENTATIONS AND WARRANTIES OF TRUSTEE AND THE
ADMINISTRATIVE AGENT. (a) The Trustee represents and warrants that:
(i) the Trustee is a New York banking corporation and trust company
organized, existing and in good standing under the laws of the State of New
York;
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(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Indenture and each of the Supplements executed by
it on the date hereof, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Indenture and such
Supplements;
(iii) this Indenture and each of the Supplements executed by it on
the date hereof have been duly executed and delivered by the Trustee and
are legal, valid and binding obligations of the Trustee, enforceable in
accordance with their respective terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law; and
(iv) until notified to the contrary by the Trustee in accordance with
SECTION 11.10, the Trustee satisfies the eligibility requirements set forth
in such Section.
(b) The Administrative Agent represents and warrants that:
(i) the Administrative Agent is a New York banking corporation
organized, existing and in good standing under the laws of the jurisdiction
of its incorporation;
(ii) the Administrative Agent has full power, authority and right to
(x) execute, deliver and perform this Indenture and each of the Supplements
executed by it on the date hereof, and (y) to authenticate and deliver each
of the Notes authenticated and delivered by it on the date hereof and has
taken all necessary action to authorize the execution, delivery,
performance and/or authentication, as applicable, by it of this Indenture,
such Supplements and such Notes; and
(iii) this Indenture, each of the Supplements and each of the Notes
executed or authenticated by it on the date hereof have been duly executed
and delivered by the Administrative Agent and, in the case of the Indenture
and each such Supplement, are legal, valid and binding obligations of the
Administrative Agent, enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity,
regardless of whether such
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enforceability is considered in a proceeding in equity or at law.
Section 11.20 MAINTENANCE OF OFFICE OR AGENCY. Each of the Trustee
and the Administrative Agent will maintain, at its address designated pursuant
to SECTION 16.03, an office or offices or agency or agencies where notices and
demands to or upon the Trustee or the Administrative Agent in respect of the
Notes, this Indenture and the other Transaction Documents to which it is a party
may be served. Each of the Trustee and the Administrative Agent will give
prompt written notice to the Servicer, the Administrative Agent (in the case of
a notice to be delivered by the Trustee), the Trustee (in the case of a notice
to be delivered by the Administrative Agent), the Issuer, and to the Noteholders
of any change in the location of the Note Register or any such office or agency.
ARTICLE XII
LISTS OF NOTEHOLDERS
Section 12.01 ACCESS TO LIST OF NOTEHOLDERS. (a) The Administrative
Agent will furnish or cause to be furnished to the Trustee, the Issuer, the
Servicer, the Sellers or the Paying Agent, within ten (10) Business Days after
receipt by the Administrative Agent of a request therefor from the Trustee, the
Issuer, the Servicer or the Paying Agent, respectively, in writing, a list in
such form as the Trustee, the Issuer, the Servicer or the Paying Agent, as
applicable, may reasonably require, of the names and addresses of the
Noteholders as of the most recent Record Date.
(b) If at any time the Administrative Agent shall cease to be the
Transfer Agent and Registrar for the Notes, the Issuer shall furnish or cause to
be furnished to the Administrative Agent.
(i) monthly at least 5 days prior to the Payment Date during such
month, a list, in such form as the Administrative Agent may reasonably
require, of the names and addresses of the Noteholders as of the
immediately preceding Record Date, and
(ii) at such other times as the Administrative Agent may request in
writing, within 5 days after the receipt by the Issuer of any such request,
a list of similar form and content as of the Record Date immediately
preceding the date upon which such list is to be provided.
Notwithstanding the requirements of the immediately preceding CLAUSE (a), the
obligation of the Administrative Agent to furnish
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the list of Noteholders pursuant to such clause at any time when it is no longer
acting as the Transfer Agent and Registrar for the Notes shall be subject to its
receipt of any such list pursuant to this CLAUSE (b). The Administrative Agent
shall preserve, in as current a form as is reasonably practicable, the names and
addresses of Noteholders contained in the most recent list furnished to the
Administrative Agent as provided above, and the names and addresses of
Noteholder received by the Administrative Agent in its capacity as Transfer
Agent and Registrar, if so acting. The Administrative Agent may destroy any
list furnished to it as provided above upon receipt of a new list so furnished.
(c) The Noteholders may communicate as provided in Section 312(b) of
the Trust Indenture Act (without regard as to whether this Indenture has been or
at such time remains qualified under the Trust Indenture Act) with all other
Noteholders with respect to their rights under this Indenture, the other
Transaction Documents or under the Notes; PROVIDED, that application by the
Noteholders under such Section of such Act shall be made to the Administrative
Agent in lieu of the Trustee as provided under such Act. The Administrative
Agent shall comply in all material respects with the provisions of such Act to
facilitate such communications by and among Noteholders.
(d) Every Noteholder by receiving and holding a Note, agrees with the
Trustee, the Administrative Agent, and the Issuer that neither the Trustee, the
Administrative Agent, the Transfer Agent and Registrar, the Issuer, the
Servicer, the Sellers nor any of their respective agents, shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Noteholders in accordance with Section 312(b) of the Trust
Indenture Act, regardless of the sources from which such information was
derived, and that neither the Trustee nor the Administrative Agent shall be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
ARTICLE XIII
SATISFACTION AND DISCHARGE
Section 13.01 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
and all obligations of the Issuer hereunder and under the other Transaction
Documents shall (except to the extent expressly otherwise provided herein or
therein with respect to certain provisions hereof or thereof which shall survive
the satisfaction and discharge hereof) cease to be of further effect at such
time (i) after the Liquidation Commencement Date as the entire Outstanding
Principal Balance of all outstanding Notes and all other Obligations owing by
the Issuer hereunder and under the
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other Transaction Documents have been reduced to zero or (ii) such earlier time
as all outstanding Notes theretofore authenticated and issued hereunder have
been delivered (other than any Notes which shall have been destroyed, lost or
stolen and which shall have been replaced or paid as provided in SECTION 6.06)
to the Administrative Agent for cancellation and the Issuer has paid all sums
payable hereunder, under the other Transaction Documents and under the Notes;
PROVIDED, HOWEVER, that this Indenture and the trusts created hereby shall
earlier terminate and this Indenture be satisfied and discharged upon any sale
or final disposition by the Trustee of all property constituting the Pledged
Assets from and after an Event of Default and the final distribution by the
Trustee of all proceeds thereof in accordance with ARTICLE IV hereof.
Section 13.02 DEPOSITED MONEYS, U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST. All moneys and U.S. Government Obligations deposited with the
Trustee or the Administrative Agent, as the case may be, in respect of the Notes
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Indenture to the payment, either directly or through any
Paying Agent (including the Issuer or the Servicer acting as Paying Agent), to
the Noteholders of all sums due and to become due thereon for principal,
premium, if any, and interest.
Section 13.03 REPAYMENT TO THE ISSUER. The Trustee, the
Administrative Agent, and any Paying Agent shall promptly pay or return to the
Issuer, upon the Issuer's request, any money or securities held by them at any
time that are not required for the payment of the principal of (and premium, if
any) and interest on the Notes and for other payments provided for in this
Indenture or the other Transaction Documents.
Any money deposited with the Trustee, the Administrative Agent, or any
Paying Agent in trust for the payment of the principal of (or premium, if any)
or interest on any Notes and remaining unclaimed for two years after the date
upon which such payment shall have become due, shall be paid to the Issuer, upon
the Issuer's request; PROVIDED, HOWEVER, that the Issuer shall cause to be
published at least once in a newspaper of general circulation in New York, New
York and Chicago, Illinois or mailed to each Noteholder entitled to such
unclaimed money, notice that such money remains unclaimed and that, after a date
specified therein, which date shall not be less than 30 days from the date of
such publication or mailing, any unclaimed balance of such money remaining shall
be repaid to the Issuer. After repayment to the Issuer, any Noteholder entitled
to such money shall thereafter, as an unsecured general creditor, look (unless
an applicable law designates another Person) only to the Issuer for payment, and
all liability of the
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Trustee, the Administrative Agent, or such Paying Agent with respect to such
trust money, shall thereupon cease.
Section 13.04 RELEASE OF LIENS. Upon the satisfaction and discharge
of this Indenture pursuant to SECTION 13.01, the Trustee, at the request of the
Issuer, shall release (and shall, at the expense of the Issuer, execute and
deliver to the Issuer all necessary UCC releases and other releases in respect
thereof) the Pledged Assets from the lien of the Trustee effected pursuant to
the Granting Clause hereof.
ARTICLE XIV
SUPPLEMENTS AND AMENDMENTS TO INDENTURE
Section 14.01 SUPPLEMENTS AND AMENDMENTS TO INDENTURE WITHOUT CONSENT
OF NOTEHOLDERS. Without the consent of any of the Noteholders (unless otherwise
required pursuant to any Supplement), the Issuer, when authorized by its Board
of Directors, the Servicer, the Trustee, and the Administrative Agent at any
time and from time to time, may enter into one or more Supplements hereto or one
or more amendments to this Indenture or any Supplement to:
(1) evidence the succession of another Person to the Issuer and the
assumption by such successor of the covenants of the Issuer herein, under
any Supplement or under the Notes, in each case, to the extent permitted
pursuant to SECTION 7.02(i) hereof; or
(2) add to the covenants of the Issuer, for the benefit of the
Noteholders of all of the Notes, or to surrender any right or power
conferred upon the Issuer hereby, or by any Supplement or the Notes; or
(3) add any additional Liquidation Events or Events of Default or to
further secure the Notes; or
(4) provide for certificated Notes in addition to or in place of
uncertificated Notes; or
(5) change or eliminate any of the provisions of this Indenture or
any Supplement, PROVIDED that any such change or elimination shall not
adversely affect in any material respect the interests of any Noteholder;
or
(6) evidence and provide for the acceptance of appointment hereunder
by a successor Trustee or Co-Trustee or successor Administrative Agent and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of
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the trusts hereunder by more than one Trustee or Administrative Agent, pursuant
to the requirements of SECTION 11.14; or
(7) cure any ambiguity, to correct or supplement any provision herein
or in any Supplement which may be inconsistent with any other provision
herein or therein or to make any other provisions with respect to matters
or questions arising under this Indenture or any of the other Transaction
Documents, PROVIDED such actions shall not materially and adversely affect
the interests of any Noteholder; or
(8) comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture
Act; or
(9) issue additional Notes and/or Series of Notes in accordance with
the provisions of SECTIONS 6.03 and 6.04; or
(10) upon the request of the Issuer and subject to the limitations
imposed by the Applicable Rating Agencies with respect thereto, provide for
the inclusion in the Program of those receivables which, but for the fact
that they are owing from a Foreign Obligor, would otherwise constitute
"Receivables" for purposes of this Indenture and the other Transaction
Documents.
No such Supplement or amendment to this Indenture or any Supplement
pursuant to this SECTION 14.01 shall become effective unless a copy thereof
shall have been sent to each of the Applicable Rating Agencies and the Rating
Agency Condition shall have been satisfied with respect thereto.
Section 14.02 SUPPLEMENTS AND AMENDMENTS TO INDENTURE WITH CONSENT OF
THE NOTEHOLDERS. Except as otherwise permitted by SECTIONS 6.03 and 14.01 and
this SECTION 14.02, and with the consent of the Noteholders of not less than the
Required Series Holders of all Series of Notes affected thereby (and any other
holders of Notes from whom consent may be required in accordance with the terms
of the applicable Supplement pursuant to which such Notes were issued), by Act
of said Noteholders delivered to the Issuer, the Trustee, and the Administrative
Agent, the Issuer, when authorized by its Board of Directors, the Servicer, the
Trustee, and the Administrative Agent may enter into one or more Supplements or
one or more amendments to this Indenture, any Supplement or any Series of Notes
to which it is a party, grant one or more consents or waivers hereto or thereto,
or execute one or more instructions or other documents pursuant hereto or
thereto, in each case, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture, any
Supplement or any Series of Notes, or for
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the purpose of waiving or modifying in any manner the rights of the Noteholders
or the rights or obligations of the parties to this Indenture or any Supplement
or taking any actions pursuant hereto or thereto; PROVIDED, HOWEVER, that no
such Supplement, amendment, consent or waiver to, or instruction or other
document in respect of, this Indenture or any Supplement shall, without the
consent of the Noteholder of each outstanding Note which is affected thereby
(and any other holders of Notes from whom consent may be required in accordance
with the terms of the applicable Supplement pursuant to which such Notes were
issued):
(1) change the Stated Maturity Date or the time for payment of the
principal of, or any installment of interest on, any such outstanding Note
(including, without limitation, any redemption or required repurchase
provisions); or reduce the principal amount of any outstanding Note (or any
premium, if any) or the interest thereon, that would be due and payable
thereon, or change the place of payment where, or the coin or currency in
which, any Note or any interest thereon is payable, or impair any rights
hereunder or under any of the other Transaction Documents to institute suit
for the enforcement of any such payment on or after the respective Stated
Maturity Date or specified time for payment thereof, or
(2) reduce the percentage in principal amount of the outstanding
Notes the consent of which is required for any such Supplement or
amendment, or the consent of which is required for any waiver of compliance
with certain provisions of this Indenture or any applicable Supplement, or
certain Liquidation Events or Events of Default hereunder and their
respective consequences, provided for in this Indenture, or
(3) modify any of the provisions of this SECTION 14.02, except (x) to
increase any percentage required to approve any amendment, modification or
waiver to this Indenture or any applicable Supplement or (y) to provide
that certain other provisions of this Indenture or any applicable
Supplement cannot be modified or waived without the consent of each
Noteholder which is affected thereby.
No such Supplement or amendment to this Indenture or any Supplement
pursuant to this Section shall become effective unless a copy thereof shall have
been sent to each of the Applicable Rating Agencies and either (i) the Rating
Agency Condition shall have been satisfied with respect thereto or (ii) if the
Rating Agency Condition is not so satisfied, the Noteholders of not less than
66-2/3% of the respective Outstanding Principal Balance of any Series or Class
of Notes whose rating is or would be adversely affected thereby shall have
consented thereto in writing.
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Section 14.03 CERTAIN MATTERS RELATING TO SUPPLEMENTS AND AMENDMENTS.
(a) The Issuer, the Trustee, and the Administrative Agent shall establish a
record date in accordance with SECTION 1.05(e) hereof for determining which
Noteholders may give any waivers or consents.
(b) Notwithstanding anything contained in SECTIONS 14.01 or 14.02 to
the contrary, no Supplement, amendment, waiver or consent which adversely
affects in any material respect the rights, duties or immunities of any
Enhancement Provider under this Indenture or any Supplement or any other
Transaction Document shall be effective without the consent of such affected
Enhancement Provider.
(c) It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any such proposed Supplement,
amendment, consent or waiver, but it shall be sufficient if such Act shall
approve the substance thereof. Promptly after the execution of any Supplement,
amendment, consent or waiver described in SECTION 14.01 or SECTION 14.02, the
Administrative Agent shall furnish written notification of the substance thereof
to each affected Noteholder and Enhancement Provider, if any, and to each of the
Applicable Rating Agencies.
(d) In executing or accepting the additional trusts created by any
Supplement or any amendment to this Indenture or any of the other Transaction
Documents permitted by this Article or the modifications thereby of the trusts
created by this Indenture and the other Transaction Documents, the Trustee and
the Administrative Agent shall be entitled to receive, and (subject to SECTION
11.02(a)) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such Supplement or amendment is authorized or
permitted by this Indenture and/or the other applicable Transaction Documents
and that all conditions precedent to the execution and delivery thereof shall
have been satisfied. Each of the Trustee, the Administrative Agent, and the
Servicer may, but shall not be obligated to, enter into any such Supplement or
amendment which affects the Trustee's, the Administrative Agent's, or the
Servicer's own rights, duties or immunities under this Indenture or the other
Transaction Documents to which it is a party or otherwise.
(e) Any Supplement executed in accordance with the provisions of
SECTION 6.03, shall not be deemed to be transactions subject to the requirements
of SECTION 14.02.
Section 14.04 EFFECT OF SUPPLEMENTS. Upon the execution of any
Supplement under this Article, this Indenture shall be modified in accordance
therewith, and such Supplement shall form a part of this Indenture for all
purposes; and all
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affected Noteholders, the Trustee, the Administrative Agent, the Servicer, and
the Issuer shall be bound thereby.
Section 14.05 CONFORMITY WITH TRUST INDENTURE ACT. In the event this
Indenture shall become qualified under the Trust Indenture Act, every Supplement
executed pursuant to this Article shall conform to the requirements of the Trust
Indenture Act as then in effect.
Section 14.06 REFERENCE IN NOTES TO SUPPLEMENTS. Notes authenticated
and delivered after the execution of any Supplement pursuant to this Article
may, and shall if required by the Trustee, the Issuer or the Administrative
Agent, bear a notation in form approved by such Person as to any matter provided
for in such Supplement. If the Issuer shall so determine, new Notes so modified
as to conform to any such Supplement may be prepared and executed by the Issuer
and authenticated and delivered by the Administrative Agent in exchange for any
outstanding Notes.
ARTICLE XV
REDEMPTIONS
Section 15.01 REDEMPTION ALLOWED. The Issuer may at its option
redeem the Notes of any Series which are redeemable before their Stated Maturity
Date in accordance with the terms of such Series of Notes and this Article.
Section 15.02 ELECTION TO REDEEM; NOTICE TO TRUSTEE AND
ADMINISTRATIVE AGENT. The election of the Issuer to redeem any Notes shall be
evidenced by a resolution of the Board of Directors of the Issuer. In case of
any such redemption at the election of the Issuer, the Issuer shall, at least 35
Business Days prior to the redemption date (the "REDEMPTION DATE") fixed by the
Issuer (unless a shorter notice shall be acceptable to the Trustee and the
Administrative Agent), notify the Trustee and the Administrative Agent of such
Redemption Date and of the principal amount of the Notes of such Series to be
redeemed. In the case of any redemption of the Notes of any Series prior to the
expiration of any restriction on such redemption provided in the terms of such
Series of Notes or elsewhere in this Indenture, the Issuer shall furnish the
Trustee and the Administrative Agent with an Officers' Certificate evidencing
compliance with such restriction.
Section 15.03 SELECTION OF SECURITIES TO BE REDEEMED. If less than
all the Notes of any Series or Class are to be redeemed, the particular Notes of
such Series to be redeemed shall be selected, not less than 30 days prior to the
Redemption Date, by the Trustee from among the outstanding Notes of such
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Series not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate in accordance with the terms of any applicable
Supplement and which may provide for the selection for redemption of portions of
the principal amount of the Notes of such Series of a denomination larger than
the minimum authorized denomination for the Notes of such Series; PROVIDED,
HOWEVER, that in case the Notes of such Series have different terms and/or
Stated Maturity Dates, the Notes of such Series to be redeemed shall be selected
by the Issuer in accordance with the terms of this Indenture, and the Issuer
shall give notice thereof to the Trustee and the Administrative Agent.
The Administrative Agent shall promptly notify the Issuer in writing
of the Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to be redeemed.
Section 15.04 NOTICE OF REDEMPTION. Unless otherwise provided in any
applicable Supplement pursuant to which Notes are issued, at least 30 but not
more than 60 days before a Redemption Date, the Issuer shall mail a notice of
redemption by first-class mail to each Noteholder whose Notes are to be
redeemed, at the addresses of such Noteholders as they appear in the Note
Register. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Noteholder
actually receives such notice. Failure to give notice by mail, or any defect in
the notice to the Noteholder of any Note of any Series designated for redemption
in whole or in part, shall not affect the validity of the proceedings for the
redemption of any other Notes of such Series.
The notice of redemption shall identify the Notes to be redeemed and
shall also state:
(1) the Redemption Date;
(2) the redemption price (including the amount of accrued and unpaid
interest to be paid and any premium payable in connection therewith) (the
"REDEMPTION PRICE");
(3) the name and address of the Paying Agent;
(4) the place or places where such Notes are to be surrendered for
payment of the Redemption Price; and
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(5) that, unless the Issuer defaults in making the redemption
payment, interest on the Notes or any portion thereof called for redemption
ceases to accrue on and after the specified Redemption Date and the only
remaining right of the Noteholders thereof will be to receive payment of
the Redemption Price upon surrender to the Administrative Agent or the
Paying Agent (if other than the Administrative Agent) of the Notes;
(6) if less than all of the outstanding Notes of any Series are
to be redeemed, the identification of the particular Notes to be
redeemed, in whole or in part; and
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, on or after the
Redemption Date, upon surrender of such Note, a new Note or Notes in an
aggregate principal amount equal to the unredeemed portion thereof will be
issued.
At the Issuer's request, the Administrative Agent shall give the
notice of redemption in the Issuer's name and at its expense. In such event the
Issuer will provide the Trustee and the Administrative Agent with the
information required by clauses (1), (2), (3), (4), (6) and (7) above.
Section 15.05 DEPOSIT OF REDEMPTION PRICE. On or prior to any
Redemption Date, the Issuer shall deposit with the Administrative Agent or (if
other than the Administrative Agent) the Paying Agent an amount of money
sufficient to pay the Redemption Price of, and accrued interest on (unless such
interest has otherwise been paid on such date), all of the Notes which are to be
redeemed on the Redemption Date.
So long as the Issuer complies with the preceding paragraph and the
other provisions of this Article, interest on the Notes (or portion thereof) to
be redeemed on the applicable Redemption Date shall cease to accrue from and
after such date and such Notes (or portions thereof) shall be deemed not to be
entitled to any benefit under this Indenture or the related Supplement except to
receive payment of the Redemption Price on the Redemption Date.
The provisions of the second paragraph of SECTION 13.03 shall apply to
any money held by the Trustee, the Administrative Agent or any Paying Agent
under this Article that remains unclaimed for two years after the Redemption
Date for any Notes called for redemption pursuant to the provisions of this
Article.
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Section 15.06 NOTES PAYABLE ON REDEMPTION DATE. Notice of redemption
having been given as aforesaid, the Notes (or portions thereof) to be so
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified. Upon surrender of any such Note for redemption in
accordance with such notice, such Notes (or portions thereof) shall be paid at
the Redemption Price, together with accrued interest to the Redemption Date.
If any Note (or portion thereof) called for redemption shall not be so
paid upon surrender for redemption, then, from the Redemption Date until such
principal is paid, interest shall be paid on the unpaid principal and, to the
extent permitted by law, on any accrued but unpaid interest thereon, in each
case at the rate prescribed therefor by such Notes.
Section 15.07 NOTES REDEEMED IN PART. Upon surrender of a Note that
is redeemed in part, the Issuer shall issue and the Administrative Agent shall
authenticate a new Note or Notes equal in aggregate principal amount to the
unredeemed portion of the Note so surrendered.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.01 LIMITATION ON RIGHTS OF NOTEHOLDERS. (a) No
Noteholder shall have any right by virtue of any provisions of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, unless such Noteholder shall have previously
given the Trustee, and unless the majority of the Noteholders of the affected
Notes or Series of Notes shall have made, a written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after 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 Noteholder with every other Noteholder and the
Trustee, that no one or more Noteholders shall have any right in any manner
whatever by virtue of, or by availing itself or themselves of, any provisions of
this Indenture to affect, disturb or prejudice the rights of any other
Noteholder or any Noteholder of any other Series of Notes, or to obtain or seek
to obtain priority over or preference to any such other Noteholder or any such
Noteholder of any other Series of Notes, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of,
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in the case of actions affecting the Noteholders as a class, all Noteholders or,
in the case of actions affecting the Noteholders of any Series of Notes, all
Noteholders of such Series. For the protection and enforcement of the
provisions of this SECTION 16.01, each and every Noteholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
(b) By their acceptance of Notes pursuant to this Indenture and the
applicable Supplement, the Noteholders agree to the provisions of this SECTION
16.01.
Section 16.02 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICT
OF LAWS PRINCIPLES EXCEPT AS CONTEMPLATED IN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
Section 16.03 NOTICES. All demands, notices, instructions and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered, four Business Days after mailing if mailed
by registered mail, return receipt requested, or the day on which the notice is
sent by facsimile transmission or, if such day is not a Business Day, then the
first Business Day after such transmission (a) in the case of the Issuer, to its
address set forth below its signature hereto; (b) in the case of Stone
Container, to its address set forth below its signature hereto; (c) in the case
of the Trustee, to the address of the Trustee set forth on the signature pages
hereof; and (d) in the case of the Administrative Agent, the Paying Agent or the
Transfer Agent and Registrar, to the address of the Administrative Agent set
forth on the signature pages hereof; or, as to each party, at such other address
or facsimile number as shall be designated by such party in a written notice to
each other party given in accordance with this SECTION 16.03. Except to the
extent expressly provided otherwise in an applicable Supplement, any notice
required or permitted to be mailed to a Noteholder shall be sent by first-class
mail, postage prepaid, to the address of such Noteholder as shown in the Note
Register. Except to the extent expressly provided otherwise in an applicable
Supplement, any notice so mailed within the time prescribed in this Indenture
shall be conclusively presumed to have been duly given on the fourth Business
Day after such notice is so mailed, whether or not the Noteholder receives such
notice. Each certificate and report required to be prepared, forwarded or
delivered to any of the Applicable Rating Agencies pursuant to SECTION 3.04
(excluding the Daily Reports) or 3.05 and a copy of any amendment, notice,
request, consent or waiver to or with respect to this Indenture, as required
pursuant hereto, in each case, required to be delivered thereto pursuant to this
Indenture
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or any of the other Transaction Documents, shall, in each case, be sent to the
address of such Applicable Rating Agency as shall be designated by such
Applicable Rating Agency from time to time in a written notice to the Servicer.
Where this Indenture or any of the other Transaction Documents
provides for notice in any manner, such notice may be waived in writing by any
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by the
Noteholders, or any of them, shall be filed with the Trustee and the
Administrative Agent, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In the event that, by reason of the suspension of regular mail service
as a result of a strike, work stoppage, riot, war, act of god or similar event,
it shall become impracticable to give notice of any event to any Person
hereunder in the manner provided in this SECTION 16.03 when such notice is
required to be given, then any manner of giving notice as shall be acceptable to
the Trustee or the Administrative Agent, as applicable, shall be deemed
sufficient giving of any such notice.
Section 16.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Indenture or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Indenture or such
other Transaction Document (as applicable) and shall in no way affect the
validity or enforceability of the other provisions of this Indenture, the Notes
or any of the other Transaction Documents or the rights of the Noteholders.
Section 16.05 FURTHER ASSURANCES. The Issuer 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 or the
Administrative Agent more fully to effect the purposes of this Indenture and the
other Transaction Documents, including the execution of any financing statements
or continuation statements relating to the Receivables for filing under the
provisions of the UCC or other applicable law of any applicable jurisdiction.
Section 16.06 NONPETITION COVENANT. Notwithstanding any prior
termination of this Indenture, each of the Trustee, the Administrative Agent,
the Servicer, the Issuer, the Paying Agent, the Authenticating Agent and the
Transfer Agent and Registrar (but not any Noteholder) agrees that it shall not
institute or join any other Person in instituting against, or with respect to,
the Issuer any proceeding of a type referred to in the definition
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of "EVENT OF BANKRUPTCY" so long as any of the Notes issued by the Issuer shall
be outstanding or there shall not have elapsed one year plus one day since the
last day on which any such Notes shall have been outstanding. The foregoing
shall not limit the right of the Servicer, the Issuer, the Trustee, the
Administrative Agent, the Paying Agent, the Authenticating Agent and the
Transfer Agent and Registrar to file any claim in or otherwise take any action
with respect to any such insolvency proceeding that was instituted against the
Issuer by any Person other than the Servicer, the Issuer, the Trustee, the
Administrative Agent, the Paying Agent, the Authenticating Agent or the Transfer
Agent and Registrar. In addition, each of the Noteholders, the Servicer, the
Trustee, the Administrative Agent, the Paying Agent, the Authenticating Agent,
and the Transfer Agent and Registrar agree that all amounts owed to them by the
Issuer shall be payable solely from amounts from the allocable share of the
Pledged Assets available for the payment therefor pursuant to and in accordance
with the priorities set forth in this Indenture and the Purchase Agreement, and
no such unpaid amounts shall constitute a Claim against the Issuer or any of its
other assets or properties (including, without limitation, any other Pledged
Assets allocable to the payment of any other amounts owing hereunder, under the
Notes or under any of the other Transaction Documents) to the extent that they
are in excess of the amounts available for their payment. The provisions of
this SECTION 16.06 shall survive the satisfaction and discharge of this
Indenture.
Section 16.07 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Trustee, the Administrative
Agent, or the Noteholders 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
are not exhaustive of any rights, remedies, powers and privileges provided by
law.
Section 16.08 COUNTERPARTS. This Indenture may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which together shall constitute one and the same instrument.
Section 16.09 THIRD-PARTY BENEFICIARIES. This Indenture will inure
to the benefit of and be binding upon the parties hereto and the Noteholders and
their respective successors and permitted assigns; PROVIDED HOWEVER, that the
Issuer shall not delegate or assign any of such Noteholders' duties or
obligations hereunder. Except as otherwise expressly provided in this
Indenture, nothing contained in this Indenture shall confer any
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rights upon any Person which is not a party to, or a permitted assignee of a
party to, this Indenture.
Section 16.10 INTEGRATION. This Indenture and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
Section 16.11 SURVIVAL OF PROVISIONS. This Indenture shall create
and constitute the continuing obligations of the parties hereto in accordance
with its terms, and shall remain in full force and effect until the satisfaction
and discharge hereof pursuant to ARTICLE XIII. The rights and remedies with
respect to (a) any breach of any representation and warranty made by the Issuer
in SECTION 2.03 or SECTION 7.01, (b) any breach of any representation and
warranty made by the Servicer in SECTION 8.01 and (c) the indemnification and
payment provisions in SECTIONS 3.08, 7.03, 8.04, and 11.09 shall be continuing
and shall survive the satisfaction and discharge of this Indenture.
Section 16.12 LIMITATION ON LIABILITY OF THE ISSUER AND THE SERVICER.
No recourse under or upon any obligation or covenant of the Issuer and/or the
Servicer, as applicable, under this Indenture, any Supplement, any Note or any
other Transaction Document, or for any claim based thereon or otherwise in
respect thereof shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer and/or Servicer, as
applicable; it being expressly understood that this Indenture, any Supplement,
the Notes and all other relevant Transaction Documents and the obligations
incurred by the Issuer and/or the Servicer hereunder or thereunder are solely
corporate obligations, and that no such personal liability whatsoever shall
attach to, or is or shall be incurred by the incorporators, shareholders,
employees, officers or directors, as such, of the Issuer or Servicer or of any
successor corporation and that any and all such personal liability of, either at
common law or in equity or by constitution or statute, and any and all such
rights and claims against, every such incorporator, shareholder, employee,
officer or director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations or covenants contained in
this Indenture, any Supplement, any of the Notes or any other Transaction
Documents, or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
any Supplement. Each of the Issuer and the Servicer and any director, officer,
incorporator, shareholder, employee or agent of either of them may rely in good
faith on any document of any kind PRIMA FACIE properly executed
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and submitted by any other Person respecting any matters arising hereunder.
Section 16.13 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR ANY OTHER
TRANSACTION DOCUMENT, AND HEREBY (A) IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE
OR FEDERAL COURT; AND (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING. SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING MAY
BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE ISSUER AT ITS
ADDRESS SET FORTH ON THE SIGNATURE PAGES HERETO. NOTHING IN THIS SECTION 16.13
SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY HERETO TO BRING ANY
ACTION OR PROCEEDING AGAINST ANY OR ALL OF THE OTHER PARTIES HERETO OR ANY OF
THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION.
Section 16.14 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER OR RELATING TO THIS INDENTURE, ANY OTHER TRANSACTION DOCUMENT, OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
ACTIONS OF ANY OF THE PARTIES HERETO OR ANY OTHER RELATIONSHIP EXISTING IN
CONNECTION WITH THIS INDENTURE OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
Section 16.15 CERTAIN PARTIAL RELEASES. (a) In the event that the
Sellers exercise their rights under SECTION 2.07 of the Purchase Agreement to
terminate the sale of any or all of the categories of Receivables, the Trustee
shall, upon the request (and at the expense) of the Sellers, execute and deliver
to the Sellers such statements of partial release relating to the UCC-1
financing statements filed pursuant to the Purchase Agreement as shall be
prepared by the Sellers and provided to the Trustee to evidence such
termination; PROVIDED, HOWEVER, that the Trustee shall have received an
Officer's Certificate of the Servicer to the effect that all conditions to such
termination specified in such SECTION 2.07 have been satisfied (and shall not
have received notice from any Noteholder to the contrary), together with such
other certificates as the Trustee may reasonably request.
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(b) In the event that any Seller (other than Stone Container) is
discontinued as a Seller pursuant to SECTION 2.07 of the Purchase Agreement, the
Trustee shall, upon the request (and at the expense) of such Seller, execute and
deliver to such Seller such statements of partial release and/or amendment
relating to the UCC-1 financing statements filed against such Seller pursuant to
the Purchase Agreement as shall be prepared by such Seller or the Servicer and
provided to the Trustee to evidence such termination; PROVIDED, HOWEVER, that
the Trustee shall have received (i) an Officer's Certificate of the Servicer to
the effect that all conditions to such termination specified in such SECTION
2.07 have been satisfied (and shall not have received notice from any Noteholder
to the contrary); (ii) an Opinion of Counsel to the effect that the filing of
such statements of partial release and/or amendment will not impair the
validity, perfection or priority of the Issuer's or the Trustee's rights in and
to (A) any Receivables or Related Assets conveyed prior to the effective date of
such termination or (B) any Receivables or Related Assets generated by any of
the other Sellers on or after the effective date of such termination; and (iii)
such other certificates as the Trustee may reasonably request. In addition,
after such a termination that complies with the requirements set out in the
preceding sentence, the Trustee shall, upon the request (and at the expense) of
such Sellers, execute and deliver to such Sellers such termination statements
relating to the UCC-1 financing statements filed against such Seller pursuant to
the Purchase Agreement as shall be prepared by such Seller or the Servicer and
provided to the Trustee to evidence such termination; PROVIDED, HOWEVER, that
the Trustee shall have received an Officer's Certificate of the Servicer to the
effect that the Trustee no longer holds any interest in any Receivables
generated by such terminated Seller.
Section 16.16 UNDERTAKING FOR COSTS. Except as expressly otherwise
provided in any applicable Supplement, all parties to this Indenture agree, and
each Noteholder by its acceptance of any Note shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture or any of the other Transaction
Documents, or in any suit against the Trustee or the Administrative Agent for
any action taken, suffered or omitted by it as Trustee or Administrative Agent,
respectively, the filing by any party litigant in such suit of an undertaking to
pay the costs of such suit and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
SECTION 16.16 shall not apply to any suit instituted by the Trustee or the
Administrative Agent, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than 10% of the aggregate principal
amount of the
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outstanding Notes, or to any suit instituted by any Noteholder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Note on or after its Maturity Date.
[THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the Issuer, the initial Servicer, the Trustee and
the Administrative Agent have caused this Indenture to be executed by their
respective officers thereunto duly authorized as of the day and year first above
written.
STONE RECEIVABLES CORPORATION,
as the Issuer
By
----------------------------------
Name: Leslie T. Lederer
Title: Vice President and Secretary
Address: 150 North Michigan Avenue,
17th Floor,
Chicago, Illinois 60601-7568
Attention: Assistant Treasurer
Telephone: (312) 553-1123
Facsimile: (312) 553-0238
STONE CONTAINER CORPORATION
as initial Servicer
By
-----------------------------------
Name: Michael B. Wheeler
Title: Vice President and Treasurer
Address: 150 North Michigan Avenue
Chicago, Illinois 60601-7568
Attention: Legal Department
Telephone: (312) 346-6600
Facsimile: (312) 580-2299
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MARINE MIDLAND BANK,
as the Trustee
By
--------------------------------
Name: BarbaraJean McCauley
Title: Assistant Vice President
Address: 140 Broadway, 12th Floor
New York, New York 10005-1180
Attention: Corporate Trust Services
Telephone: (212) 658-6084
Facsimile: (212) 658-6425
BANKERS TRUST COMPANY,
as the Administrative Agent
By
---------------------------------
Name: Melissa J. Kaye
Title: Vice President
Address: Four Albany Street
10th Floor
New York, New York 10006
Attention: Corporate Trust and Agency
Group, Structured Finance
Team, Attention: Kevin Healey
Telephone: (212) 250-8360
Facsimile: (212) 250-6439
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STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
On the __th day of March, 1995 before me personally came Leslie T.
Lederer to me known, who, being by me duly sworn, did depose and say that he is
the Vice President and Secretary of Stone Receivables Corporation, a Delaware
corporation, the corporation described in and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of said corporation.
Given under my hand and notarial seal, this __th day of March, 1995.
-----------------------------
Notary Public
Name:
-------------------
Commission expires:
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
On the __th day of March, 1995 before me personally came Michael B.
Wheeler to me known, who, being by me duly sworn, did depose and say that he is
a Vice President and Treasurer of Stone Container Corporation, a Delaware
corporation, the corporation described in and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of said corporation.
Given under my hand and notarial seal, this __th day of March, 1995.
-----------------------------
Notary Public
Name:
-------------------
Commission expires:
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
On the __th day of March, 1995 before me personally came BarbaraJean
McCauley to me known, who, being by me duly sworn, did depose and say that she
is an Assistant Vice President of Marine Midland Bank, a New York banking
corporation and trust company, which executed the foregoing instrument; and that
she signed her name thereto by order of the board of directors of said bank.
Given under my hand and notarial seal, this __th day of March, 1995.
----------------------------
Notary Public
Name:
--------------------
Commission expires:
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
On the __th day of March, 1995 before me personally came Melissa J.
Kaye to me known, who, being by me duly sworn, did depose and say that she is a
Vice President of Bankers Trust Company which executed the foregoing instrument;
and that she signed her name thereto by order of the board of directors of said
bank.
Given under my hand and notarial seal, this __th day of March, 1995.
-----------------------------
Notary Public
Name:
-------------------
Commission expires:
S&A DRAFT
3/13/95-A
APPENDIX A
DEFINITIONS
This is APPENDIX A to (a) the Purchase Agreement (as hereinafter
defined) and (b) the Indenture (as hereinafter defined).
A. DEFINED TERMS. As used in the Purchase Agreement, the Indenture
or any Supplement, as the case may be (unless the context requires a different
meaning), the following terms have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
"ACCOUNT AGREEMENTS" means the Concentration Account Agreements and
the Lockbox Agreements, as the same may be amended, supplemented, amended and
restated, or otherwise modified from time to time in accordance with the
Indenture.
"ACCOUNT BANKS" means the Concentration Account Banks and the Lockbox
Banks.
"ACCRUED CARRYING COSTS" is defined in SECTION 4.02(a) of the
Indenture.
"ACCUMULATION PERIOD" means, with respect to any Series of Notes, the
period commencing on the Scheduled Accumulation Commencement Date with respect
to such Series of Notes and ending on the earliest to occur of (i) the
Liquidation Commencement Date, (ii) the Pay-Out Period Commencement Date for
such Series or (iii) the Expected Final Payment Date for such Series.
"ACT" is defined in SECTION 1.05 of the Indenture.
"ADMINISTRATIVE AGENT" means Bankers Trust Company, in its capacity as
Administrative Agent under the Indenture, or its successor-in-interest or any
successor Administrative Agent appointed as provided in the Indenture.
"ADMINISTRATIVE AGENT CORPORATE TRUST OFFICE" means the principal
office of the Administrative Agent in New York City, New York, which office on
the Closing Date is located at Four Albany Street, 10th Floor, New York, New
York 10006.
"ADVERSE CLAIM" means any ownership interest or any security interest,
mortgage, deed of trust, lien (statutory or otherwise), charge, pledge, equity,
hypothecation, assignment, deposit arrangement, encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing.
"AFFILIATE" when used with respect to a Person means any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person. As used in this definition of "AFFILIATE," the term "control"
means the power, directly or indirectly, to direct or cause the direction of the
management and policies of a Person, whether through the ownership of such
Person's voting securities, by contract or otherwise, and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
term "control."
"AGED RECEIVABLES RATIO" means, as calculated in each Settlement
Statement as of the Cut-Off Date for the related Calculation Period, a fraction
(expressed as a percentage) having (a) a numerator which is the sum of (i) the
aggregate Unpaid Balance of Receivables that were 121 to 150 days past invoice
date, as determined as of the Cut-Off Date for the most recently ended
Calculation Period, and (ii) the aggregate Unpaid Balance of Receivables that
were written off as uncollectible during the most recently ended Calculation
Period and that were not more than 150 days past invoice date as of that Cut-Off
Date (and PROVIDED that the amount added pursuant to this CLAUSE (ii) on account
of Receivables of any Obligor (or affiliated group of Obligors) shall in no
event exceed the aggregate Unpaid Balance of Receivables owed by such Obligor
(or group) MINUS the Excess Concentration Balance for such Obligor (or group),
in each case, as determined as of such Cut-Off Date) and (b) a denominator which
is the aggregate amount payable pursuant to invoices giving rise to Receivables
that were generated by the Sellers during the Calculation Period that occurred
four Calculation Periods prior to the most recently ended Calculation Period, as
determined as of the Cut-Off Date for such fourth prior Calculation Period.
"AGGREGATE NET OUTSTANDINGS" means, as of any date, (i) the sum of the
Outstanding Principal Balances of all Series of Notes as of the opening of
business on such date MINUS (ii) any funds which, as of such date, are on
deposit in the Equalization Account, the Deferred Allocation Account, the
Defeasance Account or the Principal Funding Account (or, during the Liquidation
Period, in the Master Collection Account) for repayment or prepayment of the
principal amount of one or more Series of Notes.
"AGGREGATE REQUIRED RESERVES" means, at any time with respect to all
Notes, the sum of (i) the aggregate sum of the Required Reserves for the
Subordinated Class or Classes of Notes ranking most junior in priority as among
all other Classes outstanding at such time, (ii) the sum of the Subordination
Deficits, if any, for all Classes of Notes outstanding at such time which are
senior in priority to the Notes described in the
-2-
immediately preceding clause (i), and (iii) the sum of any other additional
amounts (without duplication) specifically required pursuant to the terms of any
Supplement to be deducted from Net Eligible Receivables in the calculation of
the Base Amount in accordance with SECTION 4.02(b) of the Indenture.
"ALLOCABLE DAILY COLLECTIONS" means, with respect to any payment in
respect of any Series on any day, an amount equal to the product of:
(a) a fraction, (i) the numerator of which is the Outstanding
Principal Balance of such Series and (ii) the denominator of which is the
sum of the Outstanding Principal Balances of all then-outstanding Notes;
and
(b) the amount of collected funds on deposit in the Master Collection
Account on that day and available for such payment.
"ALTERNATIVE DILUTION RESERVE RATIO" means, as calculated in each
Settlement Statement for any Class or Series of Notes, the result (expressed as
a percentage), calculated as of the most recent Cut-Off Date, equal to the
product of:
(a) the sum of
(i) the product of (A) the Applicable Ratings Factor, multiplied
by (B) the average of the Dilution Ratios for the 12
consecutive Calculation Periods ending on the most recent
Cut-Off Date, plus
(ii) the product of (A) the statistical standard deviation of the
Dilution Ratios for the 12 consecutive Calculation Periods
ending on the most recent Cut-Off Date, multiplied by (B)
the Applicable Z-Value for such Series or Class, and
(b) the product of
(i) a fraction, having (A) a numerator equal to the sum of the
aggregate amounts payable pursuant to invoices giving rise
to Receivables generated by the Sellers during the
Calculation Period ending on the most recent Cut-Off Date
(as calculated on such Cut-Off Date) and (B) a denominator
equal to the aggregate Unpaid Balance of all Eligible
Receivables, as calculated on the most recent Cut-Off Date,
multiplied by
(ii) 1.15.
-3-
"ALTERNATIVE LOSS RESERVE RATIO" means, as calculated for any Class or
Series of Notes in each Settlement Statement, the sum of (i) the applicable Loss
Reserve Ratio for such Class or Series plus (ii) the product of (a) the
statistical standard deviation of the Aged Receivables Ratios for the twelve
consecutive Calculation Periods ending on the most recent Cut-Off Date,
multiplied by (b) the Applicable Z-Value for such Class or Series.
"APPLICABLE RATING AGENCIES" means each of the nationally recognized
statistical rating agencies that, at the request of the Sellers or the Issuer,
has rated any then-outstanding Series of Notes.
"APPLICABLE RATINGS FACTOR" with respect to any Class or Series of
Notes, the amounts specified as such in the applicable Supplement pursuant to
which such Class or Series of Notes was issued.
"APPLICABLE RESERVE RATIO" means, at any time with respect to any
Class or Series of Notes, the ratio specified as such in the applicable
Supplement pursuant to which such Class or Series of Notes was issued.
"APPLICABLE Z-VALUE" means, at any time with respect to any Class or
Series of Notes, the amount specified as such in the applicable Supplement
pursuant to which such Class or Series of Notes was issued.
"AUTHENTICATING AGENT" means any authenticating agent appointed
pursuant to SECTION 6.07 of the Indenture.
"AUTHORIZED OFFICER" means, (a) with respect to the Issuer, the
President, the Chief Financial Officer and any Vice President of the Issuer, (b)
with respect to each of the Sellers, the President, the Chief Financial Officer
and any Vice President of such Seller, and (c) with respect to the Servicer, the
President, the Chief Financial Officer and any Vice President of the Servicer.
"BAG RECEIVABLE" means the right to payment from, or other
indebtedness of, an Obligor under a Contract (including all interest or finance
charges and other obligations of such Obligor with respect thereto) (i) arising
prior to the Consolidation from the sale of goods, merchandise or services by
Stone Bag or Stone Packaging or (ii) arising from the sale of paper bags,
plastic bags, paper sacks or services relating thereto by any of the other
Sellers; excluding, however any such rights to payment or other indebtedness
owing from an Obligor which is either (a) a Consolidated Affiliate of Stone
Container or (b) a Foreign Obligor.
-4-
"BANK ACCOUNTS" means the Lockbox Accounts and the Concentration
Accounts.
"BANKRUPTCY CODE" means the Bankruptcy Code of 1978 (11 U.S.C.
Section 101 ET SEQ.), as amended.
"BASE AMOUNT" is defined in SECTION 4.02(b) of the Indenture.
"BOOK-ENTRY FORM" means, with respect to any Note or Series of Notes,
that such Notes or Series are not certificated and the ownership and transfers
thereof shall be made through the book entries by a Clearing Agency as described
in SECTION 6.09 of the Indenture and the applicable Supplement pursuant to which
such Notes were issued.
"BOOK-ENTRY NOTES" means any Note or Notes issued in Book-Entry Form,
PROVIDED, HOWEVER, that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer permitted and Definitive Notes are to be
issued to the holder of such Notes, such Notes shall no longer be "Book-Entry
Notes".
"BOX PLANT" means, with respect to any Box Receivable, the plant of
the applicable Seller from which the sale giving rise to such Receivable was
made.
"BOX RECEIVABLE" means the right to payment from, or other
indebtedness of, an Obligor under a Contract (including all interest or finance
charges and other obligations of such Obligor with respect thereto) (i) arising
prior to the Consolidation from the sale of goods, merchandise or services by
Stone Corrugated or (ii) arising from the sale of corrugated boxes, containers
or services relating thereto by any of the other Sellers, excluding, however any
such rights to payment or other indebtedness owing from an Obligor which is
either (a) a Consolidated Affiliate of Stone Container or (b) a Foreign Obligor.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
commercial banks in Chicago, Illinois or New York, New York are not authorized
or required to be closed for business; PROVIDED, HOWEVER, that the term
"BUSINESS DAY" shall not include any other day on which the Servicer, with not
less than ten days' prior written notice to the Issuer, the Administrative Agent
and the Trustee, closes its corporate headquarters, so long as the Servicer does
not so close its headquarters for more than five additional days in any one
calendar year and no more than two of such additional days are consecutive.
"CALCULATION PERIOD" means each period commencing on the first day of
a calendar month and ending on the last day of such calendar month.
-5-
"CARRYING COST ACCOUNT" is defined in SECTION 4.01(b) of the
Indenture.
"CARRYING COST RESERVE" is defined in SECTION 4.02(a) of the
Indenture.
"CARRYING COSTS" means, for any period, (a) accrued but unpaid
interest on the Notes, (b) the Servicing Fee for such period, (c) the operating
expenses described in SECTION 7.02(n)(ii)(C) of the Indenture for such period,
and (d) other fees (including, without limitation, any commitment fees, non-
usage fees, facility fees or other similar fees), costs and expenses incurred by
the Issuer for such period and paid to third Persons who are not Stone Persons
and fees, costs and expenses incurred by the Trustee and/or the Administrative
Agent for such period in connection with its duties under the Indenture and the
other Transaction Documents (in the case of the Trustee and the Administrative
Agent, to the extent not included in the Servicing Fee).
"CBM RECEIVABLE" means the right to payment from, or other
indebtedness of, an Obligor under a Contract (including all interest or finance
charges and other obligations of such Obligor with respect thereto) arising from
the sale by any of the Sellers (prior to or after the Consolidation) of
containerboard, kraft paper, newsprint or services relating thereto.
"CHARGED-OFF RECEIVABLE" means any Receivable that, consistent with
the Credit and Collection Policy, has been or should have been charged off as
uncollectible.
"CLAIM" means a "claim" as defined in Section 101(5) of the Bankruptcy
Code.
"CLASS" means, with respect to any Series, any class of Notes of that
Series.
"CLASS ALLOCATION PERCENTAGE" means, with respect to any Class on any
Payment Date at any type after the Liquidation Commencement Date, a fraction
with (a) a numerator which equals the Outstanding Principal Balance of such
Class at such time; and (b) a denominator of which equals the sum of the
Outstanding Principal Balances of each Subordinated Class (if the Class
Allocation Percentage is being calculated for a Subordinated Class) or of each
Senior Class (if the Class Allocation Percentage is being calculated for a
Senior Class), in either case, which ranks PARI PASSU with such Class.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
-6-
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means March 14, 1995.
"COLLECTION DATE" means the earlier of (i) that date following the
Purchase Termination Date on which the aggregate Unpaid Balances of the
Receivables transferred to the Issuer have been reduced to zero or (ii) that
date designated by the Issuer and the Sellers from and after both the Purchase
Termination Date and the repayment in full of all Notes and other amounts owed
to the holders thereof under the Transaction Documents.
"COLLECTIONS" means all funds which are received by a Seller, the
Issuer, the Servicer, the Administrative Agent or the Trustee from or on behalf
of any Obligor in payment of any amounts owed (including invoice prices, finance
charges, interest and all other charges, if any) in respect of any Receivable or
Related Asset, or otherwise applied to repay or discharge any Receivable
(including insurance payments that a Seller, the Issuer or the Servicer applies
in the ordinary course of its business to amounts owed in respect of such
Receivable and net proceeds of sale or other disposition of repossessed goods
that were the subject of such Receivable).
"COMMISSION" means the Securities Exchange Commission, as constituted
from time to time, or if at any time after the execution of the Indenture such
Commission is no longer existing and/or performing the duties now assigned to it
under the Trust Indenture Act, the Person performing such duties at such time.
"COMPETITOR" means a Person (other than Stone Container or any of its
Consolidated Affiliates) engaged in the manufacture and sale of paperboard,
paper packaging products and related wood products, including, without
limitation, containerboard, kraft paper, boxboard, corrugated containers,
newsprint, paper bags, sacks, plywood, lumber, wood veneer and folding cartons.
"CONCENTRATION ACCOUNT" means any bank account that is created in
accordance with, and to perform the functions contemplated for "Concentration
Accounts" in, SECTION 3.03 of the Indenture.
"CONCENTRATION ACCOUNT AGREEMENT" means a letter agreement,
substantially in the form of EXHIBIT E to the Purchase Agreement (or such other
form as is reasonably acceptable to the Trustee), among the Issuer, the Sellers
and a Concentration Account Bank and which relates to one or more Concentration
Account, as the same may be amended, supplemented, amended and restated, or
otherwise modified, from time to time.
-7-
"CONCENTRATION ACCOUNT BANKS" means any of the banks at which one or
more Concentration Account is maintained from time to time.
"CONSOLIDATED AFFILIATE" means, with respect to any Person, any other
Person whose financial statements should, under GAAP, be consolidated with the
financial statements of such Person.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary or any other Person,
some or all of the stock of which, or other equity interests in which, is owned
(directly or indirectly) by Stone Container and the accounts of which would be
consolidated with those of Stone Container in its consolidated financial
statements as of such time in accordance with GAAP. For the purposes of this
definition, the term "CONSOLIDATED SUBSIDIARY" shall include the Issuer, unless
otherwise specified in a Transaction Document.
"CONSOLIDATION" means the merger of (i) SCNI, Stone Bag, Stone
Packaging and certain other Subsidiaries of Stone Container with and into Stone
Container and (ii) the merger of Stone Corrugated and certain other Subsidiaries
of Stone Southwest with and into Stone Southwest, in each case, which occurred
on September 30, 1994.
"CONTRACT" means an agreement between a Seller and any Person
(including but not limited to, a written contract, oral contract, purchase order
or open account agreement) pursuant to or under which such Person shall be
obligated to make payments in respect of any Receivable or Related Asset to such
Seller from time to time, as evidenced by an invoice in substantially one of the
forms attached as EXHIBIT B to the Purchase Agreement.
"CONTRIBUTED ASSETS" is defined in SECTION 2.01(a) of the Purchase
Agreement.
"CONTROLLED ACCUMULATION AMOUNT" means, with respect to any Series,
for any Payment Date during an Accumulation
Period with respect to such Series, the amount, if any, specified as the
Controlled Accumulation Amount in the related Supplement.
"CONTROLLED DEPOSIT AMOUNT" means, with respect to any Series, for any
Payment Date during an Accumulation Period, an amount equal to the sum of the
Controlled Accumulation Amount, if any, for such Payment Date and the Deficit
Controlled Accumulation Amount, if any, for the immediately preceding Payment
Date.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in
New York City, New York at which at any particular time its corporate trust
business shall be principally administered, which office on the Closing Date is
located at 140 Broadway, 12th Floor, New York, New York 10005-1180.
-8-
"CREDIT AND COLLECTION POLICY" means, with respect to a Seller, those
credit and collection policies and practices of a Seller relating to the
Contracts and Receivables of such Seller, a copy of which has been provided to
the Issuer, the Trustee and the Administrative Agent by such Seller prior to the
Closing Date, as such credit and collection policies may be modified without
violating SECTION 5.03(c) of the Purchase Agreement or SECTION 7.02(h) of the
Indenture. Notwithstanding the foregoing, as applied to any Successor Servicer,
"CREDIT AND COLLECTION POLICY" means the collection policies and practices of
that Successor Servicer with respect to receivables similar to the Receivables.
"CUT-OFF DATE" means the last day of any Calculation Period.
"DAILY REPORT" is defined in SECTION 3.04(b) of the Indenture.
"DEFEASANCE ACCOUNT" is defined in SECTION 4.01(e) of the Indenture.
"DEFEASANCE ALLOCATION PERCENTAGE" means, on any Business Day
occurring prior to the Liquidation Commencement Date with respect to any Series
of Notes that is in an Accumulation Period, a Pay-Out Period or a Prepayment
Accumulation Period:
(a) if no other Series of Notes is in an Accumulation Period, a Pay-
Out Period or a Prepayment Accumulation Period on that Business Day, the
Noteholder Allocation Percentage on that Business Day; and
(b) if at least one other Series of Notes is in an Accumulation
Period, a Pay-Out Period or a Prepayment Accumulation Period on that
Business Day, the product of (i) the Noteholder Allocation Percentage on
that Business Day MULTIPLIED BY (ii) a fraction (A) the numerator of which
is the Outstanding Principal Balance of the Series for which the Defeasance
Allocation Percentage is being calculated as of the Scheduled Accumulation
Commencement Date, Pay-Out Period Commencement Date or Prepayment
Accumulation Commencement Date for that Series and (B) the denominator of
which is the sum of the Outstanding Principal Balances of each Series that
is in an Accumulation Period, a Pay-Out Period or Prepayment Accumulation
Period, as of the Scheduled Accumulation Commencement Date, Pay-Out Period
Commencement Date or Prepayment Accumulation Commencement Date for each
such Series.
"DEFERRED ALLOCATION ACCOUNT" is defined in SECTION 4.01(f) of the
Indenture.
-9-
"DEFICIT CONTROLLED ACCUMULATION AMOUNT" means, with respect to any
Series, (a) on the first Payment Date with respect to an Accumulation Period,
the excess, if any, of the Controlled Accumulation Amount for such Payment Date
over the amount distributed from the Defeasance Account as the Principal Payment
Amount for such Payment Date and (b) on each subsequent Payment Date with
respect to an Accumulation Period, the excess, if any, of the Controlled Deposit
Amount for such subsequent Payment Date over the amount distributed from the
Defeasance Account as the Principal Payment Amount for such subsequent Payment
Date.
"DEFINITIVE NOTES" is defined in SECTION 6.09 of the Indenture.
"DILUTION" means, with respect to any Receivable, the aggregate
reduction in the Original Balance of such Receivable on account of discounts,
incorrect billings, credits, rebates, allowances, chargebacks, returned or
repossessed goods, allowances for early payments, and any other such reductions
granted in the ordinary course of business that are unrelated to the inability
of the applicable Obligor to pay such Receivables (including, without
limitation, any such reductions in such Receivable made by the applicable Seller
in respect of volume incentives relating to the Obligor thereof), in each case,
whether such reductions are effected through the granting of credits against
such Receivable or by the issuance of a check or other payment in respect of
(and as payment for) such reduction by the applicable Seller to the Obligor
thereon.
"DILUTION ADJUSTMENT" means, with respect to Receivables sold by any
Seller, and as of any Payment Date, an amount equal to (i) Dilution during the
applicable Calculation Period with respect to such Receivables, minus (ii) the
Forecasted Dilution Amounts for all Purchases of such Receivables during that
Calculation Period, it being understood that such Forecasted Dilution Amount
shall equal zero for any Calculation Period during which no Purchases occurred.
"DILUTION DISCOUNT RATIO" is defined in SECTION 2.02(b) of the
Purchase Agreement.
"DILUTION RATIO" means, as calculated in each Settlement Statement as
of the most recent Cut-Off Date, a fraction (expressed as a percentage) having
(a) a numerator equal to the aggregate amount of Dilution on the Receivables
during the Calculation Period ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated by the Sellers during the Calculation
Period immediately preceding the Calculation Period referred to in clause (a)
(so that, for example, if the Calculation Period specified in CLAUSE (a)
corresponded to the month of February, the Calculation Period in
-10-
this CLAUSE (b) would be the one corresponding to the month of January).
"DILUTION RESERVE RATIO" means, as calculated in each Settlement
Statement for each Class of Notes, the result (expressed as a percentage),
calculated as of the most recent Cut-Off Date, equal to the product of:
(a) the sum of
(i) the product of (A) the Applicable Ratings Factor for such
Class and (B) the average of the Dilution Ratios during the preceding
twelve consecutive Calculation Periods ending on the most recent
Cut-Off Date, and
(ii) the product of
(A) the difference of (1) the highest Dilution Ratio for
any Calculation Period during the preceding twelve consecutive
Calculation Periods ending on the most recent Cut-Off Date, MINUS
(2) the amount described in CLAUSE (a)(i)(B) above, MULTIPLIED BY
(B) a fraction, having a numerator equal to the amount
described above in SUBCLAUSE (a)(ii)(A)(1) and a denominator
equal to the amount described above in SUBCLAUSE (a)(i)(B), and
(b) the product of (i) a fraction, having (A) a numerator equal to
the aggregate amounts payable pursuant to invoices giving rise to Receivables
generated by the Sellers during the Calculation Period ending on the most recent
Cut-Off Date (as calculated on such Cut-Off Date) and (B) a denominator equal to
the aggregate Unpaid Balance of all Eligible Receivables, as calculated on the
most recent Cut-Off Date and (ii) 1.15.
"DISCOUNT RATE" is defined in SECTION 2.02(b) of the Purchase
Agreement.
"DISCOUNT RATE RESERVE" means, at any time, an amount equal to the
following:
DRR = AECC + EIC - CCR
where:
DRR = the Discount Rate Reserve;
AECC = the accrued and unpaid Carrying Costs (other than interest on the
Notes) for the current Calculation
-11-
Period at such time, plus the amount of the Carrying Costs (other
than interest on the Notes) estimated to accrue for the period
from such date of determination through the Calculation Period
ending immediately on or after the date occurring a number of
days equal to two times the then current number of Turnover Days
(as set forth in the then-effective Settlement Statement) after
such date of determination, provided that for purposes of
calculating the carrying costs which will occur during such
period, the Servicing Fee shall be deemed to accrue at the rate
set forth in clause(i)(y)(1) of the PROVISO in SECTION 6.07 of
the Purchase Agreement; and
EIC = the sum at such time of:
(a) WR x AOPB
---------
12;
(b) [(WR(x) + 3.00%)] x [(2 x TD) - 30] x AOPB(x)
---------------------------------------------
360; and
(c) WR(y) x [(2 x TD) -30] x AOPB(y)
--------------------------------
360
where:
WR = a per annum rate equal to weighted average of the Note
Rates of all Notes of all Series outstanding at such
time;
AOPB = the aggregate Outstanding Principal Balance of the
Notes of all Series outstanding at such time;
WR(x) = a per annum rate equal to weighted average of the Note
Rates of all Notes of all Series outstanding at such
time which bear interest at a variable rate;
AOPB(x) = the aggregate Outstanding Principal Balance of the
Notes of all Series outstanding at such time which bear
interest at a variable rate;
WR(y) = a per annum rate equal to weighted average of the Note
Rates of the Notes of all Series outstanding at such
time which bear interest at a fixed rate;
AOPB(y) = the aggregate Outstanding Principal Balance of the
Notes of all Series
-12-
outstanding which bear interest at a fixed rate; and
TD = Turnover Days (as set forth in the then effective
Settlement Statement); and
CCR = the balance in the Carrying Cost Account as of such time.
"DOLLARS" means dollars in lawful money of the United States of
America.
"DUFF & PHELPS" means Duff & Phelps Credit Rating Co.
"ELIGIBLE INVESTMENTS" means any of the following:
(a) deposit accounts that are established and maintained at a
financial institution, the short-term debt securities or certificates of
deposit of which have at the time of investment the highest short-term debt
or certificate of deposit rating (as the case may be) available from S&P
and (if rated by Duff & Phelps) by Duff & Phelps, and that are held in the
name of the Trustee in trust for the benefit of the Noteholders, subject to
the exclusive custody and control of the Trustee and/or the Administrative
Agent and for which the Trustee and/or the Administrative Agent have sole
signature authority; PROVIDED, HOWEVER, that this CLAUSE (a) shall not
apply to the Bank Accounts or to the Trust Accounts;
(b) marketable obligations of the United States of America, the full
and timely payment of principal and interest on which is backed by the full
faith and credit of the United States of America, which have a maturity
date not later than the next succeeding Payment Date;
(c) marketable obligations directly and fully guaranteed by the
United States of America, the full and timely payment of principal and
interest on which is backed by the full faith and credit of the United
States of America, which have a maturity date not later than the next
succeeding Payment Date;
(d) banker's acceptances, certificates of deposit and other interest-
bearing obligations (x) issued by institutions the short-term unsecured
obligations of which have at the time of investment a rating of not less
than "A-1+" or the equivalent thereof by S&P and (if rated by Duff &
Phelps) of not less than "D-1+" or the equivalent thereof by Duff & Phelps
and the long-term unsecured obligations have a rating of not less than
"AA-" or the equivalent thereof by S&P and (if rated by Duff & Phelps) by
Duff & Phelps, (y) which are denominated in Dollars and (z)
-13-
which have a maturity date not later than the next succeeding Payment Date;
PROVIDED, HOWEVER, that the banker's acceptances, certificates of deposit
and other obligations described in this clause (d) shall only constitute
"Eligible Investments" if and to the extent that the Servicer is satisfied
that the Trustee will have a perfected security interest therein for the
benefit of the Noteholders;
(e) repurchase agreements (i) that are entered into with any
financial institution having the ratings referred to in clause (a) at the
time of investment and (ii) that are secured by a perfected first priority
security interest in an obligation of the type described in CLAUSE (b) or
(c) above; PROVIDED, HOWEVER, that such obligation may mature later than
the next succeeding Payment Date if such bank is required to repurchase
such obligation not later than the next succeeding Payment Date; and,
PROVIDED, FURTHER, that (x) the market value of the obligation with respect
to which such bank has a repurchase obligation, determined as of the date
on which such obligation is originally purchased, shall equal or exceed
102% of the repurchase price to be paid by such bank and (y) the Trustee or
a custodian acting on its behalf (including, without limitation, the
Administrative Agent) shall have possession of the instruments or documents
evidencing such obligations;
(f) guaranteed investment contracts entered into with any financial
institution, having the rating referred to in clause (a) at the time of
investment and which, in each case, have a maturity date not later than the
next succeeding Payment Date;
(g) commercial paper (except for commercial paper issued by the
Issuer, any Seller or any Affiliate of the Issuer or any Seller) rated at
the time of investment not less than "A-1+" or the equivalent thereof by
S&P and (if rated by Duff & Phelps) of not less than "D-1+" or the
equivalent thereof by Duff & Phelps and having a maturity date not later
than the next succeeding Payment Date; and
(h) freely redeemable shares in open-end money market mutual funds
(including such mutual funds that are offered by the Person who is acting
as the Trustee or Administrative Agent or by any agent of either of the
foregoing) which (i) seek to maintain a constant net-asset value and (ii)
at the time of such investment have been rated not less than "AAA" or the
equivalent thereof by S&P and (if rated by Duff & Phelps) by Duff & Phelps.
"ELIGIBLE OBLIGOR" means, at any time, an Obligor which satisfies the
following criteria:
-14-
(a) it is not a Foreign Obligor, Governmental Authority or any
department, agency or instrumentality of any of Governmental Authority;
(b) it is not a direct or indirect Subsidiary of Stone Container or
any other entity with respect to which Stone Container or any Subsidiary of
Stone Container owns, directly or indirectly, more than 50% of such
entity's equity interests;
(c) with respect to which no Event of Bankruptcy had occurred and was
continuing as of the end of the most recent Calculation Period; and
(d) as of the end of the most recent Calculation Period, none of the
Receivables of such Obligor were evidenced by Receivables Notes.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(a) which arises from the sale of goods, merchandise or services by a
Seller in the ordinary course of its business;
(b) which represents a BONA FIDE obligation resulting from a sale of
goods or merchandise which have been shipped or delivered or services which
have been performed and is due and payable not more than 120 days after the
date on which the invoice for services, goods or merchandise, the sale of
which gave rise to such Receivable, is provided or delivered;
(c) which, as of the end of the previous Calculation Period, (i) has
not aged more than 90 days past its invoice date, (ii) if a Box Receivable,
no more than 50% of the aggregate Unpaid Balances of all Box Receivables
owing by the Obligor thereon which arose from sales from the same Box Plant
as such Box Receivable were (for reasons other than disputes) outstanding
more than 120 days past their respective invoice dates, and (iii) if other
than a Box Receivable, no more than 50% of the aggregate Unpaid Balances of
all Receivables (other than Box Receivables) owing by the Obligor thereon
and its Consolidated Affiliates were (for reasons other than disputes)
outstanding more than 120 days past their respective invoice dates;
(d) which (i) if the perfection of the Issuer's and the Trustee's
interests therein is governed by the laws of a jurisdiction where the UCC
is in force, constitutes an account or a general intangible and not chattel
paper or an instrument, as each such term is defined in the UCC and (ii) if
the perfection of the Issuer's and the Trustee's respective interests
therein is governed by the law of any
-15-
jurisdiction where the UCC is not in force, the Seller of such Receivable
has furnished to the Trustee an Opinion of Counsel to the effect that the
ownership interest of the Issuer in such Receivables and the security
interest of the Trustee in such Receivables and the other Pledged Assets
with respect thereto are not significantly less protected and favorable
than such rights would be if secured by a perfected security interest under
(and as such term is used in) the UCC;
(e) the Obligor of which is an Eligible Obligor;
(f) with regard to which both the representation and warranty of the
Issuer in SECTION 2.03(a)(i) and (ii) of the Indenture and the
representation and warranty of the relevant Seller in SECTION 4.01(e) of
the Purchase Agreement are true and correct;
(g) the transfer of which by the Issuer to the Seller and the grant
and pledge of a security interest and lien in which by the Issuer to the
Trustee does not, in either case, contravene or conflict with any law, rule
or regulation or any contractual or other restriction, limitation or
encumbrance that applies to either Seller, the Issuer or the Trustee, and
the sale, assignment or transfer of which, and the granting of a security
interest in which, does not require the consent of the Obligor thereof or
any other Person, other than any such consent that has been previously
obtained;
(h) which is denominated and payable only in Dollars in the United
States of America and is non-interest bearing; PROVIDED, HOWEVER, that such
Receivable shall not be deemed to be interest-bearing solely as a result of
the relevant Seller's imposition of an interest or other charge on any such
Receivable which remains unpaid after its scheduled due date; and,
PROVIDED, FURTHER, that such interest charge or other charge shall not be
included in the Unpaid Balance of such Receivable for purposes of
calculating the Base Amount;
(i) which arises under a Contract that has been duly authorized and
that, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless
of whether such enforceability is considered in a proceeding in equity or
at law;
-16-
(j) which is not subject to any asserted reduction (including any
reduction on account of any offsetting account payable of the Issuer or the
applicable Seller to an Obligor or funds of an Obligor held by the Issuer
or the applicable Seller), cancellation, rebate (including any advertising
rebate) or refund or any dispute, offset, counterclaim, lien or defense
whatsoever; PROVIDED, HOWEVER, that a Receivable (or any group of
Receivables) that is subject only in part to any of the foregoing shall
constitute Eligible Receivables to the extent such Receivable (or group of
Receivables) is not subject to reduction, cancellation, refund, rebate,
dispute, offset, counterclaim, lien or other defense and otherwise
satisfies the eligibility criteria set forth herein;
(k) which, together with the Contract related thereto, conforms in
all material respects with all applicable laws, rules, regulations, orders,
judgments, decrees and determinations of all courts and other governmental
authorities (whether federal, state, local or foreign and including usury
laws);
(l) which satisfies all applicable requirements of the Credit and
Collection Policy of the relevant Seller and, to the extent relevant, any
Successor Servicer;
(m) which has not been compromised, adjusted or modified (including
by extension of time or payment or the granting of any discounts,
allowances or credits), except as permitted by SECTION 7.02(h) of the
Indenture; and
(n) which is an account receivable representing all or part of
the sales price of goods, merchandise, insurance or services within
the meaning of Section 3(c)(5) of the Investment Company Act of 1940,
as amended.
"ELIGIBLE SERVICER" means (a) at any time prior to its termination as
Servicer pursuant to SECTION 10.01 of the Indenture, Stone Container, (b) the
Trustee, (c) the Administrative Agent, or (d) any other Person which, at the
time of its appointment as Servicer, (i) is servicing a portfolio of trade
receivables, (ii) is legally qualified and has the capacity to service the
Receivables, (iii) has demonstrated the ability to service professionally and
competently a portfolio of trade receivables similar to the Receivables in
accordance with high standards of skill and care, (iv) is qualified to use the
software that is then being used to service the Receivables or obtains the right
to use or has its own software which is adequate to perform its duties under the
Indenture, (v) has a net worth of at least $50,000,000 as of the end of its most
recent fiscal quarter, (vi) is acceptable to each Applicable Rating Agency as
evidenced by satisfaction of the Rating Agency
-17-
Condition, and (vii) is not, and is not a Subsidiary of or otherwise controlled
by, a Competitor.
"ENHANCEMENT" means, with respect to any Series, any surety bond,
letter of credit, guaranteed rate agreement, maturity guaranty facility, cash
collateral account or guaranty, tax protection agreement, interest rate swap or
other contract or agreement for the benefit of Noteholders of such Series. The
drawing on or payment of any Enhancement for the benefit of a Series or Class of
Notes shall not be available to the Noteholders of any other Series or Class.
"ENHANCEMENT PROVIDER" shall mean the Person providing any
Enhancement, other than any Holders of Notes of which are subordinated to any
other Series or Class of Notes.
"EQUALIZATION ACCOUNT" is defined in SECTION 4.01(c) of the Indenture.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time, and any successor statute of similar
import, together with any regulations thereunder, in each case as in effect from
time to time. References to sections of ERISA also refer to any successor
sections.
"ERISA AFFILIATE" means, with respect to any Person, any other person
(as defined in Section 3(9) of ERISA) which is under common control with such
Person within the meaning of Section 4001(b) of ERISA and the regulations
thereunder or a member of the same "controlled group" or "affiliated service
group" as such Person within the meaning of Section 414(b), (c), (m) or (o) of
the Internal Revenue Code.
"EVENT OF BANKRUPTCY" shall be deemed to have occurred with respect to
a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or any substantial part of its assets, or any similar
action with respect to such Person under any law (foreign or domestic)
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of (i) in the
case of any Person other than the Issuer, 60 days, and (ii) in the case of
the Issuer, 10 days; or an order for relief in respect of such Person shall
be entered in an involuntary case under the
-18-
federal bankruptcy laws or other similar laws (foreign or domestic) now or
hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for, such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
fail to, or admit in writing its inability to, pay its debts generally as
they become due.
"EVENT OF DEFAULT" is defined in SECTION 9.02 of the Indenture.
"EXCESS CONCENTRATION BALANCE" means, on any day and with respect to
an Obligor, the amount of otherwise Eligible Receivables due from such Obligor
as of such date (expressed as a percentage of the aggregate Unpaid Balances of
all Eligible Receivables owing by all Obligors as of such date) (such percentage
being the "OBLIGOR PERCENTAGE"), which exceeds the percentage set forth below
for the applicable category of Obligors, or such larger percentage in respect of
which the Rating Agency Condition has been satisfied; PROVIDED, HOWEVER, that
if, and to the extent that, the Servicer or the applicable Seller is unable to
make a determination as to the eligibility of the Receivables or any group of
Receivables owing by a particular Obligor, then the Servicer (at its option) may
calculate the Obligor Percentage with respect to such Obligor using the total
Unpaid Amounts of all such Receivables owing by such Obligor on such date as a
percentage of the aggregate Unpaid Balances of all Eligible Receivables owing by
all Obligors as of such date:
Minimum Rating
------------------------------------------------------------------------
Duff &
S&P Phelps Percentage
---------------- ----------------- --------------
A-1+ or AA- D-1+ or AA- 10%
A-1 or A+ D-1 or A+ 10%
A-2 or BBB+ D-2 or BBB+ 8%
A-3 or BBB- D-3 or BBB- 5%
Not rated/other Less than D-3 or BBB- 2.6%
PROVIDED, HOWEVER, that in the case of an Obligor which is a member of a group
of two or more Consolidated Affiliates, the Excess Concentration Balances shall
be calculated as if such
-19-
Obligor and each of its Consolidated Affiliates were one and the same Obligor,
and the applicable debt rating of such consolidated group of Obligors for
purposes of this definition shall be the debt rating of the ultimate parent of
such consolidated group of Obligors.
The percentage applicable to any Obligor (or the ultimate parent of
the consolidated group of Obligors of which such Obligor is a member, as the
case may be) shall be the percentage associated with the lower of such Obligor's
(or such ultimate parent's, as the case may be) short-term senior debt ratings
issued by S&P and (if so rated by Duff & Phelps) Duff & Phelps; PROVIDED, that
(i) if (x) such short-term debt is not rated by S&P or (y) such short-term debt
is rated by S&P and not by Duff & Phelps, but the actual or implied long-term
senior debt rating issued by Duff & Phelps is in a category that is lower than
the category relating to S&P's short-term debt rating, then, in either case, the
percentage applicable to such Obligor (or such ultimate parent, as the case may
be) shall be the percentage associated with the lower of such Obligor's (or such
ultimate parent, as the case may be) actual or implied long-term senior debt
ratings, if any, issued by S&P and (if so rated by Duff & Phelps) Duff & Phelps
and (ii) if no short-term or actual or implied long-term debt rating from the
Applicable Rating Agencies is then in effect with respect to 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 "Not rated/other" and "Less than D-3 or BBB-"
category set forth above. 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.
Without in any way limiting the foregoing paragraph, the Issuer may
elect to report Excess Concentration Balances on a monthly basis for any
Business Day prior to April 30, 1995, in which event the Excess Concentration
Balances during such period shall be calculated according to the following table
in lieu of the table set forth above:
-20-
Minimum Rating
------------------------------------------------------------
Duff &
S&P Phelps Percentage
--------------- --------------- -------------
A-1+ or AA- D-1+ or AA- 4%
A-1 or A+ D-1 or A+ 4%
A-2 or BBB+ D-2 or BBB+ 4%
A-3 or BBB- D-3 or BBB- 2.5%
Not rated/other Less than D-3 or BBB- 1.0%
"EXPECTED FINAL PAYMENT DATE" means, with respect to any Series, the
date specified as the Expected Final Payment Date in the related Supplement.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"FIXED PRINCIPAL NOTE" means any Note of any Series that is not
designated as a Series of Revolving Notes in the Supplement pursuant to which
such Series is issued.
"FORECASTED DILUTION AMOUNT" means, for any Purchase or series of
Purchases during a Calculation Period, the Dilution Discount Ratio(s) utilized
in calculation of the applicable Purchase Price for such Purchase or Purchases
multiplied by the aggregate Original Balances of the Receivables included in
such Purchase or Purchases.
"FOREIGN OBLIGOR" means any Obligor which is not a resident of, or
located in, the United States of America.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, as in effect from time to time.
"GLOBAL NOTE" means a Note evidencing all or any part of a Series of
Notes to be issued to the Holders thereof in Book-Entry Form, which Global Note
shall be issued to the Clearing Agency, or its nominee, for such Series, in
accordance with SECTION 6.09 of the Indenture and the applicable Supplement
pursuant to which such Note is issued.
"GOVERNMENTAL AUTHORITY" means the United States of America and any
other country from time to time in existence, and, in each case, any state,
province, or other political subdivision thereof, any other entity in the United
States of America or any other country that exercises executive,
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legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any agency, department or instrumentality of any of the
foregoing.
"GUARANTY" means any agreement, undertaking or arrangement by which
any Person guarantees, endorses, agrees to purchase or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
Indebtedness, obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
"INDEBTEDNESS" of any Person means, without duplication:
(a) all of such Person's obligations for borrowed money and all of
such Person's obligations evidenced by bonds, debentures, notes or other
similar instruments;
(b) all of such Person's obligations as lessee under leases which
have been or should be, in accordance with GAAP, recorded as capitalized
leases; and
(c) whether or not so included as liabilities in accordance with
GAAP, all of such Person's obligations to pay the deferred purchase price
of property or services, and indebtedness (excluding prepaid interest
thereon) secured by an Adverse Claim on property owned or being purchased
by such Person (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse.
For purposes of the Transaction Documents, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
"INDEMNIFIED LOSSES" is defined in SECTION 7.03 of the Indenture.
"INDEMNIFIED PARTY" is defined in SECTION 7.03 of the Indenture.
"INDENTURE" means that certain Master Indenture and Security Agreement
dated as of March 14, 1995 among the Issuer, Stone Container, the Administrative
Agent and the Trustee, as the same may be amended, restated, supplemented or
otherwise modified from time to time (including, by any Supplement thereto).
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"INITIAL CUT-OFF DATE" means the date occurring two Business Days
prior to the Closing Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
"ISSUER" means Stone Receivables Corporation, a Delaware corporation.
"ISSUER ORDER" means a written order or request of the Issuer signed
by an Authorized Officer of the Issuer.
"LETTER OF REPRESENTATIONS" means any applicable agreement among the
Issuer, the Trustee, the Administrative Agent and the applicable Clearing
Agency, with respect to such Clearing Agency's rights and obligations (in its
capacity as a Clearing Agency) with respect to any Book-Entry Notes, as the same
may be amended, supplemented, restated or otherwise modified from time to time.
"LIQUIDATION COMMENCEMENT DATE" means the earlier to occur of (a) the
date upon which the Liquidation Commencement Date is declared or occurs
automatically pursuant to SECTION 9.01 or 9.02 of the Indenture and (b) the
Purchase Termination Date.
"LIQUIDATION EVENT" is defined in SECTION 9.01 of the Indenture.
"LIQUIDATION PERIOD" means the period commencing on the Liquidation
Commencement Date.
"LOCKBOX ACCOUNTS" means those certain bank accounts, maintained at
those certain locations, described in SCHEDULE 7.01(j) to the Indenture, into
which Collections from Receivables are deposited, and any bank account that is
hereafter created in accordance with, and to perform the functions contemplated
for "Lockbox Accounts" in, SECTION 3.03 of the Indenture.
"LOCKBOX AGREEMENT" means any of the letter agreements delivered in
connection with the Indenture and any other letter agreement, substantially in
the form of EXHIBIT D to the Purchase Agreement (or such other form as is
reasonably acceptable to the Trustee), among a Lockbox Bank, the applicable
Seller and the Issuer that relates to one or more Lockbox Accounts, as the same
may be amended, supplemented, amended and restated, or otherwise modified, from
time to time.
"LOCKBOX BANK" means any of the banks at which one or more Lockbox
Accounts are maintained from time to time.
"LOSS DISCOUNT" is defined in SECTION 2.02(b) of the Purchase
Agreement.
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"LOSS RESERVE RATIO" means with respect to any Series or Class, as
calculated in each Settlement Statement, the result (expressed as a percentage)
equal to the product of (a) the Applicable Ratings Factor of such Series or
Class, as applicable, (b) the highest average of the Aged Receivables Ratio for
any three consecutive Calculation Periods that occurred during the preceding 12
consecutive Calculation Periods ending on the most recent Cut-Off Date
(PROVIDED, that for purposes of calculating this amount with respect to any
Calculation Period ending before July 31, 1995 for which the Issuer does not
have actual information, the Issuer shall use the applicable estimated Aged
Receivables Ratios set forth on the table attached hereto as ANNEX I), and (c) a
fraction having (i) a numerator equal to the sum of the aggregate amounts
payable pursuant to invoices giving rise to Receivables generated by the Sellers
during the three Calculation Periods preceding or ending on the most recent
Cut-Off Date, as determined on the Cut-Off Dates for those three Calculation
Periods, and (ii) a denominator equal to the aggregate Unpaid Balance of all
Eligible Receivables, as determined on the most recent Cut-Off Date.
"LOSS TO LIQUIDATION RATIO" means, as calculated in each Settlement
Statement, a fraction (a) the numerator of which is the aggregate Unpaid Balance
of all Receivables (net of Recoveries) which became Charged-Off Receivables or
(without duplication) were converted into Receivables Notes during the three
preceding Calculation Periods in accordance with the Credit and Collection
Policy of the applicable Seller, and (b) the denominator of which is the
aggregate amount of Collections on the Receivables received during such three
Calculation Periods.
"MAJORITY NOTEHOLDERS" means, at any time, the Holders of Notes the
aggregate Outstanding Principal Balances of which, collectively, represent more
than 50% of the aggregate Outstanding Principal Balances of the outstanding
Notes of all Series at such time.
"MASTER COLLECTION ACCOUNT" is defined in the SECTION 4.01(b) of the
Indenture.
"MATERIAL ADVERSE EFFECT" means, as to any Seller, the Issuer or the
Servicer and/or to any event or circumstance and at any time, a material adverse
effect on (a) the ability of such Person to perform its obligations under any
Transaction Document to which it is a party or (b) the validity, enforceability,
or collectibility of any Receivables, Related Assets or Contracts that,
individually or in the aggregate, represent or evidence a right to payment in
excess of 2.6% of the aggregate Unpaid Balance of the Receivables at such time.
"MATURITY DATE" with respect to any Series, shall be the date
specified in the applicable Supplement relating thereto.
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"MERGER" means the merger of StoneFin and StoneFin II with and into
Stone Container pursuant to the Merger Certificate.
"MERGER CERTIFICATE" means that certain Certificate of Ownership and
Merger effective as of the Closing Date pursuant to which the Merger shall be
consummated.
"MULTIEMPLOYER PLAN" means a "multiemployer" plan as defined in
Section 4001(a)(3) of ERISA that is maintained for the employees of the Sellers,
the Issuer, Stone Container or any ERISA Affiliate of any of the foregoing.
"NET ELIGIBLE RECEIVABLES" means, at any time, the then aggregate
Unpaid Balance of all Eligible Receivables at such time, MINUS the sum of (a)
the then aggregate amount of all Excess Concentration Balances with respect to
all Obligors at such time and (b) the dollar amount of any Adverse Claims then
outstanding, other than Permitted Adverse Claims of the type described in
clauses (i), (iv) or (v) of the definition thereof or any other Permitted
Adverse Claim relating to the payment of amounts described in the definition
thereof which are not yet due and payable and which have been fully bonded. For
purposes of calculating Net Eligible Receivables, all Collections which have
been received but have not been applied to any specific Receivables will be
presumed to be Collections of Eligible Receivables.
"NONCOMPLYING RECEIVABLE" means any Receivable which, as of the date
of origination thereof, did not meet the criteria for an Eligible Receivable as
of such date.
"NONCOMPLYING RECEIVABLES ADJUSTMENT" shall mean, as of any Settlement
Date, and with respect to any Seller's Receivables, as the case may be, an
amount equal to (i) the aggregate Unpaid Balances on the most recent Cut-Off
Date of all such Seller's Receivables which were first reported to be
Noncomplying Receivables during such Collection Period MINUS (ii) the aggregate
amount of Collections received by the Issuer during such Calculation Period with
respect to any such Seller's Receivables which were reported to be Noncomplying
Receivables in any prior Settlement Statement MINUS (iii) the "Allocated Loss
and Dilution Amount" (as such term is hereinafter defined).
As used herein, the "ALLOCATED LOSS AND DILUTION AMOUNT" shall be
determined as follows:
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ALDA = UB x (LD + DD)
where:
ALDA = the Allocated Loss and Dilution Amount.
UB = the aggregate Unpaid Balances as of the most recent
Cut-Off Date of the applicable Noncomplying Receivables
reported during the Calculation Period ended as of such
Cut-Off Date.
LD = the Loss Discount applicable to such Receivables as of
the most recent Cut-Off Date.
DD = the Dilution Discount Ratio applicable to such
Receivables as of the most recent Cut-Off Date.
"NONCOMPLYING RECEIVABLES AND DILUTION ADJUSTMENT" means as to any
Seller at any time, the sum of the Dilution Adjustment and Noncomplying
Receivables Adjustment owed to or from such Seller.
"NOTE" or "NOTES" means any one or more of the promissory notes issued
by the Issuer under the Indenture, including any such notes issued as a
replacement for a previously issued Note pursuant to SECTION 6.06 of the
Indenture.
"NOTEHOLDER" or "HOLDER" of Notes means, in each case, the Person in
whose name a Note is registered in the Note Register.
"NOTEHOLDER ALLOCATION PERCENTAGE" means:
(1) on any Business Day occurring prior to the Liquidation
Commencement Date, a fraction (expressed as a percentage) (a) the numerator
of which is the sum of the aggregate Outstanding Principal Balances of all
outstanding Series of Notes as of (i) in the case of a Series of Notes that
is in an Accumulation Period, Pay-Out Period or Prepayment Accumulation
Period, the applicable Scheduled Accumulation Commencement Date, Pay-Out
Period Commencement Date or Prepayment Accumulation Commencement Date and
(ii) in the case of a Series of Notes that is in a Revolving Period and is
not in a Prepayment Accumulation Period, that Business Day and (b) the
denominator of which is the sum of (i) the amount determined under clause
(a) immediately above and (ii) the excess, if any, of (x) the Variable
Amount, if positive, as of that day, OVER (y) the amount of funds, if any,
then on deposit in the Defeasance Account and the Principal Funding
Account;
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(2) on any Business Day occurring after the Liquidation Commencement
Date, 100%.
"NOTE RATE" means, with respect to any Series or Class of Notes, the
fixed or variable rate or rates of interest applicable thereto as set forth
therein and/or the applicable Supplement relating thereto.
"NOTE REGISTER" means the register maintained pursuant to SECTION 6.05
of the Indenture, providing for the registration of the Notes and transfers and
exchanges thereof.
"OBLIGATIONS" means (a) all obligations of the Issuer, the Sellers,
and the Servicer to the Trustee, the Administrative Agent, any other Indemnified
Party, the Noteholders and each of the foregoing's respective successors,
permitted transferees and assigns, arising under or in connection with the
Transaction Documents, and (b) all obligations of the Sellers to the Issuer, any
other RPA Indemnified Party and their respective successors, transferees and
assigns, arising under or in connection with the Transaction Documents, in each
of the cases of (a) and (b) above, howsoever such obligations shall be created,
arising or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due.
"OBLIGOR" means a Person obligated to make payments on a Receivable.
"OFFICER'S CERTIFICATE" means, unless otherwise specified in the
Indenture or in any Supplement, a certificate signed by an Authorized Officer of
the Issuer or the initial Servicer, as the case may be, or, in the case of a
Successor Servicer, a certificate signed by the President, any Vice President or
the financial controller (or an officer holding an office with equivalent or
more senior responsibilities) of such Successor Servicer, which, in the case of
any of the foregoing, is delivered to the Trustee and the Administrative Agent
(if it is not the Person delivering such Officer's Certificate).
"OPINION OF COUNSEL" means a written opinion of counsel, who shall be
reasonably acceptable to the Trustee.
"ORIGINAL BALANCE" means, with respect to any Receivable, the Unpaid
Balance of such Receivable on the date it was purchased by, or otherwise
transferred to, the Issuer, which face amount shall be calculated net of any
credits issued on or accrued through the date of Purchase.
"OUTSTANDING PRINCIPAL BALANCE" means, at any time, (a) with respect
to any Note, the outstanding principal balance of such Note at such time, and
(b) with respect to any Class or
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Series of Notes, the aggregate outstanding principal balance of all Notes in
such Class or Series, as applicable, at such time.
"PAYING AGENT" means any paying agent appointed pursuant to SECTION
6.17 of the Indenture and shall initially be the Administrative Agent.
"PAYMENT DATE" means the 15th day of each calendar month, or if such
day is not a Business Day, the next succeeding Business Day.
"PAY-OUT EVENT" means, with respect to any Series of Notes, any event
defined as such in the Supplement pursuant to which such Series was issued.
"PAY-OUT PERIOD" means, with respect to one or more Series of Notes,
the period commencing on the Pay-Out Period Commencement Date that applies to
such Series of Notes and ending on the date on which all such Series of Notes
shall have been paid in full.
"PAY-OUT PERIOD COMMENCEMENT DATE" means, with respect to one or more
Series of Notes, the date on which a Pay-Out Event for such Series occurs.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"PENSION PLAN" shall mean any employer plan that is subject to the
provisions of Part 3 of Title 1B of ERISA or to Title IV of ERISA and that is
maintained for employees of any of the Sellers, the Issuer or any of the
foregoing's ERISA Affiliates, but shall not include any Multiemployer Plan.
"PERMITTED ADVERSE CLAIMS" shall mean (i) Adverse Claims created under
the Transaction Documents (x) in favor of the Issuer (and assigned to the
Trustee) or the Trustee, in either case, as against the Sellers and (y) in favor
of the Trustee as against the Issuer; (ii) Adverse Claims for taxes, assessments
or charges of any Governmental Authority for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (iii) Adverse Claims of landlords, carriers, warehousemen,
mechanics and materialmen imposed by law and created in the ordinary course of
business for amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP; (iv) any
right of offset of an Obligor with respect to payment of a Receivable which has
the economic effect of a priority claim; (v) Adverse Claims of a collecting bank
under Section 4-210 of the UCC; and (vi) other Adverse Claims not
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described in clause (ii) above in favor of the PBGC or the Internal Revenue
Service which either (a) do not exceed $2,000,000 in the aggregate at any one
time outstanding or (b) have been bonded in full by or on behalf of the
applicable Sellers or the Issuer, as the case may be.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.
"PLEDGED ASSETS" is defined in Granting Clause of the Indenture.
"PRE-EXISTING STONEFIN PURCHASE AGREEMENT" means that certain
Receivables Purchase Agreement dated as of August 15, 1991 (as amended) among
StoneFin, Stone Container, Stone Corrugated and Stone Southwest.
"PRE-EXISTING STONEFIN II PURCHASE AGREEMENT" means that certain
Receivables Purchase Agreement dated as of August 18, 1992 (as amended) among
StoneFin II, Stone Container, SCNI, Stone Bag, Stone Packaging, and Stone
Southwest.
"PREPAYMENT ACCUMULATION COMMENCEMENT DATE" means, with respect to any
Series, so long as the Pay-Out Period Commencement Date with respect to such
Series or the Liquidation Commencement Date shall not have occurred, the date
specified in any notice of optional prepayment or redemption given by the Issuer
to the Trustee and the Administrative Agent pursuant to the Supplement relating
to such Series.
"PREPAYMENT ACCUMULATION PERIOD" means, with respect to any Series,
the period commencing on the Prepayment Accumulation Commencement Date with
respect to such Series and ending on the earlier to occur of (a) the Liquidation
Commencement Date, (b) the Pay-Out Commencement Date with respect to such
Series, and (c) the date on which the entire principal balance of the Notes of
such Series to be prepaid or redeemed, plus the applicable prepayment premium,
if any, shall have been accumulated in the Defeasance Account.
"PRINCIPAL ACCUMULATION AMOUNT" means, with respect to any Series, for
any Payment Date occurring during the Accumulation Period, the sum of the
amounts set aside in the Defeasance Account with respect to such Series during
the preceding Calculation Period; and the amount so set aside on each Business
Day during the Accumulation Period (until the Outstanding Principal Balance of
such Series has been provided for in full) will equal the product of (a) the
Defeasance Allocation Percentage for such Series and (b) the balance of
Collections available in the Master Collection Account, after making any
required transfers to the Carrying Cost Account.
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"PRINCIPAL FUNDING ACCOUNT" is defined in SECTION 4.01(e) of the
Indenture.
"PRINCIPAL PAYMENT AMOUNT" means: (i) for any Payment Date occurring
after the Calculation Period in which the Liquidation Period commences, with
respect to any Class of Notes, the product of (a) the balance of Collections in
the Master Collection Account that were deposited therein prior to the end of
the preceding Calculation Period remaining after application thereof as provided
in CLAUSE FIRST of SECTION 4.02(f) of the Indenture (and, in the case of any
Subordinated Class, after application thereof to the repayment in full of the
respective Outstanding Principal Balances all Classes of Notes senior in
priority thereto) and (b) the Class Allocation Percentage of such Class; and
(ii) for any Payment Date occurring after the Calculation Period in
which a Pay-Out Period commences with respect to any Series, an amount equal to
the amount calculated in the same manner as the Principal Accumulation Amount
with respect to a Payment Date in the Accumulation Period.
"PRINCIPAL TERMS" means, with respect to any Series of Notes: (a) the
name or designation thereof and of any Classes thereof and, if more than one
class, the relative rights and priorities thereof; (b) the initial aggregate
principal amount thereof; (c) whether such Notes are to be Fixed Principal Notes
or Revolving Notes and the denominations (if such Notes are Fixed Principal
Notes) or Stated Amounts (if such Notes are Revolving Notes) thereof; (d) the
applicable Note Rates thereof and the manner of the calculation thereof; (e) the
designation of any Trust Accounts with respect thereto; (f) the Maturity Date
and Stated Maturity Date thereof; (g) the terms of any Enhancement therefor; (g)
the Pay-Out Events with respect thereto; (h) the terms for the redemption or
prepayment thereof; (i) whether such Notes will be certificated or in Book-Entry
Form; (j) any required reserves with respect thereto; and (k) any other terms
supplementing or modifying those contained in the Indenture with respect to such
Series of Notes.
"PROCESSING DATE" means, with respect to any Receivable, the date that
the existence of such Receivable is first recorded on the applicable Seller's
and/or the Servicer's master data processing records.
"PROGRAM" means the transactions contemplated in the Transaction
Documents.
"PURCHASE" means, on any Business Day, the sale, contribution and
conveyance of all Receivables from the Sellers to the Issuer under the Purchase
Agreement for which the Purchase Price has not been previously paid or which
have not previously
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been contributed to the Issuer by Stone Container, in either case, in accordance
with the terms of SECTION 2.02 thereof.
"PURCHASE AGREEMENT" means that certain Receivables Purchase
Agreement, dated as of March 14, 1995, by and among the Sellers and the Issuer,
as the same may be further amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with the terms thereof and of
the Indenture.
"PURCHASED ASSETS" is defined in SECTION 2.01(a) of the Purchase
Agreement.
"PURCHASE DISCOUNT RESERVE RATIO" is defined in SECTION 2.02(b) of the
Purchase Agreement.
"PURCHASE PRICE" is defined in SECTION 2.02(b) of the Purchase
Agreement.
"PURCHASE PRICE PERCENTAGE" is defined in SECTION 2.02(b) of the
Purchase Agreement.
"PURCHASE TERMINATION DATE" means the earlier to occur of (i) date
upon which all of the Sellers have ceased to sell Receivables to the Issuer in
accordance with the provisions of SECTION 8.09 of the Purchase Agreement and
(ii) the date upon which the Liquidation Commencement Date is declared or
automatically occurs pursuant to SECTION 9.01 or SECTION 9.02 of the Indenture.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Applicable Rating Agency has notified the Servicer, the Trustee, and the
Administrative Agent in writing that such action will not result in a reduction
or withdrawal of the rating of any outstanding Series or Class with respect to
which it is an Applicable Rating Agency.
"RECEIVABLE" means (i) a Bag Receivable, (ii) a Box Receivable or
(iii) any other right to payment from, or other indebtedness of, an Obligor
(including all interest or finance charges and other obligations of such Obligor
with respect thereto) which (x) arises from the sale of goods, merchandise or
services by any Seller (other than any such sale of goods, merchandise or
services giving rise to a CBM Receivable) and (y) is designated as a
"Receivable" in accordance with SECTION 2.06 of the Purchase Agreement.
"RECEIVABLE NOTES" means any promissory notes issued by an Obligor to
evidence a past-due or otherwise delinquent Receivable.
"RECITALS" means the "Recitals of the Issuer" contained in the
Indenture.
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"RECORD DATE" means, with respect to any Payment Date, the third
Business Day immediately preceding such Payment Date.
"RECORDS" means all Contracts, purchase orders, invoices and other
agreements, documents, books, records and other media for the storage of
information (including tapes, disks, punch cards, computer programs and
databases and related property) maintained by the Issuer, the Sellers or the
Servicer with respect to the Transferred Assets, the Pledged Assets and/or the
related Obligors.
"RECOVERIES" means all Collections received by the Issuer, the
Servicer, the Administrative Agent or the Trustee from time to time in respect
of any Charged-Off Receivable.
"REDEMPTION DATE" is defined in SECTION 15.02 of the Indenture.
"REDEMPTION PRICE" is defined in SECTION 15.04 of the Indenture.
"RELATED ASSETS" is defined in SECTION 2.01(a) of the Purchase
Agreement.
"RELATED SECURITY" means, with respect to any Receivable: (a) all of
the applicable Seller's right, title and interest in and to the goods (including
returned goods), if any, relating to the sale which gave rise to such
Receivable; (b) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise; (c)
all letters of credit, guarantees and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise; and (d) all proceeds of any of the foregoing.
"RELATED TRANSFERRED ASSETS" is defined in Granting Clause of the
Indenture.
"REPORT DATE" means the Business Day immediately preceding the Payment
Date in any month.
"REQUIRED NOTEHOLDERS" means, at any time, the Holders of Notes the
aggregate Outstanding Principal Balances of which, collectively, represent more
than 66-2/3% of the aggregate Outstanding Principal Balances of the outstanding
Notes of all Series at such time.
"REQUIRED RESERVES" means, at any time as to any Class of Notes, the
product of (a) the Applicable Reserve Ratio with respect to such Class at such
time, (b) the Net Eligible Receivables at such time and (c) a fraction, (i) the
numerator of
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which is the Outstanding Principal Balance with respect to such Class at such
time and (ii) the denominator of which is the sum of the Outstanding Principal
Balances of all Classes of Notes of equal priority with such Class at such time.
"REQUIRED SERIES HOLDERS" means, at any time with respect to any
action to be taken by Holders of any Series of Notes, the holders of such Notes
of such Series the aggregate Outstanding Principal Balance of which,
collectively, represent more than 66-2/3% of the aggregate Outstanding Principal
Balances of all of the outstanding Notes of such Series at such time, PROVIDED,
that with respect to any outstanding Series of Revolving Notes in respect of
which there is no Outstanding Principal Balance at such time, "REQUIRED SERIES
HOLDERS" shall mean the holders of such Notes of such Series the aggregate
Outstanding Principal Balance of which, collectively, represent more than 66-
2/3% of the aggregate Stated Amount of all of the outstanding Notes of such
Series at such time.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee or
the Administrative Agent, (a) any officer within the structured finance group of
the corporate trust department (or any successor group) of the Trustee or the
Administrative Agent, as applicable, including any vice president, assistant
vice president, assistant secretary, assistant treasurer, corporate trust
officer or any other officer or assistant officer of the Trustee or
Administrative Agent, as applicable, customarily performing functions similar to
those performed by the persons who hold the office of vice president, assistant
vice president, assistant secretary, assistant treasurer or corporate trust
officer and (b) any other officer of the Trustee or the Administrative Agent, as
applicable, within such corporate trust department with direct responsibility
for the administration of the Indenture or to whom any corporate trust matter is
referred at the Trustee's Corporate Trust Office or the Administrative Agent
Corporate Trust Office, as applicable, because of his knowledge of or
familiarity with the particular subject.
"REVOLVING NOTE or REVOLVING NOTES" means any Notes of any Series that
are designated to be "Revolving Notes" in the Supplement pursuant to which such
Series is issued.
"REVOLVING NOTEHOLDER" means the Person in whose name an Revolving
Note is registered in the Note Register.
"REVOLVING PERIOD" means, with respect to any Series or Class of
Notes, that period during which such Series is outstanding prior to the
occurrence of the Accumulation Period, the Prepayment Accumulation Period, the
Pay-Out Period or the Liquidation Period.
"RPA INDEMNIFIED LOSSES" is defined in SECTION 7.01 of the Purchase
Agreement.
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"RPA INDEMNIFIED PARTY" is defined in SECTION 7.01 of the Purchase
Agreement.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SCHEDULED ACCUMULATION COMMENCEMENT DATE" means, with respect to any
Series of Notes, the date specified as such in the Supplement pursuant to which
such Series of Notes is issued.
"SCNI" means Stone Consolidated Newsprint, Inc., formerly a New York
corporation which was merged with and into Stone Container pursuant to the
Consolidation.
"SECURITIES ACT" means the Securities Act of 1933, as it may be
amended from time to time.
"SELLER" means each of the "Sellers" party to the Purchase Agreement;
PROVIDED, HOWEVER, that such term shall also include any Subsidiary of Stone
that becomes a party to the Purchase Agreement pursuant to SECTION 2.06 thereof
and shall exclude any Person that is terminated as a Seller pursuant to SECTION
2.07 of the Purchase Agreement; and PROVIDED FURTHER, that as it relates to any
Receivable generated prior to the Consolidation, the term "SELLER" shall also
include Stone Bag, Stone Corrugated and Stone Packaging.
"SELLER CHANGE EVENT" is defined in SECTION 3.04(d) of the Indenture.
"SELLER LOANS" means those certain loans which the Sellers advance to
the Issuer from time to time in lieu of cash payment of the Purchase Price as
provided in SECTION 2.02(c) of the Purchase Agreement, which Seller Loans are
evidenced by and subject to the terms of the SRC Intercompany Notes.
"SELLER'S RECEIVABLE" means, with respect to any Seller, a Receivable
originated by such Seller without regard to whether such Receivable has been or
will be transferred to the Issuer under the Purchase Agreement.
"SELLER TRANSACTION DOCUMENTS" means the Purchase Agreement and the
Account Agreements.
"SENIOR CLASS" means any Class of Notes that is identified as a
"Senior Class" in the applicable Supplement.
"SERIES" means any Series of Notes issued pursuant to SECTION 6.03 of
the Indenture.
"SERIES SALE DATE" means, with respect to any Series, the date
specified as such in the Supplement pursuant to which such Series was issued.
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"SERVICER" means at any time the Person then authorized and appointed
pursuant to ARTICLE VI of the Purchase Agreement and SECTION 3.01 of the
Indenture to service, administer and collect Receivables and Related Transferred
Assets, including any Successor Servicer appointed pursuant to ARTICLE X of the
Indenture.
"SERVICER DEFAULT" is defined in SECTION 10.01 of the Indenture.
"SERVICE TRANSFER" is defined in SECTION 10.02(b) of the Indenture.
"SERVICING FEE" is defined in SECTION 6.07 of the Purchase Agreement.
"SETTLEMENT" means the payments and other actions provided for on each
Payment Date.
"SETTLEMENT DATE" means the eighteenth day of each calendar month, or
if such day is not a Business Day, the next succeeding Business Day.
"SETTLEMENT STATEMENT" is defined in SECTION 3.04(c) of the Indenture.
"SRC INTERCOMPANY NOTES" is defined in SECTION 2.02(d) of the Purchase
Agreement.
"STATED AMOUNT" means, as to any Revolving Note, the maximum principal
amount that may be required to be funded by the Holder of such Revolving Note,
as applicable, as determined pursuant to the applicable Supplement.
"STATED MATURITY DATE" with respect to any Series, shall be the date
specified in the applicable Supplement relating thereto.
"STONE BAG" means Stone Bag Corporation, formerly a Delaware
corporation which was merged with and into Stone Container pursuant to the
Consolidation.
"STONE CONTAINER" means Stone Container Corporation, a Delaware
corporation.
"STONE CORRUGATED" means Stone Corrugated, Inc., formerly a Delaware
corporation which was merged with and into Stone Container pursuant to the
Consolidation.
"STONEFIN" means Stone Financial Corporation, formerly a Delaware
corporation which was merged with and into Stone Container pursuant to the
Merger.
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"STONEFIN II" means StoneFin II Receivables Corporation, formerly a
Delaware corporation which was merged with and into Stone Container pursuant to
the Merger.
"STONE PACKAGING" means Stone Packaging Corporation, formerly a
Delaware corporation which was merged with and into Stone Container pursuant to
the Consolidation.
"STONE PERSON" means Stone Container and each of its Subsidiaries and
Affiliates.
"STONE SOUTHWEST" means Stone Southwest, Inc., a Delaware corporation.
"SUBORDINATED CLASS" means any Class of Notes that is identified as
being a "Subordinated Class" in the applicable Supplement. With respect to any
Subsequent Issuance of a Subordinated Class, the Supplement pursuant to which
such new Notes are to be issued shall specify the priority in payment of such
new Subordinated Class relative to each other Subordinated Class outstanding as
of such Subsequent Issuance Date.
"SUBORDINATION DEFICIT" means, at any time with respect to any Class
of Notes (other than the Subordinated Class or Classes of Notes ranking most
junior in priority as among all of the other Classes of Notes then outstanding),
the positive excess, if any, of (i) the Required Reserves for such Class at such
time OVER (ii) the product of (a) the sum of (i) the aggregate Outstanding
Principal Balances of all outstanding Notes of any Class which are junior in
priority to such Class of Notes and (ii) the sum of the Required Reserves for
all outstanding Notes which are junior in priority to such Class of Notes and
(b) a fraction, (x) the numerator of which is the Outstanding Principal Balance
of such Class at such time and (y) the denominator of which is the sum of the
Outstanding Principal Balances of all Classes of Notes of equal priority with
such Class at such time.
"SUBSEQUENT ISSUANCE" means any issuance of Notes on any date after
the Closing Date.
"SUBSEQUENT ISSUANCE DATE" means, with respect to any Subsequent
Issuance, the Series Sale Date of the Notes to be issued in connection
therewith.
"SUB-SERVICER" is defined in SECTION 6.02(b) of the Purchase
Agreement.
"SUBSIDIARY" means, with respect to any Person, any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such
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corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person.
"SUCCESSOR SERVICER" is defined in SECTION 10.02(a) of the Indenture.
"SUPPLEMENT" means, with respect to each Series of Notes, each
supplement hereto executed by the Issuer, the Servicer, the Trustee and the
Administrative Agent, into each of which agreements the Principal Terms of the
Indenture shall be incorporated by reference and in each of which the terms and
provisions applicable to the Series of Notes to be issued thereunder shall be
set out, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with the terms thereof and
with the Indenture.
"TAX OPINION" means, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income tax purposes, (a) with respect to any
Notes of any Series or Class to be issued on the Closing Date or on any
Subsequent Issuance Date, such Notes will be properly characterized as debt and
(b) such action (including, without limitation, any Subsequent Issuance) will
not adversely affect the characterization of the Notes of any outstanding Series
or Class as debt.
"TERMINATION NOTICE" is defined in SECTION 10.01 of the Indenture.
"TRANSACTION DOCUMENTS" means the Purchase Agreement, the Indenture,
each Supplement, the Notes and, with respect to any Series, any other agreement
specified in the applicable Supplement relating thereto as being a "Transaction
Document."
"TRANSFER AGENT AND REGISTRAR" means any transfer agent and registrar
appointed pursuant to SECTION 6.05 of the Indenture and shall initially be the
Administrative Agent.
"TRANSFERRED ASSETS" is defined in SECTION 2.01(a) of the Purchase
Agreement.
"TRUST ACCOUNTS" means the accounts described in SECTIONS 4.01(b),
(c), (e) and (f) of the Indenture and any accounts required to be established
pursuant to any Supplement that are designated as Trust Accounts in that
Supplement.
"TRUSTEE" means Marine Midland Bank, in its capacity as trustee on
behalf of the Noteholders under the Indenture, or its successor-in-interest, or
any successor trustee appointed as provided in the Indenture.
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"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990, as in force on the Closing
Date, except as set forth in SECTION 14.05 of the Indenture.
"TURNOVER DAYS" means, at any time, that number of days calculated in
the most recent Settlement Statement for the Receivables in accordance with the
following formula:
x y
TD = (UB + UB ) X 1 X ED
----------- ---
2 NR
where:
TD = the Turnover Days for the Receivables;
x
UB = the aggregate Unpaid Balances of all of the Receivables as
of the first day of the Calculation Period to which such
Settlement Statement relates.
y
UB = the aggregate Unpaid Balances of all of the Receivables as
of the most recent Cut-Off Date.
NR = the aggregate Original Balances of all of the Receivables
which were generated during such Calculation Period.
ED = the actual days elapsed during such Calculation Period.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"UNFUNDED CURRENT LIABILITY" means, with respect to any Pension Plan,
the amount, if any, by which the present value of the accrued benefits under
such Pension Plan as of the close of its most recent plan year exceeds the fair
market value of the assets allocable thereto, in each case, as determined in
accordance with Section 412 of the Internal Revenue Code.
"UNMATURED EVENT OF DEFAULT" means any event or condition which, with
the giving of notice, lapse of time and/or passage of a vote in respect thereof,
would become an Event of Default.
"UNMATURED LIQUIDATION EVENT" means any event or condition which, with
the giving of notice, lapse of time and/or passage of a vote with respect
thereto, would become a Liquidation Event.
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"UNMATURED PAY-OUT EVENT" means any event or condition which, with the
giving of notice, lapse of time and/or passage of a vote with respect thereto,
would become a Pay-Out Event.
"UNPAID BALANCE" of any Receivable means at any time the unpaid amount
thereof. If a Receivable becomes evidenced by a Receivable Note, then the
Unpaid Balance of such Receivable shall be reduced by the principal amount of
such Receivable Note.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally Guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof or (iii) depository receipts issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligations or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligation evidenced by such depository receipt.
"VARIABLE AMOUNT" is defined in SECTION 4.02(c) of the Indenture.
B. OTHER TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with United States generally accepted
accounting principles. To the extent that the definitions of accounting terms
in any Transaction Document are inconsistent with the meanings of such terms
under generally accepted accounting principles or regulatory accounting
principles, the definitions contained in such Transaction Document shall
control. All terms used in Article 9 of the UCC in the State of New York and
not specifically defined herein, are used herein as defined in such Article 9.
As used in the Transaction Documents, the term "INCLUDING" means "including
without limitation," and other forms of the verb "to include" have correlative
meanings. All references to any Person shall include such Person's permitted
successors.
C. COMPUTATION OF TIME PERIODS. Unless otherwise stated in the
Purchase Agreement, the Indenture or any Supplement, as the case may be, in the
computation of a period of time from a specified date to a later specified date,
the word
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"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
D. REFERENCE; CAPTIONS. The words "hereof", "herein" and "hereunder"
and words of similar import when used in any Transaction Document shall refer to
such Transaction Document as a whole and not to any particular provision of such
Transaction Document; and references to "SECTION", "SUBSECTION", "SCHEDULE" and
"EXHIBIT" in any Transaction Document are references to Sections, subsections,
Schedules and Exhibits in or to such Transaction Document unless otherwise
specified in such Transaction Document. The various captions (including the
tables of contents) in each Transaction Document are provided solely for
convenience of reference and shall not affect the meaning or interpretation of
any Transaction Document.
40
Annex I
ESTIMATED AGED RECEIVABLES RATIOS
Calculation Period Ratio
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