EXECUTION VERSION
U.S. $63,416,465
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 9, 1998
Among
INSURANCE FUNDING LLC,
as the Seller
-------------
and
EAGLEFUNDING CAPITAL CORPORATION,
as the Purchaser
----------------
and
BANCBOSTON ROBERTSON STEPHENS INC.,
as the Deal Agent
-----------------
and
SUPERIOR NATIONAL INSURANCE GROUP, INC.,
as the Servicer
---------------
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 1.03. Computation of Time Periods. . . . . . . . . . . . . . . . . . . . .16
ARTICLE II THE PURCHASE FACILITY
SECTION 2.01. Purchase of the Purchased Interest. (a). . . . . . . . . . . . . . .16
SECTION 2.02. The Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 2.03. Selection of Purchase Periods. . . . . . . . . . . . . . . . . . . .17
SECTION 2.04. Settlement Procedures. . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 2.05. Payments and Computations, Etc . . . . . . . . . . . . . . . . . . .19
SECTION 2.06. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.07. Increased Costs; Capital Adequacy; Illegality. . . . . . . . . . . .21
SECTION 2.08. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 2.09. Assignment of the Originator Sale Agreement. . . . . . . . . . . . .23
ARTICLE III CONDITIONS OF THE PURCHASE
SECTION 3.01. Conditions Precedent to the Purchase . . . . . . . . . . . . . . . .24
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller . . . . . . . . . . . .25
SECTION 4.02. Representations and Warranties of the Servicer . . . . . . . . . . .29
ARTICLE V GENERAL COVENANTS
SECTION 5.01. General Covenants of the Seller. . . . . . . . . . . . . . . . . . .31
SECTION 5.02. General Covenants of the Servicer. . . . . . . . . . . . . . . . . .35
ARTICLE VI ADMINISTRATION, COLLECTION AND MONITORING OF ASSETS
SECTION 6.01. Appointment and Designation of the Servicer. . . . . . . . . . . . .38
SECTION 6.02. Collection of Receivables by the Servicer; Extensions and
Amendments of Receivables. . . . . . . . . . . . . . . . . . . . . .38
SECTION 6.03. Distribution and Application of Collections. . . . . . . . . . . . .39
SECTION 6.04. Other Rights of the Deal Agent . . . . . . . . . . . . . . . . . . .39
SECTION 6.05. Records; Audits. . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 6.06. Receivable Reporting . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 6.07. Collections and Lock-Boxes . . . . . . . . . . . . . . . . . . . . .41
SECTION 6.08. UCC Matters; Protection and Perfection of Purchased Property . . . .41
SECTION 6.09. Obligations of the Seller With Respect to Receivables. . . . . . . .42
SECTION 6.10. Applications of Collections. . . . . . . . . . . . . . . . . . . . .42
SECTION 6.11. Annual Servicing Report of Independent Public Accountants. . . . . .43
ARTICLE VII TRIGGER EVENTS
SECTION 7.01. Trigger Events . . . . . . . . . . . . . . . . . . . . . . . . . . .43
ARTICLE VIII INDEMNIFICATION
SECTION 8.01. Indemnities by the Seller. . . . . . . . . . . . . . . . . . . . . .45
SECTION 8.02. Optional Repurchase of the Purchased Interest. . . . . . . . . . . .47
ARTICLE IX THE DEAL AGENT
SECTION 9.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . .48
SECTION 9.02. Deal Agent's Reliance, Etc . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.03. Deal Agent and Affiliates. . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.04. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.05. Resignation of the Deal Agent. . . . . . . . . . . . . . . . . . . .49
SECTION 9.06. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
ARTICLE X MISCELLANEOUS
SECTION 10.01. Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . .50
SECTION 10.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 10.03 Setoff and Counterclaim . . . . . . . . . . . . . . . . . . . . . .51
SECTION 10.04. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 10.05. Binding Effect; Assignability . . . . . . . . . . . . . . . . . . .51
SECTION 10.06. Term of this Agreement. . . . . . . . . . . . . . . . . . . . . . .52
SECTION 10.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF OBJECTION TO VENUE . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 10.08. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 10.09. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . .52
SECTION 10.10. No Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . .53
SECTION 10.11. Recourse Against Certain Parties. . . . . . . . . . . . . . . . . .54
SECTION 10.12. Execution in Counterparts; Severability; Integration. . . . . . . .54
SECTION 10.13. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . .54
SCHEDULES
Schedule I -- Condition Precedent Documents
Schedule II -- Description of Credit and Collection Policy
Schedule III -- Lock-Box Banks and Lock-Box Accounts
Schedule IV -- Tradenames, Fictitious Names and "Doing Business As" Names
Schedule V -- List of Purchased Receivables
EXHIBITS
Exhibit A -- Form of Lock-Box Agreements
Exhibit B -- Form of Monthly Asset Report
Exhibit C -- Form of Opinion of Counsel for the Seller
Exhibit D -- Seller's Certificate of Formation
THIS RECEIVABLES PURCHASE AGREEMENT (the "AGREEMENT") is made as of
December 9, 1998, among:
(1) INSURANCE FUNDING LLC, a Delaware limited liability company (the
"SELLER");
(2) EAGLEFUNDING CAPITAL CORPORATION, a Delaware corporation
("EAGLEFUNDING"), as the purchaser (the "Purchaser");
(3) BANCBOSTON ROBERTSON STEPHENS INC. ("BRSI"), as agent (the "DEAL
AGENT"); and
(4) SUPERIOR NATIONAL INSURANCE GROUP, INC., a Delaware corporation
("SUPERIOR"), in its capacity as the initial Servicer hereunder (in
such capacity, the "SERVICER").
IT IS AGREED as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. (a) Certain capitalized terms
used throughout this Agreement are defined above or in this SECTION 1.01.
(b) As used in this Agreement and its exhibits, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"ADJUSTED BASE RATE" means, at any time, the rate of interest equal to
the sum of (a) the Applicable Base Rate Margin and (b) the Base Rate in effect
at such time and from time to time.
"ADJUSTED EURODOLLAR RATE" means, with respect to any Purchase Period
for all Capital allocated to such Purchase Period, an interest rate per annum
equal to the sum of
(a) a per annum rate equal to the Applicable Eurodollar Margin; PLUS
(b) the quotient, stated as a percentage, of (i) the per annum rate
determined by the Deal Agent at which dollar deposits for such Purchase Period
are offered by BankBoston, N.A. based on information presented on Telerate Page
3750 as of 11:00 a.m. London time on the second Business Day prior to the first
day of such Purchase Period, divided by (ii) a number equal to 1.00 minus the
Eurodollar Reserve Percentage, if applicable.
"ADMINISTRATIVE FEE" means the fee payable by the Seller to the Deal
Agent annually in advance on the Closing Date and, if the Collection Date has
not occurred, on each anniversary of the Closing Date, and identified as the
"Administrative Fee" in the Fee Letter.
"ADVERSE CLAIM" means a lien, security interest, charge, encumbrance
or other right or claim of any Person having the practical effect of a lien,
security interest, charge or encumbrance.
"AFFECTED PARTY" has the meaning assigned to that term in SECTION
2.07(a).
"AFFILIATE" when used with respect to a Person means any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract, or otherwise; and the terms "controlling" and "controlled" have the
meanings correlative to the foregoing.
"AGENT'S BALANCE" means, in respect of an Insurance Premium, the
amount of such Insurance Premium due and payable to an Originator by (a) an
Insurance Agent, on behalf of the related Policyholder, in which case the
Insurance Agent has deducted any commissions due such Insurance Agent from the
Outstanding Balance thereof or (b) a Policyholder, in which case the Originator
shall reduce the Outstanding Balance thereof for any commissions due such
Insurance Agent.
"ALTERNATIVE RATE" means, with respect to any Purchase Period for all
Capital allocated to such Purchase Period, an interest rate per annum equal to
the Adjusted Eurodollar Rate or the Adjusted Base Rate as the Seller shall
select by notice to the Deal Agent in accordance with the terms of this
Agreement; PROVIDED, HOWEVER, that the "ALTERNATIVE RATE" for such Capital
allocated to such Purchase Period shall be the Adjusted Base Rate if (a) on or
before the first day of such Purchase Period, the Purchaser shall have notified
the Deal Agent that a Eurodollar Disruption Event has occurred, (b) such
Purchase Period is a period of 29 days or less, or (c) such Capital is less than
$1,000,000.
"APPLICABLE BASE RATE MARGIN" means 0.0% per annum; PROVIDED, HOWEVER,
that, at all times after the occurrence of a Trigger Event (other than with
respect to an event of the type described in SECTION 7.01(h) hereof), the
"Applicable Base Rate Margin" means 2.0% per annum.
"APPLICABLE EURODOLLAR RATE MARGIN" means 0.75% per annum; PROVIDED,
HOWEVER, that, at all times after the occurrence of a Trigger Event (other than
with respect to an event of the type described in SECTION 7.01(h) hereof), the
"Applicable Eurodollar Rate Margin" means 4.25% per annum.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
pursuant to which the assignee agrees to purchase an interest in the
Purchased Interest
and this Agreement from the Purchaser, in form and substance satisfactory to
the Deal Agent and the Seller, entered into by the Purchaser and such
assignee pursuant to SECTION 10.05.
"BANKRUPTCY CODE" means the United States Bankruptcy Reform Act of
1978 (11 U.S.C. Sections 101, ET SEQ.), as amended from time to time, or any
successor statute.
"BASE RATE" means, on any day, a fluctuating rate of interest per
annum equal to the higher of (a) the per annum rate of interest announced from
time to time by BankBoston, N.A. at its head office in Boston, Massachusetts as
its "base rate", and (b) 1/2 of one percent per annum above the Federal Funds
Rate.
"BENEFIT PLAN" means any employee benefit plan as defined in
Section 3(3) of ERISA in respect of which the Seller or any ERISA Affiliate of
the Seller is, or at any time during the immediately preceding six years was, an
"employer" as defined in Section 3(5) of ERISA.
"BUSINESS DAY" means a day of the year other than a Saturday or a
Sunday on which (a) banks are required to be open in New York City and Boston,
Massachusetts and (b) if the term "Business Day" is used in connection with the
Adjusted Eurodollar Rate, dealings in dollar deposits are carried on in the
London interbank market.
"CAPITAL" means the Purchase Price, reduced from time to time by any
amounts paid by the Seller to the Purchaser as a reduction to Capital and any
Collections received and distributed on account of such Capital pursuant to
SECTION 2.04; PROVIDED, HOWEVER, that such Capital shall not be reduced by any
distribution of any portion of Collections if at any time such distribution is
rescinded or must be returned for any reason.
"CAPITAL LIMIT" means, at any time, an amount equal to the remainder
of (a) the Eligible Receivables Balance at such time, MINUS (b) the Yield
Reserve at such time.
"CERTIFICATE OF FORMATION" means the certificate of formation of
Insurance Funding LLC filed with the Secretary of State of the State of Delaware
on December 1, 1998.
"CLOSING DATE" means December 9, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor.
"COLLECTION ACCOUNT" has the meaning specified in SECTION 6.07.
"COLLECTION ACCOUNT AGREEMENT" means that certain Collection Account
Agreement dated as of even date herewith among the Collection Account Bank, the
Servicer, the Purchaser and the Deal Agent
"COLLECTION ACCOUNT BANK" has the meaning specified in SECTION 6.07.
"COLLECTION DATE" means the date on which the aggregate outstanding
Capital has been reduced to zero, the Purchaser has received all Yield and other
amounts due to it in connection with this Agreement and the Deal Agent has
received all amounts due to it in connection with this Agreement.
"COLLECTIONS" means, (a) with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of the Related Security with respect to such
Receivable, and (b) any amounts paid to the Seller (or the Deal Agent, the
Purchaser or any assignees thereof) pursuant to the terms of the Originator Sale
Agreement.
"COMMERCIAL PAPER" means the short-term promissory notes of
EagleFunding denominated in dollars, issued by EagleFunding in connection with
the transactions contemplated by the Transaction Documents, including any
portion of such short-term promissory notes that are identified on the books and
records of EagleFunding as issued in respect of the transactions contemplated by
the Transaction Documents.
"CONFIDENTIAL INFORMATION" has the meaning assigned to such term in
SECTION 10.13.
"CONTRACT" means an agreement between an Originator and a Person
pursuant to or under which an Obligor shall be obligated to make one or more
payments to an Originator including, without limitation, (i) an Insurance Policy
and (ii) a Reinsurance Contract.
"COVERAGE SHORTFALL EVENT" means, at any time, the aggregate Capital
outstanding hereunder exceeds the Capital Limit in effect at such time.
"CP DEALER FEE" means, on any day, the fees payable to the Dealer in
respect of any Commercial Paper.
"CP DISRUPTION EVENT" means the inability of EagleFunding, at any
time, whether as a result of a prohibition, a contractual restriction or any
other event or circumstance whatsoever, to raise funds through the issuance of
its commercial paper notes (whether or not constituting "Commercial Paper"
hereunder) in the United States commercial paper market.
"CP RATE" means, with respect to any Purchase Period for all Capital
allocated to such Purchase Period, the rate equivalent to the rate (or if more
than one rate, the weighted average of the rates) at which commercial paper
notes of EagleFunding having a term equal to such Purchase Period and to be
issued to fund or maintain the applicable Purchase by EagleFunding may be sold
by any placement agent or commercial paper dealer selected by EagleFunding, as
agreed between each such agent or dealer and
EagleFunding and notified by EagleFunding or such agent or dealer to the Deal
Agent and the Servicer, including an increment to such rate sufficient in amount
to enable EagleFunding to collect all amounts of CP Dealer Fees payable in
respect of all such commercial paper notes issued for the term of such Purchase
Period; PROVIDED, HOWEVER, if the rate (or rates) as agreed between any such
agent or dealer and EagleFunding with regard to any Purchase Period for the
applicable Purchase is a discount rate (or rates), the "CP RATE" for such
Purchase Period shall be the rate (or if more than one rate, the weighted
average of the rates) resulting from converting such discount rate (or rates) to
an interest-bearing equivalent rate per annum.
"CREDIT AND COLLECTION POLICY" means those credit and collection
policies and practices relating to Contracts and Receivables described in
SCHEDULE II.
"DCR" means Duff & Phelps Credit Rating Co., and any successor
thereto.
"DEAL AGENT'S ACCOUNT" means a special account (account number 24207)
in the name of the Deal Agent (or for so long as EagleFunding is the Purchaser,
in the name of EagleFunding), maintained at Bankers Trust Company for the
benefit of the Deal Agent and the Purchaser.
"DEALER" means any dealer or placement agent in respect of the
Commercial Paper.
"DEBT" of any Person means (a) indebtedness of such Person for
borrowed money, (b) obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) obligations of such Person to pay the
deferred purchase price of property or services beyond ordinary course of
business payment terms for trade payables, (d) obligations of such Person as
lessee under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases, (e) obligations secured by an Adverse Claim upon
property or assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such obligations and (f) without duplication
obligations of such Person under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in CLAUSES (a) THROUGH (e) above.
"DEFAULTED RECEIVABLE" means a Receivable (a) (ii) in the case of an
Agent's Balance, as to which any payment, or part thereof, remains unpaid for
more than 270 days from the original invoice date for such payment and (ii) in
the case of a Reinsurance Recoverable, as to which any payment, or party
thereof, remains unpaid for more than 270 days from the date of this Agreement,
(b) as to which the Obligor thereof has taken any action constituting an
Insolvency Event or suffered any Insolvency Event or (c) which, consistent with
the Credit and Collection Policy, has been or should be written off the
applicable Originator's books as uncollectible.
"DILUTION FACTORS" means, with respect to the Receivables, any
credits, rebates, freight charges, discounts, allowances, disputes, chargebacks,
allowances for
early payments and other allowances or adjustments granted in accordance with
the Originators' and the Seller's usual practices.
"DISCOUNT FACTOR" means a percentage calculated to provide the
Purchaser with a reasonable return on its investment in the Purchased Property
after taking account of the time value of money based upon the anticipated dates
of collection of the Transferred Assets. The Discount Factor shall be 5.5%.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(a) the Obligor of which is a United States resident, is not an
Affiliate of the Seller, the Servicer or any Originator, and is not a
government or a governmental subdivision or agency;
(b) which is not a Defaulted Receivable;
(c) which arises under a Contract (i) the performance of which has
been completed by the applicable Originator and by all other parties other
than the Obligor and (ii) that has been duly authorized and, 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 and is not subject to any
dispute, offset, counterclaim or defense whatsoever;
(d) (i) which is an "account" or "general intangible" within the
meaning of Section 9-106 of the UCC of all applicable jurisdictions, (ii)
as to which all performance and other action required to be taken in
connection therewith by the applicable Originator (and, if applicable, the
Seller) for the Obligor has been so performed or taken, (iii) is
denominated and payable only in United States dollars in the United States,
(iv) no portion of which is payable on account of sales taxes, and (v) in
which the applicable Originator can grant a perfected security interest;
(e) which arises in the ordinary course of the Originators' business
in connection with providing services or the sale of goods within the
United States;
(f) the assignment of which (including, without limitation, the sale
of an undivided percentage interest therein and the assignment of any
Related Security) does not contravene or conflict with any applicable laws,
rules or regulations or any contractual or other restriction, limitation or
encumbrance;
(g) which does not have an Adverse Claim filed against it and is not
otherwise subject to an Adverse Claim and has not been compromised,
adjusted or modified (including by extension of time of payment or the
granting of any discounts, allowances or credits) except for discounts,
allowances or credits made in accordance with the Credit and Collection
Policy and in the ordinary course of the Originators' business;
(h) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no party to the Contract related thereto
is in violation of any such law, rule or regulation in any material
respect;
(i) which satisfies, and has been originated in accordance with, all
applicable requirements of the Credit and Collection Policy;
(j) as to which the Deal Agent has not notified the Seller that the
Deal Agent has determined, in its reasonable business judgment, that such
Receivable (or class of Receivables) is not acceptable for purchase
hereunder;
(k) with respect to which, (i) prior to the Purchase thereof by
Purchaser, Seller has a first priority ownership interest therein, free and
clear of any Adverse Claim, and (ii) from and after the Purchase thereof,
EagleFunding has a properly perfected first priority undivided percentage
ownership interest therein, free and clear of any Adverse Claim; and
(l) with respect to which no Person other than the applicable
Originator or an Affiliate thereof is attempting to collect the proceeds of
such Receivable.
"ELIGIBLE RECEIVABLES BALANCE" means, at any time, the aggregate
Outstanding Balance of Eligible Receivables which constitute Purchased
Receivables.
"EQUITY INVESTMENT" means, the sum of $1,000.00.
"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA AFFILIATE" means (a) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as the Seller; (b) a partnership or other trade or business (whether
or not incorporated) under common control (within the meaning of Section 414(c)
of the Code) with the Seller or (c) a member of the same affiliated service
group (within the meaning of Section 414(m) of the Code) as the Seller, any
corporation described in CLAUSE (a) above or any partnership, trade or business
described in CLAUSE (b) above.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR DISRUPTION EVENT" means, with respect to all Capital
allocated to any Purchase Period, any of the following: (a) a determination by
the Purchaser that it would be contrary to law or to the directive of any
central bank or other governmental authority (whether or not having the force of
law) to obtain United States dollars in the London interbank market to make,
fund or maintain the Purchase for such Purchase Period, (b) the failure of
BankBoston, N.A. to furnish timely information for purposes of determining the
Adjusted Eurodollar Rate, (c) a determination by the Purchaser that the rate at
which deposits of United States dollars are being offered in the London
interbank market does not accurately reflect the cost to the Purchaser of
making, funding or maintaining the Purchase for such Purchase Period or (d) the
inability of the Purchaser to obtain United States dollars in the London
interbank market to make, fund or maintain the Purchase for such Purchase
Period.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day with respect to a
Purchase Period to which Capital has been allocated hereunder, the maximum rate
(expressed as a decimal) at which any lender subject thereto would be required
to maintain reserves under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor or similar regulations relating to such reserve
requirements) against Eurocurrency Liabilities, if such liabilities were
outstanding. The Eurodollar Reserve Percentage shall be adjusted automatically
on and as of the effective date of any change in the maximum rate described
above.
"FEDERAL FUNDS RATE" means, for any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day for such transactions received by the
Liquidity Agent from three Federal funds brokers of recognized standing selected
by it.
"FEE LETTER" has the meaning assigned to that term in SECTION 2.06(a).
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, in each case consistently applied.
"INDEMNIFIED AMOUNTS" has the meaning assigned to that term in
SECTION 8.01.
"INDEMNIFIED PARTIES" has the meaning assigned to that term in
SECTION 8.01.
"INSURANCE AGENT" means a Person authorized to sell an Insurance
Policy.
"INSURANCE POLICY" means a duly filed and approved contract of
insurance in force and effective on the date hereof.
"INSURANCE PREMIUM" means an amount due from a Policyholder in order
to receive the benefits of an Insurance Policy.
"INVESTMENT" means, with respect to any Person, any direct or indirect
loan, advance or investment by such Person in any other Person, whether by means
of share purchase, capital contribution, loan or otherwise, excluding the
acquisition of Receivables and other Purchased Property (and interests therein)
pursuant to the Originator Sale Agreement and excluding commission, travel and
similar advances to officers, employees and directors made in the ordinary
course of business.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended and any successor.
"IRS" shall mean the Internal Revenue Service and any Person
succeeding to the functions thereof.
"ISSUER" means EagleFunding and any other Purchaser whose principal
business consists of issuing commercial paper or other rated securities to fund
the acquisition and maintenance of interests in, or the making of loans secured
by a grant of security interests in, receivables, accounts, instruments, chattel
paper, general intangibles and other similar assets.
"LIQUIDATION FEE" means, for the Capital allocated to a Purchase
Period (computed without regard to any shortened duration of such Purchase
Period as a result of the occurrence of the Termination Date) during which such
Capital is reduced or the applicable Yield Rate for such Capital is for any
reason changed, the amount, if any, by which (a) the additional Yield
(calculated without taking into account any Liquidation Fee) which would have
accrued on the reduction of such Capital during such Purchase Period (as so
computed) if such reductions had remained as Capital or if the applicable Yield
Rate had remained unchanged, as the case may be, exceeds (b) the sum of (i)
Yield actually received by a Purchaser in respect of such Capital for such
Purchase Period and (ii) if applicable, the income, if any, received by such
Purchaser from such Purchaser's investing the proceeds of reductions of Capital.
"LIQUIDITY AGENT" means BankBoston, N.A., in its capacity as
"Liquidity Agent" under the Liquidity Agreement, together with any successor or
permitted assign in such capacity.
"LIQUIDITY AGREEMENT" means that certain Liquidity Agreement dated as
of even date herewith by and among EagleFunding, the financial institutions
party thereto from time to time as "Liquidity Providers," and the Liquidity
Agent, as the same may be amended, restated, supplemented or otherwise modified
from time to time.
"LIQUIDITY FEE" means the fee payable by the Seller and identified as
the "Liquidity Fee" in the Fee Letter.
"LIQUIDITY PROVIDERS" means the financial institutions party to the
Liquidity Agreement from time to time as "Liquidity Providers" thereunder.
"LLC AGREEMENT" means the Operating Agreement of Insurance Funding LLC
executed by GSS Holdings II, Inc., as the sole member, as the same may be
amended, restated, supplemented or otherwise modified from time to time
hereafter.
"LOCK-BOX" means a post office box to which Collections are remitted
for retrieval by a Lock-Box Bank and deposited by such Lock-Box Bank into a
Lock-Box Account.
"LOCK-BOX ACCOUNT" means an account maintained for the purpose of
receiving Collections at a bank or other financial institution which has
executed a Lock-Box Agreement.
"LOCK-BOX AGREEMENT" means an agreement, in substantially the form of
EXHIBIT A, among the applicable Originator and a Lock-Box Bank.
"LOCK-BOX BANK" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
"MANAGEMENT AGREEMENT" means the Management Agreement dated as of
December 9, 1998 between Global Securitization Services LLC and the Seller (as
the same may be amended, restated, supplemented or otherwise modified from time
to time).
"MANAGEMENT FEE" means the fee payable by the Seller and identified as
the "Management Fee" in the Management Agreement.
"MANAGER" means Global Securitization Services LLC, a Delaware limited
liability company.
"MONTHLY ASSET REPORT" means a report, in substantially the form of
EXHIBIT B, furnished by the Servicer to the Deal Agent for the Purchaser
pursuant to SECTION 6.06(b).
"MONTHLY ASSET REPORT DATE" means, with respect to any calendar month,
the 20th day of such month, or if such date is not a Business Day, the next
Business Day to occur thereafter.
"MOODY'S" means Moody's Investors Service, Inc., and any successor
thereto.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding five years contributed to by the Seller or any
ERISA Affiliate on behalf of its employees.
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract, and includes, without limitation, (i) in the case of a Reinsurance
Recoverable, the applicable Reinsurance Company and (ii) in the case of an
Agent's Balance, either the Insurance Agent or the Policyholder, as the case may
be.
"ORIGINATOR" means each of California Compensation Insurance Company,
a California corporation, Commercial Compensation Insurance Company, a New York
corporation, Combined Benefits Insurance Company, a California corporation and
Business Insurance Company, a Delaware corporation; and "ORIGINATORS" means such
corporations, collectively.
"ORIGINATOR SALE AGREEMENT" means the Receivables Purchase and Sale
Agreement of even date herewith among the Originators and the Seller, together
with all instruments, documents and agreements executed by the Originators in
connection therewith, in each case as the same may from time to time be amended,
supplemented or otherwise modified in accordance with the terms hereof.
"OTHER COSTS" has the meaning assigned to such term in SECTION
10.09(c).
"OTHER SELLERS" has the meaning assigned to such term in SECTION
10.09(c).
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"PERMITTED INVESTMENTS" means (a) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof having maturities of no more than 45 days from the date
of acquisition (or, if earlier, maturing no later than the next occurring end of
any Purchase Period); (b) time deposits and certificates of deposit having
maturities of no more than 45 days from the date of acquisition (or, if earlier,
maturing no later than the next occurring end of any Purchase Period),
maintained with or issued by any commercial bank having capital and surplus in
excess of $500,000,000 and having a short-term rating of not less than P-1 or
the equivalent thereof from Moody's, A-1 or the equivalent thereof from S&P, and
D-1 or the equivalent thereof from DCR (if rated by DCR); (c) repurchase
obligations for underlying securities of the types described in CLAUSES (a) or
(b) above with a term of not more than ten days and maturing no later than 45
days after the date of acquisition (or, if earlier, maturing no later than the
next occurring end of any Purchase Period); and (d) commercial paper maturing
within 45 days after the date of acquisition (or, if earlier, maturing no later
than the next occurring end of any Purchase Period) and having a rating of not
less than P-1 or the equivalent thereof from Moody's, A-1 or the equivalent
thereof from S&P, and D-1 or the equivalent thereof from DCR (if rated by DCR).
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company, government (or any agency or political
subdivision thereof) or other entity.
"POLICYHOLDER" means the Person who is the named insured under an
Insurance Policy.
"PROGRAM FEE" means the fee payable by the Seller and identified as
the "Program Fee" in the Fee Letter.
"PURCHASE" means a purchase by the Purchaser of interests in the
Purchased Property from the Seller pursuant to ARTICLE II.
"PURCHASE LIMIT" means, at any time, $63,416,465.
"PURCHASE PERIOD" for any outstanding Capital means (a) if Yield in
respect of all or any part thereof is computed by reference to the CP Rate, a
period of 1 to and including 45 days, (b) if Yield in respect thereof is
computed by reference to the Adjusted Eurodollar Rate, a period of one month and
(c) if Yield in respect thereof is computed at the Adjusted Base Rate, a period
of 1 to and including 31 days, PROVIDED that the last day of such period shall
in each case be a Settlement Date, in each case, as determined pursuant to
SECTION 2.03.
"PURCHASE PRICE" means, with respect to the Purchase hereunder, the
aggregate price to be paid to the Seller for the Purchase of the Purchased
Property in accordance with SECTION 2.02, which price shall be equal to the
product of (x) the aggregate Outstanding Balance of the Purchased Receivables
and (y) one MINUS the Discount Factor, and shall be an integral multiple of
$250,000.
"PURCHASED INTEREST" means the undivided percentage ownership interest
in the Purchased Property conveyed by Seller to the Purchaser under this
Agreement. The Purchased Interest shall be equal to 100% and shall remain
constant until the Collection Date, on which date the Purchased Interest shall
become zero.
"PURCHASED PROPERTY" means (i) all the Receivables purchased in
accordance with SECTION 2.01 or 2.02 and identified in SCHEDULE V hereto, (ii)
all Related Security relating to such Receivables and (iii) all Collections with
respect to, and other proceeds of, such Receivables.
"PURCHASED RECEIVABLE" means any Receivable included in the Purchased
Property and in which a Purchased Interest has been purchased under this
Agreement.
"PURCHASER" means EagleFunding or any other Person that agrees,
pursuant to an Assignment and Acceptance, to purchase an interest in this
Agreement and in the
Purchased Interest pursuant to SECTION 2.02 of this Agreement, and to assume the
obligations of EagleFunding under this Agreement.
"RATE VARIANCE FACTOR" means that number which reflects the Deal
Agent's reasonable estimate of the potential variance in selected interest rates
over a period of time designated by the Deal Agent, as shall be computed from
time to time by the Deal Agent. The Deal Agent shall notify the Servicer in
writing of the Rate Variance Factor in effect from time to time.
"RATING AGENCY" has the meaning assigned to such term in SECTION 10.01
of this Agreement.
"RECEIVABLE" means an Agent's Balance or a Reinsurance Recoverable.
"RECORDS" means all Contracts and other documents, books, records and
other information (including without limitation, computer programs, tapes,
disks, punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the related Obligors which the Seller
has itself generated, in which the Seller has acquired an interest pursuant to
the Originator Sale Agreement or in which the Seller has otherwise obtained an
interest.
"REINSURANCE COMPANY" means an insurance company listed on Schedule V
hereto which has entered into a Reinsurance Treaty with an Originator.
"REINSURANCE RECOVERABLE" means an amount due an Originator from a
Reinsurance Company in respect of a claim under a Reinsurance Treaty.
"REINSURANCE TREATY" means a contract listed on Schedule V hereto
pursuant to which an Originator reinsures or is otherwise indemnified against
all or a portion of claims it must pay to a Policyholder under any Insurance
Policy.
"RELATED SECURITY" means with respect to any Receivable:
(a) all Adverse Claims 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;
(b) the assignment to the Deal Agent, for the benefit of the
Purchaser, of all UCC financing statements covering any collateral securing
payment of such Receivable;
(c) all guarantees, indemnities, warranties, letters of credit,
insurance policies and proceeds and premium refunds thereof 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;
(d) all Records;
(e) all of the Seller's right and title to, and interest in, the
Originator Sale Agreement, the Support Agreement and the assignment to
the Deal Agent of all UCC financing statements filed by the Seller
against the Originators under or in connection with the Originator
Sale Agreement;
(f) all right, title and interest of the relevant Originators in to
and under the related Contract (but only to the extent relating to such
Receivable); and
(g) all proceeds of the foregoing.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
"SECURITY AGREEMENT" means that certain Security Agreement dated as of
even date herewith by and between EagleFunding and Bankers Trust Company, as
"Liquidity Collateral Agent" and as "Supplemental Enhancement Collateral Agent"
thereunder, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"SERVICER" means at any time the Person then authorized pursuant to
ARTICLE VI to service, administer and collect Receivables.
"SERVICER DOWNGRADE TERMINATION EVENT" has the meaning assigned to
that term in paragraph (c) of the definition of "Servicer Termination Event".
"SERVICER FEE" has the meaning assigned to that term in
SECTION 2.06(b).
"SERVICER TERMINATION EVENT" means the occurrence of any of the
following:
(a) any representation or warranty made or deemed to be made by the
Servicer (or any of its officers or agents) under or in connection with this
Agreement or any information, document or report delivered pursuant hereto shall
prove to have been false or incorrect in any material respect when made;
(b) the Servicer shall fail to pay any principal of or premium or
interest on any Debt when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue, without waiver or cure, for a period of 45 Business
Days; or (ii) any other default or any event which, with the passage of time or
the giving of notice, or both, would constitute a default under any agreement or
instrument relating to any such Debt, shall occur and shall continue, without
waiver or cure, for a period of 45 Business Days; or (iii) any Debt of
the Servicer shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment) prior to the stated
maturity thereof;
(c) the unsecured financial obligation credit rating of the Servicer
shall be rated lower than "BB" by Standard & Poor's or "B1" by Moody's or the
equivalent thereof by a nationally recognized credit rating agency (a "SERVICER
DOWNGRADE TERMINATION EVENT"); or
(d) a material failure on the part of the Servicer to observe or
perform any of its duties or obligations as Servicer under this Agreement, as
determined by the Deal Agent in the exercise of its reasonable commercial
judgment and such failure shall remain unremedied for two Business Days.
"SETTLEMENT DATE" means, with respect to any calendar month, the 25th
day of such month, or if such date is not a Business Day, the next Business Day
to occur thereafter.
"SUPPLEMENTAL ENHANCEMENT AGREEMENT" means the Supplemental
Enhancement Agreement dated as of December 9, 1998, among the Borrower, the
financial institutions from time to time parties thereto as Supplemental
Enhancement Providers, BankBoston, N.A. as supplemental enhancement agent for
the Supplemental Enhancement Providers and Bankers Trust Company, as
supplemental collateral agent for the Supplemental Enhancement Providers, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"SUPPLEMENTAL ENHANCEMENT AGENT" means BankBoston, N.A., in its
capacity as agent for the Supplemental Enhancement Providers under the
Supplemental Enhancement Agreement, and any successor "Supplemental Enhancement
Agent" thereunder.
"SUPPLEMENTAL ENHANCEMENT FEE" means the fee payable by the Seller and
identified as the "Supplemental Enhancement Fee" in the Fee Letter.
"SUPPLEMENTAL ENHANCEMENT PROVIDERS" means the financial institutions
parties to the Supplemental Enhancement Agreement from time to time as lenders
thereunder.
"SUPPORT AGREEMENT" means the Support Agreement dated as of the date
hereof executed by Superior in favor of the Seller, the Purchaser and the Deal
Agent.
"SUPPORT DEFICIENCY AMOUNT" has the meaning assigned to such term in
the Support Agreement.
"TAXES" has the meaning assigned to such term in SECTION 2.08(a).
"TERMINATION DATE" means the date of the declaration or automatic
occurrence of the Termination Date pursuant to SECTION 7.01.
"TRANSACTION DOCUMENTS" means this Agreement, the Collection Account
Agreement, the Originator Sale Agreement, the Support Agreement, the Fee Letter,
the Liquidity Agreement, the Liquidity Fee Letter, the Supplemental Enhancement
Agreement, the Supplemental Enhancement Fee Letter, the Security Agreement, and
all other certificates, instruments, UCC financing statements, reports, notices,
agreements and documents executed or delivered under or in connection with such
documents, in each case as the same may be amended, supplemented or otherwise
modified from time to time in accordance therewith.
"TRIGGER EVENT" has the meaning assigned to that term in SECTION 7.01.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"UNITED STATES" means the United States of America.
"YIELD" means, for all Capital allocated to any Purchase Period during
any such Purchase Period, the product of
YRT x C x ED
---
360
where:
C = the Capital allocated to such Purchase Period,
ED = the actual number of days elapsed during such Purchase
Period, and
YRT = the Yield Rate for such Purchase Period;
PROVIDED, HOWEVER that (a) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by
applicable law and (b) Yield shall not be considered paid by any distribution if
at any time such distribution is rescinded or must otherwise be returned for any
reason.
"YIELD RATE" means, for any Purchase Period for all Capital allocated
to such Purchase Period:
(a) to the extent a Purchaser will be funding the applicable Purchase
on the first day of such Purchase Period through the issuance of commercial
paper, a rate equal to the CP Rate for such Purchase Period, and
(b) to the extent a Purchaser will not be funding the applicable
Purchase on the first day of such Purchase Period through the issuance of
commercial paper, a rate equal to the Alternative Rate for such Purchase
Period or such other rate as the Deal Agent and the Seller shall agree to
in writing.
"YIELD RESERVE" means, at any time, an amount equal to (a) the product
of (i) the aggregate outstanding Capital at such time MULTIPLIED BY (ii) a rate
equal to 5.5% per annum.
SECTION 1.02. OTHER TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of California, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 1.03. COMPUTATION OF TIME PERIODS. Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding."
ARTICLE II
THE PURCHASE FACILITY
SECTION 2.01. PURCHASE OF THE PURCHASED INTEREST. (a) On the terms
and conditions hereinafter set forth, the Purchaser shall Purchase the Purchased
Interest from the Seller. Under no circumstances shall the Purchaser make the
Purchase if (i) the Purchase Price would exceed the Purchase Limit or (ii) a
Coverage Shortfall Event would exist.
(b) It is the intention of the parties hereto that the Purchase to be
made hereunder shall constitute a sale of an undivided percentage ownership
interest in the Purchased Property, and not a loan secured by such Purchased
Property. If at any time a court characterizes the transactions hereunder as
loans by the Purchaser to the Seller, then the Seller hereby pledges, grants a
security interest in and assigns to the Deal Agent, for the benefit of the
Purchaser, all of its right and title to and interest in the Purchased Property,
including the Purchased Receivables, Related Security and Collections related
thereto, as security for such loans and for the payment and performance of all
obligations of the Seller hereunder (including, without limitation, its
indemnification obligations under ARTICLE VIII). The security interest granted
pursuant to the foregoing sentence shall be released and terminated upon the
occurrence of the Collection Date.
SECTION 2.02. THE PURCHASE. (a) Subject to the conditions described
in SECTION 2.01(a), the Purchase shall be made in accordance with the procedures
described in SECTION 2.02(b). After the Collection Date has occurred, the
Purchaser and the Deal Agent, in accordance with their respective interests,
shall assign and transfer to the Seller their respective remaining interest in
the Purchased Property in accordance with SECTION
2.09 free and clear of any Adverse Claim resulting or arising from any act or
omission by the Purchaser or the Deal Agent, but without any other
representation or warranty, express or implied.
(b) The Purchase shall be made on at least two Business Days' notice
from the Seller to the Deal Agent prior to 10:00 a.m. (Boston, Massachusetts
time) on the day of notice; PROVIDED, HOWEVER, that if the Yield to accrue with
respect to the Purchase is computed by reference to the Adjusted Eurodollar
Rate, such notice must be received by the Deal Agent prior to 10:00 a.m.
(Boston, Massachusetts time) at least three Business Days prior to the date of
the Purchase. The notice shall specify (i) the Purchase Price, (ii) the date of
the Purchase, (iii) the duration of the initial Purchase Periods for the Capital
arising as a result of the Purchase, and (iv) the rate at which Yield is to
accrue on such Capital for such Purchase Periods. The Deal Agent shall notify
the Seller whether the duration and applicable rates of the initial Purchase
Periods described in such notice are acceptable or, if not acceptable, the Deal
Agent shall advise the Seller of such Purchase Periods and rates as may be
acceptable. On the date of the Purchase, the Purchaser shall, upon satisfaction
of the applicable conditions set forth in ARTICLE III, make available to the
Seller in same day funds, at Account No.26817259 at BankBoston, N.A., the
Purchase Price.
(c) It is expressly acknowledged that the Purchase hereunder shall be
made without recourse to the Seller; PROVIDED, HOWEVER, that the Seller shall be
liable to the Deal Agent and the Purchaser (i) for all representations,
warranties, covenants and indemnities made hereunder and (ii) for all fees,
costs, expenses, taxes and other indemnifications owed under this Agreement.
SECTION 2.03. SELECTION OF PURCHASE PERIODS. At all times hereafter
until the Termination Date, the Seller shall, subject to the Deal Agent's and
the Purchaser's approval and the limitations described below, select (a)
Purchase Periods and allocate a portion of the outstanding Capital to each
selected Purchase Period, so that the outstanding Capital is at all times
allocated to a Purchase Period and (b) Yield Rates to apply to such Capital for
such Purchase Periods. The initial Purchase Period(s) and Yield Rate(s)
applicable to the Capital arising as a result of the Purchase shall be specified
in the notice relating to the Purchase described in SECTION 2.02(b). Each
subsequent Purchase Period shall commence on the last day of the immediately
preceding Purchase Period, and the duration of and Yield Rate applicable to such
subsequent Purchase Period shall be such as the Seller shall select and the Deal
Agent shall approve on notice from the Seller received by the Deal Agent
(including notice by telephone, confirmed in writing) not later than 11:00 A.M.
(Boston, Massachusetts time) on the Business Day next preceding such last day,
EXCEPT that (a) if the Deal Agent shall not have received such notice before
11:00 A.M. (Boston, Massachusetts time) or the Deal Agent and the Seller shall
not have so mutually agreed before 12:30 P.M. (Boston, Massachusetts time) on
the Business Day next preceding such last day, such Purchase Period shall be one
day and the applicable Yield Rate shall be the Adjusted Base Rate and (b) if the
Deal Agent notifies the Seller that the Yield shall accrue for each Purchase
Period at the Alternative Rate, and the Seller notifies the Deal Agent that it
selects the Adjusted Eurodollar Rate
(as opposed to the Adjusted Base Rate) for such Purchase Period, such notice
must be received by the Deal Agent no later than 11:00 A.M. (Boston,
Massachusetts time) on the third Business Day prior to such last day. Any
Purchase Period which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day; PROVIDED, HOWEVER, that
if Yield in respect of such Purchase Period is computed by reference to the
Adjusted Eurodollar Rate, and such next succeeding Business Day is in the next
calendar month, then such Purchase Period shall end on the next preceding
Business Day. In addition, whenever any Purchase Period as to which Yield
accrues at the Adjusted Eurodollar Rate commences on the last Business Day in a
month or on a day for which there is no numerically corresponding day in the
month in which such Purchase Period ends, the last day of such Purchase Period
shall occur on the last Business Day of the month in which such Purchase Period
ends. Furthermore, if a CP Disruption Event shall have occurred and be
continuing, the Purchaser, or the Deal Agent on its behalf, may, upon notice to
the Seller, terminate any Purchase Period then in effect if the Purchaser has
funded the Capital allocated to such Purchase Period by issuing its commercial
paper notes. Any Purchase Period which commences before the Termination Date
and would otherwise end on a date occurring after the Termination Date shall end
on the Termination Date. On or after the Termination Date, the Deal Agent shall
have the right to allocate outstanding Capital to Purchase Periods of such
duration as shall be selected by the Deal Agent. The Purchaser shall, on the
first day of each Purchase Period, notify the Deal Agent of the Yield Rate for
the Capital allocated to such Purchase Period.
SECTION 2.04. SETTLEMENT PROCEDURES. (a) The Servicer shall cause
all Collections received by it or deposited in the Lock-Box Accounts to be
transferred in same day funds to the Collection Account. The Servicer shall
segregate, set aside and hold in trust for the Purchaser, in the Collection
Account, the percentage interest representing the Purchased Interest in
Collections of Purchased Receivables received on such day.
(b) On each Settlement Date, the amounts set aside in the Collection
Account in accordance with CLAUSE (a) above shall be withdrawn from the
Collection Account to be applied in the following order of priority;
(i) First, (if the Servicer is a party other than Superior, an
Originator or an Affiliate thereof) to pay any accrued and unpaid Servicer
Fee which is then due and payable, or to be retained in the Collection
Account to the extent of any daily accrued and unpaid amounts of such
Servicer Fee which are not then due and payable, until the next relevant
payment date therefor, and not to be applied to any of the following items;
(ii) Second, to pay accrued and unpaid Yield which is then due and
payable, or to be retained in the Collection Account to the extent of any
accrued and unpaid amounts of such Yield which are not then due and
payable, and not to be applied to any of the following items;
(iii) Third, (to the extent that the payment of such Liquidity Fee
does not cause a Coverage Shortfall Event to occur) to pay accrued and
unpaid Liquidity Fee which is then due and payable, or to be retained in
the Collection Account to the extent of any accrued and unpaid amounts of
such Liquidity Fee which are not then due and payable, and not to be
applied to any of the following items;
(iv) Fourth, (to the extent that the payment of such Supplemental
Enhancement Fee does not cause a Coverage Shortfall Event to occur) to pay
accrued and unpaid Supplemental Enhancement Fee which is then due and
payable, or to be retained in the Collection Account to the extent of any
accrued and unpaid amounts of such Supplemental Enhancement Fee which are
not then due and payable, and not to be applied to any of the following
items;
(v) Fifth, (to the extent that the payment of such Program Fee does
not cause a Coverage Shortfall Event to occur) to pay accrued and unpaid
Program Fee which is then due and payable, or to be retained in the
Collection Account to the extent of any accrued and unpaid amounts of such
Program Fee which are not then due and payable, and not to be applied to
any of the following items;
(vi) Sixth, (to the extent that the payment of such Administrative Fee
does not cause a Coverage Shortfall Event to occur) to pay any
Administrative Fee which is then due and payable, or to be retained in the
Collection Account to the extent of the Administrative Fee payable in
respect of the next succeeding annual period, until the next relevant
payment date therefor, and not to be applied to any of the following items;
(vii) Seventh, to pay all Capital then outstanding relating to any
Yield which is then due and payable, or to be retained in the Collection
Account to the extent of any Capital remaining outstanding;
(viii) Eighth, to pay the portion of any other accrued and unpaid
obligations which have not been paid pursuant to clauses (i) through (vi)
above and which are then due and payable by the Seller to the Purchaser or
the Deal Agent under this Agreement or any of the other Transaction
Documents, or to be retained in the Collection Account to the extent of any
accrued and unpaid amounts of such obligations which are not then due and
payable, until the next relevant payment date therefor, and not to be
applied to any of the following items;
(iv) Ninth, to pay any accrued and unpaid Management Fee which is then
due and payable, or to be retained in the Collection Account to the extent
of any daily accrued and unpaid amounts of such Management Fee which are
not then due and payable, until the next relevant payment date therefor,
and not to be applied to any of the following items;
(ix) Tenth, (if the Servicer is Superior, an Originator or an
Affiliate thereof) to pay any accrued and unpaid Servicer Fee which is then
due and payable, or to be retained in the Collection Account to the extent
of any accrued and unpaid amounts of such Servicer Fee which are not then
due and payable, until the next relevant payment date therefor.
Following the Collection Date, the Servicer shall pay any remaining Collections
set aside and held by the Servicer pursuant to CLAUSE (a) of this SECTION 2.04,
in the following order of priority;
(i) First, to Seller in the amount of its Equity Investment;
(ii) Second, to Superior in respect of any Support Deficiency Amount;
and
(iii) Third, any and all remaining amounts to the Seller.
SECTION 2.05. PAYMENTS AND COMPUTATIONS, ETC. (a) All amounts to be
paid or deposited by the Seller or the Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 11:00 A.M. (Boston,
Massachusetts time) on the day when due in lawful money of the United States in
immediately available funds to the Deal Agent's Account. The Seller shall, to
the extent permitted by law, pay to the Deal Agent interest on all amounts not
paid or deposited when due hereunder (whether owing by the Seller individually
or by the Servicer) at 2.0% per annum above the Adjusted Base Rate, payable on
demand; PROVIDED, HOWEVER, that such interest rate shall not at any time exceed
the maximum rate permitted by applicable law. Such interest shall be retained
by the Deal Agent except to the extent that such failure to make a timely
payment or deposit has continued beyond the date for distribution by the Deal
Agent of such overdue amount to the Purchaser, in which case such interest
accruing after such date shall be for the account of, and distributed by the
Deal Agent to the Purchaser. All computations of interest and all computations
of Yield, Servicer Fee, Program Fee, Liquidation Fee and other fees hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of Yield, interest or any fee payable hereunder, as the
case may be; PROVIDED, HOWEVER, that, if such extension would cause payment of
Yield on or Capital in respect of any Purchased Property on which Yield accrues
at the Adjusted Eurodollar Rate to be made in the next following month, such
payment shall be made on the next preceding Business Day.
(c) If the Purchase requested by the Seller and approved by the
Purchaser and the Deal Agent pursuant to SECTION 2.02 or any selection of a
subsequent Purchase Period for any Capital requested by the Seller and approved
by the Deal Agent pursuant
to SECTION 2.03 is not for any reason other than the act or omission of
Purchaser contrary to this Agreement made or effectuated, as the case may be, on
the date specified therefor, the Seller shall indemnify the Purchaser against
any loss, cost or expense incurred by the Purchaser, including, without
limitation, any loss (including loss of anticipated profits, net of anticipated
profits in the reemployment of such funds in the manner determined by the
Purchaser), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by the Purchaser to fund or
maintain the Purchase, as the case may be, during such Purchase Period.
SECTION 2.06. FEES. (a) The Seller shall pay to the Purchaser
(either directly or through the Deal Agent) and to the Deal Agent certain fees
in the amounts and on the dates set forth in a fee letter executed among the
Seller, the Purchaser and the Deal Agent, dated on or about the date hereof (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "FEE LETTER").
(b) The Seller shall pay to the Manager the Management Fee in the
amounts and on the dates set forth in Section 2 of the Management Agreement.
(c) The Purchaser shall pay to the Servicer a collection fee (the
"SERVICER FEE") of 0.5% per annum on the average daily amount of the Outstanding
Balance of Purchased Receivables, from the date hereof until the Collection
Date, payable on each Settlement Date; PROVIDED, HOWEVER, that such fee shall be
payable only from Collections pursuant to, and subject to the priority of
payment set forth in, SECTION 2.04; and PROVIDED, FURTHER, that, upon three
Business Days' notice to the Deal Agent, the Servicer may (if not Superior, an
Originator or an Affiliate thereof), elect to be paid, as such fee, another
percentage per annum on the average daily amount of outstanding Receivables, but
in no event shall the Servicer Fee payable in respect of any calendar month
after the date any such election is made exceed 110% of the reasonable and
appropriate costs and expenses of the Servicer incurred during such calendar
month.
(d) The Seller shall pay to the Deal Agent, within one Business Day
after the Deal Agent's demand therefore, for the benefit of the Purchaser, the
Liquidation Fee relating to the Purchased Property.
SECTION 2.07. INCREASED COSTS; CAPITAL ADEQUACY; ILLEGALITY. (a) If
either (i) the introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements) in any law,
regulation, treaty or official directive, or in the interpretation or
application thereof by any central bank or other governmental agency or
authority charged with the administration thereof (whether or not having the
force of law), or (ii) the compliance by the Deal Agent, the Purchaser or any
affiliate of either thereof (each of which, an "AFFECTED PARTY") with any
guideline or request from any central bank or other governmental agency or
authority (whether or not having the force of law), (A) shall subject an
Affected Party to any tax (except for taxes on the overall net income of such
Affected Party imposed by the United States of America or any political
subdivision thereof), duty or other charge with respect to the Purchased
Property, or any right or obligation to make Purchases hereunder, or on any
payment made hereunder or (B) shall impose, modify or deem applicable any
reserve requirement (including, without limitation, any reserve requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
any reserve requirement, if any, included in the determination of Yield),
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Affected Party or (C) shall impose
any other condition affecting the Purchased Property or the Purchaser's rights
or obligations hereunder, the result of which is to increase the cost to any
Affected Party or to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement, then within ten days after demand by such
Affected Party (which demand shall be accompanied by a statement setting forth
the basis for such demand), the Seller shall pay directly to such Affected Party
such additional amount or amounts as will compensate such Affected Party for
such additional or increased cost incurred or such reduction suffered.
(b) If either (i) the introduction of or any change (including,
without limitation, any change by way of imposition or increase of reserve
requirements) in any law, regulation, treaty or official directive, or in the
interpretation or application thereof, in each case occurring after the date
hereof, by any central bank or other governmental agency or authority charged
with the administration thereof (whether or not having the force of law), or
(ii) the compliance by an Affected Party with any guideline or request from any
central bank or other governmental agency or authority (whether or not having
the force of law) in each case promulgated after the date hereof, including,
without limitation, compliance by an Affected Party with any request or
directive regarding capital adequacy, has or would have the effect of reducing
the rate of return on the capital of any Affected Party as a consequence of its
obligations hereunder or otherwise arising in connection herewith to a level
below that which any such Affected Party could have achieved but for such
introduction, change or compliance (taking into consideration the policies of
such Affected Party with respect to capital adequacy and assuming full
utilization of such Affected Party's capital) by an amount deemed by such
Affected Party to be material, then from time to time, within ten days after
demand by such Affected Party (which demand shall be accompanied by a statement
setting forth the basis for such demand), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such reduction.
(c) If as a result of any event or circumstance similar to those
described in SECTION 2.07(a) or 2.07(b), any Affected Party is required to
compensate a bank or other financial institution providing liquidity support,
credit enhancement or other similar support to such Affected Party in connection
with this Agreement or the funding or maintenance of Purchases hereunder, then
within ten days after demand by such Affected Party, the Seller shall pay to
such Affected Party such additional amount or amounts as may be necessary to
reimburse such Affected Party for any amounts to be paid by it.
(d) In determining any amount provided for in this SECTION 2.07, the
Affected Party may use any reasonable averaging and attribution methods. Any
Affected Party making a claim under this SECTION 2.07 shall submit to the Seller
a certificate as to the calculation of such additional or increased cost or
reduction, which certificate shall be conclusive absent manifest error.
(e) If the Purchaser shall notify the Deal Agent that a Eurodollar
Disruption Event as described in CLAUSE (a) of the definition of "EURODOLLAR
DISRUPTION EVENT" has occurred, the Deal Agent shall in turn so notify the
Seller, whereupon all Capital in respect of which Yield accrues at the Adjusted
Eurodollar Rate for the then current Purchase Period shall immediately be
converted into Capital in respect of which Yield accrues at the Adjusted Base
Rate for the remainder of such Purchase Period.
(f) Without prejudice to the survival of any other agreement of the
Seller hereunder, the agreements and obligations of the Seller contained in this
SECTION 2.07 shall survive the termination of this Agreement.
SECTION 2.08. TAXES. (a) Any and all payments by the Seller or the
Servicer hereunder shall be made, in accordance with SECTION 2.05, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, EXCLUDING, in the case of the Purchaser and the Deal Agent, net income
taxes and branch profits taxes that are imposed by the United States and
franchise taxes, net income taxes and branch profits taxes that are imposed on
the Purchaser or the Deal Agent by the state or foreign jurisdiction under the
laws of which the Purchaser or the Deal Agent (as the case may be) is organized
or conducts business or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "TAXES"). If the Seller or the Servicer shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Purchaser or the Deal Agent, (i) the Seller shall make an
additional payment to the Purchaser or the Deal Agent, as the case may be, in an
amount sufficient so that, after making all required deductions (including
deductions applicable to additional sums payable under this SECTION 2.08), the
Purchaser or the Deal Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Seller or
the Servicer, as the case may be, shall make such deductions and (iii) the
Seller or the Servicer, as the case may be, shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) The Seller will indemnify the Purchaser and the Deal Agent for
the full amount of Taxes (including, without limitation, any Taxes imposed by
any jurisdiction on amounts payable under this SECTION 2.08) paid by the
Purchaser or the Deal Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto;
PROVIDED that the Purchaser or the Deal Agent, as appropriate, making a demand
for indemnity payment shall provide the Seller, at its address referred to in
SECTION 10.02, with a certificate from the relevant taxing authority or from a
responsible officer of the Purchaser or the Deal Agent stating or otherwise
evidencing that the Purchaser or the Deal Agent has made payment of such Taxes
and will provide a copy of or extract from documentation, if available,
furnished by such taxing authority evidencing assertion or payment of such
Taxes. This indemnification shall be made within ten days from the date the
Purchaser or the Deal Agent (as the case may be) makes written demand therefor.
(c) Within 30 days after the date of any payment by the Seller of any
Taxes, the Seller will furnish to the Deal Agent, at its address referred to in
SECTION 10.02, appropriate evidence of payment thereof.
(d) Within 30 days of the written request of the Seller therefor, the
Deal Agent and the Purchaser, as appropriate, shall execute and deliver to the
Seller such certificates, forms or other documents which can be furnished
consistent with the facts and which are reasonably necessary to assist the
Seller in applying for refunds of taxes remitted hereunder.
(e) If, in connection with an agreement or other document providing
liquidity support, credit enhancement or other similar support to the Purchaser
in connection with this Agreement or the funding or maintenance of Purchases
hereunder, the Purchaser is required to compensate a bank or other financial
institution in respect of taxes under circumstances similar to those described
in this SECTION 2.08 then within ten days after demand by the Purchaser, the
Seller shall pay to the Purchaser such additional amount or amounts as may be
necessary to reimburse such Purchaser for any amounts paid by it.
(f) Without prejudice to the survival of any other agreement of the
Seller hereunder, the agreements and obligations of the Seller contained in this
SECTION 2.08 shall survive the termination of this Agreement.
SECTION 2.09. ASSIGNMENT OF THE ORIGINATOR SALE AGREEMENT. The
Seller hereby represents, warrants and confirms to the Deal Agent that the
Seller has assigned to the Deal Agent, for the benefit of itself and the
Purchaser hereunder, all of the Seller's right and title to and interest in each
of the Originator Sale Agreement and the Support Agreement. The Seller confirms
and agrees that the Deal Agent shall have, following a Trigger Event, the sole
right to enforce the Seller's rights and remedies under the Originator Sale
Agreement for the benefit of the Purchaser, but without any obligation on the
part of the Deal Agent, the Purchaser or any of their respective Affiliates, to
perform any of the obligations of the Seller under the Originator Sale
Agreement. The
Seller further confirms and agrees that such assignment to the Deal Agent shall
terminate upon the Collection Date; PROVIDED, HOWEVER, that the rights of the
Deal Agent and the Purchaser pursuant to such assignment with respect to rights
and remedies in connection with any indemnities and any breach of any
representation, warranty or covenants made by the Originators pursuant to the
Originator Sale Agreement or Superior pursuant to the Support Agreement, which
rights and remedies survive the termination of the Originator Sale Agreement and
the Support Agreement, respectively, shall be continuing and shall survive any
termination of such assignment.
ARTICLE III
CONDITIONS OF THE PURCHASE
SECTION 3.01. CONDITIONS PRECEDENT TO THE PURCHASE. (a) The
Purchase hereunder is subject to the conditions precedent (i) that the Deal
Agent shall have received on or before the Closing Date the items listed in
SCHEDULE I, each (unless otherwise indicated) dated as of such date, in form and
substance satisfactory to the Deal Agent and the Purchaser, (ii) that all fees
and expenses required to be paid prior to the Purchase pursuant to the Fee
Letter have been paid, (iii) on and as of the Closing Date, the Purchase Price
is less than or equal to the remainder of the Eligible Receivables Balance MINUS
the Yield Reserve, and (iv) each of S&P, Moody's and DCR shall have delivered
written confirmation to the Deal Agent to the effect that the consummation of
this Agreement will not result in the reduction or withdrawal of their
respective ratings of the Commercial Paper.
(b) The Purchase from the Seller by the Purchaser shall be subject
to the further conditions precedent that (i) on or prior to the Closing Date,
the Servicer shall have delivered to the Deal Agent, in each case in form and
substance satisfactory to the Deal Agent, a completed Monthly Asset Report dated
as of November 30, 1998, and containing such additional information as may be
reasonably requested by the Deal Agent; (ii) on the date of the Purchase the
following statements shall be true and the Seller by accepting the Purchase
Price shall be deemed to have certified that:
(A) The representations and warranties contained in SECTION 4.01 are
correct on and as of such day as though made on and as of such date,
(B) No event has occurred and is continuing, or would result from the
Purchase which constitutes a Trigger Event,
(C) On and as of such day, after giving effect to the Purchase, a
Coverage Shortfall Event does not exist,
(D) On and as of such day, there are no Receivables as to which any
payment, or part thereof, has been unpaid for no more than 90 days from the
original invoice date for such payment, and
(E) No law or regulation shall prohibit, and no order, judgment or
decree of any federal, state or local court or governmental body, agency or
instrumentality shall prohibit or enjoin, the making of the Purchase by the
Purchaser in accordance with the provisions hereof.
and (iii) the Deal Agent shall have received such other approvals, opinions or
documents as the Deal Agent may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The
Seller represents and warrants as follows:
(a) The Seller is a limited liability company duly incorporated,
validly existing and in good standing under the laws of the jurisdiction named
at the beginning hereof and is duly qualified to do business, and is in good
standing, in every jurisdiction in which the nature of its business requires it
to be so qualified and the failure to do so could reasonably be expected to have
a material adverse effect on the Seller's ability to perform its obligations
hereunder or the ability to assign or collect the Purchased Receivables
hereunder.
(b) The execution, delivery and performance by the Seller of this
Agreement, the Originator Sale Agreement and all other Transaction Documents to
be entered into by it, including the Seller's use of the proceeds of the
Purchase, are within the Seller's corporate powers, have been duly authorized by
all necessary corporate action, do not contravene (i) the Seller's Certificate
of Formation or LLC Agreement, (ii) any law, rule or regulation applicable to
the Seller, (iii) any contractual restriction binding on or affecting the Seller
or its property or (iv) any order, writ, judgment, award, injunction or decree
binding on or affecting the Seller or its property, and do not result in or
require the creation of any Adverse Claim upon or with respect to any of its
properties (other than in favor of the Deal Agent for the benefit of the
Purchaser with respect to the Purchased Receivables and related Purchased
Property); and no transaction contemplated hereby or by the Originator Sale
Agreement requires compliance with any bulk sales act or similar law. This
Agreement, the Originator Sale Agreement and each other Transaction Document to
be entered into by the Seller have each been duly executed and delivered by the
Seller.
(c) This Agreement, the Originator Sale Agreement and each other
Transaction Document to be entered into by the Seller constitute the legal,
valid and binding obligation of the Seller enforceable against the Seller in
accordance with their respective terms subject to bankruptcy and similar laws
affecting creditors generally and principles of equity.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Seller of this Agreement, the
Originator Sale Agreement or any other Transaction Document to be entered into
by it, except for the filing of the UCC financing statements described in
SCHEDULE I.
(e) No filing, recording, notice or acknowledgment is necessary in
any jurisdiction to provide third parties with notice of the Purchase of the
Purchased Interests contemplated herein, and to give the Purchaser or the Deal
Agent, on behalf of the Purchaser, a valid and perfected first priority
"security interest", under Article 9 of the UCC, in and to the Purchased
Receivables, except for (i) the filing of the UCC financing statements referred
to in Article III, all of which financing statements have been duly executed and
are in acceptable form for filing in the relevant jurisdictions and (ii) the
delivery of the notices of the Purchaser's interest in the Reinsurance
Recoverables referred to in SECTION 6.04 hereof, all of which notices have been
duly executed and are in acceptable form for delivery to the relevant
Reinsurance Companies.
(f) There is no pending or threatened action or proceeding affecting
any Originator, the Seller or any subsidiary of any Originator before any court,
governmental agency or arbitrator that could reasonably be expected to have a
material adverse effect on the financial condition of any Originator, the Seller
or any subsidiary of any Originator or the ability of any Originator to perform
its obligations under the Originator Sale Agreement or the ability of the Seller
to perform its obligations under this Agreement or the ability to assign or
collect the Purchased Receivables hereunder. None of the Originators, the
Seller, or any subsidiary of any of the Originators is in default with respect
to any order of any court, arbitrator or governmental body except for defaults
with respect to orders of governmental agencies which defaults are not material
to the business or operations of the Originators, the Seller or any subsidiary
of any of the Originators.
(g) No proceeds of the Purchase will be used by the Seller (i) to
acquire any security in any transaction which is subject to Section 13 or 14 of
the Securities Exchange Act of 1934, as amended, or (ii) for any purpose other
than to fund a purchase of Receivables and related assets from the Originators.
(h) Each Receivable, together with the Contract related thereto,
shall, at all times, be owned by the Seller free and clear of any Adverse Claim
except as provided herein, and upon the Purchase, the Purchaser shall acquire a
valid and perfected first priority undivided percentage ownership interest in
each Purchased Receivable then existing or thereafter arising and in the Related
Security and Collections with respect thereto, which percentage shall correspond
at any time hereunder to the Purchased Interest, free and clear of any Adverse
Claim except as provided hereunder. No effective financing statement or other
instrument similar in effect covering any Receivable or the Related Security or
Collections with respect thereto shall at any time be on file in any recording
office except such as may be filed in favor of the Deal Agent relating to this
Agreement or in favor of Seller relating to the Originator Sale Agreement. The
purchase of the Receivables and related assets by the Seller from each of the
Originators constitute valid and true sales and transfers for consideration (and
not merely a pledge of such
Receivables and assets for security purposes), enforceable against creditors of
each such Originator, and no such Receivables or related assets shall constitute
property of any such Originator.
(i) As of the close of business on the Closing Date, a Coverage
Shortfall Event shall not exist.
(j) No Monthly Asset Report (if prepared by the Seller or any
Affiliate thereof, or to the extent that information contained therein is
supplied by the Seller or such Affiliate), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished by the
Seller to the Deal Agent or the Purchaser in connection with this Agreement is
or will be inaccurate in any material respect as of the date it is or shall be
dated or (except as otherwise disclosed to the Deal Agent or the Purchaser, as
the case may be, at such time) as of the date so furnished, and no such document
contains or will contain any material misstatement of fact or omits or shall
omit to state a material fact or any fact necessary to make the statements
contained therein not misleading.
(k) The principal place of business and chief executive office of the
Seller and the office where the Seller keeps all the Records are located at the
address of the Seller referred to in SECTION 10.02 hereof (or at such other
locations as to which the notice and other requirements specified in SECTION
6.08 shall have been satisfied).
(l) The names and addresses of all the Lock-Box Banks, together with
the account numbers of the Lock-Box Accounts at such Lock-Box Banks and the
names, addresses and account numbers of all accounts to which Collections of the
Receivables outstanding before the Purchase hereunder have been sent, are
specified in SCHEDULE III (which shall be deemed to be amended in respect of
terminating or adding any Lock-Box Account or Lock-Box Bank upon satisfaction of
the notice and other requirements specified in respect thereof). The Seller has
no other lock-box accounts or similar deposit accounts for the collection of the
Purchased Property except for the Lock-Box Accounts. No Adverse Claim exists
upon or with respect to any of the Lock-Box Accounts.
(m) Except as described in SCHEDULE IV, the Seller has no trade
names, fictitious names, assumed names or "doing business as" names or other
names under which it has done or is doing business.
(n) The Originator Sale Agreement is the only agreement pursuant to
which the Seller purchases Receivables; the Seller has furnished to the Deal
Agent true, correct and complete copies of the Originator Sale Agreement; and
the Originator Sale Agreement is in full force and effect and no event or
circumstance has occurred that would constitute (or, with the giving of notice
or the passage of time or both, would constitute) a Trigger Event pursuant to
SECTION 7.01(h).
(o) The Seller shall have given reasonably equivalent value to each
Originator in consideration for the transfer by such Originator to the Seller of
the
Receivables and Related Security under the Originator Sale Agreement, no such
transfer shall have been made for or on account of an antecedent debt owed by
any Originator to the Seller, and no such transfer is or may be voidable or
subject to avoidance under any section of the Bankruptcy Code.
(p) A copy of the Certificate of Formation of the Seller as in effect
on the date of this Agreement is attached as EXHIBIT D hereto. Each of the
Seller and the Originators has received advice from its counsel which is
consistent with the conclusions set forth in the legal opinion(s) of Tobin &
Tobin, special counsel to the Originators, issued in connection with the
Originator Sale Agreement and relating to the issues of substantive
consolidation and true sale of the Receivables and the related property.
(q) The Seller is not "insolvent" (within the meaning of such term in
the Bankruptcy Code); at the time of (and immediately after) the transfer of
Receivables to the Seller under the Originator Sale Agreement, the Seller shall
not have been insolvent; and at the time of (and immediately after) the Purchase
hereunder, the Seller shall not have been insolvent.
(r) The Seller accounts for the transfers to it from the Originators
of interests in Receivables, Related Security and Collections under the
Originator Sale Agreement as sales of such Receivables, Related Security and
Collections in its books, records and financial statements, in each case
consistent with GAAP and with the requirements set forth herein.
(s) The sole and exclusive business of the Seller is the purchase of
Receivables and Related Security pursuant to the Originator Sale Agreement for
its own account and for resale to the Purchaser pursuant to the terms of this
Agreement.
(t) The Seller is not an "investment company" or a company controlled
by an "investment company" registered or required to be registered under the
Investment Company Act, or otherwise subject to any other federal or state
statute or regulation limiting its ability to incur indebtedness.
(u) The Seller is not engaged, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" (as each of the quoted terms is defined or used
in Regulation T, U or X). No part of the proceeds of any Purchased Receivable
has been used for so purchasing or carrying margin stock or for any purpose
which violates, or which would be inconsistent with, the provisions of
Regulation T, U or X.
(v) Each of the Seller, the Servicer and the Deal Agent has the right
(whether by license, sublicense or assignment) to use all of the computer
software used by the Servicer and/or the Originators to account for the
Purchased Property to the extent necessary to administer the Purchased Property,
and, in the case of the Seller and the Servicer, to assign (by way of sale or
collateral pledge) or sublicense such rights to use all of such software to the
Deal Agent.
(w) The Seller has filed or caused to be filed all Federal, state and
local tax returns which are required to be filed by it, if any, and has paid or
caused to be paid all taxes shown to be due and payable on such returns or on
any assessments received by it, if any, other than any taxes or assessments, the
validity of which are being contested in good faith by appropriate proceedings
and with respect to which the Seller has set aside adequate reserves on its
books in accordance with GAAP and which proceedings have not given rise to any
Adverse Claim.
(x) The copy of the Credit and Collection Policy attached hereto as
SCHEDULE II is a true and complete copy thereof.
(y) Each Purchased Receivable, as of the date of purchase, is an
Eligible Receivable.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer represents and warrants as follows:
(a) The Servicer is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction named at the beginning
hereof and is duly qualified to do business, and is in good standing, in every
jurisdiction in which the nature of its business requires it to be so qualified
and the failure to do so could reasonably be expected to have a material adverse
effect on the Servicer's ability to perform its obligations hereunder or the
ability to collect the Purchased Receivables hereunder.
(b) The execution, delivery and performance by the Servicer of this
Agreement and all other Transaction Documents to be entered into by it are
within the Servicer's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) the Servicer's charter or
by-laws, (ii) any law, rule or regulation applicable to the Servicer, (iii) any
contractual restriction binding on or affecting the Servicer or its property or
(iv) any order, writ, judgment, award, injunction or decree binding on or
affecting the Servicer or its property, and do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties.
This Agreement and each other Transaction Document to be entered into by the
Servicer have each been duly executed and delivered by the Servicer.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Servicer of this Agreement or
any other Transaction Document to be entered into by it.
(d) This Agreement and each other Transaction Document to be entered
into by the Servicer constitute the legal, valid and binding obligation of the
Servicer enforceable against the Servicer in accordance with their respective
terms subject to bankruptcy and similar laws affecting creditors generally and
principles of equity.
(e) (i) The Servicer has furnished to the Deal Agent (A) copies of the
audited consolidated balance sheets of Servicer and its consolidated
subsidiaries as at December 31, 1997, and the related audited consolidated
statements of income, shareholders' equity and cash flows for the fiscal year of
Servicer and its consolidated subsidiaries then ended reported on by December
31, 1997, which financial statements present fairly in all material respects in
accordance with GAAP the financial position of Servicer and its consolidated
subsidiaries as at December 31, 1997, and the results of operations of Servicer
and its consolidated subsidiaries for the fiscal year of Servicer then ended,
and (B) copies of the unaudited consolidated balance sheets of Servicer and its
consolidated subsidiaries as at September 30, 1998, and the related unaudited
consolidated statements of income, shareholders' equity and cash flows for the
three-month period then ended, which financial statements present fairly in all
material respects in accordance with GAAP the financial position of Servicer and
its consolidated subsidiaries as at September 30, 1998, and the results of
operations of Servicer and its consolidated subsidiaries for the three-month
period then ended; and (ii) since September 30, 1998, (A) no material adverse
change has occurred in the business, assets, liabilities, financial condition,
results of operations or business prospects of Servicer and its subsidiaries
taken as a whole, and (B) no event has occurred or failed to occur which has
had, or may have, singly or in the aggregate, a material adverse effect on the
ability of the Servicer to perform its obligations under this Agreement or the
ability to collect the Purchased Receivables hereunder.
(f) There is no pending or threatened action or proceeding affecting
the Servicer before any court, governmental agency or arbitrator that could
reasonably be expected to have a material adverse effect on the financial
condition of the Servicer or the ability of the Servicer to perform its
obligations under this Agreement or the ability to collect the Purchased
Receivables hereunder. The Servicer is not in default with respect to any order
of any court, arbitrator or governmental body except for defaults with respect
to orders of governmental agencies which defaults are not material to the
business or operations of the Servicer.
(g) No Monthly Asset Report (if prepared by the Servicer or any
Affiliate thereof, or to the extent that information contained therein is
supplied by the Servicer or such Affiliate), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished by the
Servicer to the Deal Agent or the Purchaser in connection with this Agreement is
or will be inaccurate in any material respect as of the date it is or shall be
dated or (except as otherwise disclosed to the Deal Agent or the Purchaser, as
the case may be, at such time) as of the date so furnished, and no such document
contains or will contain any material misstatement of fact or omits or shall
omit to state a material fact or any fact necessary to make the statements
contained therein not misleading.
(h) The Servicer has filed or caused to be filed all Federal, state
and local tax returns which are required to be filed by it, and has paid or
caused to be paid all taxes shown to be due and payable on such returns or on
any assessments received by it, other than any taxes or assessments, the
validity of which are being contested in good faith by
appropriate proceedings and with respect to which the Servicer has set aside
adequate reserves on its books in accordance with GAAP and which proceedings
have not given rise to any Adverse Claim.
(i) The principal place of business and chief executive office of the
Servicer and the office where the Servicer keeps all the Records are located at
the address of the Servicer referred to in SECTION 10.02 hereof or, in any case,
upon thirty (30) days' prior notice to the Deal Agent, at another location
within the United States.
(j) The copy of the Credit and Collection Policy attached hereto as
SCHEDULE II is a true and complete copy thereof.
ARTICLE V
GENERAL COVENANTS
SECTION 5.01. GENERAL COVENANTS OF THE SELLER.
(a) COMPLIANCE WITH LAWS; PRESERVATION OF CORPORATE EXISTENCE. The
Seller shall comply in all material respects with all applicable laws
(including, without limitation, ERISA and the Code), rules, regulations, orders
and Transaction Documents and preserve and maintain its corporate existence,
rights, franchises, qualifications and privileges where the failure to comply
could reasonably be expected to have a material adverse effect on the Seller's
ability to perform its obligations hereunder or the ability to assign or collect
the Purchased Receivables hereunder.
(b) SALES, LIENS, ETC. Except as otherwise specifically provided
herein, the Seller shall not (i) sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Purchased Receivable or the related Contract, Collections
or Related Security, or upon or with respect to any Lock-Box Account, the
Collection Account or any other account to which any Collections of any
Receivable are sent, or assign any right to receive income in respect thereof
or (ii) create or suffer to exist any Adverse Claim upon or with respect to any
of the Seller's other assets.
(c) GENERAL REPORTING REQUIREMENTS. The Seller will provide, or
cause to be provided, to the Deal Agent (with a copy for the Purchaser) the
following:
(i) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Seller,
a copy of the balance sheet of the Seller and the related statement of
income and cash flows each for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, prepared in
accordance with GAAP and certified by a senior financial officer of the
Seller;
(ii) as soon as available and in any event within 90 days after the
end of each fiscal year of the Seller, a copy of the balance sheet of the
Seller and the related statement of income and cash flows for such year,
each prepared in accordance with GAAP consistently applied and reported on
by nationally recognized independent public accountants acceptable to the
Deal Agent;
(iii) promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any Reportable Event defined in
Article IV of ERISA which the Seller or any ERISA Affiliate files under
ERISA with the Internal Revenue Service or the PBGC or the U.S. Department
of Labor or which the Seller or any ERISA Affiliate receives from such
entity;
(iv) as soon as possible and in any event within three days after the
occurrence of each Trigger Event or each event which, with the giving of
notice or lapse of time or both, would constitute a Trigger Event, a
statement of the chief financial officer or chief accounting officer of the
Seller setting forth details of such Trigger Event or event and the action
which the Seller has taken and proposes to take with respect thereto;
(v) promptly following receipt thereof, copies of all financial
statements, settlement statements, portfolio and other reports, notices,
disclosures, certificates, budgets and other written material delivered or
made available to the Seller by any Originator pursuant to the terms of the
Originator Sale Agreement; and
(vi) promptly following the Deal Agent's request therefor, such other
information respecting the Receivables or the conditions or operations,
financial or otherwise, of the Seller as the Deal Agent may from time to
time request in order to protect the interests of the Deal Agent or the
Purchaser in connection with this Agreement.
(d) MERGER, ETC. The Seller will not merge or consolidate with, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions), all or substantially all of its assets (whether
now owned or hereafter acquired), or acquire all or substantially all of the
assets or capital stock or other ownership interest of any Person, other than,
with respect to asset dispositions, in connection herewith.
(e) ACCOUNTING OF PURCHASES. The Seller will not account for or
treat (whether in financial statements or otherwise) the transactions
contemplated by the Originator Sale Agreement in any manner other than the sale
of the "Transferred Assets" (as defined therein) by the Originators to the
Seller.
(f) ERISA MATTERS. The Seller will not (a) fail to comply in all
material respects with ERISA and the provisions of the Code applicable to the
Benefit Plans; (b) engage or permit any ERISA Affiliate to engage in any
prohibited transaction which would subject the Seller to a material tax or
penalty imposed on a prohibited transaction;
(c) permit to exist any accumulated funding deficiency, as defined in Section
302(a) of ERISA and Section 412(a) of the Code, or funding deficiency with
respect to any Benefit Plan other than a Multiemployer Plan; (d) incur any
liability to the PBGC over and above the premiums required by law; or (e)
terminate any Benefit Plan in a manner which could result in the imposition of a
lien on the property of the Seller or any such ERISA Affiliate.
(g) NATURE OF BUSINESS. The Seller will engage in no business other
than the purchase of Receivables and Related Security from the Originators, the
resale or grant of such Receivables and Related Security to the Purchaser and
the other transactions permitted or contemplated by this Agreement.
(h) ORIGINATOR RECEIVABLES. With respect to each Receivable acquired
by the Seller from an Originator, the Seller will (i) acquire such Receivable
pursuant to and in accordance with the terms of the Originator Sale Agreement,
(ii) take all action necessary to perfect, protect and more fully evidence the
Seller's ownership of such Receivable, including, without limitation, (A) filing
and maintaining effective financing statements (Form UCC-1) against the
Originators in all necessary or appropriate filing offices, and filing
continuation statements, amendments or assignments with respect thereto in such
filing offices and (B) executing or causing to be executed such other
instruments or notices as may be necessary or appropriate and (iii) take all
additional action that the Deal Agent may reasonably request to perfect, protect
and more fully evidence the respective interests of the parties to this
Agreement in the Receivables and other Purchased Property related thereto.
(i) DEBT; INVESTMENTS. The Seller will not incur any Debt other than
Debt arising hereunder or under the Originator Sale Agreement. The Seller will
not make any Investments (including, without limitation, the creation of, and
the making of capital contributions to, a subsidiary) other than Permitted
Investments.
(j) CHANGE IN THE ORIGINATOR SALE AGREEMENT. The Seller will not,
without the prior consent of the Deal Agent, (a) amend, modify, waive or
terminate any terms or conditions of the Originator Sale Agreement or of any
other Transaction Document to which it is a party, or (b) exercise any
discretionary rights granted to the Seller under the Originator Sale Agreement
pursuant to provisions thereof providing for certain actions to be taken "with
the consent of the Buyer", "acceptable to the Buyer" as "specified by the
Buyer", "in the reasonable judgment of the Buyer" or similar provisions.
(k) AMENDMENT TO CERTIFICATE OF FORMATION OR THE LLC AGREEMENT. The
Seller will not amend, modify or otherwise make any change to its Certificate of
Formation or its LLC Agreement, except in accordance with the terms and
provisions thereof.
(l) AUDITS. At any time and from time to time upon prior written
notice to the Seller during regular business hours and on an annual (or more
frequent) basis, if requested by the Deal Agent, the Seller will permit the Deal
Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
Records, and (ii) to visit the offices and properties of the Seller for the
purpose of examining such Records, and to discuss matters relating to the
Receivables or the Seller's performance hereunder with any of the officers or
employees of the Seller having knowledge of such matters. Each such audit shall
be at the sole expense of the Seller (subject to the Seller's right under the
Originator Sale Agreement to recover such expenses from the Originators).
(m) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Seller will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the Receivables in
the event of the destruction of the originals thereof) and keep and maintain,
all documents, books, records and other information reasonably necessary or
advisable for the collection of all Purchased Receivables (including, without
limitation, records adequate to permit the daily identification of all
collections of and adjustments to each Purchased Receivable).
(n) LOCATION OF RECORDS. The Seller will keep its chief place of
business and chief executive office, and the offices where it keeps the Records,
at the address of the Seller referred to in SECTION 10.02, or, in any such case,
upon 30 days' prior written notice to the Deal Agent, at such other locations
within the United States where all action required by SECTION 6.08 shall have
been taken and completed.
(o) CREDIT AND COLLECTION POLICIES. The Seller will, and will cause
the Servicer to, comply in all material respects with the Credit and Collection
Policy in regard to each Purchased Receivable and the related Contract. The
Seller shall not, without the written consent of the Deal Agent (i) make any
change in the character of its business or (ii) make or agree to make any
material change in the Credit and Collection Policy.
(p) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. The Seller will not
add or terminate any bank as a Lock-Box Bank from those listed in Schedule III
to the Originator Sale Agreement or SCHEDULE III hereto or make any change in
its instructions to Obligors regarding payments to be made to any Lock-Box Bank,
unless the Deal Agent shall have given its prior written consent to such
addition, termination or change (which consent shall not be unreasonably
withheld) and the Deal Agent shall have received (i) ten Business Days' prior
notice of such addition, termination or change, (ii) prior to the effective date
of such addition, termination or change, (x) executed copies of Lock-Box
Agreements executed by each new Lock-Box Bank and the Seller and (y) copies of
all agreements and documents signed by either the Seller or the respective
Lock-Box Bank with respect to any new Lock-Box Account, and (iii) the prior
written consent of the Purchaser to such addition, termination or change (which
consent shall not be unreasonably withheld).
(q) CHANGE IN CORPORATE NAME. The Seller will not make any change to
its corporate name, or use any trade names, fictitious names, assumed names or
"doing business as" names.
(r) TAXES. The Seller will file or cause to be filed all federal,
state and local tax returns which are required to be filed by it. The Seller
shall pay or cause to be paid all taxes shown to be due and payable on such
returns or on any assessments received by it, other than any taxes or
assessments, the validity of which are being contested in good faith by
appropriate proceedings and with respect to which the Seller shall have set
aside adequate reserves on its books in accordance with GAAP.
(s) TRANSACTION DOCUMENTS. The Seller will comply in all material
respects with the terms of and employ the procedures outlined in and enforce the
obligations of the Originators under the Originator Sale Agreement, enforce all
of the other rights of the Seller under each of the other Transaction Documents
to which it is a party, take all such action to such end as may be from time to
time reasonably requested by the Deal Agent, and maintain all such Transaction
Documents in full force and effect and make to the Originators such reasonable
demands and requests for information and reports or for action as the Seller is
entitled to make thereunder and as may be from time to time reasonably requested
by the Deal Agent.
(t) SEGREGATION OF COLLECTIONS. The Seller will prevent the deposit
into the Collection Account of any funds other than Collections and, to the
extent that any such funds are nevertheless deposited into the Collection
Account, will promptly identify any such funds to the Servicer for segregation
and remittance to the owner thereof.
(u) ACCOUNTING TREATMENT. The Seller will not prepare any financial
statements or other statements which shall account for the transactions
contemplated by the Originator Sale Agreement in any manner other than as the
sale of, or a capital contribution of, the "Transferred Assets" (as defined
therein) by the Originators to the Seller.
(v) QUALIFICATION TO DO BUSINESS. The Seller will duly qualify to do
business, and be in good standing, in every jurisdiction in which the nature of
its business requires it to be so qualified and the failure to do so could
reasonably be expected to have a material adverse effect on the Seller's ability
to perform its obligations hereunder or the ability to assign or collect the
Purchased Receivables hereunder.
(w) RECEIVABLES. The Seller will not, without the written consent of
the Purchaser and the Deal Agent, amend, modify, waive or cancel the terms of
any Receivable unless such amendment, modification, waiver or cancellation is in
the ordinary course of business of the Seller.
SECTION 5.02. GENERAL COVENANTS OF THE SERVICER.
(a) COMPLIANCE WITH LAWS; PRESERVATION OF CORPORATE EXISTENCE. The
Servicer shall comply in all material respects with all applicable laws
(including, without limitation, ERISA and the Code), rules, regulations, orders
and Transaction Documents and preserve and maintain its corporate existence,
rights, franchises, qualifications and privileges where the failure to comply
could reasonably be expected to have a material
adverse effect on the Servicer's ability to perform its obligations hereunder or
the ability to collect the Purchased Receivables hereunder.
(b) GENERAL REPORTING REQUIREMENTS. The Servicer will provide, or
cause to be provided, to the Deal Agent (with a copy for the Purchaser) the
following:
(i) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the
Servicer, consolidated balance sheets of the Servicer and its consolidated
subsidiaries and the related statements of income, shareholders' equity and
cash flows each for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, prepared in accordance with
GAAP and certified by a senior financial officer of the Servicer;
(ii) as soon as available and in any event within 90 days after the
end of each fiscal year of the Servicer, a copy of the consolidated balance
sheets of the Servicer and its consolidated subsidiaries and the related
statements of income, shareholders' equity and cash flows for such year,
each prepared in accordance with GAAP consistently applied and reported on
by nationally recognized independent public accountants acceptable to the
Deal Agent;
(iii) promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any Reportable Event defined in
Article IV of ERISA which the Servicer or any ERISA Affiliate files under
ERISA with the Internal Revenue Service or the PBGC or the U.S. Department
of Labor or which the Servicer or any ERISA Affiliate receives from such
entity;
(iv) promptly upon discovery thereof, written notice to the Deal
Agent that a Coverage Shortfall Event has occurred or is likely to occur;
(v) promptly following the Deal Agent's request therefor, such other
information respecting the Receivables or the conditions or operations,
financial or otherwise, of the Servicer as the Deal Agent may from time to
time request in order to protect the interests of the Deal Agent or the
Purchaser in connection with this Agreement.
(c) ERISA MATTERS. The Servicer will not (a) fail to comply in all
material respects with ERISA and the provisions of the Code applicable to the
Benefit Plans; (b) engage or permit any ERISA Affiliate to engage in any
prohibited transaction which would subject the Servicer to a material tax or
penalty imposed on a prohibited transaction; (c) permit to exist any accumulated
funding deficiency, as defined in Section 302(a) of ERISA and Section 412(a) of
the Code, or funding deficiency with respect to any Benefit Plan other than a
Multiemployer Plan; (d) incur any liability to the PBGC over and above the
premiums required by law; or (e) terminate any Benefit Plan in a manner which
could result in the imposition of a lien on the property of the Servicer or any
such ERISA Affiliate.
(c) AUDITS. At any time and from time to time upon prior written
notice to the Servicer during regular business hours and on an annual (or more
frequent) basis, if requested by the Deal Agent, the Servicer will permit the
Deal Agent, or its agents or representatives, (i) to examine and make copies of
and abstracts from all Records, and (ii) to visit the offices and properties of
the Servicer for the purpose of examining such Records, and to discuss matters
relating to the Receivables or the Servicer's performance hereunder with any of
the officers or employees of the Servicer having knowledge of such matters.
Each such audit shall be at the sole expense of the Servicer.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Servicer will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the Receivables in
the event of the destruction of the originals thereof) and keep and maintain,
all documents, books, records and other information reasonably necessary or
advisable for the collection of all Purchased Receivables (including, without
limitation, records adequate to permit the daily identification of all
collections of and adjustments to each Purchased Receivable).
(e) LOCATION OF RECORDS. The Servicer will keep its chief place of
business and chief executive office, and the offices where it keeps the Records,
at the address of the Servicer referred to in SECTION 10.02, or, in any such
case, upon 30 days' prior written notice to the Deal Agent, at such other
locations within the United States.
(f) CREDIT AND COLLECTION POLICIES. The Servicer will comply in all
material respects with the Credit and Collection Policy in regard to each
Purchased Receivable and the related Contract. The Servicer shall not, without
the written consent of the Deal Agent make or agree to make any material change
in the Credit and Collection Policy.
(g) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. The Servicer will
not add or terminate any bank as a Lock-Box Bank from those listed in Schedule
III to the Originator Sale Agreement or SCHEDULE III hereto or make any change
in its instructions to Obligors regarding payments to be made to any Lock-Box
Bank, unless the Deal Agent shall have given its prior written consent to such
addition, termination or change (which consent shall not be unreasonably
withheld) and the Deal Agent shall have received (i) ten Business Days' prior
notice of such addition, termination or change, (ii) prior to the effective date
of such addition, termination or change, (x) executed copies of Lock-Box
Agreements executed by each new Lock-Box Bank and the Servicer and (y) copies of
all agreements and documents signed by either the Servicer or the respective
Lock-Box Bank with respect to any new Lock-Box Account, and (iii) the prior
written consent of the Purchaser to such addition, termination or change (which
consent shall not be unreasonably withheld).
(h) TAXES. The Servicer will file or cause to be filed all federal,
state and local tax returns which are required to be filed by it. The Servicer
shall pay or cause to be paid all taxes shown to be due and payable on such
returns or on any assessments
received by it, other than any taxes or assessments, the validity of which are
being contested in good faith by appropriate proceedings and with respect to
which the Servicer shall have set aside adequate reserves on its books in
accordance with GAAP.
(i) TRANSACTION DOCUMENTS. The Servicer will comply in all material
respects with the terms of this Agreement and each of the other Transaction
Documents to which it is a party, take all such action to such end as may be
from time to time reasonably requested by the Deal Agent, and maintain all such
Transaction Documents in full force and effect and make such reasonable demands
and requests for information and reports or for action as the Servicer is
entitled to make thereunder and as may be from time to time reasonably requested
by the Deal Agent.
(j) SEGREGATION OF COLLECTIONS. To the extent that any funds other
than Collections are deposited into the Collection Account, the Servicer will
promptly identify any such funds for segregation and remittance to the owner
thereof.
(k) QUALIFICATION TO DO BUSINESS. The Servicer will duly qualify to
do business, and be in good standing, in every jurisdiction in which the nature
of its business requires it to be so qualified and the failure to do so could
reasonably be expected to have a material adverse effect on the Servicer's
ability to perform its obligations hereunder or the ability to collect the
Purchased Receivables hereunder.
(l) RECEIVABLES. The Servicer will not, without the written consent
of the Purchaser and the Deal Agent, amend, modify, waive or cancel the terms of
any Receivable unless such amendment, modification, waiver or cancellation is in
the ordinary course of business of the Servicer and, with respect to the
cancellation of any Receivable, for which cash consideration is paid with
respect to any such Receivable.
ARTICLE VI
ADMINISTRATION, COLLECTION AND MONITORING OF ASSETS
SECTION 6.01. APPOINTMENT AND DESIGNATION OF THE SERVICER. The
Seller, the Purchaser and the Deal Agent hereby appoint the Person (the
"SERVICER") designated by the Deal Agent from time to time with the approval of
the Purchaser pursuant to this SECTION 6.01, and subject to the third sentence
of this SECTION 6.01, as their agent to service, administer and collect the
Receivables and otherwise to enforce their respective rights and interests in,
to and under the Receivables, the Related Security and the Contracts. The
Servicer's authorization under this Agreement shall terminate on the Collection
Date. Unless and until the Deal Agent gives notice to the Seller of a
designation of a new Servicer after the occurrence of a Servicer Termination
Event and continuously until such time, Superior is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Servicer pursuant to
the terms hereof. Subject to the preceding sentence, the Deal Agent may (with
the approval of the Purchaser and after the occurrence of a Servicer Termination
Event) designate as Servicer any Person to succeed Superior or any successor
Servicer, on the condition in each case that any such Person so designated shall
agree to perform the duties and obligations of the Servicer pursuant to the
terms hereof. Each of the Seller and the Servicer hereby grants to any
successor Servicer an irrevocable power of attorney to take any and all steps in
the Seller's or the Servicer's name, as applicable, and on behalf of the Seller
or the Purchaser, as may be necessary or desirable, in the determination of the
successor Servicer, to collect all amounts due under any and all Receivables,
including, without limitation, endorsing the Seller's name on checks and other
instruments representing Collections and enforcing such Receivables and the
related Contracts. The Servicer may, with the prior consent of the Deal Agent,
subcontract with any other Person for servicing, administering or collecting the
Receivables, PROVIDED that the Servicer shall remain liable for the performance
of the duties and obligations of the Servicer pursuant to the terms hereof.
Notwithstanding anything to the contrary contained in this Agreement, the
Servicer, if not the Seller, an Originator or an Affiliate thereof, shall have
no obligation to collect, enforce or take any other action described in this
ARTICLE VI with respect to any Receivable that is not a Purchased Receivable
other than to deliver to the Seller the Collections and documents with respect
to any such Receivable that is not a Purchased Receivable as described in
SECTIONS 6.03 and 6.06(b).
SECTION 6.02. COLLECTION OF RECEIVABLES BY THE SERVICER; EXTENSIONS
AND AMENDMENTS OF RECEIVABLES. The Servicer shall take or cause to be taken all
such actions as may be necessary or advisable to collect each Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
with reasonable care and diligence, and in accordance with the Credit and
Collection Policy; PROVIDED, HOWEVER, that, (a) the Deal Agent shall have the
absolute and unlimited right to direct the Servicer (whether the Servicer is the
Seller, an Originator or otherwise) to commence or settle any legal action, to
enforce collection of any Purchased Receivable or to foreclose upon or repossess
any Related Security, (b) the Servicer shall not make the Deal Agent
or the Purchaser a party to any litigation without the express written consent
of the Deal Agent or the Purchaser, as the case may be. If the Termination Date
shall not have occurred, Superior, while it is Servicer, may, in accordance with
the Credit and Collection Policy, (a) extend the maturity or adjust the
Outstanding Balance of any Defaulted Receivable as Superior may determine to be
appropriate to maximize Collections thereof and (b) adjust the Outstanding
Balance of any Receivable to reflect the reductions or cancellations resulting
from any Dilution Factor, in each such case in accordance with the requirements
of the Credit and Collection Policy and provided that such extension or
adjustment shall not alter the status of such Receivable as a Defaulted
Receivable or limit the rights of the Purchaser or Deal Agent under this
Agreement. Except as otherwise permitted pursuant to the next preceding
sentence, neither the Servicer nor the Seller will extend, amend, cancel or
otherwise modify the terms of any Purchased Receivable, or amend, modify, cancel
or waive any term or condition of any Contract related thereto without the prior
written approval of the Deal Agent.
SECTION 6.03. DISTRIBUTION AND APPLICATION OF COLLECTIONS. The
Servicer shall set aside for the account of the Seller and the Purchaser their
respective allocable shares of the Collections of Receivables in accordance with
SECTION 2.04. The Servicer shall as soon as practicable following receipt turn
over to the Seller the Collections of any Receivable which is not a Purchased
Receivable less, in the event neither Superior nor an Affiliate thereof is the
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
such Servicer of servicing, collecting and administering the Receivables to the
extent not covered by the Servicer Fee received by it.
SECTION 6.04. OTHER RIGHTS OF THE DEAL AGENT. (a) On or before the
Closing Date, the Seller shall have, or shall have caused the Servicer or the
applicable Originator to (in each case, at the Seller's expense), (i) deliver,
return receipt requested, to each of the Reinsurance Companies in respect of the
Reinsurance Recoverables notice of the Purchaser's interest in the Purchased
Receivables comprised of Reinsurance Recoverables.
(b) At any time following the occurrence of a Servicer Termination
Event or the designation of a Servicer other than Superior, the Seller or any
Affiliate of either thereof pursuant to SECTION 6.01:
(i) The Deal Agent may or, at the request of the Deal Agent, the
Seller shall (in either case, at the Seller's expense) direct the Obligors
of Receivables, or any of them, to pay all amounts payable under any
Receivable directly to the Deal Agent or its designee;
(ii) The Deal Agent may or, at the request of the Deal Agent, the
Seller shall (in either case, at the Seller's expense) give each of the
Obligors notice (to the extent the Seller has not otherwise given notice to
such Obligors in accordance with clause (a)(i) of this SECTION 6.04) of the
Purchaser's interests in the Purchased Receivables; and
(iii) The Seller shall, at the Deal Agent's request and at the
Seller's expense, (A) assemble all Records and make the same available to
the Deal Agent or its designee at a place selected by the Deal Agent or its
designee, and (B) segregate all cash, checks and other instruments received
by it from time to time constituting Collections of Receivables in a manner
acceptable to the Deal Agent and, promptly following receipt, remit all
such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Deal Agent or its designee.
SECTION 6.05. RECORDS; AUDITS. (a) The Servicer will maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Receivables in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the timely and full collection of all Receivables (including,
without limitation, all Collections of and adjustments to each Purchased
Receivable).
(b) The Servicer, whether or not Superior or an Affiliate thereof,
shall hold all Records in trust for the Seller and the Purchaser in accordance
with their respective interests. Subject to the receipt of contrary
instructions from the Deal Agent, the Seller will deliver all Records to such
Servicer; PROVIDED, HOWEVER, that the Servicer, if other than Superior, shall as
soon as practicable upon demand deliver to the Seller all Records in its
possession relating to Receivables of the Seller other than Purchased
Receivables, and copies of Records in its possession relating to Purchased
Receivables.
(c) The Servicer will, from time to time during regular business
hours as requested by the Deal Agent, permit the Deal Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
Records and (ii) to visit the offices and properties of the Servicer for the
purpose of examining such Records and to discuss matters relating to the
Receivables or the Servicer's or the Seller's performance hereunder with any of
the officers or employees of the Servicer or the Seller having knowledge of such
matters.
SECTION 6.06. RECEIVABLE REPORTING. (a) The Servicer, so long as it
is Superior or an Affiliate thereof, and otherwise the Seller, will deliver to
the Deal Agent (i) prior to the Monthly Asset Report Date occurring during each
calendar month hereafter, a report identifying the Purchased Receivables, by
Obligor, as of the last day of the preceding calendar month, (ii) as of the
Termination Date, a report identifying the Purchased Receivables, by Obligor, on
the day immediately preceding the Termination Date and (iii) prior to the
Monthly Asset Report Date occurring in each calendar month hereafter, a report
identifying the outstanding accounts payable of each of the Originators as of
the last day of the preceding calendar month, identified by the relevant
Originator and the account payee.
(b) On or prior to the Monthly Asset Report Date occurring in each
calendar month, the Servicer shall prepare and forward to the Deal Agent for the
Purchaser, a Monthly Asset Report relating to all Purchased Receivables, as of
the close of business of the Servicer on the last day of the preceding calendar
month.
SECTION 6.07. COLLECTIONS AND LOCK-BOXES. The Seller and the
Servicer will
(i) instruct all Obligors to cause all Collections to be either (A)
remitted to a Lock-Box and will cause each Lock-Box Bank to retrieve such
Collections promptly and deposit the same to the respective Lock-Box Accounts or
(B) deposited directly with the Lock-Box Bank, and
(ii) instruct all Lock-Box Banks to transfer such Collections in same
day funds to one of the special-purpose segregated interest-bearing trust
accounts established in the name of the Deal Agent and as listed in SCHEDULE III
attached hereto (each a "COLLECTION ACCOUNT") maintained with a financial
institution (the "COLLECTION ACCOUNT BANK") acceptable to the Deal Agent, which
shall initially be BankBoston, N.A. (PROVIDED, HOWEVER, that in the event that
the Collection Account is maintained at a commercial bank having (x) combined
capital and surplus of at least $250,000,000 and (y) a short-term debt rating of
at least A-1 from S&P, P-1 from Moody's and D-1 from DCR (if rated by DCR), the
Collection Account need not be a trust account). In accordance with the terms
of the Collection Account Agreement, to be entered into among the Collection
Account Bank, the Servicer, the Purchaser and the Deal Agent, the Servicer shall
instruct the Collection Account Bank to allocate and remit such Collections in
accordance with SECTION 2.04; PROVIDED, HOWEVER, that the Deal Agent may, at any
time, revoke the Servicer's authority with respect to the Collection Account,
direct the Collection Account Bank to cease taking instructions from the
Servicer and to thereafter take direction solely from the Deal Agent. If the
Seller receives any Collections, the Seller will remit such Collections to the
Collection Account within one Business Day following the Seller's receipt
thereof. The Seller will not add or terminate any bank as Lock-Box Bank from
those listed in SCHEDULE III or make any change in its instructions to Obligors
regarding payments to be made to any Lock Box or any Lock-Box Bank, unless the
Deal Agent shall have received at least ten Business Days' prior written notice
of such addition, termination or change and all actions reasonably requested by
the Deal Agent to protect and perfect the interest of the Deal Agent and the
Purchaser in the Collections of Purchased Receivables have been taken and
completed.
SECTION 6.08. UCC MATTERS; PROTECTION AND PERFECTION OF PURCHASED
PROPERTY. The Seller will keep its principal place of business and chief
executive office, and the office where it keeps the Records, at the address of
the Seller referred to in SECTION 4.01(k) or, upon 30 days' prior written notice
to the Deal Agent, at such other locations within the United States where all
actions reasonably requested by the Deal Agent to protect and perfect the
interest of the Deal Agent and the Purchaser in the Purchased Receivables have
been taken and completed. The Seller agrees that from time to time, at its
expense, it will promptly execute and deliver all further instruments and
documents, and take all further action that the Deal Agent may reasonably
request in order to perfect, protect or more fully evidence the Purchased
Interest acquired by the
Purchaser hereunder, or to enable the Purchaser or the Deal Agent to exercise or
enforce any of their respective rights hereunder. Without limiting the
generality of the foregoing, the Seller will: (a) upon the request of the Deal
Agent, execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate or as the Deal Agent may request, and (b) on or prior
to the date hereof, mark its master data processing records evidencing such
Purchased Receivables and related Contracts with a legend, acceptable to the
Deal Agent, evidencing that the Purchaser has acquired an interest therein as
provided in this Agreement. The Seller hereby authorizes the Deal Agent to file
one or more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Purchased Property now
existing or hereafter arising without the signature of the Seller where
permitted by law. A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Purchased Property or any part
thereof shall be sufficient as a financing statement. Notwithstanding anything
to the contrary herein, the Seller shall, upon the request of the Deal Agent at
any time and at the Seller's expense, notify the Obligors of Purchased
Receivables, or any of them, of the ownership of the Purchased Interest by the
Purchaser. If the Seller fails to perform any of its agreements or obligations
under this SECTION 6.08, the Deal Agent may (but shall not be required to)
itself perform, or cause performance of, such agreement or obligation, and the
expenses of the Deal Agent incurred in connection therewith shall be payable by
the Seller upon the Deal Agent's demand therefor. For purposes of enabling the
Deal Agent to exercise its rights described in the preceding sentence and
elsewhere in this ARTICLE VI, the Seller and the Purchaser hereby authorize the
Deal Agent to take any and all steps in the Seller's name and on behalf of the
Seller and the Purchaser necessary or desirable, in the determination of the
Deal Agent, to collect all amounts due under any and all Receivables, including,
without limitation, endorsing the Seller's name on checks and other instruments
representing Collections and enforcing such Receivables and the related
Contracts.
SECTION 6.09. OBLIGATIONS OF THE SELLER WITH RESPECT TO RECEIVABLES.
The Seller will (a) at its expense, regardless of any exercise by the Deal Agent
or the Purchaser of their rights hereunder, timely and fully perform and comply
with all material provisions, covenants and other promises required to be
observed by it under the Contracts related to the Purchased Receivables to the
same extent as if the Purchased Interest therein had not been sold hereunder and
(b) pay when due any taxes, including without limitation, sales and excise
taxes, payable in connection with the Purchased Receivables. In no event shall
the Deal Agent or the Purchaser have any obligation or liability with respect to
any Purchased Receivables or related Contracts, nor shall any of them be
obligated to perform any of the obligations of the Seller or the Originators or
any of their Affiliates thereunder. The Seller will, and will cause the
Servicer to, timely and fully comply in all material respects with the Credit
and Collection Policy in regard to each Purchased Receivable and the related
Contract. The Seller will not make any change in the character of its business
or make or agree to make any change in the Credit and Collection Policy, which
change would, in either case, impair the collectibility of any Purchased
Receivable.
SECTION 6.10. APPLICATIONS OF COLLECTIONS. Any payment by an Obligor
in respect of any indebtedness owed by it to the Seller or any Originator shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law and unless otherwise instructed by the Deal Agent, be applied as a
Collection of any Purchased Receivable of such Obligor, in the order of the age
of such Receivables, starting with the oldest such Purchased Receivable, to the
extent of any amounts then due and payable thereunder, before being applied to
any Receivable that is not a Purchased Receivable or other indebtedness of such
Obligor.
SECTION 6.11. ANNUAL SERVICING REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS. On an annual basis on or before November 30 of each calendar year,
beginning with November 30, 1999, the Servicer shall cause nationally recognized
independent public accountants acceptable to the Deal Agent, to furnish a report
to each of the Servicer, the Seller, the Purchaser, the Deal Agent and each
Rating Agency then rating the Commercial Paper at the request of EagleFunding
substantially to the effect that (i) such accountants have examined certain
documents and records relating to the servicing of Receivables under this
Agreement, compared the information contained in the Monthly Asset Reports
delivered by or on behalf of the Seller under this Agreement during the annual
period covered by such report (or such shorter initial period, as the case may
be) with such documents and records and that, on the basis of such examination,
and subject to such reasonable limitations and qualifications as may be set
forth in such report, such accountants are of the opinion that the servicing has
been conducted substantially in compliance with the terms and conditions as set
forth in Article VI of this Agreement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth in such
statement and (ii) such accountants have compared the mathematical calculations
of each amount set forth in the Monthly Asset Reports delivered pursuant to this
Agreement during the period covered by such report with the Servicer's computer
reports which were the source of such amounts and that on the basis of such
comparison, such accountants are of the opinion that such amounts are in
agreement, except for such exceptions as they believe to be immaterial and such
other exceptions as shall be set forth in such statement.
ARTICLE VII
TRIGGER EVENTS
SECTION 7.01. TRIGGER EVENTS. If any of the following events
("TRIGGER EVENTS") shall occur:
(a) (i) The Servicer (if other than the Deal Agent or an Affiliate
thereof) shall fail to perform or observe any term, covenant or agreement
hereunder (other than as referred to in CLAUSE (ii) of this SECTION 7.01(a)) and
such failure shall remain unremedied for two Business Days after written notice
to Servicer and Seller or (ii) either the Servicer (if other than the Deal
Agent) or the Seller shall fail to make any payment or deposit to be made by it
hereunder when due; or
(b) (i) Any representation or warranty made or deemed to be made by
the Seller (or any of its officers or agents) under or in connection with this
Agreement or any Monthly Asset Report or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in any material
respect when made or (ii) any representation or warranty made or deemed to be
made by any Originator (or any of their respective officers or agents) under or
in connection with the Originator Sale Agreement shall prove to have been false
or incorrect in any material respect when made; or
(c) Either the Seller, the Servicer or any Originator shall fail to
perform or observe any term, covenant or agreement (other than any term
covenant, or agreement described in either of clauses (a) or (b) above)
contained in this Agreement or in the Originator Sale Agreement (as the case may
be) on its part to be performed or observed and any such failure shall remain
unremedied for two (2) Business Days after written notice thereof shall have
been given by the Deal Agent to the Seller; or
(d) Either (i) the Purchase shall for any reason, except to the extent
permitted by the terms hereof, cease to create a valid and perfected first
priority undivided percentage ownership or security interest in each Purchased
Receivable and the Related Security and Collections with respect thereto or (ii)
the purchase by the Seller of a Receivable from the Originators shall, for any
reason, cease to create in favor of the Seller a valid and perfected first
priority ownership or security interest in each Purchased Receivable and the
Related Security and Collections with respect thereto; or
(e) (i) The Seller, the Servicer, any Originator or any of their
respective Affiliates shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Seller, the Servicer or any Originator
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against (but not by) the Servicer or any Originator,
either such proceeding shall have remained undismissed or unstayed for a period
of 60 days or any order for relief of the sort described above shall have been
entered; or (ii) the Seller, the Servicer or any Originator shall take any
corporate action to authorize any of the actions set forth in CLAUSE (i) above
in this SECTION 7.01(e); or
(f) (i) The Originator Sale Agreement shall have ceased to be valid,
binding and enforceable as against any of the parties thereto without any
amendment, modification, waiver or termination of any terms or conditions
thereof, other than as agreed to in writing by the Deal Agent, or (ii) the
assignment to the Deal Agent of all of the Seller's right and title to and
interest in the Originator Sale Agreement shall have ceased, for any reason, to
be fully effective and enforceable by the Deal Agent as against any of the
parties of the Originator Sale Agreement; or
(g) A Servicer Termination Event shall have occurred and be
continuing; or
(h) The date on which some or all of the "Liquidity Commitments"
under the Liquidity Agreement shall cease to be effective or shall terminate
without renewal or such "Liquidity Commitments" shall ever be less than 102% of
the Purchase Limit; or
(i) Any Originator, the Seller or the Servicer shall fail to perform
or observe any material term, covenant or agreement contained in the Credit and
Collection Policy; or
(j) The IRS or the PBGC shall have filed notice of one or more
Adverse Claims against any Originator, the Seller or any ERISA Affiliate under
ERISA or the Code, UNLESS such Adverse Claim does not purport to cover the
Receivables, and such notice shall have remained in effect for more than thirty
(30) Business Days unless, prior to the expiration of such period, such Adverse
Claims shall have been adequately bonded by such Originator, Seller or the ERISA
Affiliate (as the case may be) in a transaction with respect to which the Deal
Agent has given its prior written approval; or
(k) The Seller shall have become subject to registration as an
"investment company" within the meaning of the Investment Company Act;
then, and in any such event, the Deal Agent may, by notice to the Seller declare
the Termination Date to have occurred, EXCEPT that, in the case of any event
described in SECTION 7.01(h) or (k), or in CLAUSE (i) of SECTION 7.01(e) above,
the Termination Date shall be deemed to have occurred automatically upon the
occurrence of such event. Upon any such declaration or automatic occurrence,
the Deal Agent and the Purchaser shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of the applicable jurisdiction and other applicable laws,
which rights shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. INDEMNITIES BY THE SELLER. Without limiting any
other rights which the Deal Agent, the Purchaser, the Liquidity Providers,
the Supplemental Enhancement Providers or any of their respective Affiliates
may have hereunder or under applicable law, the Seller hereby agrees to
indemnify the Deal Agent, the Purchaser, each Liquidity Provider, each
Supplemental Enhancement Provider each of their respective Affiliates, and
each of their respective directors, officers, employees, agents and attorneys
(all of the foregoing being collectively referred to as "INDEMNIFIED
PARTIES") from and against any and all damages, losses, claims, liabilities
and related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being
collectively referred to as "INDEMNIFIED AMOUNTS") awarded against or actually
incurred by any of them arising out of or resulting from:
(i) any Purchased Receivable represented or deemed represented by the
Seller to be an Eligible Receivable which is not an Eligible Receivable at
the time such representation is made or deemed made;
(ii) reliance on any representation or warranty made or deemed made
by the Seller, the Servicer or any of their respective officers under this
Agreement, which shall have been false or incorrect in any material respect
when made or deemed made or delivered;
(iii) the failure by the Seller or the Servicer to comply with any
term, provision or covenant contained in this Agreement or any of the other
Transaction Documents, or with any applicable law, rule or regulation with
respect to any Receivable, the related Contract or the Related Security, or
the nonconformity of any Receivable, the related Contract or the Related
Security with any such applicable law, rule or regulation;
(iv) (A) the failure to vest and maintain vested in the Purchaser or
to transfer to the Purchaser, legal and equitable title to and ownership
of, a percentage ownership interest, corresponding to the Purchased
Interest, in the Receivables which are, or are purported to be, Purchased
Receivables, together with all Collections and Related Security; or (B) the
failure to grant to the Deal Agent, for the benefit of itself and the
Purchaser, a valid and perfected first priority "security interest," under
Article 9 of the UCC, in and to the Receivables which are, or are purported
to be, Purchased Receivables, together with all Collections and Related
Security; in each case free and clear of any Adverse Claim whether existing
at the time of the Purchase of any such Receivable or at any time
thereafter;
(v) the failure by the Seller or the Servicer to make any payment
required on its part to be made hereunder;
(vi) 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 which are, or are purported to be, Purchased Receivables,
whether at the time of the Purchase or at any subsequent time;
(vii) any dispute, claim, offset or defense (other than the discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable which is, or is purported to be, a Purchased Receivable
(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 or
services related to such Receivable or the furnishing or failure to furnish
such merchandise or services;
(viii) any failure of the Seller or the Servicer to perform its
duties or obligations in accordance with the provisions of this Agreement
or any failure by an Originator, the Seller or any Affiliate thereof to
perform its respective duties under the Contracts;
(ix) the failure to pay when due any taxes, including without
limitation, sales, excise or personal property taxes payable in connection
with the Purchased Receivables;
(x) any repayment by the Deal Agent or the Purchaser of any amount
previously distributed in reduction of Capital or payment of Yield or any
other amount due hereunder, in each case which amount the Deal Agent or the
Purchaser reasonably believes is required to be repaid;
(xi) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Purchases or reinvestments or the
ownership of Purchased Property or in respect of any Receivable, Related
Security or Contract;
(xii) any failure by the Seller to give reasonably equivalent value
to each Originator in consideration for the transfer by such Originator to
the Seller of any Receivables or Related Security, or any attempt by any
Person to void or otherwise avoid any such transfer under any statutory
provision or common law or equitable action, including, without limitation,
any provision of the Bankruptcy Code; or
(xiii) the failure of the Seller, any Originator or any of their
respective agents or representatives (including, without limitation,
agents, representatives and employees of the Originators acting pursuant to
authority granted under SECTION 6.01) to remit to the Servicer or the Deal
Agent, Collections of Purchased Receivables remitted to the Seller, such
Originator or any such agent or representative.
Any amounts subject to the indemnification provisions of this SECTION 8.01 shall
be paid by the Seller to the Deal Agent within two Business Days following the
Deal Agent's demand therefor. Notwithstanding any other provision of this
Agreement to the contrary, the Seller shall not indemnify the Indemnified
Parties for or with respect to any Indemnified Amounts that would constitute
recourse for uncollectible Purchased Receivables due to credit reasons.
SECTION 8.02. OPTIONAL REPURCHASE OF THE PURCHASED INTEREST. (a)
The Servicer may, at any time after the aggregate Outstanding Balance of the
Purchased Receivables has declined to 10% or less of the Purchase Limit and upon
not less than five Business Days' prior written notice to the Deal Agent, elect
to purchase all, but not less than all, of the Purchased Interest outstanding on
such date, which purchase shall take
place on the Business Day next succeeding the fifth Business Day to occur
following the Deal Agent's receipt of such notice, in consideration of the
payment of all outstanding Capital and accrued Yield on such day in accordance
with the terms of SUBSECTION (b) of this SECTION 8.02.
(b) In the case of a purchase from the Purchaser by the Servicer of
the Purchased Interest pursuant to this SECTION 8.02, the Seller shall, on the
Business Day coinciding with such purchase, make a payment to the Deal Agent,
the proceeds of which purchase shall be deemed to be Collections relating to the
Purchased Interest, and the amount of which payment shall be applied in the
following order of priority:
(i) First, to pay any accrued and unpaid Servicer Fee (if the Servicer
is a party other than Superior, an Originator or an Affiliate thereof), and
to pay any such Servicer Fee to be accrued through (and including) the next
scheduled payment date therefor;
(ii) Second, to pay accrued and unpaid Yield with respect to Purchase
Periods associated with the portions of Capital to be reduced in accordance
with CLAUSE (vii) below, and to pay any Liquidation Fee payable in
connection with such reduction of Capital;
(iii) Third, to pay accrued and unpaid Liquidity Fee which is then due
and payable, and to pay any such Liquidity Fee to be accrued through such
date;
(iv) Fourth, to pay accrued and unpaid Supplemental Enhancement Fee
which is then due and payable, and to pay any such Supplemental Enhancement
Fee to be accrued through such date;
(v) Fifth, to pay accrued and unpaid Program Fee which is then due and
payable, and to pay any such Program Fee to be accrued through such date;
(vi) Sixth, to pay any Administrative Fee which is then due and
payable, and (unless such payment is sufficient to reduce Capital to zero
in accordance with the application to be made pursuant to this SECTION
8.02(b)), to be retained in the Collection Account to the extent of the
Administrative Fee payable in respect of the next succeeding annual period;
(vii) Seventh, to pay the portion of any other accrued and unpaid
obligations which have not been paid pursuant to clauses (i) through (v)
above and which are then due and payable by the Seller or the Servicer to
the Purchaser or the Deal Agent under this Agreement or any of the other
Transaction Documents;
(viii) Eighth, to pay all Capital relating to any Purchase Periods
selected by the Deal Agent in the exercise of its sole discretion;
(ix) Ninth, to pay accrued and unpaid Management Fee which is then due
and payable, and to pay any such Management Fee to be accrued through such
date;
(x) Tenth, to pay any accrued and unpaid Servicer Fee (if the Servicer
is Superior, an Originator or an Affiliate thereof) which is then due and
payable, and to pay any such Servicer Fee to be accrued through (and
including) the next scheduled payment date therefor.
(c) Any purchase made pursuant to this SECTION 8.02 shall be made
without recourse or warranty, express or implied (other than a representation
and warranty that the Purchased Interest so purchased is free and clear of any
Adverse Claim created by or through the Purchaser).
ARTICLE IX
THE DEAL AGENT
SECTION 9.01. AUTHORIZATION AND ACTION. The Purchaser hereby
appoints and authorizes the Deal Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Deal Agent by the terms hereof, together with such powers as are reasonably
incidental thereto, including, without limitation, the power and authority to
hold and to perfect any ownership interest or security interest created pursuant
hereto or in connection herewith on behalf of the Purchaser.
SECTION 9.02. DEAL AGENT'S RELIANCE, ETC. Neither the Deal Agent nor
any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them as Deal Agent under or in
connection with this Agreement (including, without limitation, any action taken
or omitted to be taken by it or them if the Deal Agent is designated as Servicer
pursuant to SECTION 6.01) or any other agreement executed pursuant hereto,
except for its or their own negligence or willful malfeasance or misfeasance.
Without limiting the foregoing, the Deal Agent: (i) may consult with legal
counsel (including counsel for the Seller), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (ii) makes no warranty or representation to any
Person and shall not be responsible to any other Person for any statements,
warranties or representations made in or in connection with this Agreement or in
connection with any of the other agreements executed pursuant hereto; (iii)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement on the
part of the Seller or to inspect the property (including the books and records)
of the Seller; (iv) shall not be responsible to the Purchaser or any other
Person for the due execution, legality, validity, enforceability, genuineness or
sufficiency of value of this Agreement or any other agreement, instrument or
document furnished pursuant hereto; and (v) shall incur no liability under or in
respect of this Agreement or any other agreement executed pursuant hereto, by
acting upon any notice (including
notice by telephone with respect to notices under SECTION 2.02), consent,
certificate or other instrument or writing (which may be by telex or facsimile)
believed by it to be genuine and signed or sent by the proper party or parties.
Notwithstanding anything in this SECTION 9.02 to the contrary, the foregoing
provisions of this SECTION 9.02 shall not run in favor of the Deal Agent in
connection with any claim against the Deal Agent made by EagleFunding.
SECTION 9.03. DEAL AGENT AND AFFILIATES. With respect to any
interests which may be assigned by the Purchaser to BRSI, or any Affiliate of
BRSI, pursuant to SECTION 10.04, BRSI or such Affiliate shall have the same
rights and powers under this Agreement as would the Purchaser if it were holding
such interests and may exercise the same as though it were not the Deal Agent.
BRSI and its Affiliates may generally engage in any kind of business with the
Seller, any Originator or any Obligor, any of their respective Affiliates and
any Person who may do business with or own securities of the Seller, any
Originator or any Obligor or any of their respective Affiliates, all as if BRSI
were not the Deal Agent and without any duty to account therefor to the
Purchaser, any Liquidity Provider or any Supplemental Enhancement Provider.
SECTION 9.04. [Reserved].
SECTION 9.05. RESIGNATION OF THE DEAL AGENT. The Deal Agent may
resign as Deal Agent hereunder at any time by giving not less than five (5)
Business Days' prior written notice to the Purchaser, the Seller, the Servicer
and each Rating Agency then rating the Commercial Paper, at the request of
EagleFunding; such resignation to become effective only upon the later to occur
of
(i) the earlier of (x) the appointment and acceptance of a successor
Deal Agent as provided below and (y) the 30th day following delivery of
such notice, and
(ii) the Purchaser's obtaining of written confirmation from each such
Rating Agency that such resignation and appointment will not result in a
withdrawal or downgrading of the then-current rating of the Commercial
Paper by such Rating Agency.
Upon any such resignation, the Purchaser shall appoint a financial institution
of its choosing as Deal Agent. Following the appointment of a successor Deal
Agent and such successor Deal Agent's acceptance thereof, such successor Deal
Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of the resigning Deal Agent as Deal Agent hereunder, and the
resigning Deal Agent shall be discharged from its duties and obligations as Deal
Agent hereunder. After the Deal Agent's resignation, the provisions of this
ARTICLE IX shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Deal Agent.
SECTION 9.06. PAYMENTS. If in the opinion of the Deal Agent the
distribution of any amount received by it in such capacity hereunder or under
any of the other Transaction Documents might involve it in liability, it may
refrain from making
distribution until its right to make distribution shall have been finally
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Deal
Agent is to be repaid, each Person to whom any such distribution shall have been
made shall either repay to the Deal Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. AMENDMENTS AND WAIVERS. (a) Except as provided in
SECTION 10.01(b), no amendment or modification of any provision of this
Agreement shall be effective without the written agreement of the Seller, the
Servicer and the Deal Agent, and no termination or waiver of any provision of
this Agreement or consent to any departure therefrom by the Seller shall be
effective without the written concurrence of the Deal Agent. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) Notwithstanding the provisions of SECTION 10.01(a), (i) the
written consent of the Purchaser shall be required for any amendment,
modification or waiver (A) reducing any Capital, or the Yield thereon, for any
Purchase Period, (B) postponing any date for any payment of any Capital or the
Yield thereon, for any Purchase Period, or for any payment of fees payable under
the terms of the Fee Letter, or (C) modifying the provisions of this SECTION
10.01, and (ii) the written consent of the Purchaser shall be required for any
amendment, modification or waiver increasing the Purchase Limit.
(c) Any time that the Commercial Paper is being rated by one or more
of Moody's, S&P and DCR (as applicable) (each, a "Rating Agency"), at the
request of EagleFunding, no material amendment or modification of any material
provisions hereof shall be effective absent written confirmation by each such
Rating Agency that such amendment or modification will not result in a
withdrawal or downgrading of the then-current rating of the Commercial Paper by
such Rating Agency. EagleFunding shall send, or shall cause to be sent, copies
of all amendments, modifications or supplements to this Agreement to each Rating
Agency then rating the Commercial Paper, at the request of EagleFunding, prior
to the execution thereof by all parties thereto.
SECTION 10.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex communication and communication by facsimile copy) and mailed,
telexed, transmitted or delivered, as to each party hereto, at its address set
forth under its name on the signature pages hereof or specified in such party's
Assignment and Acceptance or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices
and communications shall be effective, upon receipt, or in the case of (a)
notice by mail, five days after being deposited in the United States mails,
first class postage prepaid, (b) notice by telex, when telexed against receipt
of answerback, or
(c) notice by facsimile copy, when verbal communication of receipt is
obtained, except that notices and communications pursuant to ARTICLE II shall
not be effective until received.
SECTION 10.03 SETOFF AND COUNTERCLAIM. All payments to be made by
the Seller or the Servicer under this Agreement shall be made free and clear of
any counterclaim, set-off, deduction or other defense, which the Seller or the
Servicer may have against the Purchaser, the Deal Agent, any Liquidity Provider,
any Supplemental Enhancement Provider, or against each other.
SECTION 10.04. NO WAIVER; REMEDIES. No failure on the part of the
Deal Agent or the Purchaser to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 10.05. BINDING EFFECT; ASSIGNABILITY. This Agreement shall
be binding upon and inure to the benefit of the Seller, the Deal Agent, the
Purchaser, the Servicer and their respective successors and permitted assigns.
This Agreement and the Purchaser's rights and obligations hereunder and interest
herein shall be assignable in whole or in part (including by way of the sale of
participation interests therein) by the Purchaser and their respective
successors and assigns. EagleFunding shall send, or cause to be sent, notice of
such proposed assignment by the Purchaser, to each Rating Agency then rating the
Commercial Paper at the request of EagleFunding, prior to the effectiveness
thereof. The Seller may not assign any of its rights and obligations hereunder
or any interest herein without the prior written consent of the Purchaser and
the Deal Agent. The parties to each assignment or participation made pursuant
to this SECTION 10.05 shall execute and deliver to the Deal Agent for its
acceptance and recording in its books and records, an Assignment and Acceptance
or a participation agreement or other transfer instrument reasonably
satisfactory in form and substance to the Deal Agent and the Seller. Each such
assignment or participation shall be effective as of the date specified in the
applicable Assignment and Acceptance or other agreement or instrument only after
the execution, delivery, acceptance and recording as described in the preceding
sentence. The Deal Agent shall notify the Seller of any assignment or
participation thereof made pursuant to this SECTION 10.05. The Purchaser may in
connection with any assignment or participation or any proposed assignment or
participation pursuant to this SECTION 10.05, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Seller and the Purchased Property furnished to the Purchaser by or on behalf of
the Seller or the Servicer.
SECTION 10.06. TERM OF THIS AGREEMENT. This Agreement, including,
without limitation, the Seller's obligation to observe its covenants set forth
in ARTICLES V and VI, and the Servicer's obligation to observe its covenants set
forth in ARTICLE VI, shall remain in full force and effect until the Collection
Date; PROVIDED, HOWEVER, that the rights and remedies with respect to any breach
of any representation and warranty made
or deemed made by the Seller pursuant to ARTICLES III and IV, and the
indemnification and payment provisions of ARTICLE VIII and ARTICLE IX and the
provisions of SECTION 10.10 and SECTION 10.11 shall be continuing and shall
survive any termination of this Agreement.
SECTION 10.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
OBJECTION TO VENUE. THIS AGREEMENT, OTHER THAN THE PROVISIONS RELATING TO THE
CREATION, PERFECTION AND PRIORITY OF THE SECURITY INTEREST IN THE PURCHASED
PROPERTY, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK; THE PROVISIONS OF THIS AGREEMENT RELATING TO THE GRANT,
PERFECTION AND PRIORITY OF THE SECURITY INTEREST IN THE PURCHASED PROPERTY SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE UNIFORM COMMERCIAL CODE AS
IN EFFECT IN THE STATE OF CALIFORNIA. EACH OF THE PARTIES HERETO HEREBY AGREES
TO THE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK.
EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
SECTION 10.08. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE PURCHASER, THE SELLER AND THE DEAL AGENT EACH WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.
SECTION 10.09. COSTS, EXPENSES AND TAXES. (a) In addition to the
rights of indemnification granted to the Deal Agent, the Purchaser and the
Indemnified Parties under ARTICLE VIII hereof, the Seller agrees to pay on
demand all costs and expenses of EagleFunding and the Deal Agent incurred in
connection with the preparation, execution, delivery, administration (including
periodic auditing), amendment or modification of, or any waiver or consent
issued in connection with, this Agreement and the other documents to be
delivered hereunder or in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the Deal Agent and
EagleFunding with respect thereto, and with respect to advising the Deal Agent
and the Purchaser as to their respective rights and remedies under this
Agreement and the other documents to be delivered hereunder or in connection
herewith, and all
costs and expenses, if any (including reasonable counsel fees and expenses),
incurred by the Deal Agent or the Purchaser in connection with the enforcement
of this Agreement and the other documents to be delivered hereunder or in
connection herewith.
(b) The Seller shall pay on demand any and all commissions of
placement agents and dealers in respect of commercial paper notes (to the extent
not otherwise received by the Purchaser as a portion of Yield or Program Fee)
issued to fund the Purchase of any interests in Purchased Property and any and
all stamp, sales, excise and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement, the other documents to be delivered hereunder or any agreement or
other document providing liquidity support, credit enhancement or other similar
support to the Purchaser in connection with this Agreement or the funding or
maintenance of Purchases hereunder.
(c) The Seller shall pay on demand all other costs, expenses and
taxes (excluding income taxes) incurred by an Issuer or any general or limited
partner or shareholder of such Issuer ("OTHER COSTS"), including, without
limitation, the cost of auditing such Issuer's books by certified public
accountants, the cost of rating such Issuer's commercial paper by independent
financial rating agencies, the taxes (excluding income taxes) resulting from
such Issuer's operations, and the reasonable fees and out-of-pocket expenses of
counsel for such Issuer or any counsel for any general or limited partner or
shareholder of such Issuer with respect to (i) advising such Person as to its
rights and remedies under this Agreement and the other documents to be delivered
hereunder or in connection herewith, (ii) the enforcement of this Agreement and
the other documents to be delivered hereunder or in connection herewith or
matters relating to such Issuer's operations and (iii) advising such Person as
to the issuance of its commercial paper notes and action in connection with such
issuance; PROVIDED, HOWEVER, that the Seller and any other Persons who from time
to time sell receivables or interests therein to the Purchaser ("OTHER SELLERS")
each shall be liable for such Other Costs ratably in accordance with the usage
under their respective facilities; and PROVIDED, FURTHER, that if such Other
Costs are attributable to the Seller and not attributable to any Other Seller,
the Seller shall be solely liable for such Other Costs.
SECTION 10.10. NO PROCEEDINGS. Each of the Seller, the Deal Agent,
the Servicer and the Purchaser hereby agrees that it will not institute against,
or join any other Person in instituting against, any Issuer any proceedings of
the type referred to in CLAUSE (I) of SECTION 7.01(E) so long as any commercial
paper issued by such Issuer shall be outstanding or there shall not have elapsed
one year and one day since the last day on which any such commercial paper shall
have been outstanding.
SECTION 10.11. RECOURSE AGAINST CERTAIN PARTIES. No recourse
under or with respect to any obligation, covenant or agreement (including,
without limitation, the payment of any fees or any other obligations) of the
Purchaser as contained in this Agreement or any other agreement, instrument
or document entered into by it pursuant hereto or in connection herewith
shall be had against any administrator of the Purchaser or any incorporator,
affiliate, stockholder, officer, employee or director of the Purchaser
or of any such administrator, as such, by the enforcement of any assessment
or by any legal or equitable proceeding, by virtue of any statute or
otherwise; IT BEING EXPRESSLY AGREED AND UNDERSTOOD that the agreements of
the Purchaser contained in this Agreement and all of the other agreements,
instruments and documents entered into by it pursuant hereto or in connection
herewith are, in each case, solely the corporate obligations of the
Purchaser, and that no personal liability whatsoever shall attach to or be
incurred by any administrator of the Purchaser or any incorporator,
stockholder, affiliate, officer, employee or director of the Purchaser or of
any such administrator, as such, or any other of them, under or by reason of
any of the obligations, covenants or agreements of the Purchaser contained in
this Agreement or in any other such instruments, documents or agreements, or
which are implied therefrom, and that any and all personal liability of every
such administrator of the Purchaser and each incorporator, stockholder,
affiliate, officer, employee or director of the Purchaser or of any such
administrator, or any of them, for breaches by the Purchaser of any such
obligations, covenants or agreements, which liability may arise either at
common law or at equity, by statute or constitution, or otherwise, is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement. The provisions of this SECTION 10.11 shall survive the
termination of this Agreement.
SECTION 10.12. EXECUTION IN COUNTERPARTS; SEVERABILITY; INTEGRATION.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. This Agreement contains the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof,
superseding all prior oral or written understandings other than the fee letters
described in SECTION 2.06(a).
SECTION 10.13. CONFIDENTIALITY. Except to the extent otherwise
required by applicable laws, rules or regulation, unless the provider thereof
shall otherwise consent in writing the Seller agrees that it shall (i) maintain
the confidentiality of information obtained as a result of being a party hereto,
to any related documents or to any of the transactions contemplated hereby or
thereby (including, without limitation, the contents of any summary of
indicative terms and conditions with respect to such transactions, and the
provisions of this Agreement and any of the other Transaction Documents)
("CONFIDENTIAL INFORMATION") and (ii) not disclose, deliver or otherwise make
available to any third party any part of any such Confidential Information;
PROVIDED, HOWEVER, that the Seller may disclose any Confidential Information (w)
to its legal counsel, auditors and accountants, (x) as may be required or
requested by any governmental authority, regulatory body or rating agency, (y)
subject to a written confidentiality agreement having terms substantially
similar to this SECTION 10.13, to any Originator or any Affiliate thereof, any
financial institution or other party that extends or is considering the
extension of material debt or equity financing to any Originator or any
Affiliate thereof, or (z) as may be required or appropriate in response to a
court order or in connection with any litigation; PROVIDED FURTHER, HOWEVER,
that the Seller shall have no obligation of confidentiality whatsoever in
respect of any information which may be generally available to the public or
becomes available to the public through no fault of the Seller, any Originator
or any of their respective Affiliates.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE SELLER: INSURANCE FUNDING LLC
By: /s/ ANDREW L. STIDD
----------------------------------
Name: Andrew L. Stidd
Title: Manager
c/o GSS Holdings II, Inc.
25 West 43rd Street
Suite 704
New York, New York 10036
Attention: Andy Stidd
Facsimile No: (212)302-8767
Telephone No: (212)302-8330
THE DEAL AGENT:
BANCBOSTON ROBERTSON STEPHENS INC.
By: /s/ MARK GALLIVAN
-----------------------------------
Name: Mark Gallivan
Title: Director
BancBoston Robertson Stephens Inc.
100 Federal Street, 9th Floor
Boston, Massachusetts 02110
Attention: Adam Cohen
Facsimile No.: (617) 434-1533
Telephone No.: (617) 434-4301
THE SERVICER: SUPERIOR NATIONAL INSURANCE
GROUP, INC.
By: /s/ ROBERT E. NAGLE
----------------------------------
Name: Robert E. Nagle
Title:
26601 Agoura Road
Calabasas, CA 91302
Attention: J. Chris Seaman,
Executive Vice President and CFO
Phone: 818-880-1600
Facsimile: 818-880-8615
THE PURCHASER: EAGLEFUNDING CAPITAL CORPORATION
By: BankBoston, N.A., as its
attorney-in-fact
By: /s/ MARK GALLIVAN
----------------------------------
Name: Mark Gallivan
Title: Director
EagleFunding Capital Corporation
c/o BancBoston Robertson Stephens Inc.
100 Federal Street, 9th Floor
Boston, Massachusetts 02110
Attention: Mitchell Feldman
Facsimile No.: (617) 434-9591
Telephone No.: (617) 434-5760
c/o Lord Securities Corporation
2 Wall Street, 19th Floor
New York, New York 10005
Attention: Dwight Jenkins
Telephone No.: (212) 346-9007
Facsimile No.: (212) 346-9012