EXECUTION COPY
------------------------------------------------------------------------------
USS RECEIVABLES COMPANY, LTD.,
as Company,
UNITED STATIONERS SUPPLY CO.,
as Servicer,
and
THE CHASE MANHATTAN BANK,
as Trustee and as Securities Intermediary
on behalf of the Holders
UNITED STATIONERS RECEIVABLES MASTER TRUST
POOLING AGREEMENT
Dated as of April 3, 1998
------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . 21
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables . . . . . . . . . . . . . . . 22
Section 2.2 Acceptance by Trustee . . . . . . . . . . . . . . . . . 24
Section 2.3 Representations and Warranties of the Company Relating
to the Company . . . . . . . . . . . . . . . . . . . . 24
Section 2.4 Representations and Warranties of the Company
Relating to the Receivables . . . . . . . . . . . . . . 27
Section 2.5 Transfer of Ineligible Receivables . . . . . . . . . . 28
Section 2.6 Purchase of Investor Certificateholders' Interest in
Trust Portfolio . . . . . . . . . . . . . . . . . . . . 29
Section 2.7 Affirmative Covenants of the Company . . . . . . . . . 29
Section 2.8 Negative Covenants of the Company . . . . . . . . . . . 32
ARTICLE III
RIGHTS OF HOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 3.1 Establishment of Collection Account and Collection
Concentration Account; Certain Allocations . . . . . . 35
ARTICLE IV
ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO THE SERIES RELATING THERETO
ARTICLE V
THE CERTIFICATES AND INTERESTS
Section 5.1 The Certificates . . . . . . . . . . . . . . . . . . . 41
Section 5.2 Authentication of Certificates . . . . . . . . . . . . 41
Section 5.3 Registration of Transfer and Exchange of Certificates . 41
Section 5.4 Mutilated, Destroyed, Lost or Stolen Certificates . . . 44
Section 5.5 Persons Deemed Owners . . . . . . . . . . . . . . . . . 44
Section 5.6 Appointment of Paying Agent . . . . . . . . . . . . . . 44
Section 5.7 Access to List of Investor Certificateholders' Names
and Addresses . . . . . . . . . . . . . . . . . . . . . 45
Section 5.8 Authenticating Agent . . . . . . . . . . . . . . . . . 46
Section 5.9 Tax Treatment . . . . . . . . . . . . . . . . . . . . . 47
Section 5.10 Company Exchanges . . . . . . . . . . . . . . . . . . . 47
Section 5.11 Book-Entry Certificates . . . . . . . . . . . . . . . . 49
Section 5.12 Notices to Clearing Agency . . . . . . . . . . . . . . 49
Section 5.13 Definitive Certificates . . . . . . . . . . . . . . . . 50
ARTICLE VI
OTHER MATTERS RELATING
TO THE COMPANY
Section 6.1 Liability of the Company . . . . . . . . . . . . . . . 50
Section 6.2 Limitation on Liability of the Company . . . . . . . . 50
ARTICLE VII
EARLY AMORTIZATION EVENTS
Section 7.1 Early Amortization Events . . . . . . . . . . . . . . . 51
Section 7.2 Additional Rights Upon the Occurrence of Certain
Events . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VIII
THE TRUSTEE
Section 8.1 Duties of Trustee . . . . . . . . . . . . . . . . . . . 53
Section 8.2 Rights of the Trustee . . . . . . . . . . . . . . . . . 55
Section 8.3 Trustee Not Liable for Recitals in Certificates . . . . 56
Section 8.4 Trustee May Own Certificates . . . . . . . . . . . . . 56
Section 8.5 Trustee's Fees and Expenses . . . . . . . . . . . . . . 56
Section 8.6 Eligibility Requirements for Trustee . . . . . . . . . 57
Section 8.7 Resignation or Removal of Trustee . . . . . . . . . . . 57
Section 8.8 Successor Trustee . . . . . . . . . . . . . . . . . . . 58
Section 8.9 Merger or Consolidation of Trustee . . . . . . . . . . 58
Section 8.10 Appointment of Co-Trustee or Separate Trustee . . . . . 59
Section 8.11 Tax Returns . . . . . . . . . . . . . . . . . . . . . . 60
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates . . . . . . . . . . . . . . . . . . . . . 60
Section 8.13 Suits for Enforcement . . . . . . . . . . . . . . . . . 60
Section 8.14 Rights of Investor Certificateholders to Direct
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 8.15 Reserved. . . . . . . . . . . . . . . . . . . . . . . . 61
Section 8.16 Maintenance of Office or Agency . . . . . . . . . . . . 61
Section 8.17 Limitation of Liability . . . . . . . . . . . . . . . . 61
ii
ARTICLE IX
TERMINATION
Section 9.1 Termination of Trust; Liquidation of Receivables . . . 61
Section 9.2 Clean-Up Call and Final Termination Date of Investor
Certificates of any Series . . . . . . . . . . . . . . 61
Section 9.3 Final Payment with Respect to Any Series . . . . . . . 63
Section 9.4 Company's Termination Rights . . . . . . . . . . . . . 63
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.2 Protection of Right, Title and Interest to Trust . . . 65
Section 10.3 Limitation on Rights of Holders . . . . . . . . . . . . 65
Section 10.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 10.5 Severability of Provisions . . . . . . . . . . . . . . 67
Section 10.6 Assignment . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.7 Certificates Nonassessable and Fully Paid . . . . . . . 67
Section 10.8 Further Assurances . . . . . . . . . . . . . . . . . . 67
Section 10.9 No Waiver; Cumulative Remedies . . . . . . . . . . . . 67
Section 10.10 Counterparts . . . . . . . . . . . . . . . . . . . . . 68
Section 10.11 Third-Party Beneficiaries . . . . . . . . . . . . . . . 68
Section 10.12 Actions by Holders . . . . . . . . . . . . . . . . . . 68
Section 10.13 Merger and Integration . . . . . . . . . . . . . . . . 68
Section 10.14 Headings . . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.15 Security Agreement . . . . . . . . . . . . . . . . . . 68
Section 10.16 No Set-Off . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.17 No Bankruptcy Petition . . . . . . . . . . . . . . . . 68
Section 10.18 Limitation of Liability . . . . . . . . . . . . . . . . 69
Section 10.19 Certain Information . . . . . . . . . . . . . . . . . . 69
Section 10.20 Governing Law . . . . . . . . . . . . . . . . . . . . . 69
EXHIBITS
EXHIBIT A - TO POOLING AGREEMENT -- FORM OF LOCKBOX AGREEMENT
EXHIBIT B - TO POOLING AGREEMENT -- INTERNAL OPERATING PROCEDURES MEMORANDUM
iii
SCHEDULES
1. LIST OF RECEIVABLES
2. TRUST ACCOUNTS
3. ACTIONS WITH RESPECT TO CHATTEL PAPER
4. LOCATION OF CHIEF EXECUTIVE OFFICE OF THE COMPANY
5. CONTRACTUAL OBLIGATIONS
iv
POOLING AGREEMENT, dated as of April 3, 1998, among USS RECEIVABLES
COMPANY, LTD., a Cayman Islands limited liability company (the "Company");
United Stationers Supply Co., an Illinois corporation ("USSC"), in its capacity
as servicer (the "Servicer"); and The Chase Manhattan Bank, a New York banking
corporation, not in its individual capacity, but solely as trustee (in such
capacity, the "Trustee").
W I T N E S S E T H:
WHEREAS, as of the date hereof, (i) the Company, the Servicer and the
Sellers (as hereinafter defined) are entering into a Receivables Sale Agreement
(as amended, supplemented or otherwise modified from time to time, the
"RECEIVABLES SALE AGREEMENT") and (ii) the Company, the Servicer, the Sellers,
in their capacities as servicers of the Receivables (in such capacities, the
"SUB-SERVICERS"), and the Trustee are entering into a Servicing Agreement (as
amended, supplemented or otherwise modified from time to time, the "SERVICING
AGREEMENT"); and
WHEREAS, the parties hereto wish to enter into this Agreement in order
to create a master trust to which the Company will transfer all of its right,
title and interest in, to and under the Receivables and other Trust Assets now
or hereafter owned by the Company and such master trust shall, from time to time
at the direction of the Company, issue one or more Series of Investor
Certificates which shall represent interests in the Receivables and such other
Trust Assets as specified herein and in the Supplement related to such Series.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"ACCOUNTS" shall have the meaning specified in subsection 2.1(a)(v) of
this Agreement.
"ADJUSTED INVESTED AMOUNT" shall have, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"AFFILIATE" shall mean, with respect to any specified Person, any
other Person which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person; PROVIDED that a Person
shall not be deemed an Affiliate of another Person solely by reason of an
individual serving as an officer or director of such other Person. For
purposes of this definition, "control" of a Person means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership
of voting securities or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGENT" shall mean, with respect to any Series, the Person or Persons,
if any, so designated in the related Supplement.
"AGGREGATE ADJUSTED INVESTED AMOUNT" shall mean, with respect to any
date of determination, the sum of the Adjusted Invested Amounts with
respect to all Outstanding Series on such date of determination.
"AGGREGATE ALLOCATED RECEIVABLES AMOUNT" shall mean, with respect to
any date of determination, the sum of the Allocated Receivables Amounts
with respect to all Outstanding Series on such date of determination.
"AGGREGATE DAILY COLLECTIONS" shall mean, with respect to any Business
Day, the aggregate amount of all Collections deposited into the Collection
Account on such day.
"AGGREGATE INVESTED AMOUNT" shall mean, at any date of determination,
the sum of the Invested Amounts with respect to all Outstanding Series on
such date of determination.
"AGGREGATE OVERCONCENTRATION AMOUNT" shall mean, with respect to any
date of determination, the sum of the Overconcentration Amounts of all
Eligible Obligors at the end of the preceding Business Day.
"AGGREGATE RECEIVABLES AMOUNT" shall mean, with respect to any date of
determination, the aggregate Principal Amount of all Eligible Receivables
in the Trust at the end of the Business Day immediately preceding such date
less the sum of: (i) the Aggregate Overconcentration Amount; (ii) the
aggregate Rebate Reduction Amount; and (iii) the aggregate Dilution
Reduction Amount.
"AGGREGATE TARGET RECEIVABLES AMOUNT" shall mean, with respect to any
date of determination, the sum of the Target Receivables Amounts with
respect to all Outstanding Series on such date of determination.
"AGREEMENT" shall mean this Pooling Agreement and all amendments and
modifications hereof and supplements hereto, and including, unless
expressly stated otherwise, each Supplement.
"ALLOCABLE CHARGED-OFF AMOUNT" shall have, with respect to any Series,
the meaning specified in subsection 3.1(e) and in any Supplement for such
Series.
"ALLOCABLE RECOVERIES AMOUNT" shall have, with respect to any Series,
the meaning specified in subsection 3.1(e) and in any Supplement for such
Series.
"ALLOCATED RECEIVABLES AMOUNT" shall mean, with respect to any
Outstanding Series, the meaning assigned to such term in the related
Supplement for such Series.
"AMORTIZATION PERIOD" shall mean, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"APPLICANTS" shall have the meaning specified in Section 5.7.
"AUTHORIZED NEWSPAPER" shall have the meaning specified in Section
7.2.
"BOOK-ENTRY CERTIFICATES" shall mean the Certificates issued to a
Clearing Agency to facilitate the use of book entries by such Clearing
Agency to evidence ownership of beneficial
2
interests in the Certificates, transfers of which beneficial interests
shall be made through book entries by such Clearing Agency, all as
described in Section 5.11; PROVIDED, HOWEVER, that after the occurrence
of a condition whereupon book-entry registration and transfer are no
longer permitted and Definitive Certificates are issued to the
Certificate Book-Entry Holders, such Certificates shall no longer be
"Book-Entry Certificates".
"BUSINESS DAY" shall mean any day other than (i) a Saturday or a
Sunday or (ii) another day on which commercial banking institutions or
trust companies in the State of New York or in the city where the Corporate
Trust Office is located, are authorized or obligated by law, executive
order or governmental decree to be closed; PROVIDED that, when used in
connection with the calculation of Certificate Rates which are determined
by reference to LIBOR, "Business Day" shall mean any Business Day on which
dealings in Dollars between banks may be carried on in both London, England
and New York, New York.
"BUSINESS DAY RECEIVED" shall have the meaning specified in subsection
2.3(e) of the Servicing Agreement.
"CASH DILUTION PAYMENT" shall have the meaning specified in subsection
4.6(a) of the Servicing Agreement.
"CERTIFICATE" shall mean one of any Series of Investor Certificates.
"CERTIFICATE BOOK-ENTRY HOLDER" shall mean, with respect to a
Book-Entry Certificate, the Person who is listed on the books of the
Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency, as the beneficial owner of such Book-Entry
Certificate (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
"CERTIFICATE RATE" shall mean, with respect to any Series and Class of
Certificates, the percentage interest rate (or formula on the basis of
which such interest rate shall be determined) stated in the applicable
Supplement.
"CERTIFICATE REGISTER" shall mean the register maintained pursuant to
Section 5.3, providing for the registration of the Certificates and
transfers and exchanges thereof.
"CERTIFICATEHOLDERS' INTEREST" shall have the meaning specified in
subsection 3.1(b).
"CHARGED-OFF RECEIVABLES" shall mean all Receivables (or portions
thereof) which, in accordance with the Policies of the applicable Seller,
have or should have been written off as uncollectible, including without
limitation the Receivables of any Obligor which becomes the subject of any
voluntary or involuntary bankruptcy proceeding.
"CLASS" shall mean, with respect to any Series, any one of the classes
of Certificates of that Series as specified in the related Supplement.
"CLEAN-UP CALL PERCENTAGE" shall have, with respect to any Series, the
meaning specified in the related Supplement for such Series.
"CLEAN-UP CALL REPURCHASE PRICE" shall have the meaning specified in
Section 9.2.
3
"CLEARING AGENCY" shall mean each organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"CLEARING AGENCY PARTICIPANT" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited
with such Clearing Agency.
"COLLECTION ACCOUNT" shall have the meaning specified in subsection
3.1(a).
"COLLECTION CONCENTRATION ACCOUNT" shall have the meaning specified in
subsection 3.1(a).
"COLLECTIONS" shall mean all collections and all amounts received in
respect of the Receivables, including Recoveries, Seller Repurchase
Payments, Seller Adjustment Payments, Servicer Indemnification Amounts paid
by the Servicer and any other payments received in respect of Dilution
Adjustments, together with all collections received in respect of the
Related Property in the form of cash, checks, wire transfers or any other
form of cash payment, and all proceeds of Receivables and collections
thereof (including, without limitation, collections constituting an account
or general intangible or evidenced by a note, instrument, security,
contract, security agreement, chattel paper or other evidence of
indebtedness or security, whatever is received upon the sale, exchange,
collection or other disposition of, or any indemnity, warranty or guaranty
payable in respect of, the foregoing and all "proceeds", as defined in
Section 9-306 of the UCC, of the foregoing).
"COLLECTOR" shall mean any employee employed by the Servicer or any
Sub-Servicer to collect payments in respect of Receivables in accordance
with the Policies of the Seller which generated such Receivables.
"COMPANION SERIES" shall have the meaning specified in Section 5.10.
"COMPANY" shall mean USS Receivables Company, Ltd., a Cayman Islands
limited liability company.
"COMPANY COLLECTION SUBACCOUNT" shall have the meaning specified in
subsection 3.1(a).
"COMPANY EXCHANGE" shall have the meaning specified in subsection
5.10(a).
"COMPANY INTEREST" shall have the meaning specified in subsection
3.1(b).
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any of
its property is bound.
"CORPORATE TRUST OFFICE" shall mean the principal office of the
Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of this
Agreement is located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(Attention: Structured Finance Services).
"CUT-OFF DATE" shall mean the close of business on February 27, 1998.
"DCR" means Duff & Xxxxxx Credit Rating Company.
4
"DEFAULTED RECEIVABLE" shall mean, as of any date of determination,
any Receivable (a) that is unpaid in whole or in part for more than 60 days
after its original due date or (b) which is, as of such date of
determination, a Charged-Off Receivable, or (c) which is, as of such date
of determination, a Disputed Receivable.
"DEFINITIVE CERTIFICATES" shall have the meaning specified in
Section 5.11.
"DELIVER" or "DELIVERED" or "DELIVERY" means, with respect to any
Eligible Investment, when the steps applicable to such item as specified
below are completed:
(i) if such item is an instrument, delivering such instrument to
the Trustee endorsed to the Trustee or in blank;
(ii) if such item is a certificated security, by delivering such
certificated security to the Trustee in bearer form or in
registered form issued to the Trustee or endorsed to the
Trustee or endorsed in blank;
(iii) if such item is an uncertificated security, (a) the Company
registers the Trustee as the registered owner, upon original
issue or registration of transfer or (b) the Company has
agreed that it will comply with entitlement orders with
respect to such uncertificated security originated by the
Trustee without further consent of the registered owner;
(iv) if such item is a security entitlement other than a United
States Security Entitlement, by causing a securities
intermediary to indicate by book entry that such security
entitlement has been credited to a securities account of the
Trustee with such securities intermediary;
(v) if such item is a United States Security Entitlement, by
causing a securities intermediary to indicate by book entry
that such United States Security Entitlement has been credited
to a securities account of the Trustee with such securities
intermediary; and
(v) if such item is a securities account, by causing the securities
intermediary to indicate by book entry that all security
entitlements carried in the securities account have been
credited to such securities account.
"DEPOSIT DATE" shall have the meaning specified in subsection 3.1(d).
"DEPOSITORY" shall mean, with respect to any Series, the Clearing
Agency designated as the "Depository" in the related Supplement.
"DEPOSITORY AGREEMENT" shall mean, with respect to any Series, an
agreement among the Company, the Trustee and a Clearing Agency, or a letter
of undertaking by the Company and the Trustee, in each case in a form
reasonably satisfactory to the Trustee and the Company.
"DILUTION ADJUSTMENTS" shall mean any rebates, discounts, refunds,
payments or other adjustments (including, without limitation, as a result
of the application of any special or other discounts or any
reconciliations) in respect of any Receivable, the amount owing for any
returns (including, without limitation, as a result of the return of any
defective goods) or cancellations and the amount of any other reduction of
any payment under any Receivable, in each case granted or made by the
applicable Seller or the Servicer to the related Obligor, PROVIDED that a
"Dilution Adjustment" does not include any Charged-Off Receivable or any
refund in either adjustment of any Excluded Receivable.
5
"DILUTION REDUCTION AMOUNT" shall mean the sum of (i) the six-month
rolling average of the dollar amount of credit memos issued for prompt
payment discounts and (ii) the six-month rolling average of credit memos
issued for customer cancellations each calculated for the period of six
consecutive Settlement Periods ending prior to the most recent Settlement
Report Date.
"DISPUTED RECEIVABLE" shall mean as of any Settlement Report Date, the
Receivables shown as such on the Seller's books and records (and that are
not otherwise Defaulted Receivables).
"DISTRIBUTION DATE" shall mean, except as otherwise set forth in the
applicable Supplement, the 20th day of each calendar month, beginning on
May 20, or if such 20th day is not a Business Day, the next succeeding
Business Day.
"DOLLARS," "U.S. DOLLARS", "U.S. $" and "$" shall mean dollars in
lawful currency of the United States of America.
"EARLY AMORTIZATION EVENT" shall have, with respect to any Series, the
meaning specified in Section 7.1 of this Agreement (without taking into
account any Supplements) and in any Supplement for such Series.
"EARLY AMORTIZATION PERIOD" shall have, with respect to any Series,
the definition assigned to such term in Section 7.1 of this Agreement and
in any Supplement for such Series.
"EARLY TERMINATION" shall have the meaning assigned to such term in
the Receivables Sale Agreement.
"ELIGIBLE INSTITUTION" shall mean a depositary institution or trust
company (which may include the Trustee and its affiliates) organized under
the laws of the United States of America or any one of the states thereof
or the District of Columbia; PROVIDED, HOWEVER, that at all times (i) such
depositary institution or trust company is a member of the Federal Deposit
Insurance Corporation, the certificates of deposit or unsecured and
uncollateralized debt obligations of such depositary institution or trust
company are rated in one of the two highest long-term or highest short-term
rating category by each Rating Agency and (ii) such depositary institution
or trust company has a combined capital and surplus of at least
$100,000,000.
"ELIGIBLE INVESTMENTS" shall mean any deposit accounts, securities,
instruments or security entitlements with respect to:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) federal funds, demand deposits, time deposits or
certificates of deposit of any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (or any domestic branch of a foreign bank) and subject
to supervision and examination by Federal or state banking or
depository institution authorities; PROVIDED, HOWEVER, that at the
time of the investment or contractual commitment to invest therein the
commercial paper or other short-term unsecured debt obligations (other
than such obligations the rating of which is based on the credit of a
Person other than such depository institution or trust company)
thereof shall have a credit
6
rating from each of the Rating Agencies in the highest investment
category granted thereby;
(c) commercial paper rated, at the time of the investment or
contractual commitment to invest therein, in the highest rating
category by each Rating Agency;
(d) investments in money market funds (including funds for which
the Trustee or any of its Affiliates is investment manager or adviser)
rated in the highest rating category by each Rating Agency rating such
money market fund;
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b) above; or
(g) any other investment upon satisfaction of the Rating Agency
Condition with respect thereto.
"ELIGIBLE OBLIGOR" shall mean, as of any date of determination, each
Obligor in respect of a Receivable that satisfies the following eligibility
criteria:
(a) it is a resident of the United States, its territories or
possessions or incorporated or organized under the laws of the United
States or any state in the United States;
(b) it is not (i) the United States federal government, or any
subdivision thereof, or any agency, department or instrumentality
thereof, or (ii) a state or local government, or any subdivision
thereof, or any agency, department, or instrumentality thereof;
(c) it is not a Seller or an Affiliate of a Seller; and
(d) it is not the subject of any voluntary or involuntary
bankruptcy proceeding, unless the Obligor is a Qualifying DIP Obligor
with established debtor in possession financing;
PROVIDED, HOWEVER, that if 35% or more of the Principal Amount of
Receivables of an Obligor (measured by the Principal Amount of
Receivables of such Obligor in the Trust) is reported as being aged 90
days or more after the respective original due dates of such
Receivables as at the end of the Settlement Period immediately
preceding the most recent Settlement Report Date (commencing with the
Settlement Report Date occurring in February 1998), such Obligor shall
not be deemed an Eligible Obligor until such time as the Servicer
furnishes the Rating Agencies with a report (which may be part of a
Required Report or a Monthly Settlement Statement) indicating that
less than 35% of the Principal Amount of Receivables of such Obligor
then in the Trust are aged 90 days or more after the respective
original due dates of such Receivables.
7
"ELIGIBLE RECEIVABLE" shall mean, as of any date of determination,
each Receivable owing by an Eligible Obligor that as of such date satisfies
the following eligibility criteria:
(a) it constitutes either (i) an account within the meaning of
Section 9-106 of the UCC of the State the law of which governs the
perfection of the interest granted in it or (ii) chattel paper within
the meaning of Section 9-105 of such UCC, subject, in the case of
chattel paper, to compliance with the procedures set forth in Schedule
3 hereto;
(b) it is not a Defaulted Receivable;
(c) the goods related to it shall have been shipped or the
services related to it shall have been performed and such Receivable
shall have been billed to the related Obligor;
(d) it is denominated and payable only in U.S. Dollars in the
United States;
(e) it arose in the ordinary course of business from the sale of
goods, products or services of the relevant Seller and in accordance
with the Policies of such Seller and, at such date of determination,
no Early Termination has occurred with respect to such Seller,
(f) (i) it does not contravene any applicable law, rule or
regulation and the applicable Seller is not in violation of any law,
rule or regulation in connection with it, in each case which in any
way renders such Receivable unenforceable or would otherwise impair in
any material respect the collectibility of such Receivable and (ii) it
is not subject to any investigation or proceeding known by such Seller
that would reasonably be expected to adversely affect the payment or
enforceability thereof;
(g) if the Company or the Trust is not excluded from the
definition of "investment company" pursuant to Rule 3a-7 under the
1940 Act, it is an account receivable representing all or part of the
sales price of merchandise, insurance or services within the meaning
of Section 3(c)(5) of the 1940 Act;
(h) it is not a Receivable purchased by a Seller from any
Person;
(i) it is not a Receivable for which the applicable Seller has
established an offsetting specific reserve; PROVIDED that a Receivable
subject only in part to the foregoing shall be an Eligible Receivable
to the extent not so subject;
(j) it is not a Receivable with original payment terms in excess
of 120 days from its original invoice date, or in respect of which the
applicable Seller has (i) altered the basis of the aging from the
initial due date for payment such that the final due date extends to a
date more than 120 days from its original invoice date or (ii)
otherwise made any modification except, in the case of each of the
foregoing, in the ordinary course of business and consistent with the
Policies of such Seller;
(k) all required consents, approvals or authorizations necessary
for the creation and enforceability of such Receivable and the
effective assignment and sale thereof by the applicable Seller to the
Company and by the Company to the Trust shall have been obtained with
respect to such Receivable;
8
(l) the applicable Seller is not in default in any material
respect under the terms of the contract, if any, from which such
Receivable arose;
(m) all right, title and interest in it has been validly sold to
the Company by the applicable Seller pursuant to the Receivables Sales
Agreement;
(n) the Company or the Trust will have legal and beneficial
ownership therein free and clear of all Liens other than such Liens
described in clauses (i) and (iv) of the definition of Permitted Liens
and such Receivable has been the subject of either a valid transfer
from the Company to the Trust or, alternatively, the grant of a first
priority perfected security interest therein to the Trust free and
clear of all Liens other than such Liens described in clauses (i) and
(iv) of the definition of Permitted Liens;
(o) it is not subject to any dispute in whole or in part or to
any offset, counterclaim, defense, rescission, recoupment or
subordination; PROVIDED that a Receivable subject only in part to any
of the foregoing shall be an Eligible Receivable to the extent not so
subject;
(p) it is at all times the legal, valid and binding obligation
of the Obligor thereon, enforceable against such Obligor to pay the
full Principal Amount thereof in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or law);
(q) as of the related Receivables Purchase Date, neither the
Company nor the applicable Seller has (i) taken any action that would
impair the rights of the Trustee or the Investor Certificateholders
therein or (ii) failed to take any action that was necessary to avoid
impairing the rights therein of the Trustee or Investor
Certificateholders;
(r) each of the representations and warranties made in the
Receivables Sale Agreement by the applicable Seller with respect to
such Receivable is true and correct in all material respects; and
(s) at the time such Receivable was sold by the applicable
Seller to the Company under the Receivables Sale Agreement, no event
described in subsection 6.01(g) of the Receivables Sale Agreement
(without giving effect to any requirement as to the passage of time)
had occurred with respect to such Seller;
"ELIGIBLE SUCCESSOR SERVICER" shall mean a Person which, at the time
of its appointment as Servicer, (i) is legally qualified and has the
corporate power and authority to service the Receivables transferred to the
Trust, (ii) has demonstrated the ability to service a portfolio of similar
receivables in accordance with the standards set forth in subsection 6.2(c)
of the Servicing Agreement and (iii) has a combined capital and surplus of
at least $5,000,000.
"ENHANCEMENT" shall mean, with respect to any Series, (i) the funds on
deposit in or credited to any bank account (or subaccount thereof) of the
Trust, (ii) any surety arrangement, any letter of credit, guaranteed rate
agreement, maturity guaranty facility, tax protection agreement, interest
rate swap, currency swap or other contract, agreement or arrangement, in
each case for the benefit of any Holders of such Series, as designated in
the applicable
9
Supplement and (iii) the subordination of one Class of Certificates in a
Series to another class in such Series or the subordination of any
Certificate held or interest owned by the Company to the Investor
Certificates of such Series.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EXCHANGEABLE COMPANY INTEREST" shall have the meaning specified in
subsection 3.1(b) and shall be exchangeable as provided in Section 5.10.
"EXCHANGE DATE" shall have the meaning, with respect to any Series
issued pursuant to a Company Exchange, specified in Section 5.10.
"EXCHANGE NOTICE" shall have the meaning, with respect to any Series
issued pursuant to a Company Exchange, specified in Section 5.10.
"EXISTING COMPANION SERIES" shall have the meaning specified in
Section 5.10.
"FORCE MAJEURE DELAY" shall mean, with respect to any Servicing Party,
any cause or event which is beyond the control and not due to the
negligence of such Servicing Party which delays, prevents or prohibits the
Servicer's delivery of Required Reports and/or Monthly Settlement
Statements, including, without limitation, acts of God or the elements and
fire, but excluding strikes by any Servicing Party's employees; PROVIDED
that no such cause or event shall be deemed to be a Force Majeure Delay
unless the Servicer shall have given the Company and the Trustee written
notice promptly after the beginning of such delay.
"FRACTIONAL UNDIVIDED INTEREST" shall mean the fractional undivided
interest in the Certificateholders' Interest evidenced by an Investor
Certificate.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board and the rules
and regulations of the SEC, or such other statements by such other entity
as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"GENERAL OPINION" shall mean, with respect to any action, an Opinion
of Counsel, which shall not be at the expense of the Trustee, to the effect
that (A) such action has been duty authorized by all necessary corporate
action on the part of the Servicer, the applicable Seller or Sellers or the
Company, as the case may be, (B) any agreement executed in connection with
such action constitutes a legal, valid and binding obligation of the
Servicer, the applicable Seller or Sellers or the Company, as the case may
be, enforceable in accordance with the terms thereof, except as
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now
or hereinafter in effect, affecting the enforcement of creditors' rights
and except as such enforceability may be limited by general principles of
equity (whether considered in a proceeding at law or in equity) and (C) any
condition precedent to any such action specified in the applicable
agreement, if any, has been complied with, which opinion in the case of
this clause (C) may, to the extent that such opinion concerns questions of
fact, rely on an Officer's Certificate with respect to such questions of
fact.
10
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"HOLDERS" shall mean the collective reference to (i) the Persons in
whose names the Certificates are registered in the Certificate Register,
(ii) the owner of the Exchangeable Company Interest and (iii) if
applicable, the owner of each Series Subordinated Interest.
"INDEBTEDNESS" shall mean, with respect to any Person at any date, (a)
all indebtedness of such Person for borrowed money, (b) any obligation owed
for the deferred purchase price of property or services except trade
accounts payable arising in the ordinary course of business which are
payable according to ordinary business terms, which purchase price is
evidenced by a note or similar written instrument, (c) notes payable and
drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, (d) that portion of
obligations of such Person under capital leases which is properly
classified as a liability on a balance sheet in conformity with GAAP and
(e) all Indebtedness referred to in clauses (a) through (d) above secured
by any Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof.
"INDEPENDENT PUBLIC ACCOUNTANTS" means any independent certified
public accountants of nationally recognized standing which constitute one
of the accounting firms commonly referred to as the "big six" accounting
firms (or any successor thereto); PROVIDED that such firm is independent
with respect to the Servicer within the meaning of Rule 2-01(b) of
Regulation S-X under the Securities Act.
"INELIGIBLE RECEIVABLE" shall have the meaning specified in Section
2.5(a).
"INITIAL CLOSING DATE" shall mean April 3, 1998.
"INITIAL INVESTED AMOUNT" shall mean, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"INSOLVENCY EVENT" shall mean the occurrence of any one or more of the
Early Amortization Events specified in paragraph (a) of Section 7.1(a).
"INTERNAL OPERATING PROCEDURES MEMORANDUM" shall mean the internal
operating procedures memorandum prepared by the Trustee as set forth in
Exhibit B hereto.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986.
"INVESTED AMOUNT" shall mean, with respect to any Outstanding Series,
the meaning assigned to such term in the related Supplement for such
Series.
"INVESTED PERCENTAGE" shall mean, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"INVESTMENT EARNINGS" shall have the meaning specified in subsection
3.1(c).
"INVESTOR CERTIFICATEHOLDER" shall mean the holder of record of, or
the bearer of, an Investor Certificate.
11
"INVESTOR CERTIFICATES" shall mean the Certificates executed by the
Company and authenticated by or on behalf of the Trustee, substantially in
the form attached to the applicable Supplement, but shall not include any
Certificate held by the Company.
"ISSUANCE DATE" shall mean, with respect to any Series, the date of
issuance of such Series, or the date of any increase to the Invested Amount
of such Series, as specified in the related Supplement.
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset (including, without limitation, any lien which may arise under
relevant state or federal law, if any), (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title
retention agreement relating to such asset and (c) in the case of
securities, any purchase option, call or other similar right of a third
party with respect to such securities; PROVIDED, HOWEVER, that if a lien is
imposed under Section 412(n) of the Internal Revenue Code or Section 302(f)
of ERISA for a failure to make a required installment or other payment to a
plan to which Section 412(n) of the Internal Revenue Code or Section 302(f)
of ERISA applies, then such lien shall not be treated as a "Lien" from and
after the time any Person who is obligated to make such payment pays to
such plan the amount of such lien determined under Section 412(n)(3) of the
Internal Revenue Code or Section 302(f)(3) of ERISA, as the case may be,
and provides to the Trustee, any Agent and each Rating Agency written
evidence reasonably satisfactory to the Rating Agencies of the release of
such lien, or such lien expires pursuant to Section 412(n)(4)(B) of the
Internal Revenue Code or Section 302(f)(4)(B) of ERISA.
"LOCKBOX" shall mean the post office boxes listed on Schedule III to
the Receivables Sale Agreement to which the Obligors are instructed to
remit payments on the Receivables and/or such other post office boxes as
may be established pursuant to Section 2.3 of the Servicing Agreement.
"LOCKBOX ACCOUNT" shall mean the intervening account used by a Lockbox
Processor for deposit of funds received in a Lockbox prior to their
transfer to the Collection Concentration Account or the Collection Account.
"LOCKBOX AGREEMENT" shall mean, with respect to each Lockbox
Processor, a lockbox agreement (i) substantially in the forms set forth as
Exhibit A hereto, (ii) or in such form as the lockbox processor party
thereto employs in the ordinary course of its business for transactions of
a type similar to the one contemplated by this Agreement and which is
approved by the Trustee.
"LOCKBOX PROCESSOR" shall mean the depositary institution or
processing company (which may be the Trustee) which processes payments on
the Receivables sent by the Obligors thereon forwarded to a Lockbox.
"MATERIAL ADVERSE EFFECT" shall mean (i) with respect to a Seller or a
Servicing Party, (a) a material impairment of the ability of such Seller or
such Servicing Party, as the case may be, to perform its obligations under
the Transaction Documents, (b) a material impairment of the validity or
enforceability of any of the Transaction Documents against such Seller or
such Servicing Party, (c) a material impairment of the collectibility of
the Receivables taken as a whole or (d) a material impairment of the
interests, rights or remedies of the Trustee or the Investor
Certificateholders under or with respect to the Transaction Documents or
the Receivables taken as a whole and (ii) with respect to the Company, (a)
a material impairment of the ability of the Company to perform its
obligations under any Transaction Document to which it is a party, (b) a
12
material impairment of the validity or enforceability of any of the
Transaction Documents against the Company, (c) a material impairment of the
collectibility of the Receivables taken as a whole or (d) a material
impairment of the interests, rights or remedies of the Trustee or the
Investor Certificateholders under or with respect to the Transaction
Documents or the Receivables taken as a whole.
"MONTHLY SERVICING FEE" shall have the meaning specified in subsection
2.5(a) of the Servicing Agreement.
"MONTHLY SETTLEMENT STATEMENT" shall have the meaning specified in
Section 4.2 of the Servicing Agreement.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc.
"NEW SERIES" shall have the meaning specified in Section 5.10.
"1940 ACT" shall mean the Investment Company Act of 1940, as amended.
"OBLIGOR" shall mean, with respect to any Receivable, the party
obligated to make payments with respect to such Receivable, including any
guarantor thereof.
"OFFICER'S CERTIFICATE" shall mean, unless otherwise specified in this
Agreement, a certificate signed by the Chairman of the Board, Vice Chairman
of the Board, President, Chief Financial Officer, any Vice President, any
Secretary or any Treasurer of the Servicer or the Company, as the case may
be, or, in the case of a Successor Servicer, a certificate signed by a Vice
President and the financial controller (or an officer holding an office
with equivalent or more senior responsibilities) of such Successor
Servicer.
"OPINION OF COUNSEL" shall mean a written opinion or opinions of one
or more counsel (who may be internal counsel) to the Company or the
Servicer, designated by the Company or the Servicer, as the case may be,
which is reasonably acceptable to the Trustee.
"OPTIONAL TERMINATION NOTICE" shall have, with respect to any Series,
the meaning specified in the related Supplement for such Series.
"OUTSTANDING SERIES" shall mean, at any time, a Series issued pursuant
to an effective Supplement for which the Series Termination Date for such
Series has not occurred.
"OVERCONCENTRATION AMOUNT" shall mean, at any date with respect to an
Eligible Obligor, the Principal Amount of Eligible Receivables due from
such Obligor at such date which, expressed as a percentage of the Principal
Amount of all Eligible Receivables in the Trust at such date, exceeds the
percentage set forth below for the applicable category of that Obligor at
such date (or such higher percentage after giving effect to which the
Rating Agency Condition is satisfied):
MINIMUM RATING
S&P DCR Moody's Percentage
--- --- ------- ----------
13
A-1 or A+ D-1 or A+ P-1 or A1 15%
A-2 or BBB+ D-2 or BBB+ P-2 or Baa1 10%
A-3 or BBB- D-3 or BBB- P-3 or Baa3 5%
Not rated/other Not rated/other Not rated/other 2.5%
; PROVIDED, HOWEVER, that all Eligible Obligors that are Affiliates of each
other shall be deemed to be a single Eligible Obligor to the extent the
Servicer knows or has reason to know of the affiliation and in that case,
the applicable debt rating for such group of Obligors shall be the debt
rating of the ultimate parent of the group; PROVIDED, FURTHER, that the
debt ratings set forth under the column headed "Moody's" or "DCR" in the
above table and the references in the immediately succeeding paragraph to
Moody's and DCR shall apply only if either Moody's or DCR is a Rating
Agency under any Supplement for an Outstanding Series.
The percentage applicable to any Obligor (or the ultimate parent of the
affiliated group of which such Obligor is a member, as the case may be)
will be the percentage associated with the lower of such Obligor's (or such
ultimate parent's, as the case may be) debt rating issued by S&P, DCR, and
Moody's; PROVIDED THAT: (i) if such debt is rated only by S&P, the
applicable percentage will be the percentage associated with the rating
issued by S&P and (ii) if S&P issues no rating with respect to such Obligor
(or such ultimate parent, as the case may be), then the percentage
applicable to such Obligor (or such ultimate parent, as the case may be)
shall be the percentage associated with the categories "Not rated/other"
and "Less than D-3 or BBB-/Not rated." The ratings specified in the table
are minimums for each percentage category, so that a rating not shown in
the table falls in the category associated with the highest rating shown in
the table that is lower than that rating. Notwithstanding the above, the
percentage applicable to any Special Obligor will be 5.0%.
"PAYING AGENT" shall mean any paying agent and co-paying agent
appointed pursuant to Section 5.6 and, unless otherwise specified in the
related Supplement of any Outstanding Series and with respect to such
Series, shall initially be the Trustee.
"PERMITTED LIENS" shall mean, at any time, for any Person:
(i) Liens created pursuant to this Agreement or the Receivables
Sale Agreement;
(ii) Liens for taxes, assessments or other governmental charges
or levies not yet due and payable or which are being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of such Person;
(iii) Liens on a Receivable arising as a result of offsetting
specific reserves and rights of set-off, counterclaim or other
defenses with respect to such Receivable;
(iv) Any other Liens securing obligations not in excess of
$50,000 in the aggregate at any one time outstanding.
14
"PERSON" shall mean any individual, partnership, limited liability
company, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"POLICIES" shall mean, with respect to each Seller, the credit and
collection policies of such Seller, copies of which have been delivered to
the Trustee, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the Transaction Documents.
"POOLING AND SERVICING AGREEMENTS" shall mean, collectively, this
Agreement, the Servicing Agreement and each Supplement for an Outstanding
Series.
"POTENTIAL EARLY AMORTIZATION EVENT" shall mean an event which, with
the giving of notice and/or the lapse of time, would constitute an Early
Amortization Event hereunder or under any Supplement.
"POTENTIAL SERVICER DEFAULT" shall mean an event which, with the
giving of notice and/or the lapse of time, would constitute a Servicer
Default hereunder or under any Supplement.
"PREPAYMENT REQUEST" shall have, with respect to any Series, the
meaning specified in the related Supplement.
"PRINCIPAL AMOUNT" shall mean, with respect to any Receivable, the
amount due thereunder.
"PRINCIPAL TERMS" shall have the meaning, with respect to any Series
issued pursuant to a Company Exchange, specified in subsection 5.10(c).
"PUBLICATION DATE" shall have the meaning specified in Section 7.2.
"QUALIFYING DIP OBLIGOR" shall mean, as of any date of determination,
an Obligor (i) that is a debtor in possession in any voluntary or
involuntary bankruptcy proceeding, for which no trustee or examiner has
been appointed and no application is pending for the appointment of a
trustee or examiner, (ii) in a case under Chapter 11 of the Bankruptcy Code
in which no motion has been made for an order liquidating all or any
substantial portion of such debtor's assets and no motion has been made for
the conversion of such case to a case under chapter 7 of the Bankruptcy
Code, (iii) whose Receivables would, if included in the Trust Assets,
account for less than 1% of the aggregate Principal Amount of all
Receivables included in the Trust, (iv) as to which no party under any
Series Supplement has, in the exercise of its reasonable discretion, given
notice to the Company and the Servicer that such Obligor shall not be
included as an Eligible Obligor and (v) for which the Obligor has obtained
the approval of a bankruptcy court to make payment on any Receivables.
"RATING AGENCY" shall mean, with respect to each Outstanding Series,
any rating agency or agencies designated as such in the related Supplement;
PROVIDED that in the event that no Outstanding Series has been rated, then
for purposes of the definitions of "Eligible Institution" and "Eligible
Investments," "RATING AGENCY" shall mean S&P and references to "each Rating
Agency" shall refer solely to S&P.
15
"RATING AGENCY CONDITION" shall mean, subject to the applicable
Supplement, with respect to any action, that each Rating Agency shall have
notified the Company, the Servicer, any Agent and the Trustee in writing
that such action will not result in a reduction or withdrawal of the rating
of any Outstanding Series or any Class of any such Outstanding Series with
respect to which it is a Rating Agency.
"REBATE REDUCTION AMOUNT" shall mean, as of any Settlement Report
Date, the highest cumulative value of accruals at the end of a Settlement
Period for rebates for electronic funds transfer payments over the prior 6
consecutive Settlement Periods (including the Settlement Period ending on
such Settlement Report Date).
"RECEIVABLE" shall mean the indebtedness and payment obligations of
any Person to a Seller (including, without limitation, obligations
constituting an account or general intangible or evidenced by a note,
instrument, contract, security agreement, chattel paper or other evidence
of indebtedness or security) arising from a sale of products or the
provision of service by such Seller, including, without limitation, any
right to payment for products sold or for services rendered, and including
the right to payment of any interest, sales taxes, finance charges,
returned check or late charges and other obligations of such Person with
respect thereto.
"RECEIVABLES PURCHASE DATE" shall mean, with respect to any
Receivable, the Business Day on which the Company purchases such Receivable
from the applicable Seller and transfers such Receivable to the Trust.
"RECEIVABLES SALE AGREEMENT" shall have the meaning specified in the
recitals hereto.
"RECORD DATE" shall mean, with respect to any Series, the date
specified as such in the applicable Supplement.
"RECOVERIES" shall mean all amounts collected (net of out-of-pocket
costs of collection) in respect of Charged-Off Receivables.
"RELATED PROPERTY" shall mean, with respect to each Receivable:
(a) all of the applicable Seller's interest in the goods
(including returned goods), if any, relating to the sale which gave
rise to such Receivable;
(b) all other security interests or Liens, and the applicable
Seller's interest in the property subject thereto, from time to time
purporting to secure payment of such Receivable, together with all
financing statements signed by an Obligor describing any collateral
securing such Receivable; and
(c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable;
in the case of clauses (b) and (c), without limitation, whether pursuant to
the contract related to such Receivable or otherwise or pursuant to any
obligations evidenced by a note, instrument, contract, security agreement,
chattel paper or other evidence of indebtedness or security and the proceeds
thereof.
16
"REPORTED PERIOD" shall have the meaning specified in Section 4.1 of
the Servicing Agreement.
"REQUIRED REPORT" shall have the meaning specified in Section 4.1 of
the Servicing Agreement.
"REQUIREMENT OF LAW" for any Person shall mean the certificate or
articles of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty,
rule or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"RESIGNATION NOTICE" shall have the meaning specified in Section 6.2
of the Servicing Agreement.
"RESPONSIBLE OFFICER" shall mean (i) when used with respect to the
Trustee, any officer within the Corporate Trust Office of the Trustee
including any Vice President, any Assistant Vice President, Trust Officer
or Assistant Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and, in each case, having direct responsibility for the
administration of this Agreement and (ii) when used with respect to any
other Person, the Chairman of the Board, President, Chief Financial
Officer, any Vice President, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary of such Person.
"REVOLVING PERIOD" shall mean, with respect to any Outstanding Series,
the meaning assigned to such term in the related Supplement for such
Series.
"S&P" shall mean Standard & Poor's Ratings Services, or any successor
thereto.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIES INTERMEDIARY" shall have the meaning specified in Section
3.1(c)(ii).
"SEC" shall mean the Securities and Exchange Commission.
"SELLERS" shall mean United Stationers Supply Co. in its capacity as
Seller under the Receivables Sale Agreement and any directly or indirectly
wholly-owned subsidiary of United Stationers Inc. which has been added as a
Seller in accordance with the provisions of the Receivables Sale Agreement
and the other Transaction Documents (but, in each case, excluding any such
Subsidiaries which have been terminated as Sellers in accordance with the
provisions thereof and of the other Transaction Documents), all of the
foregoing in their capacities as Sellers under the Receivables Sale
Agreement; each, individually, a "SELLER".
"SELLER ADJUSTMENT PAYMENTS" shall have the meaning specified in
Section 2.05 of the Receivables Sale Agreement.
"SELLER REPURCHASE PAYMENTS" shall have the meaning specified in
Section 2.06 of the Receivables Sale Agreement.
17
"SERIES" shall mean any series of Investor Certificates, the terms of
which are set forth in a Supplement.
"SERIES ACCOUNT" shall mean any deposit, trust, escrow, securities,
reserve or similar account maintained for the benefit of the Investor
Certificateholders of any Series or Class, as specified in any Supplement.
"SERIES COLLECTION SUBACCOUNT" shall have the meaning specified in
subsection 3.1(a).
"SERIES COLLECTION SUB-SUBACCOUNTS" shall have the meaning specified
in subsection 3.1(a).
"SERIES NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
meaning specified in subsection 3.1(a).
"SERIES PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the meaning
specified in subsection 3.1(a).
"SERIES SUBORDINATED INTEREST" shall mean, with respect to any Series,
the undivided retained interest of the Company in the Trust Assets, if any,
which is subordinated to the Certificateholders' Interest of such Series,
as set forth in the Supplement for such Series.
"SERIES TERMINATION DATE" shall mean, with respect to any Outstanding
Series, the meaning assigned to such term in the related Supplement for
such Series.
"SERVICE TRANSFER" shall have the meaning specified in Section 6.1 of
the Servicing Agreement.
"SERVICER" shall initially mean United Stationers Supply Co. in its
capacity as Servicer under the Transaction Documents and, after any Service
Transfer, the Successor Servicer.
"SERVICER DEFAULT" shall have, with respect to any Series, the meaning
specified in Section 6.1 of the Servicing Agreement and, if applicable, as
supplemented by the related Supplement for such Series.
"SERVICER INDEMNIFICATION AMOUNT" shall have the meaning specified in
Section 5.2(c) of the Servicing Agreement.
"SERVICER SITE REVIEW" shall mean the review performed by the Trustee
of the servicing operations of the Servicer at its offices, as provided for
in subsection 8.1(f) and as described in any Supplement or attachment
thereto.
"SERVICING AGREEMENT" shall have the meaning specified in the recitals
hereto.
"SERVICING FEE" shall have the meaning specified in subsection 2.5(a)
of the Servicing Agreement.
"SERVICING FEE PERCENTAGE" shall mean 1% per annum.
"SERVICING PARTY" shall mean the collective reference to the Servicer
and each Sub-Servicer.
18
"SETTLEMENT PERIOD" shall mean (i) initially, the period commencing on
the date hereof and ending on the last day of the succeeding calendar
month, and (ii) thereafter, each calendar month.
"SETTLEMENT REPORT DATE" shall mean, except as otherwise set forth in
the applicable Supplement, the 15th day of each calendar month (or if such
15th day is not a Business Day, the next succeeding Business Day).
"SPECIAL ALLOCATION SETTLEMENT REPORT DATE" shall have the meaning
specified in subsection 3.1(e).
"SPECIAL OBLIGORS" shall mean as of any Settlement Report Date and
continuing to but not including the next Settlement Report Date, the
Obligors designated as such by the Company, each of which shall be an
Obligor that is unrated or rated below "investment grade" as to which the
concentration limit would otherwise be 2.5% but which, as to those Obligors
designated as Special Obligors, shall be 5%. The Company may designate up
to three Special Obligors in any one Settlement Period, which shall be
selected from the following Companies: BT Office Products International
Inc., Corporate Express Inc., U.S. Office Products Company, Inc., Staples
Inc., Bestbuy Supply Depot Corp. or Boise Cascade Office Products
Corporation.
"SPECIFIED BANKRUPTCY OPINION PROVISIONS" shall mean the factual
assumptions and the actions to be taken by any Seller or the Company, in
each case as specified in the legal opinion of Weil, Gotshal & Xxxxxx LLP
relating to certain bankruptcy matters and delivered on the Initial Closing
Date.
"STANDBY LIQUIDATION SYSTEM" shall mean a system by which the Trustee
will receive and store electronic information regarding Receivables from
the Servicer and each Sub-Servicer which may be utilized in the event of a
liquidation of the Receivables to be carried out by the Trustee established
pursuant to subsection 8.1(f) and as described in any Supplement or
attachment thereto.
"SUBORDINATED NOTE" shall have the meaning specified in Section 8.01
of the Receivables Sale Agreement.
"SUB-SERVICER" shall have the meaning specified in the recitals
hereto.
"SUBSIDIARY" shall mean, as to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests
having by the terms thereof ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
directly or indirectly owned, or the management of which is otherwise
controlled, through one or more intermediaries, or both, by such Person.
"SUCCESSOR SERVICER" shall have the meaning specified in Section 6.2
of the Servicing Agreement.
"SUPPLEMENT" shall mean, with respect to any Series, a supplement to
this Agreement complying with the terms of Section 5.10(c), executed in
conjunction with the issuance of any Series.
19
"TARGET RECEIVABLES AMOUNT" shall mean, with respect to any
Outstanding Series, the meaning assigned to such term in the related
Supplement for such Series.
"TARGETED HOLDER" shall have the meaning specified in subsection
5.3(e).
"TARGETED INVESTOR CERTIFICATE" shall have the meaning specified in
subsection 5.3(d).
"TAX OPINION" shall mean, with respect to any action, an Opinion of
Counsel, which shall not be at the expense of the Trustee, to the effect
that, for federal income tax purposes, (i) such action will not adversely
affect the characterization as debt or as debt or an interest in a
partnership (other than a partnership taxable as a corporation), as the
case may be, of any Investor Certificates of any Outstanding Series or
Class not retained by the Company, (ii) following such action, the Trust
will not be classified as an association or a publicly traded partnership
taxable as a corporation, (iii) such action will not cause or constitute a
taxable event in which gain or loss would be recognized by any Investor
Certificateholder or the Trust and (iv) in the case of Section 5.9, the
Investor Certificates of the new Series which are not retained by the
Company will be characterized as debt or as an interest in a partnership
(other than a partnership taxable as a corporation).
"TERMINATION NOTICE" shall have the meaning specified in Section 6.1
of the Servicing Agreement.
"TRANSACTION DOCUMENTS" shall mean the collective reference to this
Agreement, the Servicing Agreement, each Supplement with respect to any
Outstanding Series, the Receivables Sale Agreement, the Lockbox Agreements,
the Certificates and any other documents delivered pursuant to or in
connection therewith.
"TRANSFER AGENT AND REGISTRAR" shall have the meaning specified in
Section 5.3 and shall initially be the Trustee.
"TRANSFER DEPOSIT AMOUNT" shall have the meaning specified in
subsection 2.5(b).
"TRANSFER OBLIGATION DATE" shall have the meaning specified in
subsection 2.5(a).
"TRANSFERRED AGREEMENTS" shall have the meaning specified in
subsection 2.1(b).
"TRUST" shall mean the United Stationers Receivables Master Trust
created by this Agreement.
"TRUST ACCOUNT" shall have the meaning, with respect to any Series,
specified in the applicable Supplement for such Series.
"TRUST ASSETS" shall have the meaning specified in Section 2.1.
"TRUST TERMINATION DATE" shall have the meaning specified in
subsection 9.1(a).
"TRUSTEE" shall mean the institution executing this Agreement as
trustee, or its successor in interest or any successor trustee appointed as
herein provided.
20
"UCC" shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction or if no jurisdiction is
specified, as in effect in the State of New York.
"UNITED STATES REGULATIONS" means 31 C.F.R. Part 357; 12 C.F.R. Part
615, Subpart O; 12 C.F.R. Part 912; 12 C.F.R. Part 1511; 24 C.F.R. Part 81;
31 C.F.R. Part 354; and 18 C.F.R. Part 1314.
"UNITED STATES SECURITIES ENTITLEMENT" means a "Security Entitlement"
as defined in a United States Regulation.
"USSC" shall have the meaning specified in the recitals hereto.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. (a) All terms defined
in this Agreement, the Servicing Agreement or in any Supplement shall have
such defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partly defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under GAAP. To the
extent that the definitions of accounting terms herein are inconsistent with
the meanings of such terms under GAAP, the definitions contained herein shall
control.
(c) The words "hereof', "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and Section,
subsection, Schedule and Exhibit references contained in this Agreement are
references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(d) The definitions contained in Section 1.1 are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(e) Where a definition contained in Section 1.1 specifies that such
term shall have the meaning set forth in the related Supplement, the
definition of such term set forth in the related Supplement may be preceded
by a prefix indicating (or include in its definition) the specific Series or
Class to which such definition shall apply.
(f) Where reference is made in this Agreement or any related
Supplement to the principal amount of Receivables, such reference shall,
unless explicitly stated otherwise, be deemed a reference to the Principal
Amount (as such term is defined in Section 1.1) of such Receivables.
(g) Any reference herein or in any other Transaction Document to a
provision of the Internal Revenue Code or ERISA shall be deemed a reference
to any successor provision thereto.
(h) To the extent that any provision of this Agreement or any other
Transaction Document requires that a calculation be performed with respect to
a date occurring prior to the effective date of such Transaction Document,
such calculation shall be performed as provided therein as though such
Transaction Document had been effective on and as of such prior date.
21
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 CONVEYANCE OF RECEIVABLES.
(a) By execution and delivery of this Agreement, the Company does
hereby transfer, assign, set over and otherwise convey to the Trust for the
benefit of the Holders, without recourse (except as specifically provided
herein), all of its present and future right, title and interest in, to and
under:
(i) all Receivables, including those existing at the close of
business on the Initial Closing Date and all Receivables thereafter
arising from time to time until but not including the Trust
Termination Date;
(ii) the Related Property;
(iii) all Collections;
(iv) all rights (including rescission, replevin or reclamation)
relating to any Receivable or arising therefrom;
(v) the Collection Account, each Lockbox and each Lockbox
Account (collectively, the "ACCOUNTS"), including (A) all funds and
other evidences of payment held therein and all certificates and
instruments, if any, from time to time representing or evidencing any
of such Accounts or any funds and other evidences of payment held
therein, (B) all investments of such funds held in such Accounts and
all certificates and instruments from time to time representing or
evidencing such investments, (C) all Eligible Investments, (D) all
notes, certificates of deposit and other instruments from time to time
hereafter delivered or transferred to, or otherwise possessed by, the
Trustee for and on behalf of the Company in substitution for any of
the then existing Accounts and (E) all interest, dividends, cash,
instruments and other property from time to time held in any and all
of the then existing Accounts; and
(vi) all monies due or to become due and all amounts received
with respect to the items listed in clauses (i) through (v) and all
proceeds (including, without limitation, whatever is received upon the
sale, exchange, collection or other disposition of the foregoing and
all "proceeds" as defined in Section 9-306 of the UCC as in effect in
the State of New York) thereof, including all Recoveries relating
thereto;
(b) The Company hereby transfers, assigns, sets over and otherwise
conveys to the Trustee for the benefit of the Holders, and grants to the
Trustee, for the benefit of the Holders, a first priority perfected security
interest in, all its right, title and interest in, to and under the
following: each of the Receivables Sale Agreement and the Servicing
Agreement, including in respect of each agreement, (A) all property assigned
thereunder and all rights of the Company to receive monies due and to become
due under or pursuant to such agreement, whether payable as fees, expenses,
costs or otherwise, (B) all rights of the Company to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to such agreement,
(C) claims of the Company for damages arising out of or for breach of or
default under such agreement, (D) the right of the Company to amend, waive or
terminate such agreement, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder, (E) all
22
other rights, remedies, powers, privileges and claims of the Company under or
in connection with such agreement (whether arising pursuant to such agreement
or otherwise available to the Company at law or in equity), including the
rights of the Company to enforce such agreement and to give or withhold any
and all consents, requests, notices, directions, approvals, extensions or
waivers under or in connection therewith and (F) all monies due or to become
due and all amounts received with respect to the items listed in clauses (A)
through (F) and all proceeds (including, without limitation, whatever is
received upon the sale, exchange, collection or other disposition of the
foregoing and all "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of New York) thereof, including all Recoveries relating
thereto (all of the foregoing set forth in subclauses (A)-(F), inclusive, the
"TRANSFERRED AGREEMENTS");
Such property described in the foregoing paragraphs (a) and (b), together
with all investments and all monies on deposit in any other bank account or
accounts maintained for the benefit of any Holders for payment to Holders
shall constitute the assets of the Trust (the "TRUST ASSETS").
Subject to Section 5.9, although it is the intent of the parties to
this Agreement that the conveyance of the Company's right, title and interest
in, to and under the Receivables and the other Trust Assets described in
paragraph (a) pursuant to this Agreement shall constitute either a purchase
and sale or a loan, in the event that such conveyance is deemed to create a
loan, the Company hereby grants to the Trustee, for the benefit of the
Holders, a perfected first priority security interest in all of the Company's
present and future right, title and interest in, to and under the Receivables
and such other Trust Assets to secure the payment of the applicable Invested
Amounts, interest thereon and the other fees and expenses due to the Holders,
and that this Agreement shall constitute a security agreement under
applicable law in favor of the Trustee, for the benefit of the Holders.
(c) The assignment, set over and conveyance to the Trust pursuant
to Section 2.1(a) shall be made to the Trustee, on behalf of the Trust, and
each reference in this Agreement to such assignment, set over and conveyance
shall be construed accordingly. In connection with the foregoing assignment,
except as expressly provided otherwise in the Transaction Documents, the
Company, the Servicer and each Sub-Servicer agree to deliver to the Trustee
each Trust Asset (including any original documents or instruments included in
the Trust Assets as are necessary to effect such assignment) in which the
transfer of an interest is perfected under the UCC or otherwise solely by
possession and not by filing a financing statement or similar document.
Notwithstanding the assignment of the Transferred Agreements set
forth in Section 2.1(b), the Company does not hereby assign or delegate any
of its duties or obligations under the Receivables Sale Agreement to the
Trust or the Trustee and neither the Trust nor the Trustee accepts such
duties or obligations, and the Company shall continue to have the right and
the obligation to purchase Receivables from the Sellers thereunder from time
to time. The foregoing assignment, set-over and conveyance does not
constitute and is not intended to result in a creation or an assumption by
the Trust, the Trustee, any Investor Certificateholder or the Company, in its
capacity as a Holder, of any obligation of the Servicer, the Company, any
Seller or any other Person in connection with the Receivables or under any
agreement or instrument relating thereto, including, without limitation, any
obligation to any Obligor.
In connection with such assignment, the Company agrees to record
and file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) or,
where applicable, registrations in the appropriate records, (i) with respect
to the Receivables now existing and hereafter created and (ii) with respect
to any other Trust Assets a security interest in which may be perfected under
the relevant UCC, legislation or similar statute by such filing or
registration, as the case may be, in each case meeting the requirements of
applicable law in such manner and in such jurisdictions as are necessary to
perfect and maintain perfection of the assignment of the
23
Receivables and such other Trust Assets (excluding returned merchandise) to
the Trust, and to deliver a file-stamped copy or certified statement of such
financing statement or registration or other evidence of such filing or
registration to the Trustee on or prior to the date of issuance of any
Certificates. The Trustee shall be under no obligation whatsoever to file
such financing statement, or a continuation statement to such financing
statement, or to make any other filing or other registration under the UCC,
other relevant legislation or similar statute in connection with such
transfer. The Trustee shall be entitled to conclusively rely on the filings
or registrations made by or on behalf of the Company without any independent
investigation and the Company's obligation to make such filings as evidence
that such filings have been made.
In connection with such assignment, the Company further agrees, at
its own expense, on or prior to the Initial Closing Date (a) to indicate, or
to cause to be indicated, in its computer files containing its master
database of Receivables and to cause each Seller to indicate in its records
containing its master database of Receivables that Receivables have been
conveyed to the Company or the Trust, as the case may be, pursuant to the
Receivables Sale Agreement or this Agreement, respectively, for the benefit
of the Holders and (b) to deliver, or cause to be delivered, to the Trustee
computer tapes or disks containing a true and complete list of all
Receivables transferred to the Trust specifying for each such Receivable, as
of the Cut-Off Date, (i) the identification or reference number assigned to
such Receivables by the Company and (ii) the Principal Amount of such
Receivables. Such tapes or disks shall be marked as Schedule 1 to this
Agreement and are hereby incorporated into and made a part of this Agreement.
Section 2.2 ACCEPTANCE BY TRUSTEE. (a) The Trustee hereby
acknowledges its acceptance on behalf of the Trust of all right, title and
interest to the property, now existing and hereafter created, assigned to the
Trust pursuant to Section 2.1 and declares that it shall maintain such right,
title and interest, upon the trust herein set forth, for the benefit of all
Holders.
(b) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY RELATING
TO THE COMPANY. The Company hereby represents and warrants to the Trustee
and the Trust, for the benefit of the holders of Certificates of each
Outstanding Series, as of the Issuance Date of such Series, that:
(a) CORPORATE EXISTENCE; COMPLIANCE WITH LAW. The Company (i) is a
limited liability company duly formed, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has all
requisite limited liability company power and authority and all legal right
to own and operate its properties, to lease the properties it operates as
lessee and to conduct its business as now conducted and proposed to be
conducted, (iii) is duly qualified as a foreign limited liability company and
is in good standing under the laws of each jurisdiction in which its business
or activities requires such qualification, except where the failure to so
qualify and be in good standing would not reasonably be likely to cause a
Material Adverse Effect, and (iv) is in compliance with all material
Requirements of Law. The Company does not engage in activities prohibited by
the Transaction Documents or its memorandum and articles of association.
(b) CORPORATE POWER; AUTHORIZATION. The Company has the corporate
power and authority, and the legal right, to execute, deliver and perform
this Agreement and the other Transaction Documents to which it is a party and
has taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement and the other Transaction Documents to
which it is a party. No consent or authorization of, filing with, notice to
or other act by or in respect of, any Governmental
24
Authority or any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this Agreement and the
other Transaction Documents to which it is a party by or against the Company
other than (i) those which have duly been obtained or made and are in full
force and effect on the Initial Closing Date, (ii) any filings of UCC-1
financing statements or similar documents necessary to perfect the Company's
or the Trust's interest in the Trust Assets and (iii) those that may be
required under state securities or "blue sky" laws in connection with the
offering or sale of certificates. This Agreement and each other Transaction
Document to which the Company is a party have been duly executed and
delivered on behalf of the Company.
(c) ENFORCEABILITY. This Agreement and each of the other
Transaction Documents to which the Company is a party (i) constitute the
legal, valid and binding obligations of the Company enforceable against it in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights generally and except as such enforceability
may be limited by general principles of equity (whether considered in a
proceeding at law or in equity) and (ii) are effective and all action has
been taken to cause compliance with paragraph (n) of the definition of
Eligible Receivables.
(d) NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Company is a party
will not violate any Requirement of Law, and will not result in, or require,
the creation or imposition of any Lien (other than Liens contemplated or
permitted hereby) on any of its properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.
(e) NO MATERIAL LITIGATION. There are no actions, suits,
investigations or proceedings at law or in equity (including, without
limitation, injunctions, writs or restraining orders) by or before any
arbitrator, court or Governmental Authority now pending or, to the knowledge
of the Company, threatened against or affecting the Company or any material
properties, revenues or rights of the Company which (i) involve this
Agreement or any of the other Transaction Documents or any of the
transactions contemplated hereby or thereby, or (ii) could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect
with respect to the Company. The transactions contemplated hereunder and the
use of the proceeds thereof will not violate any Requirement of Law.
(f) NO DEFAULT. The Company is not in default under or with
respect to any of its Contractual Obligations. No Early Amortization Event
or Potential Early Amortization Event has occurred and is continuing.
(g) TAX RETURNS. The Company has filed or caused to be filed all
Federal and all other tax returns which are required to have been filed by it
and has paid or caused to be paid all taxes shown thereon to be due and
payable, and any material assessments made against it or any of its property.
No tax Lien has been filed, and, to the knowledge of the Company, no
material claim is being asserted, with respect to any such taxes. For
purposes of this paragraph, "taxes" shall mean any present or future tax,
levy, impost, duty, charge, assessment or fee of any nature (including
interest, penalties and additions thereto) that is imposed by any
Governmental Authority.
(h) LOCATION OF RECORDS; CHIEF EXECUTIVE OFFICE. The offices at
which the Company keeps its records concerning the Receivables either (x) are
located at the addresses set forth for the Sellers on Schedule II of the
Receivables Sale Agreement or (y) have been reported to the Trustee in
accordance with the provisions of subsection 2.8(l) of this Agreement. The
chief executive office of the Company is located at one of the addresses set
forth on Schedule 4 and is the place where the Company is "located"
25
for the purposes of Section 9-103(3)(d) of the UCC as in effect in the State
of New York. The state and county where the chief executive office of the
Company is "located" for the purposes of Section 9-103(3)(d) of the UCC has
not changed in the past four months.
(i) SOLVENCY. Both prior to and after giving effect to the
transactions occurring on each Issuance Date, (i) the fair value of the
assets of the Company at a fair valuation will exceed the debts and
liabilities, subordinated, contingent or otherwise, of the Company; (ii) the
present fair salable value of the property of the Company will be greater
than the amount that will be required to pay the probable liabilities of the
Company on its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; (iii)
the Company will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (iv) the Company will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted. For all purposes of clauses (i)
through (iv) above, the amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected
to become an actual or matured liability. The Company does not intend to, nor
does it believe that it will, incur debts beyond its ability to pay such
debts as they mature, taking into account the timing of and amounts of cash
to be received by it and the timing of and amounts of cash to be payable in
respect of its Indebtedness.
(j) INVESTMENT COMPANY. Each of the Company and the Trust is
either not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or is exempt from all provisions of such act.
(k) OWNERSHIP, SUBSIDIARIES. All of the issued and outstanding
membership interests of the Company are owned, legally and beneficially, by
United Stationers Supply Co. The Company will remain at all times a single
member limited liability company and United Stationers Supply Co. will not
transfer its ownership interest in the Company at any time. The Company has
no Subsidiaries.
(l) NAMES. The legal name of the Company is as set forth in this
Agreement. The Company has not had, nor does it have, any trade names,
fictitious names, assumed names or "doing business as" names.
(m) LIABILITIES. Other than, (i) the liabilities, commitments or
obligations (whether absolute, accrued, contingent or otherwise) arising
under or in respect of the Transaction Documents and (ii) immaterial amounts
due and payable in the ordinary course of business of a special-purpose
company, the Company does not have any liabilities, commitments or
obligations (whether absolute, accrued, contingent or otherwise), whether due
or to become due.
(n) USE OF PROCEEDS; FEDERAL RESERVE BOARD REGULATION. No proceeds
of the issuance of any Investor Certificates will be used by the Company to
purchase or carry any margin stock (as defined in Regulation U of the Board
of Governors of the Federal Reserve System, as in effect from time to time).
The Company is in compliance with all applicable regulations of the Board of
Governors of the Federal Reserve System (including, without limitation,
Regulations U and G with respect to "margin stock").
(o) COLLECTION PROCEDURES. The Company and each Seller have in
place procedures pursuant to the Transaction Documents which are either
necessary or advisable to ensure the timely collection of Receivables.
26
(p) LOCKBOX ACCOUNTS. Except to the extent otherwise permitted
under the terms of this Agreement, (i) each Lockbox Agreement to which the
Company is party is in full force and effect and (ii) each Lockbox Account
set forth in Schedule III to the Receivables Sales Agreement is free and
clear of any Lien (other than any right of set-off expressly provided for in
the applicable Lockbox Agreement).
(q) NO CONFLICT. The execution and delivery of this Agreement and
the Receivables Sale Agreement, the performance of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof and
thereof will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Company is a party or by
which it or any of its property is bound.
(r) ALL CONSENTS REQUIRED. All appraisals, authorizations,
consents, orders or other similar actions of any Person or of any
governmental body or official required in connection with the execution and
delivery of this Agreement, the Receivables Sale Agreement and the
Certificates, the performance of the transactions contemplated hereby and
thereby, and the fulfillment of or terms hereof and thereof, have been
obtained.
(s) BULK SALES. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" law by the Company.
The representations and warranties set forth in this Section 2.3
shall survive after the date made and the transfer and assignment of the
Trust Assets to the Trust. Upon discovery by a Responsible Officer of the
Company or the Servicer or by a Responsible Officer of the Trustee of a
breach of any of the foregoing representations and warranties with respect to
any Outstanding Series as of the Issuance Date of such Series, the party
discovering such breach shall give prompt written notice to the other parties
and to each Agent with respect to all Outstanding Series. The Trustee's
obligations in respect of any breach are limited as provided in subsection
8.2(g).
Section 2.4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY RELATING
TO THE RECEIVABLES. The Company hereby represents and warrants to the
Trustee and the Trust, for the benefit of the holders of Certificates of each
Outstanding Series, (x) as of the Issuance Date of such Series, and (y) with
respect to each Receivable transferred to the Trust after such Issuance Date,
as of the related Receivables Purchase Date, unless, in either case,
otherwise stated in the applicable Supplement or unless such representation
or warranty expressly relates only to a prior date, that:
(a) Schedule 1 to this Agreement sets forth in all material
respects an accurate and complete listing as of the Cut-Off Date of all
Receivables to be transferred to the Trust as of the Initial Closing Date and
the information contained therein with respect to the identity and Principal
Amount of each such Receivable is true and correct in all material respects
as of the Cut-Off Date. As of the Cut-Off Date, the aggregate amount of
Receivables owned by the Company is accurately set forth in Schedule 1 hereto.
(b) Each Receivable existing on the Initial Closing Date or, in the
case of Receivables transferred to the Trust after the Initial Closing Date,
on the date that each such Receivable shall have been transferred to the
Trust, has been conveyed to the Trust free and clear of any Lien, except for
Permitted Liens specified in clauses (i) and (iv) of the definition thereof.
(c) On the Initial Closing Date, each Receivable transferred to the
Trust that is included in the calculation of the initial Aggregate
Receivables Amount is an Eligible Receivable and, in the case
27
of Receivables transferred to the Trust after the Initial Closing Date, on
the date such Receivable shall have been transferred to the Trust, each such
Receivable that is included in the calculation of the Aggregate Receivables
Amount on such date is an Eligible Receivable. Each Receivable classified as
an "Eligible Receivable" by the Company in any document or report delivered
hereunder satisfies the requirements of eligibility contained in the
definition of Eligible Receivable.
The representations and warranties set forth in this Section 2.4
shall survive after the date made and the transfer and assignment of the
Trust Assets to the Trust. Upon discovery by a Responsible Officer of the
Company or the Servicer or a Responsible Officer of the Trustee of a breach
of any of the representations and warranties with respect to each Outstanding
Series as of the Issuance Date of such Series, the party discovering such
breach shall give prompt written notice to the other parties and to each
Agent with respect to all Outstanding Series. The Trustee's obligations in
respect of any breach are limited as provided in Section 8.2(g).
Section 2.5 TRANSFER OF INELIGIBLE RECEIVABLES. (a) TRANSFER
OBLIGATION. If (i) any representation or warranty under subsections 2.4(a),
(b) or (c) is not true and correct in any material respect as of the date
specified therein with respect to any Receivable transferred to the Trust,
(ii) there is a breach of any covenant under subsection 2.8(c) with respect
to any Receivable and such breach has a material adverse effect on the
Certificateholders' Interest in such Receivable or (iii) the Trust's interest
in any Receivable is not a first priority perfected ownership or security
interest at any time as a result of any action taken by, or any failure to
take action by, the Company (any Receivable as to which the conditions
specified in any of clauses (i), (ii) or (iii) of this subsection 2.5(a)
exists is referred to herein as an "INELIGIBLE RECEIVABLE") then, upon the
earlier (the date on which such earlier event occurs, the "TRANSFER
OBLIGATION DATE") of the discovery by the Company of any such event which
continues unremedied or receipt by the Company of written notice given by the
Trustee or the Servicer of any such event which continues unremedied, the
Company shall become obligated to deposit or cause to be deposited into the
Collection Account the Transfer Deposit Amount with respect to such
Ineligible Receivable in order to transfer such Ineligible Receivables on the
terms and conditions set forth in subsection 2.5(b).
(b) TRANSFER OF RECEIVABLES. Subject to the last sentence of this
subsection 2.5(b), the Company shall, with respect to each Ineligible
Receivable required to be transferred pursuant to subsection 2.5(a), deposit
or cause to be deposited in the Collection Account in immediately available
funds on the Business Day following the related Transfer Obligation Date an
amount equal to the lesser of (x) the amount by which the Aggregate Target
Receivables Amount exceeds the Aggregate Receivables Amount (after giving
effect to the reduction thereof by the Principal Amount of such Ineligible
Receivable) and (y) the aggregate outstanding Principal Amount of each such
Ineligible Receivable (the "TRANSFER DEPOSIT AMOUNT"). Upon transfer or
deposit of the Transfer Deposit Amount, the Trust shall automatically and
without further action be deemed to transfer, assign, set over and otherwise
convey to the Company, without recourse, representation or warranty, all the
right, title and interest of the Trust in and to such Ineligible Receivable,
all monies due or to become due with respect thereto and all proceeds
thereof; and such transferred Ineligible Receivable shall be treated by the
Trust as collected in full as of the date on which it was transferred. The
Trustee shall execute such documents and instruments of transfer or
assignment prepared by and at the expense of the Company and take such other
actions as shall reasonably be requested by the Company to effect the
conveyance of such Receivables pursuant to this subsection free and clear of
the lien of this Agreement and all other liens created by the Trustee.
Except as otherwise specified in any Supplement, the obligation of the
Company to deposit or cause to be deposited the Transfer Deposit Amount with
respect to any Ineligible Receivable shall constitute the sole remedy
respecting the event giving rise to such obligation available to Investor
Certificateholders (or the Trustee on behalf of Investor Certificateholders).
28
Section 2.6 PURCHASE OF INVESTOR CERTIFICATEHOLDERS' INTEREST IN
TRUST PORTFOLIO. (a) Upon the actual knowledge of a breach of any of the
representations and warranties set forth in paragraphs (a), (b), (c), (d),
(e)(i) or (q) of Section 2.3, which breach has a material adverse effect on
the interests of the holders of an Outstanding Series (without giving effect
to any Enhancement) under or with respect to the Transaction Documents, then
the Trustee, at the written direction of holders evidencing more than 50% of
the Invested Amount of such Outstanding Series, subject to Section 8.2
hereof, shall notify the Company to purchase such Outstanding Series and the
Company shall be obligated to make such purchase on the next Distribution
Date occurring at least five Business Days after receipt of such notice on
the terms and conditions set forth in subsection 2.6(b) below; PROVIDED,
HOWEVER, that no such purchase shall be required to be made if, by such
Distribution Date, the representations and warranties contained in paragraphs
(a), (b), (c), (d), (e)(i) or (q) of Section 2.3 shall be satisfied in all
material respects and any material adverse effect on the holders of such
Outstanding Series caused thereby shall have been cured.
(b) As required under subsection 2.6(a) above, the Company shall
deposit into the Collection Account for credit to the applicable subaccount
of the Collection Account on the Business Day preceding such Distribution
Date an amount equal to the purchase price (as described in the next
succeeding sentence) for the Certificateholders' Interest for such
Outstanding Series on such day. The purchase price for any such purchase
will be equal to (i) the Adjusted Invested Amount of such Outstanding Series
on the date on which the purchase is made plus (ii) an amount equal to all
interest accrued but unpaid on such Series up to the Distribution Date on
which the distribution of such deposit is scheduled to be made pursuant to
Section 9.2 plus (iii) any other amount required to be paid in connection
therewith pursuant to any Supplement. Notwithstanding anything to the
contrary in this Agreement, the entire amount of the purchase price deposited
in the Collection Account shall be distributed to the related Investor
Certificateholders on such Distribution Date pursuant to Section 9.2. If the
Trustee gives notice directing the Company to purchase the Certificates of an
Outstanding Series as provided above, except as otherwise specified in any
Supplement, the obligation of the Company to purchase such Certificates
pursuant to this Section 2.6 shall constitute the sole remedy respecting an
event of the type specified in the first sentence of this Section 2.6
available to the applicable Investor Certificateholders (or the Trustee on
behalf of such Investor Certificateholders).
Section 2.7 AFFIRMATIVE COVENANTS OF THE COMPANY. The Company
hereby covenants that, until the Trust Termination Date occurs, the Company
shall:
(a) FINANCIAL STATEMENTS. Furnish to the Trustee, each Agent and
the Rating Agencies, as soon as available, but in any event within 125 days
after the end of each fiscal year of the Company, a copy of the audited
balance sheet and statement of operations of the Company as at the end of
such year, all in reasonable detail and certified by an appropriate
Responsible Officer as correct and fairly presenting the financial position
and results of operations of the Company.
(b) PAYMENT OF OBLIGATIONS; COMPLIANCE WITH OBLIGATIONS. Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material obligations of whatever
nature (including, without limitation, all taxes, assessments, levies and
other governmental charges imposed on it), except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the Company. The Company shall defend the
right, title and interest of the Holders in, to and under the Receivables and
the other Trust Assets, whether now existing or hereafter created, against
all claims of third parties claiming through or under the Company, any
Seller, any Sub-Servicer or the Servicer. The Company will duly fulfill all
material obligations on its part to be fulfilled under or in connection with
each Receivable and will do nothing to impair the rights of the Holders in
such Receivable. The Company shall pay any property, excise, transfer or
similar taxes
29
arising with respect to the Receivables or on account of the transactions
contemplated by the Transaction Documents.
(c) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and accounts in which full, true and correct entries
in conformity in all material respects with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its business
and activities; and permit representatives of the Trustee upon reasonable
advance notice (i) to visit and inspect any of its properties and examine and
make abstracts from any of its books and records during normal business hours
on any Business Day and as often as may reasonably be desired subject to the
Company's normal security and confidentiality requirements and (ii) to
discuss the business, operations, properties and financial and other
condition of the Company with officers and employees of the Company and with
its Independent Public Accountants; PROVIDED, that the Trustee shall notify
the Company prior to any contact with such Independent Public Accountants and
shall give the Company the opportunity to participate in such discussions.
(d) COMPLIANCE WITH LAW AND POLICIES. (i) Comply in all material
respects with all Requirements of Law applicable to the Company; and
(ii) Cause each Seller to perform its obligations in accordance
with, and comply in all material respects with, the applicable
Policies in regard to the Receivables and the Related Property.
(e) PURCHASE OF RECEIVABLES. Purchase Receivables solely pursuant to
(i) the Receivables Sale Agreement or (ii) this Agreement.
(f) DELIVERY OF COLLECTIONS. In the event that the Company receives
Collections directly from Obligors, deposit such Collections into the applicable
Lockbox Account within one Business Day after receipt thereof by the Company.
(g) NOTICES. Promptly (and, in any event, within five Business Days
after a Responsible Officer of the Company becomes aware of such event) give
written notice to the Trustee, each Rating Agency and each Agent for any
Outstanding Series of:
(i) the occurrence of any Early Amortization Event or Potential
Early Amortization Event; and
(ii) any Lien not permitted by subsection 2.8(c) on any
Receivable or any other Trust Assets.
(h) LOCKBOXES. (i) Maintain, and keep in full force and effect, each
Lockbox Agreement to which the Company is a party, except to the extent
otherwise permitted under the terms of this Agreement and the other Transaction
Documents; and
(ii) ensure that each related Lockbox Account shall be free and
clear of, and defend each such Lockbox Account against, any writ,
order, stay, judgment, warrant of attachment or execution or similar
process.
30
(i) SEPARATE CORPORATE EXISTENCE.
(i) Maintain its own deposit, securities or other account or
accounts, separate from those of any Affiliate, with commercial
banking institutions or broker-dealers and ensure that the funds of
the Company will not be diverted to any other Person or for other than
corporate uses of the Company, nor will such funds be commingled with
the funds of any Seller or any other Subsidiary or Affiliate of any
Seller;
(ii) To the extent that it shares the same officers or other
employees as any of its members or Affiliates, the salaries of and the
expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such entities, to the extent
practicable, on the basis of such entities' actual share of such costs
and to the extent such allocation is not practicable, on a basis
reasonably related to such entities' fair share of the salary and
benefit costs associated with all such common officers and employees;
(iii) To the extent that it jointly contracts with any of its
members or Affiliates to do business with vendors or service providers
or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, to the extent practicable, on
the basis of such entities' actual share of such costs and to the
extent such allocation is not practicable, on a basis reasonably
related to such entities' fair share of such costs. To the extent
that the Company contracts or does business with vendors or service
providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing shall be
fairly allocated to or among such entities for whose benefit the goods
or services are provided, to the extent practicable, on the basis of
such entities' actual share of such costs and to the extent such
allocation is not practicable, on a basis reasonably related to such
entities' fair share of such costs. All material transactions between
the Company and any of its Affiliates, whether currently existing or
hereafter entered into, shall be only on an arm's-length basis, it
being understood and agreed that the transactions contemplated in the
Transaction Documents meet the requirements of this clause (iii);
(iv) Maintain a principal executive office at a separate address
from the address of United Stationers Supply Co. and its Affiliates;
PROVIDED that reasonably segregated offices in the same building shall
constitute separate addresses for purposes of this clause (iv). To
the extent that the Company and any of its members or Affiliates have
offices in the same location, there shall be a fair and appropriate
allocation of overhead costs among them, and each such entity shall
bear its fair share of such expenses;
(v) Issue separate financial statements prepared not less
frequently than quarterly and prepared in accordance with GAAP;
(vi) Conduct its affairs in its own name and strictly in
accordance with its articles of association and observe all necessary,
appropriate and customary limited liability company formalities,
including, but not limited to, holding all regular and special
members' and directors' meetings appropriate to authorize all limited
liability company action, keeping separate and accurate minutes of its
meetings, passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate
books, records and accounts, including, but not limited to, payroll
and intercompany transaction accounts;
31
(vii) Not assume or guarantee any of the liabilities of any
Seller, any Servicing Party or any Affiliate of any thereof, it being
understood that a shareholder's capital contribution is not such a
guarantee or assumption; and
(viii) Take, or refrain from taking, as the case may be, all
other actions that are necessary to be taken or not to be taken in
order to (x) ensure that the assumptions and factual recitations set
forth in the Specified Bankruptcy Opinion Provisions remain true and
correct in all material respects with respect to the Company and (y)
comply with those procedures described in such provisions which are
applicable to the Company.
(j) PRESERVATION OF CORPORATE EXISTENCE. (i) Preserve and maintain
its limited liability company existence, rights, franchises and privileges in
the jurisdiction of its formation and (ii)qualify and remain qualified in
good standing as a foreign limited liability company in each jurisdiction
where the ownership of its properties and the conduct of its business require
such qualification.
(k) NET WORTH. Maintain at all times a consolidated net worth
inclusive of its interest in the Receivables and the Related Property, as
determined in accordance with GAAP equal to $45 million.
(l) OPTIONAL TERMINATION. If the Company shall deliver an Optional
Termination Notice to the Trustee with respect to any Outstanding Series, the
Company shall deliver an Optional Termination Notice to the Trustee with
respect to all Outstanding Series.
(m) MAINTENANCE OF PROPERTY. Keep all material tangible property
useful and necessary in its business in good working order and condition
(normal wear and tear excepted), except to the extent that the failure to do
any of the foregoing with respect to any such property would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect with respect to the Company.
(n) FURTHER ASSURANCES. File, or cause to be filed, as necessary
from time to time, at the applicable Seller's expense and in accordance with
the provisions of the UCC of the applicable jurisdiction, duly completed and
executed continuation statements with respect to all financing statements
filed in connection with the transactions contemplated by the Receivables
Sale Agreement.
(o) TAX STATUS. The Company will make an election to be treated as
a disregarded entity for United States federal income tax purposes.
Section 2.8 NEGATIVE COVENANTS OF THE COMPANY. The Company hereby
covenants that, until the Trust Termination Date occurs, it shall not
directly or indirectly:
(a) ACCOUNTING OF TRANSFERS. Prepare any financial statements
which shall account for the transactions contemplated hereby in any manner
other than as a transfer of Receivables and the other Trust Assets by the
Company to the Trust or in any other respect account for or treat the
transactions under this Agreement (including for financial accounting
purposes, except as required by law) in any manner other than as transfers of
Receivables and the other Trust Assets by the Company to the Trust; PROVIDED,
HOWEVER, that this subsection shall not apply for any tax or tax accounting
purposes.
(b) LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except: (i) Indebtedness evidenced by the
Subordinated Note; (ii) Indebtedness representing fees, expenses and
indemnities payable pursuant to and in accordance with the Transaction
Documents; and (iii) Indebtedness for services supplied or furnished to the
Company in an amount not to exceed $10,000 at any one time outstanding;
PROVIDED that any Indebtedness permitted hereunder and described
32
in clauses (i) and (iii) shall be payable by the Company solely from funds
available to the Company which are not otherwise needed to be applied to the
payment of any amounts by the Company pursuant to any Pooling and Servicing
Agreements and shall be non-recourse other than with respect to proceeds in
excess of the proceeds needed to be so applied.
(c) LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens, it being understood that no
Permitted Lien under clause (ii) of the definition thereof shall cover any of
the Trust Assets (except to the limited extent permitted by clause (iv) of
the definition of Permitted Liens).
(d) LIMITATION ON GUARANTEE OBLIGATIONS. Become or remain liable,
directly or contingently, in connection with any Indebtedness or other
liability of any other Person, whether by guarantee, endorsement (other than
endorsements of negotiable instruments for deposit or collection in the
ordinary course of business and reimbursement and indemnification obligations
in favor of the Trustee or the Investor Certificateholders as provided for
under this Agreement and the other Transaction Documents), agreement to
purchase or repurchase, agreement to supply or advance funds, or otherwise,
except in connection with indemnification obligations of the Company to the
limited extent provided in the Company's memorandum and articles of
association; PROVIDED that any such indemnification shall be paid solely from
funds available to the Company which are not otherwise needed to be applied
to the payment of any amounts pursuant to any Pooling and Servicing
Agreements, shall be non-recourse other than with respect to proceeds in
excess of the proceeds necessary to make such payment, and shall not
constitute a claim against the Company to the extent that insufficient
proceeds exist to make such payment.
(e) LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or make any material change in its
present method of conducting business, or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets other than the assignments and transfers contemplated
hereby.
(f) LIMITATION ON DIVIDENDS AND OTHER PAYMENTS. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of capital stock
of the Company, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of the Company (any of the foregoing, a
"restricted payment"), unless (i) at the date such restricted payment is
made, the Company shall have made all payments in respect of its repurchase
obligations pursuant to this Agreement outstanding at such date and (ii) such
restricted payment is made no more frequently than on a monthly basis and is
effected in accordance with all corporate and legal formalities applicable to
the Company; PROVIDED, HOWEVER, that (A) no restricted payment shall be made
on any date if (x) a Potential Early Amortization Event of a type referred to
in clause (a)(ii) or (a)(iii) of Section 7.1 or (y) an Early Amortization
Event has occurred and is continuing (or would occur as a result of such
payment) on such date and (B) all restricted payments made on any date shall
be payable by the Company solely from funds available to the Company which
are not otherwise needed on such date to be applied to the payment of any
amounts by the Company pursuant to any Pooling and Servicing Agreement.
(g) BUSINESS OF THE COMPANY. Engage at any time in any business or
business activity other than the acquisition of Receivables Property pursuant to
the Receivables Sale Agreement, the assignments and transfers hereunder and the
other transactions contemplated by the Transaction Documents, and any activity
incidental to the foregoing and necessary or convenient to accomplish the
33
foregoing, or enter into or be a party to any agreement or instrument other
than in connection with the foregoing, except those agreements or instruments
permitted under subsection 2.8(i) or set forth on Schedule 5.
(h) LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase
any stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except for (i) any Exchangeable Company Interest, any Series Subordinated
Interest, the Receivables, the Certificates and the other Trust Assets, (ii)
the Subordinated Note and (iii) any other advance or loan made to any Seller,
PROVIDED, HOWEVER, that in the case of the preceding clause (iii), (A) no (x)
Potential Early Amortization Event of a type referred to in clause (a)(ii) or
(a)(iii) of Section 7.1 or (y) Early Amortization Event has occurred and is
continuing at the time any such investment is made (or would occur as a
result of such investment), (B) no amounts are outstanding under the
Subordinated Note, (C) the loan made is a demand loan at a market rate of
interest and (D) any such investment shall be made by the Company solely from
funds available to the Company which are not otherwise needed to be applied
to the payment of any amounts by the Company pursuant to any Pooling and
Servicing Agreement.
(i) AGREEMENTS. (i) Become a party to, or permit any of its
properties to be bound by, any indenture, mortgage, instrument, contract,
agreement, lease or other undertaking, except the Transaction Documents,
leases of office space, equipment or other facilities for use by the Company
in its ordinary course of business, employment agreements, service
agreements, agreements relating to shared employees and the other Transaction
Documents and agreements reasonably necessary or desirable to perform its
obligations under the Transaction Documents, (ii) issue any power of attorney
(except to the Trustee or the Servicer or except for the purpose of
permitting any Person to perform any ministerial functions on behalf of the
Company that are not prohibited by or inconsistent with the terms of the
Transaction Documents), or (iii) amend, supplement, modify or waive any of
the provisions of the Receivables Sale Agreement or any Lockbox Agreement or
request, consent or agree to or suffer to exist or permit any such amendment,
supplement, modification or waiver or exercise any consent rights granted to
it thereunder unless such amendment, supplement, modification or waiver or
such exercise of consent rights would not be reasonably likely to have a
Material Adverse Effect and, in the case of the Receivables Sale Agreement,
the Rating Agency Condition shall have been satisfied with respect to any
such amendments, supplements, modifications or waivers.
(j) POLICIES. Make any change or modification (or permit any
change or modification to be made) in any material respect to the Policies,
except (i) if such changes or modifications are necessary under any
Requirement of Law, (ii) if such changes or modifications would not
reasonably be likely to have a Material Adverse Effect with respect to the
Company or (iii) if the Rating Agency Condition is satisfied with respect
thereto; PROVIDED, HOWEVER, that if any change or modification, other than a
change or modification permitted pursuant to clause (i) or (ii) above, would
be reasonably likely to have a Material Adverse Effect on the interests of
the Investor Certificateholders of a Series which is not rated by a Rating
Agency, the consent of the applicable Agent (or as specified in the related
Supplement) shall be required to effect such change or modification.
(k) RECEIVABLES NOT TO BE EVIDENCED BY INSTRUMENTS. Subject to the
delivery requirement set forth in subsection 2.1(c), take any action to cause
any Receivable to be evidenced by any "instrument" other than, provided that
the procedures set forth in Schedule 3 are fully implemented with respect
thereto, an instrument which alone or together with a security agreement
constitutes "chattel paper" (each as defined in the UCC as in effect in any
state in which the Company's or the applicable Seller's chief executive
office or books and records relating to such Receivable are located), except
in connection with its enforcement or collection of a Defaulted Receivable.
34
(l) OFFICES. Move outside or within the state where such office is
now located the location of its chief executive office or of any of the
offices where it keeps its records with respect to the Receivables without
(i) in the case of moves outside such state, giving 30 days' prior written
notice to the Trustee and each Rating Agency, (ii) in the case of moves
within such state, giving the Trustee prompt notice of a change within the
state where such office is now located of the location of its chief executive
office or any office where it keeps its records with respect to the
Receivables and (iii) taking all actions reasonably requested by the Trustee
(including but not limited to all filings and other acts necessary or
advisable under the UCC or similar statute of each relevant jurisdiction) in
order to continue the Trust's first priority perfected ownership or security
interest in all Receivables now owned or hereafter created; PROVIDED,
HOWEVER, that the Company shall not change the location of its chief
executive office to outside of the United States, or to a state which is
within the Tenth Circuit unless (a) it delivers an Opinion of Counsel
reasonably acceptable to the Rating Agencies to the effect that OCTAGON GAS
SYSTEMS, INC. X. XXXXXX, 995 F.2d 948 (10th Cir. 1993) ("Octagon") is no
longer controlling precedent in the Tenth Circuit or (b) state law has
amended the UCC to overrule Octagon.
(m) CHANGE IN NAME. Change its name, identity or corporate
structure in any manner which would or might make any financing statement or
continuation statement (or other similar instrument) filed in accordance with
subsection 10.2(a) seriously misleading within the meaning of Section
9-402(7) of the UCC as in effect in any applicable jurisdiction in which UCC
filings have been made in respect of the Trust Assets without 30 days' prior
written notice to the Trustee and each Rating Agency.
(n) CHARTER. Amend or make any change or modification to its
memorandum and articles of association without first satisfying the Rating
Agency Condition (other than an amendment, change or modification made
pursuant to changes in law of the state of its formation or amendments to
change the Company's name (subject to compliance with clause (m) above),
resident agent or address of resident agent).
(o) ADDITION OF SELLERS. Agree to the addition of any Subsidiary
of United Stationers Supply Co. as an additional Seller pursuant to Section
9.13 of the Receivables Sale Agreement without such Subsidiary's being
simultaneously added as a Sub-Servicer (or without another Subsidiary's
simultaneously agreeing to act as a Sub-Servicer in respect of such
additional Seller) under the Transaction Documents pursuant to the Servicing
Agreement.
ARTICLE III
RIGHTS OF HOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
THE FOLLOWING PORTION OF THIS ARTICLE III
IS APPLICABLE TO ALL SERIES
EXCEPT TO THE EXTENT EXPRESSLY
PROVIDED OTHERWISE IN THE
SUPPLEMENT RELATING TO
SERIES 1998-1
Section 3.1 ESTABLISHMENT OF COLLECTION ACCOUNT AND COLLECTION
CONCENTRATION ACCOUNT; CERTAIN ALLOCATIONS. (a)(i)The Trustee, for the benefit
of the Holders as their interests appear in this Agreement, shall cause to be
established and maintained in the name of the Trust with an Eligible Institution
or with the corporate trust department of the Trustee or an affiliate of the
Trustee, a segregated
35
trust account (the "COLLECTION ACCOUNT"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Holders. Schedule 2, which is hereby incorporated into and made a part of
this Agreement, identifies the Collection Account by setting forth the
account number of such account, the account designation of such account and
the name of the institution with which such account has been established.
The Collection Account shall be divided into individual subaccounts for each
Outstanding Series (each, respectively, a "SERIES COLLECTION SUBACCOUNT" and,
collectively, the "SERIES COLLECTION SUBACCOUNTS") and for the Company (the
"COMPANY COLLECTION SUBACCOUNT"). For administrative purposes only, the
Trustee shall establish or cause to be established for each Series, so long
as such Series is an Outstanding Series, sub-subaccounts of the Series
Collection Subaccounts with respect to such Series (respectively, the "SERIES
PRINCIPAL COLLECTION SUB-SUBACCOUNT" and "SERIES NON-PRINCIPAL COLLECTION
SUB-SUBACCOUNT" and, collectively, the "SERIES COLLECTION SUB-SUBACCOUNTS").
(ii) The Trustee also shall establish an intervening deposit account
with an Eligible Institution or with the corporate trust department of the
Trustee or an affiliate of the Trustee (the "COLLECTION CONCENTRATION
ACCOUNT") in the name of the Company, which account, so long as no
Potential Early Amortization Event or Early Amortization Event has
occurred, shall be used for the receipt of Collections transferred from the
Lockbox Accounts (to the extent so provided in the Servicing Agreement)
prior to the deposit of such Collections into the Collection Account. The
Trustee shall have the right, upon the occurrence of and during the
continuance of an Early Amortization Event or Potential Early Amortization
Event with respect to any Outstanding Series, to give irrevocable standing
instructions governing the transfer of available funds on deposit in the
Collection Concentration Account.
(b) AUTHORITY OF THE TRUSTEE IN RESPECT OF THE COLLECTION ACCOUNT AND
THE COLLECTION CONCENTRATION ACCOUNT AND HOLDERS' INTERESTS THEREIN.(i) The
Trustee, on behalf of the Holders, shall possess all right, title and interest
in all funds on deposit from time to time in the Collection Account and in all
proceeds thereof. The Collection Account shall be under the sole dominion and
control of the Trustee for the benefit of the Investor Certificateholders and,
to the extent set forth in any Supplement, any owner of any Series Subordinated
Interest. If, at any time, the Servicer has actual notice or knowledge that any
institution holding the Collection Account is other than the corporate trust
department of the Trustee or an affiliate of the Trustee, or that the
institution holding the Collection Account or the Collection Concentration
Account has ceased to be an Eligible Institution, the Servicer shall direct the
Trustee in writing to establish within 30 days a substitute account therefor
with an Eligible Institution, transfer any cash and/or any instruments to such
new account and from the date any such substitute accounts are established, such
account shall be the Collection Account (or the Collection Concentration
Account, as the case may be). Neither the Company nor the Servicer, nor any
person or entity claiming by, through or under the Company or Servicer, shall
have any right title or interest in, except to the extent expressly provided
under the Transaction Documents, or any right to withdraw any amount from, the
Collection Account. Pursuant to the authority granted to the Servicer in
subsection 2.2(a) of the Servicing Agreement, the Servicer shall have the power,
revocable by the Trustee, to instruct the Trustee in writing to make withdrawals
from and payments to the Collection Account and/or the Collection Concentration
Account for the purposes of carrying out the Servicer's or the Trustee's duties
hereunder.
(ii) Each Series of Investor Certificates shall represent Fractional
Undivided Interests in the Trust as indicated in the Supplement (including
any Enhancement applicable to such Series as specified in the related
Supplement) relating to such Series and the right to receive Collections
and other amounts at the times and in the amounts specified in this Article
III (as supplemented by the Supplement related to such Series) to be
deposited in the Collection Account and any other accounts maintained for
the benefit of the Investor Certificateholders or paid to the Investor
Certificateholders (with respect to each outstanding Series, the
"CERTIFICATEHOLDERS' INTEREST").
36
The "EXCHANGEABLE COMPANY INTEREST" shall be the interest in the Trust
not represented by any Series of Investor Certificates then outstanding
or Series Subordinated Interests then in existence, including the right
to receive Collections and other amounts at the times and in the amounts
specified in this Article III to be paid to the Company (the "COMPANY
INTEREST"), and each Series Subordinated Interest, if any, shall be the
interest specified as such pursuant to the related Supplement; PROVIDED,
HOWEVER, that no such Exchangeable Company Interest or Series
Subordinated Interest shall include any interest in any Trust Account or
any other accounts maintained for the benefit of the Investor
Certificateholders, except as specifically provided in this Article III.
(c) ADMINISTRATION OF THE COLLECTION ACCOUNT. (i) At the written
direction of the Servicer, funds on deposit in the Collection Account
available for investment shall be invested by the Trustee in Eligible
Investments selected by the Company. In the absence of written direction
from the Servicer, funds in the Collection Account shall remain uninvested.
All such Eligible Investments shall be delivered to the Trustee in accordance
with the definition of "Delivery" and shall be held by the Trustee or its
nominee (including the Securities Intermediary) for the benefit of the
Investor Certificateholders or such Eligible Investments shall be promptly
credited to a securities account maintained by the Trustee with a securities
intermediary. Amounts on deposit in each Series Non-Principal Collection
Sub-subaccount shall, if applicable, be invested in Eligible Investments that
will mature, or that are payable or redeemable upon demand of the holder
thereof, so that such funds will be available on or before the Business Day
immediately preceding the next Distribution Date. None of such Eligible
Investments shall be disposed of prior to the maturity date with respect
thereto unless such disposition is reasonably necessary to prevent a loss.
All interest and investment earnings (net of losses and investment expenses)
(the "INVESTMENT EARNINGS") on funds deposited in a Series Non-Principal
Collection Sub-subaccount shall be deposited in such sub-subaccount. Amounts
on deposit in the Series Principal Collection Sub-subaccounts and any other
sub-subaccounts as specified in the related Supplement shall be invested in
Eligible Investments that mature, or that are payable or redeemable upon
demand of the holder thereof, so that such funds will be available not later
than the date which is specified in any Supplement. The Trustee, or its
nominee or custodian, shall maintain possession of the instruments or
securities, if any, evidencing any Eligible Investments from the time of
purchase thereof until the time of sale or maturity. Any Investment Earnings
on such invested funds in a Series Principal Collection Sub-subaccount and
any other sub-subaccounts as specified in the related Supplement will be
deposited in the related Series Non-Principal Collection Sub-subaccount. Any
Investment Earnings shall be included by the Company in its gross income for
all income tax purposes.
(ii) Any securities intermediary (as that term is defined in Article 8
of the UCC) maintaining a securities account for the Trustee for the
benefit of the Purchasers (the "Securities Intermediary"), and The Chase
Manhattan Bank as initial Securities Intermediary, hereby represents that
it is as of the date hereof and shall be for so long as it is the
Securities Intermediary hereunder a bank or broker-dealer that (a) in the
ordinary course of its business maintains securities accounts for others
and is acting in that capacity hereunder and (b) maintains a Participant's
Securities Account (as defined in the United States Regulations) with a
Federal Reserve Bank. The Securities Intermediary shall agree (and The
Chase Manhattan Bank as initial Securities Intermediary hereby agrees) with
the parties hereto that (x) the Collection Account (including any
sub-accounts thereof) is a securities account to which financial assets
may be credited, (y) the Trustee shall be entitled to exercise rights that
comprise such financial assets and to exercise the ordinary rights of an
entitlement holder, (z) the "securities intermediary's jurisdiction" as
defined in the UCC of the Securities Intermediary with respect to the
Eligible Investments credited to the Collection Account (including any
sub-accounts thereof) shall be the State of New York. The Securities
Intermediary shall represent and covenant (and The Chase
37
Manhattan Bank hereby represents and covenants) that it is not and will not
be (as long as it is the Securities Intermediary hereunder) a party to any
agreement that is inconsistent with the provisions of this Agreement. The
Securities Intermediary shall covenant (and The Chase Manhattan Bank hereby
covenants) that it will not take any action inconsistent with the
provisions of this Agreement applicable to it. It is the intent of the
Trustee, the Servicer and the Company that the Collection Account
(including any sub-accounts thereof) shall be a securities account of the
Trustee and not an account of the Company or the Servicer. If despite such
intent, the Collection Account (including any sub-accounts thereof) is
determined to be an account of the Company or the Servicer, then the
Securities Intermediary agrees to comply with entitlement orders originated
by the Trustee without further consent by the Company or the Servicer.
(d) DAILY COLLECTIONS.(i) Promptly following its receipt of
Collections in the form of available funds in the Lockbox Accounts, but in no
event later than the Business Day following such receipt, the Servicer shall
transfer, or cause to be transferred, all Collections on deposit (less the
aggregate amount of set-offs permitted to be retained pursuant to any applicable
Lockbox Agreement) in the form of immediately available funds in the Lockbox
Accounts directly to the Collection Concentration Account, provided that in the
event of and continuance of an Potential Early Amortization Period or Early
Amortization Period, such funds shall be deposited directly into the Collection
Account, without first being deposited into the Collection Concentration
Account, and the Trustee shall instruct any Lockbox Processor to transfer all
Collections in any Lockbox Account directly to the Collection Account.
(ii) Promptly, but in no event later than the date of deposit (unless
received after 3:00 p.m., New York City time, on such date, then on the
next Business Day) (the "DEPOSIT DATE"), the Trustee shall transfer amounts
on deposit in the Collection Concentration Account into the Collection
Account.
(iii) No later than the Business Day following each Deposit Date, the
Trustee shall (in accordance with the written directions received from the
Servicer pursuant to subsection (h) below, upon which the Trustee may
conclusively rely) transfer from Aggregate Daily Collections deposited into
the Collection Account pursuant to subsection (d)(i) or (d)(ii) above on
such Deposit Date, to the respective Series Collection Subaccount, an
amount equal to the product of (x) the applicable Invested Percentage for
such Outstanding Series and (y) such Aggregate Daily Collections.
(iv) No later than the Business Day following each Deposit Date, the
Trustee shall (in accordance with the written directions received from the
Servicer pursuant to subsection (h) below, upon which the Trustee may
conclusively rely) allocate funds transferred to the Series Collection
Subaccount for each Outstanding Series pursuant to subsection (d)(iii)
above to the Series Non-Principal Collection Sub-subaccount, the Series
Principal Collection Sub-subaccount and such other Sub-subaccounts of each
such Series in accordance with the related Supplement for such Series.
(v) No later than the Business Day following each Deposit Date, except
as otherwise provided in a Supplement, the Trustee shall (in accordance
with the written directions received from the Servicer pursuant to
subsection (h) below, upon which the Trustee may conclusively rely)
transfer to the Company Collection Subaccount from Aggregate Daily
Collections deposited into the Collection Account pursuant to subsection
(d)(ii) above on such Deposit Date, the remaining funds (less an amount
equal to the costs and expenses, if any, incurred by the Trustee with
respect to the sale of the Receivables pursuant to subsection 7.2(a) or
9.1(b) and reimbursable to the Trustee as provided in Section 8.5), if any,
on deposit in the Collection
38
Account on such date after giving effect to transfers to be made pursuant
to subsection (d)(iii) above.
(e) CERTAIN ALLOCATIONS DURING AN AMORTIZATION PERIOD. (i)If, on any
Settlement Report Date, an Amortization Period has commenced and is continuing
with respect to any Outstanding Series and at such Settlement Report Date, a
Revolving Period is still in effect with respect to any other Outstanding Series
(a "SPECIAL ALLOCATION SETTLEMENT REPORT DATE"), then the Servicer shall make
the following calculations:
(A) the amount (the "ALLOCABLE CHARGED-OFF AMOUNT") equal to the
excess, if any, of (I) the aggregate Principal Amount of Charged-Off
Receivables for the related Settlement Period over (II) the aggregate
Principal Amount of Recoveries received during the related Settlement
Period;
(B) the amount (the "ALLOCABLE RECOVERIES AMOUNT") equal to the
excess, if any, of (I) the aggregate Principal Amount of Recoveries
received during the related Settlement Period over (II) the aggregate
Principal Amount of Charged-Off Receivables for the related Settlement
Period; and
(ii) If, on any Special Allocation Settlement Report Date, any of the
Allocable Charged-Off Amount or the Allocable Recoveries Amount is greater
than zero for the related Settlement Period, the Trustee shall (in
accordance with written directions received pursuant to subsection (b)(i)
above, upon which the Trustee may conclusively rely) make (A) a pro rata
allocation to each Outstanding Series (based on the Invested Percentage for
such Series) of a portion (as determined in clause (iii) below) of each
such positive amount and (B) an allocation to the Exchangeable Company
Interest of the remaining portion of each such positive amount.
(iii) With respect to each portion of the Allocable Charged-Off Amount
and the Allocable Recoveries Amount which is allocated to an Outstanding
Series pursuant to subsection 3.1(e)(ii), the Trustee shall apply each such
amount to such Series in accordance with the related Supplement for such
Series.
(f) ALLOCATIONS FOR THE EXCHANGEABLE COMPANY INTEREST. (i) Until the
commencement and continuance of an Early Amortization Period, on each Business
Day and, after the occurrence and continuance of an Early Amortization Period
and until the Trust Termination Date, on each Distribution Date, after making
all allocations required pursuant to subsection 3.1(d), the Trustee shall (in
accordance with the written direction of the Servicer, upon which the Trustee
may conclusively rely) transfer to the owner of the Exchangeable Company
Interest the remaining amount on deposit in the Company Collection Subaccount.
(g) SET-OFF.(i) In addition to the provisions of Section 8.5, if the
Company shall fail to make a payment as provided in this Agreement or any
Supplement, the Servicer or the Trustee may set off and apply any amounts
otherwise payable to the Company under any Pooling and Servicing Agreement. The
Company hereby waives demand, notice or declaration of such set-off and
application; PROVIDED that notice will promptly be given to the Company of such
set-off; PROVIDED FURTHER that failure to give such notice shall not affect the
validity of such set-off.
(ii) In addition to the provisions of Section 8.5, in the event the
Servicer shall fail to make a payment as provided in any Pooling and
Servicing Agreement, the Trustee may set off and apply any amounts
otherwise payable to the Servicer in its capacity as Servicer under the
39
Transaction Documents on account of such obligation. The Servicer hereby
waives demand, notice or declaration of such set-off and application;
PROVIDED that notice will promptly be given to the Servicer of such
set-off; PROVIDED FURTHER that failure to give such notice shall not
affect the validity of such set-off.
(h) ALLOCATION AND APPLICATION OF FUNDS. The Servicer shall direct
the Trustee in writing in a timely manner to apply all Collections with respect
to the Receivables as described in this Article III and in the Supplement with
respect to each Outstanding Series. The Servicer shall direct the Trustee in
writing to pay Collections to the owner of the Exchangeable Company Interest to
the extent such Collections are allocated to the Exchangeable Company Interest
under subsection 3.1(f) and as otherwise provided in this Article III.
Notwithstanding anything in this Agreement, any Supplement or any other
Transaction Document to the contrary, to the extent that the Trustee receives
any Required Report and immediately available funds prior to 2:00 p.m., New York
City time, on any Business Day, the Trustee shall make any applications of funds
required thereby on the same Business Day and otherwise on the next succeeding
Business Day.
(i) DAILY SETTLEMENTS. Subject to the express terms of any
Supplement, but notwithstanding anything in this Agreement to the contrary, for
so long as United Stationers Supply Co. remains the Servicer and no Early
Amortization Event or Potential Early Amortization Event with respect to any
Outstanding Series shall have occurred and be continuing, the Servicer shall not
be required to make daily deposits of Collections from the Collection
Concentration Account into the Collection Account as provided in subsection
3.1(d), but may withdraw such funds from the Collection Concentration Account
and make a single deposit of immediately available funds into the Collection
Account not later than 1:00 p.m., New York City time on each Business Day in an
amount equal to the aggregate amount of Collections required (determined without
regard to this section) to be deposited into the Series Non-Principal Collection
Sub-subaccount, the Series Principal Collection Sub-subaccount (less amounts
that may be paid to or at the direction of the Company pursuant to the
applicable Supplement) and such other Sub-subaccounts of each Series in
accordance with the related Supplement for such Series or such greater amount as
determined by the Servicer. To the extent that the amount deposited by the
Servicer is greater than the amount required, the excess shall be applied on
each Business Day thereafter to satisfy the deposit requirements of the
preceding sentence up to the amount of such excess.
THE REMAINDER OF ARTICLE III SHALL BE SPECIFIED
IN THE SUPPLEMENT WITH RESPECT TO EACH SERIES.
SUCH REMAINDER SHALL BE APPLICABLE ONLY TO THE
SERIES RELATING TO THE SUPPLEMENT IN WHICH
SUCH REMAINDER APPEARS.
ARTICLE IV
ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO THE SERIES RELATING THERETO
40
ARTICLE V
THE CERTIFICATES AND INTERESTS
Section 5.1 THE CERTIFICATES. The Investor Certificates of each
Series and any Class thereof shall be in fully registered form and shall be
substantially in the form of the exhibits with respect thereto attached to
the applicable Supplement. The Certificates shall, upon issue, be executed
and delivered by the Company to the Trustee for authentication and redelivery
as provided in Section 5.2. Except as otherwise set forth in the related
Supplement, the Investor Certificates shall be issued in minimum
denominations of $1,000,000 and in integral multiples of $100,000 in excess
thereof unless otherwise specified in any Supplement for any Series and
Class. Unless otherwise specified in any Supplement for any Series, the
Investor Certificates shall be issued upon initial issuance as a single
global certificate in an original principal amount equal to the Initial
Invested Amount with respect to such Series. The Company is hereby
authorized to execute and deliver each Certificate on behalf of the Trust.
Each Certificate shall be executed by manual or facsimile signature on behalf
of the Company by a Responsible Officer. Certificates bearing the manual or
facsimile signature of the individual who was, at the time when such
signature was affixed, authorized to sign on behalf of the Company or the
Trustee shall not be rendered invalid, notwithstanding that such individual
has ceased to be so authorized prior to or on the date of the authentication
and delivery of such Certificates or does not hold such office at the date of
such Certificates. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form
provided for herein executed by or on behalf of the Trustee by the manual
signature of a duly authorized signatory, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication but failure to do so shall not render them invalid.
Section 5.2 AUTHENTICATION OF CERTIFICATES. The Trustee shall
authenticate and deliver the initial Series of the Investor Certificates that
is issued upon original issuance, upon the written order of the Company in a
form reasonably satisfactory to the Trustee, to the holders of the initial
Series of Investor Certificates, against payment to the Company of the
Initial Invested Amount. The Investor Certificates shall be duly
authenticated by or on behalf of the Trustee in authorized denominations
equal to (in the aggregate) the Initial Invested Amount and the interests
evidenced thereby, together with any Series Subordinated Interest and the
Exchangeable Company Interest, shall constitute the entire ownership of the
Trust. Upon a Company Exchange as provided in Section 5.10 and the
satisfaction of certain other conditions specified therein, the Trustee shall
authenticate and deliver the Certificates of additional Series (with the
designation provided in the applicable Supplement) (or, if provided in any
Supplement, the additional Investor Certificates of an existing Series), upon
the written order of the Company, to the Persons designated in such
Supplement. Upon the order of the Company, the Investor Certificates of any
Series shall be duly authenticated by or on behalf of the Trustee, in
authorized denominations equal to (in the aggregate) the Initial Invested
Amount of such Series of Investor Certificates.
Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.(a) The Trustee shall cause to be kept at the office or agency
to be maintained by a transfer agent and registrar (which may be the Trustee)
(the "TRANSFER AGENT AND REGISTRAR") in accordance with the provisions of
Section 8.16 a register (the "CERTIFICATE REGISTER") in which, subject to
such reasonable regulations as the Trustee may prescribe, the Transfer Agent
and Registrar shall provide for the registration of the Investor Certificates
and of transfers and exchanges of the Investor Certificates as herein
provided. The Company hereby appoints the Trustee as the initial Transfer
Agent and Registrar for the purpose of registering the Investor Certificates
and transfers and exchanges of the Investor Certificates as herein provided.
The Company, or the Trustee, as agent for the Company, may revoke such
appointment as Transfer Agent and Xxxxxxxxx
00
and remove the then-acting Transfer Agent and Registrar if the Trustee or the
Company (as applicable) determines in its sole discretion that the
then-acting Transfer Agent and Registrar has failed to perform its
obligations under this Agreement in any material respect. The then-acting
Transfer Agent and Registrar shall be permitted to resign as Transfer Agent
and Registrar upon 30 days' written notice to the Company, the Trustee and
the Servicer; PROVIDED, HOWEVER, that such resignation shall not be effective
and the Trustee shall continue to perform its duties as Transfer Agent and
Registrar until the Trustee has appointed a successor Transfer Agent and
Registrar reasonably acceptable to the Company and such successor Transfer
Agent and Registrar has accepted such appointment. The provisions of
Sections 8.1, 8.2, 8.3, 8.5 and 10.19 shall apply to the Trustee also in its
role as Transfer Agent and Registrar for so long as the Trustee shall act as
Transfer Agent and Registrar.
The Company hereby agrees to provide the Trustee from time to time
sufficient funds, on a timely basis and in accordance with and subject to
Section 8.5, for the payment of any reasonable compensation payable to the
Transfer Agent and Registrar for its services under this Section 5.3. The
Company, Trustee and Transfer Agent and Registrar shall agree on such
compensation in writing. The Trustee hereby agrees that, upon the receipt of
such funds from the Company, it shall promptly pay the Transfer Agent and
Registrar such amounts.
Upon surrender for registration of transfer of any Investor
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Company shall execute, and, upon the written
request of the Company, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Investor
Certificates in authorized denominations of the same Series representing like
aggregate Fractional Undivided Interests and which bear numbers that are not
contemporaneously outstanding.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the same
Series in authorized denominations of like aggregate Fractional Undivided
Interests, bearing numbers that are not contemporaneously outstanding, upon
surrender of the Investor Certificates to be exchanged at any such office or
agency of the Transfer Agent and Registrar maintained for such purpose.
Whenever any Investor Certificates of any Series are so surrendered
for exchange, the Company shall execute, and, upon the written request of the
Company, the Trustee shall authenticate and (unless the Transfer Agent and
Registrar is different from the Trustee, in which case the Transfer Agent and
Registrar shall) deliver, the Investor Certificates of such Series which the
Investor Certificateholder making the exchange is entitled to receive. Every
Investor Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer
substantially in the form attached to the form of such Investor Certificate
and duly executed by the holder thereof or his attorney-in-fact duly
authorized in writing delivered to the Trustee (unless the Transfer Agent and
Registrar is different from the Trustee, in which case to the Transfer Agent
and Registrar) and complying with any requirements set forth in the
applicable Supplement.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require any Investor Certificateholder that is transferring or exchanging one
or more Certificates to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of
Investor Certificates.
All Investor Certificates surrendered for registration of transfer
and exchange shall be cancelled and disposed of in a customary manner
satisfactory to the Trustee.
42
The Company shall execute and deliver Certificates to the Trustee
or the Transfer Agent and Registrar in such amounts and at such times as are
necessary to enable the Trustee and the Transfer Agent and Registrar to
fulfill their respective responsibilities under this Agreement and the
Certificates.
No interest of any Investor Certificateholder in the Receivables
may be transferred other than by means of a transfer of an Investor
Certificate.
(b) The Transfer Agent and Registrar will maintain at its expense
in the Borough of Manhattan, The City of New York and, subject to subsection
5.3(a), if specified in the related Supplement for any Series, any other city
designated in such Supplement, an office or offices or agency or agencies
where Investor Certificates may be surrendered for registration or transfer
or exchange.
(c) Unless otherwise stated in any related Supplements,
registration of transfer of Certificates containing a legend relating to
restrictions on transfer of such Certificates (which legend shall be set
forth in the Supplement relating to such Investor Certificates) shall be
effected only if the conditions set forth in the related Supplement are
complied with.
Certificates issued upon registration or transfer of, or in
exchange for, Certificates bearing the legend referred to above shall also
bear such legend unless the Company, the Servicer, the Trustee and the
Transfer Agent and Registrar receive an Opinion of Counsel satisfactory to
each of them, to the effect that such legend may be removed.
(d) (i) The Company may not transfer, assign, exchange or
otherwise pledge or convey the Series Subordinated Interest of any Series or
the Exchangeable Company Interest except, with respect to the Exchangeable
Company Interest, pursuant to Section 5.10.
(ii) Neither the Company nor the Servicer shall at any time
participate in the listing of any Targeted Investor Certificate (as defined
below) on an "established securities market" within the meaning of Section
7704(b)(1) of the Internal Revenue Code and any proposed, temporary or
final treasury regulation thereunder as of the date hereof, including,
without limitation, an over-the-counter or interdealer quotation system
that regularly disseminates firm buy or sell quotations. "TARGETED
INVESTOR CERTIFICATE" shall mean any Certificate representing a right to
receive interest or principal with respect to any Class or Series of
Investor Certificates with respect to which an Opinion of Counsel has not
been rendered that such Certificates will be treated as debt for federal
income tax purposes (it being understood that any Certificate with respect
to which an Opinion of Counsel has been rendered that such Certificate will
be treated either as debt or as an interest in a partnership for federal
income tax purposes shall be a Targeted Investor Certificate).
(e) (i) No transfer of a Targeted Investor Certificate or grant of
a participation therein shall be permitted if (A) such transfer or grant
would cause the number of Targeted Holders (as defined below) to exceed 75 or
(B) the transferee or grantee, as the case may be, is a trust, partnership or
"S corporation" (within the meaning of Section 1361(a) of the Code) (a
"FLOW-THROUGH ENTITY"), unless such flow-through entity represents that less
than 50% of the aggregate value of such flow-through entity's assets consist
of Targeted Investor Certificates. "TARGETED HOLDER" shall mean each Holder
of or participant in a Targeted Investor Certificate; PROVIDED, HOWEVER, that
any Person holding more than one interest with respect to the Investor
Certificates or the Trust, each of which separately would cause such Person
to be a Targeted Holder, shall be treated as a single Targeted Holder.
(ii) Any determination by the Transfer Agent and Registrar (in
accordance with the information contained in the Certificate Register and
the certifications made by each transferee
43
and participant pursuant to the applicable Supplement, upon which
information the Transfer Agent and Registrar may conclusively rely) that
the event described in either clause (i)(A) or (i)(B) of this subsection
5.3(e) would occur as the result of a transfer of a Targeted Investor
Certificate or the grant of a participation therein shall be (X)
communicated in writing to the transferring or granting Investor
Certificateholder prior to the effective date set out in the notice of
transfer or participation required by, or otherwise provided for under,
the related Supplement and (Y) binding upon the parties absent manifest
error.
Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence in the form
of a certification by the holder thereof of the destruction, loss or theft of
any Certificate and (b) there is delivered to the Transfer Agent and
Registrar and the Trustee such security or indemnity as may be required by
them to save the Trust and each of them harmless, then, in the absence of
actual notice to a Responsible Officer of the Trustee or Transfer Agent and
Registrar that such Certificate has been acquired by a bona fide purchaser,
the Company shall execute and, upon the written request of the Company, the
Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and aggregate Fractional Undivided Interest and bearing a number
that is not contemporaneously outstanding. In connection with the issuance
of any new Certificate under this Section 5.4, the Trustee or the Transfer
Agent and Registrar may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental expenses (including the fees and
expenses of the Trustee and Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 5.4
shall constitute conclusive and indefeasible evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.5 PERSONS DEEMED OWNERS. At all times prior to due
presentation of a Certificate for registration of transfer, the Company, the
Trustee, the Paying Agent, the Transfer Agent and Registrar, any Agent and
any agent of any of them may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Article IV of the related Supplement and for all
other purposes whatsoever, and neither the Trustee, the Paying Agent, the
Transfer Agent and Registrar, any Agent nor any agent of any of them shall be
affected by any notice to the contrary. Notwithstanding the foregoing
provisions of this Section 5.5, in determining whether the holders of the
requisite Fractional Undivided Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Company, the Servicer or any Affiliate thereof shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Certificates so owned by the Company, the
Servicer or any Affiliate thereof which have been pledged in good faith shall
not be disregarded and may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Certificates and that the pledgee is not the Company,
the Servicer or an Affiliate thereof.
Section 5.6 APPOINTMENT OF PAYING AGENT. The Paying Agent shall
make distributions to Investor Certificateholders from the Collection Account
(and/or any other account or accounts maintained for the benefit of Holders
as specified in the related Supplement for any Series) pursuant to Articles
III and IV. The Trustee may revoke such power and remove the Paying Agent if
the Trustee determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect. Unless otherwise specified in the related Supplement for any Series
and with respect to such Series, the Paying Agent shall initially be the
Trustee and, if the Trustee so chooses, any
44
co-paying agent chosen by the Trustee. Each Paying Agent shall have a
combined capital and surplus of at least $50,000,000. The Paying Agent shall
be permitted to resign upon 30 days' written notice to the Trustee. In the
event that the Paying Agent shall so resign, the Trustee shall appoint a
successor to act as Paying Agent (which shall be a depositary institution or
trust company) reasonably acceptable to the Company which appointment shall
be effective on the date on which the Person so appointed gives the Trustee
written notice that it accepts the appointment. Any resignation or removal
of the Paying Agent and appointment of successor Paying Agent pursuant to
this Section 5.6 shall not become effective until acceptance of appointment
by the successor Paying Agent, as provided in this Section 5.6. The Trustee
shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Trustee to execute and deliver to the Trustee an instrument
in which such successor Paying Agent or additional Paying Agent shall agree
with the Trustee that as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Investor Certificateholders in trust for the benefit of the Investor
Certificateholders entitled thereto until such sums shall be paid to such
Holders. The Paying Agent shall return all unclaimed funds to the Trustee
and upon removal of a Paying Agent such Paying Agent shall also return all
funds in its possession to the Trustee. The provisions of Sections 8.1, 8.2,
8.3, 8.5 and 10.19 shall apply to the Trustee also in its role as Paying
Agent, for so long as the Trustee shall act as Paying Agent. Any reference
in this Agreement to the Paying Agent shall include any co-paying agent, if
any, unless the context requires otherwise.
The Company hereby agrees to provide the Trustee from time to time
sufficient funds, on a timely basis and in accordance with and subject to
Section 8.5, for the payment of any reasonable compensation payable to the
Paying Agent for its services under this Section 5.6. The Trustee hereby
agrees that, upon the receipt of such funds from the Company, it shall
promptly pay the Paying Agent such amounts.
Section 5.7 ACCESS TO LIST OF INVESTOR CERTIFICATEHOLDERS' NAMES
AND ADDRESSES. The Trustee will furnish or cause to be furnished by the
Transfer Agent and Registrar to the Company, the Servicer or the Paying
Agent, within ten Business Days after receipt by the Trustee of a written
request therefor from the Company, the Servicer or the Paying Agent,
respectively, in writing, a list of the names and addresses of the Investor
Certificateholders as then recorded by or on behalf of the Trustee. If three
or more Investor Certificateholders of record or any Investor
Certificateholder of any Series or a group of Investor Certificateholders of
record representing Fractional Undivided Interests aggregating not less than
10% of the Invested Amount of the related Outstanding Series (the
"APPLICANTS") apply in writing to the Trustee, and such application states
that the Applicants desire to communicate with other Investor
Certificateholders of any Series with respect to their rights under this
Agreement or under the Investor Certificates and is accompanied by a copy of
the communication which such Applicants propose to transmit, then the
Trustee, after having been adequately indemnified by such Applicants for its
costs and expenses, shall transfer or shall cause the Transfer Agent and
Registrar to transmit, such communication to the Investor Certificateholders
reasonably promptly after the receipt of such application.
Every Investor Certificateholder, by receiving and holding an
Investor Certificate, consents to the disclosure of its name and address as
provided above and agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar, nor any of their respective agents, officers,
directors or employees shall be held accountable by reason of the disclosure
or mailing of any such information as to the names and addresses of the
Investor Certificateholders hereunder, regardless of the sources from which
such information was derived.
As soon as practicable following each Record Date, the Trustee
shall provide to the Paying Agent or its designee, a list of Investor
Certificateholders in such form as the Paying Agent may reasonably request.
45
Section 5.8 AUTHENTICATING AGENT. (a) The Trustee may appoint one
or more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates
in connection with the issuance, delivery, registration of transfer, exchange
or repayment of the Certificates. Whenever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an authenticating agent
and a certificate of authentication executed on behalf of the Trustee by an
authenticating agent. Each authenticating agent must be acceptable to the
Company.
(b) Any institution succeeding to the corporate trust business of
an authenticating agent shall continue to be an authenticating agent without
the execution or filing of any paper or any further act on the part of the
Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee. Upon the receipt by the
Trustee of any such notice of resignation and upon the giving of any such
notice of termination by the Trustee, the Trustee shall immediately give
notice of such resignation or termination to the Company. Any resignation of
an authenticating agent shall not become effective until acceptance of
appointment by the successor authenticating agent as provided in this Section
5.8. The Trustee may at any time terminate the agency of an authenticating
agent by giving notice of termination to such authenticating agent. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time an authenticating agent shall cease to be acceptable to the
Trustee or the Company, the Trustee promptly shall appoint a successor
authenticating agent. Any successor authenticating agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an authenticating agent. No successor authenticating agent (other than an
Affiliate of the Trustee) shall be appointed unless reasonably acceptable to
the Trustee and the Company.
(d) The Company hereby agrees to provide the Trustee from time to
time sufficient funds, on a timely basis and in accordance with and subject
to Section 8.5, for the payment of any reasonable compensation payable to
each authenticating agent for its services under this Section 5.8. The
Trustee hereby agrees that, upon the receipt of such funds from the Company
it shall pay each authenticating agent such amounts.
(e) The provisions of Sections 8.1, 8.2, 8.3 and 8.5 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 5.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in
substantially the following form:
46
"This is one of the Certificates described in the Pooling Agreement
dated as of __________ [__], 1998, among USS Receivables Company, Ltd.,
United Stationers Supply Co., as Servicer, and The Chase Manhattan Bank, as
Trustee.
--------------------
as Authenticating Agent
for the Trustee
By
----------------------
Authorized Signatory"
Section 5.9 TAX TREATMENT. It is the intent of the Servicer, the
Company, the Investor Certificateholders and the Trustee that, for federal,
state and local income and franchise tax purposes, the Investor Certificates
be treated as evidence of indebtedness secured by the Trust Assets and the
Trust not be characterized as a "publicly traded partnership" or an
association taxable as a corporation. The Company and the Trustee, by
entering into this Agreement, and each Investor Certificateholder, by its
acceptance of its Investor Certificate, agree to treat the Investor
Certificates for federal, state and local income and franchise tax purposes
as indebtedness. The parties hereto agree that they shall not cause or
permit the making, as applicable, of any election under Treasury Regulation
Section 301.7701-3 whereby the Trust or any portion thereof would be treated
as a corporation for federal income tax purposes and, except as required by
Section 8.11, shall not file tax returns or obtain any federal employer
identification number for the Trust but shall treat the Trust as a security
device for such purposes. The provisions of this Agreement and all related
Transaction Documents shall be construed to further these intentions of the
parties. This Section 5.9 shall survive the termination of this Agreement
and shall be binding on all transferees of any of the foregoing persons.
Section 5.10 COMPANY EXCHANGES.(a) The Company may, in accordance
with the procedures set forth below, call for an adjustment of the
Exchangeable Company Interest in exchange for (i) an increase in the Invested
Amount of a Class of Investor Certificates of an Outstanding Series and an
increase in the related Series Subordinated Interest or (ii) one or more
newly issued Series of Investor Certificates and the related newly created
Series Subordinated Interest (a "NEW SERIES") (any such exchange, a "COMPANY
EXCHANGE"). The Company may perform a Company Exchange by notifying the
Trustee, in writing at least 30 days in advance (an "EXCHANGE NOTICE") of the
date upon which the Company Exchange is to occur (an "EXCHANGE DATE"). Any
Exchange Notice shall state the designation of any Series (and/or Class, if
applicable) to be issued (or supplemented) on the Exchange Date and, with
respect to each such Series (and/or Class, if applicable): (a) its additional
or Initial Invested Amount, as the case may be, if any, which in the
aggregate at any time may not be greater than the current value of the
Exchangeable Company Interest, if any, at such time, (b) its Certificate Rate
(or the method for allocating interest payments or other cash flow to such
Series), if any, and (c) whether such New Series will be a companion series
to an Outstanding Series (an "EXISTING COMPANION SERIES"; and together with
the New Series, a "COMPANION SERIES"). On the Exchange Date, the Trustee
shall, upon the written order of the Company, authenticate and deliver any
Certificates evidencing an increase in the Invested Amount of a Class of
Investor Certificates or a newly issued Series only upon delivery by the
Company to the Trustee of the following (together with the delivery by the
Company to the Trustee of any additional agreements, instruments or other
documents as are specified in the related Supplement): (a) a Supplement
executed by the Company and specifying the Principal Terms of such Series
(provided that no such Supplement shall be required for any increase in the
Invested Amount of a Class of Investor Certificates
47
unless it is so required by the related Supplement), (b) a Tax Opinion
addressed to the Trustee and the Trust, (c) a General Opinion addressed to
the Trustee and the Trust and (d) written confirmation from each Rating
Agency that the Company Exchange will not result in the Rating Agency's
reducing or withdrawing its rating on any then Outstanding Series rated by
it. Upon the delivery of the items listed in clauses (a) through (d) above,
the existing Exchangeable Company Interest and the applicable Series
Subordinated Interests, as the case may be, shall be deemed cancelled, the
Trustee shall issue the applicable Series of Investor Certificates, dated the
Exchange Date, and the applicable Series Subordinated Interests and the new
Exchangeable Company Interest shall be deemed duly created, in each case as
provided above. There is no limit to the number of Company Exchanges that the
Company may perform under this Agreement. If the Company shall, on any
Exchange Date, retain any Investor Certificates issued on such Exchange Date,
it shall, prior to transferring any such Certificates to another Person,
obtain a Tax Opinion. Additional restrictions relating to a Company Exchange
may be set forth in any Supplement.
(b) Upon any Company Exchange, the Trustee, in accordance with the
written directions of the Company, shall issue to the Company under Section
5.1, for execution and redelivery to the Trustee for authentication under
Section 5.2, (i) one or more Certificates representing an increase in the
Invested Amount of an Outstanding Series or (ii) one or more new Series of
Investor Certificates. Any such Certificates shall be substantially in the
form specified in the applicable Supplement and each shall bear, upon its
face, the designation for such Series to which each such certificate belongs
so selected by the Company.
(c) In conjunction with a Company Exchange, the parties hereto
shall, except as otherwise provided in subsection (a) above, execute a
supplement to this Agreement, which shall define, with respect to any
additional Investor Certificates or newly issued Series, as the case may be:
(i) its name or designation, (ii) its additional or initial principal amount,
as the case may be (or method for calculating such amount), (iii) its coupon
rate (or formula for the determination thereof), (iv) the interest payment
date or dates and the date or dates from which interest shall accrue, (v) the
method for allocating Collections to Holders, including the applicable
Investor Percentage, (vi) the names of any accounts to be used by such Series
and the terms governing the operation of any such accounts, (vii) the issue
and term of a letter of credit or other form of Enhancement, if any, with
respect thereto, (viii) the terms, if any, on which the Certificates of such
Series may be repurchased by the Company or may be remarketed to other
investors, (ix) the Series Termination Date, (x) any deposit account
maintained for the benefit of Holders, (xi) the number of Classes of such
Series, and if more than one Class, the rights and priorities of each such
Class, (xii) the rights of the owner of the Exchangeable Company Interest
that have been transferred to the holders of such Series, (xiii) the
designation of any Series Accounts and the terms governing the operation of
any such Series Accounts, (xiv) provisions acceptable to the Trustee
concerning the payment of the Trustee's fees and expenses and (xv) other
relevant terms (all such terms, the "PRINCIPAL TERMS" of such Series). The
Supplement executed in connection with the Company Exchange shall contain
administrative provisions which are reasonably acceptable to the Trustee.
(d) In order for a New Series to be part of a Companion Series, the
Supplement for the related Existing Companion Series must provide for or
permit the Amortization Period to commence on the Issuance Date for such New
Series, and on or prior to the Issuance Date for the New Series the Servicer
and the Company shall take all actions, if any, necessary to cause the
Amortization Period for such Existing Companion Series to commence on such
Issuance Date. The proceeds from the issuance of the New Series shall be
deposited in the applicable Series Principal Collection Sub-subaccount and
the Company shall, on the Issuance Date for such New Series, deposit into the
applicable Series Non-Principal Sub-subaccount the amount of interest that
will accrue on the New Series over a period specified in the related
Supplement for such New Series. On each day on which principal is paid to the
holders of
48
the Existing Companion Series, the Trustee shall distribute to the Company
from the applicable Series Principal Collection Sub-subaccount of the New
Series an amount (up to the amount of available funds in such account) equal
to the amount distributed on such day to the Investor Certificateholders of
any Existing Companion Series; PROVIDED that, after giving effect to such
distributions, the Aggregate Receivables Amount shall equal or exceed the sum
of (i) the Target Receivables Amount with respect to such Existing Companion
Series on such day, PLUS (ii) the Target Receivables Amount with respect to
the New Series on such day, PLUS (iii) the Target Receivables Amount with
respect to any other Outstanding Series on such day; PROVIDED FURTHER that
the Trustee may conclusively rely on the calculations of the Servicer of such
amounts.
(e) Except as specified in any Supplement for a related Series, all
Investor Certificates of any Series shall be equally and ratably entitled as
provided herein to the benefits hereof without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Agreement
and the applicable Supplement.
Section 5.11 BOOK-ENTRY CERTIFICATES. If specified in any related
Supplement, the Investor Certificates, or any portion thereof, upon original
issuance, shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to the depository
specified in such Supplement (the "DEPOSITORY") which shall be the Clearing
Agency, specified by, or on behalf of, the Company for such Series. The
Investor Certificates shall initially be registered on the Certificate
Register in the name of the nominee of such Clearing Agency, and no
Certificate Book-Entry Holder will receive a definitive certificate
representing such Certificate Book-Entry Holder's interest in the Investor
Certificates, except as provided in Section 5.13. Unless and until
definitive, fully registered Investor Certificates ("DEFINITIVE
CERTIFICATES") have been issued to Holders pursuant to Section 5.13 or the
related Supplement:
(a) the provisions of this Section 5.11 shall be in full force and
effect;
(b) the Company, the Servicer and the Trustee may deal with each
Clearing Agency for all purposes (including the making of distributions on
the Investor Certificates) as the Holder without respect to whether there has
been any actual authorization of such actions by the Certificate Book-Entry
Holders with respect to such actions;
(c) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Agreement, the provisions of this Section
5.11 shall control; and
(d) the rights of Certificate Book-Entity Holders shall be
exercised only through the Clearing Agency and the related Clearing Agency
Participants and shall be limited to those established by law and agreements
between such related Certificate Book-Entry Holders and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository
Agreement, the initial Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit distributions of
principal and interest on the Investor Certificates to such Clearing Agency
Participants.
Notwithstanding the foregoing, no Class or Series of Investor Certificates
may be issued as Book Entry Certificates (but, instead, shall be issued as
Definitive Certificates) unless at the time of issuance of such Class or
Series the Company and the Trustee receive an opinion of independent counsel
that the Certificates of such Class or Series will be treated as indebtedness
for federal income tax purposes.
Section 5.12 NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Holders is required under this Agreement, unless and
until Definitive Certificates shall have been
49
issued to Certificate Book-Entry Holders pursuant to Section 5.13, the
Trustee shall give all such notices and communications specified herein to be
given to the Investor Certificateholders to the Clearing Agencies.
Section 5.13 DEFINITIVE CERTIFICATES. If (a)(i) the Company
advises the Trustee in writing that any Clearing Agency is no longer willing
or able to properly discharge its responsibilities under the applicable
Depository Agreement, and (ii) the Company is unable to locate a qualified
successor, (b) the Company, at its option, advises the Trustee in writing
that it elects to terminate the book-entry system through the Clearing Agency
or (c) after the occurrence of a Servicer Default, Certificate Book-Entry
Holders representing Fractional Undivided Interests aggregating more than 50%
of the Invested Amount held by such Certificate Book-Entry Holders of each
affected Series then issued and outstanding advise the Clearing Agency
through the Clearing Agency Participants in writing, and the Clearing Agency
shall so notify the Trustee, that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of the
Certificate Book-Entry Holders, the Trustee shall notify the Clearing Agency,
which shall be responsible to notify the Certificate Book-Entry Holders, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Book-Entry Holders requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing Agency for
registration, the Trustee shall issue the Definitive Certificates. Neither
the Company nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions.
ARTICLE VI
OTHER MATTERS RELATING
TO THE COMPANY
Section 6.1 LIABILITY OF THE COMPANY. The Company shall be liable
for all obligations, covenants, representations and warranties of the Company
arising under or related to this Agreement or any Supplement. Except as
provided in the preceding sentence and otherwise herein, the Company shall be
liable only to the extent of the obligations specifically undertaken by it
hereunder.
Section 6.2 LIMITATION ON LIABILITY OF THE COMPANY. Except as
provided in Sections 6.1 or otherwise provided herein, neither the Company
nor any of its directors or officers or employees or agents, in their
capacity as transferor of, or in connection with the transfer of, Receivables
and Related Property hereunder, shall be under any liability to the Trust,
the Trustee, the Holders or any other Person for any action taken or for
refraining from the taking of any action pursuant to this Agreement, whether
or not such action or inaction arises from express or implied duties under
this Agreement; PROVIDED, HOWEVER, that this provision shall not protect the
Company against any liability which would otherwise be imposed by reason of
wilful misconduct, bad faith or gross negligence in the performance of any
duties or by reason of reckless disregard of any obligations and duties
hereunder; PROVIDED, FURTHER, that this provision shall not protect any such
director, officer, employee or agent against any liability which would
otherwise be imposed on such Person pursuant to applicable law or the
Company's memorandum or articles of association by reason of wilful
misconduct, bad faith or gross negligence in the performance of such Person's
duties or by reason of reckless disregard of such Person's obligations and
duties hereunder. The Company and any director or officer or employee or
agent of the Company may rely in good faith on any document of any kind PRIMA
FACIE properly executed and submitted by any Person (other than, in the case
of the Company, the Company or the Servicer) respecting any matters arising
hereunder.
50
ARTICLE VII
EARLY AMORTIZATION EVENTS
Section 7.1 EARLY AMORTIZATION EVENTS. Unless modified with
respect to any Series of Investor Certificates by any related Supplement, if
any one of the following events (each, an "EARLY AMORTIZATION EVENT") shall
occur:
(a)(i) the Company shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or
any substantial part of its assets, or the Company shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against the Company any case, proceeding or other action of a nature referred
to in clause (i) above which remains undismissed, undischarged or unbonded
for a period of 60 days or an order for relief, decree, adjudication or
appointment shall occur; or (iii) there shall be commenced against the
Company any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 such days from the entry thereof; or (iv) the
Company shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Company shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due;
(b) the Trust or the Company shall become an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(c) the Trust is characterized for federal income tax purposes as a
"publicly traded partnership" or as an association taxable as a corporation;
or
(d) the Trustee shall be appointed as Successor Servicer pursuant
to subsection 6.2(b) of the Servicing Agreement;
then, an "EARLY AMORTIZATION PERIOD" with respect to all Outstanding Series
shall commence without any notice or other action on the part of the Trustee
or any Investor Certificateholder immediately upon the occurrence of such
event. The Servicer shall notify each Rating Agency and the Trustee in
writing of the occurrence of any Early Amortization Period, specifying the
cause thereof. Further, upon the commencement against the Company of a case,
proceeding or other action described in clause (a)(ii) or (iii) above, the
Company shall not purchase Receivables from any Seller, or transfer
Receivables to the Trust, until such time, if any, as such case, proceeding
or other action is vacated, discharged, or stayed or bonded pending appeal.
Additional Early Amortization Events and the consequences thereof
may be set forth in each Supplement with respect to the Series relating
thereto.
Section 7.2 ADDITIONAL RIGHTS UPON THE OCCURRENCE OF CERTAIN
EVENTS. (a) If an Insolvency Event with respect to the Company occurs, the
Company shall immediately cease to transfer Receivables to the Trust and
shall promptly give notice to the Trustee of such occurrence.
51
Notwithstanding any cessation of the transfer to the Trust of additional
Receivables, Receivables transferred to the Trust prior to the occurrence of
such Insolvency Event and Collections in respect of such Receivables and
interest, whenever created, accrued in respect of such Receivables, shall
continue to be a part of the Trust. Within 15 days of receipt by a
Responsible Officer of the Trustee of written notice of the occurrence of an
Insolvency Event in accordance with Section 7.1, if the Aggregate Invested
Amount and all accrued and unpaid interest thereon have not been paid to the
Investor Certificateholders, then the Trustee shall (i) publish a notice in a
newspaper with a national circulation (an "AUTHORIZED NEWSPAPER") that an
Insolvency Event has occurred and that the Trustee intends to sell, dispose
of or otherwise liquidate the Receivables and the other Trust Assets in a
commercially reasonable manner and (ii) send written notice to the Investor
Certificateholders and request instructions from such holders, which notice
shall request each Investor Certificateholder to advise the Trustee in
writing that it elects one of the following options: (A) the Investor
Certificateholder wishes the Trustee not to sell, dispose of or otherwise
liquidate the Receivables and the other Trust Assets, or (B) the Investor
Certificateholder wishes the Trustee to sell, dispose of or otherwise
liquidate the Receivables and the other Trust Assets and to instruct the
Servicer to reconstitute the Trust upon the same terms and conditions set
forth herein, or (C) the Investor Certificateholder refuses to advise the
Trustee as to the specific action the Trustee to take. If after 60 days from
the day notice pursuant to clause (i) above is first published (the
"PUBLICATION DATE"), the Trustee shall not have received written instructions
of (x) holders of Certificates representing undivided interests in the Trust
aggregating in excess of 50% of the related Invested Amount of each Series
(or in the case of a series having more than one Class of Investor
Certificates, each Class of such series) selecting option (A) above and (y)
if the owners of the Exchangeable Company Interest do not include the Company
(and following the delivery of written notice in the form referred to above
by the Company to such owners), the owners thereof representing undivided
interests in the Trust aggregating in excess of 50% of the Company Interest,
the Trustee shall instruct the Servicer to proceed to sell, dispose of, or
otherwise liquidate the Receivables and the other Trust Assets in a
commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids, and the Servicer shall
proceed to consummate the sale, liquidation or disposition of the Receivables
and the other Trust Assets as provided above with the highest bidder
therefor; PROVIDED, HOWEVER, that if the allocable sale price, less all
reasonable fees, expenses and other amounts due hereunder to the Trustee, its
agents and counsel to the Trustee, to be realized from such sale, liquidation
or disposition would be less than the Aggregate Invested Amount plus accrued
and unpaid interest thereon through the Distribution Date next succeeding the
date of such sale, the Trustee must receive the prior unanimous consent of
all the Investor Certificateholders to such sale, liquidation or disposition.
The Company or any of its Affiliates shall be permitted to bid for the
Receivables and the other Trust Assets. In addition, the Company or any of
its Affiliates shall have the right to match any bid by a third person and be
granted the right to purchase the Receivables and the other Trust Assets at
such matched bid price. The Trustee may obtain a prior determination from
any such conservator, receiver or liquidator that the terms and manner of any
proposed sale, disposition or liquidation are commercially reasonable. The
provisions of Sections 7.1 and 7.2 shall be cumulative. The costs and
expenses incurred by the Trustee in such sale shall be reimbursable to the
Trustee as provided in Section 8.5.
(b) The proceeds from the sale, liquidation or disposition of the
Receivables and the other Trust Assets pursuant to subsection (a) above shall be
treated as Collections on the Receivables and such proceeds will be distributed
to holders of each Series after immediately being deposited in the Collection
Account, in accordance with the provisions of subsection 3.1(d) and the related
Supplement for such Series. After giving effect to all such deposits, the
remaining funds, if any, shall be (i) paid to the Trustee in an amount equal to
the amount of any expenses incurred by the Trustee acting in its capacity either
as Trustee or as liquidating agent pursuant to subsection 7.2(a) above which
have not otherwise been reimbursed prior thereto and (ii) after giving effect to
the transfer to be made pursuant to the
52
preceding clause (i), if applicable, the remainder, if any, shall be
allocated to the Company Interest and shall be released to the owner of the
Exchangeable Company Interest upon cancellation thereof.
ARTICLE VIII
THE TRUSTEE
Section 8.1 DUTIES OF TRUSTEE. (a) The Trustee, prior to the
occurrence of a Servicer Default or Early Amortization Event of which a
Responsible Officer of the Trustee has actual knowledge and after the curing
of all Servicer Defaults and Early Amortization Events which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in the Pooling and Servicing Agreements or any
Supplement and no implied covenants or obligations shall be read into such
Pooling and Servicing Agreements against the Trustee. After the occurrence
of a Servicer Default or Early Amortization Event to the actual knowledge of
a Responsible Officer of the Trustee (which has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested in it in its
capacity as Trustee by any Pooling and Servicing Agreement and any Supplement
and shall use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. The provisions of this Section shall be
applicable to the Trustee in its capacity as Trustee hereunder. If the
Trustee shall have succeeded to the obligations of the Servicer, the
provisions of the Servicing Agreement shall govern the actions of the Trustee
as Successor Servicer.
(b) The Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein upon
resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Trustee and believed by it to be
genuine and to have been signed or presented to it pursuant to any Pooling
and Servicing Agreement by the proper party or parties and the Trustee shall
not be responsible for the accuracy of or verification of any information
contained in any report, including any calculation contained therein,
provided to it pursuant to this Agreement; PROVIDED in the case of any of the
above which are specifically required to be furnished to the Trustee pursuant
to any provision of the Pooling and Servicing Agreements, the Trustee shall,
subject to Section 8.2, examine them to determine whether they substantially
conform to the requirements of this Agreement.
(c) Subject to subsection 8.1(a), no provision of this Agreement or
any Supplement shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own
misconduct; PROVIDED, HOWEVER, that:
(i) The Trustee shall not in its individual capacity be liable for an
error of judgment unless it shall be proved that the Trustee was negligent,
or acted in bad faith, in ascertaining the pertinent facts;
(ii) The Trustee shall not in its individual capacity be liable with
respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with this Agreement or at the direction of the Servicer
or the holders of Investor Certificates evidencing in excess of 50% (or
such lesser percentage as set forth in any applicable provision) of the
Aggregate Invested Amount;
(iii) The Trustee shall not be charged with knowledge of any failure
by the Servicer to comply with any of its obligations, unless a Responsible
Officer of the Trustee receives written notice of such failure from the
Servicer, any Agent or any Investor Certificateholder;
53
(iv) The Trustee shall not be charged with knowledge of a Servicer
Default or Early Amortization Event unless a Responsible Officer shall have
received written notice of such default or event from the Servicer, any
Agent or any Investor Certificateholder. In the absence of receipt of such
notice, the Trustee may conclusively assume that there is no Servicer
Default or Early Amortization Event;
(v) So long as the Trustee has followed the instructions of the
Servicer, the Trustee shall not in any way be held liable by reason of any
insufficiency in any Account or subaccount thereof held by or on behalf of
the Trustee resulting from any investment loss on any Eligible Investment
included therein; and
(vi) The Trustee shall have no duty to monitor the performance of the
Servicer, nor shall it have any liability in connection with malfeasance or
nonfeasance by the Servicer. The Trustee shall have no liability in
connection with compliance of the Servicer or the Company with statutory or
regulatory requirements related to the Receivables.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties under any Pooling and Servicing Agreement or in the exercise of any of
its rights or powers, if the Trustee has reason to believe that the repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in any Pooling
and Servicing Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any obligations of the Servicer
under such Agreement except during such time, if any, as the Trustee shall be
the successor to, and be vested with the rights, duties, powers and privileges
of, the Servicer in accordance with the terms of such Agreement.
(e) Except as expressly provided in any Pooling and Servicing
Agreement, the Trustee shall have no power to vary the corpus of the Trust.
(f) Provided that the Servicer and the Company shall have provided to
the Trustee promptly upon request all books, records and other information
reasonably requested by the Trustee and shall have provided the Trustee with all
necessary access to the properties, books and records of the Servicer and the
Company pursuant to subsection 2.7(d) which the Trustee may reasonably require,
then, if so provided by the express terms of any Supplement, the Trustee shall
within the time provided by such Supplement have (i) completed the Servicer Site
Review, subject to Section 4.10 of the Servicing Agreement and (ii) established
the Standby Liquidation System, and shall have notified the Servicer, each
Rating Agency and each Investor Certificateholder of such events.
(g) The Trustee shall deliver the Internal Operating Procedures
Memorandum to the Company and the Servicer on the Initial Closing Date. From
and after such date, the Trustee shall take such actions as are set forth in the
Internal Operating Procedures Memorandum unless prevented from doing so through
no fault of the Trustee.
(h) Subject to the other provisions of this Agreement and without
limiting the generality of this Section 8.1, the Trustee shall have no duty (i)
to see to any insurance with respect to the Trust Assets, or (ii) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Assets other than from funds available in the
Collection Account.
54
(i) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act.
(j) The Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust created hereby or the powers granted
hereunder.
Section 8.2 RIGHTS OF THE TRUSTEE. Except as otherwise provided in
Section 8.1:
(a) The Trustee may conclusively rely on and shall be protected in
acting on, or in refraining from acting in accord with, any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, appraisal, bond, note or other paper or document believed by it to be
genuine and to have been signed or presented to it pursuant to any Pooling and
Servicing Agreement by the proper party or parties;
(b) The Trustee may consult with counsel of its choice (at the
Company's expense) and any Opinion of Counsel or any advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
with such Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by any Pooling and Servicing Agreement, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Holders, pursuant to the
provisions of any Pooling and Servicing Agreement, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; PROVIDED,
HOWEVER, that nothing contained herein shall relieve the Trustee of the
obligations, upon the occurrence of a Servicer Default or Early Amortization
Event of which a Responsible Officer of the Trustee has written notice (which
has not been cured), to exercise such of the rights and powers vested in it by
any Pooling and Servicing Agreement, and to use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. The right of the
Trustee to perform any discretionary act enumerated in this Agreement shall not
be construed as a duty, and the Trustee shall not be answerable for other than
its negligence or wilful misconduct in the performance of any such act;
(d) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by any Pooling and
Servicing Agreement; PROVIDED that the Trustee shall be liable for its
negligence or willful misconduct;
(e) The Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, direction, order, approval, bond,
note or other paper or document, or to recompute the amount of any allocations
or distributions contained in any direction from the Servicer provided for under
the Agreement, unless requested in writing so to do by the holders of Investor
Certificates evidencing Fractional Undivided Interests aggregating more than 50%
of the Invested Amount of any Series which could be adversely affected if the
Trustee does not perform such acts; PROVIDED, HOWEVER, that such holders of
Investor Certificates shall reimburse the Trustee for any reasonable expense
resulting from any such investigation requested by them; PROVIDED, FURTHER, that
the Trustee shall be entitled to make such further inquiry or investigation into
such facts or matters as it may reasonably see fit, and if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books and
55
records of the Company pursuant to subsection 2.7(d), personally or by agent
or attorney, at the sole cost and expense of the Company;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through affiliates, agents
or attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of, any
such affiliate, agent, attorney, custodian or nominee appointed with due care by
it hereunder;
(g) The Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or the
Accounts for the purpose of establishing the presence or absence of defects, the
compliance by the Company with its representations and warranties or for any
other purpose; and
(h) In the event that the Trustee is also acting as Paying Agent or
Transfer Agent and Registrar hereunder, the rights and protections afforded to
the Trustee pursuant to this Article VIII shall also be afforded to such Paying
Agent or Transfer Agent and Registrar.
Section 8.3 TRUSTEE NOT LIABLE FOR RECITALS IN CERTIFICATES. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). The Trustee makes no representations as to the validity or
sufficiency of any Pooling and Servicing Agreement or of the Certificates (other
than the certificate of authentication on the Certificates) or of any Receivable
or related document. The Trustee shall not be accountable for the use or
application by the Company of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Company in
respect of the Receivables or deposited in or withdrawn from the Accounts or
other accounts hereafter established to effectuate the transactions contemplated
herein and in accordance with the terms of any Pooling and Servicing Agreement.
The Trustee shall not be accountable for the use or application by the
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Servicer or any Sub-Servicer
in respect of the Receivables or deposited in or withdrawn from the Accounts or
any Lockbox by or at the direction of the Servicer, any Sub-Servicer or the
Lockbox Processor, in each case unless the Trustee, acting in its capacity as
Successor Servicer, itself makes such use or application. The Trustee shall at
no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Receivable.
Section 8.4 TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual or any other capacity (a) may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee
and (b) may transact any banking and trust business with the Company, the
Servicer, any Sub-Servicer or any Seller as it would were it not the Trustee.
Section 8.5 TRUSTEE'S FEES AND EXPENSES. The Trustee shall be
entitled to an annual fee agreed upon in writing prior to the Initial Closing
Date to be paid by Park Avenue Receivables Corporation ("PARCO") (which annual
fee shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust) pursuant to a separate fee letter between
PARCO and the Trustee. The Trustee also shall be entitled to reimbursement from
the Servicer or the Company upon the Trustee's request for all reasonable
expenses (including, without limitation, expenses incurred in connection with
notices, requests for documentation or other communications to or directions
from Holders), disbursements, losses, liabilities, damages and advances incurred
or made by the Trustee in
56
accordance with any of the provisions of any Pooling and Servicing Agreement
or by reason of its status as Trustee under any Pooling and Servicing
Agreement (including the reasonable fees and expenses of its agents, any
co-trustee and counsel) except any such expense, disbursement, loss,
liability, damage or advance as may arise from its negligence or bad faith or
willful misconduct; PROVIDED that any payments made by the Company in respect
of any of the foregoing items shall be made solely from funds available to
the Company which are not otherwise needed to be applied to the payment of
any amounts pursuant to any Pooling and Servicing Agreements, shall be
non-recourse other than with respect to proceeds in excess of the proceeds
necessary to make such payment, and shall not constitute a claim against the
Company to the extent that insufficient proceeds exist to make such payment.
Notwithstanding anything in this Agreement to the contrary, in no event shall
the Trustee be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits), even if
the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action. To the extent that the Trustee has not
been paid for any of the foregoing items (including pursuant to the first
sentence of this Section 8.5), the Trustee shall be entitled to be paid for
such items from amounts which otherwise would be distributable to the Company
under Article III of this Agreement. The Trustee shall be entitled to
reimbursement for any reasonable out-of-pocket costs or expenses incurred in
connection with the review, negotiation, preparation, execution and delivery
of any of the Transaction Documents or in connection with the issuance of any
Certificates on the Initial Closing Date. If the Trustee is appointed
Successor Servicer in accordance with the Servicing Agreement, the Trustee,
in its capacity as Successor Servicer, shall also be entitled to be paid the
Servicing Fee and any other compensation to which the Servicer is expressly
entitled hereunder. The provisions of this Section 8.5 shall apply to the
reasonable expenses, disbursements and advances made or incurred by the
Trustee, or any other Person, in its capacity as liquidating agent, to the
extent not otherwise paid. The covenants and agreements contained in this
Section 8.5 (including, without limitation, the covenants to pay the
expenses, disbursements, losses, liabilities, damages and advances provided
for in this Section 8.5) shall survive the termination of any Pooling and
Servicing Agreement and shall be binding, as applicable, on (i) the Servicer
and any Successor Servicer and (ii) the Company.
Section 8.6 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or any state thereof and
authorized under such laws to exercise corporate trust powers, having (or
having a holding company parent with) a combined capital and surplus of at
least $100,000,000 and subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then, for the purpose of this Section 8.6, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 8.6, the Trustee
shall resign immediately in the manner and with the effect specified in
Section 8.7.
Section 8.7 RESIGNATION OR REMOVAL OF TRUSTEE.(a) Subject to
paragraph (c) below, the Trustee may at any time resign and be discharged
from the trust hereby created by giving written notice thereof to the
Company, the Servicer and the Rating Agencies. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor trustee acceptable to the Company (which
acceptance will not unreasonably be withheld); PROVIDED that such right of
the Company to approve a successor trustee shall terminate upon the
occurrence of an Early Amortization Event.
57
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.6 hereof and shall fail to resign
after written request therefor by the Servicer, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
if a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Company may remove the Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 8.8.
(d) The obligations of the Company described in Section 8.5 hereof and
the obligations of the Servicer described in Section 8.5 hereof and Section 5.2
of the Servicing Agreement shall survive the removal or resignation of the
Trustee as provided in this Agreement.
(e) No Trustee under this Agreement shall be personally liable for any
action or omission of any successor trustee.
Section 8.8 SUCCESSOR TRUSTEE.(a) Any successor trustee appointed as
provided in Section 8.7 shall execute, acknowledge and deliver to the Company
and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents or copies thereof, at the expense of the Servicer, and
statements held by it hereunder; and the Company and the predecessor Trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor trustee all such rights, power, duties and obligations.
(b) No successor trustee shall accept appointment as provided in
this Section 8.8 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.6.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 8.8, such successor trustee shall mail notice of such succession
hereunder to each Rating Agency and to all Holders at their addresses as shown
in the Certificate Register.
Section 8.9 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 8.6, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee (unless the Trustee is The Chase
Manhattan Bank) shall promptly give notice (except to the extent prohibited
under any Requirement of Law or Contractual Obligation), but in no event less
than ten days prior to any such merger or consolidation, to the Company, the
Servicer and the Rating Agencies upon any such merger or consolidation of the
Trustee.
58
Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.(a)
Notwithstanding any other provisions of any Pooling and Servicing Agreement,
at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity and for the benefit of
the Holders, such title to the Trust, or any part thereof, and, subject to
the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 8.6 and no notice to
Holders of the appointment of any co-trustee or separate trustee shall be
required under Section 8.8. The Trustee shall promptly notify each Rating
Agency of the appointment of any co-trustee.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any statute of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of any Pooling and
Servicing Agreement, specifically including every provision of any Pooling and
Servicing Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer and the Company.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to any
Pooling and Servicing Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
59
Section 8.11 TAX RETURNS. In the event the Trust shall be
required to file tax returns, the Company shall prepare and file or shall
cause to be prepared and filed (including, without limitation, by the
Servicer) any tax returns required to be filed by the Trust and shall remit
such returns to the Trustee for signature at least five Business Days before
such returns are due to be filed. The Trustee is hereby authorized to sign
any such return on behalf of the Trust. The Company shall also prepare or
shall cause to be prepared (including, without limitation, by the Servicer)
all tax information required by law to be distributed to Holders and shall
deliver such information to the Trustee at least five Business Days prior to
the date it is required by law to be distributed to the Holders. The
Trustee, upon written request, will furnish the Company, or the Company's
designee, with all such information known to the Trustee as may be reasonably
required in connection with the preparation of all tax returns of the Trust,
and shall, upon request, execute such returns. In no event shall the Trustee
in its individual capacity be liable for any liabilities, costs or expenses
of the Trust, the Holders, the Company or the Servicer arising under any tax
law or regulation, including, without limitation, federal, state or local
income or excise taxes or any other tax imposed on or measured by income (or
any interest or penalty with respect thereto or arising from any failure to
comply therewith) and the Company hereby indemnifies and holds the Trust
harmless for any such liabilities, costs and expenses.
Section 8.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under any Pooling and
Servicing Agreement or the Certificates may be prosecuted and enforced by the
Trustee without the possession of any of the Certificates or the production
thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders in respect of which
such judgment has been obtained, in the manner specified in Article III
hereof.
Section 8.13 SUITS FOR ENFORCEMENT. If a Servicer Default shall
occur and be continuing, the Trustee may, as provided in Section 6.1 of the
Servicing Agreement, proceed to protect and enforce its rights and the rights
of the Holders under this Agreement or any other Transaction Document by
suit, action or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement
or any other Transaction Document or in aid of the execution of any power
granted in this Agreement or any other Transaction Document or for the
enforcement of any other legal, equitable or other remedy as the Trustee,
being advised by counsel, shall deem most effectual to protect and enforce
any of the rights of the Trustee or the Holders. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Investor Certificateholder any plan of
reorganization, arrangement, adjustment or composition affecting the
Certificates or the rights of any holder thereof, or authorize the Trustee to
vote in respect of the claim of any Investor Certificateholder in any such
proceeding.
Section 8.14 RIGHTS OF INVESTOR CERTIFICATEHOLDERS TO DIRECT
TRUSTEE. Investor Certificateholders evidencing more than 50% of the Invested
Amount of any Series affected by the conduct of any proceeding or the
exercise of any right conferred on the Trustee shall have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee; PROVIDED, HOWEVER, that, subject to Section 8.1, the Trustee shall
have the right to decline to follow any such direction if the Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Trustee in good faith shall, by a Responsible Officer or
Responsible Officers of the Trustee, determine that the proceedings so
directed would be illegal or expose it to personal liability or be unduly
prejudicial to the rights of Investor Certificateholders not party to such
direction; and PROVIDED, FURTHER, that nothing in any
60
Pooling and Servicing Agreement shall impair the right of the Trustee to take
any action deemed proper by the Trustee and which is not inconsistent with
such direction of the Investor Certificateholders.
Section 8.15 Reserved.
Section 8.16 MAINTENANCE OF OFFICE OR AGENCY. The Trustee will
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where notices and demands to or upon
the Trustee in respect of the Certificates and the Pooling and Servicing
Agreements may be served. The Trustee will give prompt written notice to the
Company, the Servicer and the Holders of any change in the location of the
Certificate Register or any such office or agency.
Section 8.17 LIMITATION OF LIABILITY. The Certificates are
executed by the Trustee, not in its individual capacity but solely as Trustee
of the Trust, in the exercise of the powers and authority conferred and
vested in it by this Agreement. Each of the undertaking and agreements made
on the part of the Trustee in the Certificates is made and intended not as a
personal undertaking or agreement by the Trustee but is made and intended for
the purpose of binding only the Trust.
ARTICLE IX
TERMINATION
Section 9.1 TERMINATION OF TRUST; LIQUIDATION OF RECEIVABLES.(a)
The Trust and the respective obligations and responsibilities of the Company,
the Servicer, the Sub-Servicers and the Trustee created hereby (other than
the obligation of the Trustee to make payments to Holders as hereafter set
forth or of the Company to prepare or cause to be prepared and filed tax or
information reports as provided in Section 8.11 hereof) shall terminate,
except with respect to any such obligations or responsibilities expressly
stated to survive such termination, on the earliest of (i) April 1, 2018 (ii)
at the option of the Company, at any time where the Aggregate Invested Amount
is zero (unless an Early Amortization Event as specified in Section 7.1 of
this Agreement shall have occurred and be continuing, in which case the
Company shall be deemed to elect to terminate the Trust pursuant to this
clause (ii)) and (iii) upon completion of distribution of the amounts
referred to in subsection 7.2(b) (the "TRUST TERMINATION DATE").
(b) If on the Distribution Date in the month immediately preceding
the month in which the Trust Termination Date described in clause (a)(i)
above occurs (after giving effect to all transfers, withdrawals, deposits and
drawings to occur on such date and the payment of principal on any Series of
Certificates to be made on the related Distribution Date pursuant to Article
III) the Invested Amount of any Series would be greater than zero, the
Trustee, at the written direction of the Servicer, shall sell within 30 days
of such Distribution Date all of the Receivables and other Trust Assets. The
proceeds of such sale shall be treated as Collections on the Receivables and
shall be allocated in accordance with Article III. During such 30-day
period, the Servicer shall continue to collect Collections on the Receivables
and allocate Collections in accordance with the provisions of Article III.
The costs and expenses incurred by the Trustee in such sale shall be
reimbursable to the Trustee as provided in Section 8.5.
Section 9.2 CLEAN-UP CALL AND FINAL TERMINATION DATE OF INVESTOR
CERTIFICATES OF ANY SERIES. (a) On the Distribution Date during the
Amortization Period with respect to any Series on which the Invested Amount
(or such other amount as may be set forth in the related Supplement) of such
Series is reduced to an amount equal to or less than the Clean-Up Call
Percentage of the
61
Invested Amount for such Series as of the day preceding the beginning of such
Amortization Period (or such other amount as may be set forth in the related
Supplement), the Company shall have the option to repurchase, and to the
extent set forth in the related Supplement, shall repurchase, the entire
Certificateholders' Interest of such Series, at a purchase price equal to (i)
the outstanding Invested Amount of the Investor Certificates of such Series
PLUS (ii) accrued and unpaid interest through the date of such purchase
(after giving effect to any payment of principal and monthly interest on such
date of purchase) PLUS (iii) all other amounts payable to all Investor
Certificateholders of such Series under the related Supplement (such purchase
price, the "CLEAN-UP CALL REPURCHASE PRICE"). The amount of the Clean-Up
Call Repurchase Price will be deposited into the Collection Account for
credit to the Series Collection Subaccount for such Series on the Business
Day prior to such Distribution Date in immediately available funds and will
be passed through in full to the applicable Investor Certificateholders.
Following any such repurchase, such Certificateholders' Interest in the Trust
Assets shall terminate and such interest therein will be allocated to the
Company Interest and such Holders will have no further rights with respect
thereto. In the event that the Company fails for any reason to deposit the
Clean-Up Call Repurchase Price for such Receivables, the Certificateholders'
Interest in the Receivables and the other Trust Assets will continue and
monthly payments will continue to be made to the Holders.
(b) The amount deposited pursuant to subsection 9.2(a) shall be
paid to the Investor Certificateholders of the related Series pursuant to
Article III on the Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Company pursuant to
subsection 9.2(a) shall be delivered by the Company upon such purchase to,
and be canceled by (in accordance with the written directions of the
Company), the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Company.
(c) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Invested Amount of any Series of
Certificates is greater than zero on its Series Termination Date (after
giving effect to all transfers, withdrawals, deposits and drawings to occur
on such date and the payment of principal to be made on such Series on such
date), the Trustee will sell or cause to be sold, in accordance with the
directions of Investor Certificateholders representing more than 50% of the
Invested Amount of such Series, and pay the proceeds to all Holders of such
Series PRO RATA (except that unless expressly provided to the contrary in the
related Supplement, no payment shall be made to Holders of any Class of any
Series that is by its terms subordinated to any other Class until such senior
Class of Certificates has been paid in full) in final payment of all
principal of and accrued interest on such Series of Certificates, an amount
of Receivables or interests in Receivables up to the Invested Amount of such
Series at the close of business on such date. Absent such direction from
Investor Certificateholders representing more than 50% of the Invested Amount
of such Series the Trustee shall continue to hold the Trust Assets in respect
of such Series in accordance with the terms of the Pooling and Servicing
Agreements until the Trust Termination Date (or until Investor
Certificateholders representing more than 50% of the Invested Amount of such
Series shall otherwise direct the Trustee); PROVIDED that the terms of this
Agreement, the related Supplement and the Servicing Agreement shall be deemed
to remain in full force and effect, except that no additional Receivables
shall be allocated with respect to such Series. The reasonable costs and
expenses incurred by the Trustee in such sale shall be reimbursable to the
Trustee as provided in Section 8.5. Any proceeds of such sale in excess of
such principal and interest paid shall be paid to the holder of the
Exchangeable Company Interest, unless and to the extent otherwise specified
in any applicable Supplement. Upon such Series Termination Date with respect
to the applicable series of Certificates, final payment of all amounts
allocable to any Investor Certificates of such Series shall be made in the
manner provided in this Section 9.2.
62
Section 9.3 FINAL PAYMENT WITH RESPECT TO ANY SERIES. (a) Written
notice of any termination, specifying the Distribution Date upon which the
Investor Certificateholders of any Series may surrender their Investor
Certificates for payment of the final distribution with respect to such
Series and cancellation, shall be given (subject to at least 30 days' (or
such shorter period as is acceptable to the Trustee as determined in its sole
and absolute discretion) prior written notice from the Servicer to the
Trustee containing all information required for the Trustee's notice) by the
Trustee to Investor Certificateholders of such Series, mailed not later than
the fifth Business Day of the month of such final distribution and specifying
(i) the Distribution Date upon which final payment of the Investor
Certificates will be made upon presentation and surrender of Investor
Certificates at the office or offices therein designated, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Investor Certificates at the office or
offices therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an Officer's
Certificate setting forth the information specified in Section 4.3 the
Servicing Agreement covering the period during the then current calendar year
through the date of such notice. The Trustee shall give such notice to the
Transfer Agent and Registrar and the Paying Agent at the time such notice is
given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 9.1(a) or the occurrence of the Series Termination Date with
respect to any Series pursuant to Section 9.2, all funds then on deposit in
the Collection Account (but only to the extent necessary to pay all
outstanding and unpaid amounts to Certificateholders) shall continue to be
held in trust for the benefit of the Certificateholders, and the Paying Agent
or the Trustee shall pay such funds to the Certificateholders upon surrender
of their Certificates in accordance with the terms hereof. Any Certificate
not surrendered on the date specified in subsection 9.3(a)(i) shall cease to
accrue any interest provided for such Certificate from and after such date.
In the event that all of the Investor Certificateholders shall not surrender
their Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a
second written notice to the remaining Investor Certificateholders of such
Series to surrender their Certificates for cancellation and receive the final
distribution will respect thereto. If within one year after the second
notice all the Investor Certificates of such Series shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining Investor
Certificateholders of such Series concerning surrender of their Certificates,
and the cost thereof shall be paid out of the funds in the Collection Account
held for the benefit of such Investor Certificateholders. The Trustee and the
Paying Agent shall pay to the Company upon request any monies held by them
for the payment of principal or interest that remains unclaimed for two
years. After payment to the Company, Holders entitled to the money must look
to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a
customary manner satisfactory to the Trustee.
Section 9.4 COMPANY'S TERMINATION RIGHTS. Upon the termination of
the Trust pursuant to Section 9.1 and the surrender of the Exchangeable Company
Interest and payment to the Trustee (in its capacity as such and/or in its
capacity as Successor Servicer) of all amounts owed to it under any Pooling and
Servicing Agreement, the Trustee shall assign and convey to the Company (without
recourse, representation or warranty) in exchange for the Exchangeable Company
Interest all right, title and interest of the Trust in the Trust Assets, whether
then existing or thereafter created,
63
and all proceeds thereof except for amounts held by the Trustee pursuant to
subsection 9.3(b). The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, representation or
warranty, as shall be reasonably requested by the Company to vest in the
Company all right, title and interest which the Trust had in the Trust Assets.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 AMENDMENT. (a) Any Pooling and Servicing Agreement,
including any schedule or exhibit thereto, may be amended in writing from
time to time by the Servicer, the Company and the Trustee, without the
consent of any holder of any outstanding Certificate, (i) to cure any
ambiguity therein, (ii) to correct or supplement any provisions therein which
may be inconsistent with any other provisions therein or (iii) to add any
other provisions thereto to change in any manner or eliminate any of the
provisions with respect to matters or questions raised under any Pooling and
Servicing Agreement which shall not be inconsistent with the provisions of
any other Pooling and Servicing Agreement; PROVIDED, HOWEVER, that such
action shall not, as evidenced by an Officer's Certificate from the Company
and, to the extent, in the reasonable view of the Company, a question of law
exists, supported by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of the Investor
Certificateholders. The Trustee may, but shall not be obligated to, enter
into any such amendment pursuant to this paragraph or paragraph (b) below
which affects the Trustee's rights, duties or immunities under any Pooling
and Servicing Agreement or otherwise.
(b) Any Pooling and Servicing Agreement and any schedule or exhibit
thereto may also be amended in writing from time to time by the Servicer, the
Company and the Trustee with the consent of Investor Certificateholders
evidencing more than 50% of the Invested Amount of any Series adversely
affected by the amendment (or, if any such Series shall have more than one
Class of Investor Certificates adversely affected by the amendment, 50% or
more of the Invested Amount of each such Class) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of such Pooling and Servicing Agreement or of modifying in any manner the
rights of holders of any Series then issued and outstanding; PROVIDED,
HOWEVER, that no such amendment shall (i) reduce in any manner the amount of,
or delay the timing of, distributions which are required to be made on any
Investor Certificate of such Series without the consent of such Investor
Certificateholder of such Series; (ii) change the definition of or the manner
of calculating the interest of any Investor Certificateholder of such Series
without the consent of such Investor Certificateholder; or (iii) reduce the
aforesaid percentage of Fractional Undivided Interests the holders of which
are required to consent to any such amendment in each case without the
consent of all Holders of each Series adversely affected in any material
respect.
(c) Notwithstanding anything in this Section 10.1 to the contrary,
the Supplement with respect to any Series may be amended on the terms and
with the procedures provided in such Supplement.
(d) The Company or the Servicer shall deliver any proposed
amendment to each Agent at least five days prior to the execution and
delivery thereof.
(e) Promptly after the execution of any such amendment or consent
the Trustee shall furnish written notification of the substance of such
amendment to each Holder of each Outstanding
64
Series (or with respect to an amendment of a Supplement, of the applicable
Series), and the Servicer shall furnish written notification of the substance
of such amendment to each Rating Agency. No such amendment (including,
without limitation, the amendment of any Supplement, notwithstanding anything
to the contrary contained in any Supplement) shall be effective until the
Rating Agency Condition has been satisfied with respect thereto.
(f) It shall not be necessary for the consent of Investor
Certificateholders under this Section 10.1 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(g) In executing or accepting any amendment pursuant to this
Section 10.1, the Trustee shall, upon request, be entitled to receive and
rely upon (i) an Opinion of Counsel (A) stating that such amendment is
authorized pursuant to a specific provision of a Pooling and Servicing
Agreement and complies with such provision, and (B) stating that all
conditions precedent to the execution and delivery of such amendment shall
have been satisfied in full, which opinion in the case of this clause (B)
may, to the extent that such opinion concerns questions of fact, rely on an
Officer's Certificate with respect to such questions of fact, (ii) a
certificate from a Responsible Officer of the Company stating that such
amendment does not adversely affect the interests of the holders of any
outstanding Certificates in any material respect except for holders of the
Series whose consent to such amendment has been obtained in accordance with
clause (b) of this Section 10.1 and (iii) a Tax Opinion.
Section 10.2 PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST.(a)
The Servicer shall cause this Agreement, any Supplement, all amendments
hereto and/or all financing statements and continuation statements and any
other necessary documents covering the Certificateholders' and the Trustee's
right, title and interest to the Trust to be promptly recorded, registered
and filed, and at all times to be kept recorded, registered and filed, all in
such manner and in such places as may be required by law fully to preserve
and protect the right, title and interest of the Trustee hereunder to all
property comprising the Trust. The Servicer shall deliver to the Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Company shall cooperate fully with the
Servicer in connection with the obligations set forth above and will execute
any and all documents reasonably required to fulfill the intent of this
subsection 10.2(a).
(b) With respect to any prospective change in its name, identity or
corporate structure, the Company shall comply fully with subsection 2.8(m)
hereof and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof. If the Company determines that no
refiling is required, it shall provide to the Trustee an Opinion of Counsel
so stating.
Section 10.3 LIMITATION ON RIGHTS OF HOLDERS.(a) The death or
incapacity of any Holder shall not operate to terminate this Agreement or the
Trust, nor shall such death or incapacity entitle such Holder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) Except with respect to the Investor Certificateholders as
expressly provided in any Pooling and Servicing Agreement, no Investor
Certificateholder, solely by virtue of its status as an
65
Investor Certificateholder, shall have any right to vote or in any manner
otherwise control the operation and management of the Trust, or the
obligations of the parties hereto, nor shall any Investor Certificateholder
be under any liability to any third person by reason of any action taken by
the parties to this Agreement pursuant to any provision hereof.
(c) No Investor Certificateholder, solely by virtue of its status
as an Investor Certificateholder, shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Investor Certificateholders previously shall have given to the Trustee
written request to institute such action, suit or proceeding in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt
of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding; it being understood
and intended, and being expressly covenanted by each Investor
Certificateholder with every other Investor Certificateholder and the
Trustee, that no one or more Holders shall have any right in any manner
whatever by virtue of or by availing itself or themselves of any provisions
of the Pooling and Servicing Agreements to affect, disturb or prejudice the
rights of any other of the Investor Certificateholders, or to obtain or seek
to obtain priority over or preference to any other such Investor
Certificateholder, or to enforce any right under this Agreement, except in
the manner herein provided and for the equal, ratable and common benefit of
all Investor Certificateholders. For the protection and enforcement of the
provisions of this Section 10.3, each and every Investor Certificateholder
and the Trustee shall be entitled to such relief as can be given either at
law or in equity.
(d) By their acceptance of Certificates pursuant to this Agreement
and the applicable Supplement, the Holders agree to the provisions of this
Section 10.3.
Section 10.4 NOTICES. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by facsimile), and, unless otherwise expressly provided herein,
shall be deemed to have been duty given or made when delivered by hand, or
three days after being deposited in the mail, postage prepaid, or, in the
case of facsimile notice or overnight courier service, when received, (i)
addressed as follows in the case of the Company, the Servicer and the Trustee
and (ii) in the case of the Sub-Servicers, as set forth under their
signatures in the Receivables Sale Agreement, or, in either case, to such
other address as may be hereafter notified by the respective parties hereto:
The Company: USS Receivables Company, Ltd.
0000 X. Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Facsimile: 000-000-0000
with a copy to the Servicer:
The Servicer: United Stationers Supply Co.
0000 X. Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Facsimile: 000-000-0000
66
The Trustee: The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Services
Facsimile: 000-000-0000
Any notice required or permitted to be mailed to an Investor Certificateholder
shall be given by first-class mail, postage prepaid, or by overnight courier
service, at the address of such Investor Certificateholder as shown in the
Certificate Register. Any notice so given within the time prescribed in any
Pooling Agreement or Servicing Agreement shall be conclusively presumed to have
been duly given, whether or not the Investor Certificateholder receives such
notice.
Section 10.5 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of any Pooling Agreement or Servicing
Agreement shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of such Pooling and Servicing
Agreement and shall in no way affect the validity or enforceability of the other
provisions of any Pooling and Servicing Agreement or of the Certificates or
rights of the Holders.
Section 10.6 ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.3 of the Servicing Agreement,
no Pooling and Servicing Agreement may be assigned by the Company or the
Servicer without the prior written consent of the Trustee acting at the
direction of the holders of 66-2/3% of the Invested Amount of each Outstanding
Series and without the Rating Agency Condition's having been satisfied with
respect to such assignment.
Section 10.7 CERTIFICATES NONASSESSABLE AND FULLY PAID. It is the
intention of the parties to each Pooling and Servicing Agreement that the
Investor Certificateholders shall not be personally liable for obligations of
the Trust, that the interests in the Trust represented by the Investor
Certificates shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever and that Investor Certificates upon authentication
thereof by the Trustee pursuant to Section 5.2 are and shall be deemed fully
paid.
Section 10.8 FURTHER ASSURANCES. The Company and the Servicer agree
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of each Pooling and Servicing Agreement, including,
without limitation, the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of the
UCC of any applicable jurisdiction.
Section 10.9 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Trustee or the Investor
Certificateholders, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
67
Section 10.10 COUNTERPARTS. This Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall
constitute one and the same instrument.
Section 10.11 THIRD-PARTY BENEFICIARIES. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the Holders
and their respective successors and permitted assigns. Except as otherwise
provided in this Article X, no other Person will have any right or obligation
hereunder. No Obligor shall be notified of the transfers made pursuant to
this Agreement or any Supplement.
Section 10.12 ACTIONS BY HOLDERS. (a) Wherever in any Pooling and
Servicing Agreement a provision is made that an action may be taken or a
notice, demand or instruction given by Investor Certificateholders, such
action, notice or instruction may be taken or given by any Investor
Certificateholders of any Series, unless such provision requires a specific
percentage of Investor Certificateholders of a certain Series or all Series.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by an Investor Certificateholder shall bind such Investor
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done or omitted to be done by the Trustee, the
Company or the Servicer in reliance thereon, whether or not notation of such
action is made upon such Certificate.
Section 10.13 MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding
of the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement and the
Servicing Agreement. This Agreement and the Servicing Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
Section 10.14 HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
Section 10.15 SECURITY AGREEMENT. (a) The Company hereby grants
to the Trustee, for the benefit of the Holders, a perfected first priority
security interest in all of the Company's right, title and interest in, to
and under the Receivables and the other Trust Assets now existing and
hereafter created, all monies due or to become due and all amounts received
with respect thereto and all "proceeds" thereof (including Recoveries), to
secure all of the Company's and the Servicer's obligations hereunder,
including, without limitation, the Company's obligation to sell or transfer
Receivables hereafter created to the Trust.
(b) This Agreement shall constitute a security agreement under
applicable law.
Section 10.16 NO SET-OFF. Except as expressly provided in this
Agreement and specifically in Section 3.1(g), the Trustee agrees that it
shall have no right of set-off or banker's lien against, and no right to
otherwise deduct from, any funds held in the Collection Account for any
amount owed to it by the Company, the Servicer or any Investor
Certificateholder.
Section 10.17 NO BANKRUPTCY PETITION. The Servicer hereby
covenants and agrees that, prior to the date which is one year and one day
after the date of the end of the Amortization Period with respect to all
Outstanding Series, it will not institute against, or join any other Person
in instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or
68
liquidation proceedings, or other proceedings under any federal or state
bankruptcy law or Cayman Islands bankrupty law or similar law.
Section 10.18 LIMITATION OF LIABILITY. It is expressly understood
and agreed by the parties hereto that (a) each Pooling and Servicing
Agreement is executed and delivered by the Trustee, not individually or
personally but solely as Trustee of the Trust, in the exercise of the powers
and authority conferred and vested in it, (b) the representations,
undertakings and agreements herein made on the part of the Trust are made and
intended not as personal representations, undertakings and agreements by the
Trustee, but are made and intended for the purpose of binding only the Trust,
(c) nothing herein contained shall be construed as creating any liability of
the Trustee, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties who are signatories to this Agreement and by
any Person claiming by, through or under such parties; PROVIDED, HOWEVER, the
Trustee shall be liable in its individual capacity for its own willful
misconduct, bad faith or negligence and (d) under no circumstances shall the
Trustee be personally liable for the payment of any indebtedness or expenses
of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under
any Pooling and Servicing Agreement; PROVIDED FURTHER, that the foregoing
clauses (a) through (d) shall survive the resignation or removal of the
Trustee.
The Company hereby agrees to indemnify and hold harmless the
Trustee and the Trust for the benefit of the Holders (each, an "INDEMNIFIED
PERSON") from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of, or relating to, activities of the Company pursuant
to any Pooling and Servicing Agreement to which it is a party, including but
not limited to any judgment, award, settlement, reasonable attorneys' fees
and other reasonable costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim, except to
the extent such loss, liability, expense, damage or injury resulted from the
negligence, bad faith or wilful misconduct of an indemnified person; PROVIDED
that any payments made by the Company pursuant to this subsection shall be
made solely from funds available to the Company which are not otherwise
needed to be applied to the payment of any amounts pursuant to any Pooling
and Servicing Agreements, shall be non-recourse other than with respect to
proceeds in excess of the proceeds to make such payment, and shall not
constitute a claim against the Company to the extent that insufficient
proceeds exist to make such payment.
Section 10.19 CERTAIN INFORMATION. The Servicer and the Company
shall promptly provide to the Trustee such information in computer tape, hard
copy or other form regarding the Receivables as the Trustee may reasonably
request to perform its obligations hereunder.
Section 10.20 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
69
IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of
the day and year first above written.
USS RECEIVABLES COMPANY, LTD.
By:
-----------------------------------
Name:
Title:
UNITED STATIONERS SUPPLY CO., as Servicer
By:
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as Trustee
and as Securities Intermediary
By:
-----------------------------------
Name:
Title:
SCHEDULE 1
TO POOLING AGREEMENT
--------------------
RECEIVABLES
Tape to be delivered by the Company to the Trustee.
SCHEDULE 2
TO POOLING AGREEMENT
--------------------
TRUST ACCOUNTS
Account Name Account Number
------------ --------------
USS Receivables 1998-1 Collection
Subaccount 000-000-000
USS Receivables 1998-1 Principal
Collection Sub-Subaccount 000-000-000
USS Receivables 1998-1 Non-Principal
Collection Sub-Subaccount 000-000-000
USS Receivables 1998-1 Accrued
Interest Sub-Subaccount 000-000-000
USS Receivables 1998-1 Collection
Account 000-000-000
SCHEDULE 3
TO POOLING AGREEMENT
--------------------
ACTIONS WITH RESPECT TO CHATTEL PAPER
Each Seller and the Servicer, in each case acting as custodian for the
Company, and the Company, shall immediately take all of the following actions
(in addition to all other actions set forth or reasonably requested as
described in the Transaction Documents and in all documents executed in
connection with the sale of an interest in the Receivables and the grant of a
security interest therein to other Persons) to protect or more fully evidence
the security interest granted by the Company in chattel paper evidencing
Receivables pursuant to agreements and documents entered into after the
initial Issuance Date (such chattel paper being the "CHATTEL PAPER"):
(a) Wherever it is located, maintain all Chattel Paper in
segregated storage cabinets, which cabinets will contain no other documents;
(b) Conspicuously xxxx each such storage cabinet to indicate that
the documents contained therein are Chattel Paper evidencing Receivables of
the Company;
(c) Stamp in red the original of the each document constituting
Chattel Paper with a legend to read as follows:
"THIS DOCUMENT AND ALL RIGHTS HEREUNDER HAVE BEEN SOLD TO USS
RECEIVABLES COMPANY, LTD. AND ARE SUBJECT TO A SECURITY INTEREST
IN FAVOR OF CHASE MANHATTAN BANK, AS TRUSTEE."
or such other legend that is reasonably acceptable to the Trustee; PROVIDED
that at any time that an Early Amortization Event has occurred and is
continuing, such Seller or the Servicer shall, at the request of the Trustee,
stamp any Chattel Paper with the above legend prior to sending it to other
parties for execution.
EXHIBIT A
TO POOLING AGREEMENT
--------------------
FORM OF LOCKBOX AGREEMENT
EXHIBIT B
TO POOLING AGREEMENT
--------------------
INTERNAL OPERATIONS PROCEDURES MEMORANDUM
[to be delivered]
SCHEDULE 4
TO POOLING AGREEMENT
--------------------
LOCATION OF CHIEF EXECUTIVE OFFICE OF THE COMPANY
SCHEDULE 5
TO POOLING AGREEMENT
--------------------
CONTRACTUAL OBLIGATIONS
