Exhibit 10.3

 

EXECUTION VERSION

 

 

 

 

VARIABLE FUNDING NOTE PURCHASE AGREEMENT

 

among

 

 

SSCE FUNDING, LLC,
as Issuer,

 

BARTON CAPITAL LLC,
as the Conduit Purchaser,

 

SOCIETE GENERALE,

as Agent for the Purchasers,

 

and

 

THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,
as Committed Purchasers

 

dated as of November 23, 2004

 

$125,000,000 VARIABLE FUNDING NOTE,
SERIES 2004-2

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS

 

 

 

SECTION 1.01

Certain Defined Terms

 

 

 

 

SECTION 1.02

Other Definitional Provisions

 

 

 

 

ARTICLE II

PURCHASE AND SALE

 

 

 

SECTION 2.01

Purchase and Sale of the VFN

 

 

 

 

SECTION 2.02

Initial Purchase Price

 

 

 

 

SECTION 2.03

Increases

 

 

 

 

SECTION 2.04

Fees

 

 

 

 

SECTION 2.05

Reduction of Maximum Principal Amount

 

 

 

 

SECTION 2.06

Calculation of Series 2004-2 Monthly Interest

 

 

 

 

SECTION 2.07

Benefits of Transaction Documents

 

 

 

 

SECTION 2.08

Broken Funding

 

 

 

 

ARTICLE III

CLOSING

 

 

 

SECTION 3.01

Closing

 

 

 

 

SECTION 3.02

Transactions to be Effected at the Closing

 

 

 

 

ARTICLE IV

CONDITIONS PRECEDENT TO PURCHASE ON THE CLOSING DATE

 

 

 

SECTION 4.01

Performance by SSCE Entities

 

 

 

 

SECTION 4.02

Representations and Warranties

 

 

 

 

SECTION 4.03

Corporate Documents

 

 

 

 

SECTION 4.04

Opinions of Counsel

 

 

 

 

SECTION 4.05

Opinions of Counsel to the Indenture Trustee

 

 

 

 

SECTION 4.06

Reports

 

 

 

 

SECTION 4.07

Financing Statements

 

 

 

 

SECTION 4.08

Documents

 

 

 

 

SECTION 4.09

VFN

 

 

 

 

SECTION 4.10

No Actions or Proceedings

 

 

 

 

SECTION 4.11

Approvals and Consents

 

 

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SECTION 4.12

Officer’s Certificates

 

 

 

 

SECTION 4.13

Accounts

 

 

 

 

SECTION 4.14

Expenses

 

 

 

 

SECTION 4.15

Liens

 

 

 

 

SECTION 4.16

Arrangement Fee

 

 

 

 

SECTION 4.17

Rating Agency Letters

 

 

 

 

SECTION 4.18

Other Information, Certificates, Documents and Opinions

 

 

 

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 

 

 

SECTION 5.01

Representations and Warranties of the Issuer

 

 

 

 

SECTION 5.02

Reaffirmation of Representations and Warranties by the Issuer

 

 

 

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE AGENT AND THE PURCHASERS

 

 

 

SECTION 6.01

Securities Laws; Transfer Restrictions

 

 

 

 

SECTION 6.02

Enforceability

 

 

 

 

ARTICLE VII

COVENANTS

 

 

 

SECTION 7.01

Monthly Report and Daily Report; Notice of Adverse Events

 

 

 

 

SECTION 7.02

Modifications to Transaction Documents

 

 

 

 

SECTION 7.03

Expenses

 

 

 

 

SECTION 7.04

Comfort Letters; Additional Series

 

 

 

 

SECTION 7.05

Reorganizations and Transfers

 

 

 

 

SECTION 7.06

Further Assurances

 

 

 

 

ARTICLE VIII

INDEMNIFICATION

 

 

 

SECTION 8.01

Indemnification

 

 

 

 

SECTION 8.02

Increased Costs

 

 

 

 

SECTION 8.03

Increased Capital

 

 

 

 

SECTION 8.04

Indemnity for Taxes

 

 

 

 

SECTION 8.05

Other Costs, Expenses and Related Matters

 

 

 

 

SECTION 8.06

Limitation on Recourse

 

 

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ARTICLE IX

THE AGENT

 

 

 

SECTION 9.01

Authorization and Action

 

 

 

 

SECTION 9.02

Agent’s Reliance, Etc

 

 

 

 

SECTION 9.03

Agent and Affiliates

 

 

 

 

SECTION 9.04

Indemnification

 

 

 

 

SECTION 9.05

Purchase Decision

 

 

 

 

SECTION 9.06

Successor Agent

 

 

 

 

ARTICLE X

MISCELLANEOUS

 

 

 

SECTION 10.01

Amendments

 

 

 

 

SECTION 10.02

Notices

 

 

 

 

SECTION 10.03

No Waiver; Remedies

 

 

 

 

SECTION 10.04

Binding Effect; Assignability

 

 

 

 

SECTION 10.05

Confidentiality

 

 

 

 

SECTION 10.06

GOVERNING LAW

 

 

 

 

SECTION 10.07

Wavier of Trial by Jury

 

 

 

 

SECTION 10.08

No Proceedings

 

 

 

 

SECTION 10.09

Execution in Counterparts

 

 

 

 

SECTION 10.10

No Recourse

 

 

 

 

SECTION 10.11

Survival

 

 

 

 

SECTION 10.12

Agent Conflict Waiver

 

 

 

 

SECTION 10.13

Recourse

 

 

 

 

EXHIBIT A

Form of Notice of Increase

 

EXHIBIT B

Form of Issuer’s Officer’s Certificate

 

EXHIBIT C

Form of Transfer Supplement

 

 

 

 

SCHEDULE I

Addresses for Notices

 

SCHEDULE II

Trade Names

 

 

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THIS VARIABLE FUNDING NOTE PURCHASE AGREEMENT (as amended, restated,
supplemented or otherwise modified from time to time, this “Agreement”) is dated
as of November 23, 2004, among SSCE Funding, LLC (the “Issuer”), the Conduit
Purchaser, the Agent and the Committed Purchasers from time to time party
hereto.

 

The parties hereto agree as follows:

 

RECITALS

 

WHEREAS, the Issuer will issue the variable funding note pursuant to a Master
Indenture, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the “Master Indenture”), between the
Issuer and Deutsche Bank Trust Company Americas, as indenture trustee (in such
capacity, together with its successors and assigns in such capacity, the
“Indenture Trustee”), as supplemented by the Series 2004-2 Indenture Supplement
to Master Indenture, dated as of the date hereof, between the Issuer and the
Indenture Trustee (as amended, restated, supplemented or otherwise modified from
time to time, the “Series Supplement”, and together with the Master Indenture,
the “Indenture”); and

 

WHEREAS, the Conduit Purchaser desires to acquire such variable funding note and
to make advances from time to time hereunder, and the Committed Purchaser is
committed to acquire the variable funding note and to make advances from time to
time hereunder.

 

NOW, THEREFORE, for full and fair consideration, the parties hereto agree as
follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.01  Certain Defined Terms.  Capitalized terms used herein without
definition shall have the meanings set forth in the Series Supplement, and, if
not defined therein, shall have the meanings set forth in the Master Indenture. 
Additionally, the following terms shall have the following meanings:

 

“Act” means the Securities Act of 1933, as amended.

 

“Additional Amounts” means all amounts owed by the Issuer pursuant to
Section 2.04 and Article VIII hereof, plus Breakage Amounts.

 

“Affected Party” has the meaning specified in Section 8.02 hereof.

 

“Agent” means Société Générale, in its capacity as Agent for the Purchasers.

 

“Agent Roles” has the meaning specified in Section 10.12 hereof.

 

“Aggregate Purchaser Funded Amount” means, on any date of determination an
amount equal to (a) the Initial Purchase Price, plus (b) the aggregate amount of
all Increases made prior to such date of determination, minus (c) the aggregate
amount of principal payments

 

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(including, without limitation, any Decreases) in respect of the VFN made to and
received by or on behalf of the Purchasers prior to such date.

 

“Asset Purchase Agreement” shall mean, the asset purchase agreement, liquidity
asset purchase agreement, stand-by purchase agreement or other similar agreement
pursuant to which any bank or group of banks or financial institutions agrees to
purchase or make loans secured by (or otherwise advance funds against) all or
any portion of the Conduit Purchaser’s interest in the VFN in order to support
the Conduit Purchaser’s repayment of the Commercial Paper issued to fund or
maintain such interest.

 

“Assignment and Acceptance” means an assignment and acceptance agreement entered
into by a Purchaser, a permitted assignee and the Agent for such Purchaser,
pursuant to which such assignee may become a party to this Agreement.

 

“Blended Rate” shall mean, with respect to any Funding Tranche funded or
maintained through the issuance of Commercial Paper, the rate equivalent to the
weighted average of (i) the weighted average of the discount rates on all of the
Conduit Purchaser’s Commercial Paper issued at a discount and outstanding during
the related Fixed Period, converted to an annual yield-equivalent rate on the
basis of a 360-day year, which rates shall include dealer fees and commissions
and (ii) the weighted average of the annual interest rates payable on all
interest-bearing Commercial Paper outstanding during the related Fixed Period,
on the basis of a 360-day year, which rates shall include dealer fees and
commissions; provided, that to the extent that the VFN (or any portion thereof)
is funded by a specific issuance of Commercial Paper, the “Blended Rate” shall
equal the rate or weighted average of the rates applicable to such issuance.

 

“Breakage Amounts” has the meaning specified in Section 2.08 hereof.

 

“Closing” has the meaning specified in Section 3.01 hereof.

 

“Closing Date” has the meaning specified in Section 3.01 hereof.

 

“Commercial Paper” shall mean the short-term promissory notes of the Conduit
Purchaser (or a Conduit Assignee) issued by the Conduit Purchaser (or a Conduit
Assignee) in the United States commercial paper market.

 

“Committed Purchasers” means Barton Capital LLC and each of its assigns (with
respect to its commitment to make Increases) that shall become a party to this
Agreement pursuant to Section 10.04 hereof.

 

“Conduit Assignee” shall mean any special purpose vehicle issuing indebtedness
in the United States commercial paper market.

 

“Conduit Purchaser” means Barton Capital LLC and any of its permitted assigns
that is a Conduit Assignee.

 

“CP Rate” for any Fixed Period for any Funding Tranche means, to the extent the
Conduit Purchaser funds such Funding Tranche for such Fixed Period by issuing
Commercial

 

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Paper, either the Match-Funding Rate or the Blended Rate, as determined by the
Agent in its sole discretion.

 

“Decrease” shall have the meaning assigned to such term in the Series
Supplement.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

“Fee Letter” means the letter or letters, dated November 23, 2004, between the
Issuer, Smurfit-Stone and the Agent setting forth certain fees payable in
connection with the purchase of the VFN by the Agent for the benefit of the
Purchasers.

 

“Fixed Period” means, with respect to a Funding Tranche, a period selected by
the Agent in its sole discretion; provided, that

 

(i)                                     any Fixed Period with respect to any
Funding Tranche not funded by the issuance of Commercial Paper shall be the
period from and including the initial funding thereof to be excluding the next
Payment Date and thereafter the Accrual Period;

 

(ii)                                  any Fixed Period with respect to any
Funding Tranche funded by the issuance of Commercial Paper will not be for a
term of more than 90 days; and

 

(iii)                               any Fixed Period in respect of which
interest is computed by reference to the CP Rate may be terminated at the
election of, and upon notice thereof to the Issuer by, the Agent any time, in
which case the Funding Tranche allocated to such terminated Fixed Period shall
be allocated to a new Fixed Period and shall accrue interest at the VFN Rate
(determined by reference to the One-Month LIBOR).

 

“Funding Tranche” means one or more portions of the Aggregate Purchaser Funded
Amount used to fund or maintain the VFN that accrue interest by reference to
different interest rates.

 

“Governmental Actions” means any and all consents, approvals, permits, orders,
authorizations, waivers, exceptions, variances, exemptions or licenses of, or
registrations, declarations or filings with, any Governmental Authority required
under any Governmental Rules.

 

“Governmental Authority” means the United States of America, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and having jurisdiction over the applicable Person.

 

“Governmental Rules” means any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions, of any
Governmental Authority and any and

 

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all legally binding conditions, standards, prohibitions, requirements and
judgments of any Governmental Authority.

 

“Increase” shall have the meaning assigned to such term in the Series
Supplement.

 

“Increase Amount” means the amount requested by the Issuer to be funded by the
Purchasers on an Increase Date.

 

“Increase Date” means the date on which each Increase occurs.

 

“Increased Capital” has the meaning set forth in Section 8.03 hereof.

 

“Increased Costs” has the meaning set forth in Section 8.02 hereof.

 

“Indemnified Party” means any Purchaser, the Agent or any of their officers,
directors, employees, agents, representatives, assignees or Affiliates.

 

“Initial Purchase Price” has the meaning specified in Section 2.02 hereof.

 

“Issuer Indemnified Amounts” has the meaning specified in Section 8.01(a)
hereof.

 

“Interest Period” means “Accrual Period”, as such term is defined in the Series
Supplement.

 

“Liquidity Purchasers” means each of the purchasers party to the Asset Purchase
Agreement.

 

“Match-Funding Rate” for any Fixed Period means, with respect to any Funding
Tranche funded or maintained by the Conduit Purchaser, to the extent the Conduit
Purchaser funds such Funding Tranche for such Fixed Period by issuing Commercial
Paper, a rate per annum equal to the sum of (i) the rate (or if more than one
rate, the weighted average of the rates) at which Commercial Paper issued to
fund such Funding Tranche may be sold by any placement agent or commercial paper
dealer selected by the Agent; provided, that if the rate (or rates) as agreed
between any such agent or dealer and the Agent with regard to any Fixed Period
for such Funding Tranche is a discount rate (or rates), then such rate shall be
the rate (or if more than one rate, the weighted average of the rates) resulting
from converting such discount rate (or rates) to an interest-bearing equivalent
rate per annum, plus (ii) the commissions and charges charged by such placement
agent or commercial paper dealer with respect to such Notes, expressed as a
percentage of such face amount and converted to an interest-bearing equivalent
rate per annum, plus (iii) any negative carry with respect to payments that, due
to timing issues, cannot be deployed until the following Business Day. 
Notwithstanding anything in this Agreement to the contrary, the Issuer agrees
that any amounts payable to the Conduit Purchaser in respect of Series 2004-2
Monthly Interest for any Fixed Period with respect to any Funding Tranche funded
by the Conduit Purchaser at the Match-Funding Rate shall include an amount equal
to the portion of the face amount of the outstanding Commercial Paper issued to
fund or maintain such Funding Tranche that corresponds to the portion of the
proceeds of such

 

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Commercial Paper that was used to pay the interest component of maturing
Commercial Paper issued to fund or maintain such Funding Tranche, to the extent
that the Conduit Purchaser had not received payments of interest in respect of
such interest component prior to the maturity date of such maturing Commercial
Paper.  For purposes of the foregoing sentence, the “interest component” of
Commercial Paper equals the excess of the face amount thereof over the net
proceeds received by the Conduit Purchaser from the issuance of Commercial
Paper, except that if such Commercial Paper is issued on an interest-bearing
basis its “interest-component” will equal the amount of interest accruing on
such Commercial Paper through its maturity.

 

“Notice of Increase” means a written notice of an Increase in form and substance
substantially similar to Exhibit A hereto, signed by the Issuer and delivered to
the Agent and the Indenture Trustee.

 

“Purchase Expiration Date” means the date on which the Series 2004-2
Amortization Period commences under the Series Supplement.

 

“Purchaser Percentage” of any Committed Purchaser means (a) with respect to
Barton Capital LLC, as the Committed Purchaser, the percentage set forth on the
signature page to this Agreement as changed by each Assignment and Acceptance
entered into with an assignor or assignee, as the case may be, or (b) with
respect to a Committed Purchaser that has entered into an Assignment and
Acceptance, the percentage set forth therein as such Purchaser’s Purchaser
Percentage, or such percentage as changed by each Assignment and Acceptance
entered into between such Committed Purchaser and an assignor or assignee.

 

“Purchasers” means, the Conduit Purchaser and the Committed Purchasers.

 

“Reduction” has the meaning specified in Section 2.05 hereof.

 

“SSCE Entity” means the Issuer, any Seller, Smurfit-Stone, in its individual
capacity and as the Servicer and any other Person party to the Transaction
Documents that is an affiliate of any of the foregoing.

 

“Series Supplement” has the meaning set forth in the recitals to this Agreement.

 

“VFN” means the Series 2004-2 Notes.

 

SECTION 1.02  Other Definitional Provisions.  (a)  All terms defined in this
Agreement shall have the meanings defined herein 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 1.01, and accounting terms partially defined in
Section 1.01 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 generally accepted
accounting principles, the definitions contained herein shall control.

 

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(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, the Schedules and
Exhibits in or to this Agreement unless otherwise specified.

 

(d)                                 For purposes of clarification, the term
“Transaction Documents” shall include, without limitation, this Agreement, the
VFN and each Indenture Supplement.

 

ARTICLE II

PURCHASE AND SALE

 

SECTION 2.01  Purchase and Sale of the VFN.  On the terms and subject to the
conditions set forth in this Agreement, and in reliance on the covenants,
representations, warranties and agreements herein set forth, the Issuer shall
offer to sell to the Agent, on behalf of the Purchasers, and the Agent (i) may
on behalf of the Conduit Purchaser or (ii) if the Conduit Purchaser elects not
to make the purchase thereof at such time shall, on behalf of the Committed
Purchaser, purchase at the Closing, the VFN in an initial outstanding principal
amount equal to the Initial Note Principal Balance.

 

SECTION 2.02  Initial Purchase Price.  The VFN is to be purchased at a price
(the “Initial Purchase Price”) equal to 100% of its Initial Note Principal
Balance.

 

SECTION 2.03  Increases.  (a)  Subject to the terms and conditions of this
Agreement and the Series Supplement, from time to time prior to the Purchase
Expiration Date upon receipt by the Agent and the Indenture Trustee of a Notice
of Increase, (i) the Agent, on behalf of the Conduit Purchaser, and in the sole
and absolute discretion of the Conduit Purchaser, may make Increases and (ii)
if, the Conduit Purchaser elects not to make an Increase, each Committed
Purchaser severally agrees to fund its respective Purchaser Percentages of such
Increase; provided, however, that no Committed Purchaser shall be required to
fund a portion of any Increase if, after giving effect thereto, (A) its
Purchaser Percentage times the Aggregate Purchaser Funded Amount would exceed
its Purchaser Percentage times the Maximum Principal Amount or (B) if such
Committed Purchaser is a Liquidity Purchaser, without double counting, its
Purchaser Percentage times the Aggregate Purchaser Funded Amount plus its
Purchaser’s Interest (as defined in the Asset Purchase Agreement) as a Liquidity
Purchaser under the Asset Purchase Agreement would exceed its Purchaser
Percentage times the Maximum Principal Amount.

 

(b)                                 Each Increase hereunder shall be subject to
the further conditions precedent that:

 

(i)                                     The Agent will have received copies of
each of the Monthly Report and Daily Report, in each case, most recently
required to have been delivered under the Series Supplement;

 

(ii)                                  Each of the representations and warranties
of each SSCE Entity made in the Transaction Documents to which it is a party
shall be true and correct as of

 

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the applicable Increase Date (except to the extent they expressly relate to an
earlier or later time);

 

(iii)                               Each SSCE Entity shall be in compliance with
its respective covenants contained in the Transaction Documents;

 

(iv)                              Such Increase and the application of the
proceeds thereof shall not result in the occurrence of (1) a Pay-Out Event for
any Series, a Servicer Default or an Event of Default, or (2) an event or
occurrence, which, with the passing of time or the giving of notice thereof, or
both, would become a Pay-Out Event for any Series, a Servicer Default or an
Event of Default; and;

 

(v)                                 The Purchase Expiration Date shall not have
occurred;

 

(vi)                              Immediately prior to and after giving effect
to such Increase, the Series 2004-2 Allocated Receivables Amount shall equal or
exceed the Series 2004-2 Target Receivables Amount; and

 

(vii)                           The Agent and the Indenture Trustee shall have
received a completed Notice of Increase with respect to such proposed Increase,
in accordance with Section 3.3(a)(ii) of the Series Supplement;

 

(c)                                  Each Increase of the VFN shall be requested
in an aggregate principal amount of $250,000 and integral multiples of $100,000
in excess thereof; provided, that an Increase may be requested in the entire
remaining Maximum Principal Amount.

 

(d)                                 The purchase price of each Increase shall be
equal to 100% of the Increase Amount, and shall be paid not later than 3:00 p.m.
(New York City time) on the Increase Date by wire transfer of immediately
available funds to such account as may from time to time be specified by the
Issuer in a written notice to the Agent.

 

(e)                                  All conditions set forth in Section 3.3(b)
of the Series Supplement, to the extent applicable, shall have been satisfied at
such time.

 

SECTION 2.04    Fees.  The Issuer shall pay to the Agent for the benefit of the
applicable Purchasers as and when due and in accordance with the provisions for
payment set forth in Article V of the Series Supplement, each of the following
fees:

 

(i)                                     Each Purchaser shall be entitled to
receive a fee with respect to each Interest Period (or portion thereof) (the
“Utilization Fee”) which shall accrue on each day during such Interest Period in
the amount calculated as such for such Interest Period in the Fee Letter.

 

(ii)                                  Each Committed Purchaser shall be entitled
to receive a fee with respect to each Interest Period (or portion thereof) (the
“Unused Fee”) which shall accrue on each day during such Interest Period in the
amount calculated as such for such Interest Period in the Fee Letter.

 

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SECTION 2.05  Reduction of Maximum Principal Amount.  (a)  On any Payment Date
during the Revolving Period, upon the written request of the Issuer, the Maximum
Principal Amount may be permanently reduced, in full or in part (a “Reduction”),
by the Issuer; provided that the Issuer shall have given the Agent and the
Indenture Trustee irrevocable written notice (effective upon receipt) of the
amount of such Reduction prior to 10:00 a.m. (New York City time) on a Business
Day that is at least sixty (60) days prior to the date that such Reduction is to
become effective; provided, further, that any such Reduction shall be in an
amount equal to $10,000,000 or integral multiples of $5,000,000 in excess
thereof; and provided, further, that no Reduction may cause the Maximum
Principal Amount to be lower than the greater of (i) the Outstanding Principal
Balance and (ii) in the case of any partial Reduction, $100,000,000.

 

(b)                                 The Issuer shall pay the Agent and the
applicable Purchasers any accrued and unpaid fees, costs and expenses on the
date of any such Reduction with respect to the reduction amount.

 

SECTION 2.06  Calculation of Series 2004-2 Monthly Interest.  (a)  On the
Business Day prior to each Settlement Date, the Agent shall calculate, for the
applicable Interest Period, the aggregate Series 2004-2 Monthly Interest for
each Funding Tranche (such Series 2004-2 Monthly Interest to be calculated using
the VFN Note Rate, if necessary, for the remaining days in such Interest
Period).

 

(b)                                 The Issuer agrees to pay, and the Issuer
agrees to instruct the Servicer and the Indenture Trustee to pay, all amounts
payable by it with respect to the VFN, this Agreement and the Series Supplement
to the account designated by the Agent.  All such amounts shall be paid no later
than 3:00 p.m. (New York City time) on the day when due as determined in
accordance with this Agreement, the Indenture and the other Transaction
Documents, in Dollars in immediately available funds.  Amounts received after
that time shall be deemed to have been received on the next Business Day and
shall bear interest at 2% per annum above the VFN Rate (determined by reference
to the One-Month LIBOR) then in effect, which interest shall be payable on
demand.

 

SECTION 2.07  Benefits of Transaction Documents.  Each SSCE Party hereby
acknowledges and confirms that each representation, warranty, covenant and
agreement made by it under any Transaction Document to which it is a party shall
also be for the benefit and security of the Purchasers and the Agent.

 

SECTION 2.08  Broken Funding.  In the event of (i) the payment of any principal
of any Funding Tranche other than on the last day of the Fixed Period applicable
thereto (including as a result of the occurrence of the commencement of the
Series 2004-2 Amortization Period or an optional prepayment of a Funding
Tranche), or (ii) any failure to borrow, continue or prepay any Funding Tranche
on the date specified in any notice delivered pursuant hereto, then, in any such
event, the Issuer shall compensate the applicable Purchaser for the loss, cost
and expense attributable to such event.  Such loss, cost or expense to any such
Purchaser shall be deemed to include an amount (the “Breakage Amount”)
determined by such Purchaser (or the Agent) to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such
Funding Tranche had such event not occurred, at the interest rate that would
have been applicable to such Funding Tranche, for the period from the date of
such event

 

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to the last day of the Fixed Period (or, in the case of a failure to borrow for
the period that would have been the related Fixed Period), over (ii) the amount
of interest which would be obtainable upon redeployment or reinvestment of an
amount of funds equal to such Funding Tranche for such period.  A certificate of
any Purchaser incurring any loss, cost or expense as a result of any of the
events specified in this Section 2.08 and setting forth any amount or amounts
that such Purchaser is entitled to receive pursuant to this Section 2.08 and the
reason(s) therefor shall be delivered to the Issuer by the Agent and shall
include reasonably detailed calculations and shall be conclusive absent manifest
error.  The Issuer shall pay to the related Agent on behalf of each such
Purchaser the amount shown as due on any such certificate on the first Payment
Date which is not less than three Business Days after receipt thereof.

 

ARTICLE III

CLOSING

 

SECTION 3.01  Closing.  The closing (the “Closing”) of the purchase and sale of
the VFN shall take place on or about 10:00 a.m. on November 23, 2004 or if the
conditions to closing set forth in Article IV of this Agreement shall not have
been satisfied or waived by such date, as soon as practicable after such
conditions shall have been satisfied or waived, or at such other time, date and
place as the parties hereto shall agree upon (the date of the Closing being
referred to herein as the “Closing Date”).

 

SECTION 3.02  Transactions to be Effected at the Closing.  At the Closing, the
Issuer shall deliver the VFN to the Agent in satisfaction of the Issuer’s
obligation to the Agent hereunder.

 

ARTICLE IV

CONDITIONS PRECEDENT TO
PURCHASE ON THE CLOSING DATE

 

The purchase by the Agent on behalf of the Purchasers of the VFN is subject to
the satisfaction at the time of the Closing of the following conditions (any or
all of which may be waived in writing by the Agent in its sole discretion):

 

SECTION 4.01  Performance by SSCE Entities.  All the terms, covenants,
agreements and conditions of the Transaction Documents to be complied with and
performed by the SSCE Entities at or before the Closing shall have been complied
with and performed.

 

SECTION 4.02  Representations and Warranties.  Each of the representations and
warranties of each SSCE Entity made in the Transaction Documents to which it is
a party shall be true and correct as of the time of the Closing (except to the
extent they expressly relate to an earlier or later time).

 

SECTION 4.03  Corporate Documents.  The Agent shall have received copies of the
(i) Certificate of Incorporation (or certificate of formation, as applicable),
good standing certificate and By-Laws (or operating agreement or limited
liability company agreement, as applicable) of each SSCE Entity, (ii)
resolutions from the Board of Directors (or other governing

 

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body, as applicable) of each SSCE Entity with respect to the Transaction
Documents to which it is a party, and (iii) incumbency certificate of each SSCE
Entity, each certified by appropriate corporate authorities.

 

SECTION 4.04  Opinions of Counsel.  The Agent shall have received favorable
opinions from counsel to each of the SSCE Entities, dated as of the Closing Date
and addressed to the Agent and each Purchaser, and reasonably satisfactory in
form and substance to the Agent and its counsel, as to such matters (including
without limitation, general corporate matters, certain bankruptcy matters, UCC
perfection and priority matters and enforceability matters) as the Agent and its
counsel may reasonably request, or any other matters required to be covered by
any Rating Agency.

 

SECTION 4.05  Opinions of Counsel to the Indenture Trustee.  The Agent shall
have received favorable opinions with respect to the Indenture Trustee, dated as
of the Closing Date and addressed to the Agent and each Purchaser, and
reasonably satisfactory in form and substance to the Agent and its counsel, as
to such matters as the Agent and its counsel may reasonably request, or any
other matters required to be covered by any Rating Agency.

 

SECTION 4.06  Reports.  The Agent shall have received a copy of the most recent
Monthly Report and the most recent Daily Report, in each case prior to Closing.

 

SECTION 4.07  Financing Statements.  The Agent shall have received evidence
satisfactory to it of the completion of all recordings, registrations, notices
and filings as may be necessary or, in the opinion of the Agent, desirable to
perfect or evidence the sale by each Seller to the Issuer of their respective
ownership interests in the Receivables and the related SA Transferred Assets and
the proceeds thereof and the security interest granted to the Indenture Trustee
pursuant to the Indenture, including, without limitation:

 

Acknowledgment copies of all UCC financing statements and assignments that have
been filed in the offices of the Secretary of State of the applicable states and
in the appropriate office or offices of such other locations as may be specified
in the opinions of counsel delivered pursuant to Section 4.04 hereof.

 

SECTION 4.08  Documents.  The Agent shall have received a duly executed
counterpart of each of the Transaction Documents and each and every document or
certification delivered by any party in connection with any of such agreements,
and each such document shall be in full force and effect.

 

SECTION 4.09  VFN.  The Agent shall have received an executed VFN being
purchased by the Agent on behalf of the Purchasers, registered in the name of
the Agent, as agent for the Purchasers.

 

SECTION 4.10  No Actions or Proceedings.  No action, suit, proceeding or
investigation by or before any Governmental Authority shall have been instituted
to restrain or prohibit the consummation of, or to invalidate, the transactions
contemplated by the Transaction Documents and the documents related thereto.

 

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SECTION 4.11  Approvals and Consents.  All Governmental Actions of all
Governmental Authorities required with respect to the transactions contemplated
by the Transaction Documents and the other documents related thereto shall have
been obtained or made.

 

SECTION 4.12  Officer’s Certificates.  The Agent shall have received Officer’s
Certificates from each SSCE Entity in form and substance reasonably satisfactory
to the Agent and its counsel, dated as of the Closing Date, certifying as to the
satisfaction of the conditions set forth in Sections 4.01 and 4.02 hereof with
respect to such SSCE Entity.  With respect to the Issuer, the Issuer’s Officer’s
Certificate shall be in the form of Exhibit B.

 

SECTION 4.13  Accounts.  The Agent shall have received evidence that the Series
Accounts for Series 2004-2 have been established in accordance with the terms of
the Indenture.

 

SECTION 4.14  Expenses.  Costs and expenses of the Agent and the Purchasers
accrued and payable under Section 8.05, including all accrued attorneys’ fees,
costs and expenses shall have been paid.

 

SECTION 4.15  Liens.  The Agent shall have received search reports showing that
no Liens exist on any Collateral, other than (i) Liens in favor of (or
appropriately assigned to) the Indenture Trustee, (ii) Permitted Encumbrances,
and (iii) Liens for which releases or acceptable assignments or other amendments
have been delivered to the Indenture Trustee.

 

SECTION 4.16  Arrangement Fee.  The fees due on the Closing Date (as specified
in the Fee Letter), and all other expenses of the Agent or the Purchasers
(including reasonable attorneys’ fees and expenses) shall have been paid.

 

SECTION 4.17  Rating Agency Letters.  The Agent shall have received evidence
satisfactory to it that (i) the Series 2004-2 Notes shall be rated “Aa2” by
Moody’s Investors Service, Inc. (“Moody’s”) and “AA” by Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc. and (ii) to the
extent required by the Conduit Purchaser’s commercial paper program, a letter
from each Rating Agency rating the Conduit Purchaser’s Commercial Paper
confirming its rating of the Conduit Purchaser’s Commercial Paper or that such
rating will not be withdrawn or downgraded after giving effect to this Agreement
and the transactions contemplated hereby.

 

SECTION 4.18  Other Information, Certificates, Documents and Opinions.  The SSCE
Entities shall have furnished to the Agent such other information, certificates,
documents and opinions as the Agent may reasonably request.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 

SECTION 5.01  Representations and Warranties of the Issuer.  The Issuer hereby
represents and warrants to the Agent and each Purchaser that:

 

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(a)                                  Organization and Good Standing.  The Issuer
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite corporate power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required and has the corporate power and authority to execute, deliver and
perform each of the Transaction Documents and each agreement or instrument
contemplated hereby or thereby to which it is or will be a party.

 

(b)                                 Due Authorization.  The execution and
delivery of this Agreement, the other Transaction Documents to which it is a
party, and the consummation of the transactions provided for herein and therein
have been duly authorized by the Issuer by all necessary limited liability
company action on the part of the Issuer.

 

(c)                                  Binding Obligation.  Each of this Agreement
and the other Transaction Documents to which it is a party has been duly
executed and delivered by it and constitutes a legal, valid and binding
obligation of it enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors’ rights generally and
except as enforceability may be limited by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.

 

(d)                                 No Violation.  The execution and delivery of
this Agreement and the other Transaction Documents to which the Issuer is a
party, the performance of the transactions contemplated hereby and thereby, and
the fulfillment of the terms hereof and thereof will not conflict with, violate,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under, any Requirement of
Law applicable to Issuer or any indenture, contract, agreement, mortgage, deed
of trust, or other instrument to which the Issuer is a party or by which it or
its properties is bound.

 

(e)                                  No Proceedings.  There are no proceedings
or investigations pending or, to the best knowledge of the Issuer, threatened
against the Issuer, before any Governmental Authority (i) asserting the
invalidity of this Agreement or any other Transaction Document, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any other Transaction Document, (iii) seeking any determination or
ruling that, if determined adversely to the Issuer, would, in the reasonable
judgment of the Issuer, materially and adversely affect the performance by the
Issuer of its obligations under this Agreement or any other Transaction Document
or (iv) seeking any determination or ruling that, if determined adversely to the
Issuer, could materially and adversely affect the validity or enforceability of
this Agreement or any other Transaction Document.

 

(f)                                    All Consents Required.  The execution,
delivery and performance by it of this Agreement and each of the other
Transaction Documents to which it is a party, and the consummation of the
transactions contemplated by any of the foregoing (a) do not require any consent
or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect, (b) will not violate the certificate of incorporation,
by-laws or other organizational documents of it or any

 

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order of any Governmental Authority, and (c) will not result in the creation or
imposition of any Lien on any of its assets.

 

(g)                                 Perfection.  (i) Immediately preceding the
Closing Date and the date of each Increase, the Issuer shall be the owner of all
of the Receivables and Transferred Assets and proceeds with respect thereto,
free and clear of all Adverse Claims.  On or prior to the Closing Date and the
date of each Increase, all financing statements and other documents required to
be recorded or filed in order to perfect and protect the assets of the Issuer
against all creditors (other than the Indenture Trustee and the Noteholders) of,
and purchasers (other than the Indenture Trustee and the Noteholders) from, the
Issuer and each Seller will have been (or will be within 10 days of the Closing
Date) duly filed in each filing office necessary for such purpose, and all
filing fees and taxes, if any, payable in connection with such filings shall
have been (or will be within 10 days of the Closing Date) paid in full;

 

(ii)                                  the Indenture constitutes a valid grant of
a security interest to the Indenture Trustee for the benefit of the Noteholders
and the Indenture Trustee in all right, title and interest of the Issuer in the
Collateral and proceeds with respect thereto, now existing or hereafter created
or acquired.  Accordingly, to the extent the UCC applies with respect to the
perfection of such security interest, upon the filing of any financing
statements described in Article IV hereof, the Indenture Trustee shall have a
first priority perfected security interest in such property and the proceeds
thereof (to the extent provided in Section 9-315 of the UCC), subject to
Permitted Encumbrances and, to the extent the UCC does not apply to the
perfection of such security interest, all notices filings and other actions
required by all applicable law have been taken to perfect and protect such
security interest or lien against and prior to all Adverse Claims with respect
to the Collateral and proceeds with respect thereto and all other Collateral. 
Except as otherwise specifically provided in this Agreement and the other
Transaction Documents, neither the Issuer nor any Person claiming through or
under the Issuer has any claim to or interest in any Series Account; and

 

(iii)                               immediately prior to, and after giving
effect to, the initial purchase of the VFN and each Increase hereunder, (a) the
fair saleable value of the assets of the Issuer will exceed its liabilities and
(b) the Issuer will be solvent, will be able to pay its debts generally as they
mature, will own property with a fair saleable value greater than the amount
required to pay its debts and will have capital sufficient to carry on its
business as then constituted.

 

(h)                                 Accuracy of Information.  All information
contained in this Agreement or the other Transaction Documents furnished prior
to the Closing Date by or on behalf of the Issuer to the Agent, any Purchaser or
any Secured Party for purposes of, or in connection with, this Agreement and the
other Transaction Documents is, and all such information furnished after the
Closing Date by or on behalf of the Issuer (including, without limitation, the
Monthly Reports, the Daily Reports, any other periodic reports and the Issuer’s
financial statements) to the Agent, any Purchaser or any Secured Party will be,
true and accurate, on the date such information is stated or certified.

 

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(i)                                     Tax Status.  The Issuer has filed all
tax returns (Federal, State and local) required to be filed by it and has paid
or made adequate provision for the payment of all taxes, assessments and other
governmental charges then due and payable (including for such purposes, the
setting aside of appropriate reserves for taxes, assessments and other
governmental charges being contested in good faith).

 

(j)                                     Use of Proceeds.  No proceeds of any
Notes will be used by the Issuer to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.

 

(k)                                  Place of Business.  The principal place of
business and chief executive office of the Issuer are located at the address of
the Issuer indicated on Schedule I hereto and always have been located at such
address, and the offices where the Issuer keeps all its records and Related
Security, are (unless then held by the Servicer) located at the address
indicated on Schedule I or such other locations notified to the Agent in
accordance with Section 10.02 hereof.

 

(l)                                     Tradenames, Etc.  As of the Closing Date
(i) the Issuer has only the subsidiaries and divisions listed on Schedule II
hereto; and (ii) the Issuer has, within the last five (5) years preceding the
Closing Date, operated only under the tradenames identified in Schedule II
hereto or as otherwise disclosed in writing to the Agent, and, within such (5)
year period, has not changed its name, merged with or into or consolidated with
any other corporation or been the subject of any proceeding under the Bankruptcy
Code, except as disclosed by the Issuer in writing to the Agent.

 

(m)                               Nature of Receivables.  Each Receivable (i)
represented by the Issuer or the Servicer to be an Eligible Receivable
(including in any Monthly Report, Daily Report or other report) or (ii) included
in the calculation based on Eligible Receivables or otherwise in any such report
in fact satisfies at such time the definition of “Eligible Receivable”.

 

(n)                                 Material Adverse Effect.  Between the date
of its formation and the Closing Date and/or the date of any Increase or
reinvestment, as applicable, (i) the Issuer has not incurred any obligations,
contingent or non-contingent liabilities, liabilities for charges, long-term
leases or unusual forward or long-term commitments that, alone or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, (ii)
no contract, lease or other agreement or instrument has been entered into by the
Issuer or has become binding upon the Issuer’s assets and no law or regulation
applicable to the Issuer has been adopted that has had or could reasonably be
expected to have a Material Adverse Effect and (iii) the Issuer is not in
default under any material contract, lease or other agreement or instrument to
which the Issuer is a party that alone or in the aggregate could reasonably be
expected to have a Material Adverse Effect. Between the date of the formation of
the Issuer and the Closing Date and/or the date of any Increase or reinvestment,
as applicable, no event has occurred that alone or together with other events
could reasonably be expected to have a Material Adverse Effect.

 

(o)                                 Not an Investment Company.  The Issuer is
not an “investment company” or “controlled by” an “investment company,” as such
terms are defined in the Investment Company Act, and it is not subject to
regulation under the Investment Company Act.

 

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(p)                                 ERISA.  No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect.

 

(q)                                 Bulk Sales.  No transaction contemplated
hereby or by the other Transaction Documents requires compliance with any “bulk
sales” act or similar law.

 

(r)                                    Transfers Under Sale Agreement and
Transfer and Servicing Agreement.  Each Receivable which has been transferred to
SRC by the Sellers under the Sale Agreement and by SRC to the Issuer under the
Transfer and Servicing Agreement has been purchased by or contributed to the
Issuer from or by the Sellers pursuant to, and in accordance with, the terms of
the Sale Agreement.

 

(s)                                  Preference, Voidability.  The Issuer shall
have given reasonably equivalent value to the applicable Seller in consideration
for the transfer to the Issuer of the Receivables and Related Security,
Collections and proceeds with respect thereto from the applicable Seller, and
each such transfer shall not have been made for or on account of an antecedent
debt owed by the applicable Seller to the Issuer.

 

(t)                                    Variable Funding Note.  The VFN has been
duly and validly authorized, and, when executed and authenticated in accordance
with the terms of the Indenture, and delivered to and paid for in accordance
with this Agreement, will be duly and validly issued and outstanding and will be
entitled to the benefits of the Indenture.

 

SECTION 5.02  Reaffirmation of Representations and Warranties by the Issuer.  On
the Closing Date, on each Business Day and on each day that an Increase is made
hereunder, the Issuer, by accepting the proceeds thereof, shall be deemed to
have certified that all representations and warranties described in Section 5.01
hereof are true and correct on and as of such day as though made on and as of
such day (except to the extent they relate to an earlier date or later time, and
then as of such earlier date or later time).

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE AGENT AND THE PURCHASERS

 

The Agent and each Purchaser hereby makes with respect to itself, the following
representations and warranties to the Issuer on which the Issuer shall rely in
entering into this Agreement:

 

SECTION 6.01  Securities Laws; Transfer Restrictions.  The Agent and each of the
Purchasers represents and warrants to the Issuer, as of the date hereof (or as
of a subsequent date on which a successor or assign of any Purchaser shall
become a party hereto), and agrees that:

 

(a)                                  it has (i) reviewed the Master Indenture
and the Series Supplement (including the schedule and exhibits thereto) and all
other documents which have been provided by the Issuer to it with respect to the
transactions contemplated thereby, (ii) participated in due

 

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diligence sessions with the Servicer and (iii) had an opportunity to discuss the
Issuer’s and the Sellers’ businesses, management and financial affairs, and the
terms and conditions of the proposed purchase with the Issuer and the Servicer
and their respective representatives;

 

(b)                                 it is an “accredited investor” within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Act and has
sufficient knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks of investing in, and it is able and
prepared to bear the economic risk of investing in, the VFN;

 

(c)                                  it is purchasing the VFN for its own
account, or for the account of one or more “accredited investors” within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Act that
meet the criteria described in subsection (b) and for which it is acting with
complete investment discretion, for investment purposes only and not with a view
to distribution;

 

(d)                                 it understands that (i) the VFN has not been
and will not be registered or qualified under the Act or any applicable state
securities laws or the securities laws of any other jurisdiction and is being
offered only in a transaction not involving any public offering within the
meaning of the Act, (ii) the Issuer is not required to so register or qualify
the VFN, and (iii) the VFN may be resold, pledged or otherwise transferred only
(A) to the Issuer, (B) to a “qualified institutional buyer” (as defined in Rule
144A under the Act) in a transaction meeting the requirements of Rule 144A under
the Act, or (C) in a transaction otherwise exempt from the registration
requirements of the Act, in each case in accordance with the provisions of the
Indenture and any applicable securities laws of any state of the United States
or any other jurisdiction;

 

(e)                                  it understands that upon original issuance
thereof, and until such time as the same may no longer be required under the
applicable requirements of the Act, the certificate evidencing the VFN (and all
securities issued in exchange therefor or substitution thereof) shall bear a
legend substantially in the form set forth in the form of VFN included as an
exhibit to the Series Supplement;

 

(f)                                    it understands that the Note Registrar
and Paying Agent for the VFN will not be required to accept for registration of
transfer the VFN acquired by it, except upon presentation of, if applicable, the
certificate and, if applicable, the opinion described in the Series Supplement;
and

 

(g)                                 it will obtain from any transferee of the
VFN (or any interest therein) a purchaser letter in the substantially the form
of Exhibit D to the Series Supplement.

 

SECTION 6.02  Enforceability.  This Agreement has been duly authorized, executed
and delivered by each Purchaser and the Agent, and is the valid and legally
binding obligation of such Person, enforceable against such Person in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors’ rights and to general principles of equity.

 

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ARTICLE VII

COVENANTS

 

SECTION 7.01  Monthly Report and Daily Report; Notice of Adverse Events.  (a) 
The Issuer will cause each Monthly Report and Daily Report pertaining to the
Series Supplement to be delivered to each Purchaser, contemporaneously with the
delivery thereof to the Indenture Trustee.

 

(b)                                 As soon as possible, and in any event within
one (1) day after the occurrence thereof, the Issuer shall (or shall cause the
Servicer to) give the Agent written notice of each Pay-Out Event, Event of
Default, Servicer Default or any event that could reasonably be expected to have
a Material Adverse Effect on any SSCE Entity, and shall promptly deliver to the
Agent any information regarding such Pay-Out Event, Event of Default, Servicer
Default or such event.

 

SECTION 7.02  Modifications to Transaction Documents.  (a)  Notwithstanding
anything in the Indenture to the contrary, no provision of any Transaction
Document may be amended, supplemented, waived or otherwise modified without, if
such modification is material, satisfaction of the Rating Agency Condition and
no provision of this Agreement or the Series Supplement may be amended,
supplemented, waived or otherwise modified without the written consent of the
Agent.

 

(b)                                 The Issuer shall (or shall cause the
Servicer to) give the Agent written notice of any proposed amendment,
supplement, modification or waiver of any provision of the Transaction
Documents.

 

SECTION 7.03  Expenses.  All reasonable fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the Issuer.

 

SECTION 7.04  Comfort Letters; Additional Series.  (a)  The Issuer shall deliver
to each Purchaser, concurrently with receipt thereof by any SSCE Entity, a copy
of any comfort letter or agreed upon procedures letter delivered by independent
accountants in connection with the Issuer’s first issuance of term Notes.

 

(b)                                 Notwithstanding anything to the contrary in
this Agreement, the Master Indenture or any Indenture Supplement, after the
Closing Date, the Issuer shall not issue any additional Series under the
Indenture, and the Indenture Trustee shall not authenticate any new Notes in
respect of such new Series, unless the Rating Agency Condition shall have been
satisfied with respect to Series 2004-2.

 

SECTION 7.05  Reorganizations and Transfers.  The Issuer shall not enter into
any transaction described in Section 3.10(j) of the Master Indenture, unless the
Agent shall have given their prior written consent thereto, and the Agent shall
have received such documentation, opinions, certificates and instruments as it
may have reasonably requested, in each case, in form and substance satisfactory
to it.

 

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SECTION 7.06    Further Assurances.  The Issuer agrees to take any and all acts
and to create any and all further instruments necessary or reasonably requested
by the Agent to fully effect the purposes of this Agreement.

 

ARTICLE VIII

INDEMNIFICATION

 

SECTION 8.01  Indemnification.  Without limiting any other rights which the
Agent or the Purchasers may have hereunder or under applicable law, the Issuer
hereby agrees to indemnify each Indemnified Party from and against any and all
damages, losses, claims, liabilities, costs and expenses, including, without
limitation, reasonable attorneys’ fees and disbursements (all of the foregoing
being collectively referred to as “Issuer Indemnified Amounts”) awarded against
or incurred by any of them arising out of or as a result of this Agreement, the
other Transaction Documents, the ownership, either directly or indirectly, of
any interest in the Collateral or the VFN or any of the other transactions
contemplated hereby or thereby, excluding, however, (i) Indemnified Amounts to
the extent resulting from gross negligence or willful misconduct on the part of
such Indemnified Party or (ii) recourse (except as otherwise specifically
provided in this Agreement) for uncollectible Receivables.  Without limiting the
generality of the foregoing, and subject to the exclusions set forth in the
preceding sentence, the Issuer shall indemnify each Indemnified Party for Issuer
Indemnified Amounts relating to or resulting from:

 

(a)                                  any representation or warranty made by the
Issuer or any officers of the Issuer under this Agreement, any of the other
Transaction Documents, any Monthly Report or Daily Report or any other written
information or report delivered by the Issuer pursuant hereto or thereto, which
shall have been false or incorrect when made or deemed made;

 

(b)                                 the failure by the Issuer to comply with any
applicable Requirement of Law with respect to any Receivable or the related
Contract, or the nonconformity of any Receivable or the related Contract with
any such applicable Requirement of Law;

 

(c)                                  any dispute, claim, offset or defense
(other than discharge in bankruptcy) of an Obligor to the payment of any
Receivable (including, without limitation, a defense based on such Receivable or
the related Contract not being the legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms);

 

(d)                                 the failure by the Issuer to comply with any
term, provision or covenant contained in this Agreement or any of the other
Transaction Documents to which it is a party or to perform any of its respective
duties under the Contracts;

 

(e)                                  the failure of the Issuer to pay when due
any taxes, including without limitation, sales, excise or personal property
taxes payable in connection with any of the Receivables;

 

(f)                                    any reduction in the aggregate
outstanding principal balance of the VFN or any Funding Tranche with respect to
any Purchaser as a result of the distribution of Collections pursuant to the
Master Indenture or Article V of the Series Supplement, if all or a

 

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portion of such distributions shall thereafter be rescinded or otherwise must be
returned for any reason;

 

(g)                                 the commingling by the Issuer of Collections
of Receivables at any time with other funds;

 

(h)                                 any investigation, litigation or proceeding
related to this Agreement, any of the other Transaction Documents, the use of
proceeds of Increases by the Issuer, the ownership directly or indirectly of the
VFN or any interest in the Collateral;

 

(i)                                     any failure of SRC or the Issuer, as
applicable, to give reasonably equivalent value to any Seller or SRC, in
consideration of the purchase by SRC or the Issuer, as applicable, from any
Seller of any Receivable, or any attempt by any Person to void, rescind or set
aside any such transfer under statutory provisions or common law or equitable
action, including, without limitation, any provision of the Bankruptcy Code;

 

(j)                                     any action taken by the Issuer in the
enforcement or collection of any Receivable;

 

(k)                                  the failure of any Receivable included in
any Monthly Report or Daily Report or other periodic report as an Eligible
Receivable for purposes of any calculation based on Eligible Receivables or
otherwise to be an Eligible Receivable at the time of such calculation;

 

(l)                                     the failure to vest in the Indenture
Trustee (for the benefit of the Noteholders and the Indenture Trustee) (i) to
the extent the perfection of a security interest in such property is governed by
the UCC, a valid and enforceable first priority perfected security interest in
the Collateral or (ii) if the perfection of such security interest is not
governed by the UCC, a valid and enforceable lien or security interest in the
Collateral, free and clear of any Adverse Claim; or

 

(m)                               the failure to have filed, or any delay in
filing, financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws with respect to the
Collateral transferred or purported to be transferred hereunder whether at the
time of any purchase or reinvestment or at any subsequent time.

 

If for any reason the indemnification provided in this Section 8.01 is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless for the Issuer Indemnified Amounts, then the indemnifying party
shall (subject to the exclusions set forth in the first sentence of this
Section 8.01) contribute to the maximum amount payable or paid to such
Indemnified Party as a result of the applicable claim, damage, expense, loss or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Party on the one hand and the indemnifying
party on the other hand, but also the relative fault of such Indemnified Party
(if any) and the indemnifying party and any other relevant equitable
considerations.

 

SECTION 8.02  Increased Costs.  If due to the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in or in the interpretation of any law or regulation or
any guideline or request from

 

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any central bank or other governmental authority occurring after the date
hereof, there shall be an increase in the cost to any Purchaser, the Agent or
any Liquidity Purchaser or any of their officers, directors, employees, agents,
representatives, assigns or Affiliates (each an “Affected Party”), of making,
funding or maintaining any investment in the VFN or any interest therein or of
agreeing to purchase or invest in the VFN or any interest therein, as the case
may be (other than by reason of any interpretation of or change in laws or
regulations relating to taxes imposed on or measured by net income), the Issuer
shall, from time to time, upon written demand by such an Affected Party (with a
copy to the Agent), immediately pay to such Affected Party (as a third party
beneficiary, in the case of an Affected Party that is not also the Purchaser),
that portion of such increased costs (the “Increased Costs”) incurred which such
Affected Party reasonably determines is attributable to making, funding or
maintaining any investment in the VFN or any interest therein or agreeing to
purchase or invest in the VFN or any interest therein, as the case may be, and
such Increased Costs (together with any Increased Capital, as defined below) are
to be paid in accordance with Section 5.1(a) of the Series Supplement.  In
determining such amounts, such Affected Party may use any reasonable averaging
and attribution methods, consistent with the averaging and attribution methods
generally used by such Affected Party in determining amounts of such type.  A
certificate as to such increased costs incurred submitted to the Issuer and the
Agent, setting forth the calculation thereof in reasonable detail, shall, in the
absence of manifest error, be conclusive and binding for all purposes.

 

SECTION 8.03  Increased Capital.  If the introduction of or any change in or in
the interpretation of any law or regulation or any guideline or request from any
central bank or other governmental authority occurring after the date hereof
affects or would affect the amount of capital required or expected to be
maintained by an Affected Party, and such Affected Party determines that the
amount of such capital is increased as a result of (i) the existence of such
Affected Party’s agreement to make or maintain an investment in the VFN or any
interest therein and other similar agreements or facilities, or (ii) the
existence of any agreement by any Affected Party to make or maintain an
investment in the VFN or any interest therein or to fund any such investment and
any other commitments of the same type, then, upon demand by such Affected Party
(with a copy to the Agent), the Issuer shall immediately pay to such Affected
Party (as a third party beneficiary, in the case of an Affected Party which is
not also the Purchaser) from time to time, as specified by such Affected Party,
additional amounts (the “Increased Capital”) sufficient to compensate such
Affected Party in light of such circumstances, to the extent that such Affected
Party reasonably determines such increase in capital to be allocable to the
existence of the Affected Party’s agreements described in clause (i) above or
the commitments of any Affected Party described in clause (ii) above with
respect to the VFN, and such Additional Amounts are to be paid in accordance
with Section 5.1 of the Series Supplement.  In determining such amounts, such
Affected Party may use any reasonable averaging and attribution methods,
consistent with the averaging and attribution methods generally used by such
Affected Party in determining amounts of this type.  A certificate as to such
amounts submitted to the Issuer and the Agent by such Affected Party, setting
forth the calculation thereof in reasonable detail, shall, in the absence of
manifest error, be conclusive and binding for all purposes.  For avoidance of
doubt, any accounting interpretation, including, without limitation, Accounting
Research Bulletin No. 41, or any other interpretation of the Financial
Accounting Standards Board (“FASB”), including FASB Interpretation No. 46:
Consolidation of Variable Interest Entities, shall constitute an adoption,
change, request or directive subject to this Section 8.03.

 

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SECTION 8.04  Indemnity for Taxes.  (a)  All payments made by the Issuer to the
Agent for the benefit of the Purchasers under this Agreement or any other
Transaction Document shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future stamp or similar taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding (i) taxes that would not have been imposed if the Affected
Party had timely complied with the requirements of Section 8.03 hereof, and
(ii) taxes imposed on the net income of the Agent or any other Affected Party,
in each case imposed by any jurisdiction under the laws of which the Agent or
such Affected Party is organized or any political subdivision or taxing
authority thereof or therein (all such nonexcluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, collectively or individually,
“Taxes”).  If any such Taxes are required to be withheld from any amounts
payable to the Agent or any Affected Party hereunder, the amounts so payable to
the Agent or such Affected Party shall be increased to the extent necessary to
yield to the Agent or such Affected Party (after payment of all Taxes) all
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the other Transaction Documents.  The Issuer shall indemnify the
Agent or any such Affected Party for the full amount of any such Taxes on the
first Payment Date which is not less than ten (10) days after the date of
written demand therefor by the Agent.

 

(b)                                 Each Affected Party that is a Non-United
States Person shall:

 

(i)                                     deliver to the Issuer and the Agent two
duly completed copies of IRS Form W-8 BEN or Form W-8 ECI, or successor
applicable form, as the case may be;

 

(ii)                                  deliver to the Issuer and the Agent two
(2) further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Issuer; and

 

(iii)                               obtain such extensions of time for filing
and complete such forms or certifications as may reasonably be requested by the
Issuer or the Agent;

 

unless, in any such case, an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which, regardless of the identity of the
Affected Party, renders all such forms inapplicable or which, regardless of the
identity of the Affected Party, would prevent such Affected Party from duly
completing and delivering any such form with respect to it, and such Affected
Party so advises the Issuer and the Agent.  Each such Affected Party so
organized shall certify in the case of an IRS Form W-8 BEN or IRS Form W-8 ECI
(or successor applicable form), that it is entitled to receive payments under
this Agreement and the other Transaction Documents without deduction or
withholding of any United States federal income taxes.  Each Affected Party
which is a Non-United States Person represents and warrants to the Issuer and
the Agent that, as of the date of this Agreement (or the date such Person
otherwise becomes an Affected Party, as the case may be), (i) it is entitled to
receive all payments hereunder without deduction or withholding for or on
account of any United States federal Taxes and (ii) it is permitted to take the
actions described in the preceding sentence under the laws and any applicable
double taxation treaties of the jurisdiction of its head office or any booking
office

 

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used in connection with this Agreement.  Each Affected Party which is a
Non-United States Person further agrees that, to the extent any form claiming
complete or partial exemption from withholding and deduction of United States
federal Taxes delivered under this clause (b) is found to be incomplete or
incorrect in any material respect, such Affected Party shall (to the extent it
is permitted to do so under the laws and any double taxation treaties of the
United States, the jurisdiction of its organization and the jurisdictions in
which its relevant booking offices are located) execute and deliver to each of
the Agent and the Issuer a complete and correct replacement form.

 

SECTION 8.05  Other Costs, Expenses and Related Matters.  (a)  The Issuer
agrees, upon receipt of a written invoice, to pay or cause to be paid, and to
save the Agent and the Purchasers harmless against liability for the payment of,
all reasonable out-of-pocket expenses (including, without limitation, reasonable
attorneys’, accountants’ and other third parties’ fees and expenses, any filing
fees and expenses incurred by officers or employees of the Agent and/or the
Purchasers) or intangible, documentary or recording taxes incurred by or on
behalf of the Agent and the Purchasers (i) in connection with the negotiation,
execution, delivery and preparation of this Agreement, the other Transaction
Documents, any Asset Purchase Agreement and any documents or instruments
delivered pursuant hereto and thereto and the transactions contemplated hereby
or thereby (including, without limitation, the perfection or protection of the
Purchasers’ interest in the Collateral) and (ii) (A) relating to any amendments,
waivers or consents under this Agreement, the other Transaction Documents, any
Asset Purchase Agreement, and any document or instrument delivered pursuant
hereto or thereto, (B) arising in connection with the Agent’s or such
Purchaser’s enforcement or preservation of rights (including, without
limitation, the perfection and protection of the Purchasers’ interest in the
Collateral under this Agreement, the Transaction Documents and any Asset
Purchase Agreement), or (C) arising in connection with any audit, dispute,
disagreement, litigation or preparation for litigation involving this Agreement,
any of the other Transaction Documents and any Asset Purchase Agreement.

 

(b)                                 The Agent will notify the Issuer and the
Servicer in writing of any event occurring after the date hereof which will
entitle an Indemnified Party or Affected Party to compensation pursuant to this
Article VIII.  Any notice by the Agent claiming compensation under this
Article VIII and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, the Agent or any applicable Indemnified Party or Affected Party may
use any reasonable averaging and attributing methods.

 

SECTION 8.06  Limitation on Recourse.  The obligations of the Issuer under this
Article VIII shall be payable at such time as funds are actually available
therefor in accordance with Sections 4.4 and 5.1 of the Series Supplement and,
to the extent funds are not available to pay such obligations, the claims
relating thereto shall not constitute a claim against the Issuer but shall
continue to accrue.  Each party hereto agrees that, in the event of the
commencement of any bankruptcy, reorganization, arrangement, insolvency,
liquidation or other similar proceeding against the Issuer, the payment of any
claim (as defined in Section 101 of the Bankruptcy Code) shall be subordinated
to the payment in full of all Notes.

 

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ARTICLE IX

THE AGENT

 

SECTION 9.01  Authorization and Action.  Each Purchaser hereby accepts the
appointment of and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto.  The
Purchasers hereby authorize the Agent, in its sole discretion, to take any
actions and exercise any rights or remedies under this Agreement and any
permitted related agreements and documents.  Except for actions which the Agent
is expressly required to take pursuant to this Agreement or the applicable Asset
Purchase Agreement, the Agent shall not be required to take any action which
exposes the Agent to personal liability or which is contrary to applicable law
unless the Agent shall receive further assurances to its satisfaction from the
Purchasers, of the indemnification obligations under Section 9.04 hereof against
any and all liability and expense which may be incurred in taking or continuing
to take such action.  The Agent agrees to give to the Purchasers prompt notice
of each notice and determination given to it by the Issuer, the Servicer or the
Indenture Trustee, pursuant to the terms of this Agreement or the Indenture. 
Subject to Section 9.06 hereof, the appointment and authority of the Agent
hereunder shall terminate, following the Purchase Expiration Date, upon the
payment to the Agent and the Purchasers of all amounts owing to the Agent and
the Purchasers hereunder and under the other Transaction Documents have been
indefeasibly paid in full.

 

SECTION 9.02  Agent’s Reliance, Etc.  Neither the Agent nor any of its
directors, officers, agents who are natural persons or employees shall be liable
for any action taken or omitted to be taken by it or them as Agent under or in
connection with this Agreement or any related agreement or document, except for
its or their own gross negligence or willful misconduct.  Without limiting the
foregoing, the Agent:  (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to the Purchasers and shall not be responsible to the Purchasers
for any statements, warranties or representations made by any other Person in
connection with any Transaction Document; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any Transaction Document on the part of any Person or
to inspect the property (including the books and records) of any Person; (iv)
shall not be responsible to any Purchaser for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Transaction
Document or any other instrument or document furnished pursuant hereto or
thereto; and (v) shall incur no liability under or in respect of any Transaction
Document by acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telex) believed by
it in good faith to be genuine and signed or sent by the proper party or
parties.

 

SECTION 9.03  Agent and Affiliates.  The Agent and its respective Affiliates may
generally engage in any kind of business with the Issuer, the Servicer, any
Obligor, any insurer, or any insured, any of their respective Affiliates and any
Person who may do business with or own securities of the Issuer, any Seller, the
Servicer, any Obligor or any insured or

 

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insurer or any of their respective Affiliates, all as if such entities were not
the Agent and without any duty to account therefor to the Purchasers.

 

SECTION 9.04  Indemnification.  Each Purchaser (other than the Conduit
Purchaser) severally agrees to indemnify the Agent (to the extent not reimbursed
by any SSCE Entity), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of any
Transaction Document or any action taken or omitted by the Agent under any
Transaction Document; provided, that (i) no Purchaser shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting or arising from the
Agent’s gross negligence or willful misconduct and (ii) no Purchaser shall be
liable for any amount in respect of any compromise or settlement or any of the
foregoing unless such compromise or settlement is approved by the Conduit
Purchaser and the majority of the Purchasers (other than the Conduit Purchaser)
(based on purchase commitments under the applicable Asset Purchase Agreement). 
Without limitation of the generality of the foregoing, each Purchaser (other
than a Conduit Purchaser), agrees to reimburse the Agent, promptly upon demand,
for any reasonable out-of-pocket expenses (including reasonable counsel fees)
incurred by the Agent in connection with the administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
any Transaction Document; provided, that no Purchaser shall be responsible for
the costs and expenses of the Agent in defending itself against any claim
alleging the gross negligence or willful misconduct of the Agent to the extent
such gross negligence or willful misconduct is determined by a court of
competent jurisdiction in a final and non-appealable decision.

 

SECTION 9.05  Purchase Decision.  Each Purchaser acknowledges that it has,
independently and without reliance upon the Agent, and based on such documents
and information as it has deemed appropriate, made its own evaluation and
decision to enter into this Agreement and to purchase an interest in the VFN. 
Each Purchaser also acknowledges that it will, independently and without
reliance upon the Agent or any of its Affiliates, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own decisions in taking or not taking action under this Agreement or any related
agreement, instrument or other document.

 

SECTION 9.06  Successor Agent.  The Agent may resign at any time by giving five
(5) days’ written notice thereof to the Purchasers, the Issuer and the Indenture
Trustee.  Upon any such resignation, the Purchasers shall have the right to
appoint a successor Agent.  If no successor Agent shall have been so appointed
and shall have accepted such appointment, within five days after the retiring
Agent’s giving of notice of resignation, then the retiring Agent may, on behalf
of the Purchasers, appoint a successor Agent.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement and the other
Transaction Documents (other than obligations arising or to have been performed
prior to such retirement).  After any retiring Agent’s resignation hereunder as
Agent,

 

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the provisions of this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Agreement
and the other Transaction Documents.

 

ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01  Amendments.  No amendment, supplement, modification or waiver of
any provision of this Agreement shall in any event be effective unless the same
shall be made in accordance with the requirements set forth in Section 7.02, and
then such amendment, supplement, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

 

SECTION 10.02  Notices.  All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing and mailed,
telefaxed (receipt confirmed) or hand delivered, as to each party hereto, at its
address set forth in Schedule I hereto or at such other address as shall be
designated by such party in a written notice to the other party hereto.  All
such notices and communications shall be effective upon receipt by the
addressee.

 

SECTION 10.03  No Waiver; Remedies.  No failure on the part of any party hereto
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.  The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

 

SECTION 10.04  Binding Effect; Assignability.  (a)  This Agreement shall be
binding on the parties hereto and their respective successors and assigns;
provided, however, that the Issuer may not assign any of its rights or delegate
any of its duties hereunder or under any of the other Transaction Documents to
which it is a party without the prior written consent of the Agent.  No
provision of this Agreement or any other Transaction Document shall in any
manner restrict the ability of any Purchaser to assign, participate, grant
security interests in, or otherwise transfer any portion of its interest in the
VFN (and its rights to receive any payments in respect thereof, including in
connection with any collateral securing payment with respect to such VFN);
provided, that any such transfer, participation or assignment shall only be made
in compliance with the transfer restrictions set forth in the Series Supplement;
provided, further, that unless otherwise consented to by the Issuer, such
transferee, participant or assignee shall have executed and delivered to the
Issuer, the Indenture Trustee and the Agent, a Transfer Supplement (as defined
below), with such changes as shall be reasonably acceptable to the Issuer. 
Without limiting the foregoing, any Conduit Purchaser may, in one or a series of
transactions, transfer all or any portion of its interest in the Collateral and
the VFN, and its rights and obligations under the Transaction Documents to a
Conduit Assignee, a Committed Purchaser or any Liquidity Purchaser.

 

(b)                                 Each Committed Purchaser may assign to one
or more Persons (each an “Assignee Committed Purchaser”), reasonably acceptable
to the Agent, a portion of such Purchaser’s commitment in respect of its
Purchaser Percentage of the Maximum Principal Amount (for each such Purchaser,
the “Commitment”) pursuant to a supplement hereto,

 

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substantially in the form of Exhibit C with any changes as have been approved by
the parties thereto (a “Transfer Supplement”), executed by each such Assignee
Committed Purchaser, the assignor Committed Purchasers, and the Agent.  Any such
assignment by a Committed Purchaser pursuant to this paragraph cannot be for an
amount less than $10,000,000 and, unless otherwise agreed to by each of the
existing Committed Purchasers at such time, shall be made by a ratable
assignment to such Assignee Committed Purchaser of a portion of the Commitments
(in an aggregate amount equal to the amount being assigned to such Assignee
Committed Purchaser) of each existing Committed Purchaser.  Upon (i) the
execution of the Transfer Supplement, (ii) delivery of an executed copy thereof
to the Issuer and the Agent and (iii) solely to the extent such assignor
Committed Purchasers have any portion of the Aggregate Purchaser Funded Amount
outstanding, payment by the Assignee Committed Purchaser to the assignor
Committed Purchasers of the agreed purchase price, such assignor Committed
Purchasers shall be released from their respective obligations hereunder to the
extent of such assignment and such Assignee Committed Purchaser shall for all
purposes herein be a Committed Purchaser party hereto and shall have all the
rights and obligations of a Committed Purchaser hereunder to the same extent as
if it were an original party hereto.  The amount of the Commitment of the
assignor Committed Purchasers allocable to such Assignee Committed Purchaser
shall be equal to the amount of the portion of the respective Commitments of the
assignor Committed Purchasers transferred, regardless of the purchase price paid
therefor.  The Transfer Supplement shall be an amendment hereof only to the
extent necessary to reflect the addition of such Assignee Committed Purchaser as
an “Committed Purchaser” and any resulting adjustment of the assignor Committed
Purchasers’ Commitment.

 

(c)                                  Any Purchaser may, in the ordinary course
of its business and in accordance with applicable law, at any time sell to one
or more Persons (each, a “Participant”) participating interests in all or a
portion of its rights and obligations under this Agreement; provided, that the
Agent shall have consented to such participation.  Notwithstanding any such sale
by a Purchaser of participating interests to a Participant, such Purchaser’s
rights and obligations under this Agreement shall remain unchanged, such
Purchaser shall remain solely responsible for the performance thereof, and the
other parties hereto shall continue to deal solely and directly with such
Purchaser in connection with such Purchaser’s rights and obligations under this
Agreement.  Each Participant shall be entitled to the benefits of Article IX
hereof; provided, however, that all amounts payable to any such Participant
shall be limited to the amounts which would have been payable to the Purchaser
selling such participating interest had such interest not been sold.

 

(d)                                 This Agreement shall create and constitute
the continuing obligation of the parties hereto in accordance with its terms,
and shall remain in full force and effect until such time as all amounts payable
with respect to the VFN shall have been paid in full.

 

SECTION 10.05  Confidentiality.  The Issuer shall maintain, and shall cause each
officer, employee and agent of itself and its Affiliates to maintain, the
confidentiality of the Transaction Documents and all other confidential
proprietary information with respect to the Agent and the Purchasers and each of
their respective businesses obtained by them in connection with the structuring,
negotiation and execution of the transactions contemplated herein and in the
other Transaction Documents, except for information that has become publicly
available or information disclosed (i) to legal counsel, accountants and other
professional advisors to the

 

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Issuer and its Affiliates, (ii) as required by law, regulation, the requirements
of the New York Stock Exchange or legal process or (iii) in connection with any
legal or regulatory proceeding to which the Issuer or any of its Affiliates is
subject; it being understood, that solely with respect to the Master Indenture,
the Issuer may distribute such Master Indenture to the holders of any Notes
issued pursuant thereto from time to time.  The Issuer hereby consents to the
disclosure of any nonpublic information with respect to it received by the Agent
or any Purchaser from the Issuer or the Servicer to (i) any of the Purchasers or
the Agent, (ii) legal counsel, accountants and other professional advisors to
the Agent, the Purchasers or their Affiliates, (iii) as required by law,
regulation or legal process, (iv) in connection with any legal or regulatory
proceeding to which the Agent, any Purchaser or any of their Affiliates is
subject, (v) any nationally recognized rating agency providing a rating or
proposing to provide a rating to the Conduit Purchasers’ Commercial Paper, (vi)
any placement agent which proposes herein to offer and sell the Conduit
Purchasers’ Commercial Paper, (vii) any provider of the Conduit Purchasers’
program-wide liquidity or credit support facilities, (viii) any potential
Committed Purchaser or (ix) any participant or potential participant of the
Commitment of any Committed Purchaser, the Indenture Trustee, any Secured Party,
or any liquidity or credit support provider of a Conduit Purchaser; provided,
that the Agent and the Purchasers, as the case may be, shall advise any such
recipient of information that the information they receive is nonpublic
information and may not be disclosed or used for any other purposes other than
that for which it is disclosed to such recipient without the prior written
consent of the Issuer.

 

SECTION 10.06  GOVERNING LAW.  (a)  THIS AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401(1) OF THE
GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER CONFLICT OF LAW
PROVISIONS THEREOF) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 

(b)                                  EACH PARTY HERETO HEREBY CONSENTS AND
AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN
NEW YORK CITY SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT; PROVIDED, THAT EACH PARTY HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED, FURTHER,
THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE
INDENTURE TRUSTEE, THE AGENT OR ANY PURCHASER FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE NOTES, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR
OF SUCH PERSON.  EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY
HERETO HEREBY WAIVES ANY

 

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OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  EACH
PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH PARTY AT ITS ADDRESS DETERMINED IN ACCORDANCE WITH
SECTION 10.02 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF SUCH PARTY’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN
THE UNITED STATES MAIL, PROPER POSTAGE PREPAID.  NOTHING IN THIS SECTION 10.06
SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.

 

(c)                                  BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 10.07  Wavier of Trial by Jury.  To the extent permitted by applicable
law, each of the parties hereto irrevocably waives all right of trial by jury in
any action, proceeding or counterclaim arising out of or in connection with this
Agreement or any matter arising hereunder.

 

SECTION 10.08  No Proceedings.  The Issuer agrees that so long as any
indebtedness of the Conduit Purchaser shall be outstanding or there shall not
have elapsed one year plus one day since the last day on which any indebtedness
of the Conduit Purchaser shall have been outstanding, it shall not file, or join
in the filing of, a petition against such Conduit Purchaser under the Bankruptcy
Code, or join in the commencement of any bankruptcy, reorganization,
arrangement, insolvency, liquidation or other similar proceeding against the
Conduit Purchaser.

 

SECTION 10.09  Execution in Counterparts.  This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same agreement.

 

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SECTION 10.10  No Recourse.  Notwithstanding anything to the contrary contained
herein, the obligations of the Purchasers under this Agreement are solely the
corporate obligations of the Purchasers and, in the case of obligations of the
Conduit Purchaser other than Commercial Paper, shall be payable at such time as
funds are actually received by, or are available to, the Conduit Purchaser in
excess of funds necessary to pay in full all outstanding Commercial Paper and,
to the extent funds are not available to pay such obligations, the claims
relating thereto shall not constitute a claim against the Conduit Purchaser but
shall continue to accrue.  Each party hereto agrees that the payment of any
claim (as defined in Section 101 of the Bankruptcy Code) of any such party shall
be subordinated to the payment in full of all Commercial Paper.

 

No recourse under any obligation, covenant or agreement of the Conduit Purchaser
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, member, manager, employee or agent of the Conduit Purchaser
(solely by virtue of such capacity) by the enforcement of any assessment or by
any legal or equitable proceeding, by virtue of any statute or otherwise; it
being expressly agreed and understood that this Agreement is solely a corporate
obligation of the Conduit Purchaser, and that no personal liability whatever
shall attach to or be incurred by any incorporator, stockholder, officer,
director, member, manager, employee or agent of the Conduit Purchaser (solely by
virtue of such capacity) or any of them under or by reason of any of the
obligations, covenants or agreements of the Conduit Purchaser contained in this
Agreement, or implied therefrom, and that any and all personal liability for
breaches by the Conduit Purchaser of any of such obligations, covenants or
agreements, either at common law or at equity, or by statute, rule or
regulation, of every such incorporator, stockholder, officer, director, member,
manager, employee or agent is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement; provided that the foregoing
shall not relieve any such Person from any liability it might otherwise have as
a result of fraudulent actions taken or fraudulent omissions made by them.

 

SECTION 10.11  Survival.  All representations, warranties, covenants, guaranties
and indemnifications contained in this Agreement, and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the sale, transfer or repayment of the VFN.

 

SECTION 10.12  Agent Conflict Waiver.  The Agent acts in various capacities with
respect to the maintenance and administration of the commercial paper program of
the Conduit Purchaser (including, funding agent for such Conduit Purchaser, as
issuing and paying agent, as provider of other backup facilities, and may
provide other services or facilities from time to time, the “Agent Roles”). 
Each of the parties hereto hereby acknowledges and consents to any and all Agent
Roles, waives any objections it may have to any actual or potential conflict of
interest caused by such Agent acting as the Agent for the Conduit Purchaser or
as a Committed Purchaser or as a liquidity or credit support provider under the
Conduit Purchaser’s commercial paper program and acting as or maintaining any of
the Agent Roles, and agrees that in connection with any Agent Role, the Agent
may take, or refrain from taking, any action which it in its discretion deems
appropriate and is otherwise permitted under the relevant Transaction Documents.

 

29

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SECTION 10.13  Recourse.  The obligations of the Issuer under this Agreement and
the VFN are full-recourse obligations of the Issuer.

 

 

30

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

 

SSCE FUNDING, LLC, as Issuer,

 

 

 

 

 

By:

/s/ Richard P. Marra

 

 

 

Name: Richard P. Marra

 

 

Title: Assistant Treasurer

 

S-1

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BARTON CAPITAL LLC,
as Conduit Purchaser

 

 

 

 

 

 

By:

/s/ Douglas K. Johnson

 

 

 

Name: Douglas K. Johnson

 

 

Title: President

 

S-2

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SOCIETE GENERALE,
as Agent

 

 

 

 

 

By:

/s/ C. Steven Coffman

 

 

 

Name: C. Steven Coffman

 

 

Title: Vice President

 

S-3

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BARTON CAPITAL LLC,
as a Committed Purchaser

 

 

 

 

 

By:

/s/ Douglas K. Johnson

 

 

 

Name: Douglas K. Johnson

 

 

Title: President

 

 

Purchaser Percentage: 100%

 

S-4

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EXHIBIT A

 

 

Form of Notice of
Increase

 

1.

Proposed Increase Date:                  

 

 

2.

Amount of requested Increase (lesser of minimum amount of
$                       or remaining Maximum Principal Amount)

 

$

 

 

 

 

 

 

3.

Purchase Price

 

$

 

 

 

 

 

 

4.

Remaining Maximum Principal Amount (after giving effect to the requested
Increase)

 

$

 

 

 

 

 

 

5.

Certifications:

 

 

 

(a)

The representations and warranties of SSCE Funding, LLC (“Issuer”) and the other
SSCE Entities in the Master Indenture dated as of November 23, 2004 (as amended,
restated, supplemented, modified or waived through the date hereof), between the
Issuer and Deutsche Bank Trust Company Americas (the “Indenture Trustee”); the
Series 2004-2 Supplement, dated as of November 23, 2004 (as amended, restated,
supplemented, modified or waived through the date hereof), between the Issuer
and the Indenture Trustee; and the Variable Funding Note Purchase Agreement,
dated as of November 23, 2004 (as amended, restated, supplemented, modified or
waived through the date hereof, the “Note Purchase Agreement”), among the
Issuer, the Conduit Purchaser, the Agent and the Committed Purchasers named
therein, are true and correct on the date hereof (except to the extent they
expressly relate to an earlier or later time and then as of such earlier or
later time).

 

 

 

 

(b)

The conditions to the Increase specified in Section 2.03 of the Note Purchase
Agreement and Section 3.3(b) of the Series Supplement have been satisfied and
will be satisfied as of the applicable Increase Date.

 

A-1

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SSCE FUNDING, LLC, as Issuer

 

 

 

 

 

By:

 

 

 

 

Authorized Officer

 

 

 

 

 

 

 

Date of Notice:

 

 

 

 

 

A-2

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EXHIBIT B

 

Series 2004-2 Officer’s Certificate

 

SSCE Funding, LLC (the “Issuer”), pursuant to Section 4.12 of the Variable
Funding Note Purchase Agreement, dated as of November 23, 2004 (as amended,
restated, supplemented, modified or waived through the date hereof, the “Series
2004-2 Note Purchase Agreement”), among the Issuer, the Conduit Purchaser, the
Agent and the Committed Purchasers named therein, the Issuer hereby certifies
that: (a) all of the terms, covenants, agreements and conditions of the
Transaction Documents to be complied with and performed by Issuer on or before
the date hereof have been complied with and performed; and (b) the
representations and warranties of the Issuer made in the Transaction Documents
to which it is a party are true and correct on and as of the date hereof (except
to the extent they expressly relate to an earlier or later time and then as of
such earlier or later time).

 

Capitalized terms used and not defined herein shall have the meanings ascribed
to them in the Series 2004-2 Note Purchase Agreement.

 

IN WITNESS WHEREOF, I have hereunto set my hand as of this          day of
                          , 20    .

 

 

SSCE FUNDING, LLC, as Issuer,

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

B-1

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SCHEDULE I

 

Addresses for Notices

 

If to:

 

Issuer:

 

SSCE Funding, LLC
8182 Maryland Avenue
Clayton, Missouri 63105
Attention: [            ]
Telephone: 314-746-1215
Telecopy: 314-746-1281

 

Agent:

 

Société Générale
181 West Madison Street
Suite 3400
Chicago, Illinois  60602
Attention:  Asset Securitization Group

Telephone No.:

(312) 578-5000

Facsimile No.:

(312) 578-5199

 

 

Committed Purchaser or Conduit Purchaser:

 

Barton Capital LLC
c/o AMACAR Group, LLC
6525 Morrison Boulevard, Suite 318
Charlotte, North Carolina  28211
Attention:                                         Douglas K. Johnson

Telephone No.:

(704) 365-0569

Facsimile No.:

(704) 365-1362

 

With a copy to

 

Société Générale
181 West Madison Street
Suite 3400
Chicago, Illinois  60602
Attention:  Asset Securitization Group

Telephone No.:

(312) 578-5000

Facsimile No.:

(312) 578-5199

 

I-1

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SCHEDULE II

 

Trade Names

 

[None.]

 

II-1

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