EXHIBIT 10.2


 


EXECUTION COPY


 




 









TRANSFER AND SERVICING AGREEMENT





Dated as of
November 23, 2004,





by and between







STONE RECEIVABLES CORPORATION,



SSCE FUNDING, LLC


 


and


 


SMURFIT-STONE
CONTAINER ENTERPRISES, INC.,


as Servicer






 





 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Rules of Construction

  	
   

  
	
  ARTICLE II

  	
  TRANSFER OF RECEIVABLES

  	
   

  
	
  Section 2.1

  	
  Transfers

  	
   

  
	
  Section 2.2

  	
  Grant of Security Interest

  	
   

  
	
  Section 2.3

  	
  Dilutive Credits

  	
   

  
	
  ARTICLE III

  	
  CONDITIONS PRECEDENT

  	
   

  
	
  Section 3.1

  	
  Conditions to Initial TSA Transfer

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  
	
  Section 4.1

  	
  Representations and Warranties of SRC

  	
   

  
	
  Section 4.2

  	
  Affirmative Covenants of SRC

  	
   

  
	
  Section 4.3

  	
  Negative Covenants of SRC

  	
   

  
	
  Section 4.4

  	
  Representations and Warranties of Funding
  LLC

  	
   

  
	
  Section 4.5

  	
  Covenants of Funding LLC

  	
   

  
	
  ARTICLE V

  	
  ADMINISTRATION AND SERVICING; SERVICER

  	
   

  
	
  Section 5.1

  	
  Acceptance of Appointment and Other Matters
  Relating to Servicer

  	
   

  
	
  Section 5.2

  	
  Servicing Compensation

  	
   

  
	
  Section 5.3

  	
  Representations, Warranties and Covenants
  of Servicer

  	
   

  
	
  Section 5.4

  	
  Reports and Records for the Indenture
  Trustee; Bank Account Statements

  	
   

  
	
  Section 5.5

  	
  Annual Independent Public Accountants’
  Servicing Report

  	
   

  
	
  Section 5.6

  	
  Notices to Funding LLC, Indenture Trustee
  and Rating Agencies

  	
   

  
	
  Section 5.7

  	
  Liability of Servicer

  	
   

  
	
  Section 5.8

  	
  Merger or Consolidation of, or Assumption
  of the Obligations of, SSCE as Servicer

  	
   

  
	
  Section 5.9

  	
  Limitation on Liability of Servicer and
  Others

  	
   

  
	
  Section 5.10

  	
  Servicer Indemnification of Funding LLC
  and the Indenture Trustee

  	
   

  
	
  Section 5.11

  	
  Servicer Not to Resign

  	
   

  



 


i





















 


	
  Section 5.12

  	
  Access to Certain Documentation and
  Information Regarding the Transferred Receivables

  	
   

  
	
  Section 5.13

  	
  Delegation of Duties

  	
   

  
	
  Section 5.14

  	
  Examination of Records

  	
   

  
	
  ARTICLE
  VI

  	
  TRANSFER
  TERMINATION EVENTS

  	
   

  
	
  Section 6.1

  	
  Transfer Termination Events

  	
   

  
	
  ARTICLE
  VII

  	
  SERVICER
  DEFAULTS

  	
   

  
	
  Section 7.1

  	
  Servicer Defaults

  	
   

  
	
  Section 7.2

  	
  Indenture Trustee to Act; Appointment of
  Successor

  	
   

  
	
  Section 7.3

  	
  Notification to Noteholders

  	
   

  
	
  Section 7.4

  	
  Waiver of Past Defaults

  	
   

  
	
  ARTICLE
  VIII

  	
  INDEMNIFICATION

  	
   

  
	
  Section 8.1

  	
  Costs and Expenses

  	
   

  
	
  Section 8.2

  	
  Indemnification

  	
   

  
	
  Section 8.3

  	
  No Indirect or Consequential Damages

  	
   

  
	
  ARTICLE
  IX

  	
  MISCELLANEOUS

  	
   

  
	
  Section 9.1

  	
  Notices

  	
   

  
	
  Section 9.2

  	
  No Waiver; Remedies

  	
   

  
	
  Section 9.3

  	
  Successors and Assigns

  	
   

  
	
  Section 9.4

  	
  Termination; Survival of Obligations

  	
   

  
	
  Section 9.5

  	
  Survival

  	
   

  
	
  Section 9.6

  	
  Complete Agreement; Modification of
  Agreement

  	
   

  
	
  Section 9.7

  	
  Amendments and Waivers

  	
   

  
	
  Section 9.8

  	
  GOVERNING LAW; CONSENT TO JURISDICTION;
  WAIVER OF JURY TRIAL

  	
   

  
	
  Section 9.9

  	
  Counterparts

  	
   

  
	
  Section 9.10

  	
  Severability

  	
   

  
	
  Section 9.11

  	
  Section Titles

  	
   

  
	
  Section 9.12

  	
  No Setoff

  	
   

  
	
  Section 9.13

  	
  Confidentiality

  	
   

  
	
  Section 9.14

  	
  No Bankruptcy Petition

  	
   

  



 


ii





















 


	
  Exhibit 5.3(j)

  	
  Credit
  and Collection Policy

  
	
  Schedule 4.1(m)

  	
  Offices;
  Qualification to do Business

  
	
  Schedule 4.1(p)

  	
  UCC
  Information

  
	
  Schedule 4.1(s)

  	
  Perfection
  Representations and Warranties

  
	
  Schedule 5.3(l)

  	
  Lock-Box
  Accounts

  



 


i





















 


This TRANSFER AND SERVICING AGREEMENT (this “Agreement”
or the “Transfer and Servicing Agreement”) is
entered into as of November 23, 2004, by and between STONE
RECEIVABLES CORPORATION, a Delaware corporation (“SRC”), SSCE FUNDING, LLC,
a Delaware limited liability company (“Funding LLC”)
and SMURFIT-STONE CONTAINER ENTERPRISES, INC.,
a Delaware corporation (“SSCE”), as
Servicer.


 


In
consideration of the premises and the mutual covenants hereinafter contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:


 


ARTICLE I



DEFINITIONS AND INTERPRETATION


 


Section 1.1             Definitions.  Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in Annex A to
the Master Indenture, dated as of November 23, 2004 (the “Indenture”), by and
between Funding LLC, as issuer, and Deutsche Bank Trust Company Americas, as
indenture trustee.


 


Section 1.2             Rules of Construction.  For purposes of this Agreement, the rules of
construction set forth in Section 1.2
of the Indenture shall govern.  All
Annexes, Exhibits and Schedules hereto, are incorporated herein by reference
and, taken together with this Agreement, shall constitute but a single
agreement.


 


ARTICLE II



TRANSFER OF RECEIVABLES


 


Section 2.1             Transfers.  (a) Subject to the terms and conditions
hereof (i) SRC shall sell, transfer and assign on the Closing Date to Funding
LLC, and Funding LLC shall acquire SRC’s right, title and interest in (A) each
Receivable acquired by SRC from Sellers under the Sale Agreement on the Closing
Date (the “Transferred  Receivables”),
(B) all SA Transferred Assets with respect thereto, (C) all rights of SRC under
the Sale Agreement (including the rights of any Person to cause any Seller to
repurchase Receivables from SRC under the circumstances described therein) and
(D) all proceeds of the foregoing (collectively, the “TSA
Assets”) and (ii) on each subsequent
day, SRC shall sell, transfer and assign to Funding LLC and Funding LLC shall
acquire from SRC the TSA Assets related to the Transferred Receivables acquired
by it from Sellers under the Sale Agreement on such day (in each case, a “TSA Transfer”).  Each
TSA Transfer shall be made without recourse to SRC except as specifically
provided herein.  All sales or
contributions by SRC hereunder shall cease on the TSA Termination Date.


 


(b)           Computer Files.  On or before each TSA Transfer Date, as
appropriate, SRC shall indicate in its computer files that the TSA Assets have
been sold or contributed to Funding LLC pursuant to this Agreement by so
identifying such TSA Assets with an appropriate notation.


 


(c)           No
Assumption of Liabilities. 
No obligation or liability of SRC (or any predecessor in interest) to
any Obligor or any third party under any Contract relating to 


 





















 


the TSA Assets
shall be assumed by Funding LLC, and any such assumption is hereby expressly
disclaimed.  


 


Section 2.2             Grant of Security Interest.  The parties hereto intend that each TSA
Transfer shall constitute a purchase and sale, as applicable, by SRC to Funding
LLC and not a loan by Funding LLC to SRC secured by the TSA Assets.  Notwithstanding anything to the contrary set
forth in this Section 2.2, if a
court of competent jurisdiction determines that any transaction provided for
herein constitutes a loan and not a purchase and sale, then the parties hereto
intend that this Agreement shall constitute a security agreement under
applicable law and that SRC shall be deemed to have granted, and SRC hereby
grants, to Funding LLC a first priority lien and security interest in and to
all of SRC’s right, title and interest in, to and under the TSA Assets.  SRC hereby agrees to record and file, or
cause to be recorded and filed, at its own expense, financing statements (and
continuation statements with respect to such financing statements when
applicable) with respect to the Transferred Receivables and the TSA Assets now
existing and hereafter acquired pursuant to this Agreement by Funding LLC and
in each case meeting the requirements of applicable law in such manner and in
such jurisdictions as are necessary to perfect and maintain perfection and
priority of Funding LLC’s purchase of such Transferred Receivables and any
other TSA Assets and to deliver to the Indenture Trustee a file-stamped copy of
each such financing statement.


 


Section 2.3             Dilutive Credits.  If any Dilutive Credits are applied to adjust
the balance of any Transferred Receivable in accordance with Section 2.4 of the
Sale Agreement, SRC shall compensate Funding LLC for such adjustment by paying
an amount equal to the related Dilutive Credit to Funding LLC in cash no later
than five Business Days after the grant of such Dilutive Credit; provided that no such payment need be made if the Transferor
Amount exceeds the Minimum Transferor Amount. 
The amount of any such payment required to be made by SRC, after giving
effect to the proviso to the preceding sentence, is referred to as a “Dilution Payment Amount.”


 


ARTICLE III



CONDITIONS PRECEDENT


 


Section 3.1             Conditions to Initial TSA Transfer.  The initial TSA Transfer hereunder shall be
subject to satisfaction of each of the following conditions precedent (any one
or more of which may be waived in writing by Funding LLC):


 


(a)           Transfer and Servicing
Agreement.  This
Agreement or counterparts hereof shall have been duly executed by, and
delivered to, SRC, Funding LLC and Servicer in form and substance reasonably
satisfactory to Funding LLC; and


 


(b)           Financing
Statements.  SRC shall
have filed and recorded, at its own expense, UCC-1 financing statements and, if
necessary, UCC-3 financing statements (and other similar instruments) with
respect to the Transferred Receivables and the other TSA Assets in such manner
and in such jurisdictions as are necessary or desirable to perfect Funding LLC’s
ownership interest thereof under the UCC (or any other similar law), and all
other action necessary or desirable, in the reasonable judgment of Funding LLC,
to 


 


2





















 


perfect
Funding LLC’s ownership of the Transferred Receivables and the other TSA Assets
shall have been duly taken.


 


ARTICLE IV



REPRESENTATIONS, WARRANTIES AND COVENANTS


 


Section 4.1             Representations and Warranties of SRC.  To induce Funding LLC to purchase the TSA
Assets, SRC makes the following representations and warranties to Funding LLC,
as of the Closing Date and each subsequent TSA Transfer Date, each and all of
which shall survive the execution and delivery of this Agreement.


 


(a)           Organization,
Corporate Powers.  It 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)           Authorization.  The transactions contemplated herein are
within its corporate powers and have been duly authorized by all requisite
corporate action and, if required, member or manager action.


 


(c)           Enforceability.  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)           Governmental
Approvals; No Conflicts.  The
execution, delivery and performance by it of this Agreement and each of the
other Transaction Documents to which it is a party, the sale of Transferred
Receivables and TSA Assets by it hereunder and the consummation of the other
transactions contemplated by any of the foregoing (i) 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, (ii) will not violate any applicable law or
regulation or the certificate of incorporation, by-laws or other organizational
documents of it or any order of any Governmental Authority, (iii) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon SRC or its assets, or give rise to a right thereunder
to require any payment to be made by SRC, and (iv) will not result in the
creation or imposition of any Lien on any of its assets.


 


3





















 


(e)           Litigation.  There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to its knowledge, threatened against or affecting SRC (i) that could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii) that involve this Agreement or the other
Transaction Documents to which it is a party or the transactions contemplated
hereby or thereby.


 


(f)            Compliance
with Laws and Agreements.  It
is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all indentures, agreements and
other instruments binding upon it or its property, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.


 


(g)           Taxes. It has timely filed or caused to be
filed all federal, state and local tax returns which are required to have been
filed and has paid or caused to be paid all taxes required to have been paid by
it, except (i) taxes that are being contested in good faith by appropriate
proceedings and for which it has set aside on its books adequate reserves or
(ii) to the extent that the failure to do so could not reasonably be expected
to result in a Material Adverse Effect.


 


(h)           Accuracy
and Completeness of Information. 
It has disclosed to Funding LLC all agreements, instruments and
corporate or other restrictions to which it is subject, and all other matters
known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.


 


(i)            Employee
Benefit Plans.  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.


 


(j)            Absence
of Certain Restrictions.  No
indenture, certificate of designation for equity interests, agreement or other
instrument to which it or any of its Subsidiaries is a party will prohibit or
materially restrain, or have the effect of prohibiting or materially
restraining, or imposing materially adverse conditions upon, the sale and assignment
of TSA Assets.


 


(k)           Lock-Box
Accounts.  Set forth in Schedule
5.3(l) is a complete and accurate description as of the Closing Date of
each Lock-Box Account currently maintained with respect to the Transferred
Receivables.  Such Lock-Box Account will
only be used for the collection of amounts owing on Transferred
Receivables.  SRC has caused all Obligors
on the Transferred Receivables to be sold or contributed by it hereunder to be
instructed to submit all payments on the Transferred Receivables and TSA Assets
directly to one of the Lock-Box Accounts.


 


(l)            Filings.  All filings and other acts (including but
not limited to all filings and other acts necessary or advisable under the UCC
of each relevant jurisdiction) shall 


 


4





















 


have been made or performed such that Funding LLC has
a first priority perfected ownership interest in respect of all Transferred
Receivables and TSA Assets.


 


(m)          Offices.  The offices at which SRC keeps its records
concerning the Transferred Receivables are located at the addresses specified
on Schedule 4.1(m) or have been reported to Funding LLC in accordance
with the provisions of Section 4.2(f) of this Agreement.  SRC is duly qualified to do business in each
state set forth opposite its name on Schedule 4.1(m) hereto and is not
qualified to do business in any other state.


 


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


 


(o)           Bulk
Sales Act.  No  transaction contemplated hereby with respect to SRC
requires compliance with, or will be subject to avoidance under, any bulk sales
act or similar law.


 


(p)           UCC Information.  The true legal name of SRC as registered in
the jurisdiction of its organization, and the current location of SRC’s
jurisdiction of organization are set forth in Schedule 4.1(p)
and such location has not changed within the past 12 months. During the past
five years, SRC has not had or used any trade names, fictitious names, assumed
names “doing business as” names, or any other names under which it has done or
is doing business.  In addition, Schedule 4.1(p) lists SRC’s (i) federal
employer identification number and (ii) organizational identification number,
if any, as designated by the jurisdiction of its organization.


 


(q)           No
Fraudulent Transfer.  SRC
is not entering into this Agreement with the intent (whether actual or
constructive) to hinder, delay, or defraud its present or future creditors and
is receiving reasonably equivalent value and fair consideration for the
Transferred Receivables being transferred hereunder.


 


(r)            Representations as to
Transferred Receivables. 
With respect to each Transferred Receivable transferred by it, it
represents and warrants that:


 


(i)            other than with
respect to each Transferred Receivable that is identified as not being an
Eligible Receivable in the Daily Report delivered on the TSA Transfer Date
relating to such Receivable, each Transferred Receivable satisfies the criteria
for an Eligible Receivable as of the applicable TSA Transfer Date; and


 


(ii)           SRC is the sole legal
and beneficial owner of such Transferred Receivable, and upon the sale of each
Transferred Receivable by SRC, Funding LLC will become the sole legal and
beneficial owner of such Transferred Receivable, free and clear of any Adverse
Claims and no effective financing statement or other instrument similar in
effect covering all or any part of such Transferred Receivable or TSA Asset
with respect thereto will at such time be on file against SRC in any filing or
recording office 


 


5





















 


except such as
have been filed in favor of Funding LLC or the Indenture Trustee in accordance
with this Agreement.


 


(s)           Perfection
Representations and Warranties.  The parties hereto agree that the
representations, warranties and covenants set forth in Schedule 4.1(s) shall be a part
of this Agreement for all purposes.


 


The representations and
warranties described in this Section 4.1
shall survive the sale or contribution of the TSA Assets to Funding LLC, any
subsequent assignment, contribution or sale of the TSA Assets by Funding LLC,
and the termination of this Agreement and the other Transaction Documents and
shall continue until the payment in full of all TSA Assets.


 


Section 4.2             Affirmative Covenants of SRC.  SRC covenants and agrees that it shall,
unless otherwise consented to by Funding LLC, from and after the Closing Date
and until the TSA Termination Date:


 


(a)           Compliance
with Laws, etc.  Comply in
all material respects with its certificate of incorporation and by-laws (or
other constituting documents, as applicable) and all laws, rules, regulations
and orders of any Governmental Authority, whether now in effect or hereafter
enacted, applicable to SRC, except to the extent that failure to comply
therewith could not have a Material Adverse Effect.  SRC will comply, in all material respects,
with its obligations under the Sale Agreement.


 


(b)           Preservation
of Corporate Existence. 
(i) Preserve and maintain its corporate existence, rights, franchises
and privileges in the jurisdiction of its organization and (ii) qualify and
remain qualified in good standing as a foreign corporation in each jurisdiction
where the nature of its business so requires, except where the failure so to
qualify would not, individually or in the aggregate with other such failures,
have a Material Adverse Effect.


 


(c)           Visitation
Rights.  At any reasonable
time during normal business hours and from time to time, in each case upon
reasonable notice to SRC permit (i) Funding LLC or any of its respective agents
or representatives to examine and make copies of and abstracts from the
records, books of account and documents (including computer tapes and disks) of
SRC relating to the Transferred Receivables and the TSA Assets and (ii) Funding
LLC or any of its respective agents or representatives, to visit the properties
of SRC for the purpose of examining such records, books of account and
documents, and to discuss the affairs, finances and accounts of SRC relating to
the Transferred Receivables and the TSA Assets or SRC’s performance hereunder
with any of its officers or directors and with its independent certified public
accountants (subject to any requirements of confidentiality imposed by law or
contract).


 


(d)           Separate Identity.  Take all actions
required or reasonably necessary to maintain Funding LLC’s status as a separate
legal entity, including (i) not misleading third parties as to Funding LLC’s
identity as an entity with assets and liabilities distinct from SRC, Servicer,
each Seller and each Subsidiary or Affiliate thereof; (ii) not holding itself
out to be responsible for the debts or decisions or actions relating to the
business 


 


6





















 


and affairs of
Funding LLC; (iii) taking such other actions as are necessary on its part to
ensure that the covenants set forth in Section 4.5 are met at all times;
and (iv) taking such other actions as are necessary on its part to ensure that
Funding LLC’s limited liability company procedures required by the Funding LLC
Limited Liability Company Agreement are complied with.


 


(e)           Keeping
of Records and Books of Account. 
Maintain and implement, or cause to be maintained or implemented,
administrative and operating procedures reasonably necessary or advisable for
the collection of amounts owing on all Transferred Receivables, and, until any
delivery to Funding LLC, keep and maintain, or cause to be kept and maintained,
all documents, books, records and other information reasonably necessary or
advisable for the collection of amounts owing on all such Transferred
Receivables and other TSA Assets with respect thereto.  SRC shall at its own cost and expense, for
not less than three years from the date on which each Transferred Receivable
was originated, or for such longer period as may be required by law, maintain
adequate Records with respect to such Transferred Receivable, including records
of all payments received, credits granted and merchandise returned with respect
thereto.


 


(f)            Location
of Records.  Keep its
offices where it keeps the records concerning the Transferred Receivables (and
all original documents relating thereto) at the locations referred to in Section
4.1(m) or, upon 30 days prior written notice to Funding LLC, at such other
locations in a jurisdiction where all action required by Section 4.2(p)(i)
shall have been taken and completed and be in full force and effect.


 


(g)           Computer
Files.  At its own cost
and expense, retain the ledger used by SRC as a master record of the
Transferred Receivables and, if SRC is in possession of any documents relating
to the Transferred Receivables, retain copies of all such documents as
custodian and agent for Funding LLC and other Persons with interests in the
Transferred Receivables and mark any computer tape or other physical records of
the Transferred Receivables (other than individual invoices or individual
collection files) to the effect that interests in the Transferred Receivables
have been sold to Funding LLC.


 


(h)           Payment
of and Compliance with Obligations.  Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and adequate
reserves in with respect thereto have been set aside or except where the
failure to so pay, discharge or otherwise satisfy such obligations would not
have a Material Adverse Effect in respect of SRC.  SRC shall defend the right, title and
interest of Funding LLC in, to and under the Transferred Receivables originated
by it and the other TSA Assets, whether now existing or hereafter created,
against all claims of third parties claiming through SRC. SRC will duly fulfill
all obligations on its part to be fulfilled under or in connection with each
Transferred Receivable transferred by it and will do nothing to impair the
rights of Funding LLC or its assigns in such Transferred Receivable or any TSA
Assets.


 


(i)            Policies.  Enforce the covenant in the Sale Agreement
requiring each Seller to perform its obligations in accordance with and comply
in all material respects 


 


7





















 


with the
Credit and Collection Policies as amended from time to time in accordance with
the Transaction Documents.


 


(j)            Taxes.  Pay and discharge promptly all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might give rise to a Lien upon such
properties or any part thereof, provided, however that such
payment and discharge shall not be required with respect to any such tax,
assessment, charge, levy or claim so long as (i) the validity or amount thereof
shall be contested in good faith by appropriate proceedings and SRC shall set
aside adequate reserves with respect thereto, (ii) such tax, assessment,
charge, levy or claim is in respect of property taxes for property that SRC has
determined to abandon and the sole recourse for such tax, assessment, charge,
levy or claim is to such property and (iii) the failure to make payment pending
such contest could not reasonably be expected to result in a Material Adverse
Effect.


 


(k)           Collections.  With respect to payments in respect of any
Transferred Receivables that are made directly to SRC (including any employees
thereof or independent contractors employed thereby), immediately (and in no
event later than 1 Business Day after determination that such amount was
misdirected) deliver (which may be via regular mail) or deposit such amount to
a Lock-Box Account and, prior to forwarding such amounts, to hold such payments
in trust as custodian for Funding LLC.


 


(l)            Furnishing
Copies, etc.  Furnish to
Funding LLC:


 


(i)            promptly upon
obtaining knowledge of the occurrence of any Pay Out Event, Default or Event of
Default, written notice thereof specifying the nature and extent thereof; and


 


(ii)           promptly following
request therefor, such information, documents, records or reports regarding or
with respect to the Transferred Receivables as Funding LLC may from time to
time reasonably request.


 


(m)          Obligations
with Respect to Obligors and Transferred Receivables.  Take all actions on its part reasonably
necessary to maintain in full force and effect its material rights under all
contracts relating to each Transferred Receivable.


 


(n)           Responsibilities
of Sellers. 
Notwithstanding anything herein to the contrary, (i) SRC shall perform
or cause to be performed all its obligations under the Credit and Collection
Policies related to the Transferred Receivables to the same extent as if such
Transferred Receivables had not been transferred to Funding LLC hereunder, (ii)
the exercise by Funding LLC of any of its rights hereunder shall not relieve
SRC of its obligations with respect to such Transferred Receivables and (iii)
Funding LLC shall not have any obligation or liability with respect to any
Receivables, nor shall Funding LLC be obligated to perform any of the
obligations or duties of SRC or any Seller thereunder.


 


8





















 


(o)           Transfer
of Receivables.  Sell or
otherwise transfer Receivables solely in accordance with the terms of this
Agreement.


 


(p)           Further
Action.  In addition to
the foregoing:


 


(i)            SRC shall, at its sole
cost and expense, upon request of Funding LLC, promptly and duly authorize,
execute and/or deliver, as applicable, any and all further instruments and
documents and take such further actions that may be necessary or desirable or
that Funding LLC may reasonably request to carry out more effectively the
provisions and purposes of this Agreement or to obtain the full benefits of
this Agreement and of the rights and powers herein granted, including
authorizing and filing any financing or continuation statements under the UCC
with respect to the ownership interests or Liens created or granted
hereunder.  SRC hereby authorizes Funding
LLC to file any such financing or continuation statements without the signature
of SRC to the extent permitted by applicable law.  A carbon, photographic or other reproduction
of this Agreement or of any notice or financing statement covering the TSA
Assets or any part thereof shall be sufficient as a notice or financing statement
where permitted by law.  If any amount
payable under or in connection with any of the TSA Assets is or shall become
evidenced by any instrument, such instrument, other than checks and notes
received in the ordinary course of business, shall be duly endorsed in a manner
reasonably satisfactory to Funding LLC immediately upon the SRC’s receipt
thereof and promptly delivered to or at the direction of Funding LLC.


 


(ii)           If SRC fails to perform
any agreement or obligation under this Section 4.2(p),
Funding LLC may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the reasonable expenses of
Funding LLC incurred in connection therewith shall be payable by SRC upon
demand of Funding LLC.  Funding LLC agrees
promptly to notify SRC after any such performance; provided,
that the failure to give such notice shall not affect the validity of any such
performance.


 


Section 4.3             Negative Covenants of SRC.  SRC covenants and agrees that, without the
prior written consent of Funding LLC, from and after the Closing Date and until
the date after the TSA Termination Date when the Unpaid Balances of all
Transferred Receivables transferred hereunder prior to such TSA Termination
Date have been reduced to zero:


 


(a)           Adverse Claims and Liens.  SRC shall not, except as otherwise expressly
herein provided, sell, assign (by operation of law or otherwise), transfer or
otherwise dispose of, or create or suffer to exist any Adverse Claim or Lien
upon or with respect to, any TSA Assets, or assign any right to receive proceeds
in respect thereof except for Permitted Encumbrances.


 


9





















 


(b)           Ineligible
Receivables.  SRC shall
not take any action to cause, or which would permit, an Eligible Receivable to
cease to be an Eligible Receivable, other than solely as a result of the
Obligor with respect to such Receivable becoming subject to an Exchange Partner
Arrangement after the related TSA Transfer Date or except as otherwise
expressly provided by this Agreement; provided that in no event shall an
Eligible Receivable becoming a Defaulted Receivable constitute a breach of this
Section 4.3(b).


 


(c)           Change in
Payment Instructions to Obligors.  SRC shall not cause or permit any Obligor of
any Transferred Receivables to be instructed to make any payments with respect
to any Transferred Receivables other than in accordance with its current
practices with respect to such Obligor or to a Lock-Box Account.


 


(d)           UCC Matters.  SRC shall not change its name, use an
additional name or change its identity or corporate structure in any manner
which would or might make any financing statement or continuation statement (or
other similar instrument) relating to this Agreement seriously misleading
within the meaning of the UCC (or any other similar law) or impair the
perfection of Funding LLC’s interest in any TSA Asset under any similar law,
without 30 days prior written notice to Funding LLC and without it taking all
actions required by Section 2.2.


 


(e)           Policies.  SRC shall not make any change or modification
(or permit any change or modification to be made) to the Credit and Collection
Policies, except (i) if such changes or modifications are necessary under any
Requirement of Law or (ii) if such changes or modifications could not
reasonably be expected to have a Material Adverse Effect.


 


(f)            Modification
of Ledger.  SRC shall not
delete or otherwise modify the marking on the ledger referred to in Section
4.2(g).


 


(g)           Accounting
of Purchases.  SRC shall
not prepare, or have prepared on its behalf, any financial statements which
shall account for the transactions contemplated hereby in any manner other than
as sales or contributions, as applicable, of the TSA Assets by SRC to Funding
LLC or in any other respect account for or treat the transactions contemplated
hereby (including for accounting purposes, except as required by law) in any
manner other than as sales or contributions, as applicable, of the TSA Assets
by SRC to Funding LLC; provided, that
this Section 4.3(g) shall not apply for any tax or tax accounting
purposes.


 


(h)           Instruments.  Seller shall not take any action to cause any
Transferred Receivable to be evidenced by any instrument (as defined in the UCC
as in effect in each applicable state) except in connection with the
enforcement or collection of a Transferred Receivable.


 


(i)            Modifications of
Transferred Receivables or Contracts.  SRC shall not extend, amend, forgive,
discharge, compromise, cancel, waive or otherwise modify the terms or
conditions of any Transferred Receivable or Contract, except (i) as provided in



 


10





















 


the Credit and
Collection Policies, or (ii) to the extent that such extension, amendment,
forgiveness, discharge, compromise, cancellation, waiver or modification does
not affect Funding LLC’s ownership interest in such Transferred Receivable or
Contract, as applicable, and does not negatively impact the ultimate
collectibility of such Transferred Receivable.


 


(j)            Lock-Box
Accounts.  SRC shall not
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to any Lock-Box Account cash or cash proceeds other than Collections, or take
any action to cause, or which would permit, the termination or amendment of any
Lock-Box Agreement.


 


(k)           Tax
Treatment of Funding LLC. 
SRC shall not take any action inconsistent with the treatment of Funding
LLC as an entity which is disregarded from its sole owner for U.S. federal
income tax purposes.


 


Section 4.4             Representations and Warranties of Funding LLC.  Funding LLC hereby represents and warrants to
SRC as follows:


 


(a)           Organization,
Corporate Powers.  It is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite limited liability company
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 limited liability company power and authority to execute,
deliver and perform each of the Transaction Documents and each other agreement
or instrument contemplated hereby or thereby to which it is or will be a party.


 


(b)           Authorization.  The transactions contemplated herein are
within the limited liability company powers of Funding LLC and have been duly
authorized by all requisite limited liability company and, if required, member
or manager action.


 


(c)           Enforceability.  Each of this Agreement and each of the other
Transaction Documents to which it is a party has been duly executed and
delivered by Funding LLC and constitutes a legal, valid and binding obligation
of Funding LLC 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)           Governmental Approvals; No Conflicts.  The execution, delivery and performance by it
of this Agreement and each of the other Transaction Documents to which it is a
party, the acquisition of Transferred Receivables by it hereunder and the
consummation of the other transactions contemplated by any of the foregoing (i)
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 


 


11





















 


and effect,
(ii) will not violate any applicable law or regulation or the charter, by laws
or other organizational documents of it or any order of any Governmental
Authority, (iii) will not violate or result in a default under any indenture,
agreement or other instrument binding upon Funding LLC or its assets, or give
rise to a right thereunder to require any payment to be made by Funding LLC,
and (iv) will not result in the creation or imposition of any Lien on any asset
of Funding LLC.


 


Section 4.5             Covenants of Funding LLC.  Funding
LLC hereby acknowledges that the Indenture Trustee and the Noteholders are, and
will be, entering into the transactions contemplated by the Transaction
Documents in reliance upon the Funding LLC’s identity as a legal entity
separate from SRC, SSCE, each Seller and any other Person.  Therefore, from and after the Closing Date,
Funding LLC shall take all reasonable steps to continue its identity as a
separate legal entity and to make it apparent to third Persons that it is an
entity with assets and liabilities distinct from those of SRC, SSCE, each
Seller and any other Person, and that it is not a division of SRC, SSCE, any
Seller or any other Person; provided, however, that for U.S. federal income tax
purposes, Funding LLC will not take any action inconsistent with its treatment
as an entity disregarded from its sole owner. 
Without limiting the generality of the foregoing, Funding LLC shall
comply with (i) the provisions set forth in Section 2.09 of its limited
liability company agreement and (ii) “The Transaction Facts” set forth in any
opinion issued by Winston & Strawn LLP as to substantive consolidation
issues in connection with the issuance of any Series of Notes.


 


ARTICLE V



ADMINISTRATION AND SERVICING; SERVICER


 


Section 5.1             Acceptance of Appointment and
Other Matters Relating to Servicer.


 


(a)           SSCE agrees to act, and is hereby appointed by
Funding LLC to act, as Servicer under this Agreement, and SRC hereby consents
to SSCE’s acting as Servicer.  Servicer
shall supervise the servicing and administration of the Transferred Receivables
and shall supervise the collection of payments due under the Transferred
Receivables in accordance with (i) prudent standards and its customary and
usual servicing procedures for servicing receivables owned by it and comparable
to the Transferred Receivables and in accordance with the Credit and Collection
Policy and (ii) the standard set forth in clause (ii) of the definition of “Eligible
Servicer” in Annex A to the Indenture (which standard Servicer represents is
not inconsistent with the standard set forth in clause (i) above) and shall
have full power and authority to do any and all things in connection with such
servicing and administration which it may deem necessary or desirable; provided,
however, that if SSCE is no longer the “Servicer” hereunder, the entity
that is acting as Servicer at such time shall service the Transferred
Receivables in accordance with the standards that would be employed by a
prudent institution in servicing comparable receivables for its own
account.  Servicer will be responsible on
a daily basis for servicing, managing and accepting or collecting payments on
the Transferred Receivables; provided, however, that Servicer
will hold such collections in trust for the benefit of the Noteholders.  Additional servicing activities performed by Servicer with respect to the Transferred
Receivables shall include collecting and recording payments, 


 


12





















 


communicating with Obligors, investigating payment delinquencies,
providing billing records to Obligors and maintaining internal records.  Managerial and custodial services performed
by Servicer shall include providing assistance in any inspections of the
documents and records relating to the Transferred Receivables by Funding LLC or
the Indenture Trustee to the extent provided in this Agreement, maintaining the
agreements, documents and files relating to the Transferred Receivables as
custodian and providing related data processing and reporting services for
Noteholders and on behalf of the Indenture Trustee to the extent provided in this
Agreement, the Indenture or any Indenture Supplement.  Without limiting the generality
of the foregoing, Servicer is hereby authorized and empowered (i) to instruct
the Indenture Trustee to make withdrawals and payments from the Collection Account
and the Series Accounts and any
other applicable account established pursuant to this Agreement, the Indenture
or any Indenture Supplement, as set forth in this Agreement and the Indenture
or any related Indenture Supplement, (ii) to execute and deliver, on behalf of
the Indenture Trustee for the benefit of the Noteholders, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the
Transferred Receivables and, after the delinquency of any Transferred
Receivable and to the extent permitted under and in compliance with applicable
law and regulations, to commence enforcement proceedings with respect to such
Transferred Receivable, and (iii) to make any filings, reports, notices,
applications, registrations with, and to seek any consent or authorizations
from, the Securities and Exchange Commission and any state securities authority
on behalf of Funding LLC as may be necessary or advisable to comply with any federal
or state securities or reporting requirements or laws.


 


(b)           Servicer shall not, and no Successor Servicer
shall, be obligated to use separate servicing procedures (except as may be
specified herein), offices or employees for servicing the Transferred
Receivables from the procedures, offices or employees used by Servicer or such
Successor Servicer, as the case may be, in connection with servicing other
receivables of the same type.


 


(c)           Servicer shall, on behalf of Funding LLC, the
Indenture Trustee and the Noteholders, enforce their respective rights and
interest in and under the Transferred Receivables and the related
Contracts.  If SSCE is no longer the “Servicer”
hereunder, SSCE shall promptly deliver to the entity that is acting as Servicer
at such time, at SSCE’s expense, and Servicer shall hold in trust for Funding
LLC, the Indenture Trustee and the Noteholders in accordance with their
respective interests, all books and records, files, documents, instruments and
records (including, without limitation, computer tapes or disks and microfiche
lists) that evidence or relate to Transferred Receivables.


 


(d)           In the event that SRC is unable for any reason to
transfer Receivables to Funding LLC in accordance with the provisions of this
Agreement (including, without limitation, by reason of any court of competent
jurisdiction ordering that Funding LLC not transfer any additional Receivables
to the Indenture Trustee) then, in any such event, Servicer agrees to allocate
and pay to Funding LLC (or to the Indenture Trustee on behalf of the
Noteholders), after the date of such inability, all Collections with respect to
Receivables transferred to Funding LLC prior to the occurrence of such event.


 


13





















 


(e)           Obligors shall be instructed by Servicer to make
all payments on the Transferred Receivables to Lock-Box Accounts maintained by
Lock-Box Banks pursuant to Lock-Box Agreements; provided, however,
that if, notwithstanding instructions to the contrary given to any Obligor,
Collections from such Obligor are received by Servicer, such Collections shall
be deposited in the Collection Account by Servicer immediately upon receipt of
such funds (and in no event later than 1 Business Day after receipt); provided
further, that Servicer shall not be considered in breach of the
obligation set forth in this sentence to the extent that a payment received by
Servicer is not so deposited because such payment relates to a Disputed
Item.  On each Business Day, Servicer shall transfer, or cause to be
transferred, to the Collection Account all Collections received in the Lock-Box
Accounts that have not been previously transferred.


 


(f)            Servicer or, in the event that there is a
Successor Servicer, such Successor Servicer, shall have the power revocable by
the Indenture Trustee to instruct each Lock-Box Bank to make withdrawals from
the Lock-Box Accounts in accordance with this Agreement, the Indenture or any
applicable Indenture Supplement.  All
Collections on Transferred Receivables of amounts due and owing will, pending
instructions by Servicer for transfer to the Collection Account, be deposited
in or held in the Lock-Box Account by Servicer in the name of the Indenture
Trustee and shall be remitted to the Collection Account not later than one
Business Day after such deposits become available funds; provided, however,
that Servicer shall not be considered in breach of the obligation set forth in
this sentence to the extent that a payment received by Servicer is not so
deposited because such payment relates to a Disputed Item.


 


(g)           Servicer
hereby agrees that all Collections and other proceeds received in respect of
Transferred Receivables shall be applied to reduce the Unpaid Balance of the
oldest outstanding Transferred Receivables of the Obligor to whom such
Collections are attributable until such Transferred Receivables are paid in
full; provided, however that notwithstanding the foregoing, if
Servicer can attribute a Collection to a specific Obligor and a specific
Transferred Receivable, then such Collection shall be applied to pay such
Transferred Receivable of such Obligor.


 


Section 5.2             Servicing Compensation.  As
compensation for its servicing activities hereunder and reimbursement for its
expenses, Servicer shall be entitled to receive a monthly servicing fee for
each Settlement Period (the “Servicing Fee”)
equal to the product of (i) one-twelfth, (ii) 1.00% and (iii) the Unpaid
Balance of the Transferred Receivables as of the last day of the immediately
preceding Settlement Period.


 


The share of the Servicing Fee allocable to each Series will be
specified in the related Indenture Supplement. 
The portion of the Servicing Fee allocated to any Series shall be
payable to Servicer solely pursuant to the terms of, and to the extent amounts
are available for payment as provided in, any applicable Indenture
Supplement.  The portion of the Servicing
Fee for any Settlement Period not so allocated to a particular Series, or
otherwise allocated in any Indenture Supplement, shall be paid from Collections
allocated to the holder of the Transferor Interest during such Settlement
Period and shall be paid no later than the related Payment Date.  In no event shall Funding LLC, the Indenture
Trustee or the Noteholders be liable for the share 


 


14





















 


of the Servicing Fee with respect to any Settlement Period allocated to
the holder of the Transferor Interest.


 


Section 5.3             Representations, Warranties and
Covenants of Servicer.  SSCE, as initial Servicer, and any Successor
Servicer by its appointment hereunder, hereby represents and warrants, in the
case of the initial Servicer, as of the Closing Date, and in the case of any
Successor Servicer, as of the date of its appointment and, with respect to any
Series issued after such date, as of the date of the related Indenture
Supplement and covenant until (i) the aggregate Unpaid Balance is reduced to
zero, (ii) each Noteholder shall have received all accrued interest on the
applicable Notes, and (iii) all obligations of Funding LLC and Servicer to the
Noteholders or payable or distributable to any Secured Party under the
Indenture or any Indenture Supplement shall have been finally and fully paid
and performed.


 


(a)           Organization and Good Standing.  Servicer is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, and has full power, authority and legal right to execute,
deliver and perform its obligations under this Agreement and, in all material
respects, to own its property and conduct its business as such properties are
presently owned and as such business is presently conducted.


 


(b)           Due Qualification.  Servicer
is duly qualified to do business and is in good standing as a foreign
corporation (or is exempt from such requirements), and has obtained all
necessary licenses and approvals in each jurisdiction in which the failure to
obtain such license, approval or qualification would have a material adverse
affect upon the Noteholders or upon the ability of Servicer to perform its
obligations under this Agreement.


 


(c)           Due Authorization.  The execution, delivery and performance by
Servicer of this Agreement, and the consummation by Servicer of the
transactions provided in this Agreement, have been duly authorized by all
necessary corporate action on the part of Servicer.


 


(d)           Binding Obligation.  This
Agreement constitutes the legal, valid and binding obligation of Servicer,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereinafter in effect, relating to the enforcement
of creditors’ rights in general and, with respect to any Successor Servicer
which is a national banking association, the rights of creditors of national
banks under federal law and except as such enforceability may be limited by
general principles of equity (whether considered in a proceeding at law or in
equity).


 


(e)           No Violation.  The
execution and delivery of this Agreement by Servicer, and the performance by
Servicer of the transactions contemplated by this Agreement and the fulfillment
by Servicer of the terms hereof applicable to Servicer, will not conflict with,
violate any provision of, require any filing (except for certain filings
required by the UCC), registration, consent or approval under, any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect having 


 


15





















 


applicability to Servicer, or the certificate of incorporation or
by-laws of Servicer, except for such filings, registrations, consents or
approvals as have already been obtained and are in full force and effect and
except for such violations which would not materially and adversely affect the
performance by Servicer of such transactions and the fulfillment by Servicer of
such terms (and except that Servicer makes no representation or warranty
regarding state securities or “blue sky” laws), or result in any breach of any
of the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, any indenture, contract, agreement,
mortgage, deed of trust or other instrument to which Servicer is a party or by
which it is bound.


 


(f)            No Proceeding.  There are no proceedings or investigations
pending or, to the best knowledge of Servicer, threatened against Servicer
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality (i) seeking to prevent the issuance of the Notes
or the consummation of any of the transactions contemplated by this Agreement,
(ii) seeking any determination or ruling that, in the reasonable judgment of
Servicer, would materially and adversely affect the performance by Servicer of
its obligations under this Agreement, or (iii) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement.


 


(g)           Compliance with Requirements of
Law.  Servicer shall duly satisfy all obligations
on its part be fulfilled under or in connection with the Transferred
Receivables, will maintain in effect all qualifications required under
requirements of law in order to service properly the Transferred Receivables
and will comply in all material respects with all requirements of law in
connection with servicing the Transferred Receivables, the failure to maintain
or to comply with which would have a material adverse effect on the holders of
any Series of Notes.


 


(h)           No Rescission or Cancellation.  Servicer
shall not permit any rescission or cancellation of a Transferred Receivable or
a related Contract, except as ordered by a court of competent jurisdiction or
other governmental authority and except in the ordinary course of business and
in accordance with the Credit and Collection Policies of Servicer.


 


(i)            All Consents Required.  All
approvals, authorizations, consents, orders or other actions of any Person or
of any Governmental Authority required in connection with the execution and
delivery by Servicer of this Agreement, the performance by Servicer of the
transactions contemplated by this Agreement and the fulfillment by Servicer of
the terms hereof have been obtained, where the failure to obtain the same would
have a material adverse effect on the holders of any Series; provided, however,
that Servicer makes no representation or warranty regarding state securities or
“blue sky” laws.


 


(j)            Extension or Amendment of
Transferred Receivables; Change in Credit and Collection Policy or Contracts.  Servicer will not, without written
confirmation from each Rating Agency that the rating on any Series of Notes
will not be adversely affected (i) permit Funding LLC to make any material
changes in the Credit and Collection Policy 


 


16





















 


(including Servicer’s written Credit and Collection Policy in effect as
of the Closing Date and attached hereto as Exhibit 5.3(j) or (ii)
extend, amend, modify or waive, or permit Funding LLC to extend, amend, modify
or waive, any term or condition of any related Contract, which extension,
amendment, modification, waiver or change, would, individually or in the
aggregate (A) materially change the credit standing required of the Obligors,
(B) have a substantial likelihood of having a material adverse effect on any
Noteholder, or (C) cause a Transferred Receivable that would otherwise not be
an Eligible Receivable to continue to be or to become an Eligible Receivable
other than solely as a result of such Transferred Receivable becoming subject
to an Exchange Partner Arrangement after the related TSA Transfer Date.


 


(k)           No Change in Ability to Service.  With
respect to the initial Servicer only, since the Closing Date, there has been no
material adverse change in the ability of Servicer to service and collect the
Transferred Receivables.


 


(l)            Lock-Box Banks.  Set forth in Schedule 5.3(l) is a
complete and accurate description as of the Closing Date of each Lock-Box
Account currently maintained with respect to the Transferred Receivables.  Servicer and each Successor Servicer shall
direct each Lock-Box Bank to make transfers to the Collection Account.  Neither Servicer nor any Successor Servicer
shall deposit or otherwise credit, or cause or permit to be so deposited
or credited, to any Lock-Box Account cash or cash proceeds other than
Collections, or take any action to cause, or which would permit, the
termination or amendment of any Lock-Box Agreement.  The Servicer may, add or terminate any bank
as a Lock-Box Bank or add or terminate any Lock-Box Account from those listed
on Schedule 5.3(l) hereto, or make any reasonable change in the Lock-Box
Agreements, which would not (i) have an adverse impact on the Servicer’s
ability to collect payments or (ii) cause a withdrawal or downgrade of the then
current rating of the Notes of any Series (so long as an Obligor remains
instructed to make payments on a Transferred Receivable to a Lock-Box Account),
but in each case only upon prior written notice from the Servicer to the
Transferor and the Indenture Trustee.


 


(m)          Keeping of Records and Books of
Account.  Servicer shall maintain and implement
administrative and operating procedures (including, without limitation, the
ability to create records evidencing the Transferred Receivables in the event
of the destruction of the originals thereof), and keep and maintain all
documents, books, microfiche, computer records and other information reasonably
necessary or advisable for the collection of all the Transferred Receivables.  Such documents, books and records, microfiche
lists, computer files, tapes or disks shall reflect all payments and credits
with respect to the Transferred Receivables and the computer records shall be
clearly marked to show the interests of the Indenture Trustee in the
Transferred Receivables.


 


(n)           Performance and Compliance with
Sellers’ Contracts.  Servicer shall or, if SSCE is no longer
Servicer, Funding LLC shall timely and fully perform and comply with all
material provisions, covenants and other promises required to be observed by it
under the Contracts related to the Transferred Receivables.


 


(o)           No Servicer Default.  No
Servicer Default has occurred and is continuing.


 


17





















 


(p)           Maintenance of Privileges.  Servicer
shall maintain all of its rights, powers and privileges material to the
collectibility or enforcement of the Transferred Receivables and the TSA
Assets.


 


Section 5.4             Reports and Records for the
Indenture Trustee; Bank Account Statements.


 


(a)           Daily Records.  Upon
reasonable prior notice by Funding LLC or the Indenture Trustee, Servicer shall
make available at an office of Servicer, selected by Servicer for inspection by
Funding LLC or the Indenture Trustee or their respective agents on a Business
Day during Servicer’s normal business hours a record setting forth (i) the
Collections on each Transferred Receivable and (ii) the Unpaid Balance of
Transferred Receivables for the Business Day preceding the date of the
inspection.  Servicer shall, at all
times, maintain its computer files with respect to the Transferred Receivables
in such a manner so that the Transferred Receivables will be specifically
identified and, upon reasonable prior request of Funding LLC or the Indenture
Trustee, shall make available to Funding LLC or the Indenture Trustee, at an
office of Servicer selected by Servicer, on any Business Day during Servicer’s
normal business hours any computer programs necessary to make such
identification.


 


(b)           Daily Reports.


 


(i)            On each Business Day,
Servicer shall prepare, or, if SSCE is not Servicer, the Successor Servicer
shall prepare, a completed daily report (the “Daily Report”)
substantially in the form required by the applicable Indenture Supplement.


 


(ii)           Servicer (or if SSCE is
not Servicer, the Successor Servicer) shall deliver to the Indenture Trustee
the Daily Report by 11:30 a.m., New York City time, on each Business Day with
respect to activity in the Transferred Receivables for the prior Business Day
(or, in the case of a Daily Report delivered on any day following one or more
non-Business Days, the aggregate activity for the preceding Business Day and
such non-Business Days).


 


(c)           Monthly Reports.


 


(i)            On
each Determination Date, Servicer shall prepare, or, if SSCE is not Servicer,
the Successor Servicer shall prepare, a completed monthly report (the “Monthly Report”) substantially in the form required by the
applicable Indenture Supplement.


 


(ii)           Servicer
(or if SSCE is not Servicer, the Successor Servicer) shall deliver to the
Indenture Trustee the Monthly Report by 11:30 a.m., New York City time, on each
Determination Date with respect to activity in the Transferred Receivables for
the prior Settlement Period.


 


Section 5.5             Annual Independent Public
Accountants’ Servicing Report.  Servicer shall deliver to the Indenture
Trustee:


 


18





















 


(a)           Unless included in a Form 10-K delivered or
deemed delivered under Section 5.6, as soon as available and in any event within
one-hundred five (105) days after the end of each fiscal year of Servicer, a
copy of the annual statements of income and cash flows for Servicer for such
fiscal year and the related balance sheet as at the end of such fiscal year,
setting forth in each case in comparative form the corresponding figures for
the preceding fiscal year and prepared in accordance with GAAP consistently
applied (except for such changes in application which are approved by Servicer’s
independent public accountants and disclosed therein), accompanied by an
opinion of Ernst & Young LLP or other independent public accountants of
good national reputation selected by Servicer, together with a certificate from
Servicer’s independent public accountants confirming that, in conducting such
audit, nothing came to their attention which caused them to believe that
Servicer was not in compliance with this Agreement insofar as it relates to
accounting matters, with the understanding that such audit was not directed
primarily toward obtaining knowledge of such noncompliance;


 


(b)           Unless included in a Form 10-K delivered or
deemed delivered under Section 5.6, as soon as available and in any event within
sixty (60) days after the end of the first three fiscal quarters of each fiscal
year of Servicer, a copy of (A) the unaudited statement of income and cash
flows of Servicer for such fiscal quarter and for the period from the beginning
of the respective fiscal year to the end of such fiscal quarter, and (B) an
unaudited balance sheet of Servicer as at the end of such fiscal quarter;
setting forth in each case in comparative form the corresponding figures for
the preceding fiscal year and all of the foregoing prepared in accordance with
GAAP consistently applied (except for such changes in application which are
approved by Servicer’s financial officer preparing such statements and
disclosed therein);


 


(c)           Within one hundred five (105) days after each
anniversary of the Closing Date, a report with respect to the Transaction
Documents by Ernst & Young LLP or any other firm of independent public
accountants. Each such report shall state that the accountants have compared
the amounts contained in a sample of Daily Reports and Monthly Reports randomly
selected from all Daily Reports and Monthly Reports delivered to the Indenture
Trustee during the period covered by such report with the records (including
computer records) from which such amounts were derived and that, on the basis
of such comparison, such accountants are of the opinion that the amounts are in
agreement with such documents and records, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth in
such report; and


 


(d)           Contemporaneously with the furnishing of a copy
of each annual and quarterly report provided for in Sections 5.5(a) and 5.5(b),
respectively, a certificate dated the date of delivery and signed by a
Responsible Officer of Servicer, which certificate shall state that said
financial statements fairly present the financial position and results of
operations of Servicer and were prepared in accordance with GAAP consistently
applied (except for such changes in application identified in such certificate
which are approved by Funding LLC’s independent public accountants or, in the
case of the quarterly reports, by such officer and further subject to normal
year-end adjustments) and that such Responsible Officer has reviewed the
relevant terms of the Agreement and has made, or caused to be made under such
Responsible Officer’s supervision, a review 


 


19





















 


of Funding LLC’s activities during the period covered by the statements
then being furnished, and that the review has not disclosed the existence of a
Servicer Event of Default, or if there is such an event, describing it and the
steps, if any, taken or being taken to cure it.


 


If the Servicer fails to
deliver a report required to be delivered pursuant to this Section 5.5
within ten Business Days of the date on which such report is required to be
delivered, the Indenture Trustee will promptly notify the Noteholders and the
Rating Agencies.


 


Section 5.6             Notices to Funding LLC, Indenture
Trustee and Rating Agencies.  Servicer shall deliver or make available to
Funding LLC each certificate and report required to be prepared, forwarded or
delivered pursuant to Sections 5.4 and 5.5.  Servicer shall also deliver or make available
to the Indenture Trustee and the Rating Agencies each certificate and report
required to be prepared, forwarded or delivered pursuant to Section 5.5;
provided, that, as long as Servicer is
subject to informational requirements of the Securities Exchange Act and in
accordance therewith files reports and other information with the SEC, the
Indenture Trustee and the Rating Agencies shall be deemed to have been
furnished the foregoing reports described in Sections 5.5(a) and (b)
and the Indenture Trustee and Rating Agencies may electronically access such
reports by means of the SEC’s homepage on the internet or at Servicer’s
homepage on the internet; provided, further, in the event that Servicer shall cease to be
subject to such informational requirements, Servicer will provide the Indenture
Trustee and the Rating Agencies with 30 days’ advance written notice and
thereafter Servicer shall directly furnish such reports to the Indenture
Trustee and the Rating Agencies.


 


Section 5.7             Liability of Servicer.  Servicer
shall be liable under this Agreement only to the extent of the obligations
specifically undertaken by Servicer in its capacity as Servicer.


 


Section 5.8             Merger or Consolidation of, or
Assumption of the Obligations of, SSCE as Servicer.  SSCE,
for so long as it is Servicer, shall not consolidate with or merge into any
other Person (other than an Affiliate) or convey or transfer its properties and
assets substantially as an entirety to any Person (other than an Affiliate),
unless:


 


(i)            the Person formed by
such consolidation or into which SSCE is merged or the Person which acquires by
conveyance or transfer the properties and assets of SSCE substantially as an
entirety shall be a corporation organized and existing under the laws of the
United States of America or any State or the District of Columbia, and, if SSCE
is not the surviving entity, such surviving entity shall qualify as an Eligible
Servicer and shall expressly assume, by an agreement supplemental hereto
executed and delivered to the Indenture Trustee in a form satisfactory to the
Indenture Trustee, the performance of every covenant and obligation of SSCE as
Servicer in this Agreement;


 


(ii)           SSCE has delivered
notice of such consolidation, merger, transfer or conveyance to the Rating
Agencies and received written confirmation from each Rating Agency that such
action will not result in the withdrawal or downgrade of the original rating of
any outstanding Series; and


 


20





















 


(iii)          Servicer has delivered
to the Indenture Trustee (A) an Officer’s Certificate of Servicer stating that
such consolidation, merger, conveyance or transfer and such supplemental agreement
comply with this Section 5.8 and that all conditions precedent herein
provided for relating to such transaction have been complied with and (B) an
Opinion of Counsel stating that such supplemental agreement is the legal, valid
and binding obligation of the parties (other than the Indenture Trustee)
thereto.


 


Section 5.9             Limitation on Liability of
Servicer and Others.  Subject to Section 5.10 with respect
to Servicer, except as otherwise specifically provided herein, neither Servicer
nor any of the directors or officers or employees or Affiliates or agents of
Servicer shall be under any liability to the Indenture Trustee, the Noteholders
or any other Person for taking any action or for refraining from taking any
action pursuant to this Agreement, whether arising from express or implied
duties under this Agreement or otherwise; provided, however, that
this provision shall not protect Servicer or any such director, officer,
employee, Affiliate or agent of the Servicer against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder.  Servicer and any
director or officer or employee or Affiliate or agent of Servicer may rely in
good faith on any document of any kind prima  facie properly
executed and submitted by any Person respecting any matters arising
hereunder.  Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Transferred Receivables in accordance
with this Agreement which in its reasonable opinion may involve it in any
expense or liability.  The provisions of
this Section shall survive termination of this Agreement and payment in full of
the Notes.


 


Section 5.10           Servicer Indemnification of
Funding LLC and the Indenture Trustee.  Servicer shall indemnify and
hold harmless the Indenture Trustee (and each of its directors, officers,
employees and agents) and Funding LLC (and each of its directors, officers,
employees and agents), individually and for the benefit of the Noteholders,
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of any acts or omissions of Servicer pursuant to this
Agreement, including but not limited to any judgment, award, settlement,
reasonable attorneys’ fees and other reasonable costs or expenses incurred in
connection with the defense of any action, proceeding or claim; provided,
however, that Servicer shall not indemnify the Indenture Trustee or
Funding LLC, individually or for the benefit of the Noteholders, if such acts,
omissions or alleged acts or omissions constitute or result from fraud,
negligence, breach of fiduciary duty or willful misconduct by the Indenture
Trustee or Funding LLC, as applicable; and provided, further,
that Servicer shall not indemnify Funding LLC or the Noteholders with respect
to (x) any losses, liabilities, expenses, damages or injuries of Funding LLC
with respect to any action taken by the Indenture Trustee at the request of any
Noteholder of any Series, (y) any federal, state or local taxes (or any
interest or penalties or additions with respect thereto), or (z) any losses,
liabilities, expenses, damages or injuries incurred by any Noteholder as a
result of defaults or other losses (including, without limitation, losses
incurred with respect to Defaulted Receivables) with respect to the Transferred
Receivables arising out of or based on this Agreement.  Any indemnification pursuant to this Section
5.10 shall not be payable from the Collateral, except as otherwise provided
in the Indenture or any Indenture Supplement. 
The provisions of such indemnity shall run directly to and be
enforceable by an 


 


21





















 


injured
party subject to the limitations hereof. 
The provisions of this Section 5.10 shall survive the
resignation or removal of Servicer and the termination of this Agreement.


 


Section 5.11           Servicer Not to Resign.  Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon its determination (and notification to the Indenture Trustee) that (i) the
performance of its duties hereunder is no longer permissible under applicable
law and (ii) there is no reasonable action which Servicer could take to make
the performance of its duties hereunder permissible under applicable law.  Any such determination permitting the
resignation of Servicer shall be evidenced as to clause (i) above by an Opinion
of Counsel (which Opinion of Counsel may not be provided by in-house counsel to
Servicer) to such effect delivered to the Indenture Trustee.  No such resignation shall become effective
until the Indenture Trustee or a Successor Servicer shall have assumed the responsibilities
and obligations of Servicer in accordance with Section 7.2 hereof; provided,
that if within one hundred twenty (120) days of the date that Servicer notifies
the Indenture Trustee of its determination described in the first sentence of
this Section 5.11 and delivers to the Indenture Trustee the Opinion of
Counsel referred to above, the Indenture Trustee does not appoint an Eligible
Servicer in accordance with Section 7.2 to act as Successor Servicer,
then the Indenture Trustee shall automatically be appointed Successor Servicer
in accordance with Section 7.2 (but shall have the continued authority
to appoint another Person as Successor Servicer).


 


Section 5.12           Access to Certain Documentation
and Information Regarding the Transferred Receivables.  Servicer
shall provide to the Indenture Trustee and its representatives access to
personnel having knowledge about the Transferred Receivables and copies of the
documents, books, files, microfiche lists, computer records, disks or tapes and
other information regarding the Transferred Receivables and the other TSA
Assets where required in connection with the Indenture Trustee’s enforcement of
the rights of the Noteholders, or required by applicable statutes or
regulations, to review such documentation, such access and copies, if any,
being afforded without charge but only (i) upon prior written request, (ii)
during normal business hours and (iii) subject to Servicer’s normal security
and confidentiality procedures.


 


Section 5.13           Delegation of Duties.  In the
ordinary course of business, Servicer may at any time delegate any duties
hereunder to any Person who agrees to conduct such duties in accordance with
the Credit and Collection Policy and this Agreement; provided, however,
with respect to any proposed delegation of a material function relating to
the servicing of the Transferred Receivables to a Person other than a
Subsidiary or Affiliate, written notice shall be given to each Rating Agency
and the Indenture Trustee of such delegation. 
Any delegation shall not relieve Servicer of its liability and
responsibility with respect to such duties and shall not constitute a
resignation within the meaning of Section 5.11 hereof.


 


Section 5.14           Examination of Records.  Funding
LLC and Servicer shall, prior to the sale or transfer to a third party of any
receivable, contract or invoice held in its custody, examine its computer and
other records to determine that such receivable, contract or invoice is not
part of the Transferred Receivables and TSA Assets transferred hereunder.


 


 


22





















 


ARTICLE VI



TRANSFER TERMINATION EVENTS


 


Section 6.1             Transfer Termination Events.  If a Transfer Termination Event occurs with
respect to SRC, SRC shall on the day any such Transfer Termination Event
occurs, immediately cease to transfer Receivables to Funding LLC and shall
promptly give notice thereof to the Indenture Trustee and the Rating
Agencies.  Notwithstanding any cessation
of the transfer to Funding LLC of additional Receivables, Transferred
Receivables transferred to Funding LLC prior to the occurrence of a Transfer
Termination Event and Collections in respect thereof shall continue to be
property of Funding LLC.


 


ARTICLE VII



SERVICER DEFAULTS


 


Section 7.1             Servicer Defaults.  (a)
Each of the following shall constitute a “Servicer Default”:


 


(i)            failure by Servicer to make any payment, transfer
or deposit or to give instructions or to give notice to the Indenture Trustee
to make such payment, transfer or deposit on the date such payment, transfer or
deposit or such instruction or notice is required to be made or given, as the
case may be, under the terms of this Agreement on or before three Business Days
after the date such payment, transfer or deposit is required to be made;


 


(ii)           failure on the part of Servicer duly to observe
or perform any other covenants or agreements of Servicer set forth in this
Agreement that has a material adverse effect on the holders of Notes of any
Series, which failure continues unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to Servicer by the Indenture Trustee, or by Noteholders
holding an Outstanding Principal Balance of Notes of any Series equal to at
least 50% of the aggregate Collateral Amount of such Series if such Noteholders
are materially adversely affected thereby;
or Servicer shall assign its duties under this Agreement, except as permitted
by Sections 5.8, 5.11 and 5.13;


 


(iii)          any representation, warranty or certification
made by Servicer in this Agreement or in any certificate or report delivered
pursuant to this Agreement shall prove to have been incorrect when made, which
has a material adverse effect on the rights of the holders of the Notes of any
Series and which failure continues unremedied for a period of 60 days after the
date on which written notice thereof, requiring the same to be remedied, shall
have been given to Servicer by the Indenture Trustee, or by Noteholders
holding an Outstanding Principal Balance of Notes of any 


 


23





















 


Series equal to at
least 50% of the aggregate Collateral Amount of such Series if such Noteholders
are materially adversely affected thereby;
or


 


(iv)          Servicer shall voluntarily seek, consent to or
acquiesce in the benefit or benefits of the Bankruptcy Code or, voluntarily or
involuntarily, become a party to (or be made the subject of) any proceeding
provided for under the Bankruptcy Code, other than as creditor or claimant, and
in the event such proceeding is involuntary, the petition instituting same is
not dismissed within 90 days of its filing.


 


(b)           Remedies.  In the
event of any Servicer Default, so long as Servicer Default shall not have been
remedied, the Indenture Trustee may and, at the direction of Noteholders
holding an Outstanding Principal Balance of Notes of any Series equal to at
least 50% of the aggregate Collateral Amount of such Series if such Noteholders
are materially adversely affected thereby,
shall, by notice then given in writing to Servicer and Funding LLC (with a copy
thereof to each Rating Agency and to the Indenture Trustee if given by a Person
other than the Indenture Trustee) (a “Termination Notice”),
terminate the rights and obligations of Servicer as Servicer under this
Agreement and in and to the Transferred Receivables and the proceeds thereof.


 


After receipt by Servicer of a Termination Notice, and on the date that a
Successor Servicer shall have been appointed pursuant to Section 7.2(a),
all authority, obligations and power of Servicer under this Agreement and each
Supplement shall pass to and be vested in a Successor Servicer (a “Service Transfer”); and, without limitation, the Indenture
Trustee is hereby authorized and empowered (upon the failure of Servicer to
cooperate) to execute and deliver, on behalf of Servicer, as attorney-in-fact
or otherwise, which grant of authority is irrevocable and coupled with an
interest, all documents and other instruments upon the failure of Servicer to
execute or deliver such documents or instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
Service Transfer.  Servicer agrees to
cooperate with the Indenture Trustee, Funding LLC and such Successor Servicer
in effecting the termination of the responsibilities and rights of Servicer to
conduct servicing hereunder, including, without limitation, the transfer to
such Successor Servicer of all authority of Servicer to service the Transferred
Receivables provided for under this Agreement, including, without limitation,
all authority over all Collections which shall on the date of transfer be held
by Servicer for deposit, or which have been deposited by Servicer in the
Collection Account, or which shall thereafter be received with respect to the
Transferred Receivables.  Servicer shall
at its expense promptly transfer, to the extent it is permitted by applicable
law to do so, its electronic records relating to the Transferred Receivables to
the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer, to the extent it is permitted
by applicable law to do so, to the Successor Servicer all other records,
correspondence and documents necessary for the continued servicing of the
Transferred Receivables in the manner and at such times as the Successor
Servicer shall reasonably request and shall, to the extent not prohibited by
licensing restrictions, provide access to or copies of computer software,
including by means of sublicensing arrangements if applicable, to the extent
necessary for the continued servicing of the Transferred Receivables; provided,
however, that 


 


24





















 


Servicer
shall not be required, to the extent it has an ownership interest in any electronic
records, computer software or licenses, to transfer, assign, set-over or
otherwise convey such ownership interest(s) to the Successor Servicer.  Servicer at its expense shall provide the
Successor Servicer with access to any computer hardware in its possession for a
reasonable time after Servicer’s termination to the extent necessary for the
uninterrupted servicing of the Transferred Receivables.  Notwithstanding the foregoing, Servicer shall
not be required to provide such access, whether with respect to computer
hardware or software, if to provide such access would violate applicable
contractual restrictions (including pursuant to any licensing arrangements to
which SSCE is a party); provided, however, that SSCE shall use its
reasonable best efforts in seeking consents or waivers necessary to permit the
Successor Servicer to have such access. 
To the extent that compliance with this Section 7.1 shall
require Servicer to disclose to the Successor Servicer information of any kind
which Servicer reasonably deems to be confidential, the Successor Servicer
shall be required to enter into such confidentiality agreements as Servicer
shall reasonably deem necessary to protect its interest.


 


Notwithstanding the foregoing, a delay in or failure of performance under
this Section 7.1 shall not constitute a Servicer Default if such
delay or failure was caused by an Act of God, any public enemy, acts of
declared or undeclared war, acts of terrorism, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes and no funds have been remitted to Funding LLC.  The preceding sentence shall not relieve
Servicer from using reasonable efforts to perform its obligations in a timely
manner in accordance with the terms of this Agreement, and Servicer shall
provide the Indenture Trustee, the Rating Agencies, Funding LLC and the
Noteholders with an Officer’s Certificate giving prompt notice of such failure
or delay by it, together with a description of its efforts to so perform its
obligations.  Servicer shall immediately
notify the Indenture Trustee in writing of any Servicer Default.  All costs and reasonable expenses (including
reasonable attorneys fees) incurred by the Indenture Trustee in connection with
or relating to a Servicer Default and/or transfer to a Successor Servicer,
including any court costs and expenses, the costs of negotiating and entering
into a written assumption and agreement with the Successor Servicer, and all
other reasonable costs and expenses incurred by the Indenture Trustee in the
performance of its obligation under this Section 7.1 and Section 7.2
(such costs, collectively, the “Servicer Transfer Costs”)
shall be paid by Servicer upon presentation of reasonable documentation of such
costs and expenses and if not paid by Servicer shall be payable from
Collections allocated to each Series of Notes in accordance with the related
Indenture Supplements; provided that
the amount of Servicer Transfer Costs payable from Collections for all Series
shall not exceed $400,000 in the aggregate.


 


Section 7.2             Indenture Trustee to Act;
Appointment of Successor.


 


(a)           On and after the receipt by Servicer of a
Termination Notice pursuant to Section 7.1, Servicer shall continue
to perform all servicing functions under this Agreement until the date
specified in the Termination Notice or, if no such date is specified in such
Termination Notice, until a date specified by the Indenture Trustee.  The Indenture Trustee shall as promptly as
possible after the giving of a Termination Notice appoint an Eligible Servicer
as a successor servicer (the “Successor Servicer”)
and such 


 


25





















 


Successor Servicer shall have obtained written
confirmation from each Rating Agency that the then current rating on any
outstanding Series will not be reduced or withdrawn as a result of such
appointment and shall accept its appointment by a written assumption and
agreement to perform all of the duties, obligations and liabilities of Servicer
hereunder in a form acceptable to the Indenture Trustee. In the event that a
Successor Servicer has not been appointed or has not accepted its appointment
when Servicer ceases to act as Servicer, or upon the occurrence of the events
specified in Section 5.11, the Indenture Trustee without further
action shall automatically be appointed the Successor Servicer.  The Indenture Trustee may delegate any of its
servicing obligations to an Affiliate or agent of Servicer or the Indenture
Trustee; provided, however, that any such delegation shall not
relieve the Indenture Trustee as Successor Servicer of its liabilities and
responsibilities with respect to its duties as Successor Servicer.  Notwithstanding the above, the Indenture
Trustee shall, if it is unwilling or legally unable so to act, petition a court
of competent jurisdiction to appoint as Successor Servicer a Person that is an
Eligible Servicer.  The Indenture Trustee
shall promptly give notice to each Rating Agency of the appointment of a
Successor Servicer upon such appointment.


 


(b)           Upon its appointment, the Successor Servicer
shall be the successor in all respects to Servicer with respect to servicing
functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on Servicer by
the terms and provisions hereof, and all references in this Agreement to
Servicer shall be deemed to refer to the Successor Servicer.


 


(c)           In connection with any Termination Notice, the
Indenture Trustee shall be permitted to appoint any Eligible Servicer as a
Successor Servicer and SSCE shall be responsible for payment of all servicing
compensation, if any, in excess of the Servicing Fee.  No such monthly compensation of a Successor
Servicer paid out of Collections shall be in excess of the Servicing Fee
permitted to a Successor Servicer pursuant to Section 5.2.


 


(d)           All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and terminate upon the
payment in full of the Notes, and shall pass to and be vested in Funding LLC
and, without limitation, Funding LLC is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact
or otherwise, which grant of authority is irrevocable and coupled with an
interest, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights.  The Successor
Servicer shall agree to cooperate with Funding LLC in effecting the termination
of the responsibilities and rights of the Successor Servicer to conduct
servicing of the Transferred Receivables, including, without limitation, all
authority over Collections then held by the Successor Servicer or which shall
thereafter be received by the Successor Servicer.  The Successor Servicer shall promptly
transfer its electronic records relating to the Transferred Receivables to
Funding LLC in such electronic form as Funding LLC may reasonably request and
shall promptly transfer all other records, correspondence and documents to
Funding LLC in the manner and at such times as Funding LLC shall reasonably
request.  To the extent that compliance
with this Section 7.2 shall require the Successor Servicer to disclose
to Funding LLC information 


 


26





















 


of
any kind which the Successor Servicer deems to be confidential, Funding LLC
shall be required to enter into such licensing and confidentiality agreements
as the Successor Servicer shall reasonably deem necessary to protect its
interests.


 


Section 7.3             Notification to Noteholders.  Upon the
occurrence of any Servicer Default, Servicer shall give prompt written notice
thereof to the Indenture Trustee and, upon receipt of such written notice, the
Indenture Trustee shall give notice to each Rating Agency, and the Noteholders
at their respective addresses appearing in the Note Register.  Upon any termination or appointment of a
Successor Servicer pursuant to this Article VII, the Indenture
Trustee shall give prompt written notice thereof to the Noteholders at their
respective addresses appearing in the Note Register.


 


Section 7.4             Waiver of Past Defaults.  Noteholders
of any Series materially adversely affected
by any default by the Servicer or Funding LLC holding an Outstanding
Principal Balance of Notes equal to at least 50% of the aggregate Collateral
Amount of such Series may, on behalf of all
Noteholders of such affected Series, waive any default by Servicer or Funding
LLC in the performance of their obligations hereunder and its consequences,
except a default in the failure to make any required deposits or payments of
interest or principal with respect to such 
Notes.  Upon any such waiver of a
past default with respect to any Series, such default shall cease to exist with
respect to such Series, and any default arising therefrom with respect to such
Series shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.


 


ARTICLE VIII



INDEMNIFICATION


 


Section 8.1             Costs and Expenses.  SRC hereby agrees to (a) pay or reimburse
Funding LLC for all its out-of-pocket costs and expenses incurred in connection
with the preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the other Transaction Documents and any other
documents prepared in connection herewith or therewith, the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, all reasonable and documented fees and disbursements of
counsel, (b) pay or reimburse Funding LLC for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement and any of the other Transaction Documents, including, without
limitation, the reasonable fees and disbursements of counsel and (c) pay,
indemnify and hold Funding LLC harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay
in paying stamp, excise and other similar taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement and any such other documents.  The obligations of SRC under this Section 8.1
shall be due and payable solely to the extent that SRC has funds available to
pay such obligations after giving effect to all amounts then due and payable by
SRC to or for the benefit of the Noteholders in accordance with the Transfer
and Servicing Agreement, the Indenture or any Indenture Supplement.  Any amount which SRC does not pay pursuant to
the 


 


27





















 


operation of the preceding sentence shall not
constitute a claim (as defined in § 101 of the Bankruptcy Code) against
SRC for any such insufficiency unless SRC shall have received funds available
to make such payment in accordance with the preceding sentence.


 


Section 8.2             Indemnification.  SRC hereby agrees to pay, indemnify and hold
Funding LLC harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (i) which may at any
time be imposed on, incurred by or asserted against Funding LLC in any way
relating to or arising out of this Agreement or the Transaction Documents or
the transactions contemplated hereby and thereby or in connection herewith or
any action taken or omitted by Funding LLC under or in connection with any of
the foregoing (all such other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements being
herein called “Indemnified Liabilities”) or (ii)
which would not have been imposed on, incurred by or asserted against Funding
LLC but for Funding LLC having acquired the Transferred Receivables hereunder; provided,
that such indemnity shall not be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of Funding LLC; and provided,
further, that SRC shall not have any obligation under this Section 8.2
to Funding LLC with respect to Indemnified Liabilities arising from (i) any
action taken, or omitted to be taken, by a Servicer which is not an Affiliate
of SRC, (ii) any action taken by Funding LLC at the direction of the Indenture
Trustee in collecting from an Obligor or (iii) a delay in payment, or a
default, by an Obligor with respect to any Transferred Receivable (other than
arising out of (x) any discharge, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Transferred Receivable (including, without limitation, a defense based on such
Transferred Receivable not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms) or any other claim
resulting from the sale of the merchandise or services related to any such
Transferred Receivable or the furnishing or failure to furnish such merchandise
or services, (y) a failure by SRC to perform its duties or obligations under
this Agreement or (z) the transfer hereunder of any Transferred Receivable that
is designated on the applicable Daily Report to be an Eligible Receivable and
is determined to have been at the date of such sale not an Eligible
Receivable).  The agreements in this Section 8.2
shall survive the collection of all amounts owing in respect of all Transferred
Receivables, the termination of this Agreement and the payment of all amounts
payable hereunder.  The obligations of
SRC under this Section 8.2 shall be due and payable solely to the
extent that SRC has funds available to pay such obligations after giving effect
to all amounts then due and payable by SRC to or for the benefit of the
Noteholders in accordance with the Transfer and Servicing Agreement, the
Indenture or any Indenture Supplement. 
Any amount which SRC does not pay pursuant to the operation of the
preceding sentence shall not constitute a claim (as defined in § 101 of
the Bankruptcy Code) against SRC for any such insufficiency unless SRC shall
have received funds available to make such payment in accordance with the
preceding sentence.


 


Section 8.3             No Indirect or Consequential
Damages.  NO PARTY TO THIS AGREEMENT SHALL BE
RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, 


 


28





















 


EXEMPLARY OR
CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED
HEREUNDER.


 


ARTICLE IX



MISCELLANEOUS


 


Section 9.1             Notices.  Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other parties, or whenever any of the parties desires to
give or serve upon any other parties any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be deemed to have been
validly served, given or delivered (a) upon the earlier of actual receipt
and three Business Days after deposit in the United States mail, registered or
certified mail, return receipt requested, with proper postage prepaid,
(b) upon transmission, when sent by telecopy or other similar facsimile
transmission (with such telecopy or facsimile promptly confirmed by delivery of
a copy by personal delivery or United States mail as otherwise provided in this
Section 9.1), (c) one
Business Day after deposit with a reputable overnight courier with all charges
prepaid or (d) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the address or
facsimile number set forth below or to such other address (or facsimile number)
as may be substituted by notice given as herein provided.  The giving of any notice required hereunder
may be waived in writing by the party entitled to receive such notice.  Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Funding LLC) designated in any written communication
provided hereunder to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication.  Notwithstanding
the foregoing, whenever it is provided herein that a notice is to be given to
any other party hereto by a specific time, such notice shall be effective only
if actually received by such party prior to such time, and if such notice is
received after such time or on a day other than a Business Day, such notice
shall be effective only on the immediately succeeding Business Day.


 


If to SRC:


 


Stone Receivables Corporation

8182 Maryland Avenue

Clayton, Missouri 63105

Attention: Treasurer

Telephone: 314- 746-1255

Telecopy: 314-746-1281


 


If to Funding LLC:


 


SSCE Funding, LLC

8182 Maryland Avenue

Clayton, Missouri 63105


 


 


29





















 


Attention: Assistant Treasurer

Telephone: 314-746-1212

Telecopy: 314-746-1281


 


Section 9.2             No Waiver; Remedies.  (a) Either party’s failure, at any time or
times, to require strict performance by the other party hereto of any provision
of this Agreement shall not waive, affect or diminish any right of such party
thereafter to demand strict compliance and performance herewith or
therewith.  Any suspension or waiver of any
breach or default hereunder shall not suspend, waive or affect any other breach
or default whether the same is prior or subsequent thereto and whether of the
same or a different type.  None of the
undertakings, agreements, warranties, covenants and representations of either
party contained in this Agreement, and no breach or default by either party
hereunder or thereunder, shall be deemed to have been suspended or waived by
the other party unless such waiver or suspension is by an instrument in writing
signed by an officer of or other duly authorized signatory of such party and
directed to the defaulting party specifying such suspension or waiver.


 


(b)           In
the event that (i) any of the representations or warranties contained in Section 4.1(r)
in respect of any Transferred Receivable shall be or shall have been incorrect
as of the date made or deemed made, SRC shall breach any covenant contained in Section 4.2(a),
(i) or (m) or Section 4.3 with respect to any Transferred Receivable or
any Transferred Receivable is subject to any claim of ownership or any Lien
(other than any ownership interest or Lien created under this Agreement, the
Sale Agreement or the Indenture), and as a result of such breach or claim such
Transferred Receivable is charged off as uncollectible or Funding LLC’s rights
in, to or under such Transferred Receivable or its proceeds are materially
impaired or the proceeds of such Transferred Receivable are not available for
any reason to Funding LLC to the extent set forth herein free and clear of any
Adverse Claim, (ii) any Transferred Receivable shall become subject to any
defense, dispute, offset or counterclaim of any kind (other than as expressly
permitted by this Agreement), or (iii) any Transferred Receivable shall cease
to be an Eligible Receivable because it becomes subject to an Exchange Partner
Arrangement after the related TSA Transfer Date for such Transferred Receivable
(each of the foregoing events or circumstances, a “Repurchase
Event”), such Transferred Receivable
shall cease to be an Eligible Receivable on the date on which such Repurchase
Event occurs.  In addition, if any
Repurchase Event shall occur with respect to any Transferred Receivable, then
SRC agrees to pay to Funding LLC an amount (the “Repurchase
Amount”) in cash equal to the Purchase
Price of such Transferred Receivable (whether Funding LLC paid such Purchase
Price in cash or otherwise) less Collections received by Funding LLC in respect
of such Transferred Receivable, such payment to occur no later than the 30th
day after the day such Repurchase Event becomes known (or should have become
known with due diligence) to SRC unless such Repurchase Event shall have been
cured on or before such day; provided that any such payments to Funding
LLC may be netted against the Purchase Price of newly created Transferred
Receivables in accordance with clause (ii) of the definition of Purchase Price
Percentage to the extent of such Purchase Price and the remaining amount of
such SRC Repurchase Payment due to Funding LLC after such netting, if any,
shall be paid to Funding LLC on such date in cash.  Any payment by Seller pursuant to this Section 9.2(b)
is referred to as an “SRC Repurchase Payment.”  If, on or prior to
such 30th day,


 


30





















 


SRC shall so reacquire
any such Transferred Receivable, then Funding LLC shall have no further remedy
against SRC in respect of the Repurchase Event with respect to such reacquired
Transferred Receivable. Upon an SRC Repurchase Payment, Funding LLC shall
automatically and without further action be deemed to sell, transfer, assign,
set over and otherwise convey to SRC, without recourse, representation or
warranty, all the right, title and interest of Funding LLC in, to and under
such Transferred Receivable and the other TSA Assets with respect thereto.  Funding LLC shall execute such documents and
instruments of transfer or assignment and take such other actions as shall be
reasonably requested by SRC to effect the conveyance of such Transferred
Receivable pursuant to this Section 9.2(b).


 


(c)           Each
party’s rights and remedies under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies that such party may have under
any other agreement, including the other Transaction Documents, by operation of
law or otherwise.


 


Section 9.3             Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of SRC, Funding LLC and Servicer and their
respective successors and permitted assigns, except as otherwise provided
herein.  SRC may not assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder, or consent to any assignment by any Seller under the Sale Agreement,
without the prior express written consent of Funding LLC.  Any such purported assignment, transfer,
hypothecation or other conveyance by SRC without the prior express written
consent of Funding LLC shall be void. 
SRC acknowledges that under the Indenture, Funding LLC will assign its
rights granted hereunder to the Indenture Trustee, and upon such assignment,
the Indenture Trustee shall have, to the extent of such assignment, all rights
of Funding LLC hereunder and such transferee may in turn transfer such
rights.  The terms and provisions of this
Agreement are for the purpose of defining the relative rights and obligations
of SRC and Funding LLC with respect to the transactions contemplated hereby and
no Person shall be a third-party beneficiary of any of the terms and provisions
of this Agreement.


 


Section 9.4             Termination; Survival of Obligations.  This Agreement shall create and constitute
the continuing obligations of the parties hereto in accordance with its terms,
and shall remain in full force and effect until the termination of Funding LLC
as provided in the Funding LLC Limited Liability Company Agreement (such date
the “TSA Termination Date”).


 


Section 9.5             Survival.  Except as otherwise expressly provided herein
or in any other Transaction Document, no termination or cancellation
(regardless of cause or procedure) of any commitment made by Funding LLC under
this Agreement shall in any way affect or impair the obligations, duties and
liabilities of SRC or the rights of Funding LLC relating to any unpaid portion
of any and all recourse and indemnity obligations of SRC to Funding LLC, due or
not due, liquidated, contingent or unliquidated or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the TSA Termination Date.  Except as otherwise expressly provided herein
or in any other Transaction Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon SRC, and all rights of
Funding LLC hereunder shall not terminate or expire, but rather shall survive
any such termination or cancellation and shall continue in full force and
effect until the 


 


31





















 


date after the TSA Termination Date when the Unpaid
Balances of all Transferred Receivables transferred hereunder prior to such TSA
Termination Date have been reduced to zero; provided,
that the rights and remedies pursuant to Section 9.2(b),
the indemnification and payment provisions of Section 5.9, Section 5.10
and Article VIII, and the
provisions of Section 9.14 shall
be continuing and shall survive any termination of this Agreement.


 


Section 9.6             Complete Agreement; Modification of Agreement.  This Agreement constitutes the complete
agreement between the parties with respect to the subject matter hereof,
supersedes all prior agreements and understandings relating to the subject
matter hereof and thereof, and may not be modified, altered or amended except
as set forth in Section 9.7.


 


Section 9.7             Amendments and Waivers.  (a) This Agreement may be amended from time
to time by Servicer, SRC and Funding LLC, with notice to the Rating Agencies,
but without the consent of any of Indenture Trustee or any Noteholder to cure
any ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein or to add any other provisions
with respect to matters or questions raised under this Agreement which shall
not be inconsistent with the provisions of this Agreement; provided, however,
that such action shall not adversely affect in any material respect the
interests of any of the Noteholders. 
Additionally, this Agreement may be amended from time to time by
Servicer, SRC and Funding LLC by a written instrument signed by each of them,
without the consent of Indenture Trustee or any of the Noteholders; provided that (i) SRC shall have delivered to
Indenture Trustee an Officer’s Certificate, dated the date of any such
amendment, stating that SRC reasonably believes that such amendment will not
have an Adverse Effect and (ii) the Rating Agency Condition shall have been
satisfied with respect to any such material amendment.


 


(b)           This
Agreement may also be amended from time to time by Servicer, SRC and Funding
LLC, with the consent of the Noteholders evidencing not less than a majority of
the Outstanding Principal Balance of the Notes of each Series affected thereby
for which SRC has not delivered an Officer’s Certificate stating that there is
no Adverse Effect, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or modifying
in any manner the rights of the Noteholders; provided,
however, that no such amendment shall (i)
change the date of payment of any installment of principal of or interest on
any Note, or reduce the principal amount thereof, the interest rate thereon or
the Redemption Price with respect thereto or (ii) reduce the aforesaid
percentage of the Outstanding Principal Balance of the Outstanding Notes
required to consent to any amendment without the consent of each affected
Noteholder.


 


(c)           Promptly
after the execution of any such amendment or consent, Funding LLC shall furnish
notification of the substance of such amendment to Indenture Trustee and each
Noteholder, and Servicer shall furnish notification of the substance of such
amendment to each Rating Agency.


 


(d)           It
shall not be necessary for the consent of Noteholders under this Section 9.7 to approve the particular form
of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof.


 


32





















 


(e)           The
Noteholders evidencing not less than a majority of the Outstanding Principal
Balance of the Notes of each Series or, with respect to any Series with two (2)
or more Classes, of each Class (or, with respect to any default that does not
relate to all Series, evidencing not less than a majority of the Outstanding
Notes of each Series to which such default relates or, with respect to any such
Series with two or more Classes, of each Class) may, on behalf of all Noteholders,
waive any default by SRC, Funding LLC or Servicer in the performance of their
obligations hereunder and its consequences, except the failure to make any
distributions required to be made to Noteholders or to make any required
deposits of any amounts to be so distributed. 
Upon any such waiver of a past default, such default shall cease to
exist, and any default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement.  No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.  Upon the occurrence of any such waiver, the
Indenture Trustee shall promptly notify each Rating Agency of such waiver.


 


Section 9.8             GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL.  (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 LAWS 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 FUNDING LLC FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
RECEIVABLES OR ANY SECURITY FOR THE OBLIGATIONS OF SRC ARISING HEREUNDER OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF FUNDING LLC.  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 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.


 


33





















 


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 9.1 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 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 9.9             Counterparts.  This Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.


 


Section 9.10           Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.


 


Section 9.11           Section Titles.  The section titles and table of contents
contained in this Agreement are provided for ease of reference only and shall
be without substantive meaning or content of any kind whatsoever and are not a
part of the agreement between the parties hereto.


 


Section 9.12           No Setoff.  SRC’s obligations under this Agreement shall
not be affected by any right of setoff, counterclaim, recoupment, defense or
other right SRC might have against Funding LLC, all of which rights are hereby
expressly waived by SRC.


 


34





















 


Section 9.13           Confidentiality.  Notwithstanding anything herein to the
contrary, there is no restriction (express or implied) on any disclosure or
dissemination of the structure or tax aspects of the transaction contemplated
by the Transaction Documents. 
Furthermore, each party hereto acknowledges that it has no proprietary
rights to any tax matter or tax idea contemplated hereby or to any element of
the transaction structure contemplated hereby.


 


Section 9.14           No Bankruptcy Petition.  Each of Funding LLC (with respect to SRC
only), Servicer and SRC (with respect to Funding LLC only) severally and not
jointly, hereby covenants and agrees that, prior to the date which is one year
and one day after payment in full of all outstanding Notes and all obligations
of Funding LLC under the Transaction Documents, it will not institute against,
solicit or join or cooperate with or encourage any institution against Funding
LLC or SRC any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under any United States
federal or state bankruptcy or similar law. 
Nothing in this Section 9.14
shall preclude, or be deemed to estop, any of the foregoing Persons from taking
(to the extent such action is otherwise permitted to be taken by such Person
hereunder) or omitting to take any action prior to such date in (i) any case or
proceeding with respect to Funding LLC or SRC voluntarily filed or commenced by
or on behalf of Funding LLC or SRC, respectively, under or pursuant to any such
law or (ii) any involuntary case or proceeding pertaining to Funding LLC or
SRC, as applicable under or pursuant to any such law.


 


[Remainder of page intentionally
left blank.]


 


35





















 


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


 


	
   

  	
  STONE
  RECEIVABLES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard P. Marra

  	
   

  
	
   

  	
  Name:

  	
  Richard P. Marra

  	
   

  
	
   

  	
  Title:

  	
  Assistant Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SSCE
  FUNDING, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard P. Marra

  	
   

  
	
   

  	
  Name:

  	
  Richard P. Marra

  	
   

  
	
   

  	
  Title:

  	
  Assistant Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SMURFIT-STONE CONTAINER 

  ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard P. Marra

  	
   

  
	
   

  	
  Name:

  	
  Richard P. Marra

  	
   

  
	
   

  	
  Title:

  	
  Assistant Treasurer

  	
   

  
						



 


S-1





















 


Exhibit
5.3(j)


 


SERVICER’S CREDIT AND COLLECTION
POLICY


 


See
attached.


 


1





















 


Schedule 4.1(m)


 


OFFICES;
QUALIFICATION TO DO BUSINESS


 


	
  Location of Records:

  	
  401 Alton Street

  
	
   

  	
  Alton, Illinois 62002

  
	
   

  	
   

  
	
  States in which SRC is duly qualified to do business:

  	
   

  
	
   

  	
   

  
	
   

  	
  Illinois, Missouri

  



 


1





















 


Schedule 4.1(p)


 


UCC INFORMATION


 


Stone
Receivables Corporation


 


	
  True Legal Name:

  	
  Stone Receivables Corporation

  
	
   

  	
   

  
	
  Jurisdiction of Organization:

  	
  Delaware

  
	
   

  	
   

  
	
  Chief Executive Offices/Collateral Locations:

  	
  8182 Maryland Avenue, Clayton, Missouri

  63105

  
	
  FEIN:

  	
  36-3995874

  
	
   

  	
   

  
	
  Organizational Identification Number:

  	
  2461777

  



 


During
the past five years, SRC has not had or used any trade names, fictitious names,
assumed names “doing business as” names, or any other names under which it has
done or is doing business.


 


1





















 


Schedule 4.1(s)


 


Perfection Representations and Warranties


 


I.              Representations, Warranties and Agreements
Relating to the Security Interest.  SRC hereby makes the following
representations, warranties and agreements with respect to the TSA Assets:


 


(a)  TSA Assets.


 


(i)  Creation.  The Transfer and Servicing Agreement creates
a valid and continuing security interest (as defined in the applicable UCC) in
the TSA Assets in favor of Issuer which security interest is prior to all other
Adverse Claims, and is enforceable as such as against creditors of and
purchasers from SRC.


 


(b)  Transferred Receivables.


 


(i)  Nature of Transferred Receivables.  The Transferred Receivables constitute “accounts,”
“payment intangibles,” or “general intangibles” within the meaning of the
applicable UCC.


 


(ii)  Ownership of Transferred Receivables.  SRC owns and has good and marketable title to
the Transferred Receivables and Related Security with respect thereto free and
clear of any Adverse Claim.


 


(iii)  Perfection and Related Security.  SRC has caused (and will cause each Seller to
cause), within ten days after the Closing Date relating to the first Series of
Notes, the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law in order to
perfect the sale or contribution, as applicable, of, and security interest in,
the TSA Assets from each such Seller to SRC pursuant to the Sale Agreement, the
sale or contribution, as applicable, thereof and security interest therein from
SRC to Issuer pursuant to the Transfer and Servicing Agreement, to the extent
that such collateral constitutes “accounts,” “payment intangibles,” or “general
intangibles.”


 


(c)  Rights under Sale Agreement.


 


(i)  Nature of TSA Assets.  The TSA Assets described in Section 2.1(a)(i)(D)
of the Transfer and Servicing Agreement constitute “payment intangibles” or “general
intangibles” within the meaning of the applicable UCC.


 


(ii)  Ownership.  SRC owns and has good and marketable title to
the TSA Assets described in Section 2.1(a)(i)(D) of the Transfer and
Servicing Agreement free and clear of any Adverse Claim.  Other than the security interest granted to
Issuer pursuant to the Transfer and Servicing Agreement, SRC has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed the TSA
Assets described. in Section 2.1(a)(i)(D) of the Transfer and Servicing
Agreement


 


1





















 


(d)  Priority.


 


(i)  Other than the transfer of the Transferred
Receivables to Issuer under the Transfer and Servicing Agreement, SRC has not
pledged, assigned, sold granted a security interest in, or otherwise conveyed
any of the Transferred Receivables, except for any such pledge, grant or other
conveyance which has been terminated. 
SRC has not authorized the filing of or is aware of any financing
statements against SRC that include a description of Transferred Receivables,
other than any financing statement relating to the transfer thereof by SRC to
Issuer under the Transfer and Servicing Agreement or that has been  terminated.


 


(ii)  SRC is not aware of any judgment, ERISA or
tax lien filings against SRC.


 


(e)  Survival of Supplemental Representations.  Notwithstanding any other provision of the
Transfer and Servicing Agreement or any other Transaction Document, the
representations contained in this Schedule 4.1(s)
shall be continuing, and remain in full force and effect until such time as the
Notes and all other obligations under the Indenture have been finally and fully
paid and performed.


 


(f)  No Waiver.  The parties to the Transfer and Servicing
Agreement shall not: (i) waive any of the representations set forth in this Schedule 4.1(s); or (ii) waive a breach of any of the
representations set forth in this Schedule 4.1(s).


 


(g)  SRC to Maintain Perfection and Priority.  In order to evidence the interests of Issuer
under the Transfer and Servicing Agreement, SRC shall, from time to time take
such action, or execute and deliver such instruments as may be necessary or
advisable (including such actions as are reasonably requested by the Issuer or
the Indenture Trustee) to maintain and perfect, as a first-priority interest,
Indenture Trustee’s security interest in the TSA Assets.  SRC shall, from time to time and within the
time limits established by law, prepare and present to Indenture Trustee for
Indenture Trustee’s authorization and approval, all financing statements,
amendments, continuations or initial financing statements in lieu of a
continuation statement, or other filings necessary to continue, maintain and
perfect Indenture Trustee’s security interest as a first-priority
interest.  Indenture Trustee’s approval
of such filing shall authorize SRC to file such financing statements under the
UCC without the signature of the Issuer or Indenture Trustee where allowed by
applicable law.  Notwithstanding anything
else in the Transaction Documents to the contrary, SRC shall not have any
authority to file a termination, partial termination, release, partial release,
or any amendment that deletes the name of a debtor or excludes collateral of
any such financing statements, without the prior written consent of Indenture
Trustee.


 


II.            Reaffirmation of Representations and Warranties.  On
the date of each sale or contribution of Transferred Receivables to Issuer and
on the date each Monthly Report is delivered, SRC, by accepting the Transferred
Receivables subject to such sale or contribution and/or the provision of such
information or report shall be deemed to have certified that (a) all
representations and warranties of SRC, described in this Schedule 4.1(s)
are correct on and as of 


 


2





















 


such day as though made on and as of such day and (b) no event has
occurred or is continuing, or would result from any such transfers which
constitutes a Default or an Event of Default.


 


3





















 


Schedule 5.3(l)


 


LOCK-BOX
ACCOUNTS


 


 


Bank
of America, N.A.


 


Lock-Box
Addresses: 840865, 409813 and 18265


 


Lock-Box
Account No. 3750677531


 


 


 


JPMorgan
Chase Bank, N.A.


 


Lock-Box
Nos. 21515, 905338 and 730707


 


Lock-Box
Account No. 636282956, 1007574


 


1