Document:

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

 

1Exhibit
10.3

 

EXECUTION VERSION

 

 

 

 

VARIABLE
FUNDING NOTE PURCHASE AGREEMENT

 

among

 

 

SSCE FUNDING,
LLC,

as Issuer,

 

BARTON CAPITAL
LLC,

as the Conduit Purchaser,

 

SOCIETE
GENERALE,

as Agent for
the Purchasers,

 

and

 

THE FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,

as Committed Purchasers

 

dated as of November 23,
2004

 

$125,000,000
VARIABLE FUNDING NOTE,

SERIES 2004-2

 

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I

  
	
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01

  	
  Certain Defined Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.02

  	
  Other Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
  PURCHASE
  AND SALE

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01

  	
  Purchase and Sale of the VFN

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.02

  	
  Initial Purchase Price

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.03

  	
  Increases

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.04

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.05

  	
  Reduction of Maximum Principal Amount

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.06

  	
  Calculation of Series 2004-2 Monthly
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.07

  	
  Benefits of Transaction Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.08

  	
  Broken Funding

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
  CLOSING

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.02

  	
  Transactions to be Effected at the Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
  CONDITIONS
  PRECEDENT TO PURCHASE ON THE CLOSING DATE

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
  Performance by SSCE Entities

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.02

  	
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.03

  	
  Corporate Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.04

  	
  Opinions of Counsel

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.05

  	
  Opinions of Counsel to the Indenture
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.06

  	
  Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.07

  	
  Financing Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.08

  	
  Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.09

  	
  VFN

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.10

  	
  No Actions or Proceedings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.11

  	
  Approvals and Consents

  	
   

  

 

i

 

	
  SECTION 4.12

  	
  Officer’s Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.13

  	
  Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.14

  	
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.15

  	
  Liens

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.16

  	
  Arrangement Fee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.17

  	
  Rating Agency Letters

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.18

  	
  Other Information, Certificates, Documents
  and Opinions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
  REPRESENTATIONS AND WARRANTIES OF THE
  ISSUER

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01

  	
  Representations and Warranties of the
  Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.02

  	
  Reaffirmation of Representations and
  Warranties by the Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
  REPRESENTATIONS
  AND WARRANTIES WITH RESPECT TO THE AGENT AND THE PURCHASERS

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
  Securities Laws; Transfer Restrictions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.02

  	
  Enforceability

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01

  	
  Monthly Report and Daily Report; Notice of
  Adverse Events

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.02

  	
  Modifications to Transaction Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.03

  	
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.04

  	
  Comfort Letters; Additional Series

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.05

  	
  Reorganizations and Transfers

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.06

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
  INDEMNIFICATION

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.02

  	
  Increased Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.03

  	
  Increased Capital

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.04

  	
  Indemnity for Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.05

  	
  Other Costs, Expenses and Related Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.06

  	
  Limitation on Recourse

  	
   

  

 

ii

 

	
  ARTICLE IX

  
	
  THE
  AGENT

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
  Authorization and Action

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.02

  	
  Agent’s Reliance, Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.03

  	
  Agent and Affiliates

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.04

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.05

  	
  Purchase Decision

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.06

  	
  Successor Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
  Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.02

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.03

  	
  No Waiver; Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.04

  	
  Binding Effect; Assignability

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.05

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.06

  	
  GOVERNING LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.07

  	
  Wavier of Trial by Jury

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.08

  	
  No Proceedings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.09

  	
  Execution in Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.10

  	
  No Recourse

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.11

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.12

  	
  Agent Conflict Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.13

  	
  Recourse

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of Notice of Increase

  	
   

  
	
  EXHIBIT B

  	
  Form of Issuer’s Officer’s Certificate

  	
   

  
	
  EXHIBIT C

  	
  Form of Transfer Supplement

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
  Addresses for Notices

  	
   

  
	
  SCHEDULE II

  	
  Trade Names

  	
   

  
				

 

iii

 

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

 

The parties hereto agree
as follows:

 

RECITALS

 

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

 

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

 

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

 

ARTICLE I

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“VFN” means the Series 2004-2 Notes.

 

SECTION 1.02  Other Definitional Provisions.  (a) 
All terms defined in this Agreement shall have the meanings defined
herein when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.

 

(b)                                 As
used herein and in any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms not defined in Section 1.01, and
accounting terms partially defined in Section 1.01 to the extent not
defined, shall have the respective meanings given to them under GAAP.  To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained herein
shall control.

 

5

 

(c)                                  The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; and Section, subsection, Schedule and
Exhibit references contained in this Agreement are references to Sections,
subsections, the Schedules and Exhibits in or to this Agreement unless
otherwise specified.

 

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

 

ARTICLE II

PURCHASE AND SALE

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

ARTICLE III

CLOSING

 

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

 

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

 

ARTICLE IV

CONDITIONS PRECEDENT TO

PURCHASE ON THE CLOSING DATE

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

WITH RESPECT TO THE AGENT AND THE PURCHASERS

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

ARTICLE VII

COVENANTS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

ARTICLE VIII

INDEMNIFICATION

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

22

 

ARTICLE IX

THE AGENT

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

24

 

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

 

ARTICLE X

 

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

29

 

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

 

 

30

 

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

 

	
   

  	
  SSCE FUNDING, LLC, as Issuer,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard P. Marra

  	
   

  
	
   

  	
   

  	
  Name: Richard P. Marra

  
	
   

  	
   

  	
  Title: Assistant Treasurer

  

 

S-1

 

	
   

  	
  BARTON CAPITAL LLC,

  as Conduit Purchaser

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas K. Johnson

  	
   

  
	
   

  	
   

  	
  Name: Douglas K. Johnson

  
	
   

  	
   

  	
  Title: President

  

 

S-2

 

	
   

  	
  SOCIETE GENERALE,

  as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C. Steven Coffman

  	
   

  
	
   

  	
   

  	
  Name: C. Steven Coffman

  
	
   

  	
   

  	
  Title: Vice President

  

 

S-3

 

	
   

  	
  BARTON CAPITAL LLC,

  as a Committed Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas K. Johnson

  	
   

  
	
   

  	
   

  	
  Name: Douglas K. Johnson

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
  Purchaser Percentage: 100%

  

 

S-4

 

EXHIBIT A

 

 

Form of Notice
of

Increase

 

	
  1.

  	
  Proposed Increase Date:                  

  
	
   

  	
   

  
	
  2.

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Purchase Price

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Certifications:

  
	
   

  	
   

  
	
   

  	
  (a)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

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

  
						

 

A-1

 

	
   

  	
  SSCE FUNDING, LLC, as Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Notice:

  	
   

  	
   

  	
   

  	
   

  
						

 

A-2

 

EXHIBIT B

 

Series 2004-2
Officer’s Certificate

 

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

 

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

 

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

 

	
   

  	
  SSCE FUNDING, LLC, as Issuer,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

B-1

 

SCHEDULE I

 

Addresses for
Notices

 

If to:

 

Issuer:

 

SSCE Funding,
LLC

8182 Maryland Avenue

Clayton, Missouri 63105

Attention: [            ]

Telephone: 314-746-1215

Telecopy: 314-746-1281

 

Agent:

 

Société Générale

181 West Madison Street

Suite 3400

Chicago, Illinois  60602

Attention:  Asset Securitization Group

	
  Telephone No.:

  	
  (312) 578-5000

  
	
  Facsimile No.:

  	
  (312) 578-5199

  

 

 

Committed
Purchaser or Conduit Purchaser:

 

Barton Capital
LLC

c/o AMACAR Group, LLC

6525 Morrison Boulevard, Suite 318

Charlotte, North Carolina  28211

Attention:                                         Douglas
K. Johnson

	
  Telephone
  No.:

  	
  (704)
  365-0569

  
	
  Facsimile
  No.:

  	
  (704)
  365-1362

  

 

With a copy to

 

Société Générale

181 West Madison Street

Suite 3400

Chicago, Illinois  60602

Attention:  Asset Securitization Group

	
  Telephone
  No.:

  	
  (312)
  578-5000

  
	
  Facsimile
  No.:

  	
  (312)
  578-5199

  

 

I-1

 

SCHEDULE II

 

Trade Names

 

[None.]

 

II-1

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