text
stringlengths 1
339k
⌀ | response
stringlengths 1
3.88k
| instruction
stringclasses 5
values |
|---|---|---|
In addition, Employee will disclose to the Company all patent applications filed by Employee within three (3) years after termination of employment with the Company. | disclosure of inventions | Given the provision, provide with the correct label for the given provision |
The Plan shall be binding upon the Company and any of its successors and assigns, and upon a Participant, the Eligible Spouse, and their assigns, heirs, executors, and administrators. | assignments | Given the provision, provide with the correct label for the given provision |
Employee’s Employment pursuant to the terms of this Agreement shall continue following the Effective Date hereof. | term of employment | Given the provision, provide with the correct label for the given provision |
The obligations under this Section shall survive any termination of this Agreement. | indemnifications | Given the provision, provide with the correct label for the given provision |
Context:
QuickLinks -- Click here to rapidly navigate through this document
Exhibit 10.16
EL BANCO FINANCIAL CORPORATION
AGENCY AGREEMENT
, 2006
Ladies and Gentlemen:
El Banco Financial Corporation, a Georgia corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to engage the sales agent identified on the signature page to this Agreement (the "Agent" or "you") to assist the Company on a "best efforts" basis in the sale of the Company's common stock, $.01 par value per share (the "Shares").
1. The Offering. The Company is offering the Shares, in connection with the Company's initial public offering (the "Offering").
The Company has prepared and filed, in accordance with the provisions of the Securities Act of 1933 and the rules and regulations thereunder (collectively, the "1933 Act"), with the Securities and Exchange Commission (the "Commission") a registration statement on Form SB-2 (File No. 333-135900) under the 1933 Act, including a prospectus, relating to the Shares. Except where the context otherwise requires, "Registration Statement," as used herein, means the registration statement, as amended at the time of such registration statement's effectiveness for purposes of Section 11 of the 1933 Act (the "Effective Time"), including (i) all documents filed as a part thereof, (ii) any information contained in a prospectus subsequently filed with the Commission pursuant to Rule 424(b) under the 1933 Act and deemed, pursuant to Rule 430A or Rule 430C under the 1933 Act, to be part of the registration statement at the Effective Time, and (iii) any registration statement filed to register the offer and sale of the Shares pursuant to Rule 462(b) under the 1933 Act.
Except where the context otherwise requires, a "Preliminary Prospectus," as used herein, means any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Securities Act.
Except where the context otherwise requires, "Prospectus," as used herein, means the prospectus filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act on or before the second business day after the Effective Time (or such earlier time as may be required under the Act), or, if no such filing is required, the final prospectus included in the Registration Statement at the Effective Time.
"Permitted Free Writing Prospectuses," as used herein, means the documents and each "road show" (as defined in Rule 433(h)(4) under the 1933 Act), if any, related to the offering of the Shares contemplated hereby that is a "written communication" (as defined in Rule 405 under the 1933 Act).
"Disclosure Package," as used herein, means any Preliminary Prospectus together with any combination of one or more of the Permitted Free Writing Prospectuses, if any.
"Blue Sky Application," as used herein, means any instrument or document executed by the Company or based upon written information supplied by the Company filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom or provided to any state or jurisdiction to exempt the Company as a broker-dealer or the officers, directors or employees as broker-dealers or agents of the Company under the securities laws thereof.
Any reference herein to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed to be incorporated by reference, therein (the "Incorporated Documents"), including, without limitation, unless the context otherwise requires, the documents, if
any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Securities Exchange Act of 1934 and the rules and regulations thereunder (the "Exchange Act") on or after the Effective Time, or the date of such Preliminary Prospectus, the Prospectus or such Permitted Free Writing Prospectus, as the case may be, and deemed to be incorporated therein by reference.
2. Retention of Agent; Compensation; Sale and Delivery of the Shares. Subject to the terms and conditions herein set forth, the Company hereby appoints the Agent as a placement agent, on a non-exclusive basis, to utilize its "best efforts" to solicit subscriptions for the Shares and to assist the Company with respect to the Company's sale of the Shares in the Offering.
On the basis of the representations and warranties and subject to the terms and conditions of this Agreement, the Agent accepts such appointment. The Agent shall not be obligated to purchase any Shares and shall not be obligated to take any action which Agent deems to be inconsistent with any applicable law, regulation, decision or order. Subscriptions will be offered as described in the Registration Statement. Except as otherwise provided in this Agreement, the appointment of the Agent will terminate upon completion, expiration or termination of the Offering.
In the event the Company is unable to sell a minimum of 1,875,000 Shares on or before June 30, 2007, this Agreement shall terminate and the Company shall cause the Escrow Agent (as defined below) to refund to any persons who have subscribed for any of the Shares the full amount it received from them, without interest, as set forth in the Prospectus; and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in this Section 2 and in Sections 8, 10, and 11.
In the event the Offering is terminated and the Closing (as defined below) does not occur, then the Agent shall not receive the fees set forth in subparagraph (a) below (the "Fees"); provided, however, regardless of whether or not the Closing occurs, the Agent shall be entitled to receive reimbursement of its actual accountable out-of-pocket expenses, as set forth in subparagraph (b) below.
If all conditions precedent to the consummation of the Offering are satisfied, the Company agrees to issue, or have issued, the Shares sold in the Offering and to release for delivery certificates for such Shares on the Closing Date (as defined below) against payment to the Company by any means authorized pursuant hereto; provided, however, that no funds shall be released to the Company until the conditions specified in Section 9 hereof shall have been complied with to the reasonable satisfaction of the Company. The release of Shares against payment therefor shall be made on a date or dates and at a place determined by the Company (each closing, a "Closing"). Certificates for Shares shall be delivered directly to the purchasers in accordance with their directions. The date upon which the Company shall release or deliver the Shares sold in the Offering, in accordance with the terms herein, is called the "Closing Date." After the initial Closing, which may occur at any time after the minimum of 1,875,000 Shares have been sold, the Company may continue the Offering and the Agent may continue to solicit purchasers for the Shares up to the maximum amount of the Offering or until the Offering expires or is closed by the Company as set forth in the Prospectus. Additional Closings shall occur with respect to Shares sold after the initial Closing on dates and at locations as determined by the Company after the initial Closing, each also considered a "Closing Date".
The Agent shall receive the following compensation for its services hereunder:
a. The fee shall be equal to 5.2% of the "gross proceeds" received in the Offering attributable to the efforts of the Agent. At least 48 hours prior to each Closing, the Agent shall deliver a schedule, identified as Appendix A, that lists each investor and the amount of investment.
2
b. Agent shall be reimbursed for expenses as contemplated by Section 8 of this Agreement, regardless of whether the Offering is successfully completed. Any out-of-pocket expenses or commissions payable under this Agreement shall be paid in next day funds on the earlier of the initial Closing Date or a determination by the Company to terminate or abandon the Offering, and on each subsequent Closing Date thereafter.
3. Representations and Warranties of the Company. The Company represents and warrants to the Agent that:
a. The Company has all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares as contemplated herein and as described in the Registration Statement, any Preliminary Prospectuses, the Prospectus or any Permitted Free Writing Prospectus. The consummation of the Offering, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein have been duly and validly authorized by all necessary corporate action on the part of the Company and this Agreement has been validly executed and delivered by the Company and is the valid, legal and binding agreement of the Company enforceable in accordance with its terms, except to the extent, if any, that the provisions of Section 10 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors' rights generally.
b. The Registration Statement is effective under the 1933 Act; no stop order of the Commission preventing or suspending the use of any Preliminary Prospectus or Permitted Free Writing Prospectus or the effectiveness of the Registration Statement has been issued, and no proceedings for such purpose have been instituted or, to the knowledge of the Company, are contemplated by the Commission; the Registration Statement complied when it became effective, complies as of the date hereof and, as amended or supplemented, at each time a subscription agreement of funds are submitted by prospective investors to the Company during the Offering period (each such time referred to as a "time of delivery"), at the Closing Date and at all times during which a prospectus is required by the 1933 Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares, will comply, in all material respects, with the requirements of the 1933 Act; each Preliminary Prospectus complied, at the time it was filed with the Commission, and complies as of the date hereof, in all material respects, with the requirements of the 1933 Act; at no time during the period that begins on the earlier of the date of such Preliminary Prospectus and the date such Preliminary Prospectus was filed with the Commission and ends at the Closing Time (as defined herein) did or will any Preliminary Prospectus, as then amended or supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and at no time during such period did or will any Preliminary Prospectus, as then amended or supplemented, together with any combination of one or more of the then issued Permitted Free Writing Prospectuses, if any, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; the Prospectus will comply, as of its date, the date that it is filed with the Commission, each time of delivery, the Closing Date and at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares, in all material respects, with the requirements of the 1933 Act (including, without limitation, Section 10(a) of the 1933 Act); at no time during the period that begins on the earlier of the date of the Prospectus and the date the Prospectus is filed with the Commission and ends at the later of the Closing Time and the end of the period during which a prospectus is required by the 1933 Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares did or will the Prospectus, as then amended or
3
supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; at no time during the period that begins on the date of such Permitted Free Writing Prospectus and ends at the time of purchase did or will any Permitted Free Writing Prospectus include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to any statement contained in the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning the Agent and furnished in writing by or on behalf of the Agent to the Company expressly for use in the Registration Statement, such Preliminary Prospectus, the Prospectus or such Permitted Free Writing Prospectus, as applicable. All Permitted Free Writing Prospectuses were preceded by, or accompanied with, a statutory prospectus meeting the requirements of Section 10(a) of the Act as required by Rule 164 under the 1933 Act.
c. If a Permitted Free Writing Prospectus is sent or given after the Registration Statement is filed with the Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the 1933 Act, filed with the Commission), the sending or giving, by the Agent, of any Permitted Free Writing Prospectus will satisfy the provisions of Rule 164 or Rule 433 of the 1933 Act (without reliance on subsections (b), (c) and (d) of Rule 164); each of the Preliminary Prospectuses is a prospectus that, other than by reason of Rule 433 or Rule 431 under the 1933 Act, satisfies the requirements of Section 10 of the 1933 Act, including a price range where required by rule; neither the Company nor the Agent is disqualified, by reason of subsection (f) or (g) of Rule 164 under the 1933 Act, from using, in connection with the offer and sale of the Shares, "free writing prospectuses" (as defined in Rule 405 under the 1933 Act) pursuant to Rules 164 and 433 under the 1933 Act; the Company is not an "ineligible issuer" (as defined in Rule 405 under the 1933 Act) as of the eligibility determination date for purposes of Rules 164 and 433 under the 1933 Act with respect to the offering of the Shares contemplated by the Registration Statement; the parties hereto agree and understand that the content of any and all road shows related to the Offering is solely the property of the Company.
d. No Blue Sky Application will include an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to any statement contained in a Blue Sky Application in reliance upon and in conformity with information concerning the Agent and furnished in writing by or on behalf of the Agent to the Company expressly for use in the Blue Sky Application.
e. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of State of Georgia, and has corporate power and authority to own, lease or operate its properties and to conduct its business as described in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, and to enter into and perform its obligations under this Agreement.
f. Since the respective dates as of which information is given in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, except as otherwise stated therein, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect").
g. The Company has an authorized capitalization as set forth in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any.
4
h. The Shares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued and fully paid and nonassessable and will conform to the description of the Shares contained in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any.
i. The issuance and sale of the Shares being issued at each Closing Date by the Company and the performance of this Agreement and the consummation by the Company of the other transactions herein contemplated will not conflict with or result in a breach or violation of any terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which any of the property or assets of the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Articles of Incorporation, as amended, or Bylaws, as amended, of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issuance and sale of the Shares or the consummation by the Company of the transactions contemplated by this Agreement, except such consents, approvals, authorizations, registrations or qualifications as may be required under the Act and under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Agent.
j. The Company owns its assets and has the right to conduct its business as currently conducted.
k. There is no litigation or governmental proceeding pending or threatened against, or involving the properties or business of, the Company that might materially and adversely affect the value or the operation of the any such properties or the business of the Company.
l. McNair, McLemore, Middlebrooks & Co., LLP, which has certified certain financial statements and supporting schedules of the Company included in the Registration Statement, the Preliminary Prospectus, the Prospectus and the Free Writing Prospectuses containing an audit report, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder.
m. The Company has not distributed, nor will it distribute, prior to the Closing Time any prospectus (as defined under the 1933 Act) in connection with the Offering and sale of the Shares other than the Registration Statement, any Preliminary Prospectuses, the Prospectus, any Permitted Free Writing Prospectuses or other materials, if any, permitted by the 1933 Act, including Rule 134 promulgated thereunder.
4. Representations and Warranties of the Agent.
a. The Agent has all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to act as a sales agent as contemplated herein and as described in the Registration Statement, any Preliminary Prospectuses, the Prospectus or any Permitted Free Writing Prospectus. The consummation of the Offering, the execution, delivery and performance of this Agreement by the Agent and the consummation by the Agent of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Agent and this Agreement has been validly executed and delivered by the Agent and is the valid, legal and binding agreement of the Agent enforceable in accordance with its terms, except to the extent, if any, that the provisions of Section 8 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors' rights generally.
5
b. The Agent is registered as a broker-dealer under applicable federal and state laws, is a member in good standing of the National Association of Securities Dealers, Inc., and has met and will continue to meet all registration, licensing, financial and reporting requirements it is required to meet under applicable federal and state laws and regulations in order to provide the services the Agent has agreed to provide, or that the Agent contemplates that it will provide, to the Company under this Agreement or otherwise in connection with the Offering.
c. Each employee, agent, representative or affiliate of the Agent that provides any services to the Company under this Agreement or otherwise in connection with the Offering will, at the time of providing those services, meet all registration and licensing requirements he or it is required to meet under applicable federal and state laws and regulations in order to provide those services.
5. Delivery and Payment.
An escrow procedure shall be established which shall comply with Commission Rule 15c2-4, promulgated under the Exchange Act and applicable NASD rules and regulations, with Flag Bank as escrow agent (the "Escrow Agent").
The Company and the Agent shall transmit all funds received from subscribers to the Escrow Agent by noon of the next business day following receipt thereof. The Company shall direct the Escrow Agent to make payment for Shares sold hereunder by wire transfer or certified or bank cashier's check drawn to the order of the Company in next day funds. Such payment is to be made at the offices of Flag Bank, at 10:00 a.m. local time, on each Closing Date or at another time agreed to by the Agent and the Company. The time of such payment is referred to as the "Closing Time." The Company shall direct the Escrow Agent to deliver payment of the fees due to the Agent pursuant to Section 2 hereof (less any portion thereof previously paid to the Agent) to the Agent by wire transfer or certified or bank cashier's check drawn to the order of the Agent in next day funds, to the Agent on each Closing Date.
6. Covenants of the Company. The Company hereby covenants to the Agent as follows:
a. The Company has filed the Registration Statement with the Commission. The Company will use its best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission, and will immediately upon receipt of any information concerning the events listed below notify the Agent (i) when the Registration Statement, as amended, has become effective; (ii) of any request by the Commission or any other governmental entity for any amendment or supplement to the Registration Statement; (iii) of the issuance by the Commission or any other governmental agency of any order or other action suspending the Offering or the use of the Registration Statement, the Preliminary Prospectuses, the Prospectus or the Permitted Free Writing Prospectuses, if any; or (iv) of the issuance by the Commission or any state authority of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose.
b. The Company will deliver to the Agent copies of the Registration Statement, as originally filed and each amendment thereto. Further, the Company will deliver such additional copies of the foregoing documents to counsel to the Agent as may be required for any NASD filings. The Company will also deliver to the Agent such number of copies of the Prospectus, as amended or supplemented, as the Agent may reasonably request.
c. The Company will comply in all material respects with any and all terms, conditions, requirements and provisions with respect to the Offering and the transactions contemplated thereby imposed by the Commission, by applicable state law and regulations, and by the 1933 Act, the Exchange Act and the rules and regulations of the Commission promulgated under such statutes, to be complied with prior to or subsequent to the Closing Date.
6
d. If any event relating to or affecting the Company shall occur, as a result of which it is necessary, in the reasonable opinion of counsel for the Company, to amend or supplement the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus in order to make them not misleading in light of the circumstances existing at the time of its use, the Company will, at its expense, prepare, file with the Commission, and furnish to the Agent, a reasonable number of copies of an amendment or amendments of, or a supplement or supplements to, the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus which will amend or supplement the Registration Statement, Preliminary Prospectus, Prospectus or any Permitted Free Writing Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time, not misleading.
e. The Company will endeavor in good faith, in cooperation with the Agent, to register or to qualify the Shares for offering and sale under the applicable securities laws of the jurisdictions in which the Offering will be conducted; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify to do business in any jurisdiction in which it is not so qualified. In each jurisdiction where any of the Shares shall have been registered or qualified as above provided, the Company will make and file such statements and reports in each year as are or may be required by the laws of such jurisdictions.
f. Prior to the Closing Date, the Company will inform the Agent of any event or circumstances of which it is aware as a result of which the Registration Statement, any Preliminary Prospectus, the Prospectus, or any Permitted Free Writing Prospectus as then supplemented or amended, would include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading.
g. The Company will distribute the Prospectus or other offering materials in connection with the offering and sale of the Shares only as set forth in the Prospectus, and only in accordance with the 1933 Act and the Exchange Act and the rules and regulations promulgated under such statutes, and the laws of any state in which the Shares are qualified for sale.
h. The Company will maintain appropriate arrangements with the Escrow Agent for depositing all funds received from persons mailing subscriptions for or orders to purchase Shares in the Offering as described in the Prospectus until the Closing Date and satisfaction of all conditions precedent to the release of the Company's obligation to refund payments received from persons subscribing for or ordering Shares in the Offering as described in the Prospectus.
i. The Company will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with the NASD Rule 2790 "Restrictions on the Purchase and Sale of Initial Equity Public Offerings of Equity Securities."
j. The Company will not deliver the Shares until the Company has satisfied or caused to be satisfied each condition set forth in Section 9 hereof.
7. Covenants of the Agent.
a. The Agent will not provide any service or engage in any activity, and it will not permit the Agent or any of its employees, agents, representatives or affiliates to provide any service or engage in any activity, whether pursuant to this Agreement or otherwise in connection with the Offering, for which it or he does not have in effect all registrations, licenses and approvals necessary to cause that service or activity to comply with applicable federal and state laws and regulations.
b. Notwithstanding anything contained in this Agreement to the contrary, the terms and conditions of the Offering as described in the Prospectus shall control the conduct of the Offering, and
7
neither the Agent nor any of its respective employees, agents, representatives or affiliates shall take any action in connection with the Offering contrary to those terms and conditions.
c. In connection with or during the course of the Offering, neither the Agent nor any employee, agent, representative or affiliate of the Agent will make any representation or provide any information to any subscriber or potential subscriber for the Shares other the representations and information contained in the Prospectus or other information specifically approved by the Company.
8. Payment of Expenses. The Company covenants and agrees with the Agent that it will pay or cause to be paid the following: (i) the fees, disbursements and expenses of counsel to the Company and accountants in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, each Preliminary Prospectus, the Prospectus, each Permitted Free Writing Prospectus and any amendments or supplements thereto, and the mailing and delivering of copies thereof to the Agent and dealers; (ii) the cost of printing or reproducing this agreement, the Blue Sky Survey, any dealer agreements and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws; (iv) the cost of preparing stock certificates; (v) all expenses related to road shows; (vi) the costs or expenses of any transfer agent or registrar; and (vi) all reasonable out-of-pocket fees and expenses of the Agent, including the reasonable fees and expenses of counsel for the Agent related to the Offering and not otherwise specifically provided for in this Section; the total for all such reasonable out-of-pocket fees and expenses shall not exceed $5,000 without the consent of the Company (exclusive of any blue sky-related fees if the Agent's counsel is requested to complete such services by the Company).
9. Conditions to Closing. The Closing of the Offering is subject to the following conditions:
a. The Registration Statement and any registration statement required to be filed, prior to the sale of the Shares, under the Act pursuant to Rule 424(b) shall have been filed and shall have become effective under the 1933 Act.
b. (i) No stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the 1933 Act; (ii) the Registration Statement and all amendments thereto shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iii) none of the Preliminary Prospectuses or the Prospectus, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; (iv) no Disclosure Package, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; and (v) none of the Permitted Free Writing Prospectuses, if any, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.
c. The Company and Agent agree that Appendix A is accurate and complete.
d. The NASD has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the terms of this Agreement and Agent's compensation hereunder.
10. Indemnification by the Company.
a. The Company agrees to indemnify and hold harmless the Agent, and its officers, directors, agents, representatives and affiliates and any other person, if any, who controls the Agent or its
8
affiliates within the meaning of the 1933 Act (these parties together with the Agent are hereinafter referred to as the "Agent Indemnitees") against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and counsel's fees) arising out of or based upon the actions of the Company or any of its employees, agents, representatives or affiliates (i) that constitute bad faith or gross negligence on the part of the Company or its employees, agents, representatives or affiliates, (ii) that constitute violations of applicable federal or state laws or regulations on the part of the Company or its employees, agents, representatives or affiliates, or (iii) that constitute a violation of any of the Company's agreements, representations or warranties contained in this Agreement. The Company will reimburse the Agent and the Agent Indemnitees for any legal or other expenses reasonably incurred (individually or collectively) by it or them in connection with investigating or defending any such loss, claim, damage, liability or action. However, the Company will not be responsible for (i) any losses, claims, damages, liabilities or expenses that result from bad faith or gross negligence on the part of the Agent or any of its employees, agents, representatives or affiliates, or on the part of the Agent Indemnitee, (ii) that arise out of actions or conduct by the Agent or any of its employees, agents, representatives or affiliates, or by any Agent Indemnitee, that constitute a violation of any applicable federal or state law or regulation, or (iii) that arise out of actions or conduct by the Agent or any of its employees, agents, representatives or affiliates, or by any Agent Indemnitee, that constitutes a violation of any of Agent's agreements, representations or warranties contained in this Agreement.
b. If any action or claim shall be brought or asserted against an Agent Indemnitee in respect of which indemnity may be sought from the Company, it or he shall promptly notify the Company in writing, enclosing copies of all papers served on or delivered to such party. A failure to notify or delay in notifying the Company shall not affect the right of the Agent Indemnitee to be indemnified or reimbursed hereunder except to the extent the Company is shown to have been materially prejudiced as a result of such failure. No Agent Indemnitee shall settle, compromise or consent to the entry of any judgment with respect to any litigation, investigation or proceeding commenced or threatened by any person or entity, including any governmental agency or body, or any claim whatsoever in respect of which indemnification or contribution can be sought under this Section 10 (whether or not the Agent Indemnitees are actual or potential parties thereto), unless the Agent or the Agent Indemnitee obtains the prior written consent of the Company.
11. Indemnification by the Agent.
a. The Agent agrees to indemnify and hold harmless the Company, and its officers, directors, agents, organizers, representatives and affiliates and any other person, if any, who controls the Company or its affiliates within the meaning of the 1933 Act (these parties together with the Company are hereinafter referred to as the "Company Indemnitees") against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and counsel's fees) arising out of or based upon the actions of the Agent or any of its respective employees, agents, representatives or affiliates (i) that constitute bad faith or gross negligence on the part of the Agent or any of its employees, agents, representatives or affiliates, (ii) that constitute violations of applicable federal or state laws or regulations on the part of the Agent or any of its employees, agents, representatives or affiliates, or (iii) that constitutes a violation of any of the Agent's agreements, representations or warranties contained in this Agreement. The Agent will reimburse the Company and the Company Indemnitees for any legal or other expenses reasonably incurred (individually or collectively) by it or them in connection with investigating or defending any such loss, claim, damage, liability or action. However, the Agent will not be responsible for (i) any losses, claims, damages, liabilities or expenses that result from bad faith or gross negligence on the part of the Company or any of its employees, agents, representatives or affiliates, or on the part of the Company Indemnitee, (ii) that arise out of actions or conduct by the Company or any of its employees, agents, representatives or affiliates, or by the Company, that constitute a violation of any applicable federal or state law or regulation, or
9
(iii) that constitutes a violation of any of the Company's agreements, representations or warranties contained in this Agreement.
b. If any action or claim shall be brought or asserted against a Company Indemnitee in respect of which indemnity may be sought from the Agent, it shall promptly notify the Agent in writing, enclosing copies of all papers served on or delivered to such party. A failure to notify or delay in notifying the Agent shall not affect the right of the Company Indemnitee to be indemnified or reimbursed hereunder except to the extent the Agent is shown to have been materially prejudiced as a result of such failure. No Company Indemnitee shall settle, compromise or consent to the entry of any judgment with respect to any litigation, investigation or proceeding commenced or threatened by any person or entity, including any governmental agency or body, or any claim whatsoever in respect of which indemnification or contribution can be sought under this Section 11 (whether or not the Company Indemnitees are actual or potential parties thereto), unless the Company obtains the prior written consent of the Company.
c. The Agent agrees to indemnify and hold harmless the Company Indemnitees against any and all losses, liabilities, claims, damages and expenses to which it or they may become subject if such losses, liabilities, claims, damages or expenses arise solely out of, or are based solely on, (i) any untrue or alleged untrue statement of material fact contained in the Prospectus or any amendment or supplement thereto, or the omission of a material fact required to be stated therein, or necessary to make the statements therein not misleading, but only if such untrue statement or omission or alleged omission was made in the Prospectus (as amended or supplemented) based upon and in conformity with written information concerning the Agent furnished to the Company by the Agent specifically for use in the Prospectus or (ii) any untrue or alleged untrue statement of material fact contained in any other information (whether oral or in writing) provided by the Agent or any of its respective employees, agents, representatives or affiliates to the Company or any other person in the course of providing services pursuant to this Agreement or otherwise in connection with the Offering.
12. Representations and Indemnities to Survive. All representations, warranties and agreements contained in this Agreement of the Company and the Agent shall remain in full force and effect, regardless of any termination or cancellation of this Agreement, and shall survive delivery of and payment for the Shares.
13. Termination and Payment of Expenses. This Agreement shall become effective on the date hereof and shall terminate upon the termination of the Offering. If for any reason any Shares are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Agent for all actual and accountable out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred by the Agent in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company shall then be under no further liability to the Agent except as provided in Section 8 and Section 10 hereof.
10
14. Notices. All statements, requests, notices and agreements hereunder shall be in writing and shall be sufficient in all respects if delivered or sent by reliable courier, first class mail, or facsimile transmission to:
Agent: As set forth on the signature page to this agreement
Company: El Banco Financial Corporation 623 Holcomb Bridge Road Roswell, Georgia 30076 Facsimile: (678) 352-1514
With a copy to: Nelson Mullins Riley & Scarborough LLP 999 Peachtree Street, Suit 1400 Atlanta, Georgia 30309 Attention: Rusty Pickering Facsimile: (404) 817-6050
Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
15. Non-Exclusive. This Agreement does not create an exclusive arrangement for the Agent to provide services to the Company, and nothing in this Agreement shall preclude the Company from contracting or entering into an arrangement with any other sales agent, consultant, broker-dealer or other person for such other person or entity to provide services to the Company as agent in the Offering and to receive compensation from the Company in connection with the Offering.
16. Successors. This Agreement shall be binding upon, and inure solely to the benefit of, the Agent and the Company, and to the extent provided in Sections 10, 11 and 12 hereof; the officers and directors of the Company and each person who controls the Company, or the Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this agreement. No purchaser of any of the Shares from the Agent shall be deemed a successor or assign by reason merely of such purchase.
17. Time of the Essence. Time shall be of the essence in this Agreement.
18. Business Day. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business.
19. Applicable Law. THIS AGREEMENT IS TO BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO THOSE LAWS RELATING TO CHOICE OF LAW) APPLYING TO CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN THE STATE OF GEORGIA. VENUE FOR ANY CAUSE OF ACTION ARISING FROM THIS AGREEMENT WILL LIE IN FULTON COUNTY, GEORGIA.
20. Captions. The captions included in this Agreement are included solely for convenience of reference and shall not be deemed to be a part of this Agreement.
21. Counterparts. This Agreement may be executed by any one or more of the parties in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.
22. Pronouns. All pronouns used herein shall be deemed to refer to the masculine, feminine or neuter gender as the context requires.
[Signatures on Following Page]
11
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first above written.
EL BANCO FINANCIAL CORPORATION
By: Name: Its:
(SALES AGENT) By: Name: Its: Address:
12
Appendix A
Name of Investor
Amount of Investment
13
QuickLinks
EL BANCO FINANCIAL CORPORATION AGENCY AGREEMENT Appendix A
Question:
Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | Company | Given the context, answer the question that follows |
Notices and other communications to the Agents, the Lenders and the L/C Issuers hereunder may (subject to Section 10.02(d) ) be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or L/C Issuer pursuant to Article II if such Lender or L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. | electronic communications | Given the provision, provide with the correct label for the given provision |
This Agreement shall not be deemed an employment contract between the Company and Indemnitee. | services to the company | Given the provision, provide with the correct label for the given provision |
Company shall not pay any amounts for or provide Executive and/or the Executive's family, as the case may be, any benefits under welfare benefit plans, practices, policies and programs generally provided by the Company (including without limitation, medical, prescription, dental, disability, employee life, group life, dependent life, accidental death and travel accident insurance plans and programs). | welfare benefits | Given the provision, provide with the correct label for the given provision |
The parties hereto hereby declare that it is impossible to measure in money the damages which will accrue to the Warrantholder by reason of the Company's failure to perform any of the obligations under this Agreement and agree that the terms of this Agreement shall be specifically enforceable by the Warrantholder. | specific performance | Given the provision, provide with the correct label for the given provision |
International Financial Reporting Standards, as adopted by the International Accounting Standards Board and/or the European Union, as in effect from time to time. | ifrs | Given the provision, provide with the correct label for the given provision |
This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, as such laws are applied to contracts entered into and performed in such State. | governing laws | Given the provision, provide with the correct label for the given provision |
Borrower Agent hereby accepts such appointment. | borrower agent | Given the provision, provide with the correct label for the given provision |
Additionally, upon and to the extent of a prior written request therefor, the LLC shall provide to the Unitholders reasonable access during normal business hours to personnel, books and records and such other information as any Unitholder may reasonably require for tax or regulatory purposes that are customary for investments of this type, including all rights necessary to satisfy venture capital operating company rules. | regulatory matters | Given the provision, provide with the correct label for the given provision |
All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. | capitalization | Given the provision, provide with the correct label for the given provision |
Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations. | default rates | Given the provision, provide with the correct label for the given provision |
The Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of Borrower or any of its Affiliates hereunder. | recipients | Given the provision, provide with the correct label for the given provision |
Purchaser understands that (a) except as provided in the Investors’ Rights Agreement, the Purchased Shares will not be registered under the Securities Act or any state securities laws and (b) the Purchased Shares may not be sold or otherwise disposed of unless such sale or disposition is registered under the Securities Act and applicable state securities laws or such sale or other disposition is exempt from registration thereunder. | restricted securities | Given the provision, provide with the correct label for the given provision |
In addition to the above bonus, Employee will be eligible to receive a one-time cash sign-on bonus in the amount of $200,000, which will be paid out as soon as practical following the Effective Date. | signing bonus | Given the provision, provide with the correct label for the given provision |
Notwithstanding any other provision of the Plan or this Award Agreement, if the Participant is subject to Section 16 of the Exchange Act, the Plan, this Award Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b‑3) that are requirements for the application of such exemptive rule. | limitations applicable to section 16 persons | Given the provision, provide with the correct label for the given provision |
As of the Date of Issuance, Recipient shall have all of the rights of a holder the Company’s common stock (including voting rights) with respect to the Restricted Shares, except as otherwise specifically provided in this Agreement. | stockholder rights | Given the provision, provide with the correct label for the given provision |
Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. | nature of restricted stock units | Given the provision, provide with the correct label for the given provision |
This Agreement may be amended or modified with the express written consent of all of the Members, provided, however, that no Member shall unreasonably withhold or delay his written consent to any such amendment or modification if such amendment or modification neither enlarges the obligations, nor reduces the rights, of such Member in a material way. | amendments | Given the provision, provide with the correct label for the given provision |
(a) (a) The Borrower agrees to pay to the Administrative Agent for the account of each (i) Dollar Revolving Lender a commitment fee, in Dollars, for the period from and including the Closing Date to the last day of the Revolving Commitment Period (or, if earlier, the termination of all Dollar Revolving Commitments), computed at the Applicable Commitment Fee Rate on the actual daily amount of the Available Dollar Revolving Commitment ( provided that, for purposes of this calculation, Swingline Exposure shall not constitute a Dollar Revolving Extension of Credit) of such Lender during the period for which payment is made, payable quarterly in arrears on each Fee Payment Date and (ii) Multi-Currency Revolving Lender a commitment fee, in Dollars, for the period from and including the Closing Date to the last day of the Revolving Commitment Period (or, if earlier, the termination of all Multi-Currency Revolving Commitments), computed at the Applicable Commitment Fee Rate on the actual daily amount of the Available Multi-Currency Revolving Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on each Fee Payment Date ; provided that (A) any commitment fee accrued with respect to any of the Revolving Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrower so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable by the Borrower prior to such time and (B) no commitment fee shall accrue on any of the Revolving Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender. | commitment fees | Given the provision, provide with the correct label for the given provision |
Sublandlord and Subtenant each hereby represents, warrants and covenants to Landlord that, as of the date hereof and throughout the term of the Lease, it is not (i) an “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), that is subject to Title I of ERISA, (ii) a “plan” as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the “ Code ”), that is subject to Section 4975 of the Code, or (iii) an entity deemed to hold “plan assets” of any such employee benefit plan or plan. | erisa | Given the provision, provide with the correct label for the given provision |
The closing of the sale and purchase of the Shares (the “ Closing ”) shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022, at 10:00 a.m. on the date that is two (2) Business Days after the conditions set forth in Article V have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time), unless another time, date or place is agreed to in writing by the Company and the Seller. | closing dates | Given the provision, provide with the correct label for the given provision |
Prior to issuance of any Shares upon vesting of the Award, the Award shall represent an unsecured obligation of the Company, payable (if at all) only from the Company’s general assets. | grant of awards | Given the provision, provide with the correct label for the given provision |
The Borrower is not required to register as an "investment company" under the provisions of the 1940 Act. | investment company acts | Given the provision, provide with the correct label for the given provision |
If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to perform any of its obligations hereunder or make, maintain or fund or charge interest with respect to any Credit Extension or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to Borrower through Administrative Agent, (a) any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Credit Extension or continue Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate Loans shall be suspended, and (b) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies Administrative Agent and Borrower that the circumstances giving rise to such determination no longer exist. | illegality | Given the provision, provide with the correct label for the given provision |
All demands, notices, communications and instructions upon or to the Seller, the Servicer, the Owner Trustee, the Indenture Trustee or the Rating Agencies under this Agreement shall be in writing, personally delivered, mailed by certified mail, return receipt requested, or delivered by telecopier or electronically by email (if an email address is provided), and shall be deemed to have been duly given upon receipt (a) in the case of the Seller, to Nissan Auto Receivables Corporation II, One Nissan Way, Franklin, Tennessee, 37067 (telecopier no. | notices | Given the provision, provide with the correct label for the given provision |
Subject to the provisions of this Section 8.1, each of the Sellers, severally and not jointly, agrees to indemnify, defend and hold Ecoark and Zest and their stockholders, subsidiaries, officers, directors, employees, agents, successors and assigns (such indemnified persons are collectively hereinafter referred to as the “Indemnified Persons”) harmless from and against any and all loss, liability, damage or deficiency (including interest, penalties, judgments, costs of preparation and investigation, and attorneys’ fees) (collectively, “ Losses ”) that any of the Indemnified Person may suffer, sustain, incur or become subject to arising out of or due to: (a) the non-fulfillment of any covenant, undertaking, agreement or other obligation of the Sellers, Durgin or 440labs under this Agreement or any Schedule hereto; (b) any action taken by the Sellers, Durgin or 440labs prior to the Effective Date, or the operations of 440labs prior to the Effective Date; (c) any misstatement, breach of or inaccuracy of any representation of the Sellers, Durgin or 440labs in this Agreement; or (d) any liabilities of 440labs incurred prior to the Effective Date which are not disclosed to Ecoark or Zest at or prior to the Effective Date; provided however, that the Sellers and Durgin will not be liable under this Section 8.1 unless the aggregate amount of Losses exceeds $30,000 (the “ Threshold ”), in which event the Seller shall be liable for all Losses up to, including and exceeding the amount of the Threshold. | indemnification by the sellers | Given the provision, provide with the correct label for the given provision |
The position is based in the Company’s New York office at 590 Madison Avenue, New York, NY 10022. | positions | Given the provision, provide with the correct label for the given provision |
In the event that the Exchange Offer is not consummated, this Amendment shall automatically be void ab initio and have no force or effect. | effectiveness | Given the provision, provide with the correct label for the given provision |
Each of the parties shall execute such documents and perform such further act as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement. | further assurances | Given the provision, provide with the correct label for the given provision |
Effective on the Delivery Date, Tenant’s Pro Rata Share as set forth in Article I, Section E shall be 11.8%. | tenant’s pro rata share | Given the provision, provide with the correct label for the given provision |
The Plan Administrator is the named fiduciary of the Plan. | administration | Given the provision, provide with the correct label for the given provision |
To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall control. | applications | Given the provision, provide with the correct label for the given provision |
This Third Amendment, the Credit Agreement and the other Credit Documents, constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties or any of them with respect to the subject matter hereof. | entire agreements | Given the provision, provide with the correct label for the given provision |
Notwithstanding S ection 1(a ), Confidential Information shall not include: (i) information that at the time of disclosure is publicly available, or information which later becomes publicly available through no act or omission of the Contractor; (ii) information that Contractor independently developed without the use of Company's Confidential Information; or (iii) information disclosed to Contractor by a third party not in violation of any obligations of confidentiality to Company. | exclusions | Given the provision, provide with the correct label for the given provision |
Context:
Exhibit 10.11 Execution Copy STRATEGIC ALLIANCE AGREEMENT This STRATEGIC ALLIANCE AGREEMENT (this "Agreement") is made as of December 21, 2006 by and among OXBOW CARBON & MINERALS LLC, a Delaware limited liability company having a principal office address at 1601 Forum Place, Suite 1400, West Palm Beach, Florida 33401 ("Oxbow") and GLOBAL ENERGY, INC., an Ohio corporation having a principal office address at 312 Walnut Street, Suite 2650, Cincinnati, Ohio 45202 ("Global Energy"). Oxbow and Global each may be referred to from time to time herein as a "Party" and collectively as the "Parties". RECITALS WHEREAS, Oxbow is a world leader in petroleum coke trading, marketing, sales, and shipping; and WHEREAS, Global Energy is a world leader in petroleum coke gasification, having optimized operations of the leading petroleum coke gasification technology, EGAS™ technology, at its Wabash gasification facility in Indiana; and WHEREAS, Oxbow leases a marine terminal site in Texas City, Texas which it believes to be well-suited for installation of petroleum coke gasification technology, in that gasification would optimize Oxbow's flexibility in the sale and use of petroleum coke currently stored on the site, which could be converted into pipeline SNG or hydrogen, as well as being shipped onward to Oxbow's traditional petroleum coke customers; and WHEREAS, Global Energy is a leader in the development and permitting of gasification facilities, and currently is the only gasification facility owner/operator with permits to construct new gasification facilities (specifically, its Lima and Westfield Projects); and WHEREAS, the Parties believe that an alliance as described in this Agreement will prove mutually beneficial; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: AGREEMENT 1. Purchase of Shares. Global Energy shall issue and sell to Oxbow, and Oxbow shall purchase from Global Energy, on the Closing Date, Twenty-Five Thousand (25,000) common shares of Global Energy (the "Shares"), on the following terms and conditions, and subject to satisfaction of the conditions set forth in Section 6 hereof: (a) Purchase Price. The purchase price for the Shares shall be Five Million and No/100 Dollars ($5,000,000.00), or $200.00 per Share. 1
(b) Payment. Payment of the Purchase Price shall be made on the Closing Date by wire transfer of immediately available funds to Global Energy, as applicable, at the applicable account designated by Global Energy, as follows: Bank: PNC Bank, N.A. Cincinnati, OH ABA No.: 042000398 Account No.: 40-7690-5189 Account Name: Global Energy, Inc. (c) Closing. Unless this Agreement shall have been terminated and subject to the satisfaction or waiver of the conditions set forth in Section 6, the closing of the purchase of the Shares (the "Closing") shall take place at 11:00 a.m., on December 22, 2006 (such date of closing referred to herein as the "Closing Date") at the offices of Oxbow, 1601 Forum Place, Suite 1400, West Palm Beach, Florida 33401, unless another date, time or place is agreed to in writing by the parties hereto. At the Closing, Oxbow shall pay to Global Energy the Purchase Price and Global Energy shall deliver to Oxbow a stock certificate evidencing the issuance to Oxbow of the Shares. The Closing shall be deemed effective as of 12:01 a.m. U.S. Eastern Standard Time, on the Closing Date. 2. Strategic Alliance. The Parties hereby form a strategic alliance having the following key elements: (a) Preferred Suppliers. Oxbow and Global Energy hereby designate one another as their preferred suppliers of certain goods and services, as follows: (i) Oxbow shall be the preferred petroleum coke supplier to petroleum coke gasification projects owned or controlled by Global Energy. (ii) Oxbow shall be a preferred supplier of coal, coal fines, gob or waste coal products (collectively, "Coal") to gasification projects owned or controlled by Global Energy. (iii) Global Energy shall be the preferred gasification technology supplier to petroleum coke gasification projects majority owned or controlled by Oxbow. (iv) Global Energy shall be the preferred gasification project operator for petroleum coke gasification projects at sites majority owned or controlled by Oxbow. 2
(b) Further Cooperation. The Parties also agree to cooperate in good faith as follows in furtherance of their strategic alliance: (i) Oxbow will identify Oxbow petroleum coke related sites for collaboration with Global Energy. (ii) Global Energy will identify Global Energy petroleum coke related sites for collaboration with Oxbow. The obligations of the Parties pursuant to this Section 2 are subject to continued demonstrated performance and their mutual agreement on the schedule, pricing, financing, economics and other terms and conditions applicable to any such project. 3. Lima Project. In addition to the strategic alliance described in Section 2 of this Agreement, the parties specifically agree to the following with respect to Global Energy's proposed Lima, Ohio gasification project (the "Lima Project"): (a) Investment by Oxbow. Oxbow will make a investment (the "Lima Investment") in the company which owns the Lima Project (the "Lima Project Company") in the amount of [*], as consideration for obtaining the fuel supply management agreement for the Lima Project and the other revenues and benefits described in this Section 3. Oxbow's obligation to make this investment would be subject to: (i) Oxbow obtaining the consent of its existing lenders; and (ii) Global Energy securing one or more firm written commitments in form and substance reasonably acceptable to Oxbow for at least Two Hundred Seventeen Million and No/100 Dollars ($217,000,000.00) of equity funding for the Lima Project, or in the alternative, evidence demonstrating that Global has available cash of Two Hundred Seventeen Million and No/100 Dollars ($217,000,000.00) in its account. (iii) Global Energy providing evidence satisfactory to Oxbow in its reasonable discretion that it has secured the right to purchase the site for the Lima Project from the City of Lima, Ohio for a purchase price of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00). (b) Revenues and Benefits to Oxbow. If Oxbow makes the Lima Investment: (i) Oxbow will receive four percent (4%) of the Lima Project's pre-tax project cash flow after debt service and operation and maintenance ("O&M") expenses. The Lima Project Company's obligation to make such payment would be subject to satisfaction of the same lender covenants which will apply to distributions to equity investors in the Lima Project; and 3
(ii) Oxbow will receive two percent (2%) of those non-O&M revenues of Global Energy's affiliate, Gasification Engineering Corporation, Inc. ("GEC") related to the Lima Project (e.g., any of the $200 million EPC reserves/construction contingency which is not spent). (iii) Oxbow will have a seat on the Board of Directors of GEC or any subsidiary or affiliate of GEC which is responsible for the engineering, procurement and construction ("EPC") contract for the Lima Project. (c) Fuel Management and Supply Agreement. In addition, if Oxbow makes the Lima Investment, Oxbow and Global Energy will enter into a fuel management and supply agreement (the "Fuel Management and Supply Agreement") for all fuel to be utilized by the Lima Project, which would include the following material provisions: (i) Oxbow will manage all fuel coke and Coal supply and logistics for the Lima Project. (ii) Oxbow will be paid a management fee of One Million and No/100 Dollars ($1,000,000.00) per year, such fee to be paid irrespective of actual Coal or petroleum coke use by the Lima Project. (iii) As fuel supply manager, Oxbow will receive a base commission of $0.12 per MMBTU consumed by the Lima Project, independent of fuel type (the "Base Commission"). As an incentive to obtain the lowest cost of fuel throughout the life of the Lima Project, the Lima Project Company would receive two-thirds (2/3) of any cost savings below $1.07 per MMBTU delivered to the project (such price, the "Price Basis"), escalated each year beginning in 2009 in accordance with increases in the Consumer Price Index, and Oxbow would receive one- third (1/3) of any such cost savings. Should the price of fuel delivered to the Lima Project be above the Price Basis, the commission will be reduced on a sliding scale according to the following formula: C= BC+(PB-PI)*0.1094 Where: C = commission BC = Base Commission PI = price invoiced per MMBTU PB = Price Basis per MMBTU However, the commission will never be less than $0.05 per MMBTU regardless of fuel price. For purposes of calculating this commission, the price of all fuel supply transactions would be based on the direct cost of supply and transportation expenses as invoiced. 4
(iv) Global Energy may provide up to ten percent (10%) of the annual fuel requirements of the Lima Project from renewable sources. Oxbow would receive the same commission on a per-BTU basis on any such fuel supplied by Global Energy. (d) Project Management. In the event Oxbow funds its investment in the Lima Project Company as set forth in Section 3(a), and either or both of the following occur: (i) Closing and funding of the Lima Project financing does not occur on or before December 15, 2007; or (ii) There is a delay of twelve months or more in meeting any project milestones as set forth in Schedule 3(d) ("Project Milestones"); then Oxbow shall have the right to take over the development and management of the Lima Project; provided, however, that the Lima Project fuel supply arrangements shall continue to be managed as set forth in the Fuel Management and Supply Agreement and Oxbow shall not be entitled to direct the disposition of ownership interests in the Lima Project Company, unless additional equity is required to finance the project. Further, if Oxbow elects to take over the development and management of the Lima Project and Oxbow subsequently determines that it does not desire to continue to participate in the Lima Project, it may withdraw from further participation, relinquish its economic interests in the Lima Project Company and GEC and terminate the Fuel Management and Supply Agreement, without further liability or obligation to Global Energy and/or the other Lima Project participants. 4. Representations and Warranties of Global Energy. Global Energy represents and warrants that the statements contained in this Section 4 are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date. (a) Organization. Global Energy is a corporation duly formed, validly existing and in good standing under the laws of the State of Ohio, and has full corporate power and authority to own, or hold under lease, and operate its properties, and to conduct its business as such business is now being conducted. (b) Capitalization of Global Energy. The total authorized share capital of Global Energy as of the date of this Agreement is 10,000,000 common shares and 500,000 preferred shares. As of this date, 5,549,847 common shares and 105,086 preferred shares have been issued. The preferred shares are convertible into common shares at the conversion rate of 1.0 preferred shares to 1.71 common shares. As of the Closing Date, after giving effect to the Share purchase and the conversion of the preferred shares, 5,729,544 common shares of Global Energy will be issued and outstanding. (c) The Shares. (i) The Shares are duly authorized, validly issued and fully paid and non-assessable and were issued in accordance with all applicable securities laws or pursuant to exemptions therefrom. As of the Closing Date, after giving effect to the Share purchase and the conversion of Global Energy's preferred shares, the Shares will constitute a forty-four hundredths of one percent (0.44%) interest in the common shares of Global Energy. 5
(ii) As of Closing Date, Global Energy shall own, beneficially and of record, all of the Shares free and clear of all Liens. (iii) No Person has a right to acquire any of the Shares. None of the Shares are subject to any preemptive or subscription right, right of first refusal or offer, option, warrant, put or call right, consent right, restrictive covenant, or any other agreement with any Person other than Oxbow. (d) No Violation; Consents. (i) The execution and delivery of, and performance under, this Agreement by Global Energy and the consummation of the transactions contemplated hereby by Global Energy and GEC, will not: (A) violate any provision of Applicable Law or require any approval from or filing with any Governmental Authority; (B) violate the provisions of any Governmental Approval, or the organizational or governing documents of Global Energy or GEC, or any agreement or other restriction to which Global Energy or GEC is a party or by which the property of Global Energy or GEC is bound or subject; (C) result in a breach of or constitute (with due notice or lapse of time or both) a default under (or require notice or give rise to any right of termination, consent, cancellation, or acceleration under) any contract or agreement to which Global Energy or GEC is a party or by or to which the property of Global Energy or GEC is subject or bound; or (D) result in or give to any Person any right of termination, cancellation, acceleration or modification in or with respect to or result in any loss of benefit under or with respect to, or give any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under, or result in the creation or imposition of any Lien upon Global Energy, GEC or any of their assets, in each case under any contract or license to which Global Energy or GEC is a party or by which any of its respective assets is bound or any Applicable Law. (ii) The execution and delivery of, and performance under, this Agreement by Global Energy and the consummation of the transactions contemplated hereby will not require any Consent as to Global Energy. (e) Authority; Enforceabilitv. Global Energy has full legal capacity, power and authority to execute, deliver and perform this Agreement, and the other agreements and instruments to be executed and delivered by him pursuant hereto and to consummate the transactions 6
contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered by Global Energy and, assuming due authorization, execution and delivery hereof by Oxbow, is a legal, valid and binding obligation of Global Energy, enforceable against it in accordance with its terms. (f) Disclosure. No representation or warranty of Global Energy made in this Agreement or any certificate, statement, schedule, list or other information furnished or to be furnished to Oxbow (or any Affiliate or representative thereof) pursuant to this Agreement or in connection with the transactions contemplated hereby ("Transaction Information") contains any untrue statement or omits to state a material fact necessary to make the statements herein, in light of the circumstances in which they are made (including any materiality or knowledge qualifiers), not misleading. (g) Qualification; Organization. Global Energy is qualified to conduct its business as such business is now being conducted and is in good standing in all jurisdictions listed on Schedule 4(g), which are all the jurisdictions in which the nature of its business makes such qualification necessary or advisable. True and complete copies of the Articles or Certificates of Incorporation and Bylaws of Global Energy and GEC (the "Governing Documents") have been furnished to Oxbow. Each such Governing Document is in full force and effect and has not been amended or modified. (h) Bankruptcy. Neither Global Energy nor GEC has filed any voluntary petition in bankruptcy or been adjudicated bankrupt or insolvent, or filed any petition or answer seeking any reorganization, liquidation, dissolution or similar relief under any federal or state bankruptcy, insolvency or other debtor relief or similar law, or sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator or liquidator of all or any substantial part of its properties. No court of competent jurisdiction has entered an order, judgment or decree approving a petition filed against Global Energy or GEC seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any federal or state bankruptcy act, or other debtor relief or similar law, and no other liquidator has been appointed for any of them, or of all or any substantial part of any of their properties. No proceeding has been commenced or, to Global Energy's knowledge, has been threatened, seeking to adjudicate Global Energy or GEC as bankrupt or seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief. (i) Shareholder List. Global Energy has provided to Oxbow prior to the execution of this Agreement a true and correct list of the shareholders of Global Energy and their respective shareholdings as of the date of such list. (j) Officers and Directors. The officers and directors of Global Energy and GEC are listed on Schedule 4(j) hereto. (k) Litigation and Claims. There are no Proceedings pending or threatened against Global Energy which question the validity of this Agreement or any of the transactions contemplated hereby, and Global Energy does not have knowledge of any substantive basis for any such Proceeding. Global Energy is not subject to any Decree and does not have any knowledge of any substantive basis for any Decree. 7
(1) Environmental Matters. Except as set forth on Schedule 4(1) hereto: (i) Each of Global Energy and GEC has complied in all respects with all Environmental Laws or has resolved any non-compliance to the satisfaction of the Governmental Authority having jurisdiction thereof and has provided Oxbow with evidence of such satisfaction. Each of Global Energy and GEC is in compliance with all Environmental Laws. (ii) Neither Global Energy nor GEC has any liability, known or unknown, contingent or absolute, under any Environmental Law, nor is either Global Energy or GEC responsible for any such liability of any other Person under any Environmental Law, whether by contract, by operation of law or otherwise. There are no pending or, to the knowledge of Global Energy threatened, Environmental Claims and there are no fact(s) which might reasonably form the basis for any Environmental Claim and Neither Global Energy nor any of its Affiliates, including GEC, has received any notice of any Environmental Claim or threatened Environmental Claim. (m) Permits, Approvals and Site for Lima Project. Global Energy and/or its Affiliates: (i) have obtained all licenses, permits or franchises required to be issued by or obtained from any Governmental Authority for the construction, commissioning and operation of the Lima Project; and (ii) have obtained a legally binding right to purchase the site for the Lima Project from the City of Lima, Ohio for a purchase price of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00). The representations and warranties set forth in this Section 4 shall survive the Closing. 5. Representations and Warranties of Oxbow. Oxbow represents and warrants that the statements contained in this Section 5 are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date. (a) Organization. Oxbow is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority to conduct its business as such business is now being conducted. Oxbow is properly registered to do business in all jurisdictions in which the nature of the business conducted by it makes such registration necessary in order to avoid any material disadvantage or liability to it. (b) Authority; Enforceability. Oxbow has full power and authority to execute, deliver and perform this Agreement, and the other agreements and instruments to be executed and delivered by it pursuant hereto, and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly and validly authorized, executed and delivered by Oxbow and, assuming 8
due authorization, execution and delivery hereof by Global Energy, is a legal, valid and binding obligation of Oxbow, enforceable against Oxbow in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or equity). No other or further authorization is required for Oxbow's performance hereunder other than those authorizations to be obtained by Oxbow on or prior to the consummation of the transactions contemplated by this Agreement. (c) No Violation: Consents. The execution and delivery of, and performance under, this Agreement by Oxbow and the consummation by Oxbow of the transactions contemplated hereby and thereby, will not: (a) violate any provision of Applicable Law; (b) violate the provisions of any Governmental Approval, or the organizational or governing documents of Oxbow, or any agreement or other restriction to which any Oxbow is a party or by or pursuant to which Oxbow or the property of Oxbow is bound or subject; or (c) result in a breach of or constitute (with due notice or lapse of time or both) a default under (or give rise to any right of termination, consent, cancellation, or acceleration under) any material contract or agreement to which Oxbow is a party or by or pursuant to which Oxbow's property is subject or bound. The execution and delivery of, and performance under, this Agreement by Oxbow will not require any Consent, other than (i) such Consents which, if not obtained or made, will not prevent Oxbow from performing its obligations hereunder, (ii) such Consents which become applicable to Oxbow solely as a result of the specific regulatory status of Global Energy or GEC, and (iii) the Consents set forth on Schedule 5(c). (d) Litigation and Claims. There are no Proceedings pending or threatened against Oxbow which question the validity of this Agreement or any of the transactions contemplated hereby, and Oxbow does not have knowledge of any substantive basis for any such Proceeding. Oxbow is not subject to any Decree and does not have any knowledge of any substantive basis for any Decree. (e) Investment Representations. Oxbow is acquiring the Shares for its own account for investment, and not with a view to resale or other distribution within the meaning of the Act, and Oxbow will not distribute the Shares or any part thereof in violation of the Act or any other applicable securities law. Oxbow understands that the Shares have not been, and prior to appropriate registration statements becoming effective will not be, registered under the Act, by reason of a specific exemption from the registration provisions of the Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Oxbow's representations as expressed herein. Oxbow acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Shares. (f) Bankruptcy. There are no bankruptcy, reorganization, or arrangement proceedings pending against, being contemplated by or, to the knowledge of Oxbow, threatened against, Oxbow. The representations and warranties set forth in this Section 5 shall survive the Closing. 9
6. Conditions to Closing of the Share Purchase. (a) Oxbow Conditions. The obligation of Oxbow to proceed with the Closing of the Share purchase contemplated under Section 1 is subject to the satisfaction of all of the conditions set forth in this Section 6(a): (i) Representations and Warranties. The representations and warranties made by Global Energy in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though all such representations and warranties were made on and as of that date (without giving effect to any materiality qualifications contained therein), and Global Energy shall have delivered to Oxbow a certificate, dated as of the Closing Date and signed by Global Energy, to such effect. (ii) Covenants and Agreements. All of the covenants and agreements in this Agreement to be complied with and performed by Global Energy on or before the Closing Date shall have been complied with and performed in all material respects, and Global Energy shall have delivered to the Oxbow a certificate, dated as of the Closing Date and signed by Global Energy, to such effect. (iii) Consents. Each Consent necessary in order to authorize the acquisition by Oxbow of the Shares and to execute and deliver this Agreement, including all those applicable Consents set forth on Schedule 5(c), shall have been obtained and delivered to Oxbow and shall be in full force and effect. (iv) No Injunction. No preliminary or permanent injunction or other order or Decree by any Governmental Authority which, prevents the consummation of the purchase of the Shares shall have been issued and remain in effect (and Global Energy and Oxbow agree to use commercially reasonable efforts to have any such injunction, order, or Decree lifted). (v) Constitutive Documents. Global Energy shall have delivered to Oxbow copies of the Governing Documents of Global Energy and GEC, including all amendments thereto, each certified as true, correct, complete and in effect as of the Closing by the secretary of each such company. (b) Global Energy Conditions. The obligations of Global Energy to proceed with the Closing of the Share purchase contemplated under Section 1 is subject to the satisfaction of all of the conditions set forth in this Section 6(b): (i) Representations and Warranties. The representations and warranties made by Oxbow in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though all such representations and warranties were made on and as of that date (without giving effect to any materiality or qualifications contained therein), and Oxbow shall have delivered to the Global Energy a certificate, dated as of the Closing Date and signed by an officer of Oxbow, to such effect. 10
(ii) Covenants and Agreements. All of the covenants and agreements in this Agreement to be complied with and performed by Oxbow on or before the Closing Date shall have been complied with and performed in all material respects, and Oxbow shall have delivered to the Global Energy a certificate, dated as of the Closing Date and signed by an executive officer of such Oxbow, to such effect. (iii) Consents. All Consents necessary in order to authorize the acquisition by Oxbow of the Shares and to execute and deliver this Agreement shall have been obtained and delivered to Global Energy and shall be in full force and effect. (iv) No Injunction. No preliminary or permanent injunction or other order or Decree by any Governmental Authority which prevents the consummation of the purchase of the Shares shall have been issued and remain in effect (and Global Energy and Oxbow agree to use commercially reasonable efforts to have any such injunction, order, or Decree lifted.) 7. Covenants of the Parties. (a) Access to Information. Global Energy and Oxbow shall, in good faith, and subject to the terms and conditions hereof, disclose to one another such information relative to the strategic alliance contemplated by this Agreement as may be necessary or appropriate to effectuate the purposes thereof. (b) Further Assurances. (i) Subject to the terms and conditions of this Agreement, each of the Parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the purchase and sale of the Shares pursuant to this Agreement and the other transactions contemplated herein. (ii) Each Party also further agrees that it will not take any action in breach of this Agreement or that will cause any representation or warranty contained herein to become untrue in any material respect, including any action which would result in any assignment or transfer of (or encumbrance not permitted hereunder upon) any of the Shares or which would restrict such Party's ability to consummate the transactions herein contemplated. (c) Confidential Information. Confidential Information shall not be used for any purpose other than to evaluate and consummate the transactions contemplated by this Agreement, and shall not be disclosed without prior written consent of the other Party, except to: (i) those employees with a need to know the Confidential Information for the purpose of performing work related to the transactions contemplated by this Agreement; provided, however that the Parties shall require all such employees receiving the Confidential Information abide by the terms of this confidentiality covenant. Each Party shall be responsible for any breach of this Agreement by its employees or Affiliates; or 11
(ii) those advisors, agents, contractors or lenders with a need to know the Confidential Information for the purpose of performing work related to the transactions contemplated by this Agreement; provided, however that the Parties shall require all such advisors, agents, contractors or lenders to agree to abide by the terms of this Agreement and to undertake the same obligations as the Parties have undertaken hereunder. Each Party shall be responsible for any breach of this Agreement by its advisors, agents, contractors or lenders. (iii) If a Party is requested or required by legal or regulatory authority to disclose any Confidential Information, such disclosing Party shall promptly notify the other Party of such request or requirement prior to disclosure so that the other Party may seek an appropriate protective order and/or waive compliance with the terms of this Agreement. If a protective order or other remedy is not obtained, or the other Party waives compliance with the provisions hereof, the disclosing Party agrees to furnish only that portion of the Confidential Information that it reasonably determines, in consultation with its counsel, is consistent with the scope of the subpoena or demand, and to exercise reasonable efforts to obtain assurance that confidential treatment will be accorded such Confidential Information. (iv) Each Party agrees that money damages would not be a sufficient remedy for any breach of this Section 7(c) and that the Parties shall be entitled to injunctive or other equitable relief to remedy or prevent any breach or threatened breach of this Section 7(c). Such remedy shall not be the exclusive remedy for any breach of this Section 7(c), but shall be in addition to all other rights and remedies available at law or in equity. (v) Any Confidential Information, including all copies of same (including that portion of the Confidential Information that consists of analyses, forecasts, studies or other documents prepared by a Party or its advisors, agents, contractors or lenders), shall be returned to the other Party, or at such Party's option destroyed, within five (5) days of (A) a request by a Party at anytime; or (B) the termination of this Agreement in accordance with the terms hereof. Upon the written request of a Party, the other Party shall certify the destruction of such material by written notice to the requesting Party. (vi) This covenant shall survive the termination or expiration of this Agreement and shall continue in full force and effect for a period of three (3) years thereafter. (d) Regulatory Approvals. (i) Each Party shall use all commercially reasonable efforts to obtain all authorizations, consents, orders, and approvals of, and to give all notices to and make all filings with, all Governmental Authorities (including those pertaining to the Governmental Approvals) and third parties that may be or become necessary for its execution and delivery of, and the performance of its obligations under, this Agreement and will cooperate fully with the other Party in promptly seeking to obtain all such authorizations, consents, orders, and approvals, giving such notices, and making such filings. 12
(ii) Each Party agrees to use its commercially reasonable efforts to assist the other Party in obtaining any consents of third parties and Governmental Authorities which may be necessary or advisable for such Party to obtain in connection with the transactions contemplated by this Agreement, including providing to such third parties and Governmental Authorities such financial statements and other financial information with respect to such Party and their Affiliates as such third parties or Governmental Authorities may reasonably request. (e) Exclusive Dealing. Each Party agrees that it will not circumvent or attempt to circumvent the other by contacting or participating with any third party with respect to, or otherwise attempting to consummate, the transactions contemplated by this Agreement, except in participation with each other. (f) Price Protection. If at any time on or prior to the earlier of (i) December 31, 2007, or (ii) the date on which Global Energy completes an initial public offering ("IPO") of its common stock, Global Energy sells additional common shares or other financial instruments convertible into its common shares, or enters into any similar transaction for the sale of an ownership interest in Global Energy which is the same or substantially the same as that sold to Oxbow under Section 1 of this Agreement, and the price of which is less than $200.00 per share, Global Energy shall issue additional common shares to Oxbow such that Oxbow's adjusted per-share price for its stockholdings shall be no greater than the lowest price paid by any such subsequent purchaser of its shares. It is understood that the price protection afforded by this covenant extends to and includes the offering price pursuant to the IPO. (g) Board of Directors. During the term of this Agreement, and so long as Oxbow continues to own at least 15,000 common shares of Global Energy (as such amount may be adjusted to reflect any subsequent stock splits), Global Energy agrees that Oxbow shall have a seat on Global Energy's Board of Directors. 8. Term; Termination and Remedies. (a) Term. This Agreement shall be for an initial term of five (5) years, and unless earlier terminated in accordance with this Agreement, shall automatically renew for an additional term of five (5) years thereafter. (b) Termination for Default or Bankruptcy. Either Party may terminate this Agreement by written notice to the other Party in the event of the following: (i) Default. Material nonperformance by the other Party of any provisions set forth in this Agreement which is not cured within thirty (30) days after receipt of notice thereof from the Party not in default; or 13
(ii) Bankruptcy. The filing by or against the other Party of a petition or application in any proceeding relating to such other Party as debtor under any bankruptcy or insolvency law of any jurisdiction; provided that in the event of an involuntary bankruptcy or insolvency proceeding, such other Party shall have a sixty (60) day period in which to obtain dismissal or withdrawal of such petition or application. (c) Remedies. In the event of termination of this Agreement, the Party not in default shall be entitled to obtain all appropriate relief available to it under this Agreement and at law or equity. (d) Survival. The expiration or earlier termination of this Agreement shall not terminate or otherwise affect Oxbow's ownership of the Shares or the validity of any other definitive agreements executed prior to such expiration or termination in connection with the Lima Project, the Texas City Project or any other business arrangement arising out of the strategic alliance contemplated by this Agreement. 9. Defined Terms. (a) As used in this Agreement, the following terms have the following meanings: "Act" means the Securities Act of 1933, as amended, and the rules and regulations thereunder. "Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agreement" has the meaning specified in the preamble to this Agreement, and includes all exhibits and schedules hereto. "Applicable Law" means, with reference to any Person, all Laws applicable to such Person or its property or in respect of its operations. "Base Commission" has the meaning specified in Section 3(c). "BTU" means British Thermal Units. "Closing" has the meaning specified in Section 1(c). "Closing Date" has the meaning specified in Section 1(c). "Coal" has the meaning specified in Section 2(a). 14
"Confidential Information" means any information not in the public domain, in any form, whether acquired prior to or after the Closing Date, received by a Party from the other Party or any of its Affiliates or advisors, relating to the business and operations of such Party and its respective Affiliates, including, without limitation, information regarding vendors, suppliers, trade secrets, training programs, technical information, contracts, systems, procedures, know-how, trade names, improvements, price lists, financial or other data, business plans, computer programs, software systems, internal reports, personnel files or any other compilation of information, written or unwritten, which is or was used in the business of such Party or its Affiliates, except for information (i) that was or becomes generally available to the public, other than as a result of disclosure by a Party receiving such information; or (ii) that is received by a Party on a non-confidential basis from a third party that is not prohibited from disclosing such information by obligation to the disclosing Party. "Consent" means any authorization, approval, consent, waiver, license, filing, registration, ruling, permit or certification by or with any Person. "Consumer Price Index" shall mean the Consumer Price Index for all Urban Consumers (CPI-U), base years 1982-1984=100, for the Cleveland- Akron OH metropolitan area, as published by the United States Department of Labor, Bureau of Labor Statistics. "Decree" means any claim, consent decree, conciliation agreement, settlement agreement, outstanding judgment, rule, order, writ, injunction or other decree of a Governmental Authority. "Environmental Claim" means any and all administrative or judicial actions, suits, orders, claims, liens, notices, notices of violations, investigations, complaints, proceedings, or other written communication, whether criminal or civil, pursuant to or relating to any applicable Environmental Law by any Person, including any Governmental Authority, based upon, alleging, asserting, or claiming any actual or potential (i) violation of, or liability under any Environmental Law, (ii) violation of any Environmental Permit, or (iii) liability for investigatory costs, cleanup costs, removal costs, remedial costs, response costs, natural resource damages, property damage, personal injury, fines, or penalties arising out of, based on, resulting from, or related to the presence, Release, or threatened Release into the environment of any Hazardous Materials at, from, or related to any Real Property or any other property owned, leased, licensed, or operated by any of the Companies, including any off-site location to which Hazardous Materials, or materials containing Hazardous Materials, were sent for handling, storage, treatment or disposal. "Environmental Law" means all Applicable Laws relating to pollution or protection of the environment, natural resources and health and safety, including laws relating to Releases or threatened Releases of Hazardous Materials (including Releases to ambient air, surface water, groundwater, land, surface and subsurface strata) or otherwise relating to the generation, manufacture, processing, distribution, use, treatment, storage, Release, transport, disposal or handling of Hazardous Materials. "Environmental Laws" include the Comprehensive Environmental Response Conservation and Liability Act ("CERCLA") (42 U.S.C. §§ 960 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§1801 et seq.), the Resource Conservation and Recovery Act (42 U-S.C. §§ 6901 et seq.), the Federal Water Pollution Control Act (also known as the Clean 15
Water Act) (33 U.S.C. §§ 1251 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Oil Pollution Act (33 U.S.C. §§ 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. §§ 11001 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.) and their implementing regulations, state implementation plans, and analogous state or local laws or regulations, and all other applicable federal state or local laws that address the release or discharge of Hazardous Materials into the environment or the impact of Hazardous Materials on human health or the environment. "Fuel Management and Supply Agreement" has the meaning specified in Section 3(c). "GEC" has the meaning specified in Section 3(b). "Governing Documents" has the meaning specified in Section 4(g). "Governmental Approval" means any authorization, approval, consent, waiver, license, filing, registration, ruling, permit or certification by or with any Governmental Authority, including all environmental permits. "Governmental Authority" means any applicable federal, state, county, municipal or local governmental, judicial or regulatory authority, agency, arbitration board, body, commission, instrumentality or court. "Hazardous Material" means (i) any substance or material regulated under applicable Environmental Laws or any other product, substance, pollutant, chemical, material or waste whose presence, nature, quantity and/or intensity of existence, use, manufacture, disposal, transportation, spill, Release or effect, either by itself or in combination with other materials used by the Business, is either potentially injurious to the public health, safety or welfare, or the environment, or (ii) could reasonably be expected to provide a basis for liability of any of the Companies or to any Governmental Authority or other Person under any Applicable Environmental Law. Hazardous Material shall include, without limitation, infectious or toxic substances, pollutants, radioactive materials, toxic hydrocarbons, petroleum or petro chemical products, gasoline, oil, diesel fuel or polychlorinated biphenyls or any products, by-products or fractions thereof, and asbestos. "IPO" has the meaning specified in Section 6(f). "Laws" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law in the United States or any other country, or any domestic or foreign state, county, city or other political subdivision or of any Governmental Authority. "Lima Investment" has the meaning specified in Section 3(a). "Lima Project" has the meaning specified in Section 3. "Lima Project Company" has the meaning specified in Section 3 (a). "MMBTU" mean one million British Thermal Units. 16
"Party" and "Parties" means either or both of Global Energy or Oxbow. "Person" means and includes (i) an individual, (ii) a legal entity, including a partnership, a joint venture, a corporation, a trust, a limited liability company, a limited duration company, or a limited liability partnership, (iii) companies or associations or bodies of persons, whether or not incorporated, and (iv) a Governmental Authority. "Price Basis" has the meaning specified in Section 3(c). "Proceedings" means judicial or administrative actions, labor disputes, suits, proceedings, arbitrations, citations, complaints, or investigations. "Project Milestones" has the meaning specified in Section 3(d). "Purchase Price" has the meaning specified in Section 1. "Release" means any spilling, leaking, pumping, pouring, discharging, injecting, dumping or disposing of any (i) Hazardous Material or (ii) other substance which is not a Hazardous Material, in each case not in compliance with all applicable Laws, whether intentional or unintentional. "Shares" has the meaning specified in Section 1. "Transaction Information" has the meaning specified in Section 4(f). (b) In this Agreement, unless otherwise indicated or otherwise required by the context: (i) Reference to and the definition of any document (including this Agreement) shall be deemed a reference to such document including the exhibits and schedules thereto and as such document may be amended, supplemented, revised, assigned or modified from time to time prior to the applicable Closing Date; provided, however, that this rule of interpretation shall not apply to references to documents in the Schedules; (ii) All references to an "Article", "Section", "Schedule" or "Exhibit" are to an Article or Section hereof or to a Schedule or an Exhibit attached hereto, unless otherwise noted; 1. The table of contents, article and Section headings, and other captions in this Agreement are for the purpose of reference only and do not limit or affect its meaning; 2. Defined terms in the singular include the plural and vice versa, and the masculine, feminine, or neuter gender include all genders; 3. Accounting terms used herein but not defined in this Agreement shall have the respective meanings given to them under GAAP; 17
4. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; 5. Any reference herein to a time of day means Eastern Standard Time or Eastern Daylight Time, as appropriate; 6. References to any Person or Persons shall be construed as a reference to any successors or permitted assigns of such Person or Persons; and 7. The words "including", "include" and "includes", when used in this Agreement shall mean, as required by the context, including, include, and includes "without limitation" and "without limitation by specification." 10. Miscellaneous. (a) Contracts. All contracts contemplated to be entered into by the Parties pursuant to this Agreement shall be negotiated in good faith and shall contain terms and conditions, and be performed for prices, which are commercially reasonable. (b) Publicity. No public statements or press releases shall be issued by either Party relating to the terms of this Agreement or the business affairs of the Parties hereunder without the prior consent of the other Parties, However, nothing herein shall prevent a Party from supplying such information or making such statements relating to this Agreement as such Party may consider necessary in order to satisfy its legal obligations (including, but not limited to, its obligations of disclosure under applicable securities laws). (c) Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given upon delivery, if delivered personally or by recognized overnight courier service; if sent by first-class mail, five (5) days after being mailed, return receipt requested and postage prepaid; or if sent by facsimile or e-mail, upon receipt. Such notices shall be sent to the following addresses, or at such other address as either Party shall hereafter specify in writing. If to Global: Global Energy, Inc. 312 Walnut Street, Suite 2650 Cincinnati, Ohio 45202 Facsimile No.: (513) 621-5947 Attention: H.H. Graves, President and CEO HHG@globalenergyinc.com 18
If to Oxbow: Oxbow Carbon & Minerals LLC 1601 Forum Place, Suite 1400 West Palm Beach, FL 33401 Facsimile No.: (561) 697-1876 Attention: John P. Stauffer, Vice President john.stauffer@oxbow.com (d) Consequential Damages. Neither Party shalI be liable to the other Party in connection with this Agreement or the subject matter hereof for any indirect, incidental, special or consequential damages, including but not limited to loss of revenue, cost of capital or loss of profit or business opportunity, whether such liability arises out of contract, tort (including negligence), strict liability or otherwise. (e) Successor and Assigns: No Partnership. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective Affiliates, and to their respective successors and permitted assigns. Nothing contained in this Agreement shall be construed as creating a partnership among the Parties. (f) Exclusive Understanding. This Agreement and the exhibits hereto sets forth the sole and complete understanding between the Parties with respect to the subject matter hereof, and supersedes all other prior oral or written agreements, arrangements and understandings between the Parties with respect thereto. This Agreement shall not confer any legal rights or benefits on any third party (other than Affiliates of the Parties hereto, to the extent set forth herein). (g) Attorneys' Fees. In the event either Party files an action to enforce or otherwise arising out of this Agreement, the prevailing Party in such action shall be entitled to reasonable attorneys' fees and court costs in addition to such other relief to which it may be entitled. (h) Governing Law. This Agreement, and the rights and obligations of the Parties hereunder, shall be subject to, and construed in accordance with, the laws of the State of New York. (j) Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original for all purposes, but all of which shall constitute one and the same instrument. [BALANCE OF PAGE LEFT BLANK. SIGNATURES ON NEXT PAGE] 19
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the date first set forth above. OXBOW CARBON & MINERALS LLC By /s/ Brian L. Acton Brian L. Acton President GLOBAL ENERGY, INC. By /s/ H.H. Graves H.H. Graves President and Chief Executive Officer 20
Question:
Highlight the parts (if any) of this contract related to "Parties" that should be reviewed by a lawyer. Details: The two or more parties who signed the contract | GLOBAL ENERGY, INC. | Given the context, answer the question that follows |
The Committee shall determine the Eligible Individuals, to whom, and the time or times at which, grants of Restricted Stock shall be made, the number of shares to be awarded, the price (if any) to be paid by the Participant (subject to Section 8.2), the time or times within which such Awards may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards. | awards of restricted stock | Given the provision, provide with the correct label for the given provision |
Upon the termination of Executive's employment with the Company, or at any time during such employment upon request by the Company, Executive will promptly deliver to the Company and not keep in Executive's possession, recreate, or deliver to any other person or entity, any and all property that belongs to the Company or any of its affiliates, or that belongs to any other third party and is in Executive's possession as a result of Executive's employment with the Company, including, without limitation, records, data, customer lists and information, supplier lists and information, notes, reports, correspondence, financial information, account information, product and service information, project information, files, and other documents and information, including any and all copies of the foregoing. | return of company property | Given the provision, provide with the correct label for the given provision |
Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment to, any right, power, or remedy of Lender under the Settlement Agreement, as in effect prior to the date hereof. | other terms unchanged | Given the provision, provide with the correct label for the given provision |
The Company may purchase and maintain insurance with such limits or coverages as the Managing Member reasonably deems appropriate, at the expense of the Company and to the extent available, for the protection of any officer, director, employee, agent, or representative of the Managing Member or the Company against any liability incurred by such Person in any such capacity or arising out of his status as such, whether or not the Company has the power to indemnify such Person against such liability. | insurances | Given the provision, provide with the correct label for the given provision |
The Company or an Affiliate, as applicable, may withhold all applicable taxes from any Actual Award, including any federal, state, and local taxes. | tax withholdings | Given the provision, provide with the correct label for the given provision |
Except as described in the Company’s most recent periodic report filed with the Commission or as a result of the purchase and sale of the Shares, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents, other than issuances of equity securities for equity compensation purposes, approved by the Board of Directors, in the ordinary course of business or otherwise disclosed by the Company in its SEC Reports. | capitalization | Given the provision, provide with the correct label for the given provision |
This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. | counterparts | Given the provision, provide with the correct label for the given provision |
After giving effect to this Second Amendment to Fifth Amendment and Waiver, no Default or Event of Default shall have occurred and be continuing as of the Effective Date. | no default or event of default | Given the provision, provide with the correct label for the given provision |
Executive’s employment with the Company terminated on the Termination Date. | terminations | Given the provision, provide with the correct label for the given provision |
Each of the Parties warrants and represents that such Party has neither made, nor caused to be made, nor is aware of, nor will make any assignment or transfer of any claims, demands, accounts, obligations, actions, causes of action, debts, liens, contracts, agreements, promises, representations, torts, damages, costs, attorneys’ fees, monies due on accounts, judgments, or liabilities covered by the above releases. | no assignments | Given the provision, provide with the correct label for the given provision |
The Administrative Agent shall have received (i) the Amendment and Restatement Agreement, executed and delivered by Parent, the Borrower, each other Guarantor and each Lender listed on Schedule 1.1A , which shall be in full force and effect, and (ii) Notes, if requested, payable to the requesting Lender and its registered assigns, which shall be in full force and effect. | amendments | Given the provision, provide with the correct label for the given provision |
Except as set forth in Paragraph 13(c) hereof, time is of the essence with respect to the Closing Date. | closing dates | Given the provision, provide with the correct label for the given provision |
Each of Agent, Issuing Bank and Lenders shall have the right, in its discretion, to deal exclusively with Borrower Agent for all purposes under the Loan Documents. | borrower agent | Given the provision, provide with the correct label for the given provision |
The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d) . | reimbursement by lenders | Given the provision, provide with the correct label for the given provision |
The Company further agrees, if the Company applies to have the Common Stock traded on any other trading market, it will then include in such application all of the Underlying Shares, and will take such other action as is necessary to cause all of the Underlying Shares to be listed or quoted on such other trading market as promptly as possible. | listing of common stock | Given the provision, provide with the correct label for the given provision |
You therefore agree that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by you of any of those covenants, without having to post bond. | assurances | Given the provision, provide with the correct label for the given provision |
(a) The Borrowers shall pay to the Administrative Agent for the account of the Banks a commitment fee, which shall accrue at the applicable Commitment Fee Rate, as set forth in Section 2.7(f), on the daily unused amount of the Commitment of each Bank during the period from and including the date hereof to but excluding the date on which such Commitment terminates. | fees | Given the provision, provide with the correct label for the given provision |
No action, suit or proceeding against or affecting Borrower or any Subsidiary is known to be pending, or to the knowledge of Borrower threatened, in any court or before any governmental agency or department, which, if adversely determined, could result in a final judgment or liability of a material amount not fully covered by insurance, or which may result in any material adverse change in the business, or in the condition, financial or otherwise, of Borrower. | litigations | Given the provision, provide with the correct label for the given provision |
The Company will reimburse all reasonable legal fees and expenses incurred by a Pre-2005 Plan II Beneficiary in seeking to obtain or enforce any right or benefit provided by Pre-2005 Plan II. | legal representation | Given the provision, provide with the correct label for the given provision |
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. | tax status | Given the provision, provide with the correct label for the given provision |
Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Agent to declare the Advances due and payable pursuant to the provisions of Section 6.01 , each Lender, each Issuing Bank and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender, such Issuing Bank or any such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or Issuing Bank, whether or not such Lender or Issuing Bank shall have made any demand under this Agreement or such Note and although such obligations may be contingent or unmatured or are owed to a branch or office of such Lender or such Issuing Bank different from the branch or office holding such deposit or obligated on such indebtedness. | right of set-off | Given the provision, provide with the correct label for the given provision |
Borrower understands that Lender may make loans based on other rates as well. | variable interest rate | Given the provision, provide with the correct label for the given provision |
(a) Each Lender (in its capacities as a Lender and the Swingline Lender (if applicable) and on behalf of itself and its Affiliates as potential counterparties to Secured Cash Management Agreements and Secured Hedge Agreements) and each Issuing Bank (in such capacities and on behalf of itself and its Affiliates as potential counterparties to Secured Cash Management Agreements and Secured Hedge Agreements) hereby irrevocably designates and appoints the Administrative Agent as the agent of such Lender under this Agreement and the other Loan Documents, including as the Collateral Agent for such Lender and the other Secured Parties under the Security Documents, and each such Lender irrevocably authorizes the Administrative Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. | appointments | Given the provision, provide with the correct label for the given provision |
Except to a beneficiary upon the Employee’s death (as designated on a form prescribed by the Company or under the terms of the Plan), the Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. | nontransferability of awards | Given the provision, provide with the correct label for the given provision |
All Remaining Earned Performance Share Units that become vested and nonforfeitable on the date of Grantee’s death or Disability shall be paid within thirty (30) days following such death or Disability but in no event later than the Latest Payment Date, as defined in Section 5(k). | vesting | Given the provision, provide with the correct label for the given provision |
Except as required by law, Employee may disclose Separation Information only to Employee’s immediate family members, the Court or an arbitrator in any proceedings to enforce the terms of this Agreement, Employee’s attorney(s), and Employee’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on tax treatment or to prepare tax returns, and must prevent disclosure of any Separation Information to all other third parties. | confidentiality | Given the provision, provide with the correct label for the given provision |
The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of (and stated interest on) the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). | register | Given the provision, provide with the correct label for the given provision |
The Optionee may be required to report such accounts, assets or transactions to the tax or other authorities in his or her country. | exchange controls | Given the provision, provide with the correct label for the given provision |
You agree that neither you nor any of your Affiliates shall (i) in any way publicly disparage the Company, its equity holders, officers, directors, employees, agents or Affiliates, (ii) cause embarrassment or public humiliation to such persons or (iii) make any public statement that is adverse, inimical or otherwise detrimental to the interests of any such persons or the Company’s business at any time, including without limitation, during periods after the termination of this Agreement. | non-disparagement | Given the provision, provide with the correct label for the given provision |
THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTION 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO LANDLORD PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671. | liquidated damages | Given the provision, provide with the correct label for the given provision |
As of the date hereof, the authorized common stock of the Company consists of 500,000,000 authorized shares of Common Stock, $0.0001 par value per share, of which 69,421,778 shares are issued and outstanding; and 3,169,398 shares are planned to be reserved for issuance upon conversion of the Note. | capitalization | Given the provision, provide with the correct label for the given provision |
Any assignee shall be deemed to have made any and all representations and warranties made by Purchaser hereunder, as if the assignee were the original signatory hereto. | assignments | Given the provision, provide with the correct label for the given provision |
Anti-Corruption Laws . | anti-terrorism | Given the provision, provide with the correct label for the given provision |
Subject to Section 2.1(a) and Article 3 hereof, the Loans shall be made available to Borrowers in accordance with the terms and provisions of this Agreement, up to the then applicable Revolving Loan Availability; provided , however , that, notwithstanding anything contained in this Agreement or any other Loan Documents to the contrary, each Revolving Loan requested by Borrowers under this Agreement shall be subject to Lender’s approval, which approval may be given or withheld in Lender’s sole and absolute discretion. | loan requests | Given the provision, provide with the correct label for the given provision |
Each Credit Party agrees that the provisions of Section 13.5 are for the benefit of Lender and its successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between any other Credit Party and Lender, the obligations of such other Credit Party under this Agreement or the other Credit Documents. | benefit of guaranty | Given the provision, provide with the correct label for the given provision |
In accordance with Section 3(b)(iii) of the Equity Agreements, Director agrees to be available, solely in an advisory capacity and for no further compensation, to the Boards of Directors of the Corporation and the Bank (including counsel to such entities) to consult with respect to such matters as may be reasonably requested by the Boards of Directors of the Corporation or the Bank. | obligations | Given the provision, provide with the correct label for the given provision |
Company will submit any necessary notification and supporting documentation required for the Listing of Additional Shares (“ LAS ”) with Nasdaq for the Conversion Shares, and will use its best efforts to obtain LAS as soon as possible. | principal market regulation | Given the provision, provide with the correct label for the given provision |
In the event a beneficial owner requests a Warrant Exchange, upon issuance of the paper Warrant Certificate, the Company shall act as warrant agent and the terms of the paper Warrant Certificate so issued shall exclusively govern in respect thereof. | annex a | Given the provision, provide with the correct label for the given provision |
The Commitment Fee shall be calculated quarterly in arrears and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. | commitment fees | Given the provision, provide with the correct label for the given provision |
Landlord shall not be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease unless Landlord fails to perform such obligation within thirty (30) days after the receipt of notice from Tenant specifying in detail Landlord’s failure to perform; provided, however, if the nature of Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default under this Lease if it shall commence such performance within such thirty (30) day period and thereafter diligently pursue the same to completion. | general | Given the provision, provide with the correct label for the given provision |
As of the Amendment Approval Date, the number of Shares with respect to which Awards may be granted under the Plan shall be 5,500,000 Shares, plus the number of Shares issuable under Awards outstanding under the Plan as of the Amendment Approval Date, plus the number of Shares available for issuance under the Plan that have not been made subject to an outstanding Award as of the Amendment Approval Date, all of which may be issued pursuant to the exercise of Incentive Stock Options. | number of shares available | Given the provision, provide with the correct label for the given provision |
Units issued upon payment of the Phantom Units shall be subject to the terms of the Plan and the terms of the Partnership Agreement. | partnership agreement | Given the provision, provide with the correct label for the given provision |
Any such increased amount will thereafter be the “ Base Salary ” for all purposes. | base salary | Given the provision, provide with the correct label for the given provision |
The Property Manager will operate and maintain the Property according to the highest standards achievable consistent with the Company’s authorization. | use of property | Given the provision, provide with the correct label for the given provision |
Except for items specifically required to be delivered hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Buyer with any information concerning any Seller, any Servicer, the Guarantor or any of their Affiliates that comes into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. | non-reliance on the administrative agent | Given the provision, provide with the correct label for the given provision |
Landlord shall maintain insurance against loss or damage with respect to the Building on an “all risk” or equivalent type insurance form, with customary exceptions, subject to such deductibles and self-insured retentions as Landlord may reasonably determine, in an amount equal to at least the replacement value of the Building. | required insurance | Given the provision, provide with the correct label for the given provision |
Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, or other interests in real property owned or held by the Company or any of its Subsidiaries (the “ Real Property ”) owned by the Company or any of its Subsidiaries (as applicable). | real property | Given the provision, provide with the correct label for the given provision |
The Executive acknowledges receipt of the Plan booklet which contains the entire Plan, and the Executive represents and warrants that the Executive has read the Plan. | construction | Given the provision, provide with the correct label for the given provision |
Hence, in any construction or interpretation of this Agreement, the same shall not be construed against any party on the basis that such party was the drafter. | interpretations | Given the provision, provide with the correct label for the given provision |
Associate expressly acknowledges and agrees that the restrictions set forth in this Agreement are reasonable in all respects and no greater than necessary to protect the Company’s legitimate business interests. | non-disparagement | Given the provision, provide with the correct label for the given provision |
Except as permitted by Section 7.3 , do or cause to be done all things or proceed with due diligence with any actions or courses of action which may be necessary to preserve and keep in full force and effect its existence under the laws of its state of incorporation or formation and all qualifications or licenses in jurisdictions in which such qualification or licensing is required for the conduct of its business, except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect. | preservation of existence | Given the provision, provide with the correct label for the given provision |
To secure the payment and performance by Borrower of the Obligations hereunder, each of the Credit Parties grants, under and pursuant to the Security Agreement executed by the Credit Parties dated as of the Effective Date, to Lender, its successors and assigns, an unconditional, continuing, first-priority, perfected security interest in, and does hereby assign, transfer, mortgage, convey, pledge, hypothecate and set over to Lender, its successors and assigns, all of the right, title and interest of the Credit Parties in and to the Collateral, whether now owned or hereafter acquired, and all proceeds (including all insurance proceeds) and products of any of the Collateral. | security agreements | Given the provision, provide with the correct label for the given provision |
Context:
Exhibit 10.4
FORM OF TRANSFER AND SERVICING AGREEMENT
among
VERIZON OWNER TRUST 2020-A, as Issuer,
VERIZON ABS LLC, as Depositor
and
CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, as Servicer, Marketing Agent and Custodian
Dated as of January 29, 2020
Source: VERIZON ABS LLC, 8-K, 1/23/2020
TABLE OF CONTENTS
ARTICLE I USAGE AND DEFINITIONS 1 Section 1.1 Usage and Definitions 1
ARTICLE II TRANSFER AND ACQUISITION OF DEPOSITOR TRANSFERRED PROPERTY; REPRESENTATIONS AND WARRANTIES
Section 2.1 Transfers of Depositor Transferred Property 1 Section 2.2 Acknowledgement of Further Assignments 3 Section 2.3 Savings Clause 3 Section 2.4 Representations and Warranties About Depositor Transferred Property. 3 Section 2.5 Originators' Reacquisition and Servicer's Acquisition of Receivables for Breach of Representations 5
Section 2.6 Originators' Reacquisition or Servicer's Acquisition of Bankruptcy Surrendered Receivables 6
ARTICLE III SERVICING OF RECEIVABLES 7 Section 3.1 Engagement 7 Section 3.2 Servicing of Receivables. 7 Section 3.3 Servicer's Acquisition of Receivables 9 Section 3.4 Sale of Written-Off Receivables 10 Section 3.5 Servicer Reports and Compliance Statements 11 Section 3.6 Review of Servicer's Records 12 Section 3.7 Servicer's Authorized and Responsible Persons 13 Section 3.8 Servicer's Fees 13 Section 3.9 Servicer's Expenses 13 Section 3.10 Custodian. 13 Section 3.11 Marketing Agent 14 Section 3.12 Termination of Upgrade Programs; Credits Related to Upgrade Programs 15 Section 3.13 Notices to Obligors 16
ARTICLE IV ACCOUNTS, COLLECTIONS AND APPLICATION OF FUNDS 16 Section 4.1 Bank Accounts 16 Section 4.2 Investment of Funds in Bank Accounts 18 Section 4.3 Deposits and Payments 19 Section 4.4 Reserve Account; Negative Carry Account; Acquisition Account 21 Section 4.5 Direction to Indenture Trustee for Distributions 22
ARTICLE V DEPOSITOR 23 Section 5.1 Depositor's Representations and Warranties 23 Section 5.2 Liability of Depositor 24 Section 5.3 Merger, Consolidation, Succession or Assignment 25 Section 5.4 Depositor May Own Notes 25 Section 5.5 Depositor's Authorized and Responsible Persons 25 Section 5.6 Company Existence 25 Section 5.7 No Division 25
ARTICLE VI SERVICER AND MARKETING AGENT 25 Section 6.1 Servicer's and Marketing Agent's Representations and Warranties 25 Section 6.2 Liability of Servicer and Marketing Agent 29 Section 6.3 Indemnities of Servicer and the Marketing Agent 29
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Section 6.4 Delegation and Contracting 31 Section 6.5 Servicer May Own Notes 31 Section 6.6 Annual Statement as to Compliance 31 Section 6.7 Assessment of Compliance and Accountants' Attestation 31
ARTICLE VII SERVICER RESIGNATION AND TERMINATION; SUCCESSOR SERVICER 32 Section 7.1 No Resignation 32 Section 7.2 Servicer Termination Events 33 Section 7.3 Continue to Perform 34 Section 7.4 Successor Servicer 35 Section 7.5 Transition of Servicing 36 Section 7.6 Merger, Consolidation, Succession or Assignment 37
ARTICLE VIII TERMINATION 37 Section 8.1 Optional Acquisition of Receivables; Clean-Up Redemption of Notes 37 Section 8.2 Optional Redemption of Notes 38 Section 8.3 Termination 39
ARTICLE IX OTHER AGREEMENTS 39 Section 9.1 Financing Statements 39 Section 9.2 No Transfer or Lien by Depositor 40 Section 9.3 Expenses 40 Section 9.4 Receivables Information 40 Section 9.5 No Petition 40 Section 9.6 Limited Recourse 40 Section 9.7 Limitation of Liability 41 Section 9.8 Tax Treatment of Notes 41 Section 9.9 Regulation RR Risk Retention 41 Section 9.10 Cap Collateral Account 41
ARTICLE X MISCELLANEOUS 42 Section 10.1 Amendments 42 Section 10.2 Assignment; Benefit of Agreement; Third-Party Beneficiary 44 Section 10.3 Notices 44 Section 10.4 Agent for Service 45 Section 10.5 GOVERNING LAW 45 Section 10.6 Submission to Jurisdiction 45 Section 10.7 WAIVER OF JURY TRIAL 46 Section 10.8 No Waiver; Remedies 46 Section 10.9 Severability 46 Section 10.10 Headings 46 Section 10.11 Counterparts 46 Section 10.12 Limitation of Rights of the Cap Counterparty 46 Section 10.13 Intent of the Parties; Reasonableness 46
ARTICLE XI ASSET REPRESENTATIONS REVIEW; DISPUTE RESOLUTION 47 Section 11.1 Asset Representations Review 47 Section 11.2 Dispute Resolution 47
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Schedule A Schedule of Initial Receivables SA-1 Schedule B Notice Addresses SB-1 Appendix A Usage and Definitions AA-1 Exhibit A Custodian's Security Requirements EA-1 Exhibit B Form of Annual Certification EB-1
Source: VERIZON ABS LLC, 8-K, 1/23/2020
TRANSFER AND SERVICING AGREEMENT, dated as of January 29, 2020 (this "Agreement"), among VERIZON OWNER TRUST 2020-A, a Delaware statutory trust, as issuer (the "Issuer"), VERIZON ABS LLC, a Delaware limited liability company, as depositor (the "Depositor"), and Cellco Partnership d/b/a Verizon Wireless, a Delaware general partnership ("Cellco"), as servicer (in such capacity, the "Servicer"), as marketing agent (in such capacity, the "Marketing Agent") and as custodian (in such capacity, the "Custodian").
BACKGROUND
In the normal course of their businesses, Cellco and the other Originators originate device payment plan agreements for various wireless devices. In addition, the Master Trust holds certain device payment plan agreements originated by Cellco and certain other Originators.
In connection with a securitization transaction sponsored by Cellco in which the Issuer will issue Notes secured by a pool of Receivables consisting of device payment plan agreements, certain of the Originators and/or the Master Trust have transferred a pool of Receivables and related property, and any of the Originators and/or the Master Trust may from time to time transfer additional pools of Receivables and related property to the Depositor, who will transfer them to the Issuer. The Issuer will engage the Servicer to service the Receivables.
The parties agree as follows:
ARTICLE I USAGE AND DEFINITIONS
Section 1.1 Usage and Definitions. Capitalized terms used but not defined in this Agreement are defined in Appendix A. Appendix A also contains usage rules that apply to this Agreement. Appendix A is incorporated by reference into this Agreement.
ARTICLE II TRANSFER AND ACQUISITION OF DEPOSITOR TRANSFERRED PROPERTY; REPRESENTATIONS AND WARRANTIES
Section 2.1 Transfers of Depositor Transferred Property.
(a) Transfer and Absolute Assignment of Initial Receivables. In consideration of the Issuer's delivery to the Depositor of the Notes, the Class A Certificate and the Class B Certificate, effective on the Closing Date, the Depositor transfers and absolutely assigns to the Issuer, without recourse (other than the Depositor's obligations under this Agreement), all of the Depositor's right, title and interest, whether now owned or later acquired, in the Initial Receivables and the other related Depositor Transferred Property. The Depositor certifies that the Credit Enhancement Test and the Pool Composition Tests are satisfied for the transfer and assignment of the Initial Receivables and the other related Depositor Transferred Property on the Closing Date.
(b) Transfers and Absolute Assignments of Additional Receivables. Subject to the satisfaction of the conditions in Section 2.1(d), effective on each Acquisition Date, in consideration of the Issuer's distribution to the Depositor of the (i) Additional Receivables Cash
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Transfer Amount for the Additional Receivables to be transferred to the Issuer on that Acquisition Date and (ii) an increase in the Class B Certificate Principal Balance in an amount equal to the excess, if any, of the Additional Receivables Transfer Amount over the Additional Receivables Cash Transfer Amount for such Additional Receivables, the Depositor will transfer and absolutely assign to the Issuer, without recourse (other than the Depositor's obligations under this Agreement), all of the Depositor's right, title and interest, whether then owned or later acquired, in the Additional Receivables and the other related Depositor Transferred Property.
(c) No Assumption of Obligations. These transfers and absolute assignments do not, and are not intended to, include any obligation of the Depositor or any Originator to the Obligors or any other Person relating to the Receivables and the other Depositor Transferred Property, and the Issuer does not assume any of these obligations.
(d) Conditions for Transfers of Additional Receivables. The transfer and assignment of the Additional Receivables and the other related Depositor Transferred Property on each Acquisition Date will be subject to the satisfaction of the following conditions on or before such Acquisition Date:
(i) Transfer Notice. At least two (2) Business Days before the applicable Acquisition Date, the Administrator shall deliver to the Issuer and the Indenture Trustee a Transfer Notice for the Additional Receivables to be transferred and absolutely assigned on that Acquisition Date, which will specify the Additional Receivables Transfer Amount and attach or include therewith the Schedule of Receivables;
(ii) Satisfaction of Tests. After giving effect to the transfer and assignment of the Additional Receivables by the Depositor to the Issuer, (A) the Credit Enhancement Test is satisfied and (B) the Receivables, in the aggregate, owned by the Issuer, excluding any Temporarily Excluded Receivables, satisfy each of the Pool Composition Tests under Section 3.5(b); and
(iii) Depositor's Certifications. The Depositor certifies that:
(A) as of such Acquisition Date, (1) the Depositor is Solvent and will not become insolvent as a result of the transfer and assignment of the Additional Receivables on the Acquisition Date, (2) the Depositor does not intend to incur or believe that it would incur debts that would be beyond the Depositor's ability to pay as they matured and (3) the transfer and assignment of the Additional Receivables is not made by the Depositor with actual intent to hinder, delay or defraud any Person;
(B) each of the representations and warranties made by the Depositor under Sections 2.4(a) and 2.4(b), in each case, solely with respect to the related Additional Receivables, will be true and correct as of the Acquisition Date; and
(C) all conditions to the transfer and assignment of the related Additional Receivables by the Originators to the Depositor under
2
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Section 2.1(d) of the Originator Receivables Transfer Agreement and by the Master Trust to the Depositor under Section 2.1(d) of the Master Trust Receivables Transfer Agreement, as applicable, have been satisfied.
The delivery by the Administrator, on behalf of the Depositor, of the Transfer Notice will be considered a certification by the Depositor that the conditions set forth in this Section 2.1(d) have been satisfied or will be satisfied on the Acquisition Date.
Section 2.2 Acknowledgement of Further Assignments. The Depositor acknowledges that, under the Indenture, the Issuer will assign and pledge the Depositor Transferred Property and related property and rights to the Indenture Trustee for the benefit of the Secured Parties.
Section 2.3 Savings Clause. The Depositor and the Issuer intend that each transfer and assignment under this Agreement be an absolute transfer and assignment of the Depositor Transferred Property, conveying good title to the Depositor Transferred Property free and clear of any Lien, other than Permitted Liens, from the Depositor to the Issuer. The Depositor and the Issuer intend that the Depositor Transferred Property not be a part of the Depositor's estate if there is a bankruptcy or insolvency of the Depositor. If, despite the intent of the Depositor and the Issuer, a transfer and assignment of Depositor Transferred Property under this Agreement is determined to be a pledge for a financing or is determined not to be an absolute transfer and assignment, the Depositor Grants to the Issuer a security interest in the Depositor's right, title and interest in the Depositor Transferred Property to secure a loan in an amount equal to all amounts payable by the Depositor under this Agreement, all amounts payable as principal of or interest on the Notes, all amounts payable as Servicing Fees under this Agreement and all other amounts payable by the Issuer under the Transaction Documents. In that case, this Agreement will be a security agreement under Law and the Issuer will have the rights and remedies of a secured party and creditor under the UCC.
Section 2.4 Representations and Warranties About Depositor Transferred Property.
(a) Representations and Warranties About Pool of Receivables. The Depositor makes the following representations and warranties about the pool of Receivables on which the Issuer is relying in acquiring the Depositor Transferred Property. The representations and warranties are made as of the Closing Date (for the Initial Receivables) and as of each Acquisition Date (for the related Additional Receivables) and will survive the transfer and absolute assignment of the Depositor Transferred Property by the Depositor to the Issuer under this Agreement and the pledge of the Depositor Transferred Property by the Issuer to the Indenture Trustee under the Indenture.
(i) Valid Transfer and Assignment. This Agreement evidences a valid transfer and absolute assignment of the Depositor Transferred Property from the Depositor to the Issuer, enforceable against creditors of, purchasers from and transferees and absolute assignees of the Depositor.
(ii) Good Title to Depositor Transferred Property. Immediately before the transfer and absolute assignment under this Agreement, the Depositor has good title to
3
Source: VERIZON ABS LLC, 8-K, 1/23/2020
the Depositor Transferred Property free and clear of any Lien, other than Permitted Liens, and, immediately after the transfer and absolute assignment under this Agreement, the Issuer will have good title to the Depositor Transferred Property, free and clear of any Lien, other than Permitted Liens.
(iii) Security Interest in Depositor Transferred Property.
(A) This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Depositor Transferred Property in favor of the Issuer, which is prior to any Lien, other than Permitted Liens, and is enforceable against all creditors of, purchasers from and transferees and absolute assignees of the Depositor.
(B) All filings (including UCC filings) necessary in any jurisdiction to give the Depositor a first priority, validly perfected ownership and security interest in the Originator Transferred Property and the Master Trust Transferred Property, to give the Issuer a first priority, validly perfected ownership and security interest in the Depositor Transferred Property and to give the Indenture Trustee a first priority perfected security interest in the Collateral, will be made within ten (10) days after the Closing Date or the related Acquisition Date, as applicable.
(C) All financing statements filed or to be filed against the Depositor in favor of the Issuer describing the Depositor Transferred Property transferred under this Agreement will contain a statement to the following effect: "A purchase, absolute assignment or transfer of or security interest in any collateral described in this financing statement will violate the rights of the Secured Party/Assignee."
(D) The Depositor has not authorized the filing of and is not aware of any financing statements against the Depositor that include a description of collateral covering any Depositor Transferred Property other than the financing statements relating to the security interest Granted to the Depositor under the Receivables Transfer Agreements, by the Depositor to the Issuer under this Agreement or by the Issuer to the Indenture Trustee under the Indenture, or that has been terminated.
(b) Representations and Warranties About Security Interest. If the transfer and absolute assignment of the Depositor Transferred Property under this Agreement is determined to be a pledge relating to a financing or is determined not to be a transfer and absolute assignment, the Depositor makes the following representations and warranties on which the Issuer is relying in acquiring the Depositor Transferred Property, which representations and warranties are made as of the Closing Date or as of the related Acquisition Date, as applicable,
4
Source: VERIZON ABS LLC, 8-K, 1/23/2020
will survive termination of this Agreement and may not be waived by the Issuer or the Indenture Trustee:
(i) Valid Security Interest. This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Depositor Transferred Property in favor of the Issuer, which is prior to all other Liens, other than Permitted Liens, and is enforceable against creditors of, purchasers from and transferees and absolute assignees of the Depositor.
(ii) Type. Each Receivable is (A) if the Receivable is not secured by the related Device, an "account" or "payment intangible," or (B) if the Receivable is secured by the related Device, "chattel paper," in each case, within the meaning of the applicable UCC.
(iii) Good Title. Immediately before the transfer and absolute assignment under this Agreement, the Depositor owns and has good title to the Depositor Transferred Property free and clear of all Liens, other than Permitted Liens. The Depositor has received all consents and approvals required by the terms of the Depositor Transferred Property to Grant to the Issuer its right, title and interest in the Depositor Transferred Property, except to the extent the requirement for consent or approval is extinguished under the applicable UCC.
(iv) Filing Financing Statements. The Depositor has caused, or will cause within ten (10) days after the Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable Law to perfect the security interest Granted in the Depositor Transferred Property to the Issuer under this Agreement. All financing statements filed or to be filed against the Depositor in favor of the Issuer under this Agreement describing the Depositor Transferred Property will contain a statement to the following effect: "A purchase, absolute assignment or transfer of or grant of a security interest in any collateral described in this financing statement will violate the rights of the Secured Parties."
(v) No Other Transfer, Grant or Financing Statement. Other than the security interest Granted to the Issuer under this Agreement, the Depositor has not transferred or Granted a security interest in any of the Depositor Transferred Property. The Depositor has not authorized the filing of and is not aware of any financing statements against the Depositor that include a description of collateral covering any of the Depositor Transferred Property, other than financing statements relating to the security interest Granted to the Issuer. The Depositor is not aware of any judgment or tax Lien filings against it.
Section 2.5 Originators' Reacquisition and Servicer's Acquisition of Receivables for Breach of Representations.
(a) Representations and Warranties from Receivables Transfer Agreements. Each Originator and the Servicer, severally has made, as of the Closing Date, and each Originator or the Servicer, as applicable, severally will make, as of each Acquisition Date, the Eligibility
5
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Representation about the Receivables transferred and absolutely assigned by such Originator or the Master Trust, respectively, on that date, and has consented to the transfer by the Depositor to the Issuer of the Depositor's rights to such Eligibility Representation. The Issuer is relying on each applicable Originator's or the Servicer's Eligibility Representation in acquiring the Receivables, which Eligibility Representation will survive the transfer and absolute assignment of the Receivables by the Depositor to the Issuer under this Agreement and the pledge of the Receivables to the Indenture Trustee under the Indenture.
(b) Reacquisition or Acquisition. Under Section 2.1(a), the Depositor has transferred and absolutely assigned to the Issuer the Depositor's rights under the Receivables Transfer Agreements, including the right to require (i) an Originator to reacquire any Receivables transferred and absolutely assigned by it under the Originator Receivables Transfer Agreement or (ii) the Servicer to acquire any Receivable transferred and absolutely assigned by the Master Trust under the Master Trust Receivables Transfer Agreement, in each case, for which such party has made the Eligibility Representation if, in each case, there is a breach of such Eligibility Representation, such breach is not cured and such breach results in a material adverse effect on the Issuer. If any Originator or the Servicer breaches the Eligibility Representation made by it with respect to any Receivable transferred by such Originator or the Master Trust, respectively, to the Depositor, such breach is not cured and such breach has a material adverse effect on the Issuer, then the Depositor will enforce such Originator's or the Servicer's obligation, as applicable, to reacquire or acquire, respectively, any such Receivable transferred and absolutely assigned by it to the Depositor for which the Eligibility Representation was breached pursuant to Section 3.4 of the applicable Receivables Transfer Agreement.
(c) Reacquisition or Acquisition Sole Remedy. The sole remedy of the Depositor, the Issuer or the Indenture Trustee for a breach of any Eligibility Representation is to require the related Originator or the Servicer, as applicable, to reacquire or acquire, respectively, the Receivable under Section 3.4 of the applicable Receivables Transfer Agreement.
Section 2.6 Originators' Reacquisition or Servicer's Acquisition of Bankruptcy Surrendered Receivables.
(a) Reacquisition or Acquisition. Under Section 2.1(a), the Depositor has transferred and absolutely assigned to the Issuer the Depositor's rights under the Receivables Transfer Agreements, including the right to require (i) an Originator to reacquire any Receivables transferred and absolutely assigned by it under the Originator Receivables Transfer Agreement or (ii) the Servicer to acquire any Receivable transferred and absolutely assigned by the Master Trust under the Master Trust Receivables Transfer Agreement, in each case, when such Receivable becomes a Bankruptcy Surrendered Receivable. If any Receivable becomes a Bankruptcy Surrendered Receivable, the Depositor will enforce such Originator's or the Servicer's obligation, as applicable, to reacquire or acquire, respectively, any such Receivable transferred and absolutely assigned by it to the Depositor pursuant to Section 4.6 or 4.7, respectively, of the applicable Receivables Transfer Agreement.
(b) Reacquisition or Acquisition Sole Remedy. If a Receivable becomes a Bankruptcy Surrendered Receivable, the sole remedy of the Depositor, the Issuer or the Indenture Trustee is to require the related Originator or the Servicer, as applicable, to reacquire
6
Source: VERIZON ABS LLC, 8-K, 1/23/2020
or acquire, respectively, the Bankruptcy Surrendered Receivable under Section 4.6 or 4.7, respectively, of the applicable Receivables Transfer Agreement.
ARTICLE III SERVICING OF RECEIVABLES
Section 3.1 Engagement. The Issuer engages Cellco as the Servicer of the Receivables for the Issuer and the Indenture Trustee, and Cellco accepts this engagement.
Section 3.2 Servicing of Receivables.
(a) General Servicing Obligations. The Servicer will manage, service, administer and collect on the Receivables with reasonable care using that degree of skill and attention that the Servicer exercises for all comparable device payment plan agreement receivables that it services for itself or others according to the Servicing Procedures. Without limiting the generality of the foregoing, the Servicer's obligations will include:
(i) collecting and applying all payments made on, or credits applied to, the Receivables and any other amounts received related to the Depositor Transferred Property;
(ii) investigating delinquencies;
(iii) sending invoices and notices and responding to inquiries of Obligors;
(iv) processing requests for extensions, modifications and adjustments;
(v) administering payoffs, prepayments, defaults and delinquencies;
(vi) maintaining accurate and complete accounts and receivables systems for servicing the Receivables;
(vii) providing to the Custodian copies, or access to, any documents that modify or supplement information in the Receivable Files; and
(viii) preparing and providing Monthly Investor Reports and any other periodic reports required to be prepared by the Servicer under this Agreement or any other Transaction Document.
(b) Collection of Payments; Extensions and Amendments. The Servicer shall take, or cause to be taken, all actions necessary or advisable to collect each Receivable in accordance with this Agreement and the Servicing Procedures using commercially reasonable care and diligence and in any event, with no less care or diligence than the Servicer exercises in collecting other similar receivables or obligations owed to it and its Affiliates. All payments remitted by an Obligor to the Servicer in respect of a Receivable, any release of a security deposit, and any application of a Credit granted to a customer by Verizon Wireless (other than applications of payments and credits granted to an Obligor under a Receivable in respect of cancellations, prepayments, invoicing errors or in connection with an Upgrade Offer as described under Section
7
Source: VERIZON ABS LLC, 8-K, 1/23/2020
3.12(b)) will be applied to the related account by the Servicer based on invoice aging, so that such amounts are applied to the oldest invoiced balances first, then the second oldest invoiced balances, etc., and finally to current billing amounts, in each case, in the order described below:
• late fees;
• service and all other charges, including, but not limited to, insurance premium payments and purchases (including accessories) billed to the account, other than amounts due under any device payment plan agreement, including any Receivable; and
• any amounts related to any device payment plan agreements, including Receivables, which, in the case of multiple device payment plan agreements related to a single account, will be applied in the order in which such device payment plan agreements were originated with the most recent device payment plan agreement being paid last.
Notwithstanding anything to the contrary in any other Transaction Document, the process for application of payments remitted by an Obligor to the Servicer in respect of a Receivable, releases of security deposits, and applications of Credits granted to an Obligor under a Receivable by Verizon Wireless (other than those credits granted to an Obligor in respect of an Upgrade Offer as described under Section 3.12(b)) described in the bullet points above may be changed at any time in the sole discretion of the Servicer, as long as any change in such application of any such amounts applicable to the Receivables (i) is also applicable to any device payment plan agreements that the Servicer services for itself and others and (ii) so long as Cellco is the Servicer, does not have a material adverse effect on the Noteholders. In addition, the Servicer may waive late payment charges or other fees that may be collected in the ordinary course of servicing a Receivable. The Servicer may grant extensions, refunds, rebates or adjustments on any Receivable or amend any Receivable according to the Servicing Procedures. However, if the Servicer (i) grants payment extensions resulting in the final payment date of the Receivable being later than the Collection Period immediately preceding the Final Maturity Date for the latest maturing Class of Notes, (ii) cancels a Receivable or reduces or waives (including with respect to any Upgrade Offer) the remaining Principal Balance under a Receivable or any portion thereof and/or as a result, the monthly payments due thereunder, or (iii) modifies, supplements, amends or revises a Receivable to grant the Obligor under such Receivable a contractual right to upgrade the related Device, it will acquire the affected Receivable solely as described under Section 3.3, unless it is required to take the action by Law. In addition, if the Marketing Agent or the Servicer (x) applies a payment or grants a credit to an Obligor with respect to cancellations, prepayments or invoicing errors the Servicer may apply such credits either directly to the applicable device payment plan agreement or in accordance with its customary payment application procedures set forth above and (y) applies a payment or grants a credit to an Obligor under a Receivable in connection with an Upgrade Offer as set forth in Section 3.12(b), the Servicer will apply such credits directly to the applicable device payment plan agreement and will not apply such credits in accordance with its customary payment application procedures set forth above.
8
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(c) Maintenance of Security Interests in the Receivables. The Servicer will maintain perfection of the security interest of the Issuer and the Indenture Trustee in each Receivable.
(d) No Impairment. The Servicer will not impair in any material respect the rights of the Issuer or the Noteholders in any Receivable except as permitted by this Agreement.
(e) Assignment for Enforcement. Effective as of the related Cutoff Date, the Receivables are assigned to the Servicer solely for the purpose of permitting the Servicer to perform its servicing and administrative obligations under this Agreement, including the start or pursuit of or participation in a legal proceeding to enforce its rights or remedies with respect to a Receivable or such other Proceeding otherwise related to a Receivable. If in a legal proceeding it is held that the Servicer may not enforce its rights or remedies with respect to a Receivable on the grounds that it is not a real party in interest or a holder entitled to enforce rights or remedies with respect to the Receivable, the Issuer will, at the Servicer's expense and direction, assign the Receivable to the Servicer solely for that purpose or take steps to enforce its rights and remedies with respect to the Receivable, including bringing suit in the names of the Indenture Trustee, the Noteholders and the Issuer.
(f) Powers of Attorney. The Issuer appoints the Servicer as the Issuer's attorney-in-fact, with full power of substitution to exercise all rights of the Issuer for the servicing and administration of the Receivables. This power of attorney, and all authority given, under this Section 3.2(f) is revocable and is given solely to facilitate the performance of the Servicer's obligations under this Agreement and may only be used by the Servicer consistent with this Agreement. On request of the Servicer, the Issuer will furnish the Servicer with written powers of attorney and other documents to enable the Servicer to perform its obligations under this Agreement.
(g) Release Documents. The Servicer is authorized to execute and deliver, on behalf of itself, the Issuer, the Indenture Trustee and the Noteholders any documents of satisfaction, cancellation, partial or full release or discharge, and other comparable documents, for the Receivables.
(h) Enforcement of Receivables Under an Upgrade Offer. If an Obligor accepts an Upgrade Offer with respect to a Receivable but fails to satisfy the required terms and conditions related to such Upgrade Offer, the Servicer agrees to (i) not waive any amounts due by such Obligor under the related Receivable and pursue its Servicing Procedures against such Obligor in respect of the related Receivable until all amounts due under the related Receivable are received and (ii) enforce, on behalf of the Issuer, any rights and obligations under the related Receivable.
Section 3.3 Servicer's Acquisition of Receivables.
(a) Acquisition for Servicer Modifications. If extensions, modifications, amendments, cancellations or waivers of Receivables or any terms thereof are made that would require such Receivables to be acquired under Section 3.2(b), the Servicer will acquire all such Receivables as set forth in Section 3.3(d).
(b) Acquisition for Breach of Servicer's Obligations. If a Responsible Person of the Servicer receives written notice from the Depositor, the Issuer, the Owner Trustee or the
9
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Indenture Trustee of a breach of the Servicer's obligations in Section 3.2(c) or (d), and the Servicer fails to correct such failure or impairment in all material respects by the end of the second month following the month in which the Servicer received such written notice, the Servicer will acquire all Receivables with respect to which such breach was not so cured as set forth in Section 3.3(d).
(c) Acquisition for System Limitation or Inability to Service. If the Servicer, in its sole discretion, determines that as a result of a receivables systems error or receivables systems limitation or for any other reason the Servicer is unable to service a Receivable according to the Servicing Procedures and the terms of this Agreement, the Servicer may acquire the relevant Receivable as set forth in Section 3.3(d).
(d) Acquisition of Receivables; Payment of Acquisition Amount. For any acquisition of a Receivable by the Servicer under this Section 3.3, the Servicer will acquire the Receivable by remitting the related Acquisition Amount on or prior to the second Business Day before the Payment Date related to the Collection Period in which such Receivable was acquired by the Servicer. If Cellco is the Servicer, it may pay any Acquisition Amounts according to Section 4.3(c).
(e) Transfer and Assignment of Acquired Receivables. When the Servicer's payment of the Acquisition Amount for a Receivable is included in Available Funds for a Payment Date, the Issuer will be deemed to have transferred and assigned to the Servicer, effective as of the last day of the Collection Period immediately preceding the related Collection Period, all of the Issuer's right, title and interest in the Receivable and all security and documents relating to the Receivable. The transfer and assignment will not require any action by the Issuer or the Indenture Trustee and will be without recourse, representation or warranty by the Issuer except the representation that the Issuer owns the Receivable free and clear of any Lien, other than Permitted Liens. After the transfer and assignment, the Servicer will mark its receivables systems to indicate that the receivable is no longer a Receivable and may take any action necessary or advisable to transfer the Receivable free from any Lien of the Issuer or the Indenture Trustee.
(f) No Obligation to Investigate. None of the Issuer, the Owner Trustee, the Indenture Trustee (including in its capacity as Successor Servicer hereunder), the Sponsor, the Marketing Agent, the Depositor, the Parent Support Provider, the Administrator or the Servicer will be obligated to investigate whether a breach or other event has occurred that would require the acquisition of any Receivable under this Section 3.3 or whether any Receivables are otherwise required to be acquired under this Section 3.3.
(g) Acquisition is Sole Remedy. The sole remedy of the Issuer, the Indenture Trustee, the Owner Trustee, and the Secured Parties for any extension, modification, amendment, cancellation or waiver of a Receivable or any terms thereof under Section 3.2(b) or a breach of the covenants made by the Servicer in Section 3.2(c) or (d) is the Servicer's acquisition of the Receivables, as described under this Section 3.3.
Section 3.4 Sale of Written-Off Receivables. The Servicer may sell to any third party a Receivable that has been written off. Proceeds of any sale allocable to the Written-Off
10
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Receivable will be Recoveries. Any Recoveries will be paid to the Servicer as Supplemental Servicing Fees and will not be a part of Available Funds. If the Servicer elects to sell a Written-Off Receivable, the Receivable will be deemed to have been transferred and assigned by the Issuer to the Servicer immediately before the sale by the Servicer. After the sale, the Servicer will mark its receivables systems to indicate that the Written-Off Receivable sold is no longer a Receivable and may take any action necessary or advisable to transfer the receivable free from any Lien of the Issuer or the Indenture Trustee.
Section 3.5 Servicer Reports and Compliance Statements.
(a) Monthly Investor Report.
(i) On or about the 15th day of each month, and in no case later than at least two (2) Business Days before each Payment Date, the Servicer will deliver to the Depositor, the Indenture Trustee, the Owner Trustee, the Note Paying Agent, the Cap Counterparty, the Rating Agencies and the Administrator a servicing report (the "Monthly Investor Report") for that Payment Date and the related Collection Period. The Monthly Investor Report will include (i) an Acquisition Date Supplement if the Collection Period includes an Acquisition Date and (ii) a statement as to whether or not a Delinquency Trigger has occurred in respect of the related Collection Period, together with reasonably detailed calculations thereof. A Responsible Person of the Servicer will certify that the information in the Monthly Investor Report is accurate in all material respects. The Monthly Investor Report will also be posted on the Indenture Trustee's password protected website located at https://pivot.usbank.com.
(ii) The Sponsor, in its capacity as Servicer, will include information about the pool of Initial Receivables and the disclosure required by Section 246.4(c)(1)(ii) of the U.S. Credit Risk Retention Rules in the Monthly Investor Report for the first Payment Date, which Monthly Investor Report will also be included in the Distribution Report on Form 10-D filed with the Commission for the related Collection Period.
(iii) The Sponsor, in its capacity as Servicer, will include in the Monthly Investor Report notice of the occurrence of (i) any Benchmark Transition Event and its related Benchmark Replacement Date, (ii) the determination of any Benchmark Replacement, and (iii) the making of any Benchmark Replacement Conforming Changes.
(b) Credit Enhancement and Pool Composition Tests. On or before each Payment Date and each Acquisition Date, the Servicer will determine whether the pool of Receivables to be held by the Issuer as of the related Cutoff Date, including any Additional Receivables to be acquired, satisfies the Credit Enhancement Test and each Pool Composition Test. If the pool of Receivables does not satisfy all of the Pool Composition Tests, the Administrator may identify Receivables in the pool as Temporarily Excluded Receivables so that the remaining Receivables in the pool will satisfy all of the Pool Composition Tests; provided, that the Administrator may only deem Receivables to be Temporarily Excluded Receivables if the Overcollateralization Target Amount is reached as of the close of business on such date of determination, without taking into account the Temporarily Excluded Receivables. In addition, the Principal Balance of any Temporarily Excluded Receivables will be subtracted from the Adjusted Pool Balance for
11
Source: VERIZON ABS LLC, 8-K, 1/23/2020
purposes of calculating the Credit Enhancement Test. The Servicer will state on the Acquisition Date Supplement for each Collection Period for which there is an Acquisition Date the aggregate Principal Balance of the Receivables deemed Temporarily Excluded Receivables. For the avoidance of doubt, Collections on Temporarily Excluded Receivables (solely during the time that they are Temporarily Excluded Receivables) will not constitute Available Funds and, up to the amount of the Temporarily Excluded Receivables Servicing Fee will be distributed to the Servicer, and any remaining amounts will be deposited into the Certificate Distribution Account for distribution to the Certificateholders in the priority set forth in Section 4.1(b) of the Trust Agreement. The Administrator may, at its sole option, designate Receivables that were deemed Temporarily Excluded Receivables on any prior date to no longer be deemed Temporarily Excluded Receivables as long as after such designation by the Administrator, all of the Pool Composition Tests either will remain satisfied or will not be adversely affected.
(c) Amortization Events. In connection with the preparation of each Monthly Investor Report, the Servicer will review the Amortization Events and determine whether an Amortization Event occurred during the Collection Period immediately preceding the related Collection Period (after giving effect to any acquisition of Additional Receivables during such Collection Period), and the Monthly Investor Report shall indicate whether or not an Amortization Event has occurred.
(d) Remittance Reports. For as long as the Servicer and the Marketing Agent are depositing Collections pursuant to Section 4.3(b)(ii) and depositing any required Upgrade Payments within two (2) Business Days after the identification that all of the terms and conditions related to such Upgrade Offer have been satisfied by the related Obligor, the Servicer will provide a written report (which may be electronically submitted) to the Indenture Trustee and the Note Paying Agent on each such deposit or remittance date setting forth (x) the aggregate dollar amount deposited or remitted into the Collection Account by the Servicer, the Marketing Agent or an Originator on such date, (y) the aggregate dollar amount of Collections deposited by the Servicer on such date and (z) the aggregate number of Upgrade Offers accepted since the deposit or remittance date immediately preceding the related deposit or remittance date, and the aggregate amount of Upgrade Payments remitted by the Marketing Agent or an Originator on such date.
Section 3.6 Review of Servicer's Records. The Servicer will maintain records and documents relating to its performance under this Agreement according to its customary business practices. Upon reasonable request not more than once during any calendar year, and with reasonable notice, the Servicer will give the Issuer, the Depositor, the Parent Support Provider, the Administrator, the Owner Trustee and the Indenture Trustee (or their representatives) access to the records and documents to conduct a review of the Servicer's performance under this Agreement. Any access or review will be conducted by all parties at the same time at the Servicer's offices during its normal business hours at a time reasonably convenient to the Servicer and in a manner that will minimize disruption to its business operations. Any access or review will be subject to the Servicer's security, confidentiality and privacy policies and any regulatory, legal and data protection policies. Notwithstanding the foregoing, the permissive right of the Indenture Trustee to access or review any records of the Servicer shall not be deemed to be an obligation of the Indenture Trustee to do so.
12
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Section 3.7 Servicer's Authorized and Responsible Persons. On or before the Closing Date, the Servicer will notify the Indenture Trustee and the Owner Trustee and provide a specimen signature of each Person who (a) is authorized to give instructions and directions to the Indenture Trustee and the Owner Trustee on behalf of the Servicer and (b) is a Responsible Person for the Servicer. The Servicer may change such Persons at any time by notifying the Indenture Trustee and the Owner Trustee.
Section 3.8 Servicer's Fees. As compensation for performing its obligations under this Agreement, the Servicer will be paid the Servicing Fee. On each Payment Date, the Issuer will pay the Servicing Fee to the Servicer according to Section 8.2 of the Indenture. In addition, the Servicer may retain any Supplemental Servicing Fees. The Servicer will also receive the Temporarily Excluded Receivables Servicing Fee on each Payment Date, which will be payable solely from Collections on the Temporarily Excluded Receivables, as set forth in Section 3.5(b).
Section 3.9 Servicer's Expenses. Except as otherwise stated in this Agreement, the Servicer will pay all its expenses for servicing the Receivables under this Agreement, including fees and expenses of legal counsel and independent accountants, taxes imposed on the Servicer and expenses to prepare reports, certificates or notices under this Agreement.
Section 3.10 Custodian.
(a) Appointment of Custodian. To reduce administrative costs and facilitate the servicing of the Receivables by the Servicer, the Issuer appoints Cellco, in its capacity as the Servicer, to act as the Custodian of the Receivables for the Issuer and the Indenture Trustee (for the benefit of the Secured Parties), as their interests may appear. Cellco accepts the appointment and agrees to perform the custodial obligations in this Section 3.10.
(b) Custody of Receivable Files. The Custodian will hold and maintain in custody the following documents for each Receivable (the "Receivable File") for the benefit of the Issuer and the Indenture Trustee, using reasonable care and according to the Servicing Procedures:
(i) the original Receivable (or an imaged copy of such Receivable) or an authoritative copy of the Receivable, if in electronic form; and
(ii) all other documents, notices and correspondence relating to the Receivable or the Obligor that the Servicer generates in the course of servicing the Receivable.
Except as stated above, any document in a Receivable File may be a photocopy or in electronic format or may be converted to electronic format at any time. The Custodian will hold and maintain the Receivable Files, including any receivables systems on which the Receivable Files are electronically stored, in a manner that will permit the Servicer and the Issuer to comply with this Agreement and the Indenture Trustee to comply with the Indenture.
(c) Delivery of Receivable Files. The Receivable Files are or will be constructively delivered to the Indenture Trustee, as pledgee of the Issuer under the Indenture, and the Custodian confirms to the Issuer and the Indenture Trustee that it has received the Receivable Files for the Initial Receivables and, by its delivery (in its capacity as Servicer) to the Issuer and the Indenture Trustee of an Acquisition Date Supplement, will be deemed to confirm to the
13
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Issuer and the Indenture Trustee that it has received the Receivable Files for the Additional Receivables. No initial review or any periodic review of the Receivable Files by the Issuer, the Owner Trustee or the Indenture Trustee is required.
(d) Location of Receivable Files. The Custodian will maintain the Receivable Files (or access to any Receivable Files stored in an electronic format) at one of its offices or the offices of one of its custodians in the United States. On request of the Depositor, the Issuer and the Indenture Trustee, the Custodian will provide a list of locations of the Receivable Files.
(e) Access to Receivable Files. The Custodian will give the Servicer access to the Receivable Files and, on request of the Servicer, the Custodian will promptly release any document in the Receivable Files to the Servicer for purposes of servicing the Receivables. The Custodian will give the Depositor, the Issuer and the Indenture Trustee access to the Receivable Files and the receivables systems to conduct a review of the Receivables. Any access or review will be conducted at the Custodian's offices during normal business hours at a time reasonably convenient to the Custodian in a manner that will minimize disruption of its business operations. Any access or review will be subject to the Custodian's legal, regulatory, confidentiality, privacy and data protection policies. Attached hereto as Exhibit A is a copy of the Custodian's security requirements in effect on the date of this Agreement.
(f) Effective Period and Termination. Cellco's appointment as custodian is effective as of the Initial Cutoff Date and will continue until the later of (i) the date on which all obligations of the Issuer have been paid in full and (ii) the date on which such appointment is terminated under this Section 3.10(f). If the Servicer resigns under Section 7.1 or is terminated under Section 7.2, the Servicer's appointment as custodian under this Agreement may be terminated in the same manner as the Servicer may be terminated under Section 7.2. As soon as practicable after any termination of its appointment as custodian and subject to the legal, regulatory, confidentiality, privacy and data protection policies of the Custodian and Cellco, the Custodian will deliver the Receivable Files to the Indenture Trustee or its designee or successor custodian at a place designated by the Indenture Trustee. All reasonable expenses of transferring the Receivable Files to the designee or successor custodian will be paid by the terminated custodian on receipt of an invoice in reasonable detail.
(g) No Agency. Neither the Custodian nor the Servicer shall be deemed to be an agent of the Indenture Trustee, and the Indenture Trustee shall have no liability for the acts or omissions of the Custodian or the Servicer.
Section 3.11 Marketing Agent.
(a) Appointment of Marketing Agent. The Issuer and the Servicer appoint Cellco to act as Marketing Agent for the Receivables. Cellco accepts the appointment and agrees to perform its obligations set forth in this Agreement.
(b) Duties of the Marketing Agent. The Marketing Agent will be required to remit, or to cause the related Originator to remit, to the Collection Account the amounts set forth in Sections 4.3(g), (h) and (i).
14
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(c) Fees and Expenses of the Marketing Agent. Fees and expenses, if any, of the Marketing Agent will be paid by the Originators, as separately agreed to under the Marketing Agent Agency Agreement.
(d) Covenants of the Marketing Agent. The Marketing Agent will not (i) make any Upgrade Offers that waive any obligations of an Obligor under the related device payment plan agreement, (ii) eliminate the obligation of Verizon Wireless to pay off a device payment plan agreement if an Obligor satisfies the related terms and conditions thereof, or (iii) eliminate or impair any third party beneficiary rights of an assignee under an Upgrade Offer, including the right of such assignee to enforce Verizon Wireless' payment obligation under any Upgrade Offer.
Section 3.12 Termination of Upgrade Programs; Credits Related to Upgrade Programs.
(a) To the extent any Upgrade Offer has not been terminated and an Obligor satisfies all of the terms and conditions of such Upgrade Offer in respect of a Receivable, and (i) the Marketing Agent fails to make, or to cause the related Originator to make, the required Upgrade Payment into the Collection Account as set forth in Section 4.3(g) and (ii) the Parent Support Provider fails to make any required Upgrade Payments as set forth in Section 1 of the Parent Support Agreement, the Servicer and the Marketing Agent shall terminate all Upgrade Offers within ten (10) Business Days after the date the Parent Support Provider received notice from the Indenture Trustee that an Upgrade Payment was due under Section 1 of the Parent Support Agreement.
(b) If the Marketing Agent, the relevant Originator and the Parent Support Provider fail to make such Upgrade Payments with respect to an Upgrade Offer, (i) the Servicer shall deliver the notice to Obligors pursuant to Section 3.13 with respect to such Obligors' recoupment rights against Verizon Wireless, and (ii) notwithstanding any failure to deliver such notice, (x) if Cellco is still the Servicer, the Servicer shall give a monthly credit to the Obligor against amounts owing with respect to the new device payment plan agreement resulting from the Upgrade Offer, in an amount equal to the amount due that month under the original device payment plan agreement that is a Receivable, or (y) if Cellco is no longer the Servicer, Cellco, (1) if required, shall give such monthly credit to the Obligor only if Cellco has received notice from the Servicer that the Obligor has paid the amount due in the prior month under the original device payment plan agreement that is a Receivable, and (2) shall cooperate with any Successor Servicer to properly bill and credit such Obligor's account with respect to the Receivable and the new device payment plan agreement related to the Upgrade Offer. Any such monthly credit granted to an Obligor shall be applied directly against the monthly payment due on the new device payment plan agreement and will not be applied in accordance with the Servicer's customary payment application procedures pursuant to its Servicing Procedures, if different. For the avoidance of doubt, if during such time as Cellco is no longer the Servicer, an Obligor remits the full amount due under the related new device payment plan agreement, but does not make a payment to the new Servicer for the original device payment plan agreement, a portion of such amount equal to the amount of the monthly credit granted to such Obligor resulting from the Upgrade Offer in respect of the original device payment plan agreement that is a Receivable shall be paid by Cellco to the new Servicer. In such case, to the extent that all other amounts owed on the related account are current, the Servicer will not consider such account or payments
15
Source: VERIZON ABS LLC, 8-K, 1/23/2020
under the new device payment plan agreement to be Delinquent. In addition, regardless of whether Cellco continues to be the Servicer of any Receivable for which the terms and conditions of an Upgrade Offer (other than the requirement that the Marketing Agent remit, or cause the related Originator to remit, an Upgrade Payment for such Receivable) were satisfied by the related Obligor and for which the Marketing Agent, the related Originator and the Parent Support Provider failed to make the related Upgrade Payment, Cellco shall remit any Collections received on such Receivable to the Collection Account in the time period in which it would have been otherwise obligated to do so.
Section 3.13 Notices to Obligors.
Within ten (10) days following the earlier to occur of (i) a ratings downgrade by each of the Rating Agencies of Verizon to below investment grade, or (ii) a Servicer Termination Event, the Servicer will send a notice to all Obligors indicating (a) that their Receivables have been assigned to the Issuer, and (b)(x) if Cellco has not been removed as Servicer, that the Obligors shall continue to make their payments as they had previously, or (y) if Cellco has been removed as Servicer, the name of the Successor Servicer and any new instructions with respect to their payments. In addition, if the Servicer Termination Event was as a result of the failure of the Marketing Agent to satisfy its obligation to make, or to cause the related Originators to make, required Upgrade Payments pursuant to Section 7.2(a)(i)(y), then Cellco shall also send a notice to (i) all Obligors who have a continuing right to an upgrade, indicating that Cellco has recently failed to make the necessary prepayments with respect to one or more of its customers in connection with an Upgrade Offer, and that if any Obligor chooses to upgrade and Cellco fails to make the related Upgrade Payment with respect to them, such Obligor will still be required to make payments on his or her original device payment plan agreement, but that such Obligor will have a corresponding recoupment right against his or her new device payment plan agreement with Verizon Wireless, and (ii) all Obligors who had initiated upgrades under an Upgrade Offer, indicating that Cellco had failed to make the relevant Upgrade Payment, and stating that such Obligors will continue to have an obligation to make payments on their original device payment plan agreements, but will have a corresponding right of recoupment against their new device payment plan agreements with Verizon Wireless.
ARTICLE IV ACCOUNTS, COLLECTIONS AND APPLICATION OF FUNDS
Section 4.1 Bank Accounts.
(a) Establishment of Bank Accounts. On or before the Closing Date, the Servicer will establish the following segregated accounts or subaccounts at a Qualified Institution (initially the corporate trust department of U.S. Bank National Association), each in the name of "U.S. Bank National Association, as Note Paying Agent for the benefit of the Indenture Trustee, as secured party for Verizon Owner Trust 2020-A", to be designated as follows:
(i) "Collection Account" with account number 272062000;
(ii) "Reserve Account" with account number 272062001;
16
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(iii) "Acquisition Account," as a subaccount of the Collection Account, with account number 272062002; and
(iv) "Negative Carry Account" with account number 272062003.
(b) Control of Bank Accounts. Each of the Bank Accounts will be under the control of the Indenture Trustee so long as the Bank Accounts remain subject to the Lien of the Indenture, except that the Servicer may make deposits into and direct the Note Paying Agent to make deposits into or withdrawals from the Bank Accounts according to the Transaction Documents. The Servicer may direct the Note Paying Agent to withdraw from the Collection Account and pay to the Servicer, or as directed by the Servicer, amounts that are not Available Funds for a Collection Period or that were deposited into the Collection Account in error. Following the payment in full of the Notes and the release of the Bank Accounts from the Lien of the Indenture, the Bank Accounts will be under the control of the Issuer.
(c) Benefit of Accounts; Deposits and Withdrawals. The Bank Accounts and all cash, money, securities, investments, financial assets and other property deposited in or credited to them will be held by the Note Paying Agent for the benefit of the Indenture Trustee as secured party for the benefit of the Secured Parties and, after payment in full of the Notes and the release of the Bank Accounts from the Lien of the Indenture, as agent of the Issuer and as part of the Trust Property. All deposits to and withdrawals from the Bank Accounts will be made according to the Transaction Documents.
(d) Maintenance of Accounts. If an institution maintaining the Bank Accounts ceases to be a Qualified Institution, the Servicer will, with the Indenture Trustee's assistance as necessary, move the Bank Accounts to a Qualified Institution within thirty (30) days.
(e) Compliance. Each Bank Account will be subject to the Account Control Agreement. The Servicer will ensure that the Account Control Agreement requires the Qualified Institution maintaining the Bank Accounts to comply with "entitlement orders" (as defined in Section 8-102 of the UCC) from the Indenture Trustee without further consent of the Issuer, if the Notes are Outstanding, and to act as a "securities intermediary" according to the UCC.
(f) Agreements With Respect to Accounts. The Servicer, the Issuer, the Indenture Trustee and the Securities Intermediary agree as follows:
(i) each of the Bank Accounts is, and will be maintained as, a "securities account" (as defined in Section 8-501 of the UCC);
(ii) the Securities Intermediary is acting, and will act as a "securities intermediary" (as defined in the UCC) with respect to the Bank Accounts;
(iii) this Agreement (together with the Indenture and the Account Control Agreement) is the only agreement entered into among the parties with respect to the Bank Accounts and the parties will not enter into any other agreement related to the Bank Accounts; and
17
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(iv) at the time this Agreement was entered into and the Bank Accounts were established, the Securities Intermediary has one or more offices in the United States of America that maintains the securities accounts.
Section 4.2 Investment of Funds in Bank Accounts.
(a) Permitted Investments. If (i) no Default or Event of Default has occurred and is continuing and (ii) Cellco is the Servicer, the Servicer may instruct the Indenture Trustee to invest any funds in the Collection Account, the Acquisition Account, the Reserve Account and the Negative Carry Account in Permitted Investments and, if investment instructions are received, the Indenture Trustee will direct the Qualified Institution maintaining the Bank Accounts to invest the funds in the Collection Account, the Acquisition Account, the Reserve Account or the Negative Carry Account, as applicable, in those Permitted Investments; provided, that, if on any Payment Date, the amount on deposit in the Acquisition Account (after giving effect to the acquisition of any Additional Receivables on such date) is greater than 25% of the aggregate Note Balance (after giving effect to any payments made on the Notes on such date), the Servicer shall instruct the Indenture Trustee to invest any amounts in the Acquisition Account in excess of such amount in any Permitted Investments, other than (x) any investments set forth in clauses (b) or (c) of the definition of Permitted Investments that are held by or at the Indenture Trustee or (y) any investments set forth in clause (e) of the definition thereof. If (i) the Servicer fails to give investment instructions for any funds in the Collection Account, the Acquisition Account, the Reserve Account or the Negative Carry Account to the Indenture Trustee by 11:00 a.m. New York time (or other time as may be agreed by the Indenture Trustee) on the Business Day before a Payment Date or (ii) the Qualified Institution receives notice from the Indenture Trustee that a Default or Event of Default has occurred and is continuing, the Qualified Institution will invest and reinvest funds in such Bank Account according to the last investment instructions received, if any. If no prior investment instructions have been received or if the instructed investments are no longer available or permitted, the Indenture Trustee will notify the Servicer and request new investment instructions, and the funds will remain uninvested until new investment instructions are received. The Servicer may direct the Indenture Trustee to consent, vote, waive or take any other action, or not to take any action, on any matters available to the holder of the Permitted Investments. If Cellco is not the Servicer, funds on deposit in the Collection Account, the Acquisition Account, the Reserve Account and the Negative Carry Account will remain uninvested. Notwithstanding anything to the contrary in this Section 4.2(a) or in the Transaction Documents, the Servicer shall not allow amounts held in the Collection Account or the Acquisition Account to be invested unless it is able to maintain records on a daily basis as to the amounts realized from the investment of Collections received on each Originator's Receivables.
(b) Maturity of Investments. For so long as Cellco is the Servicer, any Permitted Investments of funds in the Collection Account and the Reserve Account (or any reinvestments of the Permitted Investments) for a Collection Period must mature, if applicable, and be available no later than the second Business Day before the related Payment Date and any Permitted Investments of funds in the Acquisition Account and the Negative Carry Account (or any reinvestments of the Permitted Investments) for a Collection Period must mature or be available overnight. Any Permitted Investments with a maturity date will be held to their maturity, except
18
Source: VERIZON ABS LLC, 8-K, 1/23/2020
that such Permitted Investments may be sold or disposed of before their maturity in connection with the sale or liquidation of the Collateral under Section 5.6 of the Indenture.
(c) No Liability for Investments. None of the Depositor, the Servicer, the Indenture Trustee, the Note Paying Agent or the Qualified Institution maintaining any Bank Account will be liable for the selection of Permitted Investments or for investment losses incurred on Permitted Investments (other than in the capacity as obligor, if applicable).
(d) Continuation of Liens in Investments. The Servicer will not direct the Indenture Trustee or the Note Paying Agent to make any investment of funds or to sell any investment held in the Bank Accounts unless the security interest Granted and perfected in the account in favor of the Indenture Trustee will continue to be perfected in the investment or the proceeds of the sale without further action by any Person.
(e) Investment Earnings. Investment earnings (net of losses and investment expenses) on the Collection Account, the Acquisition Account, the Reserve Account and the Negative Carry Account will be deposited into the Certificate Distribution Account for distribution to the Certificateholders in the priority set forth in Section 4.1(b) of the Trust Agreement.
Section 4.3 Deposits and Payments.
(a) Closing Date and Acquisition Date Deposit. On the Closing Date and on each Acquisition Date, the Servicer will deposit into the Collection Account all amounts received and applied as interest or principal on the Initial Receivables or the Additional Receivables, as applicable, during the period from the related Cutoff Date to two (2) Business Days before the Closing Date or Acquisition Date, as applicable.
(b) Deposit of Collections.
(i) If Cellco is the Servicer and (x) Verizon's long-term unsecured debt is rated equal to or higher than "Baa2" by Moody's and "A" by S&P (the "Monthly Deposit Required Ratings"), (y) Verizon guarantees certain payment obligations of Cellco, as Servicer, as provided in the Parent Support Agreement and (z) no Servicer Termination Event has occurred, the Servicer may deposit Collections into the Collection Account on the second Business Day before each Payment Date.
(ii) For as long as (x) Verizon's long-term unsecured debt is not rated at least the Monthly Deposit Required Ratings, (y) Verizon does not guaranty certain payment obligations of Cellco, as Servicer or (z) a Servicer Termination Event occurs, the Servicer will (1) deposit into the Collection Account all amounts received and applied as interest or principal on the Receivables within two (2) Business Days after identification of receipt of good funds and (2) provide a written report (which may be electronically submitted) to the Indenture Trustee and the Note Paying Agent regarding such deposit set forth in clause (1) above, as required by Section 3.5(d).
(c) Reconciliation of Deposits. If Cellco is the Servicer and for any Payment Date, the sum of (i) Collections for the Collection Period, plus (ii) Acquisition Amounts for the
19
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Payment Date, exceeds the amounts deposited under Section 4.3(b) for the Collection Period, Cellco will deposit an amount equal to the excess into the Collection Account on the second Business Day before the Payment Date. If, for any Payment Date, the amounts deposited under Section 4.3(b) for the Collection Period exceed the sum of (i) Collections for the Collection Period, plus (ii) Acquisition Amounts for the Payment Date, the Indenture Trustee or the Note Paying Agent will pay to Cellco from Available Funds in the Collection Account an amount equal to the excess within two (2) Business Days after Cellco's direction, but no later than the Payment Date. If requested by the Indenture Trustee, Cellco will provide reasonable supporting details for its calculation of the amounts to be deposited or paid under this Section 4.3(c).
(d) Net Deposits. Cellco may make the deposits and payments required by Section 4.3(b) net of Servicing Fees to be paid to Cellco for the Collection Period and amounts the Servicer is permitted to retain under Section 3.8 and be reimbursed for under Section 3.9. The Servicer will account for all deposits and payments in the Monthly Investor Report as if the amounts were deposited and/or paid separately.
(e) No Segregation. Pending deposit in the Collection Account, the Servicer is not required to segregate Collections from its own funds.
(f) Negative Carry Account Deposits. Any Certificateholder may, at its option, deposit funds into the Negative Carry Account on any date.
(g) Deposit of Upgrade Payments. If any Upgrade Offer has not been terminated and an Obligor satisfies all of the terms and conditions of such Upgrade Offer in respect of a Receivable, the Marketing Agent shall deposit, or shall cause the related Originator to deposit, into the Collection Account the related Upgrade Payment, within two (2) Business Days after the identification that all of the terms and conditions related to such Upgrade Offer have been satisfied by the related Obligor in respect of a Receivable; provided, that if the conditions set forth in Section 4.3(b) (i) are satisfied, the Marketing Agent shall deposit, or shall cause the related Originators to deposit, such amounts into the Collection Account on the second Business Day before the Payment Date related to the Collection Period in which the related Obligor has satisfied all of the terms and conditions (for the avoidance of doubt, other than the required prepayment) related to such Upgrade Offer in respect of a Receivable. The parties acknowledge that the failure of the Marketing Agent to deposit, or to cause the related Originator to deposit, into the Collection Account the related Upgrade Payment or otherwise to pay off the Receivable would constitute a breach by the related Originator of its obligation to the Obligor under the Upgrade Contract and that this breach would adversely affect the value of the Receivables, and give the Obligor a claim in recoupment against the related Originator and a right to offset that claim against the amounts that the Obligor would owe to the related Originator under the new device payment plan agreement (each such agreement, a "New Upgrade DPP") entered into by the related Originator (or its agent, on its behalf) pursuant to the Upgrade Contract. The parties hereto intend that the payment by the Marketing Agent or the related Originator of the Upgrade Payment as provided in this Section 4.3(g) shall extinguish such Obligor's claim in recoupment against the related Originator and the Obligor's right to offset the amount of that claim against the amounts that the Obligor would owe under the New Upgrade DPP contemporaneously with such Upgrade Payment by the Marketing Agent or the related Originator. The parties hereto also intend that the payment by the Marketing Agent or the related Originator of the Upgrade
20
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Payment as provided in Section 2.2.1 of the Marketing Agent Agency Agreement shall extinguish each Obligor's claim in recoupment against the "Verizon Originator" described in that Section and the Obligor's right to offset the amount of that claim against the amounts that the Obligor would owe under the new device payment plan agreement entered into by such Verizon Originator (or its agent, on its behalf) pursuant to the Upgrade Contract as described in that Section 2.2.1 contemporaneously with such Upgrade Payment by the Marketing Agent or the related Originator.
(h) Deposit of Credit Payments. If an Obligor is granted a Credit and the application of such Credit to the related Obligor's account results in a shortfall in Collections for the related Collection Period, the Marketing Agent shall deposit, or shall cause the related Originator to deposit, into the Collection Account the related Credit Payment within two (2) Business Days after identification that such Credit was applied to an Obligor account; provided, that if the conditions set forth in Section 4.3(b)(i) are satisfied, the Marketing Agent shall deposit, or shall cause the related Originator to deposit, such amounts into the Collection Account on the second Business Day before the Payment Date related to the Collection Period in which such Credit was applied to an Obligor account.
(i) Deposit of Assumption of Liability Payments. If an Originator or the Servicer allows a device payment plan agreement that is a Receivable to be transferred to a new Obligor, the Marketing Agent shall acquire such Receivable and deposit, or cause the related Originator to acquire and deposit, into the Collection Account an amount equal to the applicable Acquisition Amount for the related Receivable on or prior to the second Business Day before the Payment Date related to the Collection Period in which such transfer occurred.
Section 4.4 Reserve Account; Negative Carry Account; Acquisition Account.
(a) Initial Reserve Account Deposit. On the Closing Date, the Depositor will deposit or cause to be deposited the Required Reserve Amount into the Reserve Account from the net proceeds of the sale of the Notes.
(b) Reserve Account Draw Amount. On or before two (2) Business Days before a Payment Date, the Servicer will calculate the Reserve Account Draw Amount for the Payment Date and will direct the Note Paying Agent to withdraw from the Reserve Account and deposit into the Collection Account on or before the Payment Date (x) the Reserve Account Draw Amount and (y) any amount in excess of the Required Reserve Amount for such Payment Date, after giving effect to the withdrawal of the Reserve Account Draw Amount with respect to such Payment Date.
(c) Negative Carry Account Amounts.
(i) To the extent that the Class A Certificateholder, solely at its option, deposits any amounts into the Acquisition Account, pursuant to Section 4.4(d)(i), the Class A Certificateholder will deposit into the Negative Carry Account an amount equal to the Required Negative Carry Amount related to such amount deposited into the Acquisition Account on such date.
21
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(ii) On or before two (2) Business Days before a Payment Date, the Servicer will calculate the Negative Carry Account Draw Amount for the Payment Date and will instruct the Note Paying Agent to withdraw from the Negative Carry Account and deposit the Negative Carry Account Draw Amount into the Collection Account on or before the Payment Date.
(iii) On each Payment Date, any amounts in the Negative Carry Account in excess of the Required Negative Carry Amount, after giving effect to any acquisition of Receivables on such Payment Date, shall be withdrawn from the Negative Carry Account and deposited into the Certificate Distribution Account, for distribution to the Certificateholders in the priority set forth in Section 4.1(b) of the Trust Agreement.
(iv) On or before the first Payment Date during the Amortization Period, the Servicer will direct the Note Paying Agent to withdraw all funds in the Negative Carry Account and deposit the funds into the Collection Account.
(d) Acquisition Account Amounts.
(i) From time to time, the Class A Certificateholder may, solely at its option, deposit amounts into the Acquisition Account, as set forth in Section 2.5 of the Trust Agreement.
(ii) On or before two (2) Business Days before an Acquisition Date, the Issuer, or the Servicer on its behalf, will direct the Note Paying Agent to withdraw the Additional Receivables Cash Transfer Amount from the Acquisition Account and pay that amount to the Depositor on the Acquisition Date in consideration for the acquisition of Additional Receivables by the Issuer on the Acquisition Date.
(iii) On each Payment Date, any amounts in the Acquisition Account in excess of the Required Acquisition Deposit Amount, after giving effect to any acquisition of Receivables on such Payment Date, shall be withdrawn from the Acquisition Account and deposited into the Certificate Distribution Account, for distribution to the Certificateholders in the priority set forth in Section 4.1(b) of the Trust Agreement.
(iv) On or before the first Payment Date during the Amortization Period, the Servicer will direct the Note Paying Agent to withdraw all funds in the Acquisition Account and deposit the funds into the Collection Account.
(e) Release of Funds. The Indenture Trustee shall, at such time as there are no Notes outstanding, release any remaining portion of the Collection Account from the Lien of the Indenture and release to or to the order of the Issuer or, in the case of the Reserve Account, to the Depositor.
Section 4.5 Direction to Indenture Trustee for Distributions. On or about the 15th day of each month, and in no case later than at least two (2) Business Days before each Payment Date, the Servicer will direct the Indenture Trustee or Note Paying Agent (based on the most recent Monthly Investor Report) to make the withdrawals, deposits, distributions and payments
22
Source: VERIZON ABS LLC, 8-K, 1/23/2020
required to be made on the Payment Date under Section 8.2 of the Indenture and Section 4.3(c) of this Agreement.
ARTICLE V DEPOSITOR
Section 5.1 Depositor's Representations and Warranties. The Depositor represents and warrants to the Issuer as of the Closing Date and as of each Acquisition Date, on which representations and warranties the Issuer is relying in purchasing the Depositor Transferred Property and which will survive the transfer and assignment of the Depositor Transferred Property by the Depositor to the Issuer under this Agreement and the pledge of the Depositor Transferred Property by the Issuer to the Indenture Trustee under the Indenture:
(a) Organization and Good Standing. The Depositor is a validly existing limited liability company in good standing under the laws of the State of Delaware and has full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party.
(b) Due Qualification. The Depositor is duly qualified to do business, is in good standing as a foreign limited liability company (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the conduct of its business requires such qualification, licenses or approvals, except where the failure to so qualify or obtain licenses or approvals would not reasonably be expected to have a Material Adverse Effect.
(c) Due Authorization. The execution, delivery, and performance of this Agreement and each other Transaction Document to which it is a party, have been duly authorized by the Depositor by all necessary limited liability company action on the part of the Depositor.
(d) No Proceedings. There are no actions, suits, investigations or other proceedings pending, or to its knowledge threatened, against the Depositor or any of its properties: (i) asserting the invalidity of this Agreement or any other Transaction Document to which it is a party; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party; or (iii) seeking any determination or ruling that might have a Material Adverse Effect on the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document to which it is a party.
(e) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given to it, if any, in connection with the execution and delivery of this Agreement and each other Transaction Document to which it is a party and the performance of the transactions contemplated by this Agreement or any other Transaction Document by the Depositor, in each case, have been duly obtained, effected or given and are in full force and effect, except for those which the failure to obtain would not reasonably be expected to have a Material Adverse Effect.
23
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(f) Binding Obligation. This Agreement and each other Transaction Document to which it is a party constitutes, when duly executed and delivered by each other party hereto and thereto, a legal, valid and binding obligation of the Depositor, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar Laws affecting creditors' rights generally or by general principles of equity.
(g) No Conflict. The execution and delivery of this Agreement or any other Transaction Document to which it is a party by the Depositor, and the performance by it of the transactions contemplated by the Transaction Documents and the fulfillment of the terms hereof and thereof applicable to the Depositor, (i) do not contravene (A) its limited liability company agreement, (B) any contractual restriction binding on or affecting it or its property, or (C) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, except, in each case of (A), (B) or (C), where such contravention would not reasonably be expected to have a Material Adverse Effect and (ii) do not result in or require the creation of any Adverse Claim upon or with respect to any of its properties.
(h) No Violation. The execution and delivery of this Agreement by the Depositor, the performance by the Depositor of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party and the fulfillment of the terms hereof and thereof applicable to the Depositor will not violate any Law applicable to the Depositor, except where such violation would not reasonably be expected to have a Material Adverse Effect.
Section 5.2 Liability of Depositor.
(a) Liability for Specific Obligations. The Depositor will be liable under this Agreement only for its specific obligations under this Agreement. All other liability is expressly waived and released as a condition of, and consideration for, the execution of this Agreement by the Depositor and the issuance of the Notes. The Depositor will be liable for its willful misconduct, bad faith or gross negligence in performing its obligations under this Agreement.
(b) No Liability of Others. The Depositor's obligations under this Agreement are corporate obligations. No Person will have recourse, directly or indirectly, to any member, manager, officer, director, employee or agent of the Depositor for the Depositor's obligations under this Agreement.
(c) Legal Proceedings. The Depositor will not be required to start, pursue or participate in any legal proceeding that is unrelated to its obligations under this Agreement and that, in its opinion, may result in liability or cause it to pay or risk funds or incur financial liability.
(d) Payment of Taxes. The Depositor will pay all taxes levied or assessed on the Trust Property.
(e) Reliance by Depositor. The Depositor may rely in good faith on the advice of counsel or on any document believed to be genuine and to have been executed by the proper party for any matters under this Agreement.
24
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Section 5.3 Merger, Consolidation, Succession or Assignment. Any Person (a) into which the Depositor is merged or consolidated, (b) resulting from a merger or consolidation to which the Depositor is a party, (c) succeeding to the Depositor's business or (d) that is an Affiliate of the Depositor to whom the Depositor has assigned this Agreement, will be the successor to the Depositor under this Agreement. Within fifteen (15) Business Days after the merger, consolidation, succession or assignment, such Person will (i) execute an agreement to assume the Depositor's obligations under this Agreement and each Transaction Document to which the Depositor is a party (unless the assumption happens by operation of Law), (ii) deliver to the Issuer, the Owner Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that the merger, consolidation, succession or assignment and the assumption agreement comply with this Section 5.3, (iii) deliver to the Issuer, the Owner Trustee and the Indenture Trustee an Opinion of Counsel stating that the security interest in favor of the Issuer in the Depositor Transferred Property and the Indenture Trustee in the Collateral is or will be perfected and (iv) notify the Rating Agencies of the merger, consolidation, succession or assignment.
Section 5.4 Depositor May Own Notes. The Depositor and any Affiliate of the Depositor, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights as any other Person except as limited in any Transaction Document. Notes owned by or pledged to the Depositor or any Affiliate of the Depositor will have an equal and proportionate benefit under the Transaction Documents, except as limited in any Transaction Document.
Section 5.5 Depositor's Authorized and Responsible Persons. On or before the Closing Date, the Depositor will notify the Indenture Trustee and the Owner Trustee and provide specimen signatures of (i) each Person who is authorized to give instructions and directions to the Indenture Trustee and the Owner Trustee on behalf of the Depositor and (ii) each Person who is a Responsible Person for the Depositor. The Depositor may change such Persons at any time by notifying the Indenture Trustee and the Owner Trustee in writing.
Section 5.6 Company Existence. During the term of this Agreement, the Depositor shall keep in full force and effect its existence, rights and franchises as a limited liability company under the Laws of the jurisdiction of its formation and shall obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Transaction Documents and each other instrument or agreement necessary or appropriate to the proper administration of this Agreement and the transactions contemplated hereby.
Section 5.7 No Division. Notwithstanding Section 18- 217 of the Delaware Limited Liability Company Act or the Depositor's limited liability company agreement, for so long as the Notes remain Outstanding, the Depositor shall not divide or enter into a plan of division within the meaning of Section 18- 217 of the Delaware Limited Liability Company Act.
ARTICLE VI SERVICER AND MARKETING AGENT
Section 6.1 Servicer's and Marketing Agent's Representations and Warranties.
25
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(a) The Servicer represents and warrants to the Issuer as of the Closing Date and as of each Acquisition Date, on which representations and warranties the Issuer is relying in purchasing the Depositor Transferred Property and which will survive the transfer and assignment of the Depositor Transferred Property by the Depositor to the Issuer under this Agreement and the pledge of the Depositor Transferred Property by the Issuer to the Indenture Trustee under the Indenture:
(i) Organization and Good Standing. The Servicer is a validly existing partnership in good standing under the laws of the State of Delaware and has full power and authority to own its properties and conduct its servicing business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party.
(ii) Due Qualification. The Servicer is duly qualified to do business, is in good standing as a foreign entity (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the servicing of the Receivables requires such qualification, licenses or approvals, except where the failure to so qualify or obtain licenses or approvals would not reasonably be expected to have a Material Adverse Effect.
(iii) Due Authorization. The execution, delivery, and performance of this Agreement and each other Transaction Document to which it is a party, have been duly authorized by the Servicer by all necessary partnership action on the part of the Servicer.
(iv) No Proceedings. There are no actions, suits, investigations or other proceedings pending, or to its knowledge threatened, against the Servicer or any of its properties: (i) asserting the invalidity of this Agreement or any other Transaction Document to which it is a party; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party; or (iii) seeking any determination or ruling that might have a Material Adverse Effect on the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document to which it is a party.
(v) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given to it, if any, in connection with the execution and delivery of this Agreement and each other Transaction Document to which it is a party and the performance of the transactions contemplated by this Agreement or any other Transaction Document by the Servicer, in each case, have been duly obtained, effected or given and are in full force and effect, except for those which the failure to obtain would not reasonably be expected to have a Material Adverse Effect.
(vi) Binding Obligation. This Agreement and each other Transaction Document to which it is a party constitutes, when duly executed and delivered by each other party hereto and thereto, a legal, valid and binding obligation of the Servicer, enforceable against it in accordance with its terms, except as such enforceability may be
26
Source: VERIZON ABS LLC, 8-K, 1/23/2020
limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar Laws affecting creditors' rights generally or by general principles of equity.
(vii) No Conflict. The execution and delivery of this Agreement or any other Transaction Document to which it is a party by the Servicer, and the performance by it of the transactions contemplated by the Transaction Documents and the fulfillment of the terms hereof and thereof applicable to the Servicer, (i) do not contravene (A) the organizational documents of the Servicer, (B) any contractual restriction binding on or affecting it or its property, or (C) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, except, in each case of (A), (B) or (C), where such contravention would not reasonably be expected to have a Material Adverse Effect and (ii) do not result in or require the creation of any Adverse Claim upon or with respect to any of its properties.
(viii) No Violation. The execution and delivery of this Agreement by the Servicer, the performance by the Servicer of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party and the fulfillment of the terms hereof and thereof applicable to the Servicer will not violate any Law applicable to the Servicer, except where such violation would not reasonably be expected to have a Material Adverse Effect.
(ix) Compliance with Law. It has complied with all Laws applicable to the servicing of the Receivables, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
(x) Servicing Procedures. It has complied in all material respects with the Servicing Procedures with respect to the Receivables.
(b) The Marketing Agent represents and warrants to the Issuer as of the Closing Date and as of each Acquisition Date, on which representations and warranties the Issuer is relying in purchasing the Depositor Transferred Property and which will survive the transfer and assignment of the Depositor Transferred Property by the Depositor to the Issuer under this Agreement and the pledge of the Depositor Transferred Property by the Issuer to the Indenture Trustee under the Indenture:
(i) Organization and Good Standing. The Marketing Agent is a validly existing partnership in good standing under the laws of the State of Delaware and has full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party.
(ii) Due Qualification. The Marketing Agent is duly qualified to do business, is in good standing as a foreign entity (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the conduct of its business requires such qualification, licenses or approvals, except where the failure to
27
Source: VERIZON ABS LLC, 8-K, 1/23/2020
so qualify or obtain licenses or approvals would not reasonably be expected to have a Material Adverse Effect.
(iii) Due Authorization. The execution, delivery, and performance of this Agreement and each other Transaction Document to which it is a party, have been duly authorized by the Marketing Agent by all necessary partnership action on the part of the Marketing Agent.
(iv) No Proceedings. There are no actions, suits, investigations or other proceedings pending, or to its knowledge threatened, against the Marketing Agent or any of its properties: (i) asserting the invalidity of this Agreement or any other Transaction Document to which it is a party; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party; or (iii) seeking any determination or ruling that might have a Material Adverse Effect on the performance by the Marketing Agent of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document to which it is a party.
(v) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given to it, if any, in connection with the execution and delivery of this Agreement and each other Transaction Document to which it is a party and the performance of the transactions contemplated by this Agreement or any other Transaction Document by the Marketing Agent, in each case, have been duly obtained, effected or given and are in full force and effect, except for those which the failure to obtain would not reasonably be expected to have a Material Adverse Effect.
(vi) Binding Obligation. This Agreement and each other Transaction Document to which it is a party constitutes, when duly executed and delivered by each other party hereto and thereto, a legal, valid and binding obligation of the Marketing Agent, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar Laws affecting creditors' rights generally or by general principles of equity.
(vii) No Conflict. The execution and delivery of this Agreement or any other Transaction Document to which it is a party by the Marketing Agent, and the performance by it of the transactions contemplated by the Transaction Documents and the fulfillment of the terms hereof and thereof applicable to the Marketing Agent, (i) do not contravene (A) the organizational documents of the Marketing Agent, (B) any contractual restriction binding on or affecting it or its property, or (C) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, except, in each case of (A), (B) or (C), where such contravention would not reasonably be expected to have a Material Adverse Effect and (ii) do not result in or require the creation of any Adverse Claim upon or with respect to any of its properties.
28
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(viii) No Violation. The execution and delivery of this Agreement by the Marketing Agent, the performance by the Marketing Agent of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party and the fulfillment of the terms hereof and thereof applicable to the Marketing Agent will not violate any Law applicable to the Marketing Agent, except where such violation would not reasonably be expected to have a Material Adverse Effect.
Section 6.2 Liability of Servicer and Marketing Agent.
(a) Liability for Specific Obligations. Each of the Servicer and the Marketing Agent, severally and not jointly, will be liable under this Agreement only for its specific obligations under this Agreement. All other liability is expressly waived and released as a condition of, and consideration for, the execution of this Agreement by the Servicer or the Marketing Agent, as applicable. Each of the Servicer and the Marketing Agent, severally and not jointly, will be liable only for its own willful misconduct, bad faith or gross negligence in performing its obligations under this Agreement.
(b) No Liability of Others. Each of the Servicer's and the Marketing Agent's obligations under this Agreement are corporate obligations. No Person will have recourse, directly or indirectly, to any member, manager, officer, director, employee or agent of the Servicer for the Servicer's obligations or the Marketing Agent for the Marketing Agent's obligations, as applicable, under this Agreement.
(c) Legal Proceedings. The Servicer will not be required to start, pursue or participate in any legal proceeding that is not incidental or related to its obligations to service the Receivables under this Agreement and that in its opinion may result in liability or cause it to pay or risk funds or incur financial liability. The Servicer may in its sole discretion start or pursue any legal proceeding to protect the interests of the Noteholders or the Depositor under the Transaction Documents. The Servicer will be responsible for the fees and expenses of legal counsel and any liability resulting from the legal proceeding.
(d) Force Majeure. Neither the Servicer nor the Marketing Agent will be responsible or liable for any failure or delay in performing its obligations under this Agreement caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, acts of war, terrorism, civil or military disturbances, fire, flood, earthquakes, storms, hurricanes or other natural disasters or failures of mechanical, electronic or communication systems; provided, however that this provision shall not limit the right to remove the Servicer for a Servicer Termination Event as provided in Section 7.2(a), other than with respect to the extension of the grace periods as provided in Section 7.2(a). Each of the Servicer and the Marketing Agent, as applicable, will use commercially reasonable efforts to resume performance as soon as practicable in the circumstances.
(e) Reliance by Servicer and Marketing Agent. Each of the Servicer and the Marketing Agent may rely in good faith on the advice of counsel or on any document believed to be genuine and to have been executed by the proper party for any matters under this Agreement.
Section 6.3 Indemnities of Servicer and the Marketing Agent.
29
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(a) Indemnification.
(i) The Servicer will indemnify the Issuer, the Owner Trustee and the Indenture Trustee (including in its capacity as Note Paying Agent), and their officers, directors, employees and agents (each, an "Indemnified Person") for all fees, expenses, losses, claims, actions, suits, damages and liabilities (including reasonable legal fees and expenses) resulting from the Servicer's (including in its capacity as Custodian) willful misconduct, bad faith or gross negligence in performing its obligations under the Transaction Documents (including such amounts incurred by such parties in defending themselves against any loss, damage or liability and any fees and expenses incurred in connection with any proceedings brought by the Indemnified Person to enforce the Servicer's indemnification or other obligations under this Agreement).
(ii) The Marketing Agent will indemnify the Indemnified Persons for all fees, expenses, losses, claims, actions, suits, damages and liabilities (including reasonable legal fees and expenses) resulting from the Marketing Agent's willful misconduct, bad faith or gross negligence in performing its obligations under the Transaction Documents (including such amounts incurred by such parties in defending themselves against any loss, damage or liability and any fees and expenses incurred in connection with any proceedings brought by the Indemnified Person to enforce the Marketing Agent's indemnification or other obligations under this Agreement).
(b) Proceedings. If an Indemnified Person receives notice of a Proceeding against it, the Indemnified Person will, if a claim for indemnity will be made against the Servicer or the Marketing Agent, as applicable, under this Section 6.3, promptly notify the Servicer or the Marketing Agent, as applicable, of the Proceeding; provided, that the failure to give such notice shall not affect the right of an Indemnified Person to indemnification hereunder to the extent that such failure does not prejudice the rights of the Servicer, the Marketing Agent or the Indemnified Person in such Proceeding. The Servicer or the Marketing Agent, as applicable, may participate in and assume the defense and settlement of a Proceeding at its expense. If the Servicer or the Marketing Agent, as applicable, notifies the Indemnified Person of its intention to assume the defense of the Proceeding, the Servicer or the Marketing Agent, as applicable, will assume such defense with counsel reasonably satisfactory to the Indemnified Person, and in a manner reasonably satisfactory to the Indemnified Person, and the Servicer or the Marketing Agent, as applicable, and will not be liable for fees and expenses of separate counsel to the Indemnified Person unless there is a conflict between the interests of the Servicer or the Marketing Agent, as applicable, and the Indemnified Person. If there is a conflict or if the parties cannot reasonably agree as to the selection of counsel, the Servicer or the Marketing Agent, as applicable, will pay the reasonable fees and expenses of separate counsel to the Indemnified Person. No settlement of the Proceeding in which a claim is brought against the Servicer or the Marketing Agent may be settled in the name of, on behalf of, or in any manner in which the Servicer or the Marketing Agent, as applicable, is understood to acknowledge the validity of any claim without the approval of the Servicer or the Marketing Agent, respectively, and the Indemnified Person, which approvals will not be unreasonably withheld.
(c) Survival of Obligations. Each of the Servicer's and the Marketing Agent's obligations under this Section 6.3, for the period it was the Servicer or the Marketing Agent,
30
Source: VERIZON ABS LLC, 8-K, 1/23/2020
respectively, will survive the Servicer's or the Marketing Agent's, as applicable, resignation or termination, the termination of this Agreement, the resignation or removal of the Owner Trustee or the Indenture Trustee and the termination of the Issuer.
(d) Repayment. If the Servicer or the Marketing Agent makes a payment to an Indemnified Person under this Section 6.3 and the Indemnified Person later collects from others any amounts for which the payment was made, the Indemnified Person will promptly repay those amounts to the Servicer or the Marketing Agent, as applicable.
Section 6.4 Delegation and Contracting. If Cellco is not the Servicer or the Custodian, the Servicer or the Custodian, as applicable, may not delegate to any Person its obligations under this Agreement without the consent of the Issuer. However, no notice or consent will be required for any delegation if Cellco is the Servicer or the Custodian. No notice or consent will be required for any delegation by the Marketing Agent of its obligations under this Agreement. Any of the Servicer, the Custodian or the Marketing Agent may contract with other Persons to perform its obligations under this Agreement. No delegation or contracting will relieve the Servicer, the Custodian or the Marketing Agent, as applicable, of its responsibilities, and the Servicer, the Custodian or the Marketing Agent, respectively, will remain responsible for those obligations. Each of the Servicer, the Custodian and the Marketing Agent will be responsible for the fees of its delegates and contractors, as applicable.
Section 6.5 Servicer May Own Notes. The Servicer and any Affiliate of the Servicer, may, in its individual or any other capacity, become the owner or pledgee of Notes with the same rights as it would have if it were not the Servicer or an Affiliate of the Servicer, except as otherwise stated in any Transaction Document.
Section 6.6 Annual Statement as to Compliance. Within ninety (90) days after the end of each fiscal year for which a report on Form 10-K is required to be filed with the Commission by or on behalf of the Issuer (commencing with the fiscal year ended December 31, 2020), the Servicer will deliver an Officer's Certificate to the Administrator, the Depositor, the Owner Trustee and the Indenture Trustee to the effect that (A) a review of the Servicer's activities during the prior fiscal year (or since the Closing Date in the case of the first such Officer's Certificate) and of its performance under this Agreement has been made under the supervision of the officer executing such Officer's Certificate and (B) to the best of his or her knowledge, based on the review, the Servicer has fulfilled in all material respects its obligations under this Agreement, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status of the failure.
Section 6.7 Assessment of Compliance and Accountants' Attestation.
(a) Within ninety (90) days after the end of each fiscal year for which a report on Form 10-K is required to be filed with the Commission by or on behalf of the Issuer (commencing with the fiscal year ended December 31, 2020), the Servicer will:
(i) deliver to the Issuer, the Depositor, the Administrator, the Owner Trustee, the Indenture Trustee and the Rating Agencies a report regarding the Servicer's assessment of compliance with the Servicing Criteria during the immediately preceding
31
Source: VERIZON ABS LLC, 8-K, 1/23/2020
calendar year, including disclosure of any material instance of non-compliance identified by the Servicer, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to the Issuer and signed by an authorized officer of the Servicer, and shall address each of the Servicing Criteria applicable to the Servicer;
(ii) deliver to the Issuer, the Depositor, the Administrator, the Owner Trustee, the Indenture Trustee and the Rating Agencies a report of a registered public accounting firm reasonably acceptable to the Issuer and the Administrator that attests to, and reports on, the assessment of compliance made by the Servicer and delivered pursuant to the preceding paragraph. This attestation shall be delivered in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S‑X under the Securities Act and the Exchange Act;
(iii) cause each Subservicer and each Subcontractor, if any, determined by the Servicer to be "participating in the servicing function" within the meaning of Item 1122 of Regulation AB, to deliver to the Issuer, the Depositor, the Administrator, the Owner Trustee and the Indenture Trustee an assessment of compliance and accountants' attestation as and when provided in paragraphs (i) and (ii) of this Section; and
(iv) if requested by the Administrator, acting on behalf of the Issuer, deliver to the Issuer, the Depositor and the Administrator and any other Person that will be responsible for signing the certification (a "Sarbanes Certification") required by Rules 13a-14(d) and 15d- 14(d) under the Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of an asset-backed issuer with respect to a securitization transaction a certification in the form attached hereto as Exhibit B.
The Servicer acknowledges that the parties identified in clause (a)(iv) above may rely on the certification provided by the Servicer pursuant to such clause in signing a Sarbanes Certification and filing such with the Commission. The Administrator, acting on behalf of the Issuer, will not request delivery of a certification under clause (a)(iv) above unless the Depositor is required under the Exchange Act to file an annual report on Form 10‑K with respect to an asset-backed issuer whose asset pool includes receivables.
(b) Each assessment of compliance provided by a Subservicer pursuant to Section 6.7(a)(iii) shall address each of the Servicing Criteria specified on a certification to be delivered by such Subservicer to the Servicer, the Issuer, the Depositor and the Administrator on or prior to the date of such appointment. An assessment of compliance provided by a Subcontractor pursuant to Section 6.7(a)(iii) need not address any elements of the Servicing Criteria other than those specified by the Servicer and the Issuer on the date of such appointment.
ARTICLE VII SERVICER RESIGNATION AND TERMINATION; SUCCESSOR SERVICER
Section 7.1 No Resignation. The Servicer will not resign as Servicer under this Agreement unless it determines it is legally unable to perform its obligations under this Agreement. The Servicer will notify the Issuer, the Parent Support Provider, the Owner Trustee and the Indenture Trustee of its resignation as soon as practicable after it determines it is required to resign, together with an Opinion of Counsel supporting its determination. The Issuer will
32
Source: VERIZON ABS LLC, 8-K, 1/23/2020
promptly notify the Rating Agencies of any resignation of the Servicer. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, immediately upon the resignation of Cellco as Servicer pursuant to this Section 7.1, Cellco, in its individual capacity, will be required to assume the obligations of the Servicer to acquire Receivables as set forth in Sections 3.4 and 4.7 of the Master Trust Receivables Transfer Agreement and Sections 2.5 and 2.6 of this Agreement without further action.
Section 7.2 Servicer Termination Events.
(a) Servicer Termination Events. The following events will each be a "Servicer Termination Event":
(i) (x) the Servicer fails to deposit, or deliver to the Owner Trustee or the Indenture Trustee for deposit, any Collections required to be delivered under this Agreement; (y) so long as Cellco is the Servicer, the Marketing Agent fails to deposit, or to cause the related Originators to deposit, into the Collection Account any Upgrade Payments required to be delivered under this Agreement, or (z) so long as Cellco is the Servicer, the Parent Support Provider fails to make any payments with respect to the items set forth in clause (x) or clause (y) above, to the extent the Servicer, or the Marketing Agent or any related Originator, respectively, fails to do so, and, in each case, which such failure continues for five (5) Business Days after the Servicer, the Marketing Agent or the Parent Support Provider, as applicable, receives written notice of the failure from the Owner Trustee or the Indenture Trustee, or a Responsible Person of the Servicer, the Marketing Agent or the Parent Support Provider, as applicable, obtains actual knowledge of the failure; or
(ii) the Servicer (including in its capacity as Custodian) fails to observe or to perform any obligation under this Agreement, other than as set forth in clause (i) or (iii), which failure has a material adverse effect on the Noteholders and continues for ninety (90) days after the Servicer receives written notice of the failure from the Owner Trustee, the Indenture Trustee or the Noteholders of at least a majority of the Note Balance of the Controlling Class; or
(iii) so long as Cellco is the Servicer, the failure by (x) the Marketing Agent to make, or to cause the related Originators to make, (i) any payments required to be paid by the Marketing Agent, including without limitation Credit Payments or (ii) payments relating to the acquisition by the Marketing Agent or the related Originators of Receivables that are subject to certain transfers, but not including Upgrade Payments, or (y) the Parent Support Provider to make any payments set forth in clause (x) above, to the extent that the Marketing Agent or any related Originator fails to do so, and in either case, that continues for ten (10) Business Days after the Marketing Agent or Parent Support Provider, as applicable, receives written notice of the failure from the Owner Trustee or the Indenture Trustee, or a Responsible Person of the Marketing Agent or the Parent Support Provider, as applicable, obtains actual knowledge of the failure; or
(iv) an Insolvency Event of the Servicer occurs;
33
Source: VERIZON ABS LLC, 8-K, 1/23/2020
provided, however, that a delay or failure of performance referred to in clauses (i), (ii) or (iii) above for an additional period of sixty (60) days will not constitute a Servicer Termination Event if such delay or failure was caused by force majeure or other similar occurrence, as further described in Section 6.2(d).
(b) Notice of Servicer Termination Event. The Servicer will notify the Issuer, the Owner Trustee and the Indenture Trustee of any Servicer Termination Event or any event that with the giving of notice or passage of time, or both, would become a Servicer Termination Event, no later than five (5) Business Days after a Responsible Person of the Servicer has received written notice of or has actual knowledge of the event. If a Servicer Termination Event occurs, the Issuer will promptly notify the Rating Agencies and the Asset Representations Reviewer.
(c) Removal. If a Servicer Termination Event occurs and is continuing, the Indenture Trustee may and, if directed by the Noteholders of a majority of the Note Balance of the Controlling Class, must remove the Servicer and terminate its rights and obligations under this Agreement by notifying the Servicer, the Issuer, the Parent Support Provider, the Owner Trustee, and the Secured Parties. The notice of termination will state the date the termination will be effective. On receipt of the notice, the Issuer will promptly notify the Rating Agencies, and the Owner Trustee will promptly notify the Certificateholders. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, immediately upon the removal of Cellco as Servicer pursuant to this Section 7.2, Cellco, in its individual capacity, shall assume the obligations of the Servicer to acquire Receivables as set forth in Sections 3.4 and 4.7 of the Master Trust Receivables Transfer Agreement and Sections 2.5 and 2.6 of this Agreement without further action.
(d) Waiver of Servicer Termination Events. The Noteholders of a majority of the Note Balance of the Controlling Class or, if no Notes are Outstanding, the Owner Trustee, at the direction of the Class A Certificateholder, may direct the Indenture Trustee to waive a Servicer Termination Event, except with respect to a failure to make required deposits to or payment from any of the Bank Accounts, and the consequences thereof. Upon the waiver, the Servicer Termination Event will be deemed not to have occurred. No waiver will extend to any other Servicer Termination Event or impair a right relating to any other Servicer Termination Event. The Issuer will promptly notify the Rating Agencies of any waiver.
Section 7.3 Continue to Perform. If the Servicer resigns under Section 7.1, it will continue to perform its obligations as Servicer under this Agreement until the earlier to occur of (a) a Successor Servicer accepting its engagement as Servicer under Section 7.4 or (b) the date the Servicer is legally unable to act as Servicer. If the Servicer is terminated under this Agreement, it will continue to perform its obligations as Servicer under this Agreement until the date stated in the notice of termination. If Cellco is the resigning or removed Servicer, Cellco shall (x) remit any amounts due on the Receivables that are remitted to Cellco in error, rather than to the Successor Servicer as set forth in the notice sent to Obligors under Section 3.13, and provide the Successor Servicer with any necessary information regarding the amount remitted to the Successor Servicer by Cellco and the Receivable for which such amount was remitted and (y) continue to perform its remittance obligations set forth in Section 3.12(b) for as long as any
34
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Receivable continues to have a Principal Balance or until this Agreement is terminated as set forth in Section 8.3.
Section 7.4 Successor Servicer.
(a) Engagement of Successor Servicer; Indenture Trustee to Act.
(i) If the Servicer resigns or is terminated under this Agreement, the Indenture Trustee will promptly engage an institution having a net worth of not less than $50,000,000 whose regular business and operations includes the servicing of consumer receivables and can accommodate the servicing of device payment plan agreements, as the successor to the Servicer under this Agreement (the "Successor Servicer") and successor to the Administrator under Section 3.4 of the Administration Agreement.
(ii) If no Person has accepted the engagement as Successor Servicer when the Servicer stops performing its obligations, the Indenture Trustee, without further action, will be automatically appointed the Successor Servicer to perform the obligations of the Servicer (other than any obligations specifically excluded) until such time as another Successor Servicer shall accept engagement as Successor Servicer. If the Indenture Trustee becomes the Successor Servicer, it (A) will do so in its individual capacity and not in its capacity as Indenture Trustee and, accordingly, Article VI of the Indenture will be inapplicable to the Indenture Trustee solely in its capacity as Successor Servicer and (B) may appoint as Servicer any one of its Affiliates, but the Indenture Trustee, in its capacity as Successor Servicer, will be liable for the actions and omissions of such Affiliate. If the Indenture Trustee is unwilling or legally unable to act as Successor Servicer, it will appoint, or petition a court of competent jurisdiction to appoint, an institution having a net worth of not less than $50,000,000 whose regular business and operations includes the servicing of consumer receivables and can accommodate the servicing of device payment plan agreements, as successor to the Servicer under this Agreement. The Indenture Trustee will be released from its obligations as Successor Servicer on the date that a new Servicer accepts its engagement as Successor Servicer.
(b) Acceptance of Engagement. The Successor Servicer will accept its engagement by assuming the Servicer's obligations under this Agreement or entering into an amendment to this Agreement or a new servicing agreement on substantially the same terms as this Agreement, in a form acceptable to the Owner Trustee and the Indenture Trustee. The Successor Servicer will deliver a copy of the assumption, amendment or new servicing agreement to the other parties and the Indenture Trustee. The Successor Servicer (other than the Indenture Trustee as Successor Servicer) will accept its engagement as Administrator according to Section 3.5 of the Administration Agreement. Promptly following a Successor Servicer's acceptance of its engagement, the Indenture Trustee will notify the Issuer, the Owner Trustee and the Secured Parties of the engagement. On receipt of a notice of engagement, the Issuer will promptly notify the Rating Agencies and the Asset Representations Reviewer, and the Owner Trustee will promptly notify the Certificateholders. Any Successor Servicer will agree to provide to Cellco any information relating to payments received from Obligors (including any payments received on a Receivable that was the subject of an upgrade for which none of the Marketing Agent, the related Originator or the Parent Support Provider deposited a required Upgrade Payment),
35
Source: VERIZON ABS LLC, 8-K, 1/23/2020
delinquencies in payments by Obligors, any Written-Off Receivables and any other information related to the Obligors and the Receivables required by Cellco to service the accounts of which any Receivables are a part, including, but not limited to, granting and applying credits to any account for which none of the Marketing Agent, the related Originator or the Parent Support Provider remitted an Upgrade Payment, as set forth in Section 3.12(b). Any Successor Servicer will agree to be bound by the terms and conditions of the legal, regulatory, privacy and data protection policies set forth in Exhibit A attached hereto to the extent such Successor Servicer receives information from Cellco or any of its Affiliates relating to the Receivables. For the avoidance of doubt, no Successor Servicer will be required to assume or undertake the obligations of Cellco, as Servicer, under Sections 3.4 and 4.7 of the Master Trust Receivables Transfer Agreement or Sections 2.5 and 2.6 of this Agreement. No Successor Servicer shall have any liability for the acts or omissions of any predecessor Servicer.
(c) Compensation of Successor Servicer. The Indenture Trustee may make arrangements for the compensation of the Successor Servicer out of Collections as it and the Successor Servicer may agree. In addition to the Servicing Fee, on the date of its appointment as Successor Servicer, such Successor Servicer will receive a fee of $150,000 payable pursuant to Section 8.2(c) or 8.2(e) of the Indenture, as applicable, and thereafter, will be entitled to the Additional Successor Servicer Fee, which will be paid in accordance with the priorities set forth in Section 8.2(c) or 8.2(e) of the Indenture, as applicable.
(d) Transfer of Authority. On the effective date of the Servicer's resignation or termination or the later date that the Servicer stops performing its obligations, and solely to the extent the Successor Servicer is an entity other than the Indenture Trustee, all rights and obligations of the Servicer under this Agreement and of the Administrator under the Administration Agreement will become the rights and obligations of the Successor Servicer, including as successor Administrator. For the avoidance of doubt, (x) the resignation or removal of Cellco as Servicer will not result in the termination of Cellco's duties as Marketing Agent and (y) if the Indenture Trustee is the Successor Servicer, Cellco will continue to act as Administrator under the Administration Agreement, to the extent it is able to continue to perform thereunder pursuant to the terms of the Administration Agreement.
(e) Authority of Issuer and Indenture Trustee. The Issuer and the Indenture Trustee are authorized to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents, and to do all other acts or things necessary or advisable to effect the termination and replacement of the Servicer.
Section 7.5 Transition of Servicing.
(a) Cooperation on Termination. On its resignation or termination, the Servicer will cooperate with the Issuer, the Owner Trustee, the Indenture Trustee and the Successor Servicer in effecting (i) the termination of its rights and obligations under this Agreement and (ii) an orderly transition of such rights and obligations to the Successor Servicer.
(b) Transfer of Cash, Receivable Files and Records. As soon as practicable after the effective date of its resignation or termination, the predecessor Servicer will (i) transfer to the Successor Servicer all funds relating to the Receivables that are held or later received by the
36
Source: VERIZON ABS LLC, 8-K, 1/23/2020
predecessor Servicer and (ii) deliver to the Successor Servicer the Receivable Files and the accounts and records maintained by the Servicer. The Servicer will not be obligated to provide, license or assign its processes, procedures, models, servicing software or other applications to any Successor Servicer or any third party, or provide anything covered by a restriction on transfer or assignment or a confidentiality agreement or otherwise restricted by legal, regulatory, privacy or data protection policies.
(c) Expenses of Servicing Transition. All reasonable expenses incurred by the Issuer, the Owner Trustee, the Indenture Trustee and the Successor Servicer in connection with (i) the transition of servicing rights and obligations to the Successor Servicer and (ii) amending this Agreement or entering into an assumption agreement or new agreement to reflect a succession of the Servicer will be paid by the resigning or terminated Servicer on receipt of an invoice in reasonable detail.
Section 7.6 Merger, Consolidation, Succession or Assignment. Any Person (a) into which the Servicer is merged or consolidated, (b) resulting from a merger or consolidation to which the Servicer is a party, (c) succeeding to the Servicer's business or (d) that is an Affiliate of the Servicer to whom the Servicer has assigned this Agreement, will be the successor to the Servicer under this Agreement. Within fifteen (15) Business Days after the merger, consolidation, succession or assignment, such Person will (i) execute an agreement to assume the Servicer's obligations under this Agreement and each Transaction Document to which the Servicer is a party (unless the assumption happens by operation of Law), (ii) deliver to the Issuer, the Owner Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that the merger, consolidation, succession or assignment and the assumption agreement comply with this Section 7.6 and (iii) notify the Rating Agencies of the merger, consolidation, succession or assignment.
ARTICLE VIII TERMINATION
Section 8.1 Optional Acquisition of Receivables; Clean-Up Redemption of Notes.
(a) Optional Acquisition. On each Payment Date following the last day of a Collection Period as of which the aggregate Principal Balance of the Receivables shall be equal to or less than 10% of the aggregate Principal Balance of the Receivables as of the Closing Date, the Class A Certificateholder (for as long as the Class A Certificateholder is an Originator or an Affiliate of the Originators), with the consent of the Administrator, on behalf of the Issuer, shall have the option to acquire, as of the end of the immediately preceding Collection Period, any Receivables remaining in the Trust Property on such date by transferring to the Issuer an amount equal to the Optional Acquisition Amount (the "Optional Acquisition"), and to redeem the Notes, in whole but not in part (the "Clean-Up Redemption") without any Make-Whole Payment (other than any Make-Whole Payments already due and payable on such date).
(b) Exercise of Optional Acquisition and Clean-Up Redemption of Notes. The Class A Certificateholder may exercise its option set forth in Section 8.1(a) by notifying the Issuer, the Servicer, the Indenture Trustee, the Owner Trustee and the Rating Agencies, in writing, at least ten (10) days before the Payment Date on which the Optional Acquisition is to be exercised,
37
Source: VERIZON ABS LLC, 8-K, 1/23/2020
After receiving such notice, the Indenture Trustee will promptly notify the Noteholders of the resulting Clean-Up Redemption and provide instructions for surrender of the Notes for final payment including all accrued and unpaid interest and any applicable Make-Whole Payments already due and payable on the Notes, as set forth in Section 10.1(a) of the Indenture.
On the Payment Date related to the Collection Period in which the Optional Acquisition is exercised, the Class A Certificateholder will deposit into the Collection Account the acquisition amount for such remaining Receivables as set forth in Section 8.1(a) equal to the fair market value of such Receivables as of the last day of the Collection Period immediately preceding such Payment Date as agreed upon by the Class A Certificateholder and the Issuer (the "Optional Acquisition Amount"); provided that the transfer may only occur if the Optional Acquisition Amount, together with any amounts on deposit in the Bank Accounts, is greater than or equal to the sum of (A) the Note Balance of the Notes, any accrued but unpaid interest and any unpaid Make-Whole Payments and (B) all other amounts payable by the Issuer under the Transaction Documents including, but not limited to, all fees, expenses and indemnities owed to the Indenture Trustee and the Owner Trustee under the Transaction Documents as of such date. For the avoidance of doubt, if the Class A Certificateholder and the Issuer cannot agree on the Optional Acquisition Amount, the Class A Certificateholder will not be permitted to exercise its option set forth in Section 8.1(a). On the Payment Date on which the Optional Acquisition is to be exercised, the Indenture Trustee shall transfer any amounts on deposit in the Reserve Account, the Acquisition Account and the Negative Carry Account into the Collection Account. Upon the exercise of the Optional Acquisition, the Notes will be redeemed and paid in full.
Section 8.2 Optional Redemption of Notes.
(a) Optional Redemption. On any Payment Date on and after the Payment Date in February 2021, the Class A Certificateholder (for as long as the Class A Certificateholder is an Originator or an Affiliate of the Originators), with the consent of the Administrator, on behalf of the Issuer, shall have the option to redeem the Notes, in whole but not in part (the "Optional Redemption"), with a required Make-Whole Payment.
(b) Exercise of Optional Redemption. The Class A Certificateholder may exercise its option set forth in Section 8.2(a) by notifying the Issuer, the Servicer, the Indenture Trustee, the Owner Trustee and the Rating Agencies, in writing, at least ten (10) days before the Payment Date on which the Optional Redemption is to be exercised. After receiving such notice, the Indenture Trustee will promptly notify the Noteholders of the Optional Redemption and provide instructions for surrender of the Notes for final payment including all accrued and unpaid interest and any applicable Make-Whole Payments due and payable on the Notes, as set forth in Section 10.1(a) of the Indenture.
On the Payment Date on which the Optional Redemption is to be exercised, the Issuer shall transfer the entire pool of Receivables to another Verizon special purpose entity or a third-party purchaser and the party receiving the Receivables shall cause the acquisition amount received by the Issuer for the Receivables to be deposited by the Issuer (or the Servicer, on its behalf) into the Collection Account, which amount shall be equal to the fair market value of such Receivables as of the last day of the Collection Period immediately preceding such Payment Date as agreed upon by the Class A Certificateholder and the Issuer; provided that the transfer
38
Source: VERIZON ABS LLC, 8-K, 1/23/2020
may only occur if the amount received in connection with any such transfer, together with any amounts on deposit in the Bank Accounts, is greater than or equal to the sum of (A) the Note Balance of the Notes, any accrued but unpaid interest and any unpaid Make-Whole Payments and (B) all other amounts payable by the Issuer under the Transaction Documents including, but not limited to, all fees, expenses and indemnities owed to the Indenture Trustee and the Owner Trustee under the Transaction Documents as of such date. On the Payment Date on which the Optional Redemption is to be exercised, the Indenture Trustee shall transfer any amounts on deposit in the Reserve Account, the Acquisition Account and the Negative Carry Account into the Collection Account. Upon the exercise of the Optional Redemption, the Notes will be redeemed and paid in full.
Section 8.3 Termination. This Agreement will terminate on the earlier to occur of (a) the date upon which the last remaining Receivable is paid in full, settled, sold or written off and any amounts received are applied and (b) the Issuer is terminated under Section 8.1 of the Trust Agreement.
ARTICLE IX OTHER AGREEMENTS
Section 9.1 Financing Statements.
(a) Filing of Financing Statements. The Depositor will file financing and continuation statements, and amendments to the statements, in the jurisdictions and with the filing offices necessary to perfect the Issuer's interest in the Depositor Transferred Property. The Depositor will promptly deliver to the Issuer and the Indenture Trustee file-stamped copies of, or filing receipts for, any financing statement, continuation statement and amendment to a previously filed financing statement.
(b) Issuer and Indenture Trustee Authorized to File Financing Statements. The Depositor authorizes the Issuer and the Indenture Trustee (but the Indenture Trustee will not be required to do so) to file financing and continuation statements, and amendments to the statements, in the jurisdictions and with the filing offices as the Issuer or the Indenture Trustee may determine are necessary or advisable to perfect the Issuer's interest in the Depositor Transferred Property. The financing and continuation statements may describe the Depositor Transferred Property as the Issuer or the Indenture Trustee may reasonably determine to perfect the Issuer's interest in the Depositor Transferred Property. The Issuer or the Indenture Trustee (with respect to the Indenture Trustee, solely to the extent it has elected to make such filing) will promptly deliver to the Depositor file-stamped copies of, or filing receipts for, any financing statement, continuation statement and amendment to a previously filed financing statement. The permissive right of the Indenture Trustee to file any financing statement shall not be construed as a duty or obligation.
(c) Relocation of Depositor. The Depositor will notify the Owner Trustee and the Indenture Trustee at least ten (10) days before a relocation of its chief executive office or change in its corporate structure, form of organization or jurisdiction of organization if it could require the filing of a new financing statement or an amendment to a previously filed financing statement under Section 9-307 of the UCC. If required, the Depositor will promptly file new
39
Source: VERIZON ABS LLC, 8-K, 1/23/2020
financing statements or amendments to all previously filed financing statements. The Depositor will maintain its chief executive office within the United States and will maintain its jurisdiction of organization in only one State.
(d) Change of Depositor's Name. The Depositor will notify the Owner Trustee and the Indenture Trustee at least ten (10) days before any change in the Depositor's name that could make a financing statement filed under this Section 9.1 seriously misleading under Section 9-506 of the UCC. If required, the Depositor will promptly file amendments to all previously filed financing statements.
Section 9.2 No Transfer or Lien by Depositor. Except for the transfer and assignment under this Agreement, the Depositor will not transfer or assign any Depositor Transferred Property to another Person or Grant or allow a Lien, other than a Permitted Lien, on an interest in any Depositor Transferred Property. The Depositor will defend the Issuer's interest in the Depositor Transferred Property against claims of third parties claiming through the Depositor.
Section 9.3 Expenses. The Depositor will pay the expenses to perform its obligations under this Agreement and the Issuer's and the Indenture Trustee's reasonable expenses to perfect the Issuer's interest in the Depositor Transferred Property and to enforce the Depositor's obligations under this Agreement.
Section 9.4 Receivables Information.
(a) Servicer's Receivables Systems. On and after the Closing Date or Acquisition Date, as applicable, until a Receivable has been paid in full, acquired or sold to a third party under Section 3.4, the Servicer will mark its receivables systems to indicate clearly that the Receivable is owned by the Issuer and has been pledged to the Indenture Trustee under the Indenture.
(b) List of Receivables. If requested by the Owner Trustee or the Indenture Trustee, the Servicer will furnish a list of Receivables (by loan number) to the Owner Trustee and the Indenture Trustee.
Section 9.5 No Petition. The parties agree that, before the date that is one year and one day (or, if longer, any applicable preference period) after the payment in full of (a) all securities issued by the Depositor or by a trust for which the Depositor was a depositor or (b) the Notes, it will not start or pursue against, or join any other Person in starting or pursuing against, (i) the Depositor or (ii) the Issuer, respectively, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar Law. This Section 9.5 will survive the termination of this Agreement.
Section 9.6 Limited Recourse. Each party agrees that any claim that it may seek to enforce against the Depositor or the Issuer under this Agreement is limited to the Depositor Transferred Property only and is not a claim against the Depositor's or the Issuer's assets as a whole or against assets other than the Depositor Transferred Property.
40
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Section 9.7 Limitation of Liability.
(a) Owner Trustee. This Agreement has been signed on behalf of the Issuer by Wilmington Trust, National Association not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer. In no event will Wilmington Trust, National Association in its individual capacity or as a beneficial owner of the Issuer be liable for the representations, warranties, covenants, agreements or other obligations of the Issuer under this Agreement. For all purposes under this Agreement, the Owner Trustee is subject to, and entitled to the benefits of, the Trust Agreement. Neither the Issuer nor the Owner Trustee will have any liability for any act or failure to act of the Servicer, including any action taken under a power of attorney given under this Agreement.
(b) Indenture Trustee. This Agreement has been signed by U.S. Bank National Association not in its individual capacity but solely in its capacity as Indenture Trustee. In performing its obligations under this Agreement, the Indenture Trustee is subject to, and entitled to the benefits of, the Indenture. The Indenture Trustee will not have any liability for any act or failure to act of the Servicer, the Custodian, the Marketing Agent, the Issuer or any other Person.
Section 9.8 Tax Treatment of Notes. Each of the Depositor and the Servicer agree to treat the Notes as indebtedness for U.S. federal, State and local income and franchise tax purposes.
Section 9.9 Regulation RR Risk Retention. Cellco, as Sponsor, agrees that (i) each of the Sponsor, the Master Trust, each Originator and the nominee of the Originators is under the common control of Verizon and therefore, the nominee of the Originators (which nominee is also the sole equityholder of the Master Trust) is a "majority-owned affiliate" of the Sponsor as defined in the U.S. Credit Risk Retention Rules, (ii) the Sponsor will cause the nominee of the Originators to, and the nominee of the Originators will, retain the Residual Interest on the Closing Date and (iii) the Sponsor will not, and will not permit the Master Trust, the Originators or the nominee of the Originators to, sell, transfer, finance or hedge the Residual Interest except as permitted by the U.S. Credit Risk Retention Rules.
Section 9.10 Cap Collateral Account. If the Cap Counterparty is required to post collateral under the terms of the Cap Agreement, upon written direction and notification of such requirement, the Servicer shall establish a segregated account (the "Cap Collateral Account") at a Qualified Institution that (i) is not affiliated with the Cap Counterparty and (ii) has total assets of at least $10,000,000,000 (the "Cap Custodian"), titled as an account of the Cap Counterparty as depositor and entitlement holder. In the event that the Cap Custodian no longer satisfies the requirements set forth in the immediately preceding sentence, the Issuer, the Servicer and the Cap Counterparty shall use their reasonable best efforts to move the Cap Collateral Account and any collateral posted therein to another financial institution satisfying the requirements set forth in the immediately preceding sentence within sixty (60) calendar days. The Cap Collateral Account shall be subject to a tri-party account control agreement to be entered into among the Cap Counterparty, the Issuer and the Cap Custodian (the "Control Agreement"). The Control Agreement shall provide, among other customary matters, that (x) the Cap Counterparty shall be entitled to originate entitlement orders and instructions, and receive interest and distributions, with respect to the Cap Collateral Account so long as the Issuer has not delivered a notice to the
41
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Cap Custodian and the Cap Counterparty to the effect that the Issuer shall have exclusive control over the Cap Collateral Account, (y) following delivery of such notice of exclusive control the Cap Custodian shall comply with instructions and entitlement orders originated by the Issuer without further consent by the Cap Counterparty, and (z) the Control Agreement shall terminate on the fifth Business Day following delivery of a notice from the Cap Counterparty to the Cap Custodian and the Issuer that the Cap Counterparty has designated an "Early Termination Date" (as defined in the Cap Agreement) in respect of all "Transactions" (as defined in the Cap Agreement) for the reason that the Issuer is the "Defaulting Party" (as defined in the Cap Agreement) or the sole "Affected Party" (as defined in the Cap Agreement) with respect to a "Termination Event" (as defined in the Cap Agreement), unless such notice is contested by the Issuer within such period of five (5) Business Days. The Issuer agrees that it shall not assert exclusive control over, or originate entitlement orders or instructions for the disposition of funds with respect to, the Cap Collateral Account unless the conditions for the exercise of its rights and remedies pursuant to the Cap Agreement are met and such assertion of exclusive control or origination of instructions or entitlement orders is for the purpose of exercising such rights and remedies. The only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, the Cap Collateral Account shall be (i) for application to obligations of the Cap Counterparty to the Issuer under the Cap Agreement in accordance with the terms of the Cap Agreement or (ii) to return collateral to the Cap Counterparty when and as required by the Cap Agreement or applicable law. Investment earnings on the Cap Collateral Account, if any, will be distributed to the Cap Counterparty.
ARTICLE X MISCELLANEOUS
Section 10.1 Amendments.
(a) Amendments to Clarify and Correct Errors and Defects. The parties may amend this Agreement (including Appendix A) to clarify an ambiguity, correct an error or correct or supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement, or to make Benchmark Replacement Conforming Changes, in each case, without the consent of the Noteholders, the Certificateholders or any other Person. The parties may amend any term or provision of this Agreement (including Appendix A) from time to time for the purpose of conforming the terms of this Agreement (including Appendix A) to the description thereof in the Prospectus, without the consent of Noteholders, the Certificateholders or any other Person. The Administrator may amend any term or provision of this Agreement (including Appendix A) from time to time for the purpose of making Benchmark Replacement Conforming Changes, without the consent of Noteholders, the Certificateholders, any party to this Agreement or any other Person. Notice of the occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date, the determination of a Benchmark Replacement and the making of any Benchmark Replacement Conforming Changes will be delivered in writing by the Administrator to the Issuer, the Owner Trustee, a Responsible Person of the Indenture Trustee, the Parent Support Provider, the Sponsor, the Depositor and the Servicer and included in the Monthly Investor Report. Notwithstanding anything in the Transaction Documents to the contrary, upon the delivery of notice to a Responsible Person of the Indenture Trustee and the inclusion of such information in the Monthly Investor Report, the relevant Transaction Documents will be deemed to have been amended to reflect the new Unadjusted
42
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Benchmark Replacement, Benchmark Replacement Adjustment and/or Benchmark Replacement Conforming Changes without further compliance with the amendment provisions of the relevant Transaction Documents.
(b) Other Amendments. Other than as set forth in Section 10.1(c), the parties may amend this Agreement (including Appendix A) to add any provisions to, or change in any manner or eliminate any provisions of, this Agreement or for the purpose of modifying in any manner the rights of the Noteholders under this Agreement, with the consent of the Certificateholders, either (1) without the consent of the Noteholders if (x) the Issuer or the Administrator delivers an Officer's Certificate to the Indenture Trustee and the Owner Trustee stating that the amendment will not have a material adverse effect on the Noteholders, or (y) the Rating Agency Condition is satisfied with respect to such amendment or (2) if the interests of the Noteholders are materially and adversely affected, with the consent of the holders of a majority of the Note Balance of the Controlling Class.
(c) Amendments Requiring Consent of all Affected Noteholders and Certificateholders. No amendment to this Agreement (including Appendix A) may, without the consent of all adversely affected Noteholders and Certificateholders, (i) change the applicable Final Maturity Date on a Note or change the principal amount of or interest rate or Make-Whole Payment on a Note; (ii) modify the percentage of the Note Balance of the Notes or the Controlling Class required for any action; (iii) modify or alter the definition of "Outstanding," "Controlling Class" or "Amortization Events", or (iv) change the Required Reserve Amount, the Required Acquisition Deposit Amount or the Required Negative Carry Amount.
(d) Consent of Indenture Trustee and Owner Trustee. The consent of the Indenture Trustee will be required for any amendment under Sections 10.1(b) or (c) that has a material adverse effect on the rights, obligations, immunities or indemnities of the Indenture Trustee. The consent of the Owner Trustee will be required for any amendment under Sections 10.1(b) or (c) that has a material adverse effect on the rights, obligations, immunities or indemnities of the Owner Trustee, which consent will not be unreasonably withheld.
(e) Opinion of Counsel. Before executing any amendment to this Agreement, the Owner Trustee and the Indenture Trustee shall be entitled to receive and conclusively rely upon, and the Depositor will deliver, an Opinion of Counsel stating that the execution of the amendment is permitted by this Agreement and all conditions precedent thereto have been satisfied.
(f) Notice of Amendments. Promptly after the execution of an amendment, the Depositor will deliver, or will cause the Administrator to deliver, a copy of the amendment to the Indenture Trustee and the Rating Agencies, and the Indenture Trustee will notify the Noteholders of the substance of the amendment.
(g) Noteholder Consent. For any amendment to this Agreement (or Appendix A) requiring the consent of any Noteholders, the Indenture Trustee will, when directed by Issuer Order, notify the Noteholders to request consent and follow its reasonable procedures to obtain consent. It shall not be necessary for the consent of the Noteholders to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall
43
Source: VERIZON ABS LLC, 8-K, 1/23/2020
approve the substance thereof. For the avoidance of doubt, any Noteholder consenting to any amendment shall be deemed to agree that such amendment does not have a material adverse effect on such Noteholder.
Section 10.2 Assignment; Benefit of Agreement; Third-Party Beneficiary.
(a) Assignment. Except as stated in Sections 5.3, 7.4 and 7.6, this Agreement may not be assigned by the Depositor or the Servicer without the consent of the Owner Trustee, the Indenture Trustee, the Certificateholders and the Noteholders of at least 66-2/3% of the Note Balance of the Controlling Class.
(b) Benefit of Agreement; Third-Party Beneficiaries. This Agreement is for the benefit of and will be binding on the parties and their permitted successors and assigns. The Owner Trustee and the Indenture Trustee, for the benefit of the Secured Parties, will be third-party beneficiaries of this Agreement and may enforce this Agreement against the Depositor and the Servicer. No other Person will have any right or obligation under this Agreement.
Section 10.3 Notices.
(a) Notices to Parties. All notices, requests, directions, consents, waivers or other communications to or from the parties must be in writing and will be considered received by the recipient:
(i) for personally delivered, express or certified mail or courier, when received;
(ii) for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;
(iii) for an email, when receipt is confirmed by telephone or reply email from the recipient; and
(iv) for an electronic posting to a password-protected website to which the recipient has access, on delivery of an email (without the requirement of confirmation of receipt) stating that the electronic posting has been made.
(b) Notice Addresses. A notice, request, direction, consent, waiver or other communication must be addressed to the recipient at its address stated in Schedule B, which address the party may change at any time by notifying the other parties.
(c) Notices to Noteholders. Notices to a Noteholder will be considered received by the Noteholder:
(i) for Definitive Notes, for overnight mail, on delivery or, for registered first class mail, postage prepaid, three (3) days after deposit in the mail properly addressed to the Noteholder at its address in the Note Register; or
44
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(ii) for Book-Entry Notes, when delivered under the procedures of the Clearing Agency, whether or not the Noteholder actually receives the notice.
Section 10.4 Agent for Service.
(a) Depositor. The agent for service of the Depositor for this Agreement will be the person holding the office of Secretary of the Depositor at the following address:
Verizon ABS LLC One Verizon Way Basking Ridge, New Jersey 07920
(b) Servicer. The agent for service of the Servicer for this Agreement will be the person holding the office of Secretary of the Servicer at the following address:
Cellco Partnership d/b/a Verizon Wireless One Verizon Way Basking Ridge, New Jersey 07920
(c) Marketing Agent. The agent for service of the Marketing Agent for this Agreement will be the person holding the office of Secretary of the Marketing Agent at the following address:
Cellco Partnership d/b/a Verizon Wireless One Verizon Way Basking Ridge, New Jersey 07920
Section 10.5 GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICTS OF LAW PRINCIPLES). FOR PURPOSES OF THE UCC, NEW YORK SHALL BE DEEMED TO BE THE SECURITIES INTERMEDIARY'S JURISDICTION, AND THE LAW OF THE STATE OF NEW YORK SHALL GOVERN ALL ISSUES SPECIFIED IN ARTICLE 2(1) OF THE HAGUE SECURITIES CONVENTION. NOTWITHSTANDING SECTION 10.1 OF THIS AGREEMENT, THE PARTIES WILL NOT AGREE TO AMEND THIS AGREEMENT TO CHANGE THE GOVERNING LAW TO ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK.
Section 10.6 Submission to Jurisdiction. Each party submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State Court sitting in New York, New York for legal proceedings relating to this Agreement. Each party irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or in the future have to the venue of a proceeding brought in such a court and any claim that the proceeding was brought in an inconvenient forum.
45
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Section 10.7 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY 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 THEREUNDER WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
Section 10.8 No Waiver; Remedies. No party's failure or delay in exercising a power, right or remedy under this Agreement will operate as a waiver. No single or partial exercise of a power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy. The powers, rights and remedies under this Agreement are in addition to any powers, rights and remedies under Law.
Section 10.9 Severability. If a part of this Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining Agreement and will not affect the validity, legality or enforceability of the remaining Agreement.
Section 10.10 Headings. The headings in this Agreement are included for convenience and will not affect the meaning or interpretation of this Agreement.
Section 10.11 Counterparts. This Agreement may be executed in multiple counterparts. Each counterpart will be an original and all counterparts will together be one document.
Section 10.12 Limitation of Rights of the Cap Counterparty. All of the rights of the Cap Counterparty in, to and under this Agreement or any other Transaction Document, other than the Cap Agreement (including, but not limited to, the Cap Counterparty's rights to receive notice of any action hereunder or under any other Transaction Document and to give or withhold consent to any action hereunder or under any other Transaction Document), shall terminate upon the termination of the Cap Agreement in accordance with the terms thereof.
Section 10.13 Intent of the Parties; Reasonableness. The Depositor, the Servicer and the Issuer acknowledge and agree that the purpose of Sections 6.6 and 6.7 of this Agreement is to facilitate compliance by the Issuer and the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission. None of the Depositor, the Administrator nor the Issuer shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder. The Servicer acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Issuer or the Administrator in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB. In connection with this transaction, the Servicer shall cooperate fully with the Administrator and the Issuer to deliver to the Administrator or Issuer, as applicable (including any of its assignees or designees), any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Issuer or the Administrator to permit the Issuer or Administrator (acting on behalf of the Issuer) to comply with the provisions of Regulation AB, together with such disclosures relating to the Servicer, any Subservicer and
46
Source: VERIZON ABS LLC, 8-K, 1/23/2020
the Receivables, or the servicing of the Receivables, reasonably believed by the Issuer or the Administrator to be necessary in order to effect such compliance.
ARTICLE XI
ASSET REPRESENTATIONS REVIEW; DISPUTE RESOLUTION
Section 11.1 Asset Representations Review.
(a) Upon the occurrence of a Delinquency Trigger with respect to any Collection Period, the Servicer will promptly send to the Administrator, the Indenture Trustee and each Noteholder (and to each applicable Clearing Agency for distribution to Note Owners in accordance with the rules of such Clearing Agency) as of the most recent Record Date a notice describing (i) the occurrence of the Delinquency Trigger, and including reasonably detailed calculations thereof, and (ii) the rights of the Noteholders and Note Owners regarding an Asset Representations Review (including a description of the method by which Noteholders and Note Owners may contact the Indenture Trustee in order to request a Noteholder vote in respect of an Asset Representations Review). In connection with the foregoing, upon request from the Servicer, the Indenture Trustee shall provide a list of the Noteholders of record as of the most recent Record Date. The notice provided under this Section 11.1 (a) and the related 10-D that is filed are the only notices that will be provided to Noteholders concerning whether the Delinquency Trigger has occurred.
(b) If the Indenture Trustee notifies the Servicer pursuant to 14.2 of the Indenture that sufficient Noteholders have voted within the required time to initiate an Asset Representations Review of all 60-Day Delinquent Receivables by the Asset Representations Reviewer pursuant to the Asset Representations Review Agreement, then the Servicer shall:
(i) promptly notify the Asset Representations Reviewer and the Indenture Trustee of the number of 60-Day Delinquent Receivables;
(ii) within sixty (60) days after receipt by the Servicer of that notice from the Indenture Trustee, render reasonable assistance, including granting access to copies of any underlying documents and Receivable Files and all other relevant documents, to the Asset Representations Reviewer to facilitate the performance of a review of all 60-Day Delinquent Receivables, pursuant to Section 3.3(a) of the Asset Representations Review Agreement, in order to verify compliance with the representations and warranties made to the Issuer by the Depositor; provided, that the Servicer shall use its best efforts to redact any materials provided to the Asset Representations Reviewer in order to remove any Personally Identifiable Information without changing the meaning or usefulness of the Review Materials; and
(iii) provide such other reasonable assistance to the Asset Representations Reviewer as it requests in order to facilitate its Asset Representations Review of the 60-Day Delinquent Receivables pursuant to the Asset Representations Review Agreement.
Section 11.2 Dispute Resolution.
47
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(a) If (i) the Issuer or the Indenture Trustee (acting on behalf of the Noteholders) or (ii) any Noteholder or Verified Note Owner requests, by written notice to (x) the Indenture Trustee (which will be forwarded to the related Originator or the Servicer as applicable) or (y) the related Originator or the Servicer (in the case of Receivables transferred by the Master Trust) (any such party making a request, the "Requesting Party"), that a Receivable be reacquired or acquired due to an alleged breach of the Eligibility Representation with respect to that Receivable as set forth in Section 3.3 of the Originator Receivables Transfer Agreement or Section 3.3 of the Master Trust Receivables Transfer Agreement, respectively, and the request has not been fulfilled or otherwise resolved to the reasonable satisfaction of the Requesting Party within one-hundred eighty (180) days of the receipt of such request by the related Originator or the Servicer (in the case of Receivables transferred by the Master Trust), then the Requesting Party will have the right to refer the matter, at its discretion, to either mediation (including non-binding arbitration) or third-party binding arbitration pursuant to this Section 11.2. Dispute resolution to resolve reacquisition or acquisition requests will be available regardless of whether Noteholders and Note Owners voted to direct an Asset Representations Review or whether the Delinquency Trigger occurred. The Depositor will provide written direction to the Indenture Trustee instructing it to notify the Requesting Party (directly if the Requesting Party is a Noteholder and through the applicable Clearing Agency for distribution to such Requesting Party, if the Requesting Party is a Note Owner, in accordance with the rules of such Clearing Agency) no later than five (5) Business Days after the end of the 180-day period of the date when the 180-day period ends without resolution by the appropriate party, which written direction will specify the identity of the Requesting Party and the date as of which that 180-day period shall have ended; provided, that the Indenture Trustee shall have no other obligation whatsoever to participate in any dispute resolution, mediation or arbitration to determine if a reacquisition or acquisition request has been resolved within the applicable 180-day period. The Requesting Party must provide notice of its intention to refer the matter to mediation, to refer the matter to arbitration, or to institute a legal proceeding, to the Depositor within thirty (30) days after the delivery of notice of the end of the 180-day period. The Depositor will participate in the resolution method selected by the Requesting Party. For the avoidance of doubt, the Owner Trustee shall have no obligation whatsoever to participate in any dispute resolution, mediation or arbitration to determine if a reacquisition or acquisition request has been resolved within the applicable 180-day period. For the avoidance of doubt, if the Indenture Trustee does not agree to pursue or otherwise be involved in resolving any reacquisition or acquisition request or dispute resolution proceeding, the related Noteholders or Verified Note Owners may independently pursue dispute resolution in respect of such reacquisition or acquisition. If the Indenture Trustee brings a dispute resolution action based on Noteholder direction to do so, the "Requesting Party" shall be deemed to be the requesting Note Owners (or the party to the arbitration) for purposes of the dispute resolution proceeding, including allocation of fees and expenses. The Indenture Trustee shall not be liable for any costs, expenses and/or liabilities allocated to a Requesting Party as part of the dispute resolution proceeding. Further, the Indenture Trustee shall be under no obligation under this Agreement, any other Transaction Document or otherwise to monitor reacquisition or acquisition activity or to independently determine which reacquisition or acquisition requests remain unresolved after one-hundred eighty (180) days.
(b) If the Requesting Party selects mediation (including non-binding arbitration) as the resolution method, the following provisions will apply:
48
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(i) The mediation will be administered by JAMS pursuant to its Mediation Procedures in effect on the date the arbitration is filed.
(ii) The mediator will be impartial, knowledgeable about and experienced with the laws of the State of New York and an attorney specializing in commercial litigation with at least 15 years of experience and who will be appointed from a list of neutrals maintained by JAMS. Upon being supplied a list of at least 10 potential mediators by JAMS each party will have the right to exercise two peremptory challenges within fourteen (14) days and to rank the remaining potential mediators in order of preference JAMS will select the mediator from the remaining attorneys on the list respecting the preference choices of the parties to the extent possible.
(iii) The parties will use commercially reasonable efforts to begin the mediation within thirty (30) days of the selection of the mediator and to conclude the mediation within sixty (60) days of the start of the mediation.
(iv) The fees and expenses of the mediation will be allocated as mutually agreed by the parties as part of the mediation.
(c) If the Requesting Party selects binding arbitration as the resolution method, the following provisions will apply:
(i) The arbitration will be administered by the AAA pursuant its Arbitration Rules in effect on the date the arbitration is filed.
(ii) The arbitral panel will consist of three members, (i) one to be appointed by the Requesting Party within five (5) Business Days of providing notice to the Depositor of its selection of arbitration, (ii) one to be appointed by the Depositor within five (5) Business Days of that appointment and (iii) the third, who will preside over the panel, to be chosen by the two party-appointed arbitrators within five (5) Business Days of the second appointment. If any party fails to appoint an arbitrator or the two party-appointed arbitrators fail to appoint the third within the stated time periods, then the appointments will be made by AAA pursuant to the Arbitration Rules. In each such case, each arbitrator will be impartial, knowledgeable about and experienced with the laws of the State of New York and an attorney specializing in commercial litigation with at least 15 years of experience.
(iii) Each arbitrator will be independent and will abide by the Code of Ethics for Arbitrators in Commercial Disputes in effect as of the date of this Agreement. Prior to accepting an appointment, each arbitrator must promptly disclose any circumstances likely to create a reasonable inference of bias or conflict of interest or likely to preclude completion of the hearings within the prescribed time schedule. Any arbitrator may be removed by AAA for cause consisting of actual bias, conflict of interest or other serious potential for conflict.
(iv) After consulting with the parties, the arbitral panel will devise procedures and deadlines for the arbitration, to the extent not already agreed to by the parties, with the goal of expediting the proceeding and completing the arbitration within ninety (90)
49
Source: VERIZON ABS LLC, 8-K, 1/23/2020
days after appointment. The arbitral panel will have the authority to schedule, hear, and determine any and all motions, including dispositive and discovery motions, in accordance with then-prevailing New York law (including prehearing and post hearing motions), and will do so on the motion of any party to the arbitration.
(v) Notwithstanding whatever other discovery may be available under the Rules, unless otherwise agreed by the parties, each party to the arbitration will be presumptively limited to the following discovery in the arbitration: (A) four witness depositions not to exceed five hours, and (B) one set of interrogations, document requests, and requests for admissions; provided that the arbitral panel will have the ability to grant the parties, or either of them, additional discovery to the extent that the arbitral panel determines good cause is shown that such additional discovery is reasonable and necessary.
(vi) The arbitral panel will make its final determination no later than ninety (90) days after appointment. The arbitral panel will resolve the dispute in accordance with the terms of this Agreement, and may not modify or change this Agreement in any way. The arbitral panel will not have the power to award punitive damages or consequential damages in any arbitration conducted by them. In its final determination, the arbitral panel will determine and award the costs of the arbitration (including the fees of the arbitral panel, cost of any record or transcript of the arbitration, and administrative fees) and reasonable attorneys' fees to the parties as determined by the arbitral panel in its reasonable discretion. The determination in any binding arbitration of the arbitral panel will be in writing and counterpart copies will be promptly delivered to the parties. The determination will be final and non-appealable and may be enforced in any court of competent jurisdiction.
(vii) By selecting binding arbitration, the selecting party is giving up the right to sue in court, including the right to a trial by jury.
(viii) No person may bring class or collective claims in arbitration even if the Arbitration Rules would allow them. Notwithstanding anything herein to the contrary, the arbitral panel may award money or injunctive relief in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party's individual claim.
(d) The following provisions will apply to both mediations and arbitrations:
(i) Any mediation or arbitration will be held in New York, New York; and
(ii) The details and/or existence of any unfulfilled reacquisition or acquisition request, any informal meetings, mediations or arbitration proceedings conducted under this Section 11.2, including all offers, promises, conduct and statements, whether oral or written, made in the course of the parties' attempt to informally resolve an unfulfilled reacquisition or acquisition request, and any discovery taken in connection with any arbitration, will be confidential, privileged and inadmissible for any purpose, including impeachment, in any mediation, arbitration or litigation, or other proceeding (including
50
Source: VERIZON ABS LLC, 8-K, 1/23/2020
any proceeding under this Section 11.2). This information will be kept strictly confidential and will not be disclosed or discussed with any third party (excluding a party's attorneys, experts, accountants and other agents and representatives, as reasonably required in connection with any resolution procedure under this Section 11.2), except as otherwise required by law, regulatory requirement or court order. If any party to a resolution procedure receives a subpoena or other request for information from a third party (other than a governmental regulatory body) for such confidential information, the recipient will promptly notify the other party to the resolution procedure and will provide the other party with the opportunity to object to the production of its confidential information.
[Remainder of Page Left Blank]
51
Source: VERIZON ABS LLC, 8-K, 1/23/2020
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed by its duly authorized officer as of the date and year first above written.
VERIZON ABS LLC, as Depositor
By: Name: Title:
VERIZON OWNER TRUST 2020-A, as Issuer
By: Wilmington Trust, National Association, not in its individual capacity but solely as Owner Trustee of Verizon Owner Trust 2020-A
By: Name: Title:
CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, as Servicer, Marketing Agent and Custodian
By: Name: Title:
Source: VERIZON ABS LLC, 8-K, 1/23/2020
AGREED AND ACCEPTED BY:
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee
By: Name: Title:
Solely with respect to Section 4.1(f):
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Securities Intermediary
By: Name: Title:
WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee
By: Name: Title:
CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, solely with respect to the obligations set forth in Section 7.1, in its individual capacity
By: Name: Title:
Source: VERIZON ABS LLC, 8-K, 1/23/2020
CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, as Sponsor, solely with respect to the obligations set forth in Section 3.5(a)(ii) and Section 9.9
By: Name: Title:
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Schedule A
Schedule of Initial Receivables
Delivered Electronically to Indenture Trustee at Closing
SA-1
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Schedule B
Notice Addresses
1. If to Cellco, in its individual capacity or as Servicer, Marketing Agent, Custodian or Administrator:
Cellco Partnership One Verizon Way Basking Ridge, New Jersey 07920 Attention: Assistant Treasurer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com
2. If to the Depositor:
Verizon ABS LLC One Verizon Way Basking Ridge, New Jersey 07920 Attention: Chief Financial Officer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com
With a copy to:
Cellco Partnership One Verizon Way Basking Ridge, New Jersey 07920 Attention: Assistant Treasurer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com
3. If to the Issuer:
c/o the Owner Trustee at the Corporate Trust Office of the Owner Trustee
With copies to:
Cellco Partnership One Verizon Way Basking Ridge, New Jersey 07920 Attention: Assistant Treasurer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com
SB-1
Source: VERIZON ABS LLC, 8-K, 1/23/2020
4. If to the Parent Support Provider:
Verizon Communications Inc. 1095 Avenue of the Americas New York, New York 10036 Attn: Assistant Treasurer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com
5. If to the Owner Trustee, at the Corporate Trust Office of the Owner Trustee
6. If to the Indenture Trustee, at the Corporate Trust Office of the Indenture Trustee
7. If to S&P:
S&P Global Ratings 55 Water Street New York, New York 10041 Attention: Asset Backed Surveillance Department Telephone: (212) 438-1000 Fax: (212) 438-2649
8. If to Moody's:
Moody's Investors Service, Inc. ABS Monitoring Department 7 World Trade Center 250 Greenwich Street New York, New York 10007 Email: abssurveillance@moodys.com
9. If to the Cap Counterparty:
Bank of America Merrill Lynch 1133 Avenue of the Americas 42nd Floor, NY1-533-42-01 New York, NY 10036-6710 Attention: Agreements & Documentation Facsimile No.: (212) 548-8622
With a copy to: dg.dg_gmg_cid_fax_notices@bofasecurities.com
10. If to the Asset Representations Reviewer:
Pentalpha Surveillance LLC 375 N French Rd Suite 100 Amherst NY 14228
SB-2
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Attention: VZOT 2020-A Transaction Manager Telephone: (716) 418-1634 Fax: (716) 204-5902 Email: notices@pentalphasurveillance.com (with VZOT 2020-A in the subject line)
SB-3
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Appendix A
Usage and Definitions
Verizon Owner Trust 2020-A
Usage
The following usage rules apply to this Appendix, any document that incorporates this Appendix and any document delivered under any such document:
(a) The term "document" includes any document, agreement, instrument, certificate, notice, report, statement or other writing, whether in electronic or physical form.
(b) Accounting terms not defined or not completely defined in this Appendix will have the meanings given to them under generally accepted accounting principles, international financial reporting standards or other applicable accounting principles in effect in the United States on the date of the document that incorporates this Appendix.
(c) References to "Article," "Section," "Exhibit," "Schedule," "Appendix" or another subdivision of or to an attachment are, unless otherwise stated, to an article, section, exhibit, schedule, appendix or subdivision of or an attachment to the document in which the reference appears.
(d) Any document defined or referred to in this Appendix or in any document that incorporates this Appendix means the document as amended, modified, supplemented, restated or replaced, including by waiver or consent, and includes all attachments to and instruments incorporated in the document.
(e) Any statute defined or referred to in this Appendix or in any document that incorporates this Appendix means the statute as amended, modified, supplemented, restated or replaced, including by succession of comparable successor statute, and includes any rules and regulations under the statute and any judicial and administrative interpretations of the statute.
(f) References to "law" or "applicable law" in this Appendix or in any document that incorporates this Appendix include all rules and regulations enacted under such law.
(g) The calculation of any amount as of a Cutoff Date or any other day, unless otherwise stated, will be determined as of the end of that calendar day after the application or processing of any funds, payments and other transactions on that day.
(h) References to deposits, transfers and payments of any funds refer to deposits, transfers or payments of such funds in immediately available funds.
(i) The terms defined in this Appendix apply to the singular and plural forms of those terms.
A-1
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(j) The term "including" means "including without limitation."
(k) References to a Person are also to its permitted successors and assigns, whether in its individual or representative capacity.
(l) In the computation of periods of time from one date to or through a later date, the word "from" means "from and including," the word "to" means "to but excluding," and the word "through" means "to and including."
(m) Except where "not less than zero" or similar language is indicated, amounts determined by reference to a mathematical formula may be positive or negative.
(n) References to a month, quarter or year are, unless otherwise stated, to a calendar month, calendar quarter or calendar year.
(o) No Person will be deemed to have "knowledge" of a particular event or occurrence for purposes of any document that incorporates this Appendix, unless either (i) a Responsible Person of the Person has actual knowledge of the event or occurrence or (ii) the Person has received notice of the event or occurrence according to any Transaction Document.
Definitions
"60-Day Delinquent Receivable" means, for any date of determination, a Receivable for which there are unpaid charges remaining on the account sixty (60) days after the bill's date due; provided that a Written-Off Receivable is not considered a 60-Day Delinquent Receivable.
"AAA" means the American Arbitration Association.
"Account Control Agreement" means the Account Control Agreement, dated as of the Closing Date, among the Issuer, as grantor, the Indenture Trustee, as secured party, and U.S. Bank National Association, in its capacity as both a "securities intermediary" as defined in Section 8- 102 of the UCC and a "bank" as defined in Section 9-102 of the UCC, as amended, restated, supplemented or modified from time to time.
"Accrued Note Interest" means, for a Class and a Payment Date, the sum of the Note Monthly Interest and the Note Interest Shortfall.
"Acquired Receivable" means, for a Collection Period, a Receivable (a) acquired by the Servicer under Section 3.3 of the Transfer and Servicing Agreement, (b) acquired by the Marketing Agent under Section 4.3(i) of the Transfer and Servicing Agreement, (c) reacquired by an Originator under Section 3.4 or 4.6 of the Originator Receivables Transfer Agreement, or (d) acquired by the Servicer under Section 3.4 or 4.7 of the Master Trust Receivables Transfer Agreement and for which, in each case, the acquisition or reacquisition is effective during the Collection Period and the Acquisition Amount is included in Available Funds for the related Payment Date.
A-2
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Acquisition Account" means the subaccount of the Collection Account established under Section 4.1(a) of the Transfer and Servicing Agreement.
"Acquisition Amount" means, for an Acquired Receivable for which the Acquisition Amount is to be included in Available Funds for a Payment Date, the excess of (i) the present value of the Principal Balance of the Receivable as of the last day of the Collection Period immediately preceding the related Collection Period (calculated using the Discount Rate on the basis of a 360-day year of twelve 30-day months and assuming each amount is received at the end of the Collection Period in which the amount is scheduled to be received) over (ii) all cash collections and any other cash proceeds received by the Issuer on the related Receivable from (but excluding) the last day of the Collection Period immediately preceding the related Collection Period to the day on which such Receivable becomes an Acquired Receivable.
"Acquisition Date" means each date during the Revolving Period on which the Issuer acquires Additional Receivables under Section 2.1(b) of the Transfer and Servicing Agreement and the Depositor acquires Additional Receivables under Section 2.1(b) of the Originator Receivables Transfer Agreement or Section 2.1(a) of the Master Trust Receivables Transfer Agreement; provided that there shall be no more than five (5) Acquisition Dates in any calendar month.
"Acquisition Date Supplement" means, for any Collection Period that includes an Acquisition Date, the supplement (which may be incorporated into the Monthly Investor Report) delivered by the Servicer setting forth (a) the aggregate Principal Balance as of the Cutoff Date for the Additional Receivables transferred by the Issuer, (b) the Additional Receivables Transfer Amount for such Acquisition Date, (c) the amount in the Acquisition Account on such Acquisition Date, (d) the Yield Supplement Overcollateralization Amount for such Acquisition Date and (e) the results of the Credit Enhancement Test, the Pool Composition Tests and the Floor Credit Enhancement Composition Tests as of such Acquisition Date.
"Acquisition Deposit Amount" means, for any Payment Date during the Revolving Period, an amount equal to (a) the Required Acquisition Deposit Amount minus (b) the amount on deposit in the Acquisition Account on such Payment Date (before payments under Section 8.2(c) of the Indenture on that Payment Date).
"Additional Originator" has the meaning stated in Section 6.11 of the Originator Receivables Transfer Agreement.
"Additional Receivable" means any device payment plan agreement acquired by the Issuer on an Acquisition Date and listed on the Schedule of Receivables attached to a Transfer Notice delivered to the Issuer and the Indenture Trustee in connection with such Acquisition Date.
"Additional Receivables Cash Transfer Amount" means, for an Acquisition Date, the lesser of (x) the Additional Receivables Transfer Amount and (y) the amount on deposit in the Acquisition Account on such Acquisition Date.
A-3
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Additional Receivables Transfer Amount" means, for an Acquisition Date, an amount equal to the discounted present value of the remaining payments (after the end of the calendar day on the related Cutoff Date) for the remaining term of such Additional Receivable discounted using the Discount Rate.
"Additional Successor Servicer Fee" means, for any Payment Date, the excess, if any, of (x) $425,000 over (y) the Servicing Fee.
"Additional Trust Property" means, for any Acquisition Date, (a) the Depositor Transferred Property for that Acquisition Date, (b) all present and future claims, demands, causes of action and choses in action for any of the foregoing, and (c) all payments on or under and all proceeds for any of the foregoing.
"Adjusted Pool Balance" means, on the Closing Date, an amount equal to:
(a) the Initial Pool Balance; minus (b) the Yield Supplement Overcollateralization Amount for the Closing Date;
and means, on a Payment Date or Acquisition Date, an amount (not less than zero) equal to:
(a) the Pool Balance as of the last day of the Collection Period immediately preceding such Payment Date or Acquisition Date; minus (b) the Yield Supplement Overcollateralization Amount for such Payment Date or Acquisition Date.
"Administration Agreement" means the Administration Agreement, dated as of the Closing Date, between the Administrator and the Issuer, as amended, restated, supplemented or modified from time to time.
"Administrator" means Cellco, in its capacity as administrator under the Administration Agreement.
"Adverse Claim" means any Lien other than a Permitted Lien.
"Affiliate" means, for a specified Person (other than a natural Person), (a) another Person controlling, controlled by or under common control with the specified Person, (b) any other Person beneficially owning or controlling more than fifty percent (50%) of the outstanding voting securities or rights of or interest in the capital, distributions or profits of the specified Person or (c) any controlling shareholder of, or partner in, the specified Person. For the purposes of this definition, "control" when used with respect to any Person means the direct or indirect possession of the power to direct or cause the direction of the management or policies of the Person, whether through ownership, by contract, arrangement or understanding, or otherwise.
"Amortization Event" means the occurrence of any of the following:
A-4
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(a) the Issuer fails on a Payment Date during the Revolving Period to (i) pay the Accrued Note Interest on the Notes, (ii) have the Required Reserve Amount on deposit in the Reserve Account or (iii) have the Required Negative Carry Amount on deposit in the Negative Carry Account;
(b) for any Payment Date, the sum of the fractions, expressed as percentages for each of the three Collection Periods immediately preceding such Payment Date, calculated by dividing the aggregate Principal Balance of Written-Off Receivables during each of those Collection Periods by the Pool Balance as of the first day of each of those Collection Periods, multiplied by four, exceeds 10.00%, as determined by the Servicer at least two (2) Business Days before each Payment Date;
(c) for any Payment Date, the sum of the fractions, expressed as percentages for each of the three Collection Periods immediately preceding such Payment Date, calculated by dividing the aggregate Principal Balance of all Receivables that are ninety-one (91) days or more Delinquent at the end of each of those Collection Periods by the Pool Balance as of the last day of each of those Collection Periods, divided by three, exceeds 2.00%, as determined by the Servicer at least two (2) Business Days before each Payment Date;
(d) the Adjusted Pool Balance is less than 50.00% of the aggregate Note Balance of the Notes;
(e) on any Payment Date, after giving effect to all payments to be made on such Payment Date pursuant to Section 8.2 of the Indenture and the acquisition of Additional Receivables on that date, the amount of Overcollateralization for the Notes is not at least equal to the Overcollateralization Target Amount; provided, that if the Overcollateralization Target Amount is not reached on any Payment Date solely due to a change in the percentage used to calculate such Overcollateralization Target Amount, such an event will not constitute an "Amortization Event" unless the Overcollateralization Target Amount is not reached by the end of the third month after the related Payment Date;
(f) a Servicer Termination Event has occurred and is continuing; or
(g) an Event of Default has occurred and is continuing.
"Amortization Period" means the Payment Date beginning on the earlier of (i) the Payment Date in February 2022 or (ii) the Payment Date on or immediately following the date on which an Amortization Event occurs and ending on the earlier of (a) the Payment Date on which each Class of Notes have been paid in full and (b) the Final Maturity Date.
"Amount Financed" means, for a Receivable, the amount of credit provided to the Obligor for the purchase of the related Device.
A-5
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of finance charges stated in the Receivable or in any federal Truth-in-Lending Act correction notice related to the Receivable.
"Annual Upgrade Offer" means the annual upgrade offer extended by Verizon Wireless as of the date hereof to an existing Obligor under which such Obligor can upgrade certain specified Devices that are the subject of a device payment plan agreement if the following terms and conditions specified in such offer are satisfied:
• The customer may be able to upgrade an eligible device for a new qualifying device after thirty (30) days provided that such customer has paid at least 50% of the retail price of the eligible device under the related device payment plan agreement and returns such eligible device to Verizon Wireless in good working condition with no significant damage as determined by Verizon Wireless;
• The customer is required to purchase a new qualifying device under a new device payment plan agreement. New device purchases are subject to then-available offers and any associated wireless service requirements;
• A customer's account must be in good standing and such customer must satisfy Verizon Wireless' eligibility requirements for a new device payment plan agreement;
• Upon entering into a device payment plan agreement for a new qualifying device, and after returning the eligible device to Verizon Wireless within fourteen (14) days, Verizon Wireless will agree, for the benefit of such customer and for the express benefit of any assignee of such customer's original device payment plan agreement, to acquire such customer's eligible device for the remaining balance of the related customer's original device payment plan agreement and pay off and settle that remaining balance. After Verizon Wireless does that, such customer's only remaining obligations will be under the new device payment plan agreement and for associated wireless service;
• If a customer does not return an eligible device when upgrading, or if it is not returned to Verizon Wireless in good working condition, in each case the remaining balance under such customer's original device payment plan agreement will be due on such customer's next bill. Good working condition requires, among other things, that the customer's returned device powers on and off, does not have a cracked screen, has no significant damage as determined by Verizon Wireless, and has all password-protected security features (e.g., Find My iPhone) turned off;
• The Annual Upgrade Offer and the related terms and conditions may be modified or terminated by Verizon Wireless at any time. A customer's upgrade eligibility will be determined in the sole discretion of Verizon Wireless. If the Annual Upgrade Offer is terminated or the related terms and conditions are not satisfied, a customer will remain responsible for the remaining balance due under the original device payment plan agreement.
A-6
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Applicable Anti-Money Laundering Law" has the meaning stated in Section 6.8 of the Trust Agreement.
"Arbitration Rules" means the AAA's Commercial Arbitration Rules and Mediation Procedures.
"Asset Representations Review" means, following the occurrence of a Delinquency Trigger, the review of 60-Day Delinquent Receivables to be undertaken by the Asset Representations Reviewer pursuant to the terms of the Asset Representations Review Agreement.
"Asset Representations Review Agreement" means the Asset Representations Review Agreement, dated as of the Closing Date, among the Asset Representations Reviewer, the Issuer, the Servicer and the Administrator.
"Asset Representations Reviewer" means Pentalpha Surveillance LLC, or any successor Asset Representations Reviewer under the Asset Representations Review Agreement.
"Asset Representations Reviewer Fee" means (i) a monthly fee equal to $416.67 per month, payable on each Payment Date, and (ii) the amount of any fee payable to the Asset Representations Reviewer in connection with its review of 60-Day Delinquent Receivables in accordance with the terms of the Asset Representations Review Agreement.
"Assumed Amortization Schedule" means, for each class of Notes, an amortization that results in the Note Balance for such class on any future Payment Date being equal to the percentage of the initial Note Balance of such class shown in the decrement table for such class set forth under "Maturity and Prepayment Considerations-Weighted Average Life" in the Prospectus, using a prepayment assumption percentage of 100% and assuming exercise of the Optional Acquisition on the earliest applicable Payment Date.
"Authenticating Agent" has the meaning stated in Section 2.14(a) of the Indenture.
"Available Funds" means, for a Payment Date, the sum of the following amounts for the Payment Date (without duplication):
(a) Collections on the Receivables (other than Temporarily Excluded Receivables) for the related Collection Period in the Collection Account; plus
(b) Acquisition Amounts received on Receivables that became Acquired Receivables during the related Collection Period and any amounts in respect of Acquisition Amounts paid by the Parent Support Provider; plus
(c) Credit Payments received on Receivables from the Marketing Agent or the related Originators during the related Collection Period and any amounts in respect of Credit Payments paid by the Parent Support Provider; plus
A-7
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(d) Upgrade Payments received from the Marketing Agent or the related Originators on Receivables subject to an Upgrade Offer during the related Collection Period and any amounts in respect of Upgrade Payments paid by the Parent Support Provider; plus
(e) any amounts deposited by the Class A Certificateholder to acquire the Receivables on the Payment Date under Section 8.1 of the Transfer and Servicing Agreement or any amounts received by the Issuer from a transferee of the Receivables under Section 8.2 of the Transfer and Servicing Agreement; plus
(f) the Negative Carry Account Draw Amount, if any; plus
(g) the Reserve Account Draw Amount, if any, and, after withdrawing the Reserve Account Draw Amount from the Reserve Account, any amount in excess of the Required Reserve Amount remaining on deposit in the Reserve Account; plus
(h) the amount, if any, deposited into the Collection Account from the Negative Carry Account and, on the first Payment Date during the Amortization Period, the entire amount on deposit in the Negative Carry Account and the Acquisition Account; plus
(i) any Cap Payment paid by the Cap Counterparty to the Issuer under the Cap Agreement and deposited into the Collection Account.
"Bank Accounts" means the Collection Account, the Reserve Account, the Acquisition Account and the Negative Carry Account.
"Bankruptcy Action" has the meaning stated in Section 5.5 of the Trust Agreement.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C. 101 et seq.
"Bankruptcy Surrendered Receivable" means any Receivable that is secured by the related Device and is not a Written-Off Receivable for which (i) the related Obligor has entered into a bankruptcy proceeding and (ii) the Servicer has accepted the surrender of the related Device in satisfaction of the Receivable.
"Benchmark" means, initially, One-Month LIBOR; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to One-Month LIBOR or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement.
"Benchmark Administrator" means, (1) with respect to One-Month LIBOR, the ICE Benchmark Administration Limited, (2) with respect to SOFR, the Federal Reserve Bank of New York and (3) with respect to any other Benchmark, the entity responsible for administration of such Benchmark (or in each case, any successor administrator).
A-8
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Benchmark Replacement" means the first alternative set forth in the order below that can be determined by the Administrator as of the Benchmark Replacement Date:
(1) the sum of (a) Term SOFR and (b) the Benchmark Replacement Adjustment, provided that there has been no official public statement or publication of information by the Benchmark Administrator or the regulatory supervisor for the Benchmark Administrator announcing that Term SOFR is not yet representative that has not been either withdrawn or superseded by a similar official public statement or publication that Term SOFR has become representative,
(2) the sum of (a) Compounded SOFR and (b) the Benchmark Replacement Adjustment,
(3) the sum of (a) the ISDA Fallback Rate and (b) the Benchmark Replacement Adjustment,
(4) the sum of (a) the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment, and
(5) the sum of (a) the alternate rate of interest that has been selected by the Administrator in its reasonable discretion as the replacement for the then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment.
"Benchmark Replacement Adjustment" means the first alternative set forth in the order below that can be determined by the Administrator as of the Benchmark Replacement Date:
(1) the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero), that has been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement,
(2) if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment, and
(3) the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Administrator in its reasonable discretion for the replacement of the then-current Benchmark with the applicable Unadjusted Benchmark Replacement.
"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the timing and frequency of determining rates and making payments of interest, and other administrative matters) that the Administrator decides in its reasonable discretion may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent with market practice (or, if the Administrator decides that adoption of any portion of such market practice is not administratively feasible or if the Administrator determines that no
A-9
Source: VERIZON ABS LLC, 8-K, 1/23/2020
market practice for use of the Benchmark Replacement exists, in such other manner as the Administrator determines in its reasonable discretion is reasonably necessary).
"Benchmark Replacement Date" means:
(1) in the case of clause (1) or (2) of the definition of "Benchmark Transition Event", the later of (a) the date of the related official public statement or publication of information referenced therein and (b) the date on which the applicable Benchmark Administrator permanently or indefinitely ceases to provide the Benchmark, or
(2) in the case of clause (3) of the definition of "Benchmark Transition Event", the date of the official public statement or publication of information.
For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date shall be deemed to have occurred prior to the Reference Time for such determination.
"Benchmark Transition Event" means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(1) an official public statement or publication of information by or on behalf of the Benchmark Administrator announcing that such Benchmark Administrator has ceased or will cease to provide the Benchmark, permanently or indefinitely; provided, that, at the time of such statement or publication, there is no successor Benchmark Administrator that will continue to provide the Benchmark,
(2) an official public statement or publication of information by the regulatory supervisor for the Benchmark Administrator, the central bank for the currency of the Benchmark, an insolvency official with jurisdiction over the Benchmark Administrator, a resolution authority with jurisdiction over the Benchmark Administrator or a court or an entity with similar insolvency or resolution authority over the Benchmark Administrator, which states that the Benchmark Administrator has ceased or will cease to provide the Benchmark permanently or indefinitely; provided, that, at the time of such statement or publication, there is no successor Benchmark Administrator that will continue to provide the Benchmark, or
(3) an official public statement or publication of information by the regulatory supervisor for the Benchmark Administrator announcing that the Benchmark is no longer representative.
"Beneficiary" has the meaning stated in the Parent Support Agreement.
"Benefit Plan" means an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to the provisions of Title I of ERISA, a "plan" described in and subject to
A-10
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Section 4975 of the Code, an entity whose underlying assets include "plan assets" by reason of an employee benefit plan's or plan's investment in the entity or any other employee benefit plan that is subject to any Similar Law.
"Book-Entry Note" means any of the Notes issued in book-entry form under Section 2.12 of the Indenture.
"Business Day" means any day other than (a) a Saturday, Sunday or other day on which banks in New York, New York or any jurisdiction in which the Corporate Trust Office of the Indenture Trustee or the Owner Trustee is located are authorized or required to close or (b) a holiday on the Federal Reserve calendar.
"Cap Agreement" means the interest rate cap agreement relating to the Class A-1b Notes consisting of the 2002 ISDA Master Agreement (Multicurrency Cross-Border), schedule and credit support annex, each dated as of January 24, 2020, and the confirmation, dated on or about January 23, 2020, in each case, between the Issuer and the Cap Counterparty, as such agreement may be amended and supplemented from time to time in accordance with its terms.
"Cap Collateral Account" means the account or accounts, if any, established under Section 9.10 of the Transfer and Servicing Agreement as required by the terms of the Cap Agreement.
"Cap Counterparty" means Bank of America, N.A., or any Eligible Replacement Cap Counterparty, to the extent such Eligible Replacement Cap Counterparty replaces the existing Cap Counterparty under the Cap Agreement or any replacement interest rate cap agreement.
"Cap Custodian" has the meaning stated in Section 9.10 of the Transfer and Servicing Agreement.
"Cap Payment" means, for any Interest Period in which One-Month LIBOR (calculated in accordance with the Cap Agreement) exceeds 3.00%, an amount equal to the product of (x) the excess, if any, of One-Month LIBOR (calculated in accordance with the Cap Agreement) for the related Payment Date over 3.00%, (y) the notional amount of the cap for such Payment Date, as set forth in the Cap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed in such Interest Period and the denominator of which is 360, which payment shall be deposited into the Collection Account by the Cap Counterparty on or before the second Business Day preceding the related Payment Date.
"Cellco" means Cellco Partnership d/b/a Verizon Wireless, a Delaware general partnership, doing business as Verizon Wireless.
"Certificate" means either the Class A Certificate or the Class B Certificate, as the context requires.
"Certificate Distribution Account" means the account established and maintained as such pursuant to Section 4.1 of the Trust Agreement.
A-11
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Certificate of Trust" means the Certificate of Trust of Verizon Owner Trust 2020-A.
"Certificate Paying Agent" means initially the Owner Trustee and any other Person appointed as Certificate Paying Agent under Section 3.11 of the Trust Agreement.
"Certificateholder" means the registered holder of a Certificate.
"Class" means the Class A-1a Notes, the Class A-1b Notes, the Class B Notes and the Class C Notes, as applicable.
"Class A Certificate" means the Class A Certificate executed by the Issuer and authenticated by the Owner Trustee, evidencing a portion of the Equity Interest in the Issuer, substantially in the form attached as Exhibit B-1 to the Trust Agreement.
"Class A Certificateholder" means collectively, the Originators or their designee.
"Class A Notes" means, collectively, the Class A-1a Notes and the Class A-1b Notes.
"Class A-1a Notes" means the $1,325,700,000 Class A-1a 1.85% Asset Backed Notes issued by the Issuer, substantially in the form of Exhibit A to the Indenture.
"Class A-1b Notes" means the $100,000,000 Class A-1b One-Month LIBOR (or, upon the occurrence of a Benchmark Transition Event, the appropriate Benchmark Replacement) + 0.27% Asset Backed Notes issued by the Issuer, substantially in the form of Exhibit A to the Indenture.
"Class B Certificate" means the variable funding certificate executed by the Issuer and authenticated by the Owner Trustee, substantially in the form attached as Exhibit B-2 to the Trust Agreement.
"Class B Certificate Principal Balance" means (i) on the Closing Date, $0, (ii) on any Acquisition Date, an amount equal to the excess, if any, of the Additional Receivables Transfer Amount for the Additional Receivables to be acquired by the Issuer on such Acquisition Date over the Additional Receivables Cash Transfer Amount for such Additional Receivables, and (iii) during the Amortization Period, $0; provided, that, with respect to clause (ii), immediately following the acquisition by the Depositor of Additional Receivables from the Originators on any Acquisition Date, and upon distribution by the Depositor to the Originators of the amounts set forth in Section 2.2(b) of the Originator Receivables Transfer Agreement, the Class B Certificate Principal Balance will be decreased to zero for such date.
"Class B Certificateholder" means the Depositor or its designee.
"Class B Notes" means the $98,300,000 Class B 1.98% Asset Backed Notes issued by the Issuer, substantially in the form of Exhibit A to the Indenture.
"Class C Notes" means the $76,000,000 Class C 2.06% Asset Backed Notes issued by the Issuer, substantially in the form of Exhibit A to the Indenture.
A-12
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Clean-Up Redemption" has the meaning stated in Section 8.1(a) of the Transfer and Servicing Agreement.
"Clearing Agency" means an organization registered as a "clearing agency" under Section 17A of the Exchange Act.
"Closing Date" means January 29, 2020.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means (a) the Trust Property, (b) all present and future claims, demands, causes of action and choses in action relating to the Trust Property and (c) all payments on or under and all proceeds of the Trust Property.
"Collection Account" means the account or accounts established under Section 4.1(a) of the Transfer and Servicing Agreement.
"Collection Period" means each calendar month. For a Payment Date, the related Collection Period means (i) for any Payment Date other than the initial Payment Date, the Collection Period immediately preceding the month in which the Payment Date occurs, or (ii) for the initial Payment Date, the period from the end of the calendar day on the Initial Cutoff Date and ending on and including the last day of the month immediately preceding the initial Payment Date. For purposes of determining the Principal Balance, Pool Balance or Note Pool Factor, the related Collection Period is the month in which the Principal Balance, Pool Balance or Note Pool Factor is determined.
"Collections" means, for a Collection Period, all cash collections received from Obligors and any other cash proceeds (whether in the form of cash, wire transfer or check) in respect of the Receivables received and applied by the Servicer to the payment of the Receivables during that Collection Period, but excluding:
(i) the Supplemental Servicing Fee;
(ii) amounts on any Receivable for which the Acquisition Amount is included in the Available Funds for the related Payment Date; and
(iii) any Recoveries or cash collections received with respect to Written-Off Receivables that were written-off before or during such Collection Period.
"Commission" means the U.S. Securities and Exchange Commission, and any successor thereto.
"Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term, referred to as the Remaining Life, of the Notes to be redeemed that would be utilized, at the time of
A-13
Source: VERIZON ABS LLC, 8-K, 1/23/2020
selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.
"Comparable Treasury Price" means (1) the average of three Reference Treasury Dealer Quotations for that date of redemption, or (2) if the Independent Investment Banker is unable to obtain three Reference Treasury Dealer Quotations, the average of all quotations obtained.
"Compounded SOFR" means the compounded average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology of this rate, and conventions of this rate (which, for example, may be compounded in arrears with a lookback and/or suspension period as a mechanism to determine the interest amount payable prior to the end of each Collection Period or compounded in advance) being established by the Administrator in accordance with:
(1) the rate, or methodology of this rate, and conventions of this rate selected or recommended by the Relevant Governmental Body for determining compounded SOFR; provided that
(2) if, and to the extent that, the Administrator determines that Compounded SOFR cannot be determined in accordance with clause (1) above, then the rate, or methodology of this rate, and conventions of this rate that have been selected by the Administrator in its reasonable discretion.
"Control Agreement" has the meaning stated in Section 9.10 of the Transfer and Servicing Agreement.
"Controlling Class" means (a) the Outstanding Class A Notes, voting together as a single class, (b) if no Class A Notes are Outstanding, the Outstanding Class B Notes and (c) if no Class B Notes are Outstanding, the Outstanding Class C Notes.
"Corporate Trust Office" means,
(a) for the Owner Trustee:
Rodney Square North, 1100 North Market Street Wilmington, Delaware 19890-1600 Attn: Corporate Trust Administration Telephone: 302-636-6704 Fax: 302-636-4141
or at another address in the State of Delaware as the Owner Trustee may notify the Indenture Trustee, the Administrator and the Depositor,
(b) for the Indenture Trustee, the office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered which office on the date of the execution of the Indenture is located at:
A-14
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(i) solely for the purposes of transfer, surrender, exchange or presentation for final payment:
EP-MN-WS2N 111 Fillmore Avenue East St. Paul, MN 55107, Attn: Bondholder Services/VZOT 2020-A
and (ii) for all other purposes:
MK-IL-SL7C 190 South LaSalle Street Chicago, Illinois 60603 Attention: Global Structured Finance/VZOT 2020-A Fax: (312) 332-7992
or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders, the Servicer, and the Owner Trustee, or the principal corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Noteholders, the Servicer and the Owner Trustee), and
(c) for the Master Trust Owner Trustee:
Rodney Square North, 1100 North Market Street Wilmington, Delaware 19890-1600 Attn: Corporate Trust Administration Telephone: 302-636-6704 Fax: 302-636-4141
or at another address in the State of Delaware as the Master Trust Owner Trustee may notify the Indenture Trustee, the Administrator, the Owner Trustee and the Depositor.
"Corresponding Tenor" means a tenor (including overnight) having approximately the same length (disregarding business day adjustment) as the applicable tenor for the then-current Benchmark.
"Covered Entity" and "Covered Entities" have the meanings stated in Section 1(a) of the Parent Support Agreement.
"Credit" means any payment credit (including one-time upfront credits and contingent, recurring credits), including the application of a returned security deposit, allocated to the account of an Obligor that is applied by the Servicer against amounts due on the Obligor's related invoice.
"Credit Enhancement Test" means the test that will be satisfied on the Closing Date and on each Acquisition Date, after giving effect to all payments required to be made under Section 8.2(c) of the Indenture and the acquisition of Additional Receivables on the Acquisition Date, if
A-15
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(a) (i) the Adjusted Pool Balance as of the end of the Collection Period immediately preceding the Closing Date or such Acquisition Date, as applicable, plus (ii) any amounts on deposit in the Acquisition Account minus (iii) the Overcollateralization Target Amount, is equal to or greater than (b) the aggregate Note Balance on that date.
"Credit Payment" means, with respect to any Collection Period, an amount equal to the reduction in the amount owed by an Obligor under a Receivable due to the application of any Credits to such Obligor's account that would have otherwise constituted Collections during such Collection Period.
"Custodian" means Cellco, in its capacity as custodian of the Receivable Files.
"Customer Tenure" means the number of months an Obligor has had a Verizon Wireless account based on the oldest active account establishment date for such Obligor, inclusive of any periods of up to fifty (50) days of disconnected service, up to ninety (90) days of suspended service or longer service suspensions in connection with the Servicemembers Civil Relief Act, as amended.
"Cutoff Date" means (a) for the Initial Receivables, the Initial Cutoff Date and (b) for any Additional Receivables, the end of the calendar day on the last day of the month immediately preceding the month in which such Acquisition Date occurs.
"Default" means any event that with notice or the passage of time or both would become an Event of Default.
"Definitive Notes" has the meaning stated in Section 2.13 of the Indenture.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code.
"Delinquent" means an account on which an Obligor has unpaid charges remaining on the related account on the day immediately following the related date due as indicated on the Obligor's bill.
"Delinquency Trigger" means, with respect to a Collection Period, the aggregate Principal Balance of 60-Day Delinquent Receivables as a percentage of the aggregate Principal Balance of Receivables as of the end of such Collection Period exceeds the Delinquency Trigger Percentage for such Collection Period.
"Delinquency Trigger Percentage" equals (i) during the Revolving Period, 5.0% and (ii) during the Amortization Period, 5.5%.
"Depositor" means Verizon ABS LLC, a Delaware limited liability company.
"Depositor Transferred Property" means, for the Closing Date and any Acquisition Date, (a) the Originator Transferred Property, (b) the Master Trust Transferred Property, (c) the Depositor's rights under the Receivables Transfer Agreements, (d) all present and future claims,
A-16
Source: VERIZON ABS LLC, 8-K, 1/23/2020
demands, causes of action and choses in action relating to any of the property described above and (e) all payments on or under and all proceeds of the property described above.
"Depository Agreement" means the letter of representations for the Notes, dated January 29, 2020, by the Issuer in favor of The Depository Trust Company.
"Device" means the wireless device that is the subject of a device payment plan agreement that is a Receivable.
"Discount Rate" means, with respect to a Receivable, the greater of (i) the APR with respect to such Receivable, and (ii) 7.65%.
"Eligibility Representation" has the meaning stated in Section 3.3 of the related Receivables Transfer Agreement.
"Eligible Receivable" means a Receivable that satisfies the characteristics set forth in Section 3.3 of the related Receivables Transfer Agreement.
"Eligible Replacement Cap Counterparty" means a counterparty that meets the eligibility requirements set forth in the Cap Agreement.
"Equity Interest" means a beneficial ownership interest in the Issuer, as recorded on the Trust Register.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Event of Default" has the meaning stated in Section 5.1(a) of the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FATCA Information" has the meaning stated in Section 3.3(e) of the Indenture.
"FATCA Withholding Tax" has the meaning stated in Section 3.3(e) of the Indenture.
"FICO® Score 8" means the FICO® Score 8 calculated on or about the date on which such Receivable was originated.
"Final Maturity Date" means, for (i) the Class A-1a Notes, the Payment Date in July, 2024, (ii) the Class A-1b Notes, the Payment Date in July, 2024, (iii) the Class B Notes, the Payment Date in July, 2024, and (iv) the Class C Notes, the Payment Date in July, 2024.
"First Priority Principal Payment" means, for a Payment Date, the greater of:
(a) an amount (not less than zero) equal to the aggregate Note Balance of the Class A Notes as of the immediately preceding Payment Date (or, for the initial Payment Date, as of the Closing Date) minus the Adjusted Pool Balance; and
A-17
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(b) on and after the Final Maturity Date for the Class A Notes, the aggregate Note Balance of the Class A Notes until paid in full.
"Floor Credit Enhancement Composition Tests" means, for any Payment Date and the pool of Receivables (excluding any Temporarily Excluded Receivables) held by the Issuer as of such date, each of the following tests calculated as of the end of the month preceding the month in which such date occurs:
(a) the weighted average FICO® Score 8 of the Obligors with respect to the Receivables is at least 700 (excluding Receivables with Obligors for whom FICO® Score 8s are not available),
(b) Receivables with Obligors for whom FICO® Score 8s are not available represent no more than 4.50% of the Pool Balance,
(c) Receivables with Obligors that have less than 12 months of Customer Tenure with Verizon Wireless represent no more than 22.00% of the Pool Balance,
(d) Receivables with Obligors that have 7 months or more, but less than 24 months of Customer Tenure with Verizon Wireless represent no more than 12.00% of the Pool Balance,
(e) Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless represent at least 55.00% of the Pool Balance,
(f) Receivables with Obligors that have less than 12 months of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 10.00% of the Pool Balance,
(g) Receivables with Obligors that have 12 months or more, but less than 60 months of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 50.00% of the aggregate Principal Balance of all Receivables with Obligors that have 12 months or more, but less than 60 months of Customer Tenure with Verizon Wireless, and
(h) Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 27.50% of the aggregate Principal Balance of all Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless.
"Governmental Authority" means any government or political subdivision or any agency, authority, bureau, regulatory body, central bank, commission, department or instrumentality of any such government or political subdivision, or any other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government or any
A-18
Source: VERIZON ABS LLC, 8-K, 1/23/2020
court, tribunal, grand jury or arbitrator, or any accounting board or authority (whether or not part of a government) which is responsible for the establishment or interpretation of national or international accounting principles, in each case whether foreign or domestic.
"Grant" means to mortgage, pledge, assign and to grant a lien on and a security interest in the relevant property.
"Guaranteed Obligations" has the meaning stated in Section 1(a) of the Parent Support Agreement.
"Hague Securities Convention" means The Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary (Concluded 5 July 2006), which became effective in the United States of America on April 1, 2017.
"Indemnified Person" has the meaning stated in Section 6.7(b) of the Indenture, Section 6.3(a) of the Transfer and Servicing Agreement and Section 7.2(a) of the Trust Agreement, as applicable.
"Indenture" means the Indenture, dated as of the Closing Date, between the Issuer and the Indenture Trustee.
"Indenture Trustee" means U.S. Bank National Association, a national banking association, not in its individual capacity but solely as Indenture Trustee under the Indenture.
"Indenture Trustee Fee" means a monthly fee equal to 1/12th of $12,000, payable on each Payment Date.
"Independent" means that the relevant Person (a) is independent of the Issuer, the Depositor and their Affiliates, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, the Depositor or their Affiliates and (c) is not an officer, employee, underwriter, trustee, partner, director or person performing similar functions of or for the Issuer, the Depositor or their Affiliates.
"Independent Certificate" means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in Section 11.3 of the Indenture, made by an Independent appraiser, a firm of certified public accountants of national reputation or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of "Independent" in this Indenture and that the signer is Independent within the meaning thereof.
"Independent Investment Banker" means an independent investment banking or commercial banking institution of national standing appointed by Verizon.
"Initial Cutoff Date" means the end of the calendar day on December 31, 2019.
A-19
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Initial Pool Balance" means $1,917,450,478.10 which is the aggregate Principal Balance of the Initial Receivables as of the Initial Cutoff Date.
"Initial Receivable" means any device payment plan agreement acquired by the Issuer on the Closing Date and listed on the Schedule of Receivables delivered on the Closing Date.
"Initial Trust Property" means (a) the Depositor Transferred Property for the Closing Date, (b) the Issuer's rights under the Transfer and Servicing Agreement, (c) the Issuer's rights under the Cap Agreement, (d) all security entitlements relating to the Bank Accounts and the property deposited in or credited to any of the Bank Accounts, (e) all present and future claims, demands, causes of action and choses in action for any of the foregoing and (f) all payments on or under and all proceeds for any of the foregoing.
"Insolvency Event" means, for a Person, that (1) (a) such Person admits in writing its inability to pay its debts generally as they become due, or makes a general assignment for the benefit of creditors, or (b) any proceeding is instituted by or against such Person seeking to adjudicate it bankrupt or insolvent, or seeking the liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property, or (c) such Person generally does not pay its debts as such debts become due and, in the case of any proceeding instituted against such Person, such proceeding remains unstayed for more than sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered or (2) such person takes any corporate action to authorize any such action.
"Interest Period" means for any Payment Date and (a) the Class A-1a Notes, Class B Notes and Class C Notes, the period from and including the 20th day of the calendar month immediately preceding the Payment Date to but excluding the 20th day of the month in which the Payment Date occurs (or from and including the Closing Date to but excluding March 20, 2020 for the first Payment Date) or (b) the Class A-1b Notes, the period from and including the Payment Date immediately preceding the current Payment Date to but excluding the current Payment Date (or from and including the Closing Date to but excluding March 20, 2020 for the first Payment Date).
"Investment Company Act" means the Investment Company Act of 1940, as amended.
"ISDA Definitions" means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time.
"ISDA Fallback Adjustment" means the spread adjustment (which may be a positive or negative value or zero) that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to the Benchmark for the applicable tenor.
A-20
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"ISDA Fallback Rate" means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable tenor excluding the applicable ISDA Fallback Adjustment.
"Issuer" means Verizon Owner Trust 2020-A, a Delaware statutory trust.
"Issuer Order" and "Issuer Request" has the meaning stated in Section 11.3(a) of the Indenture.
"Law" means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, executive order, order, court order, injunction, writ, decree, directive, judgment, injunction, award or similar item of or by a Governmental Authority or any interpretation, implementation or application thereof.
"LIBOR Determination Date" means, (i) with respect to the first Payment Date, the second London Business Day prior to the Closing Date and (ii) with respect to each subsequent Payment Date, the second London Business Day prior to the immediately preceding Payment Date.
"Lien" means a security interest, lien, charge, pledge or encumbrance.
"London Business Day" means any day other than a Saturday, Sunday or day on which banking institutions in London, England are authorized or obligated by law or government decree to be closed.
"Make-Whole Payment" means, for any payment of principal of the Notes on any Payment Date:
(a) for any Make-Whole Payment due, other than with respect to an Optional Redemption,
(i) for each Class of Notes other than the Class A-1b Notes, the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on the principal payment until the Payment Date in February 2022 and (ii) the principal payment, each such payment discounted from the Payment Date in February 2022 to such Payment Date monthly on a 30/360 day basis at 0.15% plus the higher of (1) zero and (2) the then-current maturity matched Treasury Rate to such payment over (b) the principal payment; or
(ii) for the Class A-1b Notes, the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on the principal payment at an interest rate of One-Month LIBOR applicable to such Payment Date plus 0.27% until the Payment Date in February 2022 and (ii) the principal payment, each such payment discounted from the Payment Date in February 2022 to such Payment Date monthly on an actual/360 day basis at One-
A-21
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Month LIBOR applicable to such Payment Date over (b) the principal payment; and
(b) for any Make-Whole Payment due with respect to an Optional Redemption,
(i) for each Class of Notes other than the Class A-1b Notes, the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on such Class of Notes assuming principal payments on such Class are made based on the Assumed Amortization Schedule for such Class and (ii) the amount of all future principal payments that would otherwise be paid on such Class of Notes assuming principal payments on such Class are paid based on the Assumed Amortization Schedule for such Class, each such amount discounted from the Payment Date on which such payment would be made in accordance with the Assumed Amortization Schedule to the Payment Date on which the Optional Redemption occurs, monthly on a 30/360 day basis at 0.15% plus the higher of (1) zero and (2) the then-current maturity matched Treasury Rate to such payment over (b) the Note Balance of such Class of Notes immediately prior to the Optional Redemption; or
(ii) for the Class A-1b Notes, the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on the Class A-1b Notes at an interest rate of One-Month LIBOR applicable to such Payment Date plus 0.27% assuming principal payments on the Class A-1b Notes are made based on the Assumed Amortization Schedule for the Class A-1b Notes and (ii) the amount of all future principal payments that would otherwise be paid on the Class A-1b Notes assuming principal payments on the Class A-1b Notes are paid based on the Assumed Amortization Schedule for the Class A-1b Notes, each such amount discounted from the Payment Date on which such payment would be made in accordance with the Assumed Amortization Schedule to the Payment Date on which the Optional Redemption occurs, monthly on an actual/360 day basis at One-Month LIBOR applicable to such Payment Date over (b) the Note Balance of the Class A-1b Notes immediately prior to the Optional Redemption;
provided, that, upon the occurrence of a Benchmark Transition Event, One-Month LIBOR used in the calculation of Make-Whole Payments will be replaced by the appropriate Benchmark Replacement as set forth in Section 2.16 of the Indenture.
"Marketing Agent" means Cellco.
"Marketing Agent Agency Agreement" means the Amended and Restated Marketing Agent Agency Agreement, dated as of September 27, 2016, between the Marketing Agent and the Verizon Originators, as amended, restated, supplemented or modified from time to time.
A-22
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Marketing Agent Remittance Obligation" has the meaning stated in the Parent Support Agreement.
"Master Collateral Agency Agreement" means the Amended and Restated Master Collateral Agency and Intercreditor Agreement, dated as of May 8, 2019, among the Master Trust, U.S. Bank National Association, as master collateral agent, Cellco, as servicer, and each creditor representative from time to time party thereto, as amended, restated, supplemented or modified from time to time.
"Master Trust" means Verizon DPPA Master Trust, a Delaware statutory trust, created and existing pursuant to the Master Trust Agreement.
"Master Trust Administrator" means Cellco.
"Master Trust Agreement" means the Second Amended and Restated Trust Agreement, dated as of May 8, 2019, between Verizon ABS II LLC, as depositor, and the Master Trust Owner Trustee, as amended, restated, supplemented or modified from time to time.
"Master Trust Owner Trustee" means Wilmington Trust, National Association, a national banking association, not in its individual capacity but solely as Master Trust Owner Trustee under the Master Trust Agreement.
"Master Trust Receivables Transfer Agreement" means the Master Trust Receivables Transfer Agreement, dated as of the Closing Date, among the Master Trust, the Servicer and the Depositor, as amended, restated, supplemented or modified from time to time.
"Master Trust Transferred Property" means, for the Closing Date and any Acquisition Date, (a) the Initial Receivables or the Additional Receivables, as applicable, transferred by the Master Trust, (b) all amounts received and applied on such Receivables after the end of the calendar day on the related Cutoff Date, (c) all present and future claims, demands, causes of action and choses in action relating to any of the property described above and (d) all payments on or under and all proceeds of the property described above.
"Material Adverse Effect" means, with respect to any event or circumstance, a material adverse effect on the ability of the applicable Person to perform its obligations under any Transaction Document.
"Monthly Deposit Required Ratings" has the meaning stated in Section 4.3(b)(i) of the Transfer and Servicing Agreement.
"Monthly Investor Report" has the meaning stated in Section 3.5(a)(i) of the Transfer and Servicing Agreement.
"Moody's" means Moody's Investors Service, Inc.
"Negative Carry Account" means the account or accounts established under Section 4.1(a) of the Transfer and Servicing Agreement.
A-23
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Negative Carry Deposit Amount" means, for a Payment Date during the Revolving Period on which amounts are in the Acquisition Account, an amount equal to (a) the Required Negative Carry Amount for that Payment Date minus (b) the amount in the Negative Carry Account on that Payment Date (before payments under Section 8.2(c) of the Indenture on that Payment Date).
"Negative Carry Account Draw Amount" means, for a Payment Date during the Revolving Period:
(a) if that Payment Date is not an Acquisition Date, the lesser of:
(i) an amount (not less than zero) equal to the Total Required Payment, plus the Reserve Deposit Amount, plus the Acquisition Deposit Amount, minus the Available Funds determined without regard to the Negative Carry Account Draw Amount or the Reserve Account Draw Amount; and
(ii) the amount in the Negative Carry Account; and
(b) if the Payment Date is an Acquisition Date, the amount in the Negative Carry Account in excess of the Required Negative Carry Amount.
"New Upgrade DPP" has the meaning stated in Section 4.3(g) of the Transfer and Servicing Agreement.
"Note Balance" means, for a Note or Class, the initial aggregate principal balance of the Note or Class minus all amounts distributed on the Note or Class that is applied to principal.
"Note Interest Rate" means a per annum rate equal to, for: (i) the Class A-1a Notes, 1.85% (computed on the basis of a 360 day year consisting of twelve 30 day months), (ii) the Class A-1b Notes, One-Month LIBOR (or, upon the occurrence of a Benchmark Transition Event, the appropriate Benchmark Replacement) + 0.27% (computed on the basis of the actual number of days elapsed during the relevant Interest Period and a 360 day year), (iii) the Class B Notes, 1.98% (computed on the basis of a 360 day year consisting of twelve 30 day months), and (iv) the Class C Notes, 2.06% (computed on the basis of a 360 day year consisting of twelve 30 day months).
"Note Interest Shortfall" means, for a Class and a Payment Date, an amount equal to the excess, if any, of the Accrued Note Interest for the Payment Date immediately preceding such Payment Date for the Class over the amount of interest that was paid to the Noteholders of that Class on the Payment Date immediately preceding such Payment Date, together with interest on the excess amount, to the extent lawful, at the Note Interest Rate for the Class for that Interest Period.
A-24
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Note Monthly Interest" means, for a Class and a Payment Date, the aggregate amount of interest accrued on the Note Balance of the Class at the Note Interest Rate for the Class for the related Interest Period.
"Note Owner" means, for a Book-Entry Note, the Person who is the beneficial owner of a Book-Entry Note as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with the Clearing Agency (as a direct participant or as an indirect participant, in each case according to the rules of the Clearing Agency).
"Note Paying Agent" means initially the Indenture Trustee and any other Person appointed as Note Paying Agent under Section 2.15 of the Indenture.
"Note Pool Factor" means, for a Class and a Payment Date, a seven-digit decimal figure equal to the Note Balance of the Class after giving effect to any payments of principal of the Class on that Payment Date divided by the initial Note Balance of the Class.
"Note Register" and "Note Registrar" have the meanings stated in Section 2.4 of the Indenture.
"Noteholder" means the Person in whose name a Note is registered on the Note Register.
"Noteholder Tax Identification Information" means properly completed and signed tax certifications (generally with respect to U.S. Federal Income Tax, IRS Form W-9 (or applicable successor form) in the case of a person that is a "United States Person" within the meaning of Section 7701(a)(30) of the Code or the appropriate IRS Form W-8 (or applicable successor form) in the case of a person that is not a "United States Person" within the meaning of Section 7701(a)(30) of the Code).
"Notes" or "Note" means, collectively or individually, as the context may require, the Class A-1a Notes, the Class A-1b Notes, the Class B Notes and the Class C Notes.
"Obligor" means the Person that has signed the account agreement of which the device payment plan agreement that constitutes the Receivable is a part and who owes payments under the Receivable.
"Officer's Certificate" means (a) for the Issuer, a certificate signed by a Responsible Person of the Issuer, (b) for the Depositor, the Administrator, the Marketing Agent, the Parent Support Provider, any Originator or the Servicer, a certificate signed by any officer of such entity, as applicable, (c) for the Master Trust, a certificate signed by a Responsible Person of the Master Trust and (d) for the Indenture Trustee, a certificate signed by a Responsible Person of the Indenture Trustee.
"One-Month LIBOR" means, with respect to any Interest Period for which One-Month LIBOR is the Benchmark, the London interbank offered rate for deposits in U.S. Dollars having a maturity of one month commencing on the related LIBOR Determination Date which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on such LIBOR
A-25
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Determination Date; provided, however, that for the first Interest Period, One-Month LIBOR shall mean an interpolated rate for deposits based on London interbank offered rates for deposits in U.S. Dollars for a period that corresponds to the actual number of days in the first Interest Period. If the rates used to determine One-Month LIBOR do not appear on the Reuters Screen LIBOR01 Page, the rates for that day will be determined on the basis of the rates at which deposits in U.S. Dollars, having a maturity of one month and in a principal balance of not less than U.S. $1,000,000 are offered at approximately 11:00 a.m., London time, on such LIBOR Determination Date to prime banks in the London interbank market by the Reference Banks. The Administrator will request the principal London office of each Reference Bank to provide a quotation of its rate to the Administrator and the Indenture Trustee. If at least two such quotations are provided, the Indenture Trustee will calculate the rate for that day as the arithmetic mean of such quoted rates to the nearest 1/100,000 of 1.00% (0.0000001), with five one-millionths of a percentage point rounded upward, of all such quotations. If fewer than two such quotations are provided, the Indenture Trustee will calculate the rate for that day as the arithmetic mean to the nearest 1/100,000 of 1.00% (0.0000001), with five one-millionths of a percentage point rounded upward, of the offered per annum rates that one or more major banks in New York City, selected by the Administrator, are quoting as of approximately 11:00 a.m., New York City time, on such LIBOR Determination Date to leading European banks for United States Dollar deposits for that maturity; provided that if the Administrator is not able to identify any major banks in New York City that are quoting as described in this sentence and for the avoidance of doubt, regardless of whether others in similar transactions are using a different index, it shall direct the Indenture Trustee to use One-Month LIBOR in effect for the applicable Interest Period which will be One-Month LIBOR in effect for the previous Interest Period, and any such direction will be deemed to apply to all subsequent LIBOR Determination Dates unless otherwise directed by the Administrator. In no event shall the Indenture Trustee be responsible for determining One-Month LIBOR or any substitute for One-Month LIBOR if such rate does not appear on Reuters Screen LIBOR01 Page.
"Opinion of Counsel" means a written opinion of counsel (which may be internal counsel) which counsel is reasonably acceptable to the Indenture Trustee, the Owner Trustee and the Rating Agencies, as applicable.
"Optional Acquisition" has the meaning stated in Section 8.1(a) of the Transfer and Servicing Agreement.
"Optional Acquisition Amount" has the meaning stated in Section 8.1(b) of the Transfer and Servicing Agreement.
"Optional Redemption" has the meaning stated in Section 8.2(a) of the Transfer and Servicing Agreement.
"Originator" means (i) with respect to the Initial Receivables or the Additional Receivables, any of Cellco or certain Affiliates of Verizon listed on Schedule B to the Originator Receivables Transfer Agreement and (ii) with respect to the Additional Receivables transferred to the Depositor pursuant to the Originator Receivables Transfer Agreement, any additional Affiliate of Verizon not listed on Schedule B to the Originator Receivables Transfer Agreement
A-26
Source: VERIZON ABS LLC, 8-K, 1/23/2020
that executes an Additional Originator Joinder Agreement substantially in the form of Exhibit B to the Originator Receivables Transfer Agreement; provided, that with respect to any amounts remitted by, or caused to be remitted by, the Marketing Agent pursuant to Sections 4.3(g), (h) and (i) of the Transfer and Servicing Agreement, the term "Originator" shall also mean, with respect to the Additional Receivables transferred to the Depositor pursuant to the Master Trust Receivables Transfer Agreement, any additional Affiliate of Verizon not listed on Schedule B to the Originator Receivables Transfer Agreement that originated any such Receivables.
"Originator Reacquisition Obligation" has the meaning stated in the Parent Support Agreement.
"Originator Receivables Transfer Agreement" means the Originator Receivables Transfer Agreement, dated as of the Closing Date, between the Originators party thereto and the Depositor, as amended, restated, supplemented or modified from time to time.
"Originator Transferred Property" means, for the Closing Date and any Acquisition Date, (a) the Initial Receivables or the Additional Receivables, as applicable, transferred by the Originators, (b) all amounts received and applied on such Receivables after the end of the calendar day on the related Cutoff Date, (c) all present and future claims, demands, causes of action and choses in action relating to any of the property described above and (d) all payments on or under and all proceeds of the property described above.
"Other Assets" means any assets (other than the Trust Property) sold, assigned or conveyed or intended to be sold, assigned or conveyed by the Depositor to any Person other than the Issuer, whether by way of a sale, capital contribution, pledge or otherwise.
"Outstanding" means, as of a date, all Notes authenticated and delivered under the Indenture on or before that date except (a) Notes that have been cancelled by the Note Registrar or delivered to the Note Registrar for cancellation, (b) Notes to the extent the amount necessary to pay the Notes has been deposited with the Indenture Trustee or Note Paying Agent in trust for the Noteholders and, if those Notes are to be redeemed, notice of the redemption has been given under the Indenture, and (c) Notes in exchange for or in place of which other Notes have been authenticated and delivered under the Indenture unless proof satisfactory to the Indenture Trustee is presented that the Notes are held by a bona fide purchaser. In determining whether Noteholders of the required Note Balance have made or given a request, demand, authorization, direction, notice, consent or waiver under any Transaction Document, Notes owned by the Issuer, the Depositor, the Servicer or their Affiliates will not be considered to be Outstanding. However, Notes owned by the Issuer, the Depositor, the Servicer or their Affiliates will be considered to be Outstanding if (A) no other Notes remain Outstanding, or (B) the Notes have been pledged in good faith and the pledgee establishes to the reasonable satisfaction of the Indenture Trustee the pledgee's right to act for the Notes and that the pledgee is not the Issuer, the Depositor, the Servicer or their Affiliates.
"Overcollateralization" means, for any date of determination other than the Closing Date, the amount by which (x) the sum of (i) the Adjusted Pool Balance as of the last day of the related
A-27
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Collection Period, and (ii) the amount on deposit in the Acquisition Account after giving effect to the acquisition of Receivables on that date exceeds (y) the aggregate Note Balance.
"Overcollateralization Target Amount" means an amount equal to:
(i) on the Closing Date, 10.50% of the Adjusted Pool Balance as of the Initial Cutoff Date;
(ii) for any date of determination (other than the Closing Date), prior to the Amortization Period, on which the pool of Receivables meets all of the Floor Credit Enhancement Composition Tests, the greater of (x) the result of (a)(i) the aggregate Note Balance, divided by (ii) 1 minus 0.1050, minus (b) the aggregate Note Balance, and (y) 1.00% of the Adjusted Pool Balance as of the Closing Date;
(iii) for any date of determination (other than the Closing Date), prior to the Amortization Period, on which the pool of Receivables does not meet all of the Floor Credit Enhancement Composition Tests, the greater of (x) the result of (a)(i) the aggregate Note Balance, divided by (ii) 1 minus 0.1350, minus (b) the aggregate Note Balance, and (y) 1.00% of the Adjusted Pool Balance as of the Closing Date;
(iv) for any date of determination, during the Amortization Period, on which the pool of Receivables meets all of the Floor Credit Enhancement Composition Tests, the greater of (x) 14.50% of the Adjusted Pool Balance as of the end of the calendar month immediately preceding such date of determination, and (y) 1.00% of the Adjusted Pool Balance as of the Closing Date; or
(v) for any date of determination, during the Amortization Period, on which the pool of Receivables does not meet all of the Floor Credit Enhancement Composition Tests, the greater of (x) 17.50% of the Adjusted Pool Balance as of the end of the calendar month immediately preceding such date of determination, and (y) 1.00% of the Adjusted Pool Balance as of the Closing Date.
"Owner Trustee" means Wilmington Trust, National Association, a national banking association, not in its individual capacity but solely as Owner Trustee under the Trust Agreement.
"Owner Trustee Fee" means a monthly fee equal to 1/12th of $15,000, payable on each Payment Date.
"Parent Support Agreement" means the guaranty, dated as of the Closing Date, among the Parent Support Provider, the Depositor, the Issuer and the Indenture Trustee, as amended, restated, supplemented or modified from time to time.
"Parent Support Provider" means Verizon.
A-28
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Payment Date" means the 20th day of each month or, if not a Business Day, the next Business Day, starting in March 2020. For a Collection Period, the related Payment Date means the Payment Date following the end of the Collection Period.
"Percentage Interest" shall mean, with respect to each Certificate, the percentage interest in the Issuer represented by such Certificate.
"Permitted Activities" has the meaning stated in Section 2.3(a) of the Trust Agreement.
"Permitted Investments" means book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form that evidence:
(a) (x) direct or fully guaranteed United States treasury obligations, (y) U.S. Department of Housing and Urban Development public agency bonds, Federal Housing Administration debentures, Government National Mortgage Association guaranteed mortgage-backed securities or participation certificates, RefCorp debt obligations, SBA-guaranteed participation certificates and guaranteed pool certificates or (z) Farm Credit System consolidated systemwide bonds and notes, Federal Home Loan Banks' consolidated debt obligations, Federal Home Loan Mortgage Corp. debt obligations and Federal National Mortgage Association debt obligations, if, with respect to the investments listed in clause (z), they meet the criteria of S&P for collateral for securities having ratings equivalent to the respective ratings of the Notes in effect at the Closing Date;
(b) demand deposits, time deposits, certificates of deposit or bankers' acceptances of any depository institution or trust company (i) incorporated under the laws of the United States or any State or any United States branch or agency of a foreign bank, (ii) subject to supervision and examination by federal or State banking or depository institution authorities and (iii) where the commercial paper or other short-term unsecured debt obligations (other than obligations with a rating based on the credit of a Person other than the depository institution or trust company) of such depository institution or trust company have the Required Rating;
(c) commercial paper, including asset-backed commercial paper, having the Required Rating;
(d) investments in money market funds having a rating in the highest investment grade category from each of S&P and Moody's (including funds for which the Indenture Trustee or the Owner Trustee or any of their Affiliates is investment manager or advisor); and
(e) any other investment that is acceptable to each Rating Agency.
"Permitted Lien" means a Lien that attaches by operation of law, or any security interest of the Depositor in the Originator Transferred Property and the Master Trust Transferred Property under the related Receivables Transfer Agreement, the Issuer in the Depositor
A-29
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Transferred Property under the Transfer and Servicing Agreement or the Indenture Trustee in the Collateral under the Indenture.
"Person" means a legal person, including a corporation, natural person, joint venture, limited liability company, partnership, trust, business trust, association, government, a department or agency of a government or any other entity.
"Personally Identifiable Information" has the meaning stated in the Asset Representations Review Agreement.
"Pool Balance" means, for any Collection Period, an amount equal to (i) the aggregate Principal Balance of the Receivables on the last day of the Collection Period immediately preceding such Collection Period (excluding Acquired Receivables), plus the aggregate Principal Balance on the related Cutoff Date of any Additional Receivables transferred during the Collection Period less (ii) the aggregate Principal Balance of any Temporarily Excluded Receivables as of the last day of the Collection Period immediately preceding such Collection Period.
"Pool Composition Tests" means, for the Closing Date, each Payment Date and any Acquisition Date and with respect to the pool of Receivables held by the Issuer as of the related Cutoff Date, including any Additional Receivables acquired by the Issuer on an Acquisition Date, each of the following tests calculated as of the end of the month preceding the month in which such date occurs:
(a) the weighted average FICO® Score 8 of the Obligors with respect to the Receivables is at least 685 (excluding Receivables with Obligors for whom FICO® Score 8s are not available),
(b) Receivables with Obligors for whom FICO® Score 8s are not available represent no more than 5.00% of the Pool Balance,
(c) Receivables with Obligors that have less than 12 months of Customer Tenure with Verizon Wireless represent no more than 28.00% of the Pool Balance,
(d) Receivables with Obligors that have 7 months or more, but less than 24 months of Customer Tenure with Verizon Wireless represent no more than 15.00% of the Pool Balance,
(e) Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless represent at least 50.00% of the Pool Balance,
(f) Receivables with Obligors that have less than 12 months of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 10.00% of the Pool Balance,
A-30
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(g) Receivables with Obligors that have 12 months or more, but less than 60 months of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 55.00% of the aggregate Principal Balance of all Receivables with Obligors that have 12 months or more, but less than 60 months of Customer Tenure with Verizon Wireless, and
(h) Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 30.00% of the aggregate Principal Balance of all Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless.
"Principal Balance" means, for a Receivable as of the last day of a month, an amount (not less than zero) equal to, without duplication:
(a) the Amount Financed; minus
(b) the portion of the amounts paid by the related Obligor applied on or before that date allocable to principal; minus
(c) any Credits allocated to such Receivable;
provided that, the Principal Balance for any Written-Off Receivable will be deemed to be zero.
"Proceeding" means a suit in equity, action at law or other judicial or administrative proceeding, or governmental investigation.
"Prospectus" means the prospectus dated as of January 21, 2020, relating to the offering of the Notes.
"Qualified Institution" means U.S. Bank National Association, Wilmington Trust, National Association, or a trust company or a bank or depository institution organized under the laws of the United States or any State or any United States branch or agency of a foreign bank or depository institution that (i) is subject to supervision and examination by federal or State banking authorities, (ii) has a short-term deposit rating of "P-1" from Moody's, if rated by Moody's, and "A-1+" from S&P, if rated by S&P, (iii) if the institution holds any Bank Accounts, has a long-term unsecured debt rating or issuer rating of at least "Aa3" from Moody's, if rated by Moody's, and at least "A" from S&P, if rated by S&P and (iv) if the institution is organized under the laws of the United States, whose deposits are insured by the Federal Deposit Insurance Corporation.
"Rating Agency" means each of Moody's and S&P.
"Rating Agency Condition" means, for an action or request and with respect to a Rating Agency, that, according to the then-current policies of the relevant Rating Agency for that action
A-31
Source: VERIZON ABS LLC, 8-K, 1/23/2020
or request, the Rating Agency has notified the Depositor, the Servicer, the Owner Trustee and the Indenture Trustee that the proposed action or request will not result in a downgrade or withdrawal of its then-current rating on any of the Notes.
"Receivable" means, for a Collection Period, an Initial Receivable or an Additional Receivable, excluding any device payment plan agreement that became an Acquired Receivable during a prior Collection Period or was a Written-Off Receivable sold under Section 3.4 of the Transfer and Servicing Agreement during a prior Collection Period.
"Receivable File" has the meaning stated in Section 3.10(b) of the Transfer and Servicing Agreement.
"Receivables Transfer Agreements" or "Receivables Transfer Agreement" means, collectively or individually, the Originator Receivables Transfer Agreement and the Master Trust Receivables Transfer Agreement, as the context may require.
"Record Date" means, for a Payment Date and a Book-Entry Note, the close of business on the day before the Payment Date and, for a Payment Date and a Definitive Note, the last day of the calendar month immediately preceding the month in which the Payment Date occurs and with respect to any notice, vote or consent, the most recently occurring Record Date for a Payment Date.
"Recoveries" means, for any Written-Off Receivable and a Collection Period, an amount equal to:
(a) all amounts received and applied by the Servicer during the Collection Period for the Receivable after the date on which it became a Written-Off Receivable, including any proceeds from the sale of a Device securing any Receivable; minus
(b) any amounts paid by the Servicer for the account of the related Obligor, including collection expenses and other amounts paid to third parties, if any, in connection with collections on the Written-Off Receivable; minus
(c) amounts, if any, required by Law or under the Servicing Procedures to be paid to the Obligor.
"Redemption Date" has the meaning stated in Section 10.1 of the Indenture.
"Reference Banks" means, for any LIBOR Determination Date, the four major banks in the London interbank market selected by the Administrator.
"Reference Time" with respect to any determination of the Benchmark means (1) if the Benchmark is One-Month LIBOR, 11:00 a.m. (London time) on the day that is two (2) London banking days preceding the date of such determination, and (2) if the Benchmark is not One- Month LIBOR, the time determined by the Administrator in accordance with the Benchmark Replacement Conforming Changes.
A-32
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Reference Treasury Dealer" means (1) any independent investment banking or commercial banking institution of national standing and any of its successors appointed by Verizon; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in the United States, referred to as a "Primary Treasury Dealer," another Primary Treasury Dealer substituted therefor, and (2) any other Primary Treasury Dealer selected by an Independent Investment Banker and approved in writing by Verizon.
"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any date of determination, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 3:30 p.m., New York City time, on the third Business Day preceding the date of determination.
"Regular Priority Principal Payment" means, for a Payment Date, an amount equal to the greater of (A) an amount (not less than zero) equal to the excess, if any, of (a) the aggregate Note Balance of the Class A Notes, the Class B Notes and the Class C Notes as of the immediately preceding Payment Date (or, for the initial Payment Date, as of the Closing Date), minus the sum of the First Priority Principal Payment, the Second Priority Principal Payment and the Third Priority Principal Payment for the current Payment Date, over (b) the Adjusted Pool Balance as of the last day of the related Collection Period minus the Overcollateralization Target Amount, and (B) on and after the Final Maturity Date for any Class of Notes, the amount that is necessary to reduce the principal amount of each such Class, as applicable, to zero (after the application of any First Priority Principal Payment, Second Priority Principal Payment and Third Priority Principal Payment).
"Regulation AB" means Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1125, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting releases (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) and Asset-Backed Securities Disclosure and Registration, Securities Act Release No. 33-9638, 79 Fed. Reg. 57,184 (Sept. 24, 2014)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.
"Relevant Governmental Body" means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or any successor thereto.
"Requesting Noteholders" has the meaning stated in Section 14.1 of the Indenture.
"Requesting Party" has the meaning stated in Section 11.2 of the Transfer and Servicing Agreement.
"Required Acquisition Deposit Amount" means, for any Payment Date during the Revolving Period, an amount equal to the excess, if any, of (x) the aggregate Note Balance of the Notes over (y) (i) the Adjusted Pool Balance as of the end of the related Collection Period minus
A-33
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(ii) the Overcollateralization Target Amount, after giving effect to any acquisition of Additional Receivables on such date.
"Required Negative Carry Amount" means, for any Payment Date during the Revolving Period, an amount equal to the product of (i) the amount in the Acquisition Account on the Payment Date (after giving effect to all payments under Section 8.2(c) of the Indenture and the acquisition of Additional Receivables, if any, on the Payment Date), (ii) the weighted average Note Interest Rate and (iii) 1/12.
"Required Rating" means, for short-term unsecured debt obligations, a rating of (a) "P-1" from Moody's and (b) "A-1+" from S&P.
"Required Reserve Amount" means $17,877,097.97, or approximately 1% of the Adjusted Pool Balance as of the Initial Cutoff Date.
"Reserve Account" means the account established under Section 4.1(a) of the Transfer and Servicing Agreement.
"Reserve Account Draw Amount" means:
(a) for each Payment Date before the Amortization Period, the lesser of:
(i) an amount (not less than zero) equal to the Total Required Payment minus the Available Funds determined without regard to the Reserve Account Draw Amount; and
(ii) the amount in the Reserve Account; and
(b) for each Payment Date during the Amortization Period, an amount equal to the amount in the Reserve Account, if that amount together with Available Funds for that Payment Date is sufficient to pay the entire Note Balance of the Notes, all accrued and unpaid interest and any unpaid Make-Whole Payments and all other amounts to be distributed to the Secured Parties under the Indenture and the Transfer and Servicing Agreement in full.
"Reserve Deposit Amount" means, for a Payment Date, an amount equal to (a) the Required Reserve Amount minus (b) the amount in the Reserve Account on the Payment Date (before payments under Section 8.2(c) of the Indenture on that Payment Date).
"Residual Interest" means an "eligible horizontal residual interest" (as defined in the U.S. Credit Risk Retention Rules) equal to at least 5% of the fair value of all of the "ABS interests" (as defined in the U.S. Credit Risk Retention Rules) in the Issuer issued as part of the transactions contemplated by the Transaction Documents, determined as of the Closing Date using a fair value measurement framework under United States generally accepted accounting principles.
A-34
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Responsible Person" means:
(a) for the Administrator, the Depositor, the Sponsor, the Servicer, the Marketing Agent, the Parent Support Provider or any Originator, a Person designated in an Officer's Certificate of the Person or other notice signed by an officer of the Person authorized to act for the Person or any treasurer, assistant treasurer or corporate secretary of such Person that has responsibility for the matter;
(b) for the Issuer, an officer in the Corporate Trust Office of the Owner Trustee, any officer of the Owner Trustee to whom any matter is referred because of the officer's knowledge of and familiarity with the matter, and a Responsible Person of the Administrator;
(c) for the Master Trust, an officer in the Corporate Trust Office of the Master Trust Owner Trustee, any officer of the Master Trust Owner Trustee to whom any matter is referred because of the officer's knowledge of and familiarity with the matter, and a Responsible Person of the Master Trust Administrator; and
(d) for the Indenture Trustee or the Owner Trustee, an officer in the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, as applicable, including each vice president, assistant vice president, secretary, assistant secretary or other officer customarily performing functions similar to those performed by those officers listed above, and any officer of the Indenture Trustee or the Owner Trustee, as applicable, to whom any matter is referred because of the officer's knowledge of and familiarity with the matter, and in each case, having direct responsibility for the administration of the Transaction Documents.
"Review" has the meaning stated in the Asset Representations Review Agreement.
"Review Materials" has the meaning stated in the Asset Representations Review Agreement.
"Review Notice" has the meaning stated in the Asset Representations Review Agreement.
"Review Receivable" has the meaning stated in the Asset Representations Review Agreement.
"Review Report" means, for an Asset Representations Review, the report of the Asset Representations Reviewer described in Section 3.5 of the Asset Representations Review Agreement.
"Revolving Period" means the period from the Closing Date to the start of the Amortization Period.
"S&P" means S&P Global Ratings.
A-35
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Sarbanes Certification" has the meaning stated in Section 6.7(a)(iv) of the Transfer and Servicing Agreement.
"Schedule of Receivables" means (a) the schedule identifying the Initial Receivables attached as Schedule A to each Receivables Transfer Agreement and Schedule A to each of the Transfer and Servicing Agreement and the Indenture or the electronic file with respect thereto delivered on the Closing Date, and (b) each schedule identifying any Additional Receivables attached as Schedule A to any Transfer Notice or the electronic file with respect thereto delivered by the Depositor, or the Administrator on its behalf, to the Issuer and the Indenture Trustee for an Acquisition Date.
"Second Priority Principal Payment" means, for a Payment Date, the greater of:
(a) an amount (not less than zero) equal to:
(i) the aggregate Note Balances of the Class A Notes and the Class B Notes as of the immediately preceding Payment Date (or, for the initial Payment Date, as of the Closing Date); minus
(ii) the Adjusted Pool Balance; minus
(iii) the First Priority Principal Payment; and
(b) on and after the Final Maturity Date for the Class B Notes, the Note Balance of the Class B Notes until paid in full.
"Secured Parties" means the Indenture Trustee, for the benefit of the Noteholders.
"Securities Account" means each Bank Account subject to the terms of the Account Control Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" means U.S. Bank National Association.
"Servicer" means Cellco or any Successor Servicer engaged under Section 7.4 of the Transfer and Servicing Agreement.
"Servicer Acquisition Obligation" has the meaning stated in the Parent Support Agreement.
"Servicer Deposit Obligation" has the meaning stated in the Parent Support Agreement.
"Servicer Representation Obligation" has the meaning stated in the Parent Support Agreement.
A-36
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Servicer Termination Event" has the meaning stated in Section 7.2 of the Transfer and Servicing Agreement.
"Servicer's Certificate" means an Officer's Certificate of the Servicer delivered pursuant to Section 6.6 of the Transfer and Servicing Agreement.
"Servicing Criteria" means the "servicing criteria" set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.
"Servicing Fee" means, for a Collection Period, the fee payable to the Servicer in an amount equal to the product of:
(a) one-twelfth of the Servicing Fee Rate; times
(b) the Adjusted Pool Balance at the beginning of the full calendar month immediately preceding such Payment Date;
provided, that the Servicing Fee for the initial Payment Date will equal the product of (i) a fraction, the numerator of which is the number of days from and including the Closing Date to and including the last day of the first Collection Period and the denominator of which is 360, and (ii) the Servicing Fee Rate times the Adjusted Pool Balance as of the Closing Date.
"Servicing Fee Rate" means 0.75%.
"Servicing Procedures" means the servicing procedures of Cellco relating to device payment plan agreements originated by the Originators, as amended or modified from time to time.
"Similar Law" means any federal, State, local or non-U.S. law or regulation that is substantially similar to Title I of ERISA or Section 4975 of the Code.
"SOFR" with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the Benchmark Administrator for SOFR (or a successor Benchmark Administrator).
"Solvent" means, with respect to any Person and as of any particular date, that (i) the present fair market value (or present fair saleable value) of the assets of such Person is not less than the total amount required to pay the probable liabilities of such Person on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (ii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business and (iii) such Person is not incurring debts or liabilities beyond its ability to pay such debts and liabilities as they mature.
"Sponsor" means Cellco.
A-37
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"State" means a state or commonwealth of the United States of America, or the District of Columbia.
"Subcontractor" means any vendor, subcontractor or other Person that is not responsible for the overall servicing (as "servicing" is commonly understood by participants in the asset-backed securities market) of the Receivables but performs one or more discrete functions identified in the Servicing Criteria with respect to the Receivables under the direction or authority of the Servicer or a Subservicer.
"Subservicer" means any Person that services Receivables on behalf of the Servicer or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Servicer under this Agreement that are identified in the Servicing Criteria.
"Successor Servicer" has the meaning stated in Section 7.4(a)(i) of the Transfer and Servicing Agreement.
"Supplemental Servicing Fee" means, for a Collection Period, all net Recoveries, late fees, prepayment charges, extension fees and other administrative fees or similar charges on the Receivables.
"Temporarily Excluded Receivables" means any Receivable deemed to be temporarily excluded by the Administrator from any calculation required to be made by the Administrator or the Servicer pursuant to and in accordance with the terms of the Transaction Documents.
"Temporarily Excluded Receivables Servicing Fee" means, for a Collection Period, the fee payable to the Servicer in an amount equal to the product of:
(a) one-twelfth of the Servicing Fee Rate; times
(b) the aggregate Principal Balance of all Temporarily Excluded Receivables at the beginning of the calendar month immediately preceding such Collection Period.
"Term SOFR" means the forward-looking term rate for the applicable Corresponding Tenor based on SOFR that has been selected or recommended by the Relevant Governmental Body.
"Third Priority Principal Payment" means, for a Payment Date, the greater of:
(a) an amount (not less than zero) equal to:
(i) the aggregate Note Balances of the Class A Notes, the Class B Notes and the Class C Notes as of the immediately preceding Payment Date (or, for the initial Payment Date, as of the Closing Date); minus
(ii) the Adjusted Pool Balance; minus
A-38
Source: VERIZON ABS LLC, 8-K, 1/23/2020
(iii) the First Priority Principal Payment; minus
(iv) the Second Priority Principal Payment; and
(b) on and after the Final Maturity Date for the Class C Notes, the Note Balance of the Class C Notes until paid in full.
"Total Required Payment" means,
(a) for a Payment Date and the Reserve Account Draw Amount, the sum of the amounts set forth in Sections 8.2(c)(i) through (viii) of the Indenture; and
(b) for a Payment Date and the Negative Carry Account Draw Amount, the sum of the amounts set forth in Sections 8.2(c)(i) through (xiii) of the Indenture.
Following an Event of Default and an acceleration of the Notes or an Insolvency Event or dissolution of the Depositor, until the Note Balances of each Class of Notes have been paid in full, the Total Required Payment will also include the aggregate Note Balances of all Notes.
"Transaction Documents" means the Certificate of Trust, the Trust Agreement, the Receivables Transfer Agreements, the Transfer and Servicing Agreement, the Indenture, the Administration Agreement, the Asset Representations Review Agreement, the Parent Support Agreement, the Underwriting Agreement, the Marketing Agent Agency Agreement, the Depository Agreement, the Cap Agreement and the Account Control Agreement.
"Transfer and Servicing Agreement" means the Transfer and Servicing Agreement, dated as of the Closing Date, among the Issuer, the Depositor and Cellco as Servicer, Marketing Agent and Custodian, as amended, restated, supplemented or modified from time to time.
"Transfer Notice" means the notice to the Issuer, the Depositor and the Indenture Trustee regarding the acquisition of Additional Receivables under Section 2.1(d) of each of the Receivables Transfer Agreements, substantially in the form of Exhibit A to each such Receivables Transfer Agreement.
"Treasury Rate" means, for any Payment Date on which a Make-Whole Payment is to be made, the rate determined on the third Business Day preceding such Payment Date equal to:
(i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release published by the Board of Governors of the Federal Reserve System designated as "Statistical Release H. 15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life (as defined in the definition of Comparable Treasury Issue), yields for the two published
A-39
Source: VERIZON ABS LLC, 8-K, 1/23/2020
maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from those yields on a straightline basis, rounding to the nearest month), or
(ii) if that release (or any successor release) is not published during the week preceding the calculation date or does not contain those yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the date of redemption.
"Treasury Regulations" shall mean regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.
"True Up Trust" means Verizon DPPA True Up Trust, a Delaware statutory trust, or its successors or assigns.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated as of the Closing Date, between the Depositor and the Owner Trustee, as amended, restated, supplemented or modified from time to time.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise specifically provided.
"Trust Property" means the Initial Trust Property and any Additional Trust Property.
"Trust Register" has the meaning stated in Section 3.3(a) of the Trust Agreement.
"Trust Registrar" has the meaning stated in Section 3.3(a) of the Trust Agreement.
"U.S. Credit Risk Retention Rules" means Regulation RR, 17 C.F.R. §246.1, et seq.
"UCC" means the Uniform Commercial Code as in effect in any relevant jurisdiction.
"Unadjusted Benchmark Replacement" means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
"Underwriting Agreement" means the Underwriting Agreement, dated as of January 21, 2020, by and among the Depositor, Cellco and each of BofA Securities, Inc., Mizuho Securities USA LLC, MUFG Securities Americas Inc. and Wells Fargo Securities, LLC, each on its own behalf and as a representative of the several underwriters identified therein.
"Underwriting Procedures" means the underwriting procedures of the Originators, as established by Cellco, relating to device payment plan agreements originated by the Originators, as such underwriting procedures may be amended or modified from time to time.
A-40
Source: VERIZON ABS LLC, 8-K, 1/23/2020
"Upgrade Contract" has the meaning stated in the Glossary of the Marketing Agent Agency Agreement.
"Upgrade Offer" means the Annual Upgrade Offer or any other upgrade offer extended by Verizon Wireless to an existing Obligor under which such Obligor can upgrade a Device that is the subject of a device payment plan agreement if the terms and conditions specified in such offer are satisfied.
"Upgrade Payment" means a prepayment amount equal to the remaining unpaid Principal Balance of the related Receivable determined as of the date of the relevant upgrade, after giving effect to any prepayment made by the related Obligor in connection with the related Upgrade Offer.
"Verified Note Owner" has the meaning stated in Section 14.1 of the Indenture.
"Verizon" means Verizon Communications Inc., a Delaware corporation.
"Verizon Originators" means the various subsidiaries and Affiliates of Cellco listed on Schedule I to the Marketing Agent Agency Agreement.
"Verizon Wireless" means the wireless business of Verizon, operated by Cellco and various other subsidiaries of Verizon, including the Originators, under the Verizon Wireless brand.
"Written-Off Receivable" means any Receivable that in accordance with the Servicing Procedures has been charged off or written off by the Servicer.
"Yield Amount" means, for each Receivable on the Closing Date, on each Payment Date and on each Acquisition Date other than a Payment Date, the amount by which (x) the Principal Balance as of the last day of the related Collection Period or as of the applicable Cutoff Date, as applicable, for such Receivable exceeds (y) the present value of the future scheduled payments on the Receivable as of the last day of the related Collection Period (or as of the applicable Cutoff Date, for the first Payment Date for the Receivables) calculated using the Discount Rate. For purposes of this calculation, the future scheduled payments on each Receivable are the equal monthly payments that would reduce the Receivable's Principal Balance as of the related Cutoff Date to zero on the Receivable's final scheduled payment date, at an interest rate equal to the APR of the Receivable, which payments are received at the end of each month without any delays, defaults or prepayments.
"Yield Supplement Overcollateralization Amount" means, for the Closing Date, for each Payment Date and for each Acquisition Date other than a Payment Date, an amount calculated as the sum of the Yield Amounts for all Receivables owned by the Issuer with an APR as stated in the related device payment plan agreement of less than 7.65%.
A-41
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Exhibit A
Custodian's Security Requirements
(See Attached)
EA-1
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Exhibit B
FORM OF ANNUAL CERTIFICATION
Re: The Transfer and Servicing Agreement, dated as of January 29, 2020 (the "Agreement"), among Verizon Owner Trust 2020-A (the "Issuer"), Verizon ABS LLC (the "Depositor"), and Cellco Partnership d/b/a Verizon Wireless ("Cellco"), as servicer (in such capacity, the "Servicer"), as marketing agent and as custodian.
I, ________________________________, the _____________of __________ [NAME OF COMPANY] (the "Company"), certify to the Issuer, the Administrator and the Depositor, and their officers, with the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Company provided in accordance with Item 1123 of Regulation AB (the "Compliance Statement"), the report on assessment of the Company's compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the "Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the registered public accounting firm's attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation Report"), and all servicing reports, officer's certificates and other information relating to the servicing of the Receivables by the Company during 20[__] that were delivered by the Company to the Issuer and the Depositor pursuant to the Agreement (collectively, the "Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the period of time covered by the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information required to be provided by the Company under the Agreement has been provided to the Issuer and the Depositor;
(4) I am responsible for reviewing the activities performed by the Company as Servicer under the Agreement, and based on my knowledge and the compliance review conducted in preparing the Compliance Statement [and except as disclosed in the Compliance Statement, the Servicing Assessment or the Attestation Report,] the Company has fulfilled its obligations under the Agreement in all material respects; and
(5) The Compliance Statement required to be delivered by the Company pursuant to the Agreement, and each Servicing Assessment and Attestation Report required to be provided by the Company and by any Subservicer or Subcontractor pursuant to the Agreement, have been provided to the Issuer, the Administrator, the Depositor, the Indenture Trustee and the Owner Trustee. Any material instances of
EB-1
Source: VERIZON ABS LLC, 8-K, 1/23/2020
noncompliance with the Servicing Criteria have been disclosed in such reports and have been disclosed to the Issuer, the Administrator and the Depositor.
Capitalized terms used herein and not otherwise defined have the meaning given to such terms in the Agreement.
Date: _________________________
By: ___________________________ Name: Title: EB-2
Source: VERIZON ABS LLC, 8-K, 1/23/2020
Question:
Highlight the parts (if any) of this contract related to "Non-Transferable License" that should be reviewed by a lawyer. Details: Does the contract limit the ability of a party to transfer the license being granted to a third party? | Except for the transfer and assignment under this Agreement, the Depositor will not transfer or assign any Depositor Transferred Property to another Person or Grant or allow a Lien, other than a Permitted Lien, on an interest in any Depositor Transferred Property. | Given the context, answer the question that follows |
Without in any way limiting the generality of the foregoing, the Performance Shares awarded hereunder shall constitute a mere unfunded promise to pay by the Company and a bonus program within the meaning of Department of Labor Regulation Section 2510.3-2(c) promulgated under ERISA. | no erisa plans | Given the provision, provide with the correct label for the given provision |
The payment of cash pursuant to an Optional Redemption shall be payable on the Optional Redemption Date. | optional redemption procedure | Given the provision, provide with the correct label for the given provision |
In the event any Asset-Related Property is not assignable (such as a letter of credit that is not transferable), Sellers shall use commercially reasonable efforts after the Closing to provide Buyer, at no cost to Sellers, with the economic benefits of such property by enforcing such property (at Buyer’s direction) for the benefit and at the expense of Buyer. | cooperation | Given the provision, provide with the correct label for the given provision |
Except as set forth in the footnotes thereto, the Financial Statements have been prepared in accordance with GAAP, subject, in the case of unaudited statements, to normal recurring adjustments necessary for a fair presentation of interim results (in accordance with GAAP) and the absence of notes thereto. | financial statements | Given the provision, provide with the correct label for the given provision |
Upon receipt of any such notice of resignation, the Required Lenders shall have the right, subject to the consent of the Borrowers (not to be unreasonably withheld or delayed) so long as no Event of Default under Sections 11.1 or 11.5 is continuing, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. | successor agents | Given the provision, provide with the correct label for the given provision |
The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise, or timely pay an Amortization Payment (as defined in this Note) (in each case, subject to a fifteen (15) calendar day cure period). | failure to pay principal or interest | Given the provision, provide with the correct label for the given provision |
In accordance with Section 4.3E , to the extent the Parent REIT issues shares of restricted common stock pursuant to a stock incentive plan, the Partnership shall issue to the Initial Limited Partner an equal number of Partnership Common Units that are subject to forfeiture in the event that such shares of restricted common stock are forfeited. | restricted units | Given the provision, provide with the correct label for the given provision |
Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon exercise of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder‘s for purposes of Section 13(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), does not exceed 4.99% of the total number of issued and outstanding Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). | limitations | Given the provision, provide with the correct label for the given provision |