Exhibit 10.1
RECEIVABLES SALES AGREEMENT
RECEIVABLES SALES AGREEMENT (this “Agreement”),
dated as of March 28, 2005, by and between TRINSIC
COMMUNICATIONS, INC., a Delaware corporation and TOUCH 1
COMMUNICATIONS, INC., an Alabama corporation, collectively as
Seller and Subservicer, and THERMO CREDIT, LLC, a Colorado limited
liability company, as Purchaser and Master Servicer.
WITNESSETH:
WHEREAS, the Seller desires to factor certain of its
telecommunication receivables and the Purchaser is in the business
of factoring certain telecommunication receivables from time to
time;
WHEREAS, the Purchaser may, but shall not be required to act
in the capacity of Master Servicer to perform certain servicing,
administrative and collection functions in respect of the
receivables purchased by the Purchaser under this Agreement (the
“Purchased Receivables”);
WHEREAS, the Purchaser and the Master Servicer desire that
the Subservicer be appointed to perform certain servicing,
administrative and collection functions in respect of the Purchased
Receivables; and
WHEREAS, the Seller has been requested, and is willing, to
act as the Subservicer.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 Certain Defined Terms . Capitalized
terms used in this Agreement have the respective meanings set forth
on Exhibit A , or as elsewhere provided in this
Agreement. In the event of a conflict, the meaning given in
Exhibit A shall prevail.
Section 1.2 Other Terms . All accounting terms
not specifically defined in this Agreement shall be construed in
accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC, and not specifically defined in
this Agreement, are used in this Agreement as defined in such
Article 9.
ARTICLE II — PURCHASE AND SALE;
ESTABLISHMENT OF ACCOUNTS
Section 2.1 Offer to Sell . Seller shall offer
to sell, transfer, assign and set over to Purchaser those Eligible
Receivables set forth on a list of such Eligible Receivables which
such list shall be delivered by the Seller to the Purchaser no
later than three (3) Business Days prior to each Purchase
Date.
Section 2.2 Purchase of Receivables . Upon
receipt of the list of Eligible Receivables pursuant to
Section 2.1, the Master Servicer, in its sole discretion, will
confirm which of the Eligible Receivables offered by Seller that
the Purchaser will Purchase. The Purchase of such
Receivables shall occur upon
payment of the Advance Amount. Upon Purchase of the Receivables,
Seller shall be deemed to have sold, transferred, assigned, set
over and conveyed to Purchaser, without recourse except as
expressly provided herein, all of Seller’s right, title and
interest in and to the Purchased Receivables. The Seller shall not
take any action inconsistent with such ownership and shall not
claim any ownership in any Purchased Receivable. The Seller shall
indicate in its Records that ownership interest in any Purchased
Receivable is held by the Purchaser. In addition, the Seller shall
respond to any inquiries with respect to ownership of a Purchased
Receivable by stating that it is no longer the owner of such
Purchased Receivable and that ownership of such Purchased
Receivable is held by the Purchaser. Documents relating to the
Purchased Receivables shall be held in trust by the Seller and the
Subservicer, for the benefit of the Purchaser as the owner of the
Purchased Receivables, and possession of any Required Information
relating to the Purchased Receivables so retained is for the sole
purpose of facilitating the servicing of the Purchased Receivables
and carrying out the terms of this Agreement. Such retention and
possession is at the will of the Purchaser and in a custodial
capacity for the benefit of the Purchaser only.
Section 2.3 Purchase Price and Payment . The
Purchase Price for Receivables purchased on any Purchase Date shall
be an amount equal to the aggregate Net Values of such Purchased
Receivables. The Advance Amount shall be the Net Value of the
Purchased Receivables after deducting applicable LEC and billing
fees, adjustments and reserves (or an estimate thereof) and
application of the Gross Liquidation Rate, reduced by (a) the
Discount Fees as of such Purchase Date, (b) the amount, if
any, by which the Thermo Contingency Account is less than the
Specified Thermo Contingency Account Balance as of such Purchase
Date, (c) any Rejected Receivable Amount not otherwise paid
pursuant to Section 4.4, and (d) other amounts due the
Purchaser in accordance with this Agreement. The Advance Amount
shall be paid to the Seller by immediately available funds on the
Purchase Date. At any time the Net Value of outstanding Purchased
Receivables shall not exceed the Purchase Commitment.
Section 2.4 Establishment of Accounts; Conveyance of
Interests Therein; Investments . (a) Except as may
otherwise be established by Purchaser, in writing, a Lockbox
Account will be established or assigned, as the case may be, for
the benefit of the Purchaser into which all Collections from Payors
with respect to Receivables shall be deposited. The Lockbox Account
will be maintained at the expense of the Seller. The Seller agrees
to deposit all Collections it receives with respect to Receivables
in said Lockbox Account and will instruct all Payors to make all
payments on Receivables to said Lockbox Account. All funds in said
Lockbox Account will be remitted as instructed by the Master
Servicer in accordance with the terms of this Agreement.
(b) The
Purchaser has established and shall maintain the Thermo Contingency
Account.
(c) The
Seller does hereby sell, transfer, assign, set over and convey to
the Purchaser all right, title and interest of the Seller in and to
all amounts deposited, from time to time, in the Lockbox Account,
and Thermo Contingency Account. Any Collections relating to
Receivables held by the Seller or the Subservicer pending deposit
to the Lockbox Account as provided in this Agreement, shall be held
in trust for the benefit of the Purchaser until such
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amounts are deposited into the
Lockbox Account. All Collections in respect of Purchased
Receivables received by the Seller and not deposited directly by
the Payor in the Lockbox Account shall be remitted to the Lockbox
Account no later than the following Business Day, and if such
Collections are not remitted on a timely basis, in addition to its
other remedies hereunder, the Purchaser shall be entitled to
receive the Misdirected Payment Fee.
Section 2.5 Grant of Security Interest . It is
the intention of the parties to this Agreement that payment of the
Advance Amount by the Purchaser to the Seller for Purchased
Receivables to be made under this Agreement shall constitute an
absolute sale of such Purchased Receivables and not a loan. In the
event, however, that a court of competent jurisdiction were to hold
that the transaction evidenced by this Agreement constitutes a loan
and not a purchase and sale, it is the intention of the parties
that this Agreement shall constitute a security agreement under the
UCC and any other applicable law, and that the Seller shall be
deemed to have granted to the Purchaser a first priority perfected
security interest in all of the Seller’s right, title and
interest in, to and under: the Purchased Receivables; the Records;
all payments of principal of or interest on such Purchased
Receivables; all amounts on deposit from time to time in the
Lockbox Account and the Thermo Contingency Account; all other
rights relating to and payment made under this Agreement, and all
proceeds of any of the foregoing.
Section 2.6 Further Action Evidencing Purchases
. The Seller agrees that, from time to time, at its expense, it
will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or
appropriate, or that the Purchaser may reasonably request, in order
to perfect, protect or more fully evidence the transfer of
ownership of and its security interest in the Purchased Receivables
and other assets in which Seller grants to Purchaser a security
interest in accordance with Section 8.2 below, and to enable
the Purchaser to exercise or enforce any of its rights under this
Agreement.
ARTICLE III — CONDITIONS OF
PURCHASES
Section 3.1 Conditions Precedent to All Purchases
. Each Purchase from the Seller by the Purchaser shall be
subject to the conditions precedent that as of each Purchase
Date:
(a) No
Event of Seller Default has occurred and the Seller is in
compliance with each of its covenants and representations set forth
in Sections 4.1 and 4.2 of this Agreement;
(b) The
Seller shall have made available to the Purchaser a complete copy
of all of Seller’s then current Carrier Agreements,
Clearinghouse Agreements and Billing and Collection Agreements and
any amendment or modification of such agreements;
(c) The
Seller shall have made available to the Purchaser a copy of each
written notice delivered by or received by either the Carrier,
Billing and Collection Agent, Clearinghouse Agent or the Seller
with respect to any Carrier Agreements, Clearinghouse Agreements
and/or the Billing and Collection Agreements, except written
notices not involving a material effect or change to the
contractual relationship;
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(d) The
Seller shall have delivered to the Purchaser evidence satisfactory
to the Purchaser of consent to service or other properly documented
LOA’s (including both paper and electronic) for the
Payors;
(e) The
Termination Date shall not have occurred; and
(f) The
Seller shall have taken such other action, including but not
limited to delivery of an opinion of counsel in the form of
Exhibit D hereto, and delivered such other
approvals, opinions or documents to the Purchaser, as the Purchaser
may reasonably request;
(g) The
Seller shall deliver to Purchaser a copy of all sales scripts and
LOA’s to be independently reviewed by a mutually agreeable
third party and Seller cannot deviate from the language of the
script or LOA without having such changes reviewed and
approved;
(h) To
the extent the Seller markets through telemarketing, Seller shall
subscribe to both state and federal, as the case may be, do not
call lists and will comply with all changes and revisions to such
rules. In addition, Seller shall utilize an independent third-party
verification company to verify all telemarketing orders for
service; and
(i) Seller
shall provide Purchaser with proofs of previous, current and
ongoing compliance with both Federal and State USF contributions
which includes copying Purchaser on all Form 499 A’s and
Q’s that are filed by Seller.
ARTICLE IV — REPRESENTATIONS,
WARRANTIES
AND COVENANTS OF THE SELLER
Section 4.1 Representations, Warranties and Covenants as
to the Seller . The Seller represents and warrants to the
Purchaser and Master Servicer, as of the date of the initial
Purchase Date and as of each Purchase Date thereafter, as
follows:
(a) The
Seller is duly organized, validly existing and in good standing
under the laws of its state of incorporation or other formation and
is duly qualified to do business and is in good standing in each
jurisdiction in which it is doing business and has the power and
authority to own and convey all of its properties and assets and to
execute and deliver this Agreement and the Related Documents and to
perform the transactions contemplated thereby; and each is the
legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms;
(b) The
execution, delivery and performance by the Seller of this Agreement
and the Related Documents and the transactions contemplated thereby
(i) have been duly authorized by all necessary corporate or
other action on the part of the Seller, (ii) do not contravene
or cause the Seller to be in default under (A) any contractual
restriction contained in any loan or other agreement or instrument
binding on or affecting the Seller or its property; or (B) any
law, rule, regulation, order, writ, judgment, award, injunction, or
decree applicable to, binding on or affecting the Seller or its
property and (iii) do not result in or require the creation of
any Adverse Claim upon or with respect to any of the property of
the Seller (other than in
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favor of the Purchaser as
contemplated hereunder), all as more fully certified by the Seller
in the form of Exhibit C attached
hereto;
(c) Except
as set forth on Schedule 4.1(e), there is no court order,
judgment, writ, pending or threatened action, suit or proceeding,
of a material nature against or affecting the Seller, its officers,
managers or directors, or the property of the Seller, in any court
or tribunal, or before any arbitrator of any kind or before or by
any Governmental Authority (i) asserting the invalidity of
this Agreement or any of the Related Documents, (ii) seeking
to prevent the sale and assignment of any Receivable or the
consummation of any of the transactions contemplated thereby, (iii)
seeking any determination or ruling that might materially and
adversely affect the Seller, this Agreement, the Related Documents,
the Receivables, the Contracts or any LOA, or (iv) asserting a
claim for payment of money in excess of $50,000;
(d) The
primary business of the Seller is the provision of
telecommunication services and/or equipment. All telecommunications
license numbers issued to the Seller by any Governmental Authority
are set forth on Schedule 2 and the Seller has
complied in all material respects with all applicable laws, rules,
regulations, orders and related Contracts, and has and maintains
all permits, licenses, certifications, authorizations,
registrations, approvals and consents of Governmental Authorities
or any other party necessary for the business of the Seller and
each of its subsidiaries;
(e) The
Seller (i) has filed and paid on a timely basis all taxes and
corresponding tax returns (federal, state and local ) required to
be filed and has paid or made adequate provisions for the payment
of all taxes, assessments, and other governmental charges due from
the Seller; (ii) the financial statements of the Seller in reports
to the United States Securities and Exchange Commission, copies of
which have been made available to the Purchaser, fairly present the
financial condition of the Seller, all in accordance with generally
accepted accounting principles consistently applied;
(iii) since September 30, 2004, there has been no
material adverse change in any such condition, business or
operations (except as has been disclosed to the Purchaser or made
available to the Purchaser in reports to the United States
Securities and Exchange Commission); and (iv) the Seller has
delivered to the Purchaser within 45 days after the end of
each subsequent three month period except after the fiscal year
end), and, 90 days after the fiscal year end of the Seller,
the financial statements, including balance sheet, income statement
and statement of cash flows prepared in accordance with generally
accepted accounting principles, of the Seller as of the end of such
three-month period or fiscal year, as the case may be, certified by
the chief financial officer and chief executive officer of the
Seller;
(f) All
information furnished by or on behalf of the Seller to the Master
Servicer or the Purchaser in connection with this Agreement is true
and complete in all material respects and does not omit to state a
material fact and the sales of Purchased Receivables under this
Agreement are made by the Seller in good faith and without intent
to hinder, delay or defraud present or future creditors of the
Seller;
(g) The
Lockbox Account is the only lockbox account to which Payors have
been instructed to direct Receivable proceeds and each Payor of an
Eligible Receivable has been
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directed upon its receipt of the
notice attached hereto as Exhibit B , which such
notice was mailed not less than two (2) Business Days prior to
the Purchase Date, to remit all payments with respect to such
Receivable for deposit in the Lockbox Account;
(h) The
principal place of business and chief executive office of the
Seller are located at the address of the Seller set forth under its
signature below and there are not now, and during the past four
months there have not been, any other locations where the Seller is
located (as that term is used in the UCC) or keeps Records except
as set forth in the designated space beneath its signature line in
this Agreement;
(i) The
exact name of the Seller as it appears in its Articles of
Incorporation, Formation or Organization is as set forth at the
beginning of this Agreement and, except as set forth on
Schedule 3 , the Seller has not changed its
legal name in the last six (6) years, and during such period,
the Seller did not use, nor does the Seller now use any tradenames,
fictitious names, assumed names or “doing business as”
names;
(j) The
federal taxpayer identification number of the Seller is as set
forth under its signature below;
(k) The
Seller has not done anything to impede or interfere with the
collection by the Purchaser of the Purchased Receivables and shall
not, without Purchaser’s prior written consent, amend, waive
or otherwise permit or agree to any deviation from the terms or
conditions of any Purchased Receivable or any related Carrier
Agreement, Clearinghouse Agreement, Billing and Collection
Agreement, Contract or LOA which (i) may create an Adverse
Claim with respect to any Receivable or (ii) would materially
affect the ability of the Subservicer or the Master Servicer to act
in each’s capacity as such; and
(l) For
federal income tax reporting and accounting purposes, the Seller
will treat the sale of each Purchased Receivable pursuant to this
Agreement as a sale of, or absolute assignment of its full right,
title and ownership interest in such Purchased Receivable to the
Purchaser.
References to financial
statements of the Seller in this Agreement refer to the
consolidated financial statements of Trinsic, Inc., the parent
corporation.
Section 4.2 Representations and Warranties of the Seller
as to Purchased Receivables . With respect to each
Purchased Receivable sold pursuant to this Agreement the Seller
represents and warrants, as of the date hereof and as of the date
of each subsequent Purchase Date, as follows:
(a) Such
Purchased Receivable (i) includes all the Required
Information; (ii) is the liability of Eligible Payor and
(iii) was created by the provision or sale of
telecommunication services or equipment by the Seller in the
ordinary course of its business; (iv) has a Purchase Date no
later than 45 days after its Billing Date; (v) is not a
Purchased Receivable as to which, as of any Determination Date,
payment by the Payor of such Receivable has been received and is
not duplicative of any other Receivable; and (vi) is owned by
the Seller free and clear of any Adverse Claim, and the Seller has
the right to sell, assign and transfer the
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same and interests therein as
contemplated under this Agreement without consent other than those
secured and delivered to the Purchaser on or prior to the Closing
Date from any Governmental Authority, the Payor, a Carrier, the
Billing and Collection Agent, the Clearinghouse Agent or any other
Person.
(b) The
Eligible Receivable Amount set forth in the applicable Required
Information of such Receivable is payable in United States Dollars
and shall not exceed with respect to any one individual Payor of
any Payor Class the amounts or percentages (%) reflected in
Schedule 1 and Schedule 1 (A) , unless
approved in writing by the Purchaser in advance, other than an
Eligible Receivable payable under a Billing and Collection
Agreement as set forth on the attached Schedule 4,
and is net of any adjustments or other modifications contemplated
by any Carrier Agreement, Clearinghouse Agreement, Billing and
Collection Agreement or otherwise and neither the Receivable nor
the related Carrier Agreement, Clearinghouse Agreement, Billing and
Collection Agreement or Contract has or will be compromised,
adjusted, extended, satisfied, subordinated, rescinded, set-off or
modified by the Seller, the Payor, the Carrier, the Clearinghouse
Agent or the Billing and Collection Agent, and is not nor will be
subject to compromise, adjustment, termination or modification,
whether arising out of transactions concerning the Contract, any
Carrier Agreement, Clearinghouse Agreement, Billing and Collection
Agreement or otherwise; and
(c) There
are no procedures or investigations pending or threatened before
any Governmental Authority (i) asserting the invalidity of
such Receivable, Carrier Agreement, Clearinghouse Agreement,
Billing and Collection Agreement, LOA or such Contract;
(ii) asserting the bankruptcy or insolvency of the related
Payor; (iii) seeking the payment of such Receivable or payment
and performance of the related Carrier Agreement, Clearinghouse
Agreement, Billing and Collection Agreement, or such other Contract
or LOA; or (iv) seeking any determination or ruling that might
materially and adversely affect the validity or enforceability of
such Receivable or the related Carrier Agreement, Clearinghouse
Agreement, Billing and Collection Agreement, or such other Contract
or LOA.
Section 4.3 Negative Covenants of the Seller .
The Seller shall not, without the written consent of the Purchaser
and the Master Servicer:
(a) Create,
purport to create or suffer to exist any Adverse Claim or lien upon
any Receivable and related Contracts, its Customer Base, the
Lockbox Account, or any other account in which any Collections of
any Receivable are deposited, or assign any right to receive income
in respect of any Receivable;
(b) Submit
or permit to be submitted to Payors any invoice for
telecommunication services or equipment rendered by or on behalf of
Seller which contains a “pay to” address other than the
Lockbox Account;
(c) Make
any change to (i) the location of its chief executive office
or the location of the office where Records are kept or
(ii) its corporate name or use any tradenames, fictitious
names, assumed names or “doing business as”
names;
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(d) Make
any change to or file for a new federal taxpayer identification
number; or;
(e) Enter
into or execute any Clearinghouse Agreement or Billing and
Collection Agreement (other than those listed on
Schedule 4 hereof) or any amendment or
modification thereof.
Section 4.4 Repurchase Obligations . Upon
discovery by any party to this Agreement of a breach of any
representation or warranty in Sections 4.1 or 4.2 of this
Article IV which materially and adversely affects the value of
a Purchased Receivable or the interests of the Purchaser therein
(herein a “Rejected Receivable”), the party discovering
such breach shall give prompt written notice to the other parties
to this Agreement. Thereafter, on the next Purchase Date, the Net
Value of the Rejected Receivables shall be deducted from the
Purchase Price of the Eligible Receivables pursuant to
Section 2. To the extent the amount of that Advance Amount is
insufficient, Purchaser shall make demand upon the Seller to pay
any such deficiency to the Purchaser within three (3) Business Days
of receipt of notice from Purchaser. Upon payment of the amount due
by the Seller to the Purchaser under this Section 4.4, the
subject Purchased Receivable will be reconveyed to the Seller
without recourse.
Section 4.5 Commitment Fee . The Seller will pay
to the Purchaser the Commitment Fee. The initial Commitment Fee
will be the amount or percentage (%) reflected in
Schedule 1 and Schedule 1 (A) , and will be
payable in three (3) installments: the first in the amount of
1% of the Commitment at the time of the first Purchase, the second
in the amount of 1% of the Commitment on the first anniversary of
the date of this Agreement, and the third in the amount of .5% of
the Commitment on the second anniversary of the date of this
Agreement. Any increases in the Purchase Commitment will require
payment of additional Commitment Fees of the amount or percentage
(%) reflected in Schedule 1 and Schedule 1
(A) payable at the time of the increase. The Commitment Fee
shall be deemed earned and payable upon execution of this Agreement
and shall be deducted from the Advance Amount when due.
Section 4.6 Discount Fees . Seller shall pay to
Purchaser an initial Discount Fee of the amount or percentage (%)
reflected in Schedule 1 and Schedule 1 (A)
, as adjusted from time to time; additional Discount Fees will be
charged at a rate specified in Schedule 1 and
Schedule 1 (A) . If uncollected after 120 days
from the Billing Date, the Billed Amount will be deemed
uncollectible and a Rejected Receivable. The Discount Fees shall be
deducted from the Advance Amount.
ARTICLE V — ACCOUNTS
ADMINISTRATION
Section 5.1 Appointment of Master Servicer .
Purchaser may from time to time appoint and delegate to a third
party the duties of Master Servicer under this Agreement. If a
third party Master Servicer is appointed, Purchaser shall so notify
Seller, and such notice shall be deemed to confirm to Seller that
Purchaser has appointed the Master Servicer (including any
successors thereto), its agent and attorney-in-fact, with full
power of substitution, to take any and all reasonable steps in the
Seller’s name and on the Seller’s behalf necessary or
desirable in the determination of the Master Servicer to collect
all amounts due under any and all Purchased Receivables, process
all Collections, commence proceedings with respect to enforcing
payment
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of such Purchased Receivables and
the related Contracts, and adjusting, settling or compromising the
account or payment thereof. Upon receipt of Purchaser’s
notice of appointment, the Seller shall furnish the Master Servicer
(and any successors thereto) with any specific powers of attorney
and other documents necessary or appropriate to enable the Master
Servicer to carry out its servicing and administrative duties under
this Agreement, and shall cooperate with the Master Servicer to the
fullest extent in order to ensure the collectability of the
Purchased Receivables. To the extent the Purchaser shall have
delegated its duties with respect to any Purchased Receivable or
related Contracts, it shall not be obligated to perform any of the
obligations of the Master Servicer hereunder.
Section 5.2 Lockbox Account . The Purchaser and
the Master Service acknowledge that certain amounts deposited in
the Lockbox Account may relate to Receivables other than Purchased
Receivables and that such amounts continue to be owned by the
Seller. All such amounts shall be administered in accordance with
Section 5.4.
Section 5.3 Determinations of the Master Servicer
. On each Determination Date, the Master Servicer will
determine:
(a) the
Net Value of all Purchased Receivables which have become Rejected
Receivables since the prior Purchase Date (the “Rejected
Receivable Amount”);
(b) the
amount of Collections up to the Purchase Price of all Purchased
Receivables received since the prior Determination Date (the
“Paid Receivables Amount”);
(c) the
Net Value of all Purchased Receivables which have become Defaulted
Receivables since the prior Purchase Date (the “Defaulted
Receivable Amount”);
(d) the
aggregate amount deposited in the Lockbox Account in excess of the
Purchase Price of each Purchased Receivable, including Collections
pertaining to Receivables not purchased under this Agreement, since
the prior Determination Date (the “Excess Collection
Amount”); and
(e) the
Net Value of all Purchased Receivables less the Rejected Receivable
Amount and the Defaulted Receivable Amount as of the current
Determination Date (the “Current Net Value
Amount”).
The
Master Servicer’s determinations of the foregoing amounts
shall be conclusive in the absence of manifest error. The Master
Servicer shall provide to Seller and Purchaser on a monthly basis a
settlement statement setting forth the determinations made by it
under this Section 5.3. The Master Servicer shall timely
notify the Purchaser and Seller of such determinations.
Section 5.4 Distributions from Accounts .
(a) On each Determination Date, following the determinations
set forth in Section 5.3, the Master Servicer will distribute
any amount owed to the Seller pursuant to Section 5.3 by wire
transfer.
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(b) Until
the Termination Date, with reasonable best efforts on each Purchase
Date or in any event within two (2) Business Days of each such
Purchase Date, the Master Servicer shall pay to the Purchaser all
amounts due and owing the Purchaser in accordance with this
Agreement and pay the balance, if any, to the Seller by wire
transfer; provided , however , with respect to
Receivables processed or cleared pursuant to any Carrier Agreement,
Clearinghouse Agreement or Billing and Collection Agreement, if
applicable, any Excess Collection Amount shall be retained by the
Purchaser until such time that the Seller’s billing cycle (or
batch) to which such Excess Collection Amount applies is deemed
closed by the Purchaser which, absent the occurrence of an Event of
Seller Default and provided that the Purchaser has received
information in sufficient form and format to allow the Purchaser to
properly apply and/or post Collections against Purchased
Receivables, will occur no later than the next immediate Purchase
Date following such determination to an account designated by the
Seller.
Section 5.5 Allocation of Moneys following Termination
Date . (a) Upon the occurrence of a Termination Date
hereunder, the Master Servicer shall administer and monitor the
Lockbox Account and any and all Collections and apply the amount of
such Collections to the outstanding Net Value of Purchased
Receivables. To the extent any Purchased Receivable becomes a
Defaulted Receivable, the Purchaser may withdraw an amount equal to
such Defaulted Receivable Amount from the Thermo Contingency
Account and deposit such amount in the Lockbox Account,
provided , however , that such recourse is expressly
limited to the monies which comprise the Thermo Contingency Account
at the time of the Termination Date which shall not at any time
exceed the Specified Thermo Contingency Account Balance.
Thereafter, any Excess Collection Amount which relates to
Receivables not purchased by the Purchaser may not be used for
deposit to the Thermo Contingency Account and shall be otherwise
administered in accordance with this Agreement.
(b) In
any event, following the Termination Date and the Purchaser’s
receipt of the Termination Fee, if any, the Seller may, at its
option, repurchase all previously Purchased Receivables by
depositing with the Purchaser the then aggregate uncollected
portion of the Advance Amount with respect to such Purchased
Receivables. Following such payment and any other amount due and
owing the Purchaser under this Agreement, including without
limitation any due but unpaid Commitment Fees or Discount Fees,
this Agreement shall be deemed terminated.
(c) On
the first Determination Date on which the aggregate Net Value of
all Purchased Receivables (other than Defaulted Receivables) is
less than the aggregate amount remaining in the Thermo Contingency
Account, the Master Servicer shall disburse all remaining amounts
held in the Thermo Contingency Account to the Seller and all
interests of the Purchaser in all Purchased Receivables owned by
the Purchaser shall be reconveyed and reassigned by the Purchaser
to the Seller, without recourse. Following such disbursement and
reconveyance, this Agreement shall be deemed terminated.
ARTICLE VI — APPOINTMENT OF THE
SUBSERVICER
Section 6.1 Appointment of the Subservicer . As
consideration for the Seller’s receipt of Excess Collection
Amount, the Master Servicer and the Purchaser hereby appoint
the
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Seller and the Seller hereby
accepts such appointment to act as Subservicer under this
Agreement. The Subservicer shall service the Purchased Receivables
and enforce the Purchaser’s respective rights and interests
in and under each Purchased Receivable and each related Contract or
LOA; and shall take, or cause to be taken, all such actions as may
be necessary or advisable to service, administer and collect each
Purchased Receivable all in accordance with (i) customary and
prudent servicing procedures for telecommunication receivables of a
similar type, and (ii) all applicable laws, rules and
regulations; and shall serve in such capacity until the termination
of its responsibilities pursuant to Section 6.4 or 7.1. The
Subservicer may, only with the prior consent of the Purchaser,
subcontract with a third party for billing, collection, servicing
or administration of the Receivables. Any termination or
resignation of the Subservicer under this Agreement shall not
affect any claims that the Purchaser may have against the
Subservicer for events or actions taken or not taken by the
Subservicer arising prior to any such termination or
resignation.
Section 6.2 Duties and Obligations of the
Subservicer . (a) The Subservicer shall at any time
permit the Purchaser, the Master Servicer or any of their
representatives to visit the offices of the Subservicer and examine
and make copies of all Servicing Records;
(b) The
Subservicer shall notify the Purchaser or the Master Servicer of
any action, suit, proceeding, dispute, offset, deduction, defense
or counterclaim that is or may be asserted by any Person with
respect to any Purchased Receivable;
Section 6.3 Subservicing Expenses . The
Subservicer shall be required to pay for all expenses incurred by
the Subservicer in connection with its activities hereunder
(including any payments to accountants, counsel or any other
Person) and shall not be entitled to any payment or reimbursement
therefore.
Section 6.4 Subservicer Not to Resign . The
Subservicer shall not resign from the duties and responsibilities
hereunder except upon Purchaser’s or Master Servicer’s
determination that (a) the performance of Subservicer’s
duties hereunder has become impermissible under applicable law and
(b) there is no reasonable action which the Subservicer could
take to make the performance of its duties hereunder permissible
under applicable law evidenced as to clause (a) above by an opinion
of counsel to such effect delivered to the Purchaser.
Section 6.5 Authorization of the Master Servicer
. Should the Subservicer ever be released of its duties for
whatever reason, the Seller hereby authorizes and irrevocably
appoints the Master Servicer (including any successors thereto),
its agent and attorney in fact, with full power of substitution, to
take any and all reasonable steps in the Seller’s name and on
the Seller’s behalf necessary or desirable in the
determination of the Master Servicer to collect all amounts due
under any and all Purchased Receivables, process all Collections,
commence proceedings with respect to enforcing payment of such
Purchased Receivables and the related Contracts, and adjusting,
settling or compromising the account or payment thereof. The Seller
shall furnish the Master Servicer (and any successors thereto) with
any specific powers of attorney and other documents necessary or
appropriate to enable the Master Servicer to carry out its
servicing and administrative duties under this Agreement, and shall
cooperate with the
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Master Servicer to the fullest
extent in order to ensure the collectability of the Purchased
Receivables.
ARTICLE VII — EVENTS OF SELLER
DEFAULT
Section 7.1 Events of Seller Default . If any of
the following events (each, an “Event of Seller
Default”) shall occur and be continuing:
(a) The
Seller (either as Seller or Subservicer) shall materially fail to
perform or observe any term, covenant or agreement contained in
this Agreement;
(b) An
Insolvency Event shall have occurred;
(c) There
is a material breach of any of the representations and warranties
of the Seller as stated in Sections 4.1 or 4.2 that has
remained uncured for a period of 10 days following receipt of
written notice with respect thereto;
(d) Any
Governmental Authority shall file notice of a lien with regard to
any of the assets of the Seller or with regard to the Seller which
remains undischarged for a period of 30 days after
receipt;
(e) As
of the first day of any month, the aggregate Net Value of Purchased
Receivables which became Defaulted Receivables or Rejected
Receivables during the prior three-month period shall exceed 5.0%
of the average aggregate Net Values of all Purchased Receivables
then owned by the Purchaser at the end of each of such three
months;
(f) This
Agreement shall for any reason cease to evidence the transfer to
the Purchaser (or its assignees or transferees) of the legal and
equitable title to, and ownership of, the Purchased
Receivables;
(g) The
termination of any Clearinghouse Agreement, if applicable, and/or
any Carrier Agreement or Billing and Collection Agreement for any
reason whatsoever absent the consummation of a substitute
Clearinghouse Agreement, Carrier Agreement and/or Billing and
Collections Agreement, as the case may be, and without the
Seller’s prior written consent, and/or any invoice due and
owing by the Seller relating to any Carrier Agreement,
Clearinghouse Agreement or Billing and Collection Agreement has
become more than thirty days past due;
(h) The
amount deposited hereunder (net of withdrawals required hereunder)
in the Thermo Contingency Account has remained at less than the
Specified Thermo Contingency Account Balance for fourteen
consecutive days; or
(i) The
Seller shall be in violation o
