EXECUTION COPY
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U.S. $100,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of June 24, 1998
Among
FIDELITY LEASING SPC I, INC.
as the Seller
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FIDELITY LEASING, INC.
as the Servicer
---------------
the INVESTORS
named herein
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VARIABLE FUNDING CAPITAL CORPORATION
as a Purchaser
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FIRST UNION CAPITAL MARKETS, a division of
WHEAT FIRST SECURITIES, INC.
as the Deal Agent
-----------------
FIRST UNION NATIONAL BANK
as the Liquidity Agent
----------------------
and
Xxxxxx Trust and Savings Bank
as the Collateral Custodian and Backup Servicer
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................................1
SECTION 1.1 CERTAIN DEFINED TERMS...............................................................................1
SECTION 1.2 OTHER TERMS.........................................................................................24
SECTION 1.3 COMPUTATION OF TIME PERIODS.........................................................................24
ARTICLE II THE PURCHASE FACILITY.................................................................................24
SECTION 2.1 PURCHASES OF ASSET INTERESTS........................................................................24
SECTION 2.2 THE INITIAL PURCHASE, SUBSEQUENT PURCHASES AND INCREMENTAL PURCHASES................................25
SECTION 2.3 REDUCTION OF THE PURCHASE LIMIT; REPURCHASE.........................................................25
SECTION 2.4 DETERMINATION OF YIELD..............................................................................26
SECTION 2.5 [RESERVED]..........................................................................................26
SECTION 2.6 DIVIDING OR COMBINING ASSET INTERESTS...............................................................26
SECTION 2.7 NON-LIQUIDATION SETTLEMENT PROCEDURES...............................................................26
SECTION 2.8 SETTLEMENT PROCEDURES FOLLOWING A TERMINATION DATE..................................................28
SECTION 2.9 SETTLEMENT PROCEDURES FOLLOWING A RESTRICTING EVENT.................................................29
SECTION 2.10 COLLECTIONS AND ALLOCATIONS.........................................................................31
SECTION 2.11 PAYMENTS, COMPUTATIONS, ETC.........................................................................31
SECTION 2.12 OPTIONAL REPURCHASE.................................................................................32
SECTION 2.13 FEES................................................................................................32
SECTION 2.14 INCREASED COSTS; CAPITAL ADEQUACY; ILLEGALITY.......................................................33
SECTION 2.15 TAXES...............................................................................................34
SECTION 2.16 ASSIGNMENT OF THE PURCHASE AGREEMENT................................................................36
SECTION 2.17 SUBSTITUTION OF CONTRACTS...........................................................................36
ARTICLE III CONDITIONS OF PURCHASES..............................................................................37
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE............................................................37
SECTION 3.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND REMITTANCES OF COLLECTIONS................................38
SECTION 3.3 DELIVERY OF CONTRACT FILES..........................................................................38
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................39
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER........................................................39
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF SELLER RELATING TO THE AGREEMENT AND THE CONTRACTS................43
SECTION 4.3 REPRESENTATIONS AND WARRANTIES OF THE SELLER RELATING TO THE PURCHASE LIMIT AND CAPITAL LIMIT.......44
ARTICLE V GENERAL COVENANTS OF THE SELLER........................................................................44
SECTION 5.1 GENERAL COVENANTS...................................................................................44
SECTION 5.2 COVENANTS OF SELLER.................................................................................45
SECTION 5.3 RELEASE OF LIEN ON EQUIPMENT........................................................................49
SECTION 5.4 HEDGING OF CONTRACTS................................................................................49
SECTION 5.5 RETRANSFER OF INELIGIBLE CONTRACTS..................................................................50
SECTION 5.6 RETRANSFER OF ASSETS................................................................................51
SECTION 5.7 YEAR 2000 COMPATIBILITY.............................................................................51
ARTICLE VI ADMINISTRATION AND SERVICING OF CONTRACTS.............................................................52
SECTION 6.1 APPOINTMENT AND ACCEPTANCE; DUTIES..................................................................52
SECTION 6.2 COLLECTION OF PAYMENTS..............................................................................55
SECTION 6.3 SERVICER ADVANCES...................................................................................56
SECTION 6.4 REALIZATION UPON DEFAULTED CONTRACT.................................................................57
SECTION 6.5 MAINTENANCE OF INSURANCE POLICIES...................................................................57
SECTION 6.6 REPRESENTATIONS AND WARRANTIES OF SERVICER..........................................................58
SECTION 6.7 REPRESENTATIONS AND WARRANTIES OF BACKUP SERVICER AND COLLATERAL CUSTODIAN..........................59
SECTION 6.8 COVENANTS OF SERVICER...............................................................................61
SECTION 6.9 COVENANTS OF BACKUP SERVICER AND COLLATERAL CUSTODIAN...............................................61
SECTION 6.10 SERVICING COMPENSATION..............................................................................62
SECTION 6.11 CUSTODIAL COMPENSATION..............................................................................62
SECTION 6.12 PAYMENT OF CERTAIN EXPENSES BY SERVICER.............................................................62
SECTION 6.13 REPORTS.............................................................................................63
SECTION 6.14 ANNUAL STATEMENT AS TO COMPLIANCE...................................................................63
SECTION 6.15 ANNUAL INDEPENDENT PUBLIC ACCOUNTANT'S SERVICING REPORTS............................................64
SECTION 6.16 ADJUSTMENTS.........................................................................................64
SECTION 6.17 MERGER OR CONSOLIDATION OF THE SERVICER.............................................................64
SECTION 6.18 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS..................................................65
SECTION 6.19 INDEMNIFICATION OF THE SELLER, THE BACKUP SERVICER, THE.............................................65
COLLATERAL CUSTODIAN, THE DEAL AGENT AND THE SECURED PARTIES........................................65
SECTION 6.20 THE SERVICER NOT TO RESIGN..........................................................................66
SECTION 6.21 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION.....................................................66
REGARDING THE CONTRACTS.............................................................................66
SECTION 6.22 BACKUP SERVICER.....................................................................................67
SECTION 6.23 IDENTIFICATION OF RECORDS...........................................................................69
SECTION 6.24 SERVICER DEFAULTS...................................................................................69
SECTION 6.25 APPOINTMENT OF SUCCESSOR SERVICER...................................................................71
SECTION 6.26 NOTIFICATION........................................................................................72
SECTION 6.27 PROTECTION OF RIGHT, TITLE AND INTEREST TO ASSETS...................................................72
SECTION 6.28 RELEASE OF CONTRACT FILES...........................................................................73
ARTICLE VII PAYOUT AND RESTRICTING EVENTS........................................................................73
SECTION 7.1 PAYOUT EVENTS.......................................................................................73
SECTION 7.2 RESTRICTING EVENTS..................................................................................73
ARTICLE VIII INDEMNIFICATION.....................................................................................75
SECTION 8.1 INDEMNITIES BY THE SELLER...........................................................................75
ARTICLE IX THE DEAL AGENT AND THE LIQUIDITY AGENT................................................................78
SECTION 9.1 AUTHORIZATION AND ACTION...........................................................................78
SECTION 9.2 DELEGATION OF DUTIES...............................................................................78
SECTION 9.3 EXCULPATORY PROVISIONS.............................................................................79
SECTION 9.4 RELIANCE...........................................................................................79
SECTION 9.5 NON-RELIANCE ON DEAL AGENT, LIQUIDITY AGENT AND OTHER PURCHASERS...................................80
SECTION 9.6 REIMBURSEMENT AND INDEMNIFICATION..................................................................81
SECTION 9.7 DEAL AGENT AND LIQUIDITY AGENT IN THEIR INDIVIDUAL CAPACITIES......................................81
SECTION 9.8 SUCCESSOR DEAL AGENT OR LIQUIDITY AGENT............................................................81
ARTICLE X ASSIGNMENTS; PARTICIPATIONS............................................................................82
SECTION 10.1 ASSIGNMENTS AND PARTICIPATIONS.....................................................................82
ARTICLE XI MISCELLANEOUS.........................................................................................85
SECTION 11.1 AMENDMENTS AND WAIVERS.............................................................................85
SECTION 11.2 NOTICES, ETC.......................................................................................86
SECTION 11.3 RATABLE PAYMENTS...................................................................................86
SECTION 11.4 NO WAIVER, RIGHTS AND REMEDIES.....................................................................87
SECTION 11.5 BINDING EFFECT; BENEFIT OF AGREEMENT...............................................................87
SECTION 11.6 TERM OF THIS AGREEMENT.............................................................................87
SECTION 11.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE...............................87
SECTION 11.8 WAIVER OF JURY TRIAL...............................................................................87
SECTION 11.9 COSTS, EXPENSES AND TAXES..........................................................................88
SECTION 11.10 NO PROCEEDINGS.....................................................................................89
SECTION 11.11 RECOURSE AGAINST CERTAIN PARTIES...................................................................89
SECTION 11.12 PROTECTION OF OWNERSHIP INTERESTS OF THE PURCHASERS; INTENT OF PARTIES; SECURITY INTEREST..........89
SECTION 11.13 CONFIDENTIALITY....................................................................................90
SECTION 11.14 EXECUTION IN COUNTERPARTS; SEVERABILITY; INTEGRATION...............................................91
EXHIBITS
EXHIBIT A Form of Notice of Sale
EXHIBIT B Form of Lock-Box Notices
EXHIBIT C "Limited Purpose" provisions of Seller's Certificate of Incorporation
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Monthly Report
EXHIBIT F Form of Servicer's Certificate
EXHIBIT G Form of Purchase Certificate
EXHIBIT H Form of Hedging Agreement (including Schedule and Confirmation)
SCHEDULES
SCHEDULE I Condition Precedent Documents
SCHEDULE II Lock-Box Banks and Lock-box Accounts
SCHEDULE III Tradenames, Fictitious Names and "Doing Business As" Names
SCHEDULE IV Location of Contract Files
SCHEDULE V List of Contracts
THIS RECEIVABLES PURCHASE AGREEMENT (the "Agreement") is made as of
June 24, 1998, among:
(1) FIDELITY LEASING SPC I, INC., a Delaware corporation, as seller
(the "Seller");
(2) FIDELITY LEASING, INC., a Pennsylvania corporation ("Fidelity"), as
servicer (the "Servicer");
(3) the financial institutions listed on the signature pages of this
Agreement under the heading "Investors" and their respective successors and
assigns (the "Investors");
(4) VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation
("VFCC");
(5) FIRST UNION CAPITAL MARKETS, a division of WHEAT FIRST SECURITIES,
INC. ("FCM"), as deal agent (the "Deal Agent") and as documentation agent (the
"Documentation Agent");
(6) FIRST UNION NATIONAL BANK ("First Union"), as liquidity agent (the
"Liquidity Agent"); and
(7) Xxxxxx Trust and Savings Bank, as collateral custodian (the
"Collateral Custodian") and backup servicer (the "Backup Servicer").
IT IS AGREED as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms.
(a) Certain capitalized terms used throughout this Agreement are
defined above or in this Section 1. 1.
(b) As used in this Agreement and its exhibits, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined).
ADCB: On any date of determination, the sum of the Discounted Contract Balance
of each Eligible Contract (excluding all Defaulted Contracts, Casualty Loss
Contracts, Early Termination Contracts and Contracts subject to a Warranty
Event) included in the Asset Pool as of the date of such determination.
Addition Date: With respect to any Additional Contracts, the date on which such
Additional Contracts become Pool Assets.
Additional Contracts: All Contracts that become Pool Assets after the Closing
Date.
Additional Cut Off Date: Each date on and after which Collections on an
Additional Contract are to be transferred to the Asset Pool.
Adjusted Eurodollar Rate: On any day, an interest rate per annum equal to the
quotient, expressed as a percentage and rounded upwards (if necessary), to the
nearest 1/100 of 1%, obtained by dividing (i) the LIBOR Rate on such day by (ii)
the decimal equivalent of 100% minus the Eurodollar Reserve Percentage on such
day.
Adjusted Eurodollar Rate Advances: Any Advance with respect to which Yield
accrues at a rate based upon the Adjusted Eurodollar Rate.
Administration Agreement: That certain Administration Agreement executed between
VFCC and FCM, as the same may be amended, supplemented, or otherwise modified
from time to time.
Adverse Claim: A lien, security interest, charge, encumbrance or other right or
claim of any Person.
Affected Party: As defined in Section 2.14(a).
Affiliate: With respect to a Person means any other Person 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" or "controlled" have meanings correlative
to the foregoing.
Agent's Account: A special account (account number 01 41 96 47) in the name of
the Deal Agent or, so long as VFCC is the sole Purchaser hereunder, in the name
of VFCC maintained at Bankers Trust Company.
Aggregate Unpaids: At any time, an amount, equal to the sum of all Yield
(accrued and to accrue), Capital and all other amounts owed hereunder, under any
Hedging Agreement (including, without limitation, payments in respect of the
termination of any such Hedging Agreement) or under any fee letter delivered by
the Originator to the Deal Agent and the Purchasers at such time (whether due or
accrued).
Agreement: This Receivables Purchase Agreement, dated as of June 24, 1998, as
amended, modified, supplemented or restated from time to time.
Alternative Rate: An interest rate per annum equal to the Adjusted Eurodollar
Rate or the Base Rate, as the Deal Agent shall select in accordance with the
terms of the Agreement; provided, however, that the "Alternative Rate" shall be
the Base Rate if the relevant Purchaser shall have notified the Deal Agent that
a Eurodollar Disruption Event has occurred.
Asset: All right, title and interest of the transferring party in, to and under
any and all of the following:
(i) the Existing Contracts and Additional Contracts, and all
monies due or to become due in payment of such Contracts on and after
the related Cut Off Date, including but not limited to any Prepayment
Amounts, any payments in respect of a casualty or early termination,
and any Recoveries received with respect thereto, but excluding any
Scheduled Payments due prior to the related Cut Off Date and any
Excluded Amounts;
(ii) the Equipment related to such Contracts including all
proceeds from any sale or other disposition of such Equipment;
(iii) the Contract Files,
(iv) all payments made or to be made in the future with
respect to such Contracts or the obligor thereunder and under any
guarantee or similar credit enhancement with respect to such Contracts;
(v) all Insurance Proceeds with respect to each such
Contract; and
(vi) all income and proceeds of the foregoing.
Asset Interest: At any time, an undivided variable percentage ownership interest
in all Assets. The undivided percentage interest of an Asset Interest shall
equal
C + C x R
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AC
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ADCB
where:
C = equals the Capital in respect of such Asset Interest.
AC = equals the aggregate Capital on such date.
R = equals the Overcollateralization on such date.
Asset Pool: At any time, all then outstanding Assets.
Assignment and Acceptance: An assignment and acceptance entered into by an
Investor and an Eligible Assignee, and accepted by the Deal Agent, in
substantially the form of Exhibit D hereto.
Backup Servicer: Xxxxxx Trust and Savings Bank and its permitted successors and
assigns.
Backup Servicer and Collateral Custodian Fee Letter: The letter dated as of the
Closing Date, among Fidelity, the Deal Agent, the Backup Servicer and Collateral
Custodian setting forth among other things the Backup Servicer Fee and the
Collateral Custodial Fee.
Backup Servicer Fee Rate: The rate per annum set forth in the Backup Servicer
and Collateral Custodian Fee Letter, dated as of the Closing Date.
Backup Servicing Fee: As defined in Section 6.22.
Bankruptcy Code: The Federal Bankruptcy Code, as amended from time to time
(Title 11 of the United States Code).
Base Rate: On any date, a fluctuating rate of interest per annum equal to the
higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 1.0%.
Base Rate Advance: Any Advance with respect to which Yield accrues at a rate
based upon the Base Rate.
Benefit Plan: Any employee benefit plan as defined in Section 3(3) of ERISA in
respect of which the Seller or any ERISA Affiliate of the Seller is, or at any
time during the immediately preceding six years was, an "employer" as defined in
Section 3(5) of ERISA.
Blended Discount Rate: For any Determination Date, a rate per annum equal to the
weighted average (calculated based on the applicable Outstanding Balances) of
(i) the Blended Discount Rate as of the immediately preceding Determination Date
and (ii) the Sale Discount Rate, if any, for any Contract transferred to the
Asset Pool on the most recent Purchase Date, if any, occurring on or after the
immediately preceding Determination Date; provided, however, that the Blended
Discount Rate for the first Determination Date following the Closing Date shall
be the Sale Discount Rate applicable to the Original Contracts.
Breakage Costs: Any amount or amounts as shall compensate a Purchaser for any
loss, cost or expense incurred by such Purchaser (as reasonably determined by
such Purchaser) as a result of a prepayment by the Seller of Capital or Yield
pursuant to the terms hereof.
Business Day: Any day of the year other than a Saturday or a Sunday on which (a)
banks are not required or authorized to be closed in New York City,
Philadelphia, Pennsylvania, Charlotte, North Carolina and Chicago, Illinois, and
(b) if the term "Business Day" is used in connection with the Adjusted
Eurodollar Rate, dealings in United States dollar deposits are carried on in the
London interbank market.
Capital: For each Asset Interest, the amount paid to the Seller for such Asset
Interest at the time of its purchase by the Purchaser pursuant to this
Agreement, reduced from time to time by Collections distributed on account of
such Capital pursuant to Sections 2.7, 2.8 or 2.9; provided, however, that such
Capital shall not be reduced by any distribution or any portion of Collections
if at any time such distribution is rescinded or must be returned for any
reason.
Capital Limit: At any time, the product of (i) the ADCB and (ii) the lesser of
(a) 90% and (b) 100% - (two and a half (2 1/2) multiplied by the Net Loss to
Liquidation Ratio).
Casualty Loss: With respect to any item of Equipment, the loss, theft, damage
beyond repair or governmental condemnation or seizure of such item of Equipment.
Casualty Loss Contract: Any Contract that is subject to a Casualty Loss.
Closing Date: June 24, 1998.
Code: The Internal Revenue Code of 1986, as amended.
Collateral Custodian: Xxxxxx Trust and Savings Bank and its permitted successors
and assigns.
Collection Account: As defined in Section 6.2(f).
Collection Date: The date following the Termination Date on which the aggregate
outstanding Capital has been reduced to zero, the Purchasers have received all
Yield and other amounts due to the Purchasers in connection with this Agreement
each Hedge Transaction has been terminated and each Hedge Counterparty has
received all amounts owing to it under its respective Hedging Agreement and the
Deal Agent has received all amounts due to it in connection with this Agreement.
Collections: (a) All cash collections and other cash proceeds of any Asset,
including, without limitation, Scheduled Payments, Prepayments, Insurance
Proceeds and Recoveries, all as related to amounts attributable to the Contracts
in the Asset Pool or the related Equipment, but excluding any Excluded Amounts,
(b) any other funds received by the Seller or the Servicer with respect to any
Contract or related Equipment, and (c) all payments received pursuant to any
Hedging Agreement or Hedge Transaction.
Commercial Paper Notes: On any day, any short-term promissory notes issued by
VFCC with respect to financing its purchase of an Asset Interest hereunder.
Commitment: For each Investor, the commitment of such Investor to make purchases
from the Seller in an amount not to exceed the amount set forth opposite such
Investor's name on the signature pages of this Agreement, as such amount may be
modified in accordance with the terms hereof.
Commitment Fee: As defined in Section 2.13(a) hereof.
Commitment Fee Rate: The rate per annum set forth in the Fee Letter.
Commitment Termination Date: June 23, 1999 or such later date to which the
Commitment Termination Date may be extended (if extended) in the sole discretion
of VFCC and each Investor in accordance with the terms of Section 2.1(b).
Contract: Any lease of Equipment by the Originator or by a third party, in each
case as lessor, to an Obligor.
Contract Files: With respect to each Contract, the fully executed original
counterpart (for UCC purposes) of the Contract, the original certificate of
title or other title document with respect to the related Equipment (if
applicable), and otherwise such documents, if any, that the Collateral Custodian
holds, evidencing ownership of such Equipment (if applicable) and all other
documents originally delivered to the Seller or held by the Collateral Custodian
with respect to any Contract.
Contract List: The contract list provided by the Seller to the Deal Agent and
the Collateral Custodian, in the form of Schedule V hereto.
CP Disruption Event: The inability of a Purchaser, at any time, whether as a
result of a prohibition, a contractual restriction or any other event or
circumstance whatsoever, to raise funds through the issuance of its commercial
paper notes (whether or not constituting commercial paper notes issued to fund
Purchases hereunder) in the United States commercial paper market.
CP Rate: For any Fixed Period, the per annum rate equivalent to the weighted
average of the per annum rates paid or payable by VFCC from time to time as
interest on or otherwise (by means of interest rate xxxxxx or otherwise) in
respect of the promissory notes issued by VFCC that are allocated, in whole or
in part, by the Deal Agent (on behalf of VFCC) to fund or maintain the Asset
Interest during such period, as determined by the Deal Agent (on behalf of VFCC)
and reported to the Seller and the Servicer, which rates shall reflect and give
effect to the commissions of placement agents and dealers in respect of such
promissory notes, to the extent such commissions are allocated, in whole or in
part, to such promissory notes by the Deal Agent (on behalf of VFCC); provided,
however, that if any component of such rate is a discount rate, in calculating
the "CP Rate", the Deal Agent shall for such component use the rate resulting
from converting such discount rate to an interest bearing equivalent rate per
annum.
CP Rate Advances: Any Advance with respect to which Yield accrues at a rate
based upon the CP Rate.
Credit and Collection Policy: The written credit and collection policies of the
Originator and Servicer in effect on the date hereof, as amended or supplemented
from time to time in accordance with Section 4.1(j).
Custodial Fee: As defined in Section 6.11.
Cut Off Date: With respect to each Existing Contract, the date on and after
which Collections on such Existing Contract are to be transferred to the Asset
Pool, and with respect to each Additional Contract, the related Additional Cut
Off Date.
Default Ratio: As of any Determination Date, the percentage equivalent of a
fraction, the numerator of which is equal to twice the sum of the Discounted
Contract Balance of Contracts that became Defaulted Contracts (net of Recoveries
related thereto) during the immediately preceding six calendar months and the
denominator of which is the average of the ADCB as of each of the current
Determination Date and each of the immediately preceding five Determination
Dates.
Defaulted Contract: (i) A Contract in the Asset Pool as to which the Servicer
has determined or should have determined in accordance with its Credit and
Collection Policy that such Contract is not collectible or is subject to
repossession, or (ii) a Contract in the Asset Pool as to which all or a portion
of any one or more Scheduled Payments is more than 120 days past due in an
aggregate amount equal to the higher of (A) ten dollars or more or (B) ten
percent or more of any Scheduled Payment.
Delinquency Ratio: As of any Determination Date, the percentage equivalent of a
fraction, the numerator of which is the average of the Discounted Contract
Balance of Delinquent Contracts as of such Determination Date and each of the
immediately preceding two Determination Dates and the denominator of which is
the average of the ADCB as of such Determination Date and each of the
immediately preceding two Determination Dates.
Delinquent Contract: A Contract in the Asset Pool as to which all or a portion
of any one or more Scheduled Payments is 60 days or more past due.
Derivatives: Any exchange-traded or over-the-counter (i) forward, future,
option, swap, cap, collar, floor, foreign exchange contract, any combination
thereof, whether for physical delivery or cash settlement, relating to any
interest rate, interest rate index, currency, currency exchange rate, currency
exchange rate index, debt instrument, debt price, debt index, depositary
instrument, depositary price, depositary index, equity instrument, equity price,
equity index, commodity, commodity price or commodity index, (ii) any similar
transaction, contract, instrument, undertaking or security, or (iii) any
transaction, contract, instrument, undertaking or security containing any of the
foregoing.
Determination Date: The last Business Day of each calendar month.
Discounted Contract Balance: With respect to any Contract, (i) as of the related
Cut Off Date, the present value of all remaining Scheduled Payments becoming due
under such Contract after the applicable Cut Off Date discounted monthly at the
Sale Discount Rate and (ii) as of any other date of determination, the present
value of all remaining Scheduled Payments becoming due
under such Contract after such Determination Date discounted monthly at the
applicable Blended Discount Rate.
The "Discounted Contract Balance" for each Contract shall be calculated
assuming:
(a) all payments due in any Monthly Period as due on the last
day of the Monthly Period;
(b) payments are discounted on a monthly basis using a 30 day
month and a 360 day year; and
(c) all security deposits and drawings under letters of
credit, if any, issued in support of a Contract are applied to reduce
Scheduled Payments in inverse order of the due date thereof.
Early Termination Contracts: Any Contract that the Servicer has allowed the
related Obligor to terminate prior to the date on which the final Scheduled
Payment is due thereunder.
Eligible Assignee: (a) A Person whose short-term rating is at least A-1 from S&P
and P-1 from Moody's, or whose obligations under this Agreement are guaranteed
by a Person whose short-term rating is at least A-1 from S&P and P-1 from
Moody's, or (b) such other Person satisfactory to VFCC, the Deal Agent and each
of the rating agencies rating the Commercial Paper and approved, in writing, by
the Seller; provided, however, that no such approval shall be required in the
event any Investor is required by any rating agency rating VFCC's commercial
paper notes or by any regulatory agency to make an assignment.
Eligible Contract: On any Determination Date, each Contract with respect to
which each of the following is true:
(a) the information with respect to the Contract and the Equipment
subject to the Contract is true and correct in all material respects;
(b) immediately prior to the transfer hereunder of the Contract and any
related Equipment (or security interest therein), the Contract was owned by the
Seller free and clear of any Adverse Claim;
(c) no Scheduled Payment related to the Contract is (i) more than 60
days delinquent, (ii) a payment as to which the Servicer has failed to make a
Servicer Advance, (iii) a payment as to which the related Equipment has been
repossessed or (iv) a payment as to which the related Equipment has been
charged-off in accordance with the credit and collection policies of the
Servicer;
(d) the Contract is not a Defaulted Contract;
(e) no provision of the Contract has been waived, altered or modified
in any respect except as allowed under the Credit and Collection Policy of the
Servicer;
(f) the Contract is a valid and binding payment obligation of the
Obligor and is enforceable in accordance with its terms (except as may be
limited by applicable Insolvency Laws and the availability of equitable
remedies);
(g) the Contract is not and will not be subject to rights of
rescission, setoff, counterclaim or defense and no such rights have been
asserted or threatened with respect to the Contract;
(h) the Contract, at the time it is sold to VFCC does not violate the
laws of the United States or any state in any manner which would create
liability for any Purchaser or which would materially and adversely affect the
enforceability or collectibility of such Contract;
(i) (i) the Contract and any related Equipment have not been sold,
transferred, assigned or pledged by the Seller to any other Person and, with
respect to a Contract that is a "true lease," any Equipment related to such true
lease is owned by the Seller free and clear of any Liens of any third parties
(except for any Permitted Liens) and (ii) such Contract is secured by a fully
perfected Lien of the first priority on the related Equipment but only to the
extent that the Contract has (i) a $1.00 purchase option exercisable at the
expiration of its term and the Equipment has a residual value in excess of
$10,000,00 at such time; (ii) a fixed price purchase option exercisable at the
expiration of its term and the Equipment has a residual value in excess of
$10,000.00 at such time; or (iii) a fair market value purchase price option
exercisable at the expiration of its term and the residual value of the
Equipment exceeds $50,000.00 at such time;
(j) the Contract constitutes chattel paper, an account, an instrument
or a general intangible as defined under the UCC and if the Contract constitutes
"chattel paper" for purposes of the UCC, there is not more than one "secured
party's original" counterpart of the Contract;
(k) all filings necessary to evidence the conveyance or transfer to the
Deal Agent of the Contract and all right, title and interest in the related
Equipment have been made in all appropriate Jurisdictions;
(l) the Obligor is not the subject of bankruptcy or other insolvency
proceedings;
(m) the Obligor's billing address is in the United States and the
Contract is a U.S. dollar-denominated obligation;
(n) the Contract does not require the prior written consent of an
Obligor or contain any other restriction on the transfer or assignment of the
Contract (other than a consent or waiver of such restriction that has been
obtained prior to the Closing Date, with respect to an Existing Contract, or the
Addition Date, with respect to an Additional Contract);
(o) the obligations of the related Obligor under the Contract are
irrevocable, unconditional and non-cancelable (without the right to set off for
any reason and net of any maintenance or cost per copy charges);
(p) the Contract has a remaining term to maturity of not greater than
60 months, provided, however, that up to 10% (by ADCB) may have a remaining term
to maturity of not greater than 72 months;
(q) no adverse selection procedure was used in selecting the Contract
for the Asset Pool;
(r) the Obligor under the Contract is required to maintain casualty
insurance or to self-insure with respect to the related Equipment in accordance
with the Servicer's normal requirements;
(s) the Contract is not a "consumer lease" as defined In Section
2A-103(l)(e) of the UCC;
(t) the Contract is not subject to any guarantee by the Servicer nor
has the Seller or the Originator established any specific credit reserve with
respect to the related Obligor;
(u) the Contract provides that (i) the Originator, the Seller or the
Servicer may accelerate all remaining Scheduled Payments if the Obligor is in
default under any of its obligations under such Contract and (ii) the Obligor
thereof may not elect to utilize its security deposit to offset any remaining
Scheduled Payment;
(v) the Obligor under the Contract is required to maintain the
Equipment in good working order and bear all costs of operating the Equipment
(including the payment of Taxes);
(w) no provision of such Contract provides for a Prepayment Amount less
than the amount calculated in accordance with the definition of Prepayment
Amount;
(x) the Contract has not been terminated as a result of a Casualty Loss
to the related Equipment or for any other reason;
(y) the Discounted Contract Balance of such Contract, when aggregated
with the Discounted Contract Balance of each other Contract having the same
Obligor, does not exceed the Portfolio Concentration Criteria;
(z) the Discounted Contract Balance of such Contract does not include
the amount of any security deposit held by the Servicer or the Seller;
(aa) such Contract provides that in the event of a Casualty Loss, the
Obligor is required to pay an amount not less than the present value of all
remaining Scheduled Payments
discounted at the applicable Sale Discount Rate plus any past due amounts as of
the date of determination;
(bb) the Obligor thereunder has represented to the Originator that such
Obligor has accepted the related Equipment and has had a reasonable opportunity
to inspect and test such Equipment and the Originator has not been notified of
any defects therein; and
(cc) all payments in respect of a Contract will be made free and clear
of, and without deduction or withholding for or on account of, any Taxes, unless
such withholding or deduction is required by law.
Equipment: The tangible assets financed or leased by an Obligor pursuant to a
Contract and/or, unless the context otherwise requires, a security interest in
such assets, such tangible assets to consist of small ticket equipment,
including without limitation small manufacturing, automotive repair, printing,
information and document processing and storage, telecommunications and office
equipment.
ERISA: The U.S. Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
ERISA Affiliate: (a) Any corporation which is a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Code) as the
Seller; (b) A trade or business (whether or not incorporated) under common
control (within the meaning of Section 414(c) of the Code) with the Seller or
(c) A member of the same affiliated service group (within the meaning of Section
414(m) of the Code) as the Seller, any corporation described in clause (a) above
or any trade or business described in clause (b) above.
Eurocurrency Liabilities: As defined in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
Eurodollar Disruption Event: The occurrence of any of the following: (a) a
determination by a Purchaser that it would be contrary to law or to the
directive of any central bank or other governmental authority (whether or not
having the force of law) to obtain United States dollars in the London interbank
market to make, fund or maintain any Purchase, (b) the failure of one or more of
the Reference Banks to furnish timely information for purposes of determining
the Adjusted Eurodollar Rate, (c) a determination by a Purchaser that the rate
at which deposits of United States dollars are being offered to such Purchaser
in the London interbank market does not accurately reflect the cost to such
Purchaser of making, funding or maintaining any Purchase or (d) the inability of
a Purchaser to obtain United States dollars in the London interbank market to
make, fund or maintain any Purchase.
Eurodollar Reserve Percentage: Of any Reference Bank for any period, for any
Capital means the percentage applicable during such period (or, if more than one
such percentage shall be so applicable, the daily average of such percentages
for those days in such period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such Reference Bank with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term of one, two or three months, as applicable based upon
the related LIBOR Rate.
Excluded Amounts: (a) Any collections on deposit in the Collection Account or
otherwise received by the Servicer on or with respect to the Asset Pool or
related Equipment, which collections are attributable to any Taxes, fees or
other charges imposed by any Governmental Authority, (b) any collections
representing reimbursements of insurance premiums or payments for services that
were not financed by the Originator, (c) any collections with respect to
Contracts retransferred or substituted for with respect to a Warranty Event, or
otherwise replaced by a Substitute Contract, (d) any late fees, insufficient
funds charges, inspection charges, collection fees, delinquency fees,
repossession fees or UCC fees, extension fees, documentation fees, maintenance
fees and insurance fees, and (e) Residual Proceeds.
Existing Contracts: The Contracts purchased by the Seller under the Purchase
Agreement and owned by the Seller on the Closing Date.
Facility Financing Statement: As defined in Schedule I.
Federal Funds Rate: For any period, a fluctuating interest rate per annum equal
for each day during such period to the weighted average of the federal funds
rates as quoted by First Union and confirmed in Federal Reserve Board
Statistical Release H.15(519) or any successor or substitute publication
selected by First Union (or, if such day is not a Business Day, for the next
preceding Business Day), or, if, for any reason, such rate is not available on
any day, the rate determined, in the sole opinion of First Union, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 A.M. Charlotte, North Carolina time.
Fee Letter: The letter agreement, the Closing Date, among the Seller, the
Servicer and the Deal Agent, setting forth, among other things, the Commitment
Fee, the Program Fee and the Structuring Fee.
First Union: First Union National Bank, in its individual capacity, and its
successors or assigns.
Fixed Period: For any Payment Date the period beginning on, and including the
13th day of the immediately preceding calendar month (or, with respect to the
first Fixed Period, the Closing Date) and ending on, but excluding the 13th day
of the current calendar month.
GAAP: Generally accepted accounting principles as in effect from time to time
the United States.
Governmental Authority: With respect to any Person, any nation or government,
any state or other political subdivision thereof, any entity exercising
executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
court or arbitrator having jurisdiction over such Person.
H.15: Federal Reserve Statistical Release H.15.
Hedge Breakage Costs: For any Hedge Transaction, any amount payable by the
Seller for the early termination of that Hedge Transaction or any portion
thereof.
Hedge Counterparty: Any entity which (a) on the date of entering into any Hedge
Transaction (i) is an interest rate swap dealer that is either a Purchaser or an
Affiliate of a Purchaser, or has been approved in writing by the Deal Agent
(which approval shall not be unreasonably withheld), and (ii) has a long-term
unsecured debt rating of not less than "A" by S&P and not less than "A-2" by
Moody's ("Long-term Rating Requirement") and a short-term unsecured debt rating
of not less than "A-1" by S&P and not less than "P-1" by Moody's ("Short-term
Rating Requirement"), and (b) in a Hedging Agreement (i) consents to the
assignment of the Seller's rights under the Hedging Agreement to the Deal Agent
pursuant to Section 5.4(b) and (ii) agrees that in the event that Moody's or S&P
reduces its long-term unsecured debt rating below the Long-term Rating
Requirement, or reduces its short-term unsecured debt rating below the
Short-term Rating Requirement, it shall transfer its rights and obligations
under each Hedging Transaction to another entity that meets the requirements of
clause (a) and (b) hereof and has entered into a Hedging Agreement with the
Seller on or prior to the date of such transfer.
Hedge Notional Amount: For any Purchase, the aggregate notional amount in effect
on any day under all Hedge Transactions entered into pursuant to Section 5.4(a)
for that Purchase.
Hedge Rate: For any Contract to which a Purchase relates, the "Fixed Rate" of
the Hedge Transaction to be used in computing the Sale Discount Rate of that
Contract.
Hedge Transaction: Each interest rate swap transaction between the Borrower and
a Hedge Counterparty which is entered into pursuant to Section 5.4(a) and is
governed by a Hedging Agreement.
Hedging Agreement: Each agreement between the Seller and a Hedge Counterparty
which governs one or more Hedge Transactions entered into pursuant to Section
5.4(a), which agreement shall consist of a "Master Agreement" in a form
published by the International Swaps and Derivatives Association, Inc., together
with a "Schedule" thereto substantially in the form of Exhibit H hereto or such
other form as the Deal Agent shall approve in writing, and each "Confirmation"
thereunder confirming the specific terms of each such Hedge Transaction.
Increased Costs: Any amounts required to be paid by the Seller to an Affected
Party pursuant to Section 2.12.
Incremental Purchase: Any Purchase that increases the aggregate outstanding
Capital hereunder.
Indebtedness: With respect to any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current liabilities incurred in the ordinary course of
business and payable in accordance with customary trade practices) or which is
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
of such Person under capital leases, (c) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (d) all
liabilities secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof,
and (e) all indebtedness, obligations or liabilities of that Person in respect
of Derivatives.
Indemnified Amounts: As defined in Section 8. 1
Indemnified Persons: As defined in Section 6.19.
Ineligible Contract: As defined in Section 5.5.
Insolvency Event: With respect to a specified Person, (a) the filing of a decree
or order for relief by a court having jurisdiction in the premises in respect of
such Person or any substantial part of its property in an involuntary case under
any applicable Insolvency Law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Insolvency Law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
Insolvency Laws: The Bankruptcy Code of the United States of America and all
other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
or similar debtor relief laws from time to time in effect affecting the rights
of creditors generally.
Instrument: Any "instrument" (as defined in Article 9 of the UCC), other than an
instrument which constitutes part of chattel paper.
Insurance Policy: With respect to any Contract, an insurance policy covering
physical damage to or loss of the related Equipment.
Insurance Proceeds: Depending on the context, any amounts payable or any
payments made, to the Servicer under any Insurance Policy.
Investment: With respect to any Person, any direct or indirect loan, advance or
investment by such Person in any other Person, whether by means of share
purchase, capital contribution, loan or otherwise, excluding the acquisition of
Assets pursuant to the Purchase Agreement and excluding commission, travel and
similar advances to officers, employees and directors made in the ordinary
course of business.
Issuer: VFCC and any other Purchaser whose principal business consists of
issuing commercial paper or other securities to fund its acquisition and
maintenance of receivables, accounts, instruments, chattel paper, general
intangibles and other similar assets.
LIBOR Rate: For any period of one, two or three months chosen by the Deal Agent
(the "LIBOR Period"), an interest rate per annum equal the rate appearing on the
Telerate Page 3750 as of 11:00 a.m. (London time) on the Business Day which is
the second Business Day immediately preceding the first day of such LIBOR Period
for a term equal to such LIBOR Period or, if no such rate appears on such day,
the average (rounded upward to the nearest one-sixteenth (1/16) of one percent)
per annum rate of interest determined by First Union at its principal office in
Charlotte, North Carolina (each such determination, absent manifest error, to be
conclusive and binding) as of two Business Days prior to the first day of the
applicable LIBOR Period, to be the rate at which deposits in immediately
available funds in U.S. dollars are being, have been, or would be offered or
quoted by First Union to major banks in the interbank market for Eurodollar
deposits at or about 11:00 A.M. (Charlotte, North Carolina time) on such day,
for a term comparable to such LIBOR Period and in an amount approximately equal
to the Capital allocated to such LIBOR Period by the Deal Agent.
Lien: With respect to any Asset, (a) any mortgage, lien, pledge, charge security
interest or encumbrance of any kind in respect of such Asset or (b) the interest
of a vendor or lessor under any conditional sale agreement, financing lease or
other title retention agreement relating to such Asset.
Liquidation Expenses: With respect to any Contract, the aggregate amount of all
out-of-pocket expenses reasonably incurred by the Servicer (including amounts
paid to any subservicer) and any reasonably allocated costs of internal counsel,
in each case in accordance with the Servicer's customary procedures in
connection with the repossession, refurbishing and disposition of any related
Equipment upon or after the expiration or earlier termination of such Contract
and other out-of-pocket costs related to the liquidation of any such Equipment,
including the attempted collection of any amount owing pursuant to such Contract
if it is a Defaulted Contract.
Liquidity Bank: Each liquidity bank that is a party to the Liquidity Purchase
Agreement dated as of June 24, 1998, among the Purchaser, First Union, as
liquidity agent, and each other liquidity bank a party thereto.
Lock-Box: A post office box to which Collections are remitted for retrieval by a
Lock-Box Bank and deposited by such Lock-Box Bank into a Lock-Box Account.
Lock-Box Account: An account maintained for the purpose of receiving Collections
at a bank or other financial institution which has executed a Lock-Box Notice
for the purpose of receiving Collections.
Lock-Box Bank: Any of the banks or other financial institutions holding one or
more Lock-Box Accounts.
Lock-Box Notice: A notice, in substantially the form of Exhibit B, among the
Seller, the Originator (if applicable) and a Lock-Box Bank.
Monthly Period: As to any Determination Date, the calendar month ended on such
Determination Date.
Monthly Report: As defined in Section 6.13(a).
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Multiemployer Plan: A "multiemployer plan" as defined in Section 4001(a)(3) of
ERISA which is or was at any time during the current year or the immediately
preceding five years contributed to by the Seller or any ERISA Affiliate on
behalf of its employees.
Net Loss to Liquidation Ratio: At any time, the product of the Default Ratio and
the weighted average life (in years, rounded upwards to the nearest tenth of a
year) of the Asset Pool.
Notice of Sale: A notice, substantially in the form of Exhibit A hereto,
delivered pursuant to Section 2.2.
Obligor: A Person obligated to make payments pursuant to a Contract including
any guarantor thereof.
Officer's Certificate: A certificate signed by any officer of the Seller or the
Servicer and delivered to the Collateral Custodian, as the case may be.
Opinion of Counsel: A written opinion of counsel, who may be counsel for Seller
or the Servicer and who shall be reasonably acceptable to the Deal Agent.
Original Contract: Each Contract identified by account number and Outstanding
Balance as of the related Cut Off Date in the Contract List.
Originator: Fidelity Leasing, Inc. or any wholly owned subsidiary thereof.
Originator Assets: Any Asset that was transferred to the Seller by the
Originator.
Outstanding Balance: Of any Asset at any time, the then outstanding principal
balance thereof.
Overcollateralization: On any day, the difference between the (i) the ADCB on
such day and (ii) the aggregate Capital on such day.
Payment Date: The 20th day of each calendar month or, if such day is not a
Business Day, the next succeeding Business Day.
Payout Event: As defined in Section 7. 1.
Permitted Investments: Any one or more of the following types of investments:
(a) marketable obligations of the United States of America, the full
and timely payment of which are backed by the full faith and credit of the
United States of America and which have a maturity of not more than 270 days
from the date of acquisition;
(b) marketable obligations, the full and timely payment of which are
directly and fully guaranteed by the full faith and credit of the United States
of America and which have a maturity of not more than 270 days from the date of
acquisition;
(c) bankers' acceptances and certificates of deposit and other
interest-bearing obligations (in each case having a maturity of not more than
270 days from the date of acquisition) denominated in dollars and issued by any
bank with capital, surplus and undivided profits aggregating at least
$100,000,000, the short-term obligations of which are rated A-1 by S&P and P-1
by Moody's;
(d) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clauses (a), (b) and (c) above
entered into with any bank of the type described in clause (c) above;
(e) commercial paper rated at least A-1 by S&P and P-1 by Moody's; and,
(f) demand deposits, time deposits or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or
trust companies incorporated under the laws of the United States of America or
any state thereof (or domestic branches of any foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided, however that at the time such investment, or
the commitment to make such investment, is entered into, the short-term debt
rating of such depository institution or trust company shall be at least A-1 by
S&P and P-1 by Moody's.
Permitted Liens: (a) shall mean, with respect to Contracts in the Asset Pool:
(i) Liens for state, municipal or other local taxes if such
taxes shall not at the time be due and payable, (ii) Liens in favor of
the Seller created pursuant to a Purchase Agreement and transferred to
the Asset Pool hereunder and (iii) Liens in favor of the Deal Agent as
agent for the Purchasers created pursuant to this Agreement; and
(b) with respect to the related Equipment:
(i) materialmen's, warehousemen's and mechanics' liens and
other Liens arising by operation of law in the ordinary course of
business for sums not due, (ii) Liens for state, municipal or other
local taxes if such taxes shall not at the time be due and payable,
(iii) Liens in favor of the Seller created pursuant to a Purchase
Agreement and transferred to the Asset Pool hereunder and (iv) Liens in
favor of the Deal Agent as agent for the Purchasers created pursuant to
this Agreement.
Person: An individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated
association, sole proprietorship, joint venture, government (or any agency or
political subdivision thereof) or other entity.
Pool Assets: On any day any Asset in the Asset Pool.
Portfolio Concentration Criteria: The following concentration limitations at all
times measured on the basis of percentage of ADCB:
(a) the sum of the Discounted Contract Balances of Contracts relating
to any one individual Obligor is limited to the greater of 1.5% of the ADCB,
(b) the sum of the Discounted Contract Balance of the 25 obligors with
the largest aggregate Discounted Contract Balances is limited to 15% of the
ADCB;
(c) the sum of the Discounted Contract Balances of Obligors located in
the state of Texas is limited to 20% of the ADCB;
(d) the sum of the Discounted Contract Balances of Obligors located in
the States of New York, Florida and California is limited to 15% of the ADCB;
(e) the sum of the Discounted Contract Balances of Obligors located in
any other one State (other than Texas, New York, Florida and California) is
limited to 10% of the ADCB;
(f) the sum of the Discounted Contract Balances of Contracts whose
Obligors are municipalities or other government related organizations is limited
to 1% of the ADCB; and
(g) the sum of the Discounted Contract Balances of which the payment
terms are non-monthly is limited to 10% of the ADCB.
Prepaid Contract: Any Contract that has terminated or been prepaid in full prior
to its scheduled expiration date (including because of a Casualty Loss), other
than a Defaulted Contract.
Prepayment Amount: As specified in Section 6.2(b).
Prepayments: Any and all (i) partial and full prepayments on a Contract
(including, with respect to any Contract and any Monthly Period, any Scheduled
Payment or portion thereof which is due in a subsequent Monthly Period which the
Servicer has received, and expressly permitted the related Obligor to make, in
advance of its scheduled due date, and which will be applied to such Scheduled
Payment on such due date), (ii) cash proceeds or rents realized from the sale,
lease, re-lease or re-financing of Equipment under a Prepaid Contract, net of
Liquidation Expenses, and (iii) Recoveries.
Prime Rate: The rate announced by First Union from time to time as its prime
rate in the United States, such rate to change as and when such designated rate
changes. The Prime Rate is not intended to be the lowest rate of interest
charged by First Union in connection with extensions of credit to debtors.
Program Fee: As defined in Section 2.13(b).
Program Fee Rate: The rate per annum set forth in the Program Fee Agreement.
Purchase: A purchase by a Purchaser of an undivided interest in the Assets from
the Seller pursuant to Article II, including without limitation, the remittance
by the Servicer to the Seller of Collections of Pool Assets pursuant to Section
2.7(b).
Purchase Agreement: The Purchase and Sale Agreement dated as of the date hereof,
between the Originator and the Seller, as amended, modified, supplemented or
restated from time to time.
Purchase Certificate: Each certificate, in the Form of Exhibit G, delivered on
the date of the Initial Purchase and on the date of each Incremental Purchase.
Purchase Date: The Closing Date, and as to any Incremental Purchase, any
Business Day that is (i) at least one (1) calendar week following the
immediately preceding Purchase Date and (ii) two (2) Business Days immediately
following the receipt by the Deal Agent of a written request by the Seller to
sell an Asset Interest, such notice to be in the form of Exhibit A hereto and to
conform to requirements of Section 3.2 hereof.
Purchase Limit: At any time, $100,000,000, on or after the Termination Date, the
"Purchase Limit" shall mean the aggregate outstanding Capital.
Purchasers: Collectively, VFCC and the Investors and any other Person that
agrees, pursuant to the pertinent Assignment and Acceptance, to purchase an
Asset Interest pursuant to this Agreement.
Qualified Institution: As defined in Section 6.2.
Rating Agency: Each of Standard & Poor's, Moody's and any other rating agency
that has been requested to issue a rating with respect to the commercial paper
notes issued by the Issuer.
Records: All Contracts and other documents, books, records and other information
(including without limitation, computer programs, tapes, disks, punch cards,
data processing software and related property and rights) maintained with
respect to Assets and the related Obligors which the Seller has itself
generated, in which the Seller has acquired an interest pursuant to the Purchase
Agreement or in which the Seller has otherwise obtained all interest.
Recoveries: With respect to a Defaulted Contract, proceeds from the sale, lease,
re-lease or refinancing of the Equipment, proceeds of any related Insurance
Policy and any other recoveries with respect to such Defaulted Contract and the
related Equipment and related property, and other amounts representing late fees
and penalties net of Liquidation Expenses and amounts, if any, so received that
are required to be refunded to the Obligor on such Contract.
Reference Bank: Any bank which furnishes information for purposes of determining
the Adjusted Eurodollar Rate.
Register: As defined in Section 10. 1(c).
Reinvestment Termination Date: The Business Day that the Seller designates as
the Reinvestment Termination Date by notice to the Deal Agent at least ten
Business Days prior to such Business Day or, if any of the conditions precedent
in Section 3.2 are not satisfied, the Business Day that the Deal Agent
designates as the Reinvestment Termination Date by notice to the Seller at least
one Business Day prior to such Business Day.
Replaced Contract: As defined in Section 2.17(a).
Reporting Date: The 16th day of the month or the first Business Day thereafter.
Required Investors: At a particular time, Investors with Commitments in excess
of 66 2/3 % of the Purchase Limit.
Required Reports: Collectively, the Monthly Report, the Servicer's Certificate
and the quarterly financial statement of the Servicer required to be delivered
to the Deal Agent pursuant to Section 6.13(c) hereof.
Requirements of Law: For any Person shall mean the certificate of incorporation
or articles of association and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or order or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act, and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
Residual Proceeds: With respect to any Contract or any item of Equipment, the
net proceeds for the sale, re-lease or other disposition of the equipment upon
the expiration, or early termination, of the term of such Contract.
Responsible Officer: As to any Person (other than the Collateral Custodian and
Backup Servicer), any officer of such Person with direct responsibility for the
administration of this Agreement and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject, and with respect to
the Collateral Custodian and Backup Servicer it shall mean any officer within
the office at the address set forth under its name on the signature pages hereof
including any Vice President, Managing Director, Assistant Vice President,
Secretary, Assistant Secretary or Assistant Treasurer or any other officer of
the Collateral Custodian and Backup Servicer customarily performing functions
similar to those performed by any of the above designated officers and, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
Restricting Event: As defined in Section 7.2.
Retransfer Date: As defined in Section 5.6.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. and any successor thereto.
Sale Discount Rate: For any Contract to be transferred to the Asset Pool by the
Seller, a rate per annum, calculated on the Business Day immediately preceding
such transfer, equal to the sum of (i) the Hedge Rate for that Contract, (ii)
the Program Fee Rate, (iii) .05% and (iv) the Servicing Fee Rate.
Scheduled Payments: On any Determination Date with respect to any Contract, (a)
each monthly, quarterly, annual or seasonal rent or financing (whether principal
or principal and interest) payment scheduled to be made by the Obligor thereof
after such Determination Date under the terms of such Contract, reduced by a
number of such scheduled payments equal to a number (rounding upwards to the
next highest integer if such number is not an integer) obtained by dividing (i)
the dollar amount of any security deposit related to such Contract by (ii) the
amount of a single scheduled payment under such Contract, (b) any payment due
from the Obligor of such Contract at the expiration or other termination of such
Contract and (c) any payments in connection with a Warranty Event.
Secured Party: (i) Each Purchaser and (ii) each Hedge Counterparty that is
either a Purchaser or an Affiliate of a Purchaser if that Affiliate is a Hedge
Counterparty executes a counterpart of this Agreement agreeing to be bound by
the terms of this Agreement applicable to a Secured Party.
Seller: Fidelity Leasing SPC I, Inc., or any permitted successor thereto.
Servicer: Fidelity Leasing, Inc. and its permitted successors and assigns.
Servicer Advance: An advance of Scheduled Payments made by the Servicer pursuant
to Section 6.3.
Servicer Default: As specified in Section 6.24.
Servicer's Certificate: As defined in Section 6.13(b).
Servicing Fee: As specified in Section 2.13(c).
Servicing Fee Letter: The letter, dated as of the Closing Date, among the
Seller, the Servicer, and the Deal Agent setting forth, among other things, the
Servicer Fee.
Servicing Fee Rate: The rate per annum set forth in the Servicing Fee Letter.
Solvent: As to any Person at any time, having a state of affairs such that all
of the following conditions are met: (a) the fair value of the property of such
Person is greater than the amount of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(31) of the Bankruptcy
Code; (b) the present fair salable value of the property of such Person in an
orderly liquidation of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute unreasonably small capital.
Structuring Fee: The structuring fee agreed to between the Seller and the Deal
Agent in the Program Fee Agreement.
Substitute Contract: On any day, an Eligible Contract which meets each of the
conditions for substitution set forth in Schedule IV hereto.
Successor Servicer: As defined in Section 6.25(a).
Taxes: Any present or future taxes, levies, imposts, duties, charges,
assessments or fees of any nature (including interest, penalties, and additions
thereto) that are imposed by any government or other taxing authority.
Termination Date: The earliest of (a) the date of termination of the Purchase
Limit pursuant to Section 2.3, (b) the date of the occurrence of a Payout Event
pursuant to Section 7. 1, (c) the Reinvestment Termination Date and (d)
Commitment Termination Date.
Termination Notice: As defined in Section 6.24.
Transaction: As defined in Section 3.2.
Transaction Documents: This Agreement, the Purchase Agreement, the Liquidity
Purchase Agreement, dated as of the date hereof between VFCC and First Union,
and the Custodial Agreement, dated as of the date hereof between the Seller, the
Servicer, the Deal Agent and the Collateral Custodian, and any additional
document the execution of which is necessary or incidental to carrying out the
terms of the foregoing documents.
UCC: The Uniform Commercial Code as from time to time in effect in the specified
jurisdiction.
United States: The United States of America.
Unreimbursed Servicer Advances: At any time, the amount of all previous Servicer
Advances (or portions thereof) as to which the Servicer has not been reimbursed
as of such time pursuant to Section 2.7 and which the Servicer has determined in
its sole discretion will not be recoverable from Collections with respect to the
related Contract.
Warranty Event: As to any Pool Asset, the occurrence and continuance of a
material breach of any representation or warranty relating to such Contract.
Yield: For each Asset Interest for any Fixed Period, the product of:
YR x C x ED
--
360
where:
C = the Capital of such Asset Interest.
YR = the weighted average of the Yield Rates applicable during such
Fixed Period.
ED = the actual number of days elapsed during such Fixed Period.
provided, however that (i) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by
applicable law and (ii) Yield shall not be considered paid by any distribution
if at any time such distribution is rescinded or must otherwise be returned for
any reason.
Yield Rate: For any Fixed Period,
(a) to the extent the relevant Purchaser funded the applicable Asset
Interest through the issuance of commercial paper, a rate equal to the CP Rate,
or
(b) to the extent the relevant Purchaser did not fund the applicable
Asset Interest through the issuance of commercial paper, a rate equal to the
Alternative Rate plus 1.25% or if
the Alternative Rate is not available for any reason (as determined in the Deal
Agent's sole discretion) and the tranche period applicable to such Asset
Interest is less than one month, the Base Rate.
Section 1.2 Other Terms.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
Section 1.3 Computation of Time Periods.
Unless otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
ARTICLE II
THE PURCHASE FACILITY
Section 2.1 Purchases of Asset Interests.
(a) On the terms and conditions hereinafter set forth, the Seller may
on any Purchase Date, at its option, sell and assign Asset Interests to the
Purchasers. The Deal Agent may act on behalf of and for the benefit of the
Purchasers in this regard. VFCC may, in its sole discretion, purchase, or if
VFCC shall decline to purchase, the Liquidity Agent shall purchase on behalf of
the Investors, Asset Interests from time to time during the period from the date
hereof to but not including the Termination Date. Under no circumstances shall
any Purchaser make the initial Purchase or any Incremental Purchase if, after
giving effect to such Purchase or Incremental Purchase, the aggregate Capital
outstanding hereunder would exceed the lesser of (i) the Purchase Limit or (ii)
the Capital Limit. Each Asset Interest purchased by any Purchaser hereunder is
subject to the interests of the Hedge Counterparties under Sections 2.7(a)(i),
2.8(b)(i) and 2.9(b)(i) of this Agreement.
(b) The Seller may, within 60 days, but no later than 45 days, prior to
the then existing Commitment Termination Date, by written notice to the Deal
Agent, make written request for VFCC and the Investors to extend the Commitment
Termination Date for an additional period of 364 days. The Deal Agent will give
prompt notice to VFCC and each of the Investors of its receipt of such request
for extension of the Commitment Termination Date. VFCC and each Investor shall
make a determination, in their sole discretion and after a full credit review,
not less than 15 days prior to the then applicable Commitment Termination Date
as to whether or not it will agree to extend the Commitment Termination Date;
provided, however, that the failure of VFCC or any Investor to make a timely
response to the Seller's request for extension of the Commitment Termination
Date shall be deemed to constitute a refusal by VFCC
or the Investor, as the case may be, to extend the Commitment Termination Date.
The Commitment Termination Date shall only be extended upon the consent of both
(i) VFCC and (ii) 100% of the Investors.
Section 2.2 The Initial Purchase, Subsequent Purchases and
Incremental Purchases.
(a) Subject to the conditions described in Section 2.1, the initial
Purchase and each Incremental Purchase shall be made in accordance with the
procedures described in Section 2.2(b). After the Collection Date has occurred,
each of the Purchasers and the Deal Agent, in accordance with their respective
interests, shall assign and transfer to the Seller their respective remaining
interest in Asset Interests to the Seller free and clear of any Adverse Claim
resulting solely from an act or omission by a Purchaser or the Deal Agent, but
without any other representation or warranty, express or implied.
(b) The initial Purchase and each Incremental Purchase shall be made
pursuant to the terms of a Purchase Certificate in the form of Exhibit G hereto,
after receipt by the Purchaser of a Notice of Sale delivered by the Seller to
the Deal Agent (with a copy to the Collateral Custodian) at least two Business
Days prior to such proposed Purchase Date and each such notice shall specify (i)
the aggregate amount of such initial Purchase or Incremental Purchase which
amount must satisfy the applicable minimum requirement set forth in the
following sentence and (ii) the date of such Purchase or Incremental Purchase.
The Seller may deliver notices as frequently as bi-weekly (or more frequently
subject to the prior written consent of the Deal Agent), and each amount
specified in any such notice must satisfy the following minimum requirements, as
applicable, as a condition to the related Purchase the initial Purchase and each
Incremental Purchase hereunder shall be in an amount equal to $3,000,000 or an
integral multiple of $10,000 in excess thereof. Following receipt of such
notice, the Deal Agent will consult with VFCC in order to assist VFCC in
determining whether or not to make the Purchase. If VFCC declines to make a
proposed Purchase, the initial Purchase or Incremental Purchase will be made by
the Investors. On the date of such Purchase or Incremental Purchase, as the case
may be, VFCC or each Investor shall, upon satisfaction of the applicable
conditions set forth in Article III, make available to the Seller in same day
funds, at such bank or other location reasonably designated by Seller in its
Notice of Sale given pursuant to this Section 2.2(b), an amount equal to (i) the
Capital of the Asset Interest related to such initial Purchase or Incremental
Purchase, as the case may be, in the case of a purchase by VFCC or (ii) such
Investor's pro rata share of the Capital related to such Asset Interest, in the
case of a Purchase by the Investors.
Section 2.3 Reduction of the Purchase Limit; Repurchase.
(a) The Seller may, upon at least five Business Days' notice to the
Deal Agent, terminate in whole or reduce in part the portion of the Purchase
Limit that exceeds the sum of the aggregate Capital and Yield accrued and to
accrue thereon, and the Commitments of the Investors shall be reduced
proportionately; provided, however, that each partial reduction of the Purchase
Limit shall be in an aggregate amount equal to $1,000,000 or an integral
multiple
thereof. Each notice of reduction or termination pursuant to this Section 2.3(a)
shall be irrevocable.
(b) The Seller may, upon 30 days (and not more than 90 days) notice to
each Purchaser and the Deal Agent prior to the date of such reduction, reduce
each Purchaser's Asset Interest by remitting to each Purchaser (i) cash and (ii)
instructions to apply such cash to the reduction of Capital and accrued Yield
through the date of such payment, provided that no such reduction shall be given
effect unless the Seller has complied with the terms of any Hedging Agreement
requiring that one or more Hedge Transactions be terminated in whole or in part
as the result of any such reduction of the Purchaser's Asset Interest, and
Seller has paid all Hedge Breaking Costs owing to the relevant Hedge
Counterparty for any such termination. If the Seller does not notify each
Purchaser and the Deal Agent of any such Capital reduction at least 30 days
prior to such Capital reduction, the Seller shall pay all costs related to the
reduction of outstanding Capital, including Breakage Costs, Hedge Breakage Costs
and all costs associated with the outstanding Commercial Paper Notes related to
such Capital reduction. The Seller understands (i) that Commercial Paper Notes
issued in connection with such Assets Interests may not be prepaid, (ii) that
the amount of cash proceeds received by each Purchaser may not match the amount
of maturing Commercial Paper Notes on the desired repayment date and (iii) that
each Purchaser shall use its reasonable best efforts to minimize any such
Breakage Costs.
Section 2.4 Determination of Yield.
The Deal Agent shall determine the Yield (including unpaid Yield, if
any, due and payable on a prior Payment Date) to be paid on each Payment Date
for the Fixed Period and shall advise the Servicer thereof on the first Business
Day after the Fixed Period.
Section 2.5 [reserved].
Section 2.6 Dividing or Combining Asset Interests.
The Deal Agent may, with the consent of a Purchaser, take any of the
following actions at the end of such Fixed Period with respect to any Asset
Interest: (i) divide the Asset Interest owned by such Purchaser into two or more
portions of Asset Interests having aggregate Capital equal to the Capital of
such divided Asset Interest, (ii) combine one portion of an Asset Interest of
such Purchaser with another portion of an Asset Interest of such Purchaser with
a Fixed Period ending on the same day, creating a new portion of an Asset
Interest having Capital equal to the Capital of the two portions of Asset
Interest combined or (iii) combine the Asset Interest of such Purchaser with the
Asset Interest to be purchased on such day by such Purchaser, creating a new
Asset Interest having Capital equal to the Capital of the two Asset Interests
combined; provided, that an Asset Interest of VFCC may not be combined with an
Asset Interest of the Investors.
Section 2.7 Non-Liquidation Settlement Procedures.
The provisions of this Section 2.7 shall apply during the term of this
Agreement prior to the occurrence of the Payout Event.
(a) On each Payment Date, the Servicer shall pay to the following
Persons, from (i) the Collection Account, to the extent of available funds, and
(ii) a Servicer Advance if made or required pursuant to Section 6.3, the
following amounts in the following order of priority:
(i) FIRST, pro rata to each Hedge Counterparty, any amounts,
including any Hedge Breakage Costs, owing that Hedge Counterparty under
its respective Hedging Agreement in respect of any Hedge
Transaction(s), for the payment thereof;
(ii) SECOND, to the Servicer, in an amount equal to any
Unreimbursed Servicer Advances, for the payment thereof;
(iii) THIRD, to the Servicer, in an amount equal to any
accrued and unpaid Servicing Fee arrearage, for the payment thereof;
(iv) FOURTH, to the Servicer, in amount equal to any accrued
and unpaid Servicing Fee, for the payment thereof;
(v) FIFTH, to the extent not paid for by Fidelity, to the
Backup Servicer, in an amount equal to any accrued and unpaid Backup
Servicing Fee, for the payment thereof;
(vi) SIXTH, to the extent not paid for by Fidelity, to the
Collateral Custodian, in an amount equal to any accrued and unpaid
Custodial Fee, for the payment thereof;
(vii) SEVENTH, to the extent not paid for by Fidelity, to the
Deal Agent for the ratable payment to each Purchaser in an amount equal
to any accrued and unpaid Commitment Fees;
(viii) EIGHTH, to the extent not paid for by Fidelity, to the
Deal Agent for the ratable payment to each Purchaser, in an amount
equal to any accrued and unpaid Program Fees and Yield for such Payment
Date;
(ix) NINTH, to the Deal Agent, in the amount of unpaid
Increased Costs and/or Taxes, for payment to the Purchasers in respect
thereof;
(x) TENTH, to the extent that funds are available, any
remaining amounts may be reinvested in Eligible Contracts; provided,
however, that if the aggregate Capital exceeds the lesser of (i) the
Capital Limit; or (ii) the Purchase Limit an amount equal to such
excess shall be paid to the Deal Agent to pay down Capital outstanding;
(xi) ELEVENTH, to the extent funds are available to satisfy
any unpaid Indemnified Amounts, amounts required to be paid by the
Seller pursuant to the indemnification provisions of Section 8.1 and
any other amounts due hereunder; and
(xii) TWELFTH, any remaining amount shall be distributed to
the Seller.
(b) Notwithstanding anything to the contrary contained in this Section
2.7 or any other provision in this Agreement, if on any Business Day prior to
the Payout Event the aggregate outstanding amount of Capital shall exceed the
lesser of (i) the Purchase Limit or (ii) the Capital Limit, then the Seller
shall remit to the Deal Agent, prior to any reinvestment of funds as set forth
in item TENTH of Section 2.7(a) and in any event no later than the close of
business of the Deal Agent on the next succeeding Business Day, a payment (to be
applied by the Deal Agent to outstanding Capital allocated to Monthly Periods
selected by the Deal Agent, in its reasonable discretion) in such amount as may
be necessary to reduce outstanding Capital to an amount less than or equal to
the lesser of (i) the Purchase Limit or (ii) the Capital Limit.
Section 2.8 Settlement Procedures Following a Termination Date.
The provisions of this Section 2.8 shall apply during the term of this
Agreement after the occurrence of a Payout Event provided that no Restricting
Event has occurred.
(a) [reserved].
(b) On each Payment Date, the Servicer shall pay to the following
Persons, from (i) the Collection Account, to the extent available funds and (ii)
a Servicer Advance if made or required pursuant to Section 6.3, the following
amounts in the following order of priority:
(i) FIRST, pro rata to each Hedge Counterparty, any amounts,
including any Hedge Breakage Costs, owing that Hedge Counterparty under
its respective Hedging Agreement in respect of any Hedge
Transaction(s), for the payment thereof;
(ii) SECOND, to the Servicer, in an amount equal to any
Unreimbursed Servicer Advances, for the payment thereof;
(iii) THIRD, to the Servicer, in an amount equal to any
accrued and unpaid Servicing Fee arrearage, for the payment thereof;
(iv) FOURTH, to the Servicer, in an amount equal to any
accrued and unpaid Servicing Fee, for the payment thereof;
(v) FIFTH, to the extent not paid for by Fidelity, to the
Backup Servicer, in an amount equal to any accrued and unpaid Backup
Servicing Fee, for the payment thereof;
(vi) SIXTH, to the extent not paid for by Fidelity, to the
Collateral Custodian, in an amount equal to any accrued and unpaid
Custodial Fee, for the payment thereof;
(vii) SEVENTH, to the extent not paid for by Fidelity, to the
Deal Agent for the ratable payment to each Purchaser in an amount equal
to any accrued and unpaid Commitment Fees;
(viii) EIGHTH, to the extent not paid for by Fidelity, to the
Deal Agent, in an amount equal to any accrued and unpaid Program Fees
and Yield for such Payment Date;
(ix) NINTH, to the Deal Agent, in the amount of unpaid
Increased Costs and/or Taxes, for payment to the Purchasers in respect
thereof;
(x) TENTH, to the Deal Agent for payment to the Purchasers in
an amount necessary to reduce the aggregate Capital to an amount equal
to the product of (i) the Asset Interest and (ii) the ADCB as of the
current Determination Date;
(xi) ELEVENTH, to the extent funds are available to satisfy
any unpaid Indemnified Amounts required to be paid by the Seller
pursuant to the indemnification provisions of Section 8.1, and any
other amounts due hereunder; and
(xii) TWELFTH, any remaining amount shall be distributed to
the Seller, provided, however, that if the Overcollateralization is
less than or equal to the product of (i) 0.05 and (ii) the Purchase
Limit as of the day immediately preceding the occurrence of a
Termination Date, the amount which would have been distributed to the
Seller will be distributed to the Purchaser in reduction, to zero, of
the aggregate Capital.
(c) If at any time on or after the occurrence of a Payout Event, the
Deal Agent or the Seller determines that as of the close of business on the day
immediately preceding the Termination Date the outstanding amount of Capital
exceeded the lesser of (i) the Purchase Limit, or (ii) the Capital Limit, then
the Seller shall immediately remit to the Deal Agent, for the benefit of the
Purchasers, a payment (to be applied by the Deal Agent to outstanding Capital
allocated to Monthly Periods selected by the Deal Agent, in its reasonable
discretion) in such amount as may be necessary to reduce the amount of Capital
to the lesser of (i) the Purchase Limit, or (ii) the Capital Limit as of the
close of business on the date immediately preceding the Payout Event.
Section 2.9 Settlement Procedures Following a Restricting Event.
The provisions of this Section 2.9 shall apply during the term of this
Agreement after the occurrence of a Restricting Event.
(a) [reserved].
(b) On each Payment Date, the Servicer shall pay to the following
Persons, from (i) the Collection Account, to the extent of available funds and
(ii) a Servicer Advance if made or required pursuant to Section 6.3, the
following amounts in the following order of priority:
(i) FIRST, pro rata to each Hedge Counterparty, any amounts,
including any Hedge Breakage Costs, owing that Hedge Counterparty under
its respective Hedging Agreement in respect of any Hedge
Transaction(s), for the payment thereof;
(ii) SECOND, to the Servicer, in an amount equal to any
Unreimbursed Servicer Advances, for the payment thereof;
(iii) THIRD, to the Servicer, in an amount equal to any
accrued and unpaid Servicing Fee arrearage, for the payment thereof;
(iv) FOURTH, to the Servicer, in an amount equal to any
accrued and unpaid Servicing Fee, for the payment thereof;
(v) FIFTH, to the extent not paid for by Fidelity, to the
Backup Servicer, in an amount equal to any accrued and unpaid Backup
Servicing Fee, for the payment thereof;
(vi) SIXTH, to the extent not paid for by Fidelity, to the
Collateral Custodian, in an amount equal to any accrued and unpaid
Custodial Fee, for the payment thereof;
(vii) SEVENTH, to the extent not paid for by Fidelity, to the
Deal Agent for the ratable payment to each Purchaser in an amount equal
to any accrued and unpaid Commitment Fees;
(viii) EIGHTH, to the extent not paid for by Fidelity, to the
Deal Agent, for the ratable payment to each Purchaser in an amount
equal to any accrued and unpaid Program Fees and Yield for such Payment
Date;
(ix) NINTH, to the Deal Agent, in the amount of unpaid
Increased Costs and/or Taxes, for payment to the Purchasers in respect
thereof;
(x) TENTH, to the extent that funds are available, to the Deal
Agent for the Purchasers in reduction of aggregate Capital;
(xi) ELEVENTH, to the extent funds are available to satisfy
any unpaid Indemnified Amounts, amounts required to be paid by the
Seller pursuant to the indemnification provisions of Section 8.1, and
other amounts due hereunder; and
(xii) TWELFTH, upon the reduction of the Capital to zero and
the payment in full of the Aggregate Unpaids, any remaining amount
shall be distributed to the Seller.
(c) If at any time on or after the Restricting Event, the Deal Agent or
the Seller determines that as of the close of business on the day immediately
preceding Termination Date the outstanding amount of Capital exceeded the lesser
of (i) the Purchase Limit, or (ii) the Capital Limit, then the Seller shall
immediately remit to the Deal Agent, for the benefit of the Purchasers, a
payment (to be applied by the Deal Agent to outstanding Capital allocated to
Monthly Periods selected by the Deal Agent, in its reasonable discretion) in
such amount as may be necessary to reduce the amount of Capital to the lesser of
(i) the Purchase Limit, or (ii) the Capital Limit as of the close of business on
the date immediately preceding the Restricting Event.
Section 2.10 Collections and Allocations.
(a) Collections. The Servicer shall transfer, or cause to be
transferred, all Collections on deposit in the form of available funds in the
Lock Box Account to the Collection Account by the close of business on the
Business Day such Collections are received in the Lock Box Account. The Servicer
shall promptly (but in no event later than two Business Days after the receipt
thereof) deposit all Collections received directly by it in the Collection
Account. The Servicer shall make such deposits or payments on the date indicated
therein by electronic funds transfer through the Automated Clearing House
system, or by wire transfer, in immediately available funds.
(b) Initial Deposits. On the Closing Date and on each Addition Date
thereafter, the Servicer will deposit (in immediately available funds) into the
Collection Account all Collections received after the applicable Cut Off Date
and through and including the Closing Date or Addition Date, as the case may be,
in respect of Contracts being transferred to the Asset Pool on such date.
(c) Excluded Amounts. The Servicer may withdraw from the Collection
Account any Collections constituting Excluded Amounts if the Servicer has, prior
to such withdrawal, delivered to the Deal Agent a report setting forth the
calculation of such Excluded Amounts in a format reasonably satisfactory to the
Deal Agent.
Section 2.11 Payments, Computations, Etc.
(a) Unless otherwise expressly provided herein, all amounts to be paid
or deposited by the Seller or the Servicer hereunder shall be paid or deposited
in accordance with the terms hereof no later than 11:00 A.M. (Charlotte, North
Carolina time) on the day when due in lawful money of the United States in
immediately available funds to the Agent's Account. The Seller shall, to the
extent permitted by law, pay to the Secured Parties interest on all amounts not
paid or deposited when due hereunder at 1% per annum above the Base Rate,
payable on demand; provided, however, that such interest rate shall not at any
time exceed the maximum rate permitted by applicable law. Such interest shall be
retained by the Deal Agent except to the extent that such failure to make a
timely payment or deposit has continued beyond the date for distribution by the
Deal Agent of such overdue amount to the Secured Parties, in which case such
interest accruing after such date shall be for the account of, and distributed
by the Deal Agent to the Secured Parties. All computations of interest and all
computations of Yield and other fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of Yield, interest or any fee payable hereunder, as the
case may be.
(c) If any Purchase or Incremental Purchase requested by the Seller and
approved by a Purchaser and the Deal Agent pursuant to Section 2.2, is not, for
any reason whatsoever related to a default or nonperformance by the Seller, made
or effectuated, as the case may be, on the date specified therefor, the Seller
shall indemnify such Purchaser against any reasonable loss, cost or expense
incurred by such Purchaser, including, without limitation, any loss (including
loss of anticipated profits, net of anticipated profits in the reemployment of
such funds in the manner determined by such Purchaser), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Purchaser to fund or maintain such Purchase or Incremental Purchase, as
the case may be, during such Monthly Period.
Section 2.12 Optional Repurchase.
At any time following the Termination Date when the ADCB is less than
ten percent of the ADCB as of the Termination Date, the Servicer may notify the
Deal Agent in writing of its intent to purchase all remaining Assets in the
Asset Pool, provided that all Hedge Transactions have been terminated. On the
Payment Date next succeeding any such notice, the Servicer shall purchase all
such Assets for a price equal to the sum of (i) the Aggregate Unpaids, (ii) all
Yield accrued and to accrue, as reasonably determined by the Deal Agent, and
(iii) all accrued and unpaid Commitment Fees, Program Fees, Backup Servicing
Fees, Custodial Fees, Increased Costs, Taxes, Hedge Breaking Costs, Breakage
Costs and any other amounts payable by the Seller hereunder or under or with
respect to any Hedging Agreement, and the proceeds of such purchase will be
deposited into the Collection Account and paid in accordance with Section
2.8(b).
Section 2.13 Fees.
(a) Fidelity, in its individual capacity, shall pay to the Deal Agent
from its own funds on each Payment Date, monthly in arrears, a fee (the
"Commitment Fee"), as set forth in the Fee Letter.
(b) Fidelity, in its individual capacity, shall pay to the Deal Agent
from the Collection Account on each Payment Date, monthly in arrears, a fee (the
"Program Fee") agreed to between Fidelity and the Deal Agent in the Fee Letter.
(c) The Servicer shall be entitled to receive a fee (the "Servicing
Fee"), monthly in arrears in accordance with Section 2.7(a), 2.8(b) or 2.9(b),
as applicable, which fee shall be equal to the product of (i) the Servicing Fee
Rate agreed to between the Servicer and the Deal Agent in the Servicing Fee
Letter and (ii) ADCB for the immediately preceding Determination Date.
(d) The Backup Servicer shall be entitled to receive the Backup
Servicing Fee in accordance with Section 2.7(a), 2.8(b) or 2.9(b) as applicable.
(e) The Collateral Custodian shall be entitled to receive the Custodial
Fee in accordance with Section 2.7(a), 2.8(b) or 2.9(b), as applicable.
(f) The Seller shall pay to the Deal Agent, on the Closing Date, the
Structuring Fee in immediately available funds.
Section 2.14 Increased Costs; Capital Adequacy; Illegality.
(a) If either (i) the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in or in the interpretation of any law or regulation or (ii) the compliance by a
Purchaser or any Affiliate thereof (each of which, an "Affected Party") with any
guideline or request from any central bank or other governmental agency or
authority (whether or not having the force of law), (A) shall subject an
Affected Party to any Tax (except for Taxes on the overall net income of such
Affected Party), duty or other charge with respect to an Asset Interest, or any
right to make Purchases hereunder, or on any payment made hereunder or (B) shall
impose, modify or deem applicable any reserve requirement (including, without
limitation, any reserve requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve requirement, if any, included
in the determination of Yield), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Affected Party or (C) shall impose any other condition affecting an Asset
Interest or a Purchaser's rights hereunder, the result of which is to increase
the cost to any Affected Party or to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement, then within ten days after
demand by such Affected Party (which demand shall be accompanied by a statement
setting forth the basis for such demand), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such additional or increased cost incurred or such reduction
suffered.
(b) If either (i) the introduction of or any change in or in the
interpretation of any law, guideline, rule, regulation, directive or request or
(ii) compliance by any Affected Party with any law, guideline, rule, regulation,
directive or request from any central bank or other governmental authority or
agency (whether or not having the force of law), including, without limitation,
compliance by an Affected Party with any request or directive regarding capital
adequacy, has or would have the effect of reducing the rate of return on the
capital of any Affected Party as a consequence of its obligations hereunder or
arising in connection herewith to a level below that which any such Affected
Party could have achieved but for such introduction, change or compliance
(taking into consideration the policies of such Affected Party with respect to
capital adequacy) by an amount deemed by such Affected Party to be material,
then from time to time, within ten days after demand by such Affected Party
(which demand shall be accompanied by a statement setting forth the basis for
such demand), the Seller shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
reduction.
(c) If as a result of any event or circumstance similar to those
described in clauses (a) or (b) of this section, any Affected Party is required
to compensate a bank or other financial institution providing liquidity support,
credit enhancement or other similar support to such Affected Party in connection
with this Agreement or the funding or maintenance of Purchases hereunder, then
within ten days after demand by such Affected Party, the Seller shall pay to
such
Affected Party such additional amount or amounts as may be necessary to
reimburse such Affected Party for any amounts paid by it.
(d) In determining any amount provided for in this section, the
Affected Party may use any reasonable averaging and attribution methods. Any
Affected Party making a claim under this section shall submit to the Seller a
certificate as to such additional or increased cost or reduction, which
certificate shall be conclusive absent demonstrable error.
(e) If a Purchaser shall notify the Deal Agent that a Eurodollar
Disruption Event as described in clause (a) of the definition of "Eurodollar
Disruption Event" has occurred, the Deal Agent shall in turn so notify the
Seller, whereupon all Capital in respect of which Yield accrues at the Adjusted
Eurodollar Rate shall immediately be converted into Capital in respect of which
Yield accrues at the Base Rate.
Section 2.15 Taxes.
(a) All payments made by an Obligor in respect of a Contract and all
payments made by the Seller or the Servicer under this Agreement will be made
free and clear of and without deduction or withholding for or on account of any
Taxes, unless such withholding or deduction is required by law. In such event,
the Obligor, Seller, or Servicer (as the case may be) shall pay to the
appropriate taxing authority any such Taxes required to be deducted or withheld
and the amount payable to each Purchaser or the Deal Agent (as the case may be)
will be increased (such increase, the "Additional Amount") such that every net
payment made under this Agreement after deduction or withholding for or on
account of any Taxes (including, without limitation, any Taxes on such increase)
is not less than the amount that would have been paid had no such deduction or
withholding been deducted or withheld. The foregoing obligation to pay
Additional Amounts, however, will not apply with respect to net income or
franchise taxes imposed on a Purchaser or the Deal Agent, respectively, with
respect to payments required to be made by the Seller or Servicer under this
Agreement, by a taxing jurisdiction in which such Purchaser or Deal Agent is
organized, conducts business or is paying taxes as of the Closing Date (as the
case may be). If a Purchaser or the Deal Agent pays any Taxes in respect of
which the Seller is obligated to pay Additional Amounts under this Section
2.14(a), the Seller shall promptly reimburse such Purchaser or Deal Agent in
full.
(b) The Seller will indemnify each Purchaser and the Deal Agent for the
full amount of Taxes in respect of which the Seller is required to pay
Additional Amounts (including, without limitation, any Taxes imposed by any
jurisdiction on such Additional Amounts) paid by such Purchaser or the Deal
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto; provided, however, that
such Purchaser or the Deal Agent, as appropriate, making a demand for indemnity
payment shall provide the Seller, at its address set forth under its name on the
signature pages hereof, with a certificate from the relevant taxing authority or
from a responsible officer of such Purchaser or the Deal Agent stating or
otherwise evidencing that response such Purchaser or the Deal Agent has made
payment of such Taxes and will provide a copy of or extract from documentation,
if available, furnished by such taxing authority evidencing assertion or payment
of such Taxes.
This indemnification shall be made within ten days from the date the Purchaser
or the Deal Agent (as the case may be) makes written demand therefor.
(c) Within 30 days after the date of any payment by the Seller of any
Taxes, the Seller will furnish to the Deal Agent, at its address set forth under
its name on the signature pages hereof, appropriate evidence of payment thereof.
(d) If a Purchaser is not created or organized under the laws of the
United States or a political subdivision thereof, such Purchaser shall, to the
extent that it may then do so under applicable laws and regulations, deliver to
the Seller with a copy to the Deal Agent (i) within 15 days after the date
hereof, or, if later, the date on which such Purchaser becomes a Purchaser
hereof two (or such other number as may from time to time be prescribed by
applicable laws or regulations) duly completed copies of IRS Form 4224 or Form
1001 (or any successor forms or other certificates or statements which may be
required from time to time by the relevant United States taxing authorities or
applicable laws or regulations), as appropriate, to permit the Seller to make
payments hereunder for the account of such Purchaser, as the case may be,
without deduction or withholding of United States federal income or similar
Taxes and (ii) upon the obsolescence of or after the occurrence of any event
requiring a change in, any form or certificate previously delivered pursuant to
this Section 2.14(d), copies (in such numbers as may from time to time be
prescribed by applicable laws or regulations) of such additional, amended or
successor forms, certificates or statements as may be required under applicable
laws or regulations to permit the Seller to make payments hereunder for the
account of such Purchaser, without deduction or withholding of United States
federal income or similar Taxes.
(e) For any period with respect to which a Purchaser or the Deal Agent
has failed to provide the Seller with the appropriate form, certificate or
statement described in clause (d) of this section (other than if such failure is
due to a change in law occurring after the date of this Agreement), the Deal
Agent or such Purchaser, as the case may be, shall not be entitled to
indemnification under clauses (a) or (b) of this section with respect to any
Taxes.
(f) Within 30 days of the written request of the Seller therefor, the
Deal Agent and the Purchasers, as appropriate, shall execute and deliver to the
Seller such certificates, forms or other documents which can be furnished
consistent with the facts and which are reasonably necessary to assist the
Seller in applying for refunds of Taxes remitted hereunder; provided, however,
that the Deal Agent and the Purchasers shall not be required to deliver such
certificates forms or other documents if in their respective sole discretion it
is determined that the deliverance of such certificate, form or other document
would have a material adverse affect on the Deal Agent or any Purchaser and
provided further, however, that the Seller shall reimburse the Deal Agent or any
such Purchaser for any reasonable expenses incurred in the delivery of such
certificate, form or other document.
(g) If, in connection with an agreement or other document providing
liquidity support, credit enhancement or other similar support to the Purchasers
in connection with this Agreement or the funding or maintenance of Purchases
hereunder, the Purchasers are required to compensate a bank or other financial
institution in respect of Taxes under circumstances similar
to those described in this section then within ten days after demand by the
Purchasers, the Seller shall pay to the Purchasers such additional amount or
amounts as may be necessary to reimburse the Purchasers for any amounts paid by
them.
(h) Without prejudice to the survival of any other agreement of the
Seller hereunder, the agreements and obligations of the Seller contained in this
section shall survive the termination of this Agreement.
Section 2.16 Assignment of the Purchase Agreement.
The Seller hereby represents, warrants and confirms to the Deal Agent
that the Seller has assigned to the Deal Agent, for the ratable benefit of the
Secured Parties hereunder, all of the Seller's right and title to and interest
in the Purchase Agreement. The Seller confirms that following a Payout Event the
Deal Agent shall have the sole right to enforce the Seller's rights and remedies
under the Purchase Agreement for the benefit of the Secured Parties, but without
any obligation on the part of the Deal Agent, the Purchasers or any of their
respective Affiliates, to perform any of the obligations of the Seller under the
Purchase Agreement. The Seller further confirms and agrees that such assignment
to the Deal Agent shall terminate upon the Collection Date; provided, however,
that the rights of the Deal Agent and the Secured Parties pursuant to such
assignment with respect to rights and remedies in connection with any
indemnities and any breach of any representation, warranty or covenants made by
the Originator pursuant to the Purchase Agreement, which rights and remedies
survive the termination of the Purchase Agreement, shall be continuing and shall
survive any termination of such assignment.
Section 2.17 Substitution of Contracts.
On any day prior to the occurrence of a Restricting Event, the Seller
may, and upon the request of the Deal Agent shall, subject to the conditions set
forth in this Section 2.16, replace any Contract subject to a Warranty Event or
in respect of which the Obligor thereunder has requested the rewriting and/or
restructuring of such Contract with one or more other Contracts (each, a
"Substitute Contract"), provided that no such replacement shall occur unless
each of the following conditions is satisfied as of the date of such replacement
and substitution:
(a) the Seller has previously recommended to the Deal Agent (with a
copy to the Collateral Custodian) in writing that the Contract to be replaced
should be replaced (each a "Replaced Contract");
(b) each Substitute Contract is an Eligible Contract on the date of
substitution;
(c) after giving effect to any such substitution, the aggregate of all
outstanding Capital does not exceed the lesser of the (i) Purchase Limit and
(ii) the Capital Limit;
(d) the aggregate Discounted Contract Balance (at the applicable Sale
Discount Rate) of such Substitute Contracts shall be equal to or greater than
the aggregate Discounted Contract
Balances (at the applicable Sale Discount Rate as of the date of the inclusion
of such Contract in the Asset Pool) of Contracts being replaced;
(e) such Substitute Contracts, at the time of substitution by the
Seller, shall have approximately the same weighted average life as the replaced
Contracts;
(f) all representations and warranties of the Seller contained in
Sections 4.1 and 4.2 shall be true and correct as of the date of substitution of
any such Substitute Contract;
(g) the substitution of any Substitute Contract does not cause a Payout
Event to occur; and
(h) the Seller shall deliver to the Deal Agent on the date of such
substitution a certificate of a Responsible Officer certifying that each of the
foregoing is true and correct as of such date.
In addition, the Seller shall deliver to the Collateral Custodian the
related Contract File as required by Section 3.3. In connection with any such
substitution, the Deal Agent as agent for the Secured Parties shall,
automatically and without further action, be deemed to transfer to the Seller,
free and clear of any Lien created pursuant to this Agreement, all of the right,
title and interest of the Deal Agent as agent for the Secured Parties in, to and
under such Replaced Contract, and the Deal Agent as agent for the Secured
Parties shall be deemed to represent and warrant that it has the corporate
authority and has taken all necessary corporate action to accomplish such
transfer, but without any other representation and warranty, express or implied.
Any right of the Deal Agent as agent for the Secured Parties to substitute any
Contract in the Asset Pool pursuant to this Section 2.16 shall be in addition
to, and without limitation of, any other rights and remedies that the Deal Agent
as agent for the Secured Parties or any Secured Party may have to require the
Seller or the Servicer, as applicable, to substitute for, or accept retransfer
of, any Contract pursuant to the terms of this Agreement.
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.1 Conditions Precedent to Initial Purchase.
The initial Purchase hereunder is subject to the condition precedent
that the Deal Agent shall have received on or before the date of such purchase
the items listed in Schedule I, each (unless otherwise indicated) dated such
date, in form and substance satisfactory to the Deal Agent and the Purchasers.
Section 3.2 Conditions Precedent to All Purchases and Remittances
of Collections.
Each Purchase (including the Initial Purchase) from the Seller by a
Purchaser, the right of the Servicer to remit Collections to the Seller pursuant
to Section 2.7(b) and each Incremental Purchase (each, a "Transaction") shall be
subject to the further conditions precedent that (a) with respect to any
Purchase (including the Initial Purchase) or Incremental Purchase, the Servicer
shall have delivered to the Deal Agent, on or prior to the date of such Purchase
or Incremental Purchase in form and substance satisfactory to the Deal Agent,
(i) a Purchase Notice (Exhibit A), (ii) a Purchase Certificate (Exhibit G), and
(iii) a Certificate of Assignment (Exhibit A to the Purchase and Sale Agreement)
including Schedule I, thereto dated within 10 days prior to the date of such
Purchase (other than the Initial Purchase, in which case such items shall be
dated within 5 days prior to the date of such Initial Purchase) or Incremental
Purchase and containing such additional information as may be reasonably
requested by the Deal Agent; (b) on the date of such Transaction the following
statements shall be true and the Seller shall be deemed to have certified that:
(i) The representations and warranties contained in Sections
4.1 and 4.2 are true and correct on and as of such day as though made
on and as of such date,
(ii) No event has occurred and is continuing, or would result
from such Transaction which constitutes a Payout Event,
(iii) On and as of such day, after giving effect to such
Transaction, the outstanding Capital does not exceed the lesser of (x)
the Purchase Limit, or (y) the Capital Limit,
(iv) On and as of such day, the Seller and the Servicer each
has performed all of the agreements contained in this Agreement to be
performed by such person at or prior to such day, and
(v) No law or regulation shall prohibit, and no order,
judgment or decree of any federal, state or local court or governmental
body, agency or instrumentality shall prohibit or enjoin, the making of
such Purchase, remittance of Collections or Incremental Purchase by the
Purchaser in accordance with the provisions hereof; and
(c) on the date of such Transaction, the Deal Agent shall have received
such other approvals, opinions or documents as the Deal Agent may reasonably
require.
Section 3.3 Delivery of Contract Files.
As a condition subsequent to each Purchase or substitution of
Substitute Contracts made hereunder, the Seller shall deliver to the Collateral
Custodian, within 10 calendar days after such Purchase or substitution, the
related Contract Files.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Seller.
The Seller represents and warrants as follows:
(a) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware, and has full corporate power, authority and legal right to own or
lease its properties and conduct its business as such properties are presently
owned or leased and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement and the Purchase
Agreement.
(b) Due Qualification. The Seller is duly qualified to do business and
is in good standing as a corporation, and has obtained or will obtain all
necessary licenses and approvals, in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals would have a material adverse
effect on its ability to perform its obligations hereunder.
(c) Due Authorization. The execution and delivery of this Agreement and
the Purchase Agreement and the consummation of the transactions provided for
herein and therein have been duly authorized by the Seller by all necessary
corporate action on the part of the Seller.
(d) No Conflict. The execution and delivery of this Agreement and the
Purchase Agreement, the performance by the Seller of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof and
thereof will not conflict with or result in any breach of any of the material
terms and provisions of, and will not constitute (with or without notice or
lapse of time or both) a default under, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which the Seller is a party or
by which it or any of its property is bound.
(e) No Violation. The execution and delivery of this Agreement and the
Purchase Agreement, the performance of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof will not conflict
with or violate, in any material respect, any Requirements of Law applicable to
the Seller.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of the Seller, threatened against the Seller, before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
the Purchase Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Purchase Agreement or (iii)
seeking any determination or ruling that could reasonably be expected to be
adversely determined, and if adversely determined, would materially and
adversely affect the performance by the Seller of its obligations under this
Agreement or the Purchase Agreement.
(g) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority required
in connection with the execution and delivery by the Seller of this Agreement
and the Purchase Agreement, the performance by the Seller of the transactions
contemplated by this Agreement and the Purchase Agreement, and the fulfillment
of the terms hereof and thereof by the Seller, have been obtained unless the
failure to obtain such shall not materially and adversely affect the Seller's
performance of its obligations thereunder.
(h) Bulk Sales. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" law by Seller.
(i) Solvency. The transactions under this Agreement and/or the Purchase
Agreement do not and will not render the Seller not Solvent.
(j) Selection Procedures; Credit and Collection Policy. No procedures
believed by the Seller to be materially adverse to the interests of VFCC or the
Purchasers were utilized by the Seller in identifying and/or selecting the
Contracts in the Asset Pool. In addition, each Contract shall have been
underwritten in accordance with and satisfy the standards of any Credit and
Collection Policy which has been established by the Seller or the Originator and
is then in effect. Such Credit and Collection Policy or procedure may be amended
from time to time in the Seller's or the Originator's normal course of business
provided that the Seller shall not materially change such credit and collection
policy or procedure without the prior written consent of the Deal Agent.
(k) Taxes. The Seller has filed or caused to be filed all Tax returns
which, to its knowledge, are required to be filed. The Seller has paid or made
adequate provisions for the payment of all Taxes and all assessments made
against it or any of its property (other than any amount of Tax the validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in accordance with generally accepted accounting
principles have been provided on the books of the Seller), and no Tax lien has
been filed and, to the Seller's knowledge, no claim is being asserted, with
respect to any such Tax, fee or other charge.
(l) Agreements Enforceable. This Agreement and the Purchase Agreement
constitute the legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with their respective terms, except as such
enforceability may be limited by Insolvency Laws and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(m) Exchange Act Compliance. No proceeds of any Purchase or Incremental
Purchase will be used by the Seller to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(n) No Liens. Each Asset, together with the Contract related thereto,
shall, at all times, be owned by the Seller free and clear of any Adverse Claim
except as provided herein, and upon each Purchase, remittance of Collections or
Incremental Purchase, the relevant Secured Party shall acquire (subject to
recordation where necessary) a valid and perfected first priority undivided
ownership interest in each Asset then existing or thereafter arising and
Collections with respect thereto, free and clear of any Adverse Claim except as
provided hereunder. No effective financing statement or other instrument similar
in effect covering any Asset or Collections with respect thereto shall at any
time be on file in any recording office except such as may be filed in favor of
the Deal Agent relating to this Agreement.
(o) Reports Accurate. No Monthly Report (if prepared by the Seller, or
to the extent that information contained therein is supplied by the Seller),
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by the Seller to the Deal Agent or a Purchaser in
connection with this Agreement is or will be inaccurate in any material respect
as of the date it is or shall be dated or (except as otherwise disclosed to the
Deal Agent or such Purchaser, as the case may be, at such time) as of the date
so furnished, and no such document contains or will contain any material
misstatement of fact or omits or shall omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(p) Location of Offices. The principal place of business and chief
executive office of the Seller and the office where the Seller keeps all the
Records are located at the address of the Seller referred to in Section 11.2
hereof (or at such other locations as to which the notice and other requirements
specified in Section 5.2(m) shall have been satisfied).
(q) Lock-Boxes. The names and addresses of all the Lock-Box Banks,
together, with the account numbers of the Lock-Box Accounts of the Seller at
such Lock-Box Banks and the names, addresses and account numbers of all accounts
to which Collections of the Assets outstanding before the initial Purchase
hereunder have been sent, are specified in Schedule II (which shall be deemed to
be amended in respect of terminating or adding any Lock-Box Account or Lock-Box
Bank upon satisfaction of the notice and other requirements specified in respect
thereof).
(r) Tradenames. Except as described in Schedule III, the Seller has no
trade names, fictitious names, assumed names or "doing business as" names or
other names under which it has done or is doing business.
(s) Purchase Agreement. The Purchase Agreement is the only agreement
pursuant to which the Seller purchases Assets.
(t) Value Given. The Seller shall have given reasonably equivalent
value to the Originator in consideration for the transfer to the Seller of the
Assets under the Purchase Agreement, no such transfer shall have been made for
or on account of an antecedent debt owed by the Originator to the Seller, and no
such transfer is or may be voidable or subject to avoidance
under any section of the Bankruptcy Code; no event or circumstance has occurred
that would constitute a Payout Event pursuant to Section 7. 1.
(u) Special Purpose Entity. The Certificate of Incorporation of the
Seller includes substantially the provisions set forth on Exhibit C hereto, and
the Originator has confirmed in writing to the Seller that, so long as the
Seller is not "insolvent" within the meaning of the Bankruptcy Code, the
Originator will not cause the Seller to file a voluntary petition under the
Bankruptcy Code or any other bankruptcy or insolvency laws. Each of the Seller
and the Originator is aware that in light of the circumstances described in the
preceding sentence and other relevant facts, the filing of a voluntary petition
under the Bankruptcy Code for the purpose of making the assets of the Seller
available to satisfy claims of the creditors of the Originator would not result
in making such assets available to satisfy such creditors under the Bankruptcy
Code.
(v) Accounting. The Seller accounts for the transfers to it from the
Originator of interests in Assets and Collections under the Purchase Agreement
as sales of such Assets and transfers of Asset Interests as sales of such Asset
Interests in its books, records and financial statements, in each case
consistent with GAAP and with the requirements set forth herein.
(w) Separate Entity. The Seller is operated as an entity with assets
and liabilities distinct from those of the Originator and any Affiliates thereof
(other than the Seller), and the Seller hereby acknowledges that the Deal Agent
and the Secured Parties are entering into the transactions contemplated by this
Agreement in reliance upon the Seller's identity as a separate legal entity from
the Originator and from each such other Affiliate of the Originator.
(x) Security Interest. The Seller has granted a security interest (as
defined in the UCC) to the Deal Agent, as agent for the Secured Parties, in the
Assets and Collections, which is enforceable in accordance with applicable law
upon execution and delivery of this Agreement. Upon the filing of UCC-1
financing statements naming the Deal Agent as secured party and the Seller as
debtor, the Deal Agent, as agent for the Secured Parties, shall have a first
priority perfected security interest in the Assets and Collections (except for
any Permitted Liens). All filings (including, without limitation, such UCC
filings) as are necessary in any Jurisdiction to perfect the interest of the
Deal Agent as agent for the Secured Parties, in the Assets and Collections have
been (or prior to the applicable Purchase will be) made.
(y) Investments. The Seller does not own or hold directly or
indirectly, any capital stock or equity security of, or any equity interest in,
any Person.
(z) Business. Since its incorporation, the Seller has conducted no
business other than the purchase and receipt of Contracts and related assets
from the Originator under the Purchase Agreement, the sale of Contracts under
this Agreement and such other activities as are incidental to the foregoing.
(aa) Investment Company Act. The Seller is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(bb) Accuracy of Representations and Warranties. Each representation or
warranty by the Seller contained herein or in any certificate or other document
furnished by the Seller pursuant hereto or in connection herewith is true and
correct in all material respects.
The representations and warranties set forth in this section shall
survive the transfer of the Assets to the Deal Agent as agent for the Secured
Parties. Upon discovery by the Seller, the Servicer, any Secured Party, the
Liquidity Agent or the Deal Agent of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the others.
Section 4.2 Representations and Warranties of Seller Relating to the
Agreement and the Contracts.
The Seller hereby represents and warrants to the Deal Agent, each
Secured Party, the Liquidity Agent and each Investor that, as of the Closing
Date and as of each Addition Date:
(a) Binding, Obligation, Valid Transfer and Security Interest.
(i) This Agreement and the Purchase Agreement each constitute
legal, valid and binding obligations of the Seller, enforceable against
the Seller in accordance with its terms, except as such enforceability
may be limited by Insolvency Laws and except as such enforceability may
be limited by general principles of equity (whether considered in a
suit at law or in equity).
(ii) This Agreement constitutes either (A) a valid transfer to
the Deal Agent as agent for the Secured Parties of all right, title and
interest of the Seller in, to and under all Assets in the Asset Pool to
the extent of the Asset Interest, and such transfer will be free and
clear of any Lien of any Person claiming through or under the Seller or
its Affiliates, except for Permitted Liens, or (B) a grant of a
security interest in all Assets in the Asset Pool to the Deal Agent as
agent for the Secured Parties. Upon the filing of the financing
statements described in Section 6.8(c) and, in the case of Additional
Contracts on the applicable Addition Date, the Deal Agent as agent for
the Secured Parties shall have a first priority perfected security
interest in all Assets in the Asset Pool, subject only to Permitted
Liens. Neither the Seller nor any Person claiming through or under
Seller shall have any claim to or interest in the Collection Account
and, if this Agreement constitutes the grant of a security interest in
such property, except for the interest of Seller in such property as a
debtor for purposes of the UCC.
(b) Eligibility of Contracts. As of the Closing Date, (i) Schedule I to
this Agreement and the information contained in the Purchase Certificate
delivered pursuant to Section 2.2(b) is an accurate and complete listing in all
material respects of all the Existing Contracts in the Asset Pool as of the
Closing Date and the information contained therein with respect to the identity
of such Contracts and the amounts owing thereunder is true and correct in all
material respects as of the related Cut Off Date, (ii) each such Contract is an
Eligible Contract, (iii) each such Contract
and the related Equipment is free and clear of any Lien of any Person (other
than Permitted Liens) and in compliance with all Requirements of Law applicable
to the Seller and (iv) with respect to each such Contract, all consents,
licenses, approvals or authorizations of or registrations or declarations with
any Governmental Authority required to be obtained, effected or given by the
Seller in connection with the transfer of an interest in such Contract and the
related Equipment to the Deal Agent as agent for the Secured Parties have been
duly obtained, effected or given and are in full force and effect. On each
Addition Date on which Additional Contracts are added by the Seller to the Asset
Pool, the Seller shall be deemed to represent and warrant that (i) such
Additional Contract referenced on the related Purchase Certificate delivered
pursuant to Section 2.2(b) hereof is an Eligible Contract, (ii) each such
Additional Contract and the related Equipment is free and clear of any Lien of
any Person (other than Permitted Liens) and in compliance with all Requirements
of Law applicable to Seller and/or the Originator, (iii) with respect to each
such Additional Contract, all consents, licenses, approvals, authorizations,
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Seller in connection with the addition of
such Contract and the related Equipment to the Asset Pool have been duly
obtained, effected or given and are in full force and effect and (iv) the
representations and warranties set forth in Section 4.2(a) are true and correct
with respect to each Contract transferred on such day as if made on such day.
(c) Notice of Breach. The representations and warranties set forth in
this Section 4.2 shall survive the transfer of an interest in the respective
Contracts and related Equipment, or interests therein, to the Deal Agent as
agent for the Secured Parties. Upon discovery by the Seller, the Servicer, any
Secured Party, the Deal Agent, the Liquidity Agent of any Investor of a breach
of any of the foregoing representations and warranties, the party discovering
such breach shall give prompt written notice to the others.
Section 4. 3 Representations and Warranties of the Seller Relating
to the Purchase Limit and Capital Limit.
The Seller is hereby deemed to represent and warrant that on each day
prior to the Termination Date, the amount of Capital outstanding on such day
shall not exceed the lesser of (x) the Purchase Limit or (y) the Capital Limit.
ARTICLE V
GENERAL COVENANTS OF THE SELLER
Section 5.1 General Covenants.
Until the date on which all Aggregate Unpaids have been indefeasibly
paid in full, the Seller hereby covenants that:
(a) Compliance with Laws, Preservation of Corporate Existence. The
Seller will comply in all material respects with all applicable laws, rules,
regulations and orders and preserve and maintain its corporate existence,
rights, franchises, qualifications and privileges.
Section 5.2 Covenants of Seller.
The Seller hereby covenants that:
(a) Contracts Not to be Evidenced by Instruments. The Seller will take
no action to cause any Contract which is not, as of the Closing Date or the
related Addition Date, as the case may be, evidenced by an Instrument, to be so
evidenced except in connection with the enforcement or collection of such
Contract.
(b) Security Interests. The Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Contract in the Asset Pool or related Equipment, whether now
existing or hereafter transferred hereunder, or any interest therein, and the
Seller will not sell, pledge, assign or suffer to exist any Lien on its
interest, if any, hereunder. The Seller will promptly notify the Deal Agent of
the existence of any Lien on any Contract in the Asset Pool or related Equipment
and the Seller shall defend the right, title and interest of the Deal Agent as
agent for the Secured Parties in, to and under the Contracts in the Asset Pool
and the related Equipment, against all claims of third parties, provided,
however, that nothing in this section 5.2(b) shall prevent or be deemed to
prohibit the Seller from suffering to exist Permitted Liens upon any of the
Contracts in the Asset Pool or any related Equipment.
(c) Delivery of Collections. The Seller agrees to pay to the Servicer
promptly (but in no event later than two Business Days after receipt) all
Collections received by Seller in respect of the Contracts in the Asset Pool.
(d) Compliance with the Law. Seller hereby agrees to comply in all
material respects with all Requirements of Law applicable to Seller, the
Contracts and the Equipment.
(e) Activities of Seller. The Seller shall not engage in any business
or activity of any kind, or enter into any transaction or indenture, mortgage,
instrument, agreement, contract, lease or other undertaking, which is not
incidental to the transactions contemplated and authorized by this Agreement or
the Purchase Agreements.
(f) Indebtedness. The Seller shall not create, incur, assume or suffer
to exist any Indebtedness or other liability whatsoever, except (i) obligations
incurred under this Agreement or under any Hedging Agreement required by Section
5.4(a), or (ii) liabilities incident to the maintenance of its corporate
existence in good standing.
(g) Guarantees. The Seller shall not become or remain liable, directly
or indirectly, in connection with any Indebtedness or other liability of any
other Person, whether by guarantee, endorsement (other than endorsements of
negotiable instruments for deposit or collection in the ordinary course of
business), agreement to purchase or repurchase, agreement to supply or advance
funds, or otherwise.
(h) Investments. The Seller shall not make or suffer to exist any loans
or advances to, or extend any credit to, or make any investments (by way of
transfer of property, contributions to capital, purchase of stock or securities
or evidences of indebtedness, acquisition of the business or assets, or
otherwise) in, any Person except for purchases of Contracts pursuant to the
Purchase Agreements, or for investments in Permitted Investments in accordance
with the terms of this Agreement.
(i) Merger; Sales. The Seller shall not enter into any transaction of
merger or consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or acquire or be acquired by any Person, or convey,
sell, lease or otherwise dispose of all or substantially all of its property or
business, except as provided for in this Agreement.
(j) Distributions. The Seller shall not declare or pay, directly or
indirectly, any dividend or make any other distribution (whether in cash or
other property) with respect to the profits, assets or capital of the Seller or
any Person's interest therein, or purchase, redeem or otherwise acquire for
value any of its capital stock now or hereafter outstanding, except that so long
as no Payout Event has occurred and is continuing and no Payout Event would
occur as a result thereof or after giving effect thereto and the Seller would
continue to be Solvent as a result thereof and after giving effect thereto, the
Seller may declare and pay cash or stock dividends on its capital stock.
(k) Agreements. The Seller shall not become a party to, or permit any
of its properties to be bound by, any indenture, mortgage, instrument, contract,
agreement, lease or other undertaking, except the Transaction Documents, or
amend or modify the provisions of its Certificate of Incorporation without the
consent of the Deal Agent or issue any power of attorney except to the Deal
Agent or the Servicer.
(l) Separate Corporate Existence. The Seller shall:
(i) Maintain its own deposit account or accounts, separate
from those of any Affiliate, with commercial banking institutions. The
funds of the Seller will not be diverted to any other Person or for
other than corporate uses of the Seller.
(ii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders or Affiliates,
the salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary
and benefit costs associated with all such common officers and
employees.
(iii) Ensure that, to the extent that it jointly contracts
with any of its stockholders or Affiliates to do business with vendors
or service providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities, and each
such entity shall bear its fair share of such costs. To the extent that
the Seller contracts or does business with vendors or service providers
when the goods and services provided are partially for the benefit of
any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose
benefit the goods and services are provided, and each such entity shall
bear its fair share of such costs. All material transactions between
Seller and any of its Affiliates shall be only on an arm's length
basis.
(iv) Maintain a principal executive and administrative office
through which its business is conducted separate from those of its
Affiliates. To the extent that Seller and any of its stockholders or
Affiliates have offices in the same location, there shall be a fair and
appropriate allocation of overhead costs among them, and each such
entity shall bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with its
Certificate of Incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited to, holding
all regular and special stockholders, and directors' meetings
appropriate to authorize all corporate action, keeping separate and
accurate minutes of its meetings, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts.
(vi) Take or refrain from taking, as applicable, each of the
activities specified in the "non-substantive consolidation" opinion of
Xxxxxx, Xxxxx & Xxxxxxx LLP delivered on the Closing Date, upon which
the conclusions expressed therein are based.
(m) Location of Seller, Records; Instruments. The Seller (x) shall not
move outside the Commonwealth of Pennsylvania, the location of its chief
executive office, without 30 days' prior written notice to the Deal Agent and
(y) shall not move, or consent to the Collateral Custodian or Servicer moving,
the Contract Files from the possession of the Collateral Custodian thereof on
the Closing Date, without 30 days' prior written notice to the Deal Agent and
(z) will promptly take all actions required of each relevant jurisdiction in
order to continue the first priority perfected security interest of the Deal
Agent as agent for the Secured Parties in all Assets in the Asset Pool. The
Seller will give the Deal Agent prompt notice of a change within the
Commonwealth of Pennsylvania of the location of its chief executive office.
(n) Accounting of Purchases. Other than for federal, state and local
income tax purposes, the Seller will not account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as the sale, or absolute assignment, of Assets by the Seller
to a Purchaser. The Seller will not account for or treat (whether in financial
statements or otherwise) the transaction contemplated by the Purchase Agreement
in any manner other than as the sale, or absolute assignment, of the Originator
Assets by the Originator to the Seller, as the case may be.
(o) ERISA Matters. The Seller will not (a) engage or permit any ERISA
Affiliate to engage in any prohibited transaction for which an exemption is not
available or has not previously been obtained from the United States Department
of Labor; (b) permit to exist any accumulated funding deficiency, as defined in
Section 302(a) of ERISA and Section 412(a) of
the Code, or funding deficiency with respect to any Benefit Plan other than a
Multiemployer Plan; (c) fail to make any payments to a Multiemployer Plan that
the Seller or any ERISA Affiliate may be required to make under the agreement
relating to such Multiemployer Plan or any law pertaining thereto; (d) terminate
any Benefit Plan so as to result in any liability; or (e) permit to exist any
occurrence of any reportable event described in Title IV of ERISA.
(p) Originator Assets. With respect to each Asset acquired by the
Seller, the Seller will (i) acquire such Asset pursuant to and in accordance
with the terms of the Purchase Agreement, (ii) take all action necessary to
perfect, protect and more fully evidence the Seller's ownership of such Asset,
including, without limitation, (A) filing and maintaining, effective financing
statements (Form UCC-1) against the Originator in all necessary or appropriate
filing offices, and filing continuation statements, amendments or assignments
with respect thereto in such filing offices and (B) executing or causing to be
executed such other instruments or notices as may be necessary or appropriate
and (iii) take all additional action that the Deal Agent may reasonably request
to perfect, protect and more fully evidence the respective interests of the
parties to this Agreement in the Assets and interest therein represented by the
Asset Interest.
(q) Transactions with Affiliates. The Seller will not enter into, or be
a party to, any transaction with any of its Affiliates, except (i) the
transactions permitted or contemplated by the Transaction Documents, and (ii)
other transactions (including, without limitation, the lease of office space or
computer equipment or software by the Seller to or from an Affiliate) (A) in the
ordinary course of business, (B) pursuant to the reasonable requirements of the
Seller's business, (C) upon fair and reasonable terms that are no less favorable
to the Seller than could be obtained in a comparable arm's-length transaction
with a Person not an Affiliate of the Seller, and (D) not inconsistent with the
factual assumptions set forth in the opinion letters issued by Xxxxxx, Xxxxx &
Bockius LLP and delivered to the Deal Agent as a condition to the initial
Purchase as such assumptions may be modified in any subsequent opinion letters
delivered to the Deal Agent hereunder pursuant to Section 3.2(c) or otherwise.
It is understood that any compensation arrangement for officers shall be
permitted under clause (ii)(A) through (C) above if such arrangement has been
expressly approved by the board of directors of the Seller.
(r) Change in the Purchase Agreement. The Seller will not amend,
modify, waive or terminate any terms or conditions of the Purchase Agreement,
without the consent of Deal Agent.
(s) Amendment to Certificate of Incorporation. Notwithstanding anything
to the contrary contained herein, the Seller will not amend, modify or otherwise
make any change to its Certificate of Incorporation which would delete or
otherwise nullify or circumvent the provisions set forth on Exhibit C hereto.
(t) Credit and Collection Policy. The Seller shall not cause or permit
any changes to be made to the Credit and Collection Policy in any manner that
would materially and adversely affect the collectibility of the Contracts sold
hereunder without the prior written consent of the Deal Agent, which consent
shall not be unreasonably withheld.
Section 5.3 Release of Lien on Equipment.
At the same time as (i) any Contract in the Asset Pool expires by its
terms and all amounts in respect thereof have been paid by the related Obligor
and deposited in the Collection Account or (ii) any Contract becomes a Prepaid
Contract and all amounts in respect thereof have been paid by the related
Obligor and deposited in the Collection Account, the Deal Agent as agent for the
Purchasers will, to the extent requested by the Servicer, release its interest
in such Contract; provided, however, that such release will not constitute a
release of their respective interests in the Equipment or the proceeds of such
Contract or Equipment. In connection with any sale of such Equipment on or after
the occurrence of (i) or (ii) above, the Deal Agent as agent for the Purchasers
will after the deposit by the Servicer of the proceeds of such sale into the
Collection Account, at the sole expense of the Servicer, execute and deliver to
the Servicer any assignments, bills of sale, termination statements and any
other releases and instruments as the Servicer may reasonably request in order
to effect the release and transfer of such Equipment; provided that the Deal
Agent as agent for the Purchasers will make no representation or warranty,
express or implied, with respect to any such Equipment in connection with such
sale or transfer and assignment. Nothing in this section shall diminish the
Servicer's obligations pursuant to Section 6.1(c) with respect to the proceeds
of any such sale.
Section 5.4 Hedging of Contracts.
(a) On or prior to each Purchase Date of any Purchase, the Seller shall
enter into one or more Hedge Transactions for that Purchase, provided that each
such Hedge Transaction shall:
(i) be entered into with a Hedge Counterparty and governed by
a Hedging Agreement;
(ii) have a schedule of monthly payment periods the first of
which commences on the Purchase Date of that Purchase and the last of
which ends on the last Scheduled Payment due to occur under the
Contracts to which that Purchase relates;
(iii) have an amortizing notional amount such that the Hedge
Notional Amount in effect during any monthly payment period shall be
equal to one hundred percent (100%) of the present value of all
remaining Scheduled Payments becoming due after the first day of that
monthly payment period under all Contracts to which that Purchase
relates, determined as of the Purchase Date of that Purchase by
discounting on a monthly basis each such Scheduled Payment from the end
of the monthly payment period in which that Scheduled Payment is due to
occur to the Purchase Date at the Sale Discount Rate; and
(iv) provide for two series of monthly payments to be netted
against each other, one such series being payments to be made by the
Seller to a Hedge Counterparty (solely on a net basis) by reference to
a fixed rate to be used in computing the Sale Discount Rate for that
Purchase, and the other such series being payments to be made by the
Hedge Counterparty to the Deal Agent (solely on a net basis) by
reference to the
money market yield of the rate set forth in Federal Reserve Statistical
Release H.15 (519) under the caption "Commercial Paper-Nonfinancial"
for a 30-day maturity as in effect on the first day of each monthly
payment period, the net amount of which shall be paid into the
Collection Account (if payable by the Hedge Counterparty) or from the
Collection Account to the extent funds are available under Section
2.7(a), 2.8(b) and 2.9(b) of this Agreement (if payable by the Seller);
(b) As additional security hereunder, Seller hereby assigns to the Deal
Agent, as agent for the Secured Parties, all right, title and interest of Seller
in each Hedging Agreement, each Hedge Transaction, and all present and future
amounts payable by a Hedge Counterparty to Seller under or in connection with
the respective Hedging Agreement and Hedge Transaction(s) with that Hedge
Counterparty ("Hedge Collateral"), and grants a security interest to the Deal
Agent, as agent for the Secured Parties, in the Hedge Collateral. Seller
acknowledges that, as a result of that assignment, Seller may not, without the
prior written consent of the Deal Agent, exercise any rights under any Hedging
Agreement or Hedge Transaction, except for Seller's right under any Hedging
Agreement to enter into Hedge Transactions in order to meet the Seller's
obligations under Section 4.5(a) hereof. Nothing herein shall have the effect of
releasing the Seller from any of its obligations under any Hedging Agreement or
any Hedge Transaction, nor be construed as requiring the consent of the Deal
Agent or any Secured Party for the performance by Seller of any such
obligations.
Section 5.5 Retransfer of Ineligible Contracts.
In the event of a breach of any representation or warranty set forth in
Section 4.2 with respect to a Contract in the Asset Pool (each such Contract, an
"Ineligible Contract"), no later than the earlier of (i) knowledge by the Seller
of such Contract becoming an Ineligible Contract and (ii) receipt by the Seller
from the Deal Agent or Servicer of written notice thereof, the Seller shall
either (a) accept the retransfer of each such Ineligible Contract and any
related Equipment selected by the Servicer as to which such breach related, and
the Deal Agent as agent for the Secured Parties shall convey to the Seller,
without recourse, representation or warranty, all of its right, title and
interest in such Ineligible Contract; or (b) subject to the satisfaction of the
conditions in Section 2.16, substitute for such Ineligible Contract a Substitute
Contract. In any of the foregoing instances, the Seller shall accept the
retransfer of each such Ineligible Contract, and the ADCB shall be reduced by
the Discounted Contract Balance (calculated using the applicable Blended
Discount Rate as of the most recent Determination Date) of each such Ineligible
Contract and, if applicable, increased by the Discounted Contract Balance of
each such Substitute Contract. On and after the date of retransfer, the
Ineligible Contract so retransferred shall not be included in the Asset Pool
and, as applicable, the Substitute Contract shall be included in the Asset Pool.
In consideration of such retransfer, without substitution, the Seller shall, on
the date of retransfer of such Ineligible Contract, make a deposit to the
Collection Account (for allocation pursuant to Section 2.7 , 2.8 or 2.9, as
applicable) in immediately available funds in an amount equal to the Discounted
Contract Balance of such Ineligible Contract (calculated using the applicable
Blended Discount Rate as of the most recent Determination Date). Upon each
retransfer to the Seller of such Ineligible Contract, the Deal Agent, as agent
for the Secured Parties, shall automatically and without further action be
deemed
to transfer, assign and set-over to the Seller, without recourse, representation
or warranty, all the right, title and interest of the Deal Agent, as agent for
the Secured Parties in, to and under such Ineligible Contract and all monies due
or to become due with respect thereto, the related Equipment and all proceeds of
such Ineligible Contract and Recoveries and Insurance Proceeds relating thereto
and all rights to security for any such Ineligible Contract, and all proceeds
and products of the foregoing. The Deal Agent, as agent for the Secured Parties,
shall, at the sole expense of the Servicer execute such documents and
instruments of transfer as may be prepared by the Servicer on behalf of the
Seller and take other such actions as shall reasonably be requested by the
Seller to effect the transfer of such Ineligible Contract pursuant to this
subsection.
Section 5.6 Retransfer of Assets.
In the event of a breach of any representation or warranty set forth in
Section 4.2 hereof which breach could reasonably be expected to have a material
adverse affect on the rights of the Secured Parties or the Deal Agent, as agent
of the Secured Parties, or on the ability of the Seller to perform its
obligations hereunder, by notice then given in writing to the Seller, the Deal
Agent may direct the Seller to accept the retransfer of all of the Assets, in
which case the Seller shall be obligated to accept retransfer of such Assets on
a Payment Date specified by the Seller (such date, the "Retransfer Date") and to
terminate all Hedge Transactions prior to the Retransfer Date. The Seller shall
deposit on the Retransfer Date an amount equal to the deposit amount provided
below for such Assets in the Collection Account for distribution to the Secured
Parties in accordance with Section 2.7(a), 2.8(b) or 2.9(b), as applicable. The
deposit amount (the "Retransfer Amount") for such retransfer will be equal to
the (A) sum of (i) the Aggregate Unpaids, (ii) all Yield accrued and to accrue,
as reasonably determined by the Deal Agent, and (iii) all Hedge Breakage Costs
and any other amounts payable by Seller under or with respect to any Hedging
Agreement minus (B) the amount, if any, available in the Collection Account on
such Payment Date. On the Retransfer Date, provided that full Retransfer Amount
has been deposited into the Collection Account, the Assets shall be transferred
to the Seller; and the Deal Agent as agent for the Secured Parties shall, at the
sole expense of the Servicer, execute and deliver such instruments of transfer,
in each case without recourse, representation or warranty, as shall be prepared
and reasonably requested by the Servicer on behalf of the Seller to vest in the
Seller, or its designee or assignee, all right, title and interest of the Deal
Agent as agent for the Secured Parties in, to and under the Assets. If the Deal
Agent gives a notice directing the Seller to accept such a retransfer as
provided above, the obligation of Seller to accept a retransfer pursuant to this
Section 5.6 shall constitute the sole remedy respecting a breach of the
representations and warranties contained in Section 4.2 available to the Secured
Parties and the Deal Agent on behalf of the Secured Parties.
Section 5.7 Year 2000 Compatibility.
The Seller shall take all action necessary to assure that, prior to
January 1, 2000, the Seller's computer system is able to operate and effectively
process data including dates on and after January 1, 2000. At the request of the
Deal Agent or the Backup Servicer, the Seller shall
provide assurance acceptable to the Deal Agent or the Backup Servicer of the
Seller's Year 2000 Compatibility.
ARTICLE VI
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 6.1 Appointment and Acceptance; Duties.
(a) Appointment of Initial Servicer and Collateral Custodian. Fidelity
Leasing, Inc. is hereby appointed as Servicer pursuant to this Agreement.
Fidelity Leasing, Inc. accepts the appointment and agrees to act as the Servicer
pursuant to this Agreement. Xxxxxx Trust and Savings Bank is hereby appointed as
Collateral Custodian pursuant to this Agreement. Xxxxxx Trust and Savings Bank
accepts the appointment and agrees to act as the Collateral Custodian pursuant
to this Agreement.
(b) General Duties. The Servicer will manage, service, administer,
collect and enforce the Assets in the Asset Pool on behalf of the Purchasers
(the "Servicing Duties") and will have full power and authority to do any and
all things in connection with the performance of the Servicing Duties which it
deems necessary or desirable provided, however, nothing it does may contravene
the provisions of this Agreement. The Servicer will perform the Servicing Duties
with reasonable care, using that degree of skill and attention that a prudent
person engaging in such activities would exercise, but in any event shall not
act with less care than the Servicer exercises with respect to all comparable
contracts that it services for itself or others. The Servicing Duties will
include, without limitation, collection and posting of all payments, responding
to inquiries of Obligors regarding the Assets in the Asset Pool, investigating
delinquencies and making Servicer Advances, remitting payments to the Deal Agent
in a timely manner, furnishing monthly, quarterly and annual statements with
respect to collections and payments in accordance with the provisions of this
Agreement, and using its best efforts to maintain the perfected first priority
security interest of the Deal Agent as agent for the Secured Parties in the
Assets. The Servicer will follow customary standards, policies, and procedures
and will have full power and authority, acting alone, to do any and all things
in connection with the performance of the Servicing Duties that it deems
necessary or desirable. If the Servicer commences a legal proceeding to enforce
a Defaulted Contract or commences or participates in a legal proceeding
(including a bankruptcy proceeding) relating to or involving an Asset in the
Asset Pool, the Deal Agent as agent for the Secured Parties will be deemed to
have automatically assigned the related Contract to the Servicer for purposes of
commencing or participating in any such proceeding as a party or claimant, and
the Servicer is authorized and empowered by the Secured Parties, pursuant to
this Section 6.1(b), to execute and deliver, on behalf of itself and the Deal
Agent as agent for the Secured Parties, any and all instruments of satisfaction
or cancellation, or partial or full release or discharge, and all other notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceedings. If in any enforcement suit
or legal proceeding it is held that the Servicer may not enforce a Contract on
the ground that it is not a real party in interest or a holder entitled to
enforce the Contract, then the Deal Agent will, at the Servicer's expense and
direction, take steps on behalf of the Deal Agent as agent for the Secured
Parties to enforce the Contract, including bringing suit in the name of the Deal
Agent as agent for the Secured Parties.
(c) Disposition Upon Termination of Contract. Upon the termination of a
Contract included in the Asset Pool as a result of a default by the Obligor
thereunder the Servicer will use commercially reasonable efforts to dispose of
any related Equipment. Without limiting the generality of the foregoing, the
Servicer may dispose of any such Equipment by purchasing such Equipment or by
selling such Equipment to any of its Affiliates for a purchase price equal to
the fair market value thereof, any such sale to be evidenced by a certificate of
a Responsible Officer of the Servicer delivered to the Deal Agent setting forth
the Contract, the Equipment, the sale price of the Equipment and certifying that
such sale price is the fair market value of such Equipment.
(d) Further Assurances. The Deal Agent will, at the sole expense of the
Servicer, furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement.
(e) Custodial Duties. The Collateral Custodian shall take and retain
custody of the Contract Files delivered by the Seller pursuant to Section 3.3
hereof in accordance with the terms and conditions of this Agreement, all for
the benefit of the Secured Parties and subject to the Lien thereon in favor of
the Deal Agent as agent for the Secured Parties. Within five Business Days of
its receipt of any Contract File, the Collateral Custodian shall review the
related Contract to verify that such Contract has been executed and has no
missing or mutilated pages and to confirm (in reliance on the related contract
number and Lessee name) that such Contract is referenced on the related list of
Contracts. In order to facilitate the foregoing review by the Collateral
Custodian, in connection with each delivery of Contract Files hereunder to the
Collateral Custodian, the Servicer shall provide to the Collateral Custodian an
electronic file (in EXCEL or a comparable format) that contains the related list
of Contracts or which otherwise contains the Contract number and the name of the
Lessee with respect to each related Contract. If, at the conclusion of such
review, the Collateral Custodian shall determine that such Contract is not
executed or in proper form on its face, or that it is not referenced on such
list of Contracts, the Collateral Custodian shall promptly notify the Seller and
the Deal Agent of such determination by providing a written report to such
Persons setting forth, with particularity, the lack of execution of such
Contract, that such Contract has missing or mutilated pages, or the fact that
such Contract was not referenced on the related list of Contracts. In addition,
unless instructed otherwise in writing by the Seller or the Deal Agent within 10
days of the Collateral Custodian's delivery of such report, the Collateral
Custodian shall return any Contract not referenced on such list of Contracts to
the Seller. Other than the foregoing, the Collateral Custodian shall not have
any responsibility for reviewing any Contract File.
In taking and retaining custody of the Contract Files, the Collateral
Custodian shall be deemed to be acting as the agent of the Deal Agent as agent
for the Secured Parties, provided, however, that the Collateral Custodian makes
no representations as to the existence, perfection or
priority of any Lien on the Contract Files or the instruments therein, and
provided, further, that the Collateral Custodian's duties as agent shall be
limited to those expressly contemplated herein. All Contract Files shall be kept
in fireproof vaults or cabinets at the locations specified on Schedule IV
attached hereto, or at such other office as shall be specified to the Deal Agent
by the Collateral Custodian in a written notice delivered at least 45 days prior
to such change. All Contract Files shall be placed together in a separate file
cabinet with an appropriate identifying label and maintained in such a manner so
as to permit retrieval and access. All Contract Files shall be clearly
segregated from any other documents or instruments maintained by the Collateral
Custodian. The Collateral Custodian shall clearly indicate that such Contract
Files are the sole property of the Seller and that the Seller has granted an
interest therein to the Deal Agent on behalf of the Secured Parties. In
performing its duties, the Collateral Custodian shall use the same degree of
care and attention as it employs with respect to similar Contracts which it
holds as Collateral Custodian.
(f) Concerning the Collateral Custodian.
(i) The Collateral Custodian may conclusively rely on and
shall be fully protected in acting upon any certificate, instrument,
opinion, notice, letter, telegram or other document delivered to it and
which in good faith it reasonably believes to be genuine and which has
been signed by the proper party or parties. The Collateral Custodian
may rely conclusively on and shall be fully protected by in acting upon
(A) the written instructions of any designated officer of the Deal
Agent or (B) the verbal instructions of the Deal Agent.
(ii) The Collateral Custodian may consult counsel satisfactory
to it and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(iii) The Collateral Custodian shall not be liable for any
error of judgment, or for any act done or step taken or omitted by it,
in good faith, or for any mistakes of fact or law, or for anything
which it may do or refrain from doing in connection herewith except in
the case of its willful misconduct or grossly negligent performance or
omission.
(iv) The Collateral Custodian makes no warranty or
representation and shall have no responsibility (except as expressly
set forth in this Agreement) as to the content, enforceability,
completeness, validity, sufficiency, value, genuineness, ownership or
transferability of the Contracts, and will not be required to and will
not make any representations as to the validity or value (except as
expressly set forth in this Agreement) of any of the Contracts. The
Collateral Custodian shall not be obligated to take any legal action
hereunder which might in its judgment involve any expense or liability
unless it has been furnished with an indemnity reasonably satisfactory
to it.
(v) The Collateral Custodian shall have no duties or
responsibilities except such duties and responsibilities as are
specifically set forth in this Agreement and no
covenants or obligations shall be implied in this Agreement against the
Collateral Custodian.
(vi) The Collateral Custodian shall not be required to expend
or risk its own funds in the performance of its duties hereunder.
(vii) It is expressly agreed and acknowledged that the
Collateral Custodian is not guaranteeing performance of or assuming any
liability for the obligations of the other parties hereto or any
parties to the Contracts.
Section 6.2 Collection of Payments.
(a) Collection Efforts, Modification of Contracts. The Servicer will
make reasonable efforts to collect all payments called for under the terms and
provisions of the Contracts in the Asset Pool as and when the same become due,
and will follow those collection procedures which it follows with respect to all
comparable Contracts that it services for itself or others. The Servicer may not
waive, modify or otherwise vary any provision of a Contract. The Servicer may in
its discretion waive any late payment charge or any other fees that may be
collected in the ordinary course of servicing any Contract in the Asset Pool.
(b) Prepaid Contract. The Servicer may not permit a Contract in the
Asset Pool to become a Prepaid Contract (which shall not include a Contract that
becomes a Prepaid Contract due to a Casualty Loss), unless (x) the Servicer
provides an Additional Contract or (y) such prepayment will not result in the
Collection Account receiving an amount (the "Prepayment Amount") less than the
sum of (A) the Discounted Contract Balance on the date of such prepayment
calculated using the applicable Blended Discount Rate in effect on the date of
such payment, (B) any outstanding Servicer Advances thereon (and to the extent
not included therein any accrued and unpaid interest) and (C) all Hedge Breakage
Costs owing to the relevant Hedge Counterparty for any termination of one or
more Hedge Transactions, in whole or in part, as required by the terms of any
Hedging Agreement as the result of any such Contract becoming a Prepaid
Contract. After a Payout Event has occurred, the Servicer may not permit a
Contract in the Asset Pool to become a Prepaid Contract (which shall not include
a Contract that becomes a Prepaid Contract due to a Casualty Loss), unless the
Servicer collects an amount equal to the sum of (A) the Discounted Contract
Balance on the date of such prepayment calculated using the applicable Blended
Discount Rate in effect on the date of payment, (B) any outstanding Servicer
Advances thereon (and to the extent not included therein any accrued and unpaid
interest) and (C) all Hedge Breakage Costs owing to the relevant Hedge
Counterparty for any termination of one or more Hedge Transactions, in whole or
in part, as required by the terms of any Hedging Agreement as the result of any
such Contract becoming a Prepaid Contract.
(c) Acceleration. The Servicer shall accelerate the maturity of all or
any Scheduled Payments under any Contract in the Asset Pool under which a
default under the terms thereof has occurred and is continuing (after the lapse
of any applicable grace period) promptly after such Contract becomes a Defaulted
Contract.
(d) Taxes and other Amounts. To the extent provided for in any Contract
in the Asset Pool, the Servicer will use its best efforts to collect all
payments with respect to amounts due for taxes, assessments and insurance
premiums relating to such Contracts or the Equipment and remit such amounts to
the appropriate Governmental Authority or insurer on or prior to the date such
payments are due.
(e) Payments to Lock-Box Account. On or before the Closing Date with
respect to the Existing Contracts and on or before the relevant Addition Date,
with respect to Additional Contracts, the Servicer shall have instructed all
Obligors to make all payments in respect of the Contracts in the Asset Pool to a
Lock-Box or directly to a Lock-Box Account.
(f) Establishment of the Collection Account. The Servicer shall cause
to be established, on or before the Closing Date, and maintained in the name of
the Deal Agent as agent for the Secured Parties, with an office or branch of a
depository institution or trust company organized under the laws of the United
States of America or any one of the States thereof or the District of Columbia
(or any domestic branch of a foreign bank) a segregated corporate trust account
(the "Collection Account"); provided, however, that at all times such depository
institution or trust company shall be a depository institution organized under
the laws of the United States of America or any one of the States thereof or the
District of Columbia (or any domestic branch of a foreign bank), (i) (A) which
has either (1) a long-term unsecured debt rating of A- or better by S&P and A-3
or better by Moody's or (2) a short-term unsecured debt rating or certificate of
deposit rating of A-1 or better by S&P or P-1 or better by Moody's, (B) the
parent corporation of which has either (1) a long-term unsecured debt rating of
A- or better by S&P and A-3 or better by Moody's or (2) a short-term unsecured
debt rating or certificate of deposit rating of A-1 or better by S&P and P-1 or
better by Moody's or (C) is otherwise acceptable to the Deal Agent and (ii)
whose deposits are insured by the Federal Deposit Insurance Corporation (any
such depository institution or trust company, a "Qualified Institution").
Section 6.3 Servicer Advances.
For each Monthly Period, if the Servicer determines that any Scheduled
Payment (or portion thereof) which was due and payable pursuant to a Contract in
the Asset Pool during such Monthly Period was not received prior to the end of
such Monthly Period, the Servicer may make an advance in an amount up to the
amount of such delinquent Scheduled Payment (or portion thereof); in addition,
if on any day there are not sufficient funds on deposit in the Collection
Account to pay accrued Yield of any Asset Interest the Monthly Period of which
ends on such day, the Servicer shall make an advance in the amount necessary to
pay such Yield (in either case, any such advance, a "Servicer Advance").
Notwithstanding the preceding sentence, (i) the Servicer shall be required to
make a Servicer Advance with respect to any Contract if, and only if, the
Servicer determines (such determination to be conclusive and binding) in good
faith that such Servicer Advance will ultimately be recoverable from future
collections on, or the liquidation of, the Asset Pool and payments by one or
more Hedge Counterparties under one or more Hedging Agreements, (ii) the
Servicer's obligation to make a Servicer Advance for any Contract shall cease on
the day such Contract becomes a Defaulted Contract or is charged-off
pursuant to the Servicer's Credit and Collection Policies and (iii) any
successor Servicer, including the Backup Servicer, will not be obligated to make
any Servicer Advances. The Servicer will deposit any Servicer Advances into the
Collection Account on or prior to 11:00 a.m. (Charlotte, North Carolina time) on
the related Payment Date, in immediately available funds.
Section 6.4 Realization Upon Defaulted Contract.
The Servicer will use reasonable efforts to repossess or otherwise
comparably convert the ownership of any Equipment relating to a Defaulted
Contract and will act as sales and processing agent for Equipment which it
repossesses. The Servicer will follow such other practices and procedures as it
deems necessary or advisable and as are customary and usual in its servicing of
contracts and other actions by the Servicer in order to realize upon such
Equipment, which practices and procedures may include reasonable efforts to
enforce all obligations of Obligors and repossessing and selling such Equipment
at public or private sale in circumstances other than those described in the
preceding sentence. Without limiting the generality of the foregoing, the
Servicer may sell any such Equipment to the Servicer or its Affiliates for a
purchase price equal to the then fair market value thereof, any such sale to be
evidenced by a certificate of a Responsible Officer of the Servicer delivered to
the Deal Agent setting forth the Contract, the Equipment, the sale price of the
Equipment and certifying that such sale price is the fair market value of such
Equipment. In any case in which any such Equipment has suffered damage, the
Servicer will not expend funds in connection with any repair or toward the
repossession of such Equipment unless it reasonably determines that such repair
and/or repossession will increase the Recoveries by an amount greater than the
amount of such expenses. The Servicer will remit to the Collection Account the
Recoveries received in connection with the sale or disposition of Equipment
relating to a Defaulted Contract.
Section 6.5 Maintenance of Insurance Policies.
The Servicer will use its best efforts to ensure that each Obligor
maintains an Insurance Policy with respect to the related Equipment in an amount
at least equal to the sum of the Discounted Contract Balance of the related
Contract and shall ensure that each such Insurance Policy names the Deal Agent,
as agent for the Secured Parties, as loss payee and as an insured thereunder;
provided that the Servicer, in accordance with its Credit and Collection Policy,
may allow Obligors to self-insure. Additionally, the Servicer will require that
each Obligor maintain property damage liability insurance during the term of
each Contract in amounts and against risks customarily insured against by the
Obligor on equipment owned by it. If an Obligor fails to maintain property
damage insurance, the Servicer may purchase and maintain such insurance on
behalf of, and at the expense of, the Obligor. In connection with its activities
as Servicer, the Servicer agrees to present, on behalf of the Deal Agent as
agent for the Secured Parties, claims to the insurer under each Insurance Policy
and any such liability policy, and to settle, adjust and compromise such claims,
in each case, consistent with the terms of each Contract. The Servicer's
Insurance Policies with respect to the related Equipment will insure against
liability for personal injury and property damage relating to such Equipment,
will name the Deal Agent as
agent for the Secured Parties as loss payee and as an insured thereunder and
will contain a breach of warranty clause.
Section 6.6 Representations and Warranties of Servicer.
The Servicer represents and warrants to the Deal Agent, as agent for
the Secured Parties, the Secured Parties, the Collateral Custodian and Backup
Servicer that, as of the Closing Date and on each Addition Date, insofar as any
of the following affects the Servicer's ability to perform its obligations
pursuant to this Agreement in any material respect:
(a) Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of Pennsylvania
with all requisite corporate power and authority to own its properties and to
conduct its business as presently conducted and to enter into and perform its
obligations pursuant to this Agreement.
(b) Due Qualification. The Servicer is qualified to do business as a
corporation, is in good standing, and has obtained all licenses and approvals as
required under the laws of all jurisdictions in which the ownership or lease of
its property and or the conduct of its business (other than the performance of
its obligations hereunder) requires such qualification, standing, license or
approval, except to the extent that the failure to so qualify, maintain such
standing or be so licensed or approved would not have an adverse effect on the
interests of the Seller or of the Secured Parties. The Servicer is qualified to
do business as a corporation, is in good standing, and has obtained all licenses
and approvals as required under the laws of all states in which the performance
of its obligations pursuant to this Agreement requires such qualification,
standing, license or approval and where the failure to qualify or obtain such
license or approval would have material adverse effect on its ability to perform
hereunder.
(c) Power and Authority. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms. The
Servicer has duly authorized the execution, delivery and performance of this
Agreement by all requisite corporate action. The execution, delivery and
performance of this Agreement does not contravene the Servicer's Certificate of
Incorporation or by-laws.
(d) No Violation. The consummation of the transactions contemplated by,
and the fulfillment of the terms of, this Agreement by the Servicer (with or
without notice or lapse of time) will not (i) conflict with, result in any
breach of any of the terms or provisions of, or constitute a default under, the
articles of incorporation or by-laws of the Servicer, or any term of any
agreement, indenture, mortgage, deed of trust or other instrument to which the
Servicer is a party or by which it or any of its property is bound, (ii) result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, or (iii) violate any law, regulation, order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority
applicable to the Servicer or any of its properties.
(e) No Consent. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
Governmental Authority having jurisdiction over the Servicer or any of its
properties is required to be obtained by or with respect to the Servicer in
order for the Servicer to enter into this Agreement or perform its obligations
hereunder.
(f) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, except as such enforceability may be limited by (i)
applicable Insolvency Laws and (ii) general principles of equity (whether
considered in a suit at law or in equity).
(g) No Proceeding. There are no proceedings or investigations pending
or threatened against the Servicer, before any Governmental Authority (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that might (in the reasonable judgment of
the Servicer) materially and adversely affect the performance by the Servicer of
its obligations under, or the validity or enforceability of, this Agreement.
(h) Reports Accurate. No Servicer Certificate, information, exhibit,
financial statement, document, book, record or report furnished or to be
furnished by the Servicer to the Deal Agent or a Purchaser in connection with
this Agreement is or will be inaccurate in any material respect as of the date
it is or shall be dated or (except as otherwise disclosed to the Deal Agent or
such Purchaser, as the case may be, at such time) as of the date so furnished,
and no such document contains or will contain any material misstatement of fact
or omits or shall omit to state a material fact or any fact necessary to make
the statements contained therein not misleading.
Section 6.7 Representations and Warranties of Backup Servicer and
Collateral Custodian.
Each of the Backup Servicer and the Collateral Custodian represents and
warrants to the Deal Agent, as agent for the Secured Parties, and the Secured
Parties that, as of the Closing Date and on each Addition Date, insofar as any
of the following affects the Backup Servicer's or the Collateral Custodian's, as
the case may be, ability to perform its obligations pursuant to this Agreement
in any material respect:
(a) Organization and Good Standing. Xxxxxx Trust and Savings Bank is an
Illinois banking corporation duly organized, validly existing and in good
standing under the laws of the State of Illinois with all requisite corporate
power and authority to own its properties and to conduct its business as
presently conducted and to enter into and perform its obligations pursuant to
this Agreement.
(b) Power and Authority. Each of the Backup Servicer and the Collateral
Custodian has the corporate power and authority to execute and deliver this
Agreement and to carry out its terms. Each of the Backup Servicer and the
Collateral Custodian has duly authorized the execution, delivery and performance
of this Agreement by all requisite corporate action.
(c) No Violation. The consummation of the transactions contemplated by,
and the fulfillment of the terms of, this Agreement by the Backup Servicer and
the Collateral Custodian will not (i) conflict with, result in any breach of any
of the terms or provisions of, or constitute a default under, the charter or
bylaws of the Backup Servicer or the Collateral Custodian, or any term of any
material agreement, indenture, mortgage, deed of trust or other instrument to
which the Backup Servicer or the Collateral Custodian is a party or by which it
or any of its property is bound, (ii) result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, or (iii) violate any
law, regulation, order, writ, judgment, injunction, decree, determination or
award of any Governmental Authority applicable to Xxxxxx Trust and Savings Bank
or any of its properties that might (in the reasonable judgment of the Backup
Servicer or the Collateral Custodian, as the case may be) materially and
adversely affect the performance by the Backup Servicer or the Collateral
Custodian of its obligations under, or the validity or enforceability of, this
Agreement.
(d) No Consent. No consent, approval, authorization, order,
registration, filing, qualification, license or permit (collectively, the
"Consents") of or with any Governmental Authority having jurisdiction over the
Backup Servicer or the Collateral Custodian or any of its respective properties
is required to be obtained by or with respect to the Backup Servicer or the
Collateral Custodian in order for the Backup Servicer or the Collateral
Custodian, as the case may be, to enter into this Agreement or perform its
obligations hereunder (except with respect to performance only, such Consents as
the Backup Servicer or the Collateral Custodian, as the case may be, may need to
obtain prior to the commencement of its performance of its duties hereunder in
the certain jurisdictions outside of Illinois, provided that in lieu of
obtaining for itself the requisite Consents, the Backup Servicer or the
Collateral Custodian, as the case may be, may and shall be permitted to delegate
the performance of its duties to parties having the requisite Consents in such
jurisdictions; provided, however, in the case of such delegation of performance
the Backup Servicer or the Collateral Custodian, as the case may be, shall not
be relieved of their responsibility under this Agreement with respect to such
duties).
(e) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of Xxxxxx Trust and Savings Bank, enforceable against the
Backup Servicer and the Collateral Custodian in accordance with its terms,
except as such enforceability may be limited by (i) applicable Insolvency Laws
and (ii) general principles of equity (whether considered in a suit at law or in
equity).
(f) No Proceeding. There are no proceedings or investigations pending
or, to the best of its knowledge, threatened, against the Backup Servicer or the
Collateral Custodian, before any Governmental Authority (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might (in the reasonable judgment of the Backup
Servicer or the Collateral Custodian, as the case may be) materially and
adversely affect the performance by the Backup Servicer or the Collateral
Custodian of its obligations under, or the validity or enforceability of, this
Agreement.
Section 6.8 Covenants of Servicer.
The Servicer hereby covenants that:
(a) Compliance with Law. The Servicer will comply with all laws and
regulations of any Governmental Authority applicable to the Servicer or the
Contracts in the Asset Pool and related Equipment and Contract Files or any part
thereof.
(b) Obligations with Respect to Contracts; Modifications. The Servicer
will duly fulfill and comply with all obligations on the part of the Seller to
be fulfilled or complied with under or in connection with each Contract in the
Asset Pool and will do nothing to impair the rights of the Deal Agent as agent
for the Secured Parties or of the Secured Parties in, to and under the Assets.
The Servicer will perform such obligations under the Contracts in the Asset Pool
and will not change or modify the Contracts.
(c) Preservation of Security Interest. The Servicer will execute and
file such financing and continuation statements and any other documents which
may be required by any law or regulation of any Governmental Authority to
preserve and protect fully the interest of the Deal Agent as agent for the
Secured Parties in, to and under the Assets.
(d) No Bankruptcy Petition. Prior to the date that is one year and one
day after the payment in full of all amounts owing in respect of all outstanding
commercial paper issued by VFCC, the Servicer will not institute against the
Seller or VFCC, or join any other Person in instituting against the Seller or
VFCC, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United States or
any state of the United States. This Section 6.9(d) will survive the termination
of this Agreement.
(e) Year 2000 Compatibility. The Servicer shall take all action
necessary to assure that, prior to January 1, 2000, the Servicer's computer
system is able to operate and effectively process data including dates on and
after January 1, 2000. At the request of the Deal Agent or the Backup Servicer,
the Servicer shall provide assurance acceptable to the Deal Agent or the Backup
Servicer of the Servicer's Year 2000 Compatibility.
Section 6.9 Covenants of Backup Servicer and Collateral Custodian.
Each of the Backup Servicer and the Collateral Custodian hereby
covenants that:
(a) Contract Files. The Collateral Custodian will not dispose of any
documents constituting the Contract Files in any manner which is inconsistent
with the performance of its obligations as the Collateral Custodian pursuant to
this Agreement and will not dispose of any Contract except as contemplated by
this Agreement.
(b) Compliance with Law. Each of the Backup Servicer and the Collateral
Custodian will comply with all laws and regulations of any Governmental
Authority applicable to the Backup Servicer and the Collateral Custodian.
(c) No Bankruptcy Petition. Prior to the date that is one year and one
day after the payment in full of all amounts owing in respect of all outstanding
commercial paper issued by VFCC, neither the Backup Servicer nor the Collateral
Custodian will institute against the Seller or VFCC, or join any other Person in
instituting against the Seller or VFCC, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States.
This Section 6.9(d) will survive the termination of this Agreement.
(d) Location of Contract Files. The Contract Files shall remain at all
times in the possession of the Collateral Custodian at the address set forth
herein unless notice of a different address is given in accordance with the
terms hereof.
(e) No Changes in Backup Servicer and Collateral Custodian Fee. The
Backup Servicer and Collateral Custodian will not make any changes to the fees
set forth in the Backup Servicer and Collateral Custodian Fee Letter without the
prior written approval of the Deal Agent.
(f) Year 2000 Compatibility. The Backup Servicer and Collateral
Custodian shall take all action necessary to assure that, prior to January 1,
2000, the Backup Servicer and Collateral Custodian's computer system is able to
operate and effectively process data including dates on and after January 1,
2000. At the request of the Deal Agent, the Backup Servicer and Collateral
Custodian shall provide assurance acceptable to the Deal Agent of the Backup
Servicer and Collateral Custodian's Year 2000 Compatibility.
Section 6.10 Servicing Compensation.
As compensation for its servicing activities hereunder and
reimbursement for its expenses, the Servicer shall be entitled to receive a
servicing fee (the "Servicing Fee") in respect of each Monthly Period (or
portion thereof) equal to one-twelfth of the product of (A) the Servicing Fee
Rate and (B) the ADCB as on the most recent Determination Date, such Servicing
Fee to be payable monthly in arrears on each Payment Date to the extent of funds
available therefor pursuant to the provisions of Section 2.7, 2.8 or 2.9, as
applicable.
Section 6.11 Custodial Compensation.
As compensation for its custodial activities hereunder and
reimbursement for its expenses, the Collateral Custodian shall be entitled to
receive a custodial fee (the "Custodial Fee") as provided in the Backup Servicer
and Collateral Custodian Fee Letter.
Section 6.12 Payment of Certain Expenses by Servicer.
The Servicer will be required to pay all expenses incurred by it in
connection with its activities under this Agreement, including fees and
disbursements of independent accountants, Taxes imposed on the Servicer,
expenses incurred in connection with payments and reports
pursuant to this Agreement, and all other fees and expenses not expressly stated
under this Agreement for the account of the Seller, but excluding Liquidation
Expenses incurred as a result of activities contemplated by Section 6.4. The
Servicer will be required to pay all reasonable fees and expenses owing to any
bank or trust company in connection with the maintenance of the Collection
Account and the Lock-Box Account. The Servicer shall be required to pay such
expenses for its own account and shall not be entitled to any payment therefor
other than the Servicing Fee.
Section 6.13 Reports.
(a) Monthly Report. With respect to each Determination Date and the
related Monthly Period, the Servicer will provide to the Seller, the Deal Agent
and the Backup Servicer, on the related Reporting Date, a monthly statement (a
"Monthly Report"), signed by a Responsible Officer of the Servicer and
substantially in the form of Exhibit E.
(b) Servicer's Certificate. Together with each Monthly Report, the
Servicer shall submit to the Purchaser a certificate (a "Servicer's
Certificate"), signed by a Responsible Officer of the Servicer and substantially
in the form of Exhibit F.
(c) Financial Statements. The Servicer will submit to the Purchaser and
the Backup Servicer, within 45 days of the end of each of its fiscal quarters,
commencing February 15, 1998 unaudited financial statements (including an
analysis of delinquencies and losses for each fiscal quarter) as of the end of
each such fiscal quarter. The Servicer will submit to the Purchaser, within 90
days of the end of each of its fiscal years, commencing December 31, 1997
audited financial statements (including an analysis of delinquencies and losses
for each fiscal year describing the causes thereof and sufficient to determine
whether a Payout Event has occurred or is reasonably likely to occur and
otherwise reasonably satisfactory to the Deal Agent) as of the end of each such
fiscal year.
Section 6.14 Annual Statement as to Compliance.
The Servicer will provide to the Deal Agent and the Backup Servicer, on
or prior to December 31 of each year, commencing December 31, 1997, an annual
report signed by a Responsible Officer of the Servicer certifying that (a) a
review of the activities of the Servicer, and the Servicer's performance
pursuant to this Agreement, for the period ending on the last day of the
immediately preceding fiscal year has been made under such Person's supervision
and (b) the Servicer has performed or has caused to be performed in all material
respects all of its obligations under this Agreement throughout such year and no
Servicer Default has occurred and is continuing (or if a Servicer Default has so
occurred and is continuing, specifying each such event, the nature and status
thereof and the steps necessary to remedy such event, and, if a Servicer Default
occurred during such year and no notice thereof has been given to the Deal
Agent, specifying such Servicer Default and the steps taken to remedy such
event).
Section 6.15 Annual Independent Public Accountant's Servicing
Reports.
The Servicer will cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer) to
furnish to the Deal Agent and the Backup Servicer, on or prior to September 30
of each year, commencing September 30, 1998, (i) a report relating to the
previous fiscal year to the effect that (A) such firm has reviewed certain
documents and records relating to the servicing of the Contracts in the Asset
Pool, and (B) based on such examination, such firm is of the opinion that the
Monthly Reports for such year were prepared in compliance with this Agreement,
except for such exceptions as it believes to be immaterial and such other
exceptions as will be set forth in such firm's report and (ii) a report covering
the preceding fiscal year to the effect that such accountants have applied
certain agreed-upon procedures to certain documents and records relating to the
servicing of Contracts under this Agreement, compared the information contained
in the Servicer's Certificates delivered during the period covered by such
report with such documents and records and that no matters came to the attention
of such accountants that caused them to believe that such servicing was not
conducted in compliance with this Article VI of this Agreement, except for such
exceptions as such accountants shall believe to be immaterial and such other
exceptions as shall be set forth in such statement. In the event such firm
requires the Backup Servicer to agree to the procedures performed by such firm,
the Servicer shall direct the Backup Servicer in writing to so agree; it being
understood and agreed that the Backup Servicer will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and the
Backup Servicer makes no independent inquiry or investigation as to, and shall
have no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.
Section 6.16 Adjustments.
If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Contract in the Asset Pool and such Collection was
received by the Servicer in the form of a check which is not honored for any
reason or (ii) the Servicer makes a mistake with respect to the amount of any
Collection and deposits an amount that is less than or more than the actual
amount of such Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such dishonored
check or mistake. Any Scheduled Payment in respect of which a dishonored check
is received shall be deemed not to have been paid.
Section 6.17 Merger or Consolidation of the Servicer.
The Servicer shall not consolidate with or merge into any other Person
or convey or transfer its properties and assets substantially as an entirety to
any Person, unless the Servicer is the surviving entity and unless:
(i) the Servicer has delivered to the Deal Agent and the
Backup Servicer an Officer's Certificate and an Opinion of Counsel each
stating that any consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 6.17 and that all
conditions precedent herein provided for relating to such
transaction have been complied with and, in the case of the Opinion of
Counsel, that such supplemental agreement is legal, valid and binding
with respect to the Servicer and such other matters as the Deal Agent
may reasonably request;
(ii) the Servicer shall have delivered notice of such
consolidation, merger, conveyance or transfer to the Deal Agent; and
(iii) after giving effect thereto, no Payout Event or event
which with notice or lapse of time would constitute a Payout Event
shall have occurred.
Section 6.18 Limitation on Liability of the Servicer and Others.
Except as provided herein, neither the Servicer nor any of the
directors or officers or employees or agents of the Servicer shall be under any
liability to the Deal Agent, the Secured Parties or any other Person for any
action taken or for refraining from the taking of any action pursuant to this
Agreement whether arising from express or implied duties under this Agreement;
provided, however, that this provision shall not protect the Servicer or any
such Person against any liability which would otherwise be imposed by reason of
its willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of its willful misconduct hereunder.
Section 6.19 Indemnification of the Seller, the Backup Servicer,
the Collateral Custodian, the Deal Agent and the
Secured Parties.
The Servicer shall indemnify and hold harmless the Seller, the Backup
Servicer, the Collateral Custodian, the Deal Agent, the Liquidity Agent and each
Secured Party and their respective officers, directors, employees and agents
(collectively, the "Indemnified Persons") from and against any loss, liability,
expense, damage or injury suffered or sustained by any Indemnified Person by
reason of any acts, omissions or alleged acts or omissions of the Servicer,
including, but not limited to any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim, but excluding
allocations of overhead expenses of any such Indemnified Party or other
non-monetary damages of any such Indemnified Party. Notwithstanding the
foregoing, the Servicer shall not indemnify an Indemnified Person if such loss,
liability, expense, damage or injury results or arises (i) as a result of fraud,
gross negligence or breach of fiduciary duty by such Indemnified Person; and
(ii) under any federal, state or local income or franchise taxes or any other
Tax imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith) required to be paid by
the Seller, the Backup Servicer, the Collateral Custodian, the Deal Agent, the
Liquidity Agent or the Secured Parties in connection herewith to any taxing
authority. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof. If the
Servicer has made any indemnity payment pursuant to this Section 8.1 and such
payment fully indemnified the recipient thereof and the recipient thereafter
collects any payments from others in respect of such Indemnified Amounts, the
recipient shall repay to the Servicer an amount equal to the amount it has
collected from others in respect of such indemnified amounts.
If for any reason the indemnification provided above in this Section
6.19 is unavailable to the Indemnified Person or is insufficient to hold an
Indemnified Person harmless, then Servicer shall contribute to the amount paid
or payable by such Indemnified Person as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Person on the one hand and Servicer on the
other hand but also the relative fault of such Indemnified Person as well as any
other relevant equitable considerations.
The parties hereto agree that the provisions of this Section 6.19 shall
not be interpreted to provide recourse to the Seller against loss by reason of
the bankruptcy or insolvency (or other credit condition) of, or default by,
related Obligor on, any Pool Asset.
Any indemnification pursuant to this Section shall not be payable from
the Assets.
The obligations of the Servicer under this Section 6.19 shall survive
the resignation or removal of the Deal Agent, the Liquidity Agent, the Backup
Servicer or the Collateral Custodian and the termination of this Agreement.
Section 6.20 The Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon the Servicer's determination that (i) the performance
of its duties hereunder is or becomes impermissible under applicable law and
(ii) there is no reasonable action which the Servicer could take to make the
performance of its duties hereunder permissible under applicable law. Any such
determination permitting the resignation of the Servicer shall be evidenced as
to clause (i) above by an Opinion of Counsel to such effect delivered to the
Deal Agent and the Backup Servicer. No such resignation shall become effective
until a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 6.25.
Section 6.21 Access to Certain Documentation and Information
Regarding the Contracts.
The Collateral Custodian shall provide to the Deal Agent access to the
Contract Files and all other documentation regarding the Contracts in the Asset
Pool and the related Equipment in such cases where the Deal Agent is required in
connection with the enforcement of the rights or interests of the Secured
Parties, or by applicable statutes or regulations to review such documentation,
such access being afforded without charge but only (i) upon two business days
prior written request, (ii) during normal business hours and (iii) subject to
the Servicer's and Collateral Custodian's normal security and confidentiality
procedures. Prior to the Closing Date and periodically thereafter at the
discretion of the Deal Agent, the Deal Agent may review the Servicer's
collection and administration of the Contracts in order to assess compliance by
the Servicer with the Servicer's written policies and procedures, as well as
with this Agreement and may conduct an audit of the Contracts and Contract Files
in conjunction with such a review. Such review shall be reasonable in scope and
shall be completed in a reasonable period of time.
Section 6.22 Backup Servicer.
(a) On or before the date on which the initial Purchase occurs, until
the receipt by the Servicer of a Termination Notice, the Backup Servicer shall
perform, on behalf of the Deal Agent and the Secured Parties, the following
duties and obligations:
(i) On or before the Closing Date, the Backup Servicer shall
accept from the Servicer delivery of the information required to be set
forth in the Monthly Reports in hard copy and on computer tape;
provided, however, the computer tape is in an MS-DOS, PC readable ASCII
format or format to be agreed upon by the Backup Servicer and the
Servicer on or prior to closing.
(ii) Not later than 12:00 noon New York time two Business Days
prior to each Reporting Date, the Backup Servicer shall accept delivery
of tape from the Servicer, which shall include but not be limited to
the following information: the name, number and name of the related
Lessee for each Contract, the collection status, the contract status,
the principal balance and the ADCB (the "Tape").
The Servicer shall provide, or cause the Subservicer to provide, the
Tape on each Reporting Date as described above.
(b) On or before the date on which the initial Purchase occurs, and
until the receipt by the Servicer of a Termination Notice, the Backup Servicer
shall perform, on behalf of the Secured Parties and the Deal Agent, the
following duties and obligations:
(i) Prior to the related Payment Date, the Backup Servicer
shall review the Monthly Report to ensure that it is complete on its
face and that the following items in such Monthly Report have been
accurately calculated, if applicable, and reported: (A) the ADCB, (B)
the Backup Servicing Fee, (C) the Average ADCB, (D) the accounts that
are 30-60 days past due, (E) the accounts that are 61-90 days past due,
(E) the accounts that are 90+ days past due, (F) the accounts that are
Defaulted Contracts, (G) the Delinquency Ratio and (H) the Default
Ratio. The Backup Servicer shall notify the Deal Agent and the Servicer
of any disagreements with the Monthly Report based on such review not
later than the Business Day preceding such Payment Date to such
Persons.
(ii) If the Servicer disagrees with the report provided under
paragraph (i) above by the Backup Servicer or if the Servicer or any
subservicer has not reconciled such discrepancy, the Backup Servicer
agrees to confer with the Servicer to resolve such disagreement on or
prior to the next succeeding Determination Date and shall settle such
discrepancy with the Servicer if possible, and notify the Deal Agent of
the resolution thereof. The Servicer hereby agrees to cooperate at its
own expense, with the Backup Servicer in reconciling any discrepancies
herein. If within 20 days after the delivery of the report provided
under paragraph (i) above by the Backup Servicer, such discrepancy is
not resolved, the Backup Servicer shall promptly notify the Deal Agent
of the continued existence of such discrepancy. Following receipt of
such notice by the Deal
Agent, the Servicer shall deliver to the Deal Agent, the Secured
Parties, and the Backup Servicer no later than the related Payment Date
a certificate describing the nature and amount of such discrepancies
and the actions the Servicer proposes to take with respect thereto.
With respect to the foregoing, the Backup Servicer, in the performance
of its duties and obligations hereunder, is entitled to rely conclusively, and
shall be fully protected in so relying, on the contents of each Tape, including,
but not limited to, the completeness and accuracy thereof, provided by the
Servicer.
(c) After the receipt of an effective Termination Notice by the
Servicer in accordance with this Agreement, all authority, power, rights and
responsibilities of the Servicer, under this Agreement, whether with respect to
the Contracts or otherwise shall pass to and be vested in the Backup Servicer,
subject to and in accordance with the provisions of Section 6.25, as long as the
Backup Servicer is not prohibited by an applicable provision of law from
fulfilling the same, as evidenced by an Opinion of Counsel.
(d) Any Person (i) into which the Backup Servicer may be merged or
consolidated, (ii) which may result from any merger or consolidation to which
the Backup Servicer shall be a party, or (iii) which may succeed to the
properties and assets of the Backup Servicer substantially as a whole, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Backup Servicer hereunder, shall be the
successor to the Backup Servicer under this Agreement without further act on the
part of any of the parties to this Agreement.
(e) As compensation for its back-up servicing obligations hereunder,
the Backup Servicer shall be entitled to receive the Backup Servicing Fee in
respect of each Monthly Period (or portion thereof) until the first to occur of
the date on which the Backup Servicer becomes a Successor Servicer, resigns or
is removed as Backup Servicer or termination of this Agreement.
(f) The Backup Servicer may resign at any time by not less than 120
days notice to the Deal Agent, the Liquidity Agent, the Servicer, the Seller and
the Originator. In addition, the Backup Servicer may be removed without cause by
the Deal Agent by notice then given in writing to the Servicer, the Seller and
the Backup Servicer. In the event of any such resignation or removal, the Backup
Servicer may be replaced by (i) the Servicer, acting with the consent of the
Deal Agent or (ii) if no such replacement is appointed within 30 days following
such removal or resignation, by the Deal Agent.
(g) The Backup Servicer undertakes to perform only such duties and
obligations as are specifically set forth in this Agreement, it being expressly
understood by all parties hereto that there are no implied duties or obligations
of the Backup Servicer hereunder. Without limiting the generality of the
foregoing, the Backup Servicer, except as expressly set forth herein, shall have
no obligation to supervise, verify, monitor or administer the performance of the
Servicer. The Backup Servicer may act through its agents, attorneys and
custodians in performing any of its duties and obligations under this Agreement,
it being understood by the
parties hereto that the Backup Servicer will be responsible for any misconduct
or negligence on the part of such agents, attorneys or custodians acting on the
routine and ordinary day-to-day operations for and on behalf of the Backup
Servicer. Neither the Backup Servicer nor any of its officers, directors,
employees or agents shall be liable, directly or indirectly, for any damages or
expenses arising out of the services performed under this Agreement other than
damages or expenses which result from the gross negligence or willful misconduct
of it or them or the failure to perform materially in accordance with this
Agreement.
(h) The Backup Servicer shall not be liable for any obligation of the
Servicer contained in this Agreement or for any errors of the Servicer contained
in any computer tape, certificate or other data or document delivered to the
Backup Servicer hereunder or on which the Backup Servicer must rely in order to
perform its obligations hereunder, and the Seller, Secured Parties, Deal Agent,
Liquidity Agent, Collateral Custodian and Backup Servicer, shall look only to
the Servicer to perform such obligations. The Backup Servicer, and the
Collateral Custodian shall have no responsibility and shall not be in default
hereunder or incur any liability for any failure, error, malfunction or any
delay in carrying out any of their respective duties under this Agreement if
such failure or delay results from the Backup Servicer acting in accordance with
information prepared or supplied by a Person other than the Backup Servicer or
the failure of any such other Person to prepare or provide such information. The
Backup Servicer shall have no responsibility, shall not be in default and shall
incur no liability for (i) any act or failure to act of any third party,
including the Servicer (ii) any inaccuracy or omission in a notice or
communication received by the Backup Servicer from any third party, (iii) the
invalidity or unenforceability of any Asset or Contract under applicable law,
(iv) the breach or inaccuracy of any representation or warranty made with
respect to any Asset, Contract or any item of Equipment, or (v) the acts or
omissions of any successor Backup Servicer.
Section 6.23 Identification of Records.
The Servicer shall clearly and unambiguously identify each Contract in
the Asset Pool and the related Equipment in its computer or other records to
reflect that such Contracts and Equipment have been transferred to and are owned
by the Seller and that an interest therein has been transferred by the Seller
pursuant to this Agreement.
Section 6.24 Servicer Defaults.
If any one of the following events (a "Servicer Default") shall occur
and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Deal Agent as required by this
Agreement including, without limitation, while Fidelity is Servicer, any payment
required to be made under the Backup Servicer and Collateral Custodian Fee
Letter, or to deliver any required Monthly Report or other Required Reports
hereunder on or before the date occurring two Business Days after the date such
payment, transfer, deposit, instruction of notice or report is required to be
made or given, as the case may be, under the terms of this Agreement;
(b) any failure on the part of the Servicer duly to observe or perform
in any material respect any other covenants or agreements of the Servicer set
forth in this Agreement or the Purchase Agreement which has a material adverse
effect on the Secured Parties, which continues unremedied for a period of 30
days after the first to occur of (i) the date on which written notice of such
failure requiring the same to be remedied shall have been given to the Servicer
by the Deal Agent and (ii) the date on which the Servicer becomes aware thereof;
(c) any representation, warranty or certification made by the Servicer
in this Agreement or in any certificate delivered pursuant to this Agreement
shall prove to have been incorrect when made, which has a material adverse
effect on the Secured Parties and which continues to be unremedied for a period
of 30 days after the first to occur of (i) the date on which written notice of
such incorrectness requiring the same to be remedied shall have been given to
the Servicer by the Deal Agent and (ii) the date on which the Servicer becomes
aware thereof;
(d) an Insolvency Event shall occur with respect to the Servicer;
(e) any material delegation of the Servicer's duties which is not
permitted by Section 7.1;
(f) any financial or Asset information reasonably requested by the Deal
Agent or the Purchaser as provided herein is not reasonably provided as
requested;
(g) the rendering against the Servicer of a final judgment, decree or
order for the payment of money in excess of U.S. $1,000,000 and the continuance
of such judgment, decree or order unsatisfied and in effect for any period of 61
consecutive days without a stay of execution;
(h) the failure of the Servicer to make any payment due with respect to
aggregate recourse debt or other obligations with an aggregate principal amount
exceeding U.S. $1,000,000 or the occurrence of any event or condition which
would permit acceleration of such recourse debt or other obligations if such
event or condition has not been waived;
(i) any change in the management of the Servicer relating to the
positions of President, CEO, Chairman of the Board and Executive Vice President;
or
(j) any change in the control of the Servicer which takes the form of
either a merger or consolidation in which the Servicer is not the surviving
entity.
Notwithstanding anything herein to the contrary, so long as any such Servicer
Default shall not have been remedied, the Deal Agent, by written notice to the
Servicer (with a copy to the Backup Servicer) (a "Termination Notice"), may
terminate all of the rights and obligations of the Servicer as Servicer under
this Agreement.
Section 6.25 Appointment of Successor Servicer.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 6.24, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Deal Agent in writing or, if no such date
is specified in such Termination Notice or otherwise specified by the Deal
Agent, until a date mutually agreed upon by the Servicer and the Deal Agent. The
Deal Agent may at the time described in the immediately preceding sentence in
its sole discretion, appoint the Backup Servicer as the Servicer hereunder, and
the Backup Servicer shall on such date assume all obligations of the Servicer
hereunder, and all authority and power of the Servicer under this Agreement
shall pass to and be vested in the Backup Servicer; provided, however, that the
Successor Servicer shall not (i) be responsible or liable for any past actions
or omissions of the outgoing Servicer or (ii) be obligated to make Servicer
Advances. In the event that the Deal Agent does not so appoint the Backup
Servicer, there is no Backup Servicer or the Backup Servicer is unwilling or
unable to assume such obligations on such date, the Deal Agent shall as promptly
as possible appoint a successor servicer (the Backup Servicer or any such other
successor, the "Successor Servicer"), and such Successor Servicer shall accept
its appointment by a written assumption in a form acceptable to the Deal Agent.
If the Deal Agent within 60 days of receipt of a Termination Notice is unable to
obtain any bids from Eligible Servicers and the Servicer delivers an Officer's
Certificate to the effect that it cannot in good faith cure the Servicer Default
which gave rise to a transfer of servicing, then the Deal Agent shall offer the
Seller the right to accept retransfer of all the Assets and the Seller may
accept re-transfer of all the Assets, provided, however, that if the long-term
unsecured debt obligations of the Seller are not rated at the time of such
purchase at least investment grade by each rating agency providing a rating in
respect of such long-term unsecured debt obligations, no such re-transfer shall
occur unless the Seller shall deliver an Opinion of Counsel reasonably
acceptable to the Deal Agent that such re-transfer would not constitute a
fraudulent conveyance of the Seller. The amount to be paid and deposited in
respect of such re-transfer shall be equal to the sum of the Capital outstanding
plus all Yield that has accrued thereon and that will accrue thereon. In the
event that a Successor Servicer has not been appointed and has not accepted its
appointment at the time when the Servicer ceases to act as Servicer, the Deal
Agent shall petition a court of competent Jurisdiction to appoint any
established financial institution having a net worth of not less than U.S.
$50,000,000 and whose regular business includes the servicing of Contracts as
the Successor Servicer hereunder.
(b) Upon its appointment, the Backup Servicer (subject to Section
6.25(a)) or the Successor Servicer, as applicable, shall be the successor in all
respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Backup Servicer or the Successor Servicer, as applicable.
(c) All authority and power granted to the Servicer under this
Agreement shall automatically cease and terminate upon termination of this
Agreement and shall pass to and be vested in the Seller and, without limitation,
the Seller is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Servicer agrees to cooperate with the Seller
in effecting the termination of the responsibilities and rights of the Servicer
to conduct servicing on the Contracts in the Asset Pool.
(d) Upon the Backup Servicer receiving notice that it is required to
serve as the Servicer hereunder pursuant to the foregoing provisions of this
Section 6.25, the Backup Servicer will promptly begin the transition to its role
as Servicer.
(e) The Backup Servicer shall be entitled to receive its reasonable
costs incurred in transitioning to Servicer.
Section 6.26 Notification.
Upon the Servicer becoming aware of the occurrence of any Servicer
Default, the Servicer shall promptly give written notice thereof to the Deal
Agent and the Backup Servicer.
Section 6.27 Protection of Right, Title and Interest to Assets.
(a) The Servicer shall cause this Agreement, all amendments hereto
and/or all financing statements and continuation statements and any other
necessary documents covering the right, title and interest of the Deal Agent as
agent for the Secured Parties and of the Secured Parties to the Assets to be
promptly recorded, registered and filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the Deal
Agent as agent for the Secured Parties hereunder to all property comprising the
Assets. The Servicer shall deliver to the Deal Agent file-stamped copies of, or
filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recording, registration or filing.
The Seller shall cooperate fully with the Servicer in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this subsection 6.27(a).
(b) The Servicer will give the Deal Agent at least 30 days' prior
written notice of any relocation of any office from which it services Contracts
in the Asset Pool or keeps the Contract Files or of its principal executive
office and whether, as a result of such relocation, the applicable provisions of
the UCC or any other applicable law governing the perfection of interests in
property would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and shall
file such financing statements or amendments as may be necessary to continue the
perfection of the security interest of the Deal Agent as agent for the Secured
Parties in the Contracts in the Asset Pool and the proceeds thereof. The
Servicer will at all times maintain each office from which it services Contracts
in the Asset Pool within the United States of America.
Section 6.28 Release of Contract Files.
The Seller may, with the prior written consent of the Deal Agent (such
consent not to be unreasonably withheld), require that the Collateral Custodian
release each Contract File (a) delivered to the Collateral Custodian in error,
(b) for which a Substitute Contract has been substituted in accordance with
Section 2.16, (c) as to which the lien on the related Equipment has been so
released pursuant to Section 5.3, (d) which has been retransferred to the Seller
pursuant to Section 5.5 or 5.6, or (e) which is required to be redelivered to
the Seller in connection with the termination of this Agreement, in each case by
submitting to the Collateral Custodian and the Deal Agent a written request in
the form of Exhibit H hereto (signed by both the Seller and the Deal Agent)
specifying the Contracts to be so released and reciting that the conditions to
such release have been met (and specifying the section or sections of this
Agreement being relied upon for such release). The Collateral Custodian shall
upon its receipt of each such request for release executed by the Seller and the
Deal Agent promptly, but in any event within 5 Business Days, release the
Contract Files so requested to the Seller.
ARTICLE VII
PAYOUT AND RESTRICTING EVENTS
Section 7.1 Payout Events.
If any of the following events ("Payout Events") shall occur:
(a) as of any Reporting Date, the Delinquency Ratio for the preceding
Determination Date exceeds 3.0%;
(b) as of any Reporting Date, the Default Ratio for the preceding
Determination Date exceeds 2.75%;
(c) the passage of 60 days following receipt by the Purchaser of a
written notification of the Seller's intent to terminate the revolving period;
(d) a Restricting Event has occurred.
Section 7.2 Restricting Events.
If any of the following events ("Restricting Events") shall occur:
(a) as of any Reporting Date, the Delinquency Ratio for the preceding
Determination Date exceeds 4.0%;
(b) as of any Reporting Date, the Default Ratio for the preceding
Determination Date exceeds 3.25%;
(c) the Termination Date shall have occurred;
(d) the level of Capital exceeds the Capital Limit and the Seller does
not, within one Business Day, contribute Eligible Contracts and/or cash
collateral sufficient to cause the Capital to comply with the Capital Limit;
(e) the Seller is not in compliance with the Portfolio Concentration
Criteria, and such noncompliance is not cured within 5 Business Days;
(f) a Servicer Default occurs and is continuing;
(g)(i) failure on the part of the Seller to make any payment or
deposit required by the terms of this Agreement on the day such payment
or deposit is required to be made or
(ii) failure on the part of the Seller to observe or perform
any of its covenants or agreements set forth in this Agreement, which
failure has a material adverse effect on the interests of the Deal
Agent, any Secured Party, the Liquidity Agent or any Investor and which
continues unremedied for a period of 30 days or more after written
notice to Seller; provided, that only a five Business Day cure period
shall apply in the case of a failure by the Seller to observe its
covenants not to grant a security interest or otherwise intentionally
create a Lien on the Contracts;
(h) any representation or warranty made by the Seller in this Agreement
or any information required to be given by the Seller to the Deal Agent to
identify Contracts pursuant to this Agreement, shall prove to have been
incorrect in any material respect when made or delivered and which continues to
be incorrect in any material respect for a period of 30 days after written
notice or actual knowledge thereof;
(i) the occurrence of an Insolvency Event relating to the Originator,
the Seller or the Servicer;
(j) the Seller shall become an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "40 Act") or the
arrangements contemplated by this Agreement shall require registration as an
"investment company" within the meaning of the 40 Act;
(k) a regulatory, tax or accounting body has ordered that the
activities of the Seller or any Affiliate of the Seller, contemplated hereby be
terminated or, as a result of any other event or circumstance, the activities of
the Seller contemplated hereby may reasonably be expected to cause the Seller or
any of its respective Affiliates to suffer materially adverse regulatory,
accounting or tax consequences; or
(l) on any day, the aggregate Hedge Notional Amount in effect for that
day under all Hedge Transactions is less than 100% of the Capital outstanding on
that day.
then, and in any such event, the Termination Date shall be deemed to have
occurred automatically upon the occurrence of such event. Upon any such
occurrence, the Deal Agent and the Purchasers shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of the applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnities by the Seller.
Without limiting any other rights which the Deal Agent, the Backup
Servicer, the Collateral Custodian, the Liquidity Agent, the Secured Parties or
any of their respective Affiliates may have hereunder or under applicable law,
the Seller hereby agrees to indemnify the Deal Agent, the Backup Servicer, the
Collateral Custodian, the Liquidity Agent, the Secured Parties, and each of
their respective Affiliates and officers, directors, employees and agents
thereof from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by, but excluding allocations
of overhead expenses of any such Indemnified Party or other non-monetary damages
of any such Indemnified Party any of them arising out of or as a result of this
Agreement or the ownership of the Asset Interest or in respect of any Asset or
any Contract, excluding, however, (a) Indemnified Amounts to the extent
resulting from negligence or willful misconduct on the part of the Deal Agent,
the Backup Servicer, the Collateral Custodian, the Liquidity Agent, such Secured
Parties or such Affiliate and (b) recourse (except with respect to payment and
performance of obligations provided for in this Agreement) for Defaulted
Contracts. If the Seller has made any indemnity payment pursuant to this Section
8.1 and such payment fully indemnified the recipient thereof and the recipient
thereafter collects any payments from others in respect of such Indemnified
Amounts then, the recipient shall repay to the Seller an amount equal to the
amount it has collected from others in respect of such indemnified amounts.
Without limiting the foregoing, the Seller shall indemnify the Deal Agent, the
Backup Servicer, the Collateral Custodian, the Liquidity Agent, the Secured
Parties and each of their respective Affiliates and officers, directors,
employees and agents thereof for Indemnified Amounts relating to or resulting
from:
(i) any Purchased Asset treated as or represented by the
Seller to be an Eligible Contract which is not at the applicable time
an Eligible Contract;
(ii) reliance on any representation or warranty made or deemed
made by the Seller, the Servicer (if the Originator or one of its
Affiliates) or any of their respective officers under or in connection
with this Agreement, which shall have been false or incorrect in any
material respect when made or deemed made or delivered;
(iii) the failure by the Seller or the Servicer (if the
Originator or one of its Affiliates) to comply with any term, provision
or covenant contained in this Agreement or any agreement executed in
connection with this Agreement, or with any applicable law, rule or
regulation with respect to any Asset, the related Contract, or the
nonconformity of any Asset, the related Contract with any such
applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in the relevant
Purchaser or to transfer to such Purchaser, an undivided ownership
interest in the Assets, together with all Collections, free and clear
of any Adverse Claim whether existing at the time of any Purchase or at
any time thereafter;
(v) the failure to maintain, as of the close of business on
each Business Day prior to the Termination Date, an amount of Capital
outstanding which is less than or equal to the lesser of (x) the
Purchase Limit on such Business Day, or (y) the Capital Limit on such
Business Day;
(vi) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Assets which are, or are purported to be, Pool Assets, whether at
the time of any Purchase or at any subsequent time;
(vii) any dispute, claim, offset or defense (other than the
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Asset which is, or is purported to be, a Purchased Asset
(including, without limitation, a defense based on such Asset or the
related Contract not being a legal, valid and binding obligation of
such Obligor enforceable against it in accordance with its terms), or
any other claim resulting from the sale of the merchandise or services
related to such Asset or the furnishing or failure to furnish such
merchandise or services;
(viii) any failure of the Seller or the Servicer (if the
Originator or one of its Affiliates) to perform its duties or
obligations in accordance with the provisions of this Agreement or any
failure by the Originator, the Seller or any Affiliate thereof to
perform its respective duties under the Contracts;
(ix) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with merchandise or
services which are the subject of any Asset or Contract;
(x) the failure by Seller to pay when due any Taxes for which
the Seller is liable, including without limitation, sales, excise or
personal property taxes payable in connection with the Pool Assets;
(xi) any repayment by the Deal Agent, the Liquidity Agent or a
Secured Party of any amount previously distributed in reduction of
Capital or payment of Yield or any other amount due hereunder or under
any Hedging Agreement, in each case which amount the Deal Agent, the
Liquidity Agent or a Secured Party believes in good faith is required
to be repaid;
(xii) the commingling of Collections of Pool Assets at any
time with other funds;
(xiii) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of Purchases or reinvestments or
the ownership of the Asset Interest or in respect of any Asset or
Contract;
(xiv) any failure by the Seller to give reasonably equivalent
value to the Originator in consideration for the transfer by the
Originator to the Seller of any Assets or any attempt by any Person to
void or otherwise avoid any such transfer under any statutory provision
or common law or equitable action, including, without limitation, any
provision of the Bankruptcy Code; or
(xv) the failure of the Seller, the Originator or any of their
respective agents or representatives to remit to the Servicer or the
Deal Agent, Collections of Pool Assets remitted to the Seller or any
such agent or representative.
Any amounts subject to the indemnification provisions of this Section 8.1 shall
be paid by the Seller solely pursuant to the provisions of Sections 2.7, 2.8 and
2.9 hereof as the case may be to the Deal Agent within two Business Days
following the Deal Agent's demand therefor.
If for any reason the indemnification provided above in this Section
8.1 is unavailable to the Indemnified Person or is insufficient to hold an
Indemnified Person harmless, then Servicer shall contribute to the amount paid
or payable by such Indemnified Person as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Person on the one hand and the Seller on
the other hand but also the relative fault of such Indemnified Person as well as
any other relevant equitable considerations.
The parties hereto agree that the provisions of Section 8.1 shall not
be interpreted to provide recourse to the Seller against loss by reason of the
bankruptcy or insolvency (or other credit condition) of, or default by, related
Obligor on, any Pool Asset.
ARTICLE IX
THE DEAL AGENT AND THE LIQUIDITY AGENT
Section 9.1 Authorization and Action.
(a) Each Secured Party hereby designates and appoints the Deal Agent as
Deal Agent hereunder, and authorizes the Deal Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Deal
Agent by the terms of this Agreement together with such powers as are reasonably
incidental thereto. The Deal Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Deal
Agent shall be read into this Agreement or otherwise exist for the Deal Agent.
In performing its functions and duties hereunder, the Deal Agent shall act
solely as agent for the Secured Parties and does not assume nor shall be deemed
to have assumed any obligation or relationship of trust or agency with or for
the Seller or any of its successors or assigns. The Deal Agent shall not be
required to take any action which exposes the Deal Agent to personal liability
or which is contrary to this Agreement or applicable law. The appointment and
authority of the Deal Agent hereunder shall terminate at the indefeasible
payment in full of the Aggregate Unpaids.
(b) Each Investor hereby designates and appoints FUNB as Liquidity
Agent hereunder, and authorizes the Liquidity Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the
Liquidity Agent by the terms of this Agreement together with such powers as are
reasonably incidental thereto. The Liquidity Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Liquidity Agent shall be read into this Agreement or otherwise exist for the
Liquidity Agent. In performing its functions and duties hereunder, the Liquidity
Agent shall act solely as agent for the Investors and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for the Seller or any of its successors or assigns. The Liquidity Agent shall
not be required to take any action which exposes the Liquidity Agent to personal
liability or which is contrary to this Agreement or applicable law. The
appointment and authority of the Liquidity Agent hereunder shall terminate at
the indefeasible payment in full of the Aggregate Unpaids.
Section 9.2 Delegation of Duties.
(a) The Deal Agent may execute any of its duties under this Agreement
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Deal Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
(b) The Liquidity Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all
matters pertaining to such duties. The Liquidity Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
Section 9.3 Exculpatory Provisions.
(a) Neither the Deal Agent nor any of its directors, officers, agents
or employees shall be (i) liable for any action lawfully taken or omitted to be
taken by it or them under or in connection with this Agreement (except for its,
their or such Person's own gross negligence or willful misconduct or, in the
case of the Deal Agent, the breach of its obligations expressly set forth in
this Agreement), or (ii) responsible in any manner to any of the Secured Parties
for any recitals, statements, representations or warranties made by the Seller
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished
in connection herewith, or for any failure of the Seller to perform its
obligations hereunder, or for the satisfaction of any condition specified in
Article III. The Deal Agent shall not be under any obligation to any Secured
Party to ascertain or to inquire as to the observance or performance of any of
the agreements or covenants contained in, or conditions of, this Agreement, or
to inspect the properties, books or records of the Seller. The Deal Agent shall
not be deemed to have knowledge of any Payout Event unless the Deal Agent has
received notice from the Seller or a Secured Party.
(b) Neither the Liquidity Agent nor any of its directors, officers,
agents or employees shall be (i) liable for any action lawfully taken or omitted
to be taken by it or them under or in connection with this Agreement (except for
its, their or such Person's own gross negligence or willful misconduct or, in
the case of the Liquidity Agent, the breach of its obligations expressly set
forth in this Agreement), or (ii) responsible in any manner to the Deal Agent or
any of the Secured Parties for any recitals, statements, representations or
warranties made by the Seller contained in this Agreement or in any certificate,
report, statement or other document referred to or provided for in, or received
under or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other document furnished in connection herewith, or for any failure of the
Seller to perform its obligations hereunder, or for the satisfaction of any
condition specified in Article III. The Liquidity Agent shall not be under any
obligation to the Deal Agent or any Secured Party to ascertain or to inquire as
to the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Seller. The Liquidity Agent shall not be deemed to have knowledge
of any Payout Event unless the Liquidity Agent has received notice from the
Seller, the Deal Agent or a Secured Party.
Section 9.4 Reliance.
(a) The Deal Agent shall in all cases be entitled to rely, and shall be
fully protected in relying, upon any document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Seller),
independent accountants and other experts selected by the Deal Agent. The Deal
Agent shall in all cases be fully justified in failing or refusing to take any
action under this Agreement or any other document furnished in connection
herewith unless it shall first receive such advice or concurrence of VFCC or the
Required Investors or all of the Secured Parties, as applicable, as it deems
appropriate or it shall first be indemnified to its satisfaction by the Secured
Parties, provided that unless and until the Deal Agent shall have received such
advice, the Deal Agent may take or refrain from taking any action, as the Deal
Agent shall deem advisable and in the best interests of the Secured Parties. The
Deal Agent shall in all cases be fully protected in acting, or in refraining
from acting, in accordance with a request of VFCC or the Required Investors or
all of the Secured Parties, as applicable, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Secured
Parties.
(b) The Liquidity Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Seller), independent accountants
and other experts selected by the Liquidity Agent. The Liquidity Agent shall in
all cases be fully justified in failing or refusing to take any action under
this Agreement or any other document furnished in connection herewith unless it
shall first receive such advice or concurrence of Required Investors as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Investors, provided that unless and until the Liquidity Agent shall have
received such advice, the Liquidity Agent may take or refrain from taking any
action, as the Liquidity Agent shall deem advisable and in the best interests of
the Investors. The Liquidity Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of the
Required Investors and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Investors.
Section 9.5 Non-Reliance on Deal Agent, Liquidity Agent and Other
Purchasers.
Each Secured Party expressly acknowledges that neither the Deal Agent,
the Liquidity Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Deal Agent or the Liquidity Agent
hereafter taken, including, without limitation, any review of the affairs of the
Seller, shall be deemed to constitute any representation or warranty by the Deal
Agent or the Liquidity Agent. Each Secured Party represents and warrants to the
Deal Agent and to the Liquidity Agent that it has and will, independently and
without reliance upon the Deal Agent, the Liquidity Agent or any other Secured
Party and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations,
property, prospects, financial and other conditions and creditworthiness of the
Seller and made its own decision to enter into this Agreement or Hedging
Agreement, as the case may be.
Section 9.6 Reimbursement and Indemnification.
The Investors agree to reimburse and indemnify VFCC, the Deal Agent,
the Liquidity Agent and each of their respective officers, directors, employees,
representatives and agents ratably according to their pro rata shares, to the
extent not paid or reimbursed by the Seller (i) for any amounts for which VFCC,
the Liquidity Agent, acting in its capacity as Liquidity Agent, or the Deal
Agent, acting in its capacity as Deal Agent, is entitled to reimbursement by the
Seller hereunder and (ii) for any other expenses incurred by VFCC, the Liquidity
Agent, acting in its capacity as Liquidity Agent, or the Deal Agent, in its
capacity as Deal Agent and acting on behalf of the Secured Parties, in
connection with the administration and enforcement of this Agreement.
Section 9.7 Deal Agent and Liquidity Agent in their Individual
Capacities.
The Deal Agent, the Liquidity Agent and each of their respective
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Seller or any Affiliate of the Seller as though the
Deal Agent or the Liquidity Agent, as the case may be, were not the Deal Agent
or the Liquidity Agent, as the case may be, hereunder. With respect to the
acquisition of Asset Interests pursuant to this Agreement, the Deal Agent, the
Liquidity Agent and each of their respective Affiliates shall have the same
rights and powers under this Agreement as any Purchaser and may exercise the
same as though it were not the Deal Agent or the Liquidity Agent, as the case
may be, and the terms "Investor," "Purchaser," "Investors" and "Purchasers"
shall include the Deal Agent or the Liquidity Agent, as the case may be, in its
individual capacity.
Section 9.8 Successor Deal Agent or Liquidity Agent.
(a) The Deal Agent may, upon 5 days' notice to the Seller and the
Secured Parties, and the Deal Agent will, upon the direction of all of the
Secured Parties (other than the Deal Agent, in its individual capacity) resign
as Deal Agent. If the Deal Agent shall resign, then the Required Investors
during such 5-day period shall appoint from among the Secured Parties a
successor agent. If for any reason no successor Deal Agent is appointed by the
Required Investors during such 5-day period, then effective upon the expiration
of such 5-day period, the Second Parties shall perform all of the duties of the
Deal Agent hereunder and the Seller shall make all payments in respect of the
Aggregate Unpaids or under any fee letter delivered by the Originator to the
Deal Agent and the Secured Parties directly to the applicable Secured Party and
for all purposes shall deal directly with the Secured Party. After any retiring
Deal Agent's resignation hereunder as Deal Agent, the provisions of this Article
VIII and Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Deal Agent under this Agreement.
(b) The Liquidity Agent may, upon 5 days' notice to the Seller, the
Deal Agent and the Investors, and the Liquidity Agent will, upon the direction
of all of the Investors (other than the Liquidity Agent, in its individual
capacity) resign as Liquidity Agent. If the Liquidity Agent shall resign, then
the Required Investors during such 5-day period shall appoint from among the
Investors a successor Liquidity Agent. If for any reason no successor Liquidity
Agent is appointed by the Required Investors during such 5-day period, then
effective upon the expiration of such 5-day period, the Investors shall perform
all of the duties of the Liquidity Agent hereunder and all payments in respect
of the Aggregate Unpaids. After any retiring Liquidity Agent's resignation
hereunder as Liquidity Agent, the provisions of this Article VIII and Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Liquidity Agent under this Agreement.
ARTICLE X
ASSIGNMENTS; PARTICIPATIONS
Section 10.1 Assignments and Participations.
(a) Each Investor may upon at least 30 days' notice to VFCC, the Deal
Agent, the Liquidity Agent and S&P and Xxxxx'x, assign to one or more banks or
other entities all or a portion of its rights and obligations under this
Agreement; provided, however, that (i) each such assignment shall be of a
constant, and not a varying percentage of all of the assigning Investor's rights
and obligations under this Agreement, (ii) the amount of the Commitment of the
assigning Investor being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than the lesser of (A) $15,000,000 or an integral
multiple of $1,000,000 in excess of that amount and (B) the full amount of the
assigning Investor's Commitment, (iii) each such assignment shall be to an
Eligible Assignee, (iv) the parties to each such assignment shall execute and
deliver to the Deal Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500 or such lesser amount as shall be approved by the Deal Agent, (v) the
parties to each such assignment shall have agreed to reimburse the Deal Agent,
the Liquidity Agent and VFCC for all fees, costs and expenses (including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for each of the Deal Agent, the Liquidity Agent and VFCC) incurred by the Deal
Agent, the Liquidity Agent and VFCC, respectively, in connection with such
assignment and (vi) there shall be no increased costs, expenses or taxes
incurred by the Deal Agent, the Liquidity Agent or VFCC upon such assignment or
participation, and provided further that upon the effective date of such
assignment the provisions of Section 3.03(f) of the Administration Agreement
shall be satisfied. Upon such execution, delivery and acceptance by the Deal
Agent and the Liquidity Agent and the recording by the Deal Agent, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be the date of acceptance thereof by the Deal Agent and the
Liquidity Agent, unless a later date is specified therein, (i) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of an Investor hereunder and (ii)
the Investor assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Investor's rights and obligations under this Agreement, such Investor shall
cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Investor assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Investor makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Investor makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of VFCC or the performance or observance by VFCC of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of such financial statements and other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Deal Agent or the
Liquidity Agent, such assigning Investor or any other Investor and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assigning Investor and such assignee confirm that such
assignee is an Eligible Assignee; (vi) such assignee appoints and authorizes
each of the Deal Agent and the Liquidity Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
such agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as an Investor.
(c) The Deal Agent shall maintain at its address referred to herein a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Investors and the
Commitment of, and the Capital of, each Asset interest owned by each investor
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and VFCC, the
Seller and the Investors may treat each Person whose name is recorded in the
Register as an Investor hereunder for all purposes of this Agreement. The
Register shall be available for inspection by VFCC, the Liquidity Agent or any
Investor at any reasonable time and from time to time upon reasonable prior
notice.
(d) Subject to the provisions of Section 10.1(a), upon its receipt of
an Assignment and Acceptance executed by an assigning Investor and an assignee,
the Deal Agent and the Liquidity Agent shall each, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit D
hereto, accept such Assignment and Acceptance, and the Deal Agent shall then (i)
record the information contained therein in the Register and (ii) give prompt
notice thereof to VFCC.
(e) Each Investor may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment and
each Asset Interest owned by it); provided, however, that (i) such Investor's
obligations under this Agreement (including, without limitation, its Commitment
hereunder) shall remain unchanged, (ii) such Investor shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Deal Agent and the other Investors shall continue to deal solely
and directly with such Investor in connection with such Investor's rights and
obligations under this Agreement, and provided further that the Deal Agent shall
have confirmed that upon the effective date of such participation the provisions
of Section 3.03(f) of the Administration Agreement shall be satisfied.
Notwithstanding anything herein to the contrary, each participant shall have the
rights of an Investor (including any right to receive payment) under Sections
2.12 and 2.13; provided, however, that no participant shall be entitled to
receive payment under either such Section in excess of the amount that would
have been payable under such Section by the Seller to the Investor granting its
participation had such participation not been granted, and no Investor granting
a participation shall be entitled to receive payment under either such Section
in an amount which exceeds the sum of (i) the amount to which such Investor is
entitled under such Section with respect to any portion of any Asset Interest
owned by such Investor which is not subject to any participation plus (ii) the
aggregate amount to which its participants are entitled under such Sections with
respect to the amounts of their respective participations. With respect to any
participation described in this Section 10.1, the participant's rights as set
forth in the agreement between such participant and the applicable Investor to
agree to or to restrict such Investor's ability to agree to any modification,
waiver or release of any of the terms of this Agreement or to exercise or
refrain from exercising any powers or rights which such Investor may have under
or in respect of this Agreement shall be limited to the right to consent to any
of the matters set forth in Section 11.1 of this Agreement.
(f) Each Investor may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.1, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Seller or VFCC furnished to such
Investor by or on behalf of the Seller or VFCC.
(g) In the event (i) an Investor ceases to qualify as an Eligible
Assignee, or (ii) an Investor makes demand for compensation pursuant to Section
2.12 or Section 2.13, VFCC may, and, upon the direction of the Seller and prior
to the occurrence of a Restricting Event, shall, in any such case,
notwithstanding any provision to the contrary herein, replace such Investor with
an Eligible Assignee by giving three Business Days' prior written notice to such
Investor. In the event of the replacement of an Investor, such Investor agrees
(i) to assign all of its rights and obligations hereunder to an Eligible
Assignee selected by VFCC upon payment to such Investor of the amount of such
Investor's Asset Interests together with any accrued and unpaid Yield thereon,
all accrued and unpaid commitment fees owing to such Investor and all other
amounts owing to such Investor hereunder and (ii) to execute and deliver an
Assignment and Acceptance and such other documents evidencing such assignment as
shall be necessary or reasonably requested by VFCC or the Deal Agent. In the
event that any Investor ceases to qualify as an Eligible Assignee, such affected
Investor agrees (1) to give the Deal Agent, the Seller and VFCC
prompt written notice thereof and (2) subject to the following proviso, to
reimburse the Deal Agent, the Liquidity Agent, the Seller, VFCC and the relevant
assignee for all fees, costs and expenses (including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for each of the Deal
Agent, the Liquidity Agent, the Seller and VFCC and such assignee) incurred by
the Deal Agent, the Liquidity Agent, the Seller, VFCC and such assignee,
respectively, in connection with any assignment made pursuant to this Section
10.1(g) by such affected Investor; provided, however, that such affected
Investor's liability for such costs, fees and expenses shall be limited to the
amount of any up-front fees paid to such affected Investor at the time that it
became a party to this Agreement.
(h) Nothing herein shall prohibit any Investor from pledging or
assigning as collateral any of its rights under this Agreement to any Federal
Reserve Bank in accordance with applicable law and any such pledge or collateral
assignment may be made without compliance with Section 10.1(a) or Section
10.1(b).
(i) In the event any Investor causes increased costs, expenses or taxes
to be incurred by the Deal Agent, Liquidity Agreement or VFCC in connection with
the assignment or participation of such Investor's rights and obligations under
this Agreement to an Eligible Assignee then such Investor agrees that it will
make reasonable efforts to assign such increased costs, expenses or taxes to
such Eligible Assignee in accordance with the provisions of this Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Amendments and Waivers.
(a) Except as provided in this Section 11.1, no amendment, waiver or
other modification of any provision of this Agreement shall be effective without
the written agreement of the Seller, the Deal Agent and the Required Investors;
provided, however, that no such amendment, waiver or modification affecting the
rights or obligations of any Hedge Counterparty, the Backup Servicer or the
Collateral Custodian shall be effective as against that Hedge Counterparty, the
Backup Servicer and/or the Collateral Custodian, as the case may be, without the
written agreement of such Persons. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
(b) No amendment, waiver or other modification of this Agreement shall:
(i) without the consent of each affected Purchaser, (A) extend
the Commitment Termination Date or the date of any payment or deposit
of Collections by the Seller or the Servicer, (B) reduce the rate or
extend the time of payment of Yield (or any component thereof), (C)
reduce any fee payable to the Deal Agent for the benefit of the
Purchasers, (D) except pursuant to Article X hereof, change the amount
of the Capital of any Purchaser, an Investor's pro rata share or an
Investor's Commitment, (E) amend,
modify or waive any provision of the definition of Required Investors
or this Section 11.1(b), (F) consent to or permit the assignment or
transfer by the Seller of any of its rights and obligations under this
Agreement or (G) amend or modify any defined term (or any defined term
used directly or indirectly in such defined term) used in clauses (A)
through (E) above in a manner which would circumvent the intention of
the restrictions set forth in such clauses; or
(ii) without the written consent of the Deal Agent, amend,
modify or waive any provision of this Agreement if the effect thereof
is to affect the rights or duties of such Agent.
(c) Notwithstanding the foregoing provisions of this Section 11.1,
without the consent of the Investors, the Deal Agent may, with the consent of
the Seller amend this Agreement solely to add additional Persons as Investors
hereunder. Any modification or waiver shall apply to each of the Purchasers
equally and shall be binding upon the Seller, the Purchasers and the Deal Agent.
Section 11.2 Notices, Etc.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted or delivered,
as to each party hereto, at its address set forth under its name on the
signature pages hereof or specified in such party's Assignment and Acceptance or
at such other address as shall be designated by such party in a written notice
to the other parties hereto. All such notices and communications shall be
effective, upon receipt, or in the case of (a) notice by mail, five days after
being deposited in the United States mail, first class postage prepaid, (b)
notice by telex, when telexed against receipt of answer back, or (c) notice by
facsimile copy, when verbal communication of receipt is obtained, except that
notices and communications pursuant to Article 11 shall not be effective until
received with respect to any notice sent by mail or telex.
Section 11.3 Ratable Payments.
If any Secured Party, whether by setoff or otherwise, has payment made
to it with respect to any portion of the Aggregate Unpaids owing to such Secured
Party (other than payments received pursuant to Section 8.1 in a greater
proportion than that received by any other Secured Party), such Secured Party
agrees, promptly upon demand, to purchase for cash without recourse or warranty
a portion of the Aggregate Unpaids held by the other Secured Parties so that
after such purchase each Secured Party will hold its ratable proportion of the
Aggregate Unpaids; provided, however, that if all or any portion of such excess
amount is thereafter recovered from such Secured Party, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
Section 11.4 No Waiver, Rights and Remedies.
No failure on the part of the Deal Agent, the Collateral Custodian, the
Backup Servicer or a Secured Party to exercise, and no delay in exercising, any
right or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right. The rights and
remedies herein provided are cumulative and not exclusive of any rights and
remedies provided by law.
Section 11.5 Binding Effect; Benefit of Agreement.
This Agreement shall be binding upon and inure to the benefit of the
Seller, the Deal Agent, the Backup Servicer, the Collateral Custodian, the
Secured Parties and their respective successors and permitted assigns and, in
addition, the provisions of 2.7(a)(i), 2.8(b)(i) and 2.9(b)(i) shall inure to
the benefit of each Hedge Counterparty, whether or not that Hedge Counterparty
is a Secured Party.
Section 11.6 Term of this Agreement.
This Agreement, including, without limitation, the Seller's obligation
to observe its covenants set forth in Article V, and the Servicer's obligation
to observe its covenants set forth in Article VI, shall remain in full force and
effect until the Collection Date; provided, however, that the rights and
remedies with respect to any breach of any representation and warranty made or
deemed made by the Seller pursuant to Articles III and IV and the
indemnification and payment provisions of Article VIII and Article IX and the
provisions of Section 11.9 and Section 11.10 shall be continuing and shall
survive any termination of this Agreement.
Section 11.7 Governing Law; Consent to Jurisdiction; Waiver of
Objection to Venue.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. EACH OF THE SECURED PARTIES, THE SELLER, THE
LIQUIDITY AGENT AND THE DEAL AGENT HEREBY AGREES TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON
FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 11.8 Waiver of Jury Trial.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE SECURED PARTIES,
THE SELLER AND THE DEAL AGENT WAIVES ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH
DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 11.9 Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the Deal
Agent, the Liquidity Agent, the Backup Servicer, the Collateral Custodian, the
Secured Parties and its or their Affiliates and officers, directors, employees
and agents thereof under Article VIII hereof, the Seller agrees to pay on demand
all costs and expenses of the Deal Agent, the Liquidity Agent, the Backup
Servicer, the Collateral Custodian and the Secured Parties incurred in
connection with the preparation, execution, delivery, administration (including
periodic auditing), amendment or modification of, or any waiver or consent
issued in connection with, this Agreement and the other documents to be
delivered hereunder or in connection herewith (excluding any Hedging Agreement),
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Deal Agent, the Liquidity Agent, the Backup Servicer, the
Collateral Custodian and the Secured Parties with respect thereto and with
respect to advising the Deal Agent, the Liquidity Agent, the Backup Servicer,
the Collateral Custodian and the Secured Parties as to their respective rights
and remedies under this Agreement and the other documents to be delivered
hereunder or in connection herewith (excluding any Hedging Agreement), and all
costs and expenses, if any (including reasonable counsel fees and expenses),
incurred by the Deal Agent, the Liquidity Agent, the Backup Servicer, the
Collateral Custodian or the Secured Parties in connection with the enforcement
of this Agreement and the other documents to be delivered hereunder or in
connection herewith (including any Hedging Agreement).
(b) The Seller shall pay on demand any and all stamp, sales, excise and
other taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement, the other documents
to be delivered hereunder or any agreement or other document providing liquidity
support, credit enhancement or other similar support to the Purchaser in
connection with this Agreement or the funding or maintenance of Purchases
hereunder.
(c) The Seller shall pay on demand all other costs, expenses and Taxes
(excluding income taxes) incurred by any Issuer or any shareholder of such
Issuer ("Other Costs"), including, without limitation, all costs and expenses
incurred by the Deal Agent in connection with periodic audits of the Seller's or
the Servicer's books and records and the cost of rating such Issuer's commercial
paper with respect to financing its purchase of Asset Interests hereunder by
independent financial rating agencies.
Section 11.10 No Proceedings.
Each of the Seller, the Deal Agent, the Liquidity Agent, the Servicer,
the Backup Servicer, the Collateral Custodian and the Secured Parties hereby
agrees that it will not institute against, or join any other Person in
instituting against VFCC any proceedings of the type referred to in Section
6.8(d) and 6.9(c) so long as any commercial paper issued by VFCC shall be
outstanding and there shall not have elapsed one year and one day since the last
day on which any such commercial paper shall have been outstanding.
Section 11.11 Recourse Against Certain Parties.
No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of any Secured Party as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any administrator of such Secured Party
or any incorporator, affiliate, stockholder, officer, employee or director of
such Secured Party or of any such administrator, as such, by the enforcement of
any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; it being expressly agreed and understood that the agreements of
such Secured Party contained in this Agreement and all of the other agreements,
instruments and documents entered into by it pursuant hereto or in connection
herewith are, in each case, solely the corporate obligations of such Secured
Party, and that no personal liability whatsoever shall attach to or be incurred
by any administrator of such Secured Party or any incorporator, stockholder,
affiliate, officer, employee or director of such Secured Party or of any such
administrator, as such, or any other of them, under or by reason of any of the
obligations, covenants or agreements of such Secured Party contained in this
Agreement or in any other such instruments, documents or agreements, or which
are implied therefrom, and that any and all personal liability of every such
administrator of such Secured Party and each incorporator, stockholder,
affiliate, officer, employee or director of such Secured Party or of any such
administrator, or any of them, for breaches by such Secured Party of any such
obligations, covenants or agreements, which liability may arise either at common
law or at equity, by statute or constitution, or otherwise, is hereby expressly
waived as a condition of and in consideration for the execution of this
Agreement. The provisions of this Section 11.11 shall survive the termination of
this Agreement.
Section 11.12 Protection of Ownership Interests of the Purchasers;
Intent of Parties; Security Interest.
(a) The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may reasonably be necessary or desirable, or that the Deal Agent
may reasonably request, to perfect, protect or more fully evidence the Asset
Interests and the undivided ownership interest in the Assets in the Asset Pool
represented by such Asset Interests, or to enable the Deal Agent or the Secured
Parties to exercise and enforce their rights and remedies hereunder.
(b) If the Seller or the Servicer fails to perform any of its
obligations hereunder after five Business Days' notice from the Deal Agent, the
Deal Agent or any Secured Party may (but shall not be required to) perform, or
cause performance of, such obligation; and the Deal Agent's or such Secured
Party's costs and expenses incurred in connection therewith shall be payable by
the Seller (if the Servicer that fails to so perform is the Seller or an
Affiliate thereof) as provided in Article VIII, as applicable. The Seller
irrevocably authorizes the Deal Agent and appoints the Deal Agent as its
attorney-in-fact to act on behalf of the Seller (i) to execute on behalf of the
Seller as debtor and to file financing statements necessary or desirable in the
Deal Agent's sole discretion to perfect and to maintain the perfection and
priority of the interest of the Secured Parties in the Assets and (ii) to file a
carbon, photographic or other reproduction of this Agreement or any financing
statement with respect to the Assets as a financing statement in such offices as
the Deal Agent in its sole discretion deems necessary or desirable to perfect
and to maintain the perfection and priority of the interests of the Secured
Parties in the Assets. This appointment is coupled with an interest and is
irrevocable.
(c) The parties hereto intend that the conveyance of Asset Interests by
the Seller to the Purchasers shall be treated as sales for all purposes. If,
despite such intention, a determination is made that such transactions shall not
be treated as sales, then the parties hereto intend that this Agreement
constitutes a security agreement and the transactions effected hereby constitute
secured loans by the Purchasers to the Seller under applicable law. For such
purpose, the Seller hereby transfers, conveys, assigns and grants to the Deal
Agent, for the benefit of the Secured Parties, a continuing security interest in
all Assets, all Collections, all Hedging Agreements and the proceeds of the
foregoing to secure the repayment of all Capital, all payments at any time due
or accrued in respect of the Yield on any Asset Interest and all other payments
at any time due (whether accrued or due) by the Seller hereunder (including
without limit any amount owing under Article VIII hereof), under any Hedging
Agreement (including, without limitation, payments in respect of the termination
of any such Hedging Agreement) or under any fee letter to the Deal Agent and
each Purchaser.
Section 11.13 Confidentiality
(a) Each of the Deal Agent, the Secured Parties, the Liquidity Agent,
the Servicer, the Collateral Custodian, the Backup Servicer and the Seller shall
maintain and shall cause each of its employees and officers to maintain the
confidentiality of the Agreement and all information with respect to the other
parties, including all information regarding the business of the Seller and the
Servicer hereto and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that each such party and its officers and employees
may (i) disclose such information to its external accountants, attorneys,
investors, potential investors and the agents of such Persons ("Excepted
Persons"), provided, however, that each Excepted Person shall, as a condition to
any such disclosure, agree for the benefit of the Deal Agent, the Secured
Parties, the Liquidity Agent, the Servicer, the Collateral Custodian, the Backup
Services and the Seller that such information shall be used solely in connection
with such Excepted Person's evaluation of, or relationship with, the Seller and
its affiliates, (ii) disclose the existence of the Agreement, but not the
financial terms thereof, (iii) disclose such information as is required by an
applicable law or an order of an
judicial or administrative proceeding and (iv) disclose the Agreement and such
information in any suit, action, proceeding or investigation (whether in law or
in equity or pursuant to arbitration) involving any of the Transaction Documents
or any Hedging Agreement for the purpose of defending itself, reducing its
liability, or protecting or exercising any of its claims, rights, remedies, or
interests under or in connection with any of the Transaction Documents or any
Hedging Agreement. It is understood that the financial terms that may not be
disclosed except in compliance with this Section 11.13(a) include, without
limitation, all fees and other pricing terms, and all Payout Events, Restricting
Events, Servicer Defaults, and priority of payment provisions
(b) Anything herein to the contrary notwithstanding, the Seller and the
Servicer each hereby consents to the disclosure of any nonpublic information
with respect to it (i) to the Deal Agent, the Liquidity Agent, the Collateral
Custodian, the Backup Servicer or the Secured Parties by each other, (ii) by the
Deal Agent or the Purchasers to any prospective or actual assignee or
participant of any of them or (iii) by the Deal Agent, the Liquidity Agent or a
Purchaser to any Rating Agency, Commercial Paper dealer or provider of a surety,
guaranty or credit or liquidity enhancement to a Purchaser and to any officers,
directors, employees, outside accountants and attorneys of any of the foregoing,
provided each such Person is informed of the confidential nature of such
information. In addition, the Secured Parties, the Liquidity Agent and the Deal
Agent may disclose any such nonpublic information as required pursuant to any
law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
(c) Notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, (ii) disclosure of any and all information
(A) if required to do so by any applicable statute, law, rule or regulation, (B)
to any government agency or regulatory body having or claiming authority to
regulate or oversee any respects of the Collateral Custodian's or Backup
Servicer's business or that of their affiliates, (C) pursuant to any subpoena,
civil investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the Collateral Custodian or Backup
Servicer or an affiliate or an officer, director, employer or shareholder
thereof is a party, (D) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated herein approved in advance by the Seller or Servicer
or (E) to any affiliate, independent or internal auditor, agent, employee or
attorney of the Collateral Custodian or Backup Servicer having a need to know
the same, provided that the Collateral Custodian or Backup Servicer advises such
recipient of the confidential nature of the information being disclosed, or
(iii) any other disclosure authorized by the Seller or Servicer.
Section 11.14 Execution in Counterparts; Severability; Integration.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. In case any provision in or
obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
This Agreement contains the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written understandings
other than any fee letter delivered by the Originator to the Deal Agent and the
Purchasers.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE SELLER: FIDELITY LEASING SPC I, INC.
By_________________________________________
Title:
THE SERVICER: FIDELITY LEASING, INC.
By_________________________________________
Title:
THE INVESTORS: FIRST UNION NATIONAL BANK
By_________________________________________
Title:
Commitment: $100,000,000
First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
Confirmation No: (000) 000-0000
VFCC: VARIABLE FUNDING CAPITAL CORPORATION
By First Union Capital Markets, a division
of Wheat First Securities, Inc. as
attorney-in-fact
By_________________________________________
Title:
Variable Funding Capital Corporation
c/o First Union Capital Markets, a division of
Wheat First Securities, Inc.
One First Xxxxx Xxxxxx, XX-0
Attention: Conduit Administration
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
With a copy to:
Lord Securities Corp.
Attention:
Facsimile No.: (____) __________
Confirmation No.: (____) __________
THE DEAL AGENT: FIRST UNION CAPITAL MARKETS, a division
of WHEAT FIRST SECURITIES, INC.
By_________________________________________
Title:
First Union Capital Markets, a division of
Wheat First Securities, Inc.
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Conduit Administration
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
THE LIQUIDITY AGENT: FIRST UNION NATIONAL BANK
By_________________________________________
Title:
First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
THE COLLATERAL CUSTODIAN: XXXXXX TRUST AND SAVINGS BANK,
as Collateral Custodian
By_________________________________________
Title:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Indenture Trust Administrator
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
THE BACKUP SERVICER: XXXXXX TRUST AND SAVINGS BANK,
as Backup Servicer
By_________________________________________
Title:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Indenture Trust Administrator
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
FIDELITY LEASING, INC.: FIDELITY LEASING, INC.
By_________________________________________
Title:
