EXECUTION COPY
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U.S. $50,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 18, 1997
Among
SW LEASING PORTFOLIO IV, INC.
as the Seller
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FIDELITY LEASING, INC.
as the Servicer
---------------
the INVESTORS
named herein
------------
VARIABLE FUNDING CAPITAL CORPORATION
as the Purchaser
----------------
FIRST UNION CAPITAL MARKETS CORP.
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.................................................................................23
Section 1.3 Computation of Time Periods.................................................................23
ARTICLE II THE PURCHASE FACILITY................................................................................23
Section 2.1 Purchases of Asset Interests................................................................23
Section 2.2 The Initial Purchase, Subsequent Purchases and Incremental Purchases........................24
Section 2.3 Reduction of the Purchase Limit; Repurchase.................................................25
Section 2.4 Determination of Yield......................................................................25
Section 2.5 [reserved]..................................................................................25
Section 2.6 Dividing or Combining Asset Interests.......................................................25
Section 2.7 Non-Liquidation Settlement Procedures.......................................................26
Section 2.8 Settlement Procedures Following a Termination Date..........................................27
Section 2.9 Settlement Procedures Following a Restricting Event.........................................28
Section 2.10 Collections and Allocations................................................................30
Section 2.11 Payments, Computations, Etc................................................................30
Section 2.12 Optional Repurchase........................................................................31
Section 2.13 Fees.......................................................................................31
Section 2.14 Increased Costs; Capital Adequacy; Illegality..............................................32
Section 2.15 Taxes......................................................................................33
Section 2.16 Assignment of the Purchase Agreement.......................................................35
Section 2.17 Substitution of Contracts..................................................................35
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........................37
Section 3.3 Delivery of Contract Files..................................................................38
ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................................................38
Section 4.1 Representations and Warranties of the Seller................................................38
Section 4.2 Representations and Warranties of Seller Relating to the Agreement and the Contracts........42
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.........................................................................44
Section 5.3 Release of Lien on Equipment................................................................48
Section 5.4 Hedging of Contracts........................................................................49
Section 5.5 Retransfer of Ineligible Contracts..........................................................49
Section 5.6 Retransfer of Assets........................................................................50
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ARTICLE VI ADMINISTRATION AND SERVICING OF CONTRACTS............................................................51
Section 6.1 Appointment and Acceptance; Duties..........................................................51
Section 6.2 Collection of Payments......................................................................54
Section 6.3 Servicer Advances...........................................................................55
Section 6.4 Realization Upon Defaulted Contract.........................................................56
Section 6.5 Maintenance of Insurance Policies...........................................................56
Section 6.6 Representations and Warranties of Servicer..................................................57
Section 6.7 Representations and Warranties of Backup Servicer and Collateral Custodian..................58
Section 6.8 Covenants of Servicer.......................................................................60
Section 6.9 Covenants of Backup Servicer and Collateral Custodian.......................................60
Section 6.10 Servicing Compensation.....................................................................61
Section 6.11 Custodial Compensation.....................................................................61
Section 6.12 Payment of Certain Expenses by Servicer....................................................61
Section 6.13 Reports....................................................................................62
Section 6.14 Annual Statement as to Compliance..........................................................62
Section 6.15 Annual Independent Public Accountant's Servicing Reports...................................62
Section 6.16 Adjustments................................................................................63
Section 6.17 Merger or Consolidation of the Servicer....................................................63
Section 6.18 Limitation on Liability of the Servicer and Others.........................................64
Section 6.19 Indemnification of the Seller, the Backup Servicer, the....................................64
Collateral Custodian, the Deal Agent and the Purchasers.................................................64
Section 6.20 The Servicer Not to Resign.................................................................65
Section 6.21 Access to Certain Documentation and Information
Regarding the Contracts.................................................................................65
Section 6.22 Backup Servicer............................................................................66
Section 6.23 Identification of Records..................................................................68
Section 6.24 Servicer Defaults..........................................................................68
Section 6.25 Appointment of Successor Servicer..........................................................70
Section 6.26 Notification...............................................................................71
Section 6.27 Protection of Right, Title and Interest to Assets..........................................71
Section 6.28 Release of Contract Files..................................................................72
ARTICLE VII PAYOUT AND RESTRICTING EVENTS.......................................................................72
Section 7.1 Payout Events...............................................................................72
Section 7.2 Restricting Events..........................................................................72
ARTICLE VIII INDEMNIFICATION....................................................................................74
Section 8.1 Indemnities by the Seller...................................................................74
ARTICLE IX THE DEAL AGENT AND THE LIQUIDITY AGENT...............................................................77
Section 9.1 Authorization and Action....................................................................77
Section 9.2 Delegation of Duties........................................................................77
Section 9.3 Exculpatory Provisions......................................................................78
Section 9.4 Reliance....................................................................................79
Section 9.5 Non-Reliance on Deal Agent, Liquidity Agent and Other Purchasers............................79
Section 9.6 Reimbursement and Indemnification...........................................................80
Section 9.7 Deal Agent and Liquidity Agent in their Individual Capacities...............................80
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Section 9.8 Successor Deal Agent or Liquidity Agent.....................................................80
ARTICLE X ASSIGNMENTS; PARTICIPATIONS...........................................................................81
Section 10.1 Assignments and Participations.............................................................81
ARTICLE XI MISCELLANEOUS........................................................................................84
Section 11.1 Amendments and Waivers.....................................................................84
Section 11.2 Notices, Etc...............................................................................85
Section 11.3 Ratable Payments...........................................................................85
Section 11.4 No Waiver, Rights and Remedies.............................................................86
Section 11.5 Binding Effect.............................................................................86
Section 11.6 Term of this Agreement.....................................................................86
Section 11.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE.......................86
Section 11.8 WAIVER OF JURY TRIAL.......................................................................87
Section 11.9 Costs, Expenses and Taxes..................................................................87
Section 11.10 No Proceedings............................................................................88
Section 11.11 Recourse Against Certain Parties..........................................................88
Section 11.12 Protection of Ownership Interests of the Purchasers; Intent of Parties; Security Interest;
Third Party Beneficiary.................................................................................88
Section 11.13 Confidentiality...........................................................................89
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
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THIS RECEIVABLES PURCHASE AGREEMENT (the "Agreement") is made as of
December 18, 1997, among:
(1) SW LEASING PORTFOLIO IV, INC., a Pennsylvania 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 CORP. ("FCMC"), 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)
decimal equivalent of 100% minus the Eurodollar Reserve Percentage on such day.
Administration Agreement: That certain Administration Agreement executed
between VFCC and First Union Capital Markets Corp., 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 December 18, 1997,
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
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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.
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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%.
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.
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) 88% and (b) 100% - (three and a half (3 1/2) multiplied by the Net Loss to
Liquidation Ratio).
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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: December 18, 1997.
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 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) Residual Proceeds and (c) any other funds received by
the Seller or the Servicer with respect to any Contract or related Equipment.
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 Program Fee Agreement.
Commitment Termination Date: December 17, 1998 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.
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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.
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.
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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.
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 Xxxxx'x, 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 Xxxxx'x, or (b) such other Person satisfactory to VFCC, the Deal
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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
8
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;
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(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.
10
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.
Excess Funds: On any Payment Date, any amount payable to the Seller pursuant
to Sections 2.7(a)(x), 2.8(b)(x) or 2.9(b)(x), as the case may be.
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 and (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.
11
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.
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.
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.
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: As defined in Section 5.4.
Hedge Counterparty: An entity (i) (A) whose commercial paper or short-term
deposit rating is at least P-1 from Moody's and at least A-1 from S & P and
(B) who shall agree that, in the event that its commercial paper or short-term
deposit rating is reduced below A-1 by S&P or P-1 by Moody's, it shall secure
its obligations in a manner as the Deal Agent may reasonably request or assign
its obligations to a Person meeting the requirements of clauses (i)(A) and
(ii) hereof, and (ii) which shall be rated at least A and A2 by S&P and
Moody's, respectively and (iii) which has entered into a Hedging Agreement.
Hedged Amount: As defined in Section 5.4.
12
Hedged Costs: With respect to any Payment Date, the amount of hedging costs,
including, without limitation, payments to the Hedge Counterparty, as payable
out of funds in the Collection Account on such Payment Date as provided by
Section 2.7.
Hedged Level: As defined in Section 5.4.
Hedging Agreement: With respect to this Agreement, each hedging agreement
entered into by the Seller and a Hedge Counterparty.
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 and (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.
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.
13
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.
14
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 December 18, 1997, 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.
15
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;
16
(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 any one state is limited to 10% of the ADCB;
17
(d) 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
(e) 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 Agreement: 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 Servicing Fee.
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
18
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, $50,000,000, 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.
19
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 fixed interest rate
associated with the Hedge Agreement related to such purchase, (ii) the Program
Fee Rate, (iii) .05% and (iv) the Servicing Fee Rate.
20
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.
Seller: SW Leasing Portfolio IV, Inc., or any permitted successor thereto.
Seller Note: As defined in the Purchase Agreement.
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 Rate: The rate per annum set forth in the 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.
21
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).
Swap Rate: As defined in Section 5.4.
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:
22
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 Asset Interest 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 or such other rate as the Deal Agent and the Seller shall
agree to in writing.
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
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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.
(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 shall deliver no more than two such notices
in any calendar month, and each amount specified in any such notice must
satisfy the following minimum requirements, as applicable, as a condition to
the related Purchase: (i) the initial Purchase shall be in an amount equal to
$10,000,000 or an integral multiple of $10,000 in excess thereof; (ii) each
Incremental Purchase hereunder shall be in an amount equal to $5,000,000 or an
integral multiple of $10,000 in excess thereof; provided, however, that if
such Incremental Purchase is to be made hereunder at a time when there are no
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outstanding Commercial Paper Notes issued in respect of a Purchase of
$5,000,000 or an integral multiple of $10,000 in excess thereof, then such
Incremental Purchase shall be in an amount equal to $10,000,000 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) Pursuant to the provisions of Section 2.7(b), Section 2.8(c) and
Section 2.9(c), the Seller may, at any time prior to the occurrence of the
Termination Date, reduce the aggregate outstanding Capital by remitting to the
Deal Agent, for application by the Deal Agent to reduce the Capital of each
(i) cash and (ii) instructions to apply such cash to the reduction of Capital.
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 a 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
a Purchaser with another portion of an Asset Interest of such Purchaser with a
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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 a 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, to any Hedging Counterparty, an amount equal to
any accrued and unpaid amounts under any Hedge Agreement, 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 Deal Agent for the ratable payment to
each Purchaser, in an amount equal to any accrued and unpaid Program
Fee and Yield for such Payment Date;
(viii) EIGHTH, to the Deal Agent, in the amount of unpaid
Increased Costs and/or Taxes, for payment to the Purchasers in
respect thereof;
(ix) NINTH, 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;
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(x) TENTH, 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
(xi) ELEVENTH, any remaining amount shall be distributed to
the Seller for application to the payment, in the following order of
priority, of interest accrued and unpaid on, and the reduction to
zero of the principal amount of, the Seller Note.
(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 NINTH 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, to any Hedging Counterparty, an amount equal to
any accrued and unpaid amounts under any Hedging Agreement, 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;
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(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 Deal Agent, in an amount equal to any
accrued and unpaid Program Fee and Yield for such Payment Date;
(viii) EIGHTH, to the Deal Agent, in the amount of unpaid
Increased Costs and/or Taxes, for payment to the Purchasers in
respect thereof;
(ix) NINTH, 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;
(x) TENTH, 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
(xi) ELEVENTH, any remaining amount shall be distributed to
the Seller for application to the payment, in the following order of
priority, of interest accrued and unpaid on, and the reduction to
zero of the principal amount of, the Seller Note, 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 Purchaser, 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].
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(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, to any Hedging Counterparty, an amount equal to
any accrued and unpaid amounts under any Hedge Agreement, 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 Deal Agent, for the ratable payment to
each Purchaser in an amount equal to any accrued and unpaid Program
Fee and Yield for such Payment Date;
(viii) EIGHTH, to the Deal Agent, in the amount of unpaid
Increased Costs and/or Taxes, for payment to the Purchasers in
respect thereof;
(ix) NINTH, to the extent that funds are available, to the
Deal Agent for the Purchasers in reduction of aggregate Capital;
(x) TENTH, 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
(xi) ELEVENTH, 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 for application to the payment, in
the following order of priority, of interest accrued and unpaid on,
and the reduction to zero of the principal amount of, the Seller
Note.
(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
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the Seller shall immediately remit to the Deal Agent, for the benefit of the
Purchaser, 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 Purchaser 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 Purchasers, in
which case such interest accruing after such date shall be for the account of,
and distributed by the Deal Agent to the Purchasers. All computations of
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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 the Purchaser against any reasonable
loss, cost or expense incurred by the 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 the Purchaser), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by the 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. 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, hedging costs, breakage fees and any other amounts payable by the
Seller hereunder or under or with respect to any Hedging Agreement.
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 Program Fee Agreement.
(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 agreement between such parties dated the date hereof (the "Program Fee
Agreement").
(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 Program Fee
Agreement and (ii) ADCB for the immediately preceding Determination Date.
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(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.
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(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
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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 Purchaser, 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 Purchaser shall not be required to deliver such
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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 Purchaser
and provided further, however, that the Seller shall reimburse the Deal Agent
or 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
Purchasers 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 Purchasers, 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 Purchasers
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:
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(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 Purchasers 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 Purchasers in, to and under
such Replaced Contract, and the Deal Agent as agent for the Purchasers 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 Purchasers 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 Purchasers or any Purchaser 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.
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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
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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
Commonwealth of Pennsylvania, 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.
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(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
39
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 Purchaser 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
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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 Purchasers 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 Purchasers, 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 Purchasers, shall have a first
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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 Purchasers, 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
Purchasers. Upon discovery by the Seller, the Servicer, any Purchaser, 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
Purchaser, 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 Purchasers 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
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of a security interest in all Assets in the Asset Pool to the Deal
Agent as agent for the Purchasers. 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 Purchasers 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 Purchasers 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 Purchasers. Upon discovery by the Seller, the Servicer, any
Purchaser, 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.
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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 Purchasers 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.
44
(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; Investments. 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 (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 this Agreement and the
45
Purchase Agreements, 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.
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(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 Purchasers 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 this Agreement and the Purchase
Agreement, 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
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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) Investments. The Seller will not make any Investments other than
Permitted Investments.
(s) 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.
(t) Amendment to Certificate of Incorporation. 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.
(u) 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.
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Section 5.4 Hedging of Contracts.
On or prior to the Purchase Date, the Seller shall have entered into
the Hedging Agreement with the Hedge Counterparty. On each Purchase Date the
Seller shall assign to the Deal Agent on behalf of VFCC all of the Seller's
rights under the Hedging Agreements relating to the Contracts conveyed on such
Purchase Date. Each Hedging Agreement shall (i) have a scheduled Termination
Date that coincides with the last Scheduled Payment due to occur for the
Contracts conveyed on such Purchase Date; (ii) provide for a notional amount
from time to time equal to one hundred percent (100%) of the aggregate Capital
on such Purchase Date, after giving effect to any increase in the aggregate
Capital to be made on such Purchase Date, (the "Hedged Level"), of the
aggregate amount (discounted to the present value at the "Swap Rate" defined
below) of all remaining Scheduled Payments on the Contracts on such Purchase
Date (the "Hedged Amount"); (iii) provide that the Hedge Counterparty's
payment obligations shall be calculated by reference to the Hedged Amount and
a per annum rate determined by reference to USD-CP-H. 15, as defined in the
1991 ISDA Definitions published by the International Swap Dealers Association,
Inc. and as determined in accordance with the procedures in effect on the date
of this Agreement (the "H.15"), for a period of 30 days, as determined on the
immediately preceding Payment Date; (iv) provide that the Seller's payment
obligations shall be calculated by reference to the Hedged Amount and a per
annum fixed rate agreed to between the Seller and the Hedge Counterparty (the
"Swap Rate"); (v) provide for net payments to be paid on each Payment Date and
any early termination date thereunder (A) on behalf of the Seller, solely out
of funds in the Collection Account and (B) by the Hedge Counterparty for
deposit into the Collection Account, for distribution in accordance with the
Agreement, (vi) provide for early termination at the option of the Required
Investors upon the disposition of the related Contracts and (vii) include
other provisions requested by the Required Investors and be in a form
acceptable to the Required Investors, which form shall be substantially the
same as set forth in Exhibit H hereto. In the event the H.15 is no longer
available, then the rate described in clause (iii) above shall be determined
by reference to such other publication or method of calculation as shall be
reasonably agreed between the Seller and the Purchaser in order to effect an
economically equivalent business deal between such parties. The Servicer will
provide the Deal Agent with written notice confirming the amounts, if any, to
be paid by or to the Hedge Counterparty on each Payment Date and any early
termination date.
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 Purchasers
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,
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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 Purchasers, 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 Purchasers, 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 Purchasers, 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 Purchasers or the Deal Agent, as
agent of the Purchasers, 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 and
the Seller shall be obligated to accept retransfer of such Assets on a Payment
Date specified by the Seller (such date, 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 Purchasers. The deposit amount (the "Retransfer Amount") for such
retransfer will be equal to the (A) sum of (i) the aggregate outstanding
Capital at the end of the Business Day preceding the Payment Date on which the
retransfer is scheduled to be made, (ii) an amount equal to all amounts
accrued and to accrue with respect to unpaid Program Fees, Commitment Fees and
Yield in respect of such Capital at the applicable Yield Rate through the
maturity date of latest maturing Commercial Paper Notes and (iii) any and all
costs associated with the termination, in whole or in part, of 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 Purchasers
shall, at the sole expense of the Servicer, execute and deliver such
instruments of transfer, in each case without recourse, representation or
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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 Purchasers 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 Purchasers and the Deal Agent on behalf of the
Purchasers.
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 Purchasers 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 Purchasers 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
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empowered by the Purchasers, pursuant to this Section 6.1(b), to execute and
deliver, on behalf of itself and the Deal Agent as agent for the Purchasers,
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 Purchasers to enforce the Contract,
including bringing suit in the name of the Deal Agent as agent for the
Purchasers.
(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 Purchasers and subject to the Lien thereon in favor of the
Deal Agent as agent for the Purchasers. 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
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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 Purchasers, 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 Purchasers. 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
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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 and (B) any outstanding Servicer Advances thereon.
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 the Discounted Contract
Balance plus accrued and unpaid interest and any outstanding Servicer Advances
thereon plus any swap breakage costs associated with the prepayment.
(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.
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(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 Purchasers, 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 under any Hedging Agreement, (ii) the Servicer's obligation to
make a Servicer Advance for any Contract shall cease on the day such Contract
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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 Purchasers, 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 Purchasers, 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
Purchasers as loss payee and as an insured thereunder and will contain a
breach of warranty clause.
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Section 6.6 Representations and Warranties of Servicer.
The Servicer represents and warrants to the Deal Agent, as agent for
the Purchasers, the Purchasers, 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 Purchasers. 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.
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(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 Purchasers, and the
Purchasers 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
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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
articles of incorporation 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
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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 Purchasers or of the Purchasers 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
Purchasers 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.
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.
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(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.
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
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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
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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;
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(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 Purchasers 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 Purchasers.
The Servicer shall indemnify and hold harmless the Seller, the Backup
Servicer, the Collateral Custodian, the Deal Agent, the Liquidity Agent and
each Purchaser 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 Tax law, including without limitation 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 Purchasers 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.
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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
Purchasers, 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.
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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 Purchaser, 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 Purchaser 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
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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
Purchasers, 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,
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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,
Purchaser, 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
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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 Purchasers, 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 Purchasers 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.
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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.
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(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 Purchaser and of the Purchasers 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 Purchasers 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 Purchasers 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.
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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%;
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(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 Purchaser, 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
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(l) on any day, less than 100% of the Capital is subject to Hedging
Agreements.
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 Purchasers 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 Purchasers, 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 Purchaser
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 Purchasers 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;
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(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;
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(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 Purchaser of any amount previously distributed in reduction of
Capital or payment of Yield or any other amount due hereunder, in
each case which amount the Deal Agent, the Liquidity Agent or a
Purchaser 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.
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ARTICLE IX
THE DEAL AGENT AND THE LIQUIDITY AGENT
Section 9.1 Authorization and Action.
(a) Each Purchaser 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 Purchasers 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.
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(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 Purchasers
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
Purchaser 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 Purchaser.
(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 Purchasers 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
Purchaser 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 Purchaser.
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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 Purchasers, as applicable, as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Purchasers, 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 Purchasers.
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 Purchasers, as applicable, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Purchasers.
(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 Purchaser 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 Purchaser 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 Purchaser and based on such documents and information as it
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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.
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
Purchasers, 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
Purchasers, and the Deal Agent will, upon the direction of all of the
Purchasers (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 Purchasers 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 Purchasers 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 Purchasers directly to the applicable Purchaser and for all purposes
shall deal directly with the Purchasers. 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.
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(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
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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
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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
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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 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.
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(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 Purchaser, whether by setoff or otherwise, has payment made to
it with respect to any portion of the Aggregate Unpaids owing to such
Purchaser (other than payments received pursuant to Section 8.1 in a greater
proportion than that received by any other Purchaser), such Purchaser agrees,
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promptly upon demand, to purchase for cash without recourse or warranty a
portion of the Aggregate Unpaids held by the other Purchasers so that after
such purchase each Purchaser 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 Purchaser, 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 Purchaser 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.
This Agreement shall be binding upon and inure to the benefit of the
Seller, the Deal Agent, the Backup Servicer, the Collateral Custodian, the
Purchasers and their respective successors and permitted assigns.
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 PURCHASERS, 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 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.
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Section 11.8 WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PURCHASERS,
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
Purchasers 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 Purchasers 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, 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
Purchasers with respect thereto and with respect to advising the Deal Agent,
the Liquidity Agent, the Backup Servicer, the Collateral Custodian and the
Purchasers as to their respective rights and remedies under this Agreement and
the other documents to be delivered hereunder or in connection herewith, 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 Purchasers in connection with the
enforcement of this Agreement and the other documents to be delivered
hereunder or in connection herewith.
(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
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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 Purchasers
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 Purchaser 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 Purchaser
or any incorporator, affiliate, stockholder, officer, employee or director of
such Purchaser 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 Purchaser 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 Purchaser, and that no personal liability whatsoever shall attach to or
be incurred by any administrator of such Purchaser or any incorporator,
stockholder, affiliate, officer, employee or director of such Purchaser 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 Purchaser 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 Purchaser and each incorporator, stockholder,
affiliate, officer, employee or director of such Purchaser or of any such
administrator, or any of them, for breaches by such Purchaser 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; Third Party Beneficiary.
(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
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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
Purchasers 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 Purchaser may (but shall not be required to) perform, or
cause performance of, such obligation; and the Deal Agent's or such
Purchaser'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 Purchasers 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 Purchasers 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 Purchasers and
the Hedge Counterparties, a continuing security interest in all Assets, all
Collections 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.
(d) Each of the parties hereto agree that the Hedge Counterparties
shall be third party beneficiaries hereunder with respect to the rights
specifically granted to such Hedge Counterparties, including, without
limitation, the priorities set forth in Section 2.7, 2.8 and 2.9.
Section 11.13 Confidentiality
(a) Each of the Deal Agent, the Purchasers, 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
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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
Seller and the Investors 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 and (iii) disclose such information as is
required by an applicable law or an order of an judicial or administrative
proceeding. 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
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 Purchasers 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 Purchasers, 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.
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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.
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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: SW LEASING PORTFOLIO IV, INC.
By______________________________
Title:
THE SERVICER: FIDELITY LEASING, INC.
By______________________________
Title:
THE INVESTORS: FIRST UNION NATIONAL BANK
By______________________________
Title:
Commitment: $50,000,000
First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
Confirmation No: (000) 000-0000
VFCC: VARIABLE FUNDING CAPITAL
CORPORATION
By First Union Capital Markets Corp., as
attorney-in-fact
By______________________________
Title:
Variable Funding Capital Corporation
c/o First Union Capital Markets Corp.
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Attention: Xx. Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
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With a copy to:
Lord Securities Corp.
Attention:
Facsimile No.: (____) __________
Confirmation No.: (____) __________
THE DEAL AGENT: FIRST UNION CAPITAL MARKETS
CORP.
By
Title:________________________
First Union Capital Markets Corp.
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxx
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. Xxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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THE COLLATERAL CUSTODIAN: XXXXXX TRUST AND SAVINGS BANK
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
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
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FIDELITY LEASING, INC.: FIDELITY LEASING, INC.
By______________________________
Title:
95
