PURCHASE AND SALE CONTRACT DATED AND EFFECTIVE AS OF JANUARY 30, 2009 BY AND AMONG
Exhibit 2.1
Execution
Copy
DATED AND
EFFECTIVE AS OF JANUARY 30, 2009
BY AND
AMONG
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SELLER:
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COLLECTIVELY
MEANS: IDT CARMEL, INC.; and IDT CARMELPORTFOLIO MANAGEMENT LLC; and
FFPM CARMEL HOLDINGS ILLC; and ITS
PREDECESSORS
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AND
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BUYER:
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▇▇▇▇▇▇▇
ORIGINATOR III LLC
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BUYER
INFORMATION:
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ADDRESS:
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c/o
Sherman Capital Markets LLC
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▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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TELEPHONE NO.:
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(▇▇▇)
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FAX NO.:
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(▇▇▇)
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SCHEDULE OF
EXHIBITS
EXHIBIT
I: Identity
of Seller Entity
EXHIBIT
II: Asset
Schedule
EXHIBIT
III: ▇▇▇▇
of Sale and Assignment of Assets
EXHIBIT
IV: Wire
Transfer Instructions
EXHIBIT
V: Third
Party Servicers Used By Seller Prior to Sale and List of
Collection/Contingent Fee
Agreements
EXHIBIT
VI: Third
Parties That Sold Assets Schedule to Seller
EXHIBIT
VII:
Legal Account Data & Non-Legal Account Data
EXHIBIT
VIII:
Seller Supplied Actual Historical Cash Flows
EXHIBIT
IX:
Consent Letter
EXHIBIT
X:
Servicing Agreement
*Exhibits
have been omitted and will be furnished to the Securities and Exchange
Commission upon request.
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THIS PURCHASE AND SALE CONTRACT ("Agreement") is dated and effective as
of the day and year as set forth on the cover page of this Agreement by and
among Seller, as specified on Exhibit
I of this Agreement ("Seller"), and the Buyer more
specifically identified on the cover page to this Agreement and incorporated
herein ("Buyer").
RECITALS
Recital 1. Seller desires to
sell the Assets (as defined below) set forth on the Asset Schedule (as defined
below).
Recital 2. Buyer was the
successful bidder for purchase of the Assets identified on the Asset Schedule
for the consideration and under the express terms, provisions, conditions and
limitations as set forth herein.
Recital 3. Seller is
willing, subject to the express terms, provisions, conditions, limitations,
waivers and disclaimers as may be expressly set forth herein, to sell, transfer,
assign and convey to Buyer all right, title and interest, in and to the
Assets.
NOW, THEREFORE, in consideration of the
mutual promises herein set forth and other valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Seller and Buyer agree as
follows:
ARTICLE
I
DEFINITIONS
For purposes of this Agreement, the
following terms shall have the meanings indicated:
Section 1.1.
“Accounts” means a charged off
receivable for an Obligor on which there is an Unpaid Balance due and
owing.
Section 1.2
“Assets”
means the Accounts shown in the Asset Schedule and which the parties intend
shall be transferred to Buyer under the terms of this Agreement.
Section 1.3.
“Asset
Schedule” means the schedule describing the Assets purchased under this
Agreement attached as Exhibit
II hereto, including the computer disk or tape describing the Assets and
containing the data fields indicated on Exhibit II.
Section 1.4. “Bank
Account” means
the account established by Seller identified in Exhibit IV.
Section 1.5.
“▇▇▇▇ of
Sale and Assignment of Assets” means the document to be signed and
delivered in accordance with Section 3.1 to Buyer on or before the Transfer Date
with respect to the Assets purchased under this Agreement, substantially in the
form attached hereto as Exhibit
III, together with the Asset Schedule.
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Section 1.6.
“Business
Day” means a day that is not a Saturday, Sunday or legal holiday
recognized by the Federal Government.
Section 1.7.
“Claim”
means any claim, demand, cause of action, judgment, loss, damage, liability,
cost and expense (including reasonable attorneys' fees, whether suit is
instituted or not), whether known or unknown, liquidated or
contingent.
Section 1.8.
“Cut-off
Date” means December 8, 2008.
Section 1.9.
“Debt” means the obligations
for the Assets being sold pursuant to this Agreement as identified in the Asset
Schedule. Nothing in this definition shall be deemed to imply that
the Debts are enforceable; the Debts may include Repurchase Assets, as defined
in this Agreement.
Section 1.10. “Evidence
of Indebtedness” means with respect to each Asset: (a) each available
account agreement and signature card ("Account
Agreement"), or
other available account agreement between Obligor and Seller, for such Asset,
judgment, deficiency or charge-off; and (b) any other available evidence as
mutually agreed upon by Buyer and Seller, including, without limitation, any
Asset account history data or computer printouts, notations or any other Asset
summary information upon which a creditor could reasonably rely in asserting
that the same represents a balance due and owing on a right of
collection. The term "Evidence of Indebtedness" does not include any
correspondence, reports, information, internal analysis which is unrelated to
enforcement of the Asset or any attorney-client privileged materials or
memorandum, credit information, regulatory reports, and/or internal assessments
of valuation prepared for or on behalf of Seller. THE EXISTENCE OF AN EVIDENCE OF
INDEBTEDNESS SHALL NOT BE DEEMED TO IMPLY THAT THE DEBT EVIDENCED THEREBY IS
COLLECTIBLE. WITHOUT REGARD TO ANY EVIDENCE OF INDEBTEDNESS, ONE OR
MORE ASSETS, HOWEVER, MAY BE SUBJECT TO RESTRICTIONS DUE TO DEATH, INCAPACITY,
INCARCERATION, BANKRUPTCY OR A STATUTE OF LIMITATIONS, provided, however,
that the mention of such conditions in this Section 1.10 shall not affect the
enforceability of any representation, warranty or covenant with respect to any
Asset made by Seller hereunder. Evidence of
Indebtedness may include, without limitation, original documents or copies
thereof, whether by photocopy, microfiche, microfilm or other reproduction
process.
Section 1.11. “Funding
Date” means January 30, 2009.
Section 1.12 “Initial
Funding Amount” means $18,354,243.00 which represents the Purchase Price
minus (i) the Buyer's 50% share of the estimated collections between and
including December 9, 2008 and January 31, 2009; and (ii) the agreed upon
repurchase price for Repurchase Assets repurchased on the Transfer
Date.
Section
1.13 “Originating
Creditor” means, collectively, those entities listed on Exhibit
VI attached to this Agreement.
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Section
1.14 “Originating
Purchase Agreements” means, collectively, the purchase and sale
agreements between Seller and Originating Creditors pursuant to which Seller
purchased the Assets from Originating Creditors, redacted copies of which Buyer
has received and a list of which is attached to this Agreement as Exhibit
VI.
Section 1.15. “Obligor”
means with respect to each Asset, the obligor(s) specified in the Asset
Schedule, including, without limitation, any and all account signatories,
makers, guarantors, sureties or other persons or entities liable for the
Debt.
Section 1.16. “Purchase
Price” means twenty-one-million-nine-hundred-thousand dollars
($21,900,000.00), subject to post-closing adjustments as provided in Section 2.4
and Section 6.2(b).
Section
1.17 “Purchase
Price Percentage” means the Purchase Price divided by the aggregate
Unpaid Balance of all Assets on the Cut-off Date.
Section 1.18 “Repurchase
Asset” means an Asset that meets one or more of the following definitions
as of the Cut-off Date: (i) all Obligors have been released of liability for
their respective Debt by a court of competent jurisdiction or by
Seller; (ii) the Obligors have been discharged in
bankruptcy; (iii) all Obligors are deceased; (iv) all Obligors have
filed for protection under the United States Bankruptcy Code; (v) the Debt was
created by an act of fraud; (vi) a settlement arrangement has been made between
Obligor and Seller or (vii) an Obligor has filed a complaint, legal action, suit
or proceeding in a court of competent jurisdiction or before an administrative
body with the authority to hear such a dispute alleging that the Asset was
originated, serviced or otherwise maintained unlawfully. Seller makes
no representations or warranties regarding the number of Repurchase Assets
included in this portfolio as of the Cut-Off Date.
Section 1.19 “Requirements
of Law” with
respect to any party to this Agreement, means any law, ordinance, statute,
treaty, rule, judgment, regulation or other determination or finding of any
arbitrator or governmental authority applicable to or binding upon such party or
to which such party is subject, whether federal, state, county, local or
otherwise (including, without limitation, usury laws, the Federal
Truth-In-Lending Act, the Fair Debt Collection Practices Act, the Federal Equal
Credit Opportunity Act and the Fair Credit Reporting Act).
Section
1.20 This section intentionally
left blank.
Section 1.21 “Servicing
Agreement” means that certain agreement to be executed by and between
Seller or an affiliate of Seller and Buyer or an affiliate of Buyer on or before
the Transfer Date pursuant to which Seller or Seller’s affiliate services some
or all of the Assets. The Servicing Agreement shall be in a form and
substance acceptable to Buyer and Seller and substantially in the form of Exhibit
X hereto.
Section 1.22 “Transfer
Date” means the same date as the Funding Date, as defined
above.
Section 1.23 “Transfer
Documents” means the ▇▇▇▇ of Sale and Assignment of Assets as provided in
Exhibit
III of this Agreement and such other documents, as Buyer reasonably
requires
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for the
transfer of all right, title and interest in and to the Assets purchased by
Buyer pursuant to this Agreement. In the event that either party
reasonably determines that an additional document is needed to execute the sale
contemplated by this Agreement, the other party shall make a commercially
reasonable effort to draft and/or execute such document.
Section 1.24 “Unpaid
Balance” means as to any Asset, at the time of the Cut-Off Date, the
total outstanding unpaid current balance, as shown on Seller’s books and records
and calculated in accordance with all laws and relevant agreements entered into
by the obligor (which may include amounts due in respect of purchases, account
overdrafts and charges related thereto, cash advances, finance charges, late
fees, return or NSF check charges, overlimit fees, other related costs and
charges, as of the Asset’s charge-off date, minus payments or
adjustments).
Section
1.25 “Wire
Transfer Instructions” means the instructions
for wire transferring any portion of the Purchase Price as set forth on Exhibit
IV attached hereto.
ARTICLE
II
PURCHASE
AND SALE OF THE ASSETS
Section 2.1. Agreement to Sell
and Purchase Assets. Seller agrees to sell, and Buyer agrees
to purchase, the Assets described in the Asset Schedule (Exhibit II), subject to
the terms, provisions, conditions, limitations, waivers and disclaimers set
forth in this Agreement. The Assets shall be transferred and assigned
pursuant to a ▇▇▇▇ of Sale and Assignment of Assets purchased
hereunder.
Section 2.2.
Agreement
to Assign/Buyer's Right to Act. On the Transfer Date, Seller
shall send to Buyer one ▇▇▇▇ of Sale and Assignment of Assets for all of the
Assets purchased hereunder, substantially in the form of Exhibit
III hereto, executed by an authorized representative of Seller, which
▇▇▇▇ of Sale and Assignment of Assets shall sell, transfer, assign, set-over,
quitclaim and convey to Buyer, without recourse, warranty or representation, all
right, title and interest of Seller in and to each of the Assets sold, including
without limitation, the right to collect all principal and/or interest and/or
other amounts due under the Debt(s) and/or other proceeds of any kind paid or
collected for payment thereon after the Transfer Date. Buyer shall
have the right to file uniform commercial code financing statements necessary to
evidence the sale of the Assets. Buyer
shall have no right to communicate with any Obligor or Obligor’s accountants or
attorneys or other related third parties or to otherwise take any action with
respect to any Asset or any Obligor until after the Transfer Date and payment in
full of the Initial Funding Amount.
Section 2.3. Asset
Schedules. Seller has provided as Exhibit
II hereto, the Asset Schedule setting forth all of the Assets that Buyer
is purchasing hereunder in addition to the computer disk or tape containing
information specific to the Assets, which computer disk or tape is hereby
incorporated by reference into the Asset Schedule.
Section 2.4. Purchase
Price/Payment/Adjustment. On or before 3:00 p.m. (EST time),
on the Funding Date(s), Buyer shall pay to Seller the Initial Funding
Amount. Within thirty (30) days following the Transfer Date, Seller
shall calculate an amount equal to: the actual collections received by or on
behalf of the Seller between and including January 1, 2009 and January
31,
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2009;
minus two-million-eight-hundred-thousand-dollars ($2,800,000.00); the difference
(which may be positive or negative) shall be multiplied by fifty-percent
(50%). For example, if the actual collections are $3.0 million, the
Seller shall pay the Buyer $100,000. If the actual collections are
$2.6 million, the Buyer shall pay the Seller $100,000. The Seller
shall then immediately inform the Buyer of this calculation and provide
sufficient detail to allow the Buyer to adjust the Unpaid Balance for any
Assets, as needed. If this amount is greater than zero, the Seller
shall pay that amount to the Buyer within five (5) days. If this
amount is less than zero, the Buyer shall pay that amount to the Seller within
five (5) days. All of such funds must be paid in immediately
available funds in United States Dollars by wire transfer to the payee’s bank
account in accordance with the recipient’s wire transfer
instructions.
Section 2.5. Payments
Received/No Adjustments to Total or Package Purchase
Price. After the Transfer Date, unless otherwise required
under the terms of the Servicing Agreement, Seller shall forward all payments
received on the Assets after the Cut-Off Date directly to Buyer at least every
fourteen (14) days via Federal Express or other similar carrier for delivery
next business day. Buyer shall pay all shipping charges associated
with the delivery of all such payments. With regard to all payments
that Seller receives via electronic transfer on the Assets, Seller shall forward
an electronic file to Buyer at least once every fourteen days (14), along with
the date the payment was received and sufficient information for Buyer to
identify the Assets to which the payment should be applied.
ARTICLE
III
TRANSFER
OF ASSETS AND ASSET DOCUMENTS
Section 3.1. Assignment of
Assets and Asset Documents/Paid Off Assets. Seller and Buyer
shall facilitate the execution of this Agreement and the ▇▇▇▇ of Sale and
Assignment of Assets without recourse, warranty, or representation, except as
expressly provided for in this Agreement, on or before the Transfer Date via
facsimile. Original sets of this Agreement shall be sent via
overnight delivery to Buyer and Seller for execution, along with any necessary
final data transmission. The ▇▇▇▇ of Sale and Assignment of Assets
shall have the same effect as an individual and separate ▇▇▇▇ of Sale and
Assignment of each and every Asset. Buyer agrees, acknowledges,
confirms and understands that Buyer shall be responsible for the recording
and/or filing of the originals of any such assignments as the same may be
necessary, proper or appropriate and shall pay all costs, fees and expenses for
the recording and/or filing of such assignments. Seller reserves the
right to retain copies of all or any portion of any Asset document(s) delivered
by Seller. Notwithstanding anything herein to the contrary, if any Debt is paid
off after the Cut-off Date, Seller shall only be responsible for sending to
Buyer the funds received by Seller to pay off the Debt after the Cut-off Date in
accordance with the procedures set forth in Section 2.5, and Seller shall not be
obligated to deliver to Buyer any Transfer Documents relating to such paid-off
Asset. In addition, Buyer shall have the sole responsibility to
obtain any of the Asset Documents in the possession of any attorneys, collection
agencies or foreclosing trustees as set forth in Section 3.5.
Section
3.2. Additional
Documentation in the Possession of Seller. Seller agrees to
deliver to Buyer upon request as noted below, copies of all available Evidence
of Indebtedness currently in Seller possession, whether electronic or paper
copies, within thirty (30) days following the Transfer Date. Seller
acknowledges that the electronic and paper documentation in
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its
possession has substantial value to the Buyer and will use commercially
reasonable efforts to transfer such information to the Buyer within such time
frame. For each Asset with respect to which the Seller has
information in Seller’s possession or Seller’s agents have initiated legal
action, the Seller shall use commercially reasonable efforts to provide such
information in Exhibit VII Buyer within sixty (60) days following the Transfer
Date. Any Documents supplied to the Buyer pursuant to this Section
3.2 shall be supplied in accordance with general industry standards and shall
include an indexing system that allows the Buyer to match the documents to the
Assets in accordance with industry standards.
Section 3.3. No Obligation for
Further Documentation. In no event shall Seller or any servicing agent be
obligated to send or deliver to Buyer the servicer records and/or any working
files maintained by the servicing agent, unless otherwise agreed to by
Seller. Seller shall be under no obligation to contact Originating
Creditors or to request additional information.
Section 3.4. Collection/Contingent
Fee. To the extent that any Asset transferred and sold
hereunder is subject to any pending collection and/or contingent fee agreement
by which any entity or person is entitled to payment based on the amount of
monies collected or judgment obtained and/or collected, then the transfer of
such Asset shall be made subject to the rights of any such entity or person, and
Buyer has the option, where available and exercisable prior to the Funding Date,
to assume the collection and/or contingent fee agreement and, if assumed, shall
be bound by the terms thereof to the same extent as if Buyer had independently
contracted for such services. Buyer hereby agrees to indemnify,
defend and hold Seller harmless from and against amounts claimed to be due under
any such collection and/or fee agreement to the extent those claims are
disclosed to the Buyer. Seller further agrees to disclose all such
written agreements to the Buyer at least three business days prior to the
Transfer Date. In addition, Seller has provided Buyer with a list of
all material unwritten agreements it has entered into for any serving of the
Accounts included in the Asset Schedule. Exhibit
V sets forth all collection and/or contingent fee agreements (written or
material unwritten) of Seller with respect to the Accounts included in the Asset
Schedule. Notwithstanding the preceding, the Seller represents and
warrants that on the Closing Date, other than as may be limited in the Servicing
Agreement in Exhibit
X, the Buyer shall have the right to recall all of the Assets from any
third party servicer at Buyer’s sole discretion, with no obligations for any
future fees, commissions or other payments to any third party
servicer. In the event of such a recall, the Buyer shall have not
obligations to allow the third party to continue servicing the Assets either
through the Seller or directly.
Section 3.5. Notification. Following
the Transfer Date and payment in full of the Initial Funding Amount, Seller
shall notify its selected credit reporting agencies of the sale and transfer of
the Asset(s) to Buyer. In turn, Buyer will notify the Obligor(s) of
Buyer’s acquisition of the Assets to the extent required by law.
ARTICLE
IV
SERVICING
OF THE ASSETS
Section 4.1. Interim
Servicing/Buyer Bound. Until the Transfer Date, Seller or any
Servicing Agent shall continue to service the Assets to be
transferred. Buyer shall be bound by the actions taken by Seller
and/or servicing agent prior to the Transfer Date so long as those actions
are
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lawful
and consistent with the reasonable collection practices employed by the Seller
prior to the contemplation of this transaction. BUYER SHALL TAKE NO
ACTION TO COMMUNICATE WITH ANY OBLIGOR OR OBLIGOR’S ACCOUNTANTS OR ATTORNEYS OR
OTHER RELATED THIRD PARTIES OR ENFORCE OR OTHERWISE SERVICE OR MANAGE SUCH
ASSETS OR INSPECT OR EXAMINE ANY COLLATERAL UNTIL AFTER THE TRANSFER DATE AND
PAYMENT IN FULL OF THE INITIAL FUNDING AMOUNT. BUYER SHALL TAKE NO
ACTION TO COMMUNICATE WITH ANY SERVICING AGENT OR SELLER'S ASSET MANAGER UNLESS
AND UNTIL THE INITIAL FUNDING AMOUNT DUE TO SELLER HEREUNDER HAS BEEN PAID IN
FULL. In no event shall Buyer be deemed a third party beneficiary of
any servicing contract or agreement between Seller and any servicing agent and
in no event shall Seller or any servicing agent be deemed to be a fiduciary for
the benefit of Buyer with respect to the Assets, or any of them.
Section 4.2.
Servicing
After Transfer Date.
(a) The
Assets shall be sold and conveyed to Buyer on a servicing-released basis, other
than as described in Section 8.13. As of the Transfer Date, all
rights, obligations, liabilities and responsibilities with respect to the
servicing of the Assets shall pass to Buyer, and Seller and/or its servicing
agent shall be discharged from all liability therefore, to the full extent
allowed for in any agreement between the Seller and its Servicing
Agents.
(b) Notwithstanding
the forgoing, the Resurgent Capital Services L.P., as servicer for Buyer and
Seller intend to contemporaneously execute a Servicing Agreement substantially
in the form of Exhibit
X hereto.
Section 4.3. Buyer Servicer
Requirements. Except if Seller is directly or indirectly
servicing an Asset pursuant to the Servicing Agreement, Buyer shall be
responsible for complying with all Requirements of Law, with respect to the
ownership and/or servicing and/or collection of any of the Debts from and after
the Transfer Date including, without limitation, the obligation to notify any
Obligor of the transfer of servicing rights from Seller to
Buyer. Notwithstanding the foregoing, in all events Buyer shall be
responsible for ensuring that Buyer’s actions are in compliance with all
applicable Requirements of Law. Seller shall have the right, but not
the obligation, to mail its own notice addressed to any Obligor at the address
shown in its records, notifying such Obligor of the transfer of any Asset or the
servicing of the Asset from Seller to Buyer.
ARTICLE
V
RETENTION
OF ASSET AND REFUND OPTION OF SELLER
PRIOR
TO THE TRANSFER DATE
Section 5.1. Seller's Right to
Retain Asset(s). At least three (3) days prior to the Transfer
Date, Seller shall prepare a list of all Accounts previously included in the
December 9, 2008 data file that the Seller wishes to exclude from the sale
hereunder. For each Account the Seller wishes to exclude the Seller
shall provide the Balance as of the date the list is provided to the Buyer and a
description of the reason the Seller wishes to exclude the Account.
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ARTICLE
VI
REPURCHASE
Section 6.1 Limitation on
Right to Resell and Repurchase Obligations. NEITHER SELLER NOR
BUYER SHALL BE ENTITLED TO REQUIRE THE OTHER TO FACILITATE A REPURCHASE OF AN
ASSET FOR ANY REASON OTHER THAN AS EXPRESSLY ALLOWED FOR IN THIS
AGREEMENT. BUYER ACKNOWLEDGES AND AGREES THAT THE DEBTS MAY BE
UNCOLLECTABLE AND MAY HAVE LITTLE OR NO VALUE.
Section
6.2 Seller’s
Obligation to Repurchase. The Seller shall repurchase all
Repurchase Assets included in the Assets, subject to the following
terms.
(a) On
or before the Transfer Date, the Buyer shall scrub the Assets to identify
Repurchase Assets, and shall provide the Seller with an electronic file listing
each Repurchase Asset identified by the Buyer and the reason the Account was
designated as a Repurchase Asset. The Buyer represents and warrants
to the Seller that such scrub is materially accurate and correct as of the date
of that scrub and has identified materially all of the Repurchase Assets, and no
material number in excess of those Repurchase Assets described in clauses (ii),
(iii) and (iv) of the definition of Repurchase Asset in Section 1.17. The Seller
shall then repurchase those Repurchase Assets at an amount equal the aggregate
Unpaid Balance of the Repurchase Assets multiplied by the Purchase Price
Percentage. Notwithstanding anything the contrary in this Agreement,
if not so repurchased the Buyer shall be entitled to offset that amount from the
Purchase Price paid.
(b) The Buyer
shall continue to scrub the Assets to identify Repurchase Assets for a period of
ninety (90) days following the Transfer Date. If the Unpaid Balance
of the Repurchase Assets identified after the Transfer Date are less than
three-percent (3.0%) of the aggregate Unpaid Balance of the total Assets (the
“Repurchase
Threshold”), the Seller shall be under no obligation to repurchase any
additional Repurchase Assets. If the Unpaid Balance of the Repurchase
Assets identified after the Transfer Date is greater than or equal to the
Repurchase Threshold, then to the extent the Unpaid Balance of these Repurchase
Assets is greater than the Repurchase Threshold the Seller shall then repurchase
such excess Repurchase Assets for an amount equal the aggregate Unpaid Balance
of those excess Repurchase Assets multiplied by the Purchase Price
Percentage. The Seller shall pay the Buyer the repurchase proceeds
within thirty (30) days of the Buyer providing notice of a Repurchase
Asset.
(c) If
requested, in writing, by Seller within ten (10) Days of an applicable
repurchase request, Buyer shall also provide reasonable and customary proof of
the fact(s) that rendered an Asset an Account which Buyer may require Seller to
Repurchase. Such proof includes, but is not limited to photocopies of
relevant documents, extracts of credit bureau reports, and extracts of other
commercially reasonable data reports or data scrubs.
(d) The Buyer’s
right to resell an Asset to the Seller under the terms of this Section VI is in
addition to any other remedies available under the terms of this Agreement
(provided that in no event shall Seller be required to pay Buyer more than the
Unpaid Balance of any Repurchase Asset in connection with such repurchase,
provided, however, this shall not affect
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or reduce
Seller’s other Obligations hereby, including without limitation, its
indemnification obligations under Section 10.2 hereof ). Buyer’s
decision to resell or not to resell an Account shall not impact Buyer’s right to
pursue other remedies, including but not limited to indemnification under
Section X of this Agreement.
ARTICLE
VII
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF BUYER
Buyer hereby represents, warrants and
covenants, to and with Seller, as of the date of this Agreement and as of the
Transfer Date that:
Section 7.1. No
Collusion. Neither Buyer, its affiliates, nor any of their
respective officers, partners, agents, representatives, employees or parties in
interest: (i) has in any way colluded, conspired, connived or agreed
directly or indirectly with any other bidder, firm or person to submit a
collusive or sham bid, or any bid other than a bona fide bid, in connection with
the sale of the Assets subject to this Agreement, or (ii) has, in any manner,
directly or indirectly, sought by agreement or collusion or communication or
conference with any other bidder, firm or person to fix the price or prices, or
to fix any overhead, profit or cost element of the bid price or the bid price of
any other bidder at the sale for the Assets subject to this Agreement, or to
secure any advantages against Seller.
Section 7.2. Authorization. Buyer
has full right, power and authority to enter into and perform this Agreement in
accordance with all of the terms and provisions hereto. The execution
and delivery of the Agreement has been duly authorized, and the individual
signing is duly authorized to execute it in the capacity of his or her office,
and to obligate and bind Buyer, and Buyer’s subsidiaries and affiliates, in the
manner described. The execution and performance of the Agreement will not
violate Buyer’s organizational documents or by-laws or any material contract or
other instrument, Requirements of Law or order to which it is a party or by
which it is bound. The execution and performance of this Agreement
does not require the approval or consent of any other person or government
agency.
Section 7.3. Binding
Obligations. Assuming due authorization, execution and
delivery by each other party hereto, this Agreement and all of the obligations
of Buyer hereunder are the legal, valid and binding obligations of Buyer,
enforceable in accordance with the terms of this Agreement, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and by
general equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law.)
Section 7.4. No Breach or
Default. The execution and delivery of this Agreement and the
performance of its obligations hereunder by Buyer will not conflict with any
Requirements of Law to which Buyer is subject or by which any of its assets may
be bound or conflict with or result in a breach of or constitute a default under
any of the terms, conditions or provisions of any agreement or instrument to
which Buyer is a party or by which it or any of its assets may be bound, or any
order or decree applicable to Buyer.
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Section 7.5. Assistance of
Third Parties. Buyer hereby agrees, acknowledges, confirms and
understands that Seller shall have no responsibility or liability to Buyer
arising out of or related to any third party's failure to assist or cooperate
with Buyer. In addition, Buyer is not relying upon the continued
actions or efforts of Seller or any third party in connection with its decision
to purchase the Assets, except as set forth in the Servicing
Agreement. Notwithstanding the forgoing, the Seller shall be liable
for all obligations included in the Servicing Agreement.
Section 7.6. Enforcement/Legal
Actions. Buyer covenants, agrees, warrants and represents that
Buyer shall not institute any enforcement or legal action or proceeding in the
name of Seller, any subsidiary of Seller, or any servicing agent or make
reference to any of the foregoing entities in any correspondence to or
discussion with any particular Obligor regarding enforcement or collection of
the Assets. Buyer also represents, warrants, and covenants not to
take any enforcement action against any Obligor that would be in violation of
any Requirements of Law or mislead, deceive, or otherwise fail to disclose to
any particular Obligor the identity of Buyer as the owner of the Assets in a
manner that violates any Requirements of Law. Buyer further
represents, warrants and covenants not to use, adopt, exploit, or allude to
Seller or any servicing agent or any name derived therefrom or confusingly
similar therewith or the name of any other local, state or federal agency or
association to promote Buyer's sale, enforcement, collection, or management of
the Assets. Buyer agrees, acknowledges, confirms and understands that
there may be no adequate remedy at law for a violation of the terms, provisions,
conditions and limitations set forth in this Section 7.6 and Seller shall have
the right to seek the entry of an order by a court of competent jurisdiction
enjoining any violation hereof. Buyer shall not represent that there
is an affiliation or agency relationship between Buyer and Seller, nor shall
Buyer state or represent in any way that Buyer is acting on behalf of the
Seller.
Notwithstanding
the foregoing, and to the extent permitted by law, Buyer or subsequent
transferee may use Seller’s name to the extent necessary to establish Buyer’s or
a subsequent transferee's right to collect an Asset for purposes of (a)
identifying any Asset in communications with Obligor in order to collect amounts
outstanding on the Asset, but Buyer or a subsequent transferee's shall not take
collection action in Seller’s name, (b) in connection with filing a suit upon
the Asset or in connection with a sale of the Asset, but Buyer or a subsequent
transferee shall not bring suit in Seller’s name or (c) in bankruptcy and
probate proceedings of an Obligor. Buyer or a subsequent transferee may also use
Seller’s name in connection with the sale or financing of the purchase of such
Asset, but only to the extent necessary to establish Buyer’s or a subsequent
transferee's right to take such action or in connection with entering into any
servicing arrangement, but only to the extent required to identify Seller as the
originator or subsequent owner of the Assets. Neither Buyer nor any subsequent
transferees shall take any collection action in Seller’s name or any of Seller’s
Affiliates’ names, or represent that there is an affiliation or agency
relationship between Buyer or subsequent transferee and Seller or any of its
Affiliates or state or represent in any way that Buyer or any subsequent
transferee is acting on behalf of Seller or any of its Affiliates in taking any
of the above described or any other action. Buyer shall indemnify Seller, as
described in Article X, for any claims that arise against Seller as a result of
Buyer’s use of Seller’s name in any authorized or unauthorized manner. Nothing
in this Agreement shall permit Buyer to identify Seller as the owner of the
Assets after the Transfer Date.
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ARTICLE
VIII
REPRESENTATIONS
AND WARRANTIES OF SELLER
Representations
and Warranties of Seller. Seller hereby represents and
warrants to Buyer as of the date hereof:
Section
8.1 Ownership. Seller
is the sole owner of all right, title and interest in and to the Assets, free
and clear of any lien, security interest, pledge, charge, encumbrance, or
similar right or claim of any person or entity, and other than financing
statements filed by or on behalf of Buyer or its agents. As of the
Transfer Date, no effective financing statement or other instrument similar in
effect covering any of the Assets or related debt or any other interest therein
will be on file in any recording office, and Seller has the right to transfer
all interest therein to Buyer on the terms and conditions set forth herein.
Seller shall convey to Buyer such clear and marketable title, free and clear of
any lien, security interest, pledge, charge, encumbrance, or similar right or
claim of any person (other than Buyer and its agents). Seller
warrants that as of the Transfer Date, Seller shall be responsible for
reimbursing all third party servicers for any fees or costs due to such third
party servicer, whether now or in the future, for actions taken with respect to
the purchased Accounts prior to the Transfer Date, including but not limited to
all collection commissions, media costs or fees, attorney fees, court costs and
filing fees associated with any litigation.
Section 8.2. Authorization. Seller
has full right, power and authority to enter into and perform this Agreement in
accordance with all of the terms and provisions hereto. The execution
and delivery of the Agreement has been duly authorized, and the individual
signing is duly authorized to execute it in the capacity of his or her office,
and to obligate and bind Seller, and Seller’s subsidiaries and affiliates, in
the manner described. The execution and performance of the Agreement will not
violate Seller’s organizational documents or by-laws or any material contract or
other instrument, Requirements of Law or order to which it is a party or by
which it is bound. The execution and performance of this Agreement
does not require the approval or consent of any other person or government
agency.
Section 8.3. Binding
Obligations. Assuming due authorization, execution and
delivery by each other party hereto, this Agreement and all of the obligations
of Seller hereunder are the legal, valid and binding obligations of Seller,
enforceable in accordance with the terms of this Agreement, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and by
general equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law.)
Section 8.4. No Breach or
Default. The execution and delivery of this Agreement and the
performance of its obligations hereunder by Seller will not conflict with any
Requirements of Law to which Seller is subject or by which any of its assets may
be bound, or conflict with or result in a breach of or constitute a default
under any of the terms, conditions or provisions of any agreement or instrument
to which Seller is a party or by which it or any of its assets may be bound, or
any order or decree applicable to Seller.
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Section
8.5 Seller is
Sophisticated Investor. Seller is a
sophisticated investor, and has the knowledge and experience in financial and
business matters necessary to enable Seller to evaluate the merits and risks of
the transaction contemplated by this Agreement.
Section 8.6 No Pending
Proceedings. There is no proceeding, action, investigation or
litigation pending or, to the best of Seller’s knowledge, threatened against
Seller which, individually or in the aggregate, may have a material adverse
effect on this Agreement or any action taken or to be taken in connection with
Seller’s obligations contemplated in this Agreement, or which would be likely to
impair materially its ability to perform under the terms of this
Agreement.
Section 8.7 Compliance with
Applicable Requirements of Law. To
the best of Seller’s knowledge, each of the Assets has been originated,
maintained and serviced in compliance in all material respects with all
Requirements of Law in all matters relating to the Assets.
Section 8.8 No Adverse
Selection. Seller will be selling all of the like Accounts
generated in the normal course of the Seller’s operations to Buyer, with no like
Accounts held back for collections or sale to a third party. Seller
has not utilized any selection process or methodology when selecting the
Accounts to be sold to Buyer that could be reasonably expected to have a
negative impact on the value of the Assets or Buyer’s ability to collect on
them.
Section 8.9 Finder’s
Fee. Seller acknowledges that Seller has employed an
investment banker, broker or finder in connection with the transaction
contemplated hereby who might be entitled to a fee or commission from Seller
upon consummation of the transaction contemplated in this
Agreement. To the extent that Seller has engaged any such agent, all
fees or commissions for those services will be borne by Seller.
Section 8.10 No Future
Advances. There are no obligations to make any future advances
to any Obligor or on behalf of any Obligor for any Account included in the
Assets.
Section 8.11 Data Files
Materially Correct. The information included in the Asset
Schedule is true and correct in all material respects.
Section 8.12 Historical Cash
Flow Information Materially Correct. To the best of Seller’s
knowledge, the historical summary cash flow information for the prior three (3)
months attached hereto as Exhibit
VIII, is materially correct and accurately summarizes actual cash flows
received by Seller for the Accounts included in the Asset Schedule and included
in this Sale, other than Accounts closed due to payment, death of the Obligor,
or bankruptcy filing by the Obligor. The Seller further represents
and warrants that it has not materially changed the collection practices applied
to the Assets from those in place during the period applicable to the
information included in Exhibit
VIII. For the avoidance of doubt, the definition of material
change shall include, but not be limited to, changes in the settlement terms
applied to the Assets by the Seller or its agents.
Section
8.13 Current Servicing
Agreements. The Seller has previously entered into servicing agreements
with various third party servicers. Exhibit
V identifies each collection agency or collection law firm that will be
servicing Accounts included in the Asset Schedule on the Transfer Date and
includes a materially correct summary of the number of Accounts included in
the
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Asset
Schedule placed at that agency, and the aggregate face value of the Accounts
placed at that agency. The Seller warrants that it will provide the
most recent servicing agreement and all relevant amendments for the each of the
agencies listed in Exhibit
V to the Buyer at least three (3) business days prior to the Transfer
Date. The Seller further warrants that no other servicers are working
any of the Accounts included in the Asset Schedule or have any claims to any of
such Accounts. The Seller agrees that following the Closing Date,
pursuant to the Servicing Agreement the Seller shall continue to manage the
Assets at these servicers, using the same reasonable care and prudent management
applied to the Assets before the Closing Date. The Seller shall work
closely with the Seller to manage the recall of these Assets from the third
party servicers in a prudent manner following the Closing Date, subject to the
Servicing Agreement in Exhibit
X.
Section 8.14 Originating
Purchase and Sale Agreements/Consents. The Seller has
purchased the Accounts included in this sale from various third
parties. Exhibit
VI includes a list of each of the third parties from whom the Seller
purchased one or more Accounts included in the Asset Schedule. The
Seller warrants that it will provide a copy of each applicable purchase and sale
agreement with each of the third parties included on Exhibit
VI to the Buyer at least 3 business days prior to the Transfer
Date.
Section 8.15 Consents. Seller
shall obtain any required consents from and provide any required notices to the
Originating Creditors for the sale of the Accounts to Buyer on or prior to the
Transfer Date including, without limitation, obtaining a consent letter (each a
“Consent
Letter” and collectively, the “Consent
Letters”) from each Originating Creditor in the form attached to this
Agreement as Exhibit
IX and Seller shall provide copies of the executed Consent Letters to
Buyer on or before the Transfer Date. Notwithstanding the foregoing, to the
extent that an Originating Purchase Agreement does not require consent to
transfer and does not require the undertaking or assumption by any subsequent
purchaser of any obligations under such Originating Purchase Agreement, then
Seller shall not be required to obtain such Consent Letter.
Section 8.16
Litigation by
Obligors. To the best of Seller’s knowledge, the Seller has
not included any Assets in the transaction contemplated under this Agreement
where an Obligor for any has filed a complaint, legal action, suit or proceeding
in a court of competent jurisdiction or before an administrative body with the
authority to hear such a dispute alleging that the Asset was originated,
serviced or otherwise maintained unlawfully, and such complaint, legal action,
suit or proceeding is still outstanding. To the best of Seller’s
knowledge, the Seller has also not included any Assets that are included in a
pending or reasonably threatened class action lawsuit known to the Seller, or
which would reasonably be expected to be included in a pending or reasonably
threatened class action lawsuit.
Section
8.16 Legal form of
Seller.
(a) IDT Carmel, Inc. is a corporation
organized under the laws of the State of Delaware;
(b) IDT Carmel Portfolio Management LLC
is a limited liability company organized under the laws of the State of
Delaware; and
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(b) FFPM Holdings I LLC is a limited
liability company organized under the laws of the State of
Delaware.
ARTICLE
IX
BUYER'S
EVALUATION AND ACCEPTANCE OF RISK OF
ASSETS
SOLD "AS-IS"
Buyer hereby represents, warrants,
acknowledges and agrees to the following:
Section 9.1. Independent
Evaluation. Buyer's bid for and decision to purchase the
Assets pursuant to this Agreement is and was based upon Buyer's own independent
evaluation of information deemed relevant to Buyer, including, but not limited
to, the information made available by Seller to Buyer for the Assets, and
Buyer's independent evaluation of related information. Buyer
acknowledges and agrees that, while some information concerning the Assets was
made available to Buyer for review prior to the Transfer Date, such information,
through no fault of Seller, may not be complete. If an asset
servicer, servicing agent or any of Seller's contractors or employees failed to
deliver to Seller any or all of the Asset information in such servicer's or
employee's possession, then Seller shall not be liable for the failure to
include such Asset information in the materials made available for review by
Buyer prior to the Transfer Date. Buyer has relied solely on its own
investigation and it has not relied upon any oral or written information
provided by Seller or its personnel or agents and acknowledges that no employee
or representative of Seller has been authorized to make, and that Buyer has not
relied upon, any written statements other than those specifically contained in
this Agreement.
Section 9.2. Due
Diligence. Buyer has been urged to conduct a prudent due diligence review
and analyses of the information provided by Seller in order to make a complete
informed decision with respect to the purchase and acquisition of the
Assets.
Section 9.3. Economic
Risk. Buyer acknowledges that the Assets may have limited or
no liquidity and Buyer has the financial wherewithal to own the Assets for an
indefinite period of time and to bear the economic risk of an outright purchase
of the Assets and a total loss of the Purchase Price for the
Assets. Buyer acknowledges that the Assets may be Uncollectible
and/or Repurchase Assets.
Section 9.4 No Finder’s
Fee. Buyer has not employed any investment banker, broker or
finder in connection with the transaction contemplated hereby who might be
entitled to a fee or commission from Buyer upon consummation of the transaction
contemplated in this Agreement. To the extent that Buyer has engaged
any such agent, all fees or commissions for those services will be borne by
Buyer.
Section 9.5. No Other
Representations or Warranties. BUYER HAS CONDUCTED ITS OWN DUE
DILIGENCE WITH RESPECT TO THE ASSETS AND ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, THE ASSETS ARE BEING SOLD "AS
IS" AND "WITH ALL
FAULTS", WITHOUT ANY REPRESENTATION OR
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WARRANTY
WHATSOEVER, AND SELLER SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR
REPRESENTATION, ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS OR IMPLIED, CONCERNING
THE ASSETS, THE STRATIFICATION OR PACKAGING OF THE ASSETS.
ARTICLE
X
INDEMNIFICATION
Section 10.1 Buyer’s
Indemnification. From and after the Transfer Date, Buyer shall
defend, indemnify and hold harmless Seller and Seller’s affiliates, and any of
Seller or Seller’s agents, affiliates, employees, contractors, officers,
directors, members, owners, partners, and representatives (collectively “Buyer
Indemnitees”) against and from any and all liability for, and from and
against any and all losses or damages a Buyer Indemnitee may suffer as a result
of any Claim or threatened Claim as a result of (i) the breach or inaccuracy of
any of Buyer’s representations or warranties as set forth in this Agreement and
in the other documents executed in connection with the bid and the sale of the
Assets; (ii) any Claim or threatened Claim by any Obligor regarding any
collection efforts, assignment, enforcement, servicing or administration of the
Assets by Buyer or Buyer’s agents, affiliates, employees, contractors, officers,
directors, assignees, and representatives; (iii) any violation by Buyer’s or
Buyer’s agents, affiliates, employees, contractors, officers, directors,
assignees, and representatives of any federal, state, and local statutes, laws,
rules and regulations which may be applicable to Buyer related to the
transaction contemplated hereunder, including without limitation any federal or
state securities laws, the Right to Financial Privacy Act, the Privacy Act of
1974 or the Fair Credit Reporting Act; or (iv) any Claims arising from the use
of a subsequent transferee of Seller’s name in violation of this
Agreement.
Section 10.2 Seller’s
Indemnification. Notwithstanding any preceding limitations as
to the Seller’s actual knowledge or any use of the term ”to the best of
Seller’s knowledge,” for a period of two (2) years following the Transfer Date,
Seller shall defend, indemnify and hold harmless Buyer and Buyer’s affiliates,
or any of Buyer’s or Buyer’s agents, affiliates, employees, contractors,
officers, directors, members, owners, partners, and representatives
(collectively “Seller
Indemnitees”) against and from any and all liability for and from and
against any and all losses or damages a Seller Indemnitee may suffer as a result
of any Claim or threatened Claim as a result of: (i) the breach of any of
Seller’s representations, warranties or covenants as set forth in this Agreement
and in the other documents executed in connection with Seller’s sale of the
Assets; (ii) any Claim or threatened Claim by any Obligor regarding
any collection efforts, assignment, enforcement, servicing or administration of
the Assets by Seller or Seller’s agents, affiliates, employees, contractors,
officers, directors, assignees, and representatives; or (iii) any violation by
Seller’s or Seller’s agents, affiliates, employees, contractors, officers,
directors, assignees, and representatives of any federal, state, and local
statutes, laws, rules and regulations applicable to Seller related to the
transaction contemplated hereunder, including without limitation any federal or
state securities laws, the Right to Financial Privacy Act, the Privacy Act of
1974 or the Fair Credit Reporting Act.”
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Section 10.3 Defense of
Indemnified Claim. In the event any claim, action, suit or
other actual or threatened proceeding is instituted against a Seller Indemnitee
or Buyer Indemnitee (collectively “Indemnitees”)
based upon any of the foregoing, the indemnifying party shall have the right,
but shall not be required, to assume the Indemnitee’s defense.
(a) Such
defenses shall be provided in a manner, and with counsel reasonably acceptable
to the Indemnitees,
(b) The
indemnifying party shall directly pay for any Loss incurred.
(c) Without
limiting the foregoing, the indemnifying party may not settle any claim, action,
suit or proceeding for anything other than monetary consideration (including
without limitation, a in the value of an Asset) for which it has assumed
Indemnitee’s defense without the prior written consent the Indemnitee (not to be
unreasonably withheld or delayed).
Section 10.4
Notice of
Indemnification Claim. Each party will promptly notify the
other party of any claim or threatened claim against the other party, or any
claim or threatened claim that may affect the other party. Failure to
give such notice to an indemnifying party will not affect indemnification
hereunder except to the extent that such failure adversely affected the
indemnifying party.
Section 10.5. Limitation of
Liability. The maximum amount of
Seller’s potential liability under this Agreement shall be equal to the Initial
Funding Amount, minus any net collections received by the Buyer for or on
account of the purchased Assets as of the date a claim is made under this
Agreement, and minus any amounts paid by Seller for any Repurchase Assets (the
“Maximum”). Notwithstanding
the preceding sentence, the maximum Seller’s potential liability under this
Agreement shall not be less than one-million-five-hundred thousand dollars
($1,500,000.00). For the purposes of this section, net collections
shall be equal to the gross payments received by or on behalf of the Buyer for
the purchased Assets, minus any amounts the Buyer has actually paid to any third
party as reasonable compensation for collection commissions, court costs, or
filing fees.
IN NO
EVENT SHALL ANY PARTY BE LIABLE IN ANY RESPECT FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, RELIANCE OR PUNITIVE DAMAGES, WHETHER IN
TORT OR CONTRACT, NOR SHALL ANY PARTY BE LIABLE FOR ANY LOSS OF PROFITS,
REVENUE, DATA, GOODWILL, BUSINESS OPPORTUNITIES OR ANY OTHER COMMERCIAL DAMAGE
OF ANY KIND OR NATURE WHATSOEVER, UNLESS EXPLICITLY ALLOWED IN A WRITING SIGNED
BY THE LIABLE PARTY.
In
addition, in no event shall Seller or Buyer have any obligation to indemnify any
Indemnitee in connection with any third-party claims until all Seller
Indemnitees or Buyer Indemnitees (in each case as a group), respectively, have
suffered losses or damages in the aggregate amount of $50,000 (the “Minimum
Indemnification”). After the Seller Indemnitees or Buyer
Indemnitees (in each case as a group), as applicable, have suffered losses or
damages in the aggregate amount of the Minimum Indemnification, such Indemnitees
shall be entitled to indemnification from Seller or Buyer, respectively, for the
amount of all losses or damages in excess of the Minimum
Indemnification. The foregoing
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limitation
shall in no event apply to Buyer’s requirement to pay the Purchase Price in full
or Seller’s requirement to pay for any Repurchase Asset.
ARTICLE
XI
ASSIGNMENT
OF RIGHTS TO THIRD PARTIES
Section 11.1. Assignment of
Agreement Prior to Transfer Date. Prior to the Transfer Date,
Buyer shall not assign, encumber, transfer or convey its rights under this
Agreement without the prior written consent of Seller.
Section 11.2. Assignment After
Transfer Date. With respect to any Asset, Buyer and any
subsequent owner shall have the right, at any time after the Transfer Date, to
assign its rights in, under and/or to any Asset and this Agreement to
any subsequent transferee of such Asset; but Buyer shall remain liable for all
obligations of Buyer to Seller hereunder, notwithstanding such
assignment. Buyer shall take reasonable steps to communicate these
obligations to any subsequent transferee, but the subsequent transferee shall
not be obligated unless agreed to in writing by the subsequent
transferee.
Section 11.3 Buyer’s Right to
Finance the Assets. Buyer or an affiliate, subsidiary or permitted
transferee of Buyer may pledge, assign or create a security interest in the
Assets to or for a lender as collateral for a loan (including loans structured
in the form of repurchase agreements or other sales with
recourse). Buyer acknowledges that the pledge, assignment or creation
of a security interest in some or all of the Assets shall not relieve Buyer of
any of its liabilities or obligations hereunder and Buyer shall be liable to
Seller for any failure of subsequent purchasers to comply with the terms of its
Agreement.
ARTICLE
XII
This
Section Intentionally Left Blank
ARTICLE
XIII
NOTICE
OF OBLIGOR CLAIMS OR LITIGATION
Buyer shall promptly notify Seller of
any material Claim, threatened Claim, or litigation filed by any Obligor against
Seller that arises from or relates to any of the Assets purchased
hereunder.
ARTICLE
XIV
INFORMATIONAL
TAX REPORTING
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Buyer
hereby agrees to perform all obligations with respect to federal and/or state
tax reporting relating to or arising out of the Assets sold and assigned
pursuant to this Agreement including, without limitation, the obligations with
respect to Forms 1098 and 1099 and backup withholding with respect to the same,
if required, for the year 2009 and thereafter. Seller shall file such
reporting forms relating to the period of the year 2009 for which Seller owned
the Asset(s).
ARTICLE
XV
RETAINED
CLAIMS
Buyer and
Seller agree that the sale of the Assets pursuant to this Agreement shall
exclude the transfer by Seller to Buyer of any and all claims and/or causes of
action Seller has or may have: (i) against officers, directors,
employees, insiders, accountants, attorneys, other persons employed by Seller,
underwriters or any other similar person or persons who have caused a loss to
Seller in connection with the initiation, origination or administration of any
of the Assets; (ii) against any third parties involved in any alleged
fraud or other misconduct relating to the making or servicing of any of the
Assets, or (iii) against any appraiser, title insurer or other party
from whom Seller or any servicing agent contracted services or title insurance
in connection with the making, insuring or servicing of any of the
Assets.
ARTICLE
XVI
This
Section Left Intentionally Blank
ARTICLE
XVII
CONFIDENTIALITY
PROVISIONS
Section
17.1. Definition of
Confidential Information. Both parties agree that
“Confidential Information” includes (i) the terms and conditions of this
Agreement for the sale of Assets; (ii) any amount of consideration paid for such
Assets; (iii) all information marked as “confidential” or with similar
designation, or information which the receiving party should, in the exercise of
reasonable judgment, recognize to be confidential; (iv) any and all information
of or about Obligor(s), of any nature whatsoever, and specifically including but
not limited to account numbers, Obligor social security numbers, customer lists,
customer financial information and the fact of the existence of a relationship
between the providing party and customer and nonpublic personal information
(“Information”), regarding the current and former customers of the Seller. The
term nonpublic personal information means personally identifiable financial
information provided by a consumer to a financial institution, resulting from
any transaction with the consumer or any service performed for the consumer, or
otherwise obtained by the financial institution.” The definition also
includes “any list, description, or other grouping of consumers (and publicly
available information pertaining to them) that is derived using any nonpublic
personal information other than publicly available information.”; (v) all
business, financial or technical information of either party and any of either
party’s vendors (including but not limited to credit card account numbers; and
software licensed from third parties or owned by either party or its
affiliates.
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Section 17.2. Safeguarding
Confidential Information. Both parties will establish data
security policies and procedures to ensure compliance with this section that are
designed to maintain safeguards against the destruction, loss, alteration of, or
unauthorized access to personal, non-public, or Confidential
Information. Each party must maintain the confidentiality of the
Information at least to the same extent it does do for other Accounts it owns or
services. Neither party shall, directly or through any affiliate of
such party, disclose such information to any other person that is a
nonaffiliated third party of both the Seller and the Buyer, unless such
disclosure would be lawful if made directly to such other person by the other
party. Neither party shall, under any circumstances, disclose the
Information to any third party for purposes of telemarketing, direct mail
marketing or electronic mail marketing. Each party agrees that it
will maintain the confidentiality of the Information disclosed to it and limit
use of such Information solely for the purposes for which it was
disclosed. Each party further agrees to notify the other party of any
material intentional or inadvertent release of Information immediately upon
discovery and to take any actions reasonably necessary or required by law in
response thereto.
Each
party agrees that the foregoing covenants, agreements, and undertakings relate
to matters that are of a special, unique, and extraordinary character which
gives them peculiar and special value. Each party agrees that the
other party cannot reasonably or adequately be compensated in damages for the
losses resulting from non-permissible disclosure. Each party
therefore expressly agrees, on behalf of itself and representatives, that, in
addition to any and all other rights and remedies which the other party may have
at law or equity, the other party shall also be entitled to seek injunctive
and/or other equitable relief to prevent the continuing breach of any of the
terms or provisions hereof or to otherwise secure the enforcement of any of the
terms or provisions hereof. The terms hereof shall expressly survive
the termination of any other agreements between the parties.
(i) Prior to Transfer
Date. Buyer agrees that it shall treat as confidential and
shall not disclose or otherwise make available, the personal account information
and all other data received by Buyer from Seller with respect to any Asset,
other than to employees, agents, lenders, auditors, contractors or affiliates of
Buyer or Seller whose duties reasonably require access to such
information.
(ii) After Transfer
Date. Each party shall follow all Requirements of Law with
regard to disclosure of account information, and shall treat the Assets and any
information related to them with a standard of care equal to or in excess of the
standards applied to the other Assets owned by that party. These
standards include instructing party’s employees, agents, affiliates, and
contractors of these confidentiality requirements and taking reasonable steps to
ensure that such employees, etc. to agree to adhere to these confidentiality
requirements.
Section
17.3. Notice of
Disclosure.
Buyer and Seller agree that Confidential Information will not be disclosed by
either party without the written consent of the other, except to the extent that
disclosure (i) is required to be made under any applicable court order, law, or
regulation; (ii) is required to be made to any tax, banking or other regulatory
authority or legal or financial advisor of either party, including, but not
limited to, disclosure required, in the opinion of Seller’s or Buyer’s counsel,
by the Securities Act of 1933 or the Securities Exchange Act of
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1934;
(iii) is made in connection with the sale or other transfer of any Asset or
interest therein by the Buyer or its successors or assigns; or (iv) is made to
Buyer’s auditors or lenders; or (v) is made to third party servicers in
accordance with traditional and customary servicing practices, as evidenced by
the Buyer’s practices with regard to other Accounts it owns. Should
either party be required to disclose Confidential Information as set forth in
this Agreement, other than for the exceptions (iii), (iv), or (v) above, the
providing party shall promptly notify the other party so that the other party
may seek the necessary injunctive relief or otherwise protect the
confidentiality of such requested information.
Section
17.4. Both parties agree that any violation of the obligations of
confidentiality, as set forth in this Article XVII, shall be a material breach
of the Agreement and shall entitle the nonbreaching party to indemnification by
the breaching party for any claims that may be brought against it by third
parties.
Section
17.5. The provisions of Article XVII shall survive termination of
this Agreement in perpetuity.
ARTICLE
XVIII
ADDITIONAL
GUARANTEE
Section 18.1. Guarantee. As
a condition to Buyer’s agreeing to purchase the Assets and pay the Purchase
Price, IDT Carmel, Inc., as Guarantor shall have executed and delivered to Buyer
the Guaranty dated January 30, 2009.
Section 18.2 Buyer’s Reliance
on Guarantee. The Buyer and Seller mutually agree that the
Buyer has materially relied upon the existence of the Guarantor’s guarantee when
entering into this Agreement and that such guarantee was a material inducement
for the Buyer to enter into this Agreement
ARTICLE
IXX
MISCELLANEOUS
PROVISIONS
Section 19.1. Severability. If
any term, covenant, condition or provision hereof is unlawful, invalid, or
unenforceable for any reason whatsoever, and such illegality, invalidity, or
unenforceability does not affect the remaining parts of this Agreement, then all
such remaining parts hereof shall be valid and enforceable and have full force
and effect as if the invalid or unenforceable part had not been
included.
Section 19.2. Rights
Cumulative/Waivers. The rights of each of the parties under
this Agreement are cumulative and may be exercised as often as any party
considers appropriate under the terms and conditions specifically set
forth. The rights of each of the parties hereunder shall not be
capable of being waived or varied otherwise than by an express waiver or
variation in writing. Any failure to exercise or any delay in
exercising any of such rights shall not operate as a waiver or variation of that
or any other such right. Any defective or partial exercise of any of
such rights shall not preclude any other or further exercise of that or any
other such right. No act or course of
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conduct
or negotiation on the part of any party shall in any way preclude such party
from exercising any such right or constitute a suspension or any variation of
any such right.
Section 19.3. Assignment. Subject
to the restrictions set forth in Article XI, this Agreement and the terms,
covenants, conditions, provisions, obligations, undertakings, rights and
benefits hereof, including the Addenda, Exhibits and Schedules hereto may be
assigned by Buyer without restriction.
Section 19.4. Prior
Understanding. This Agreement supersedes any and all prior
discussions and agreements between Seller and Buyer with respect to the purchase
of the Assets and other matters contained herein, and this Agreement contains
the sole and entire understanding between the parties hereto with respect to the
transactions contemplated herein.
Section 19.5. Integrated
Agreement. This Agreement and all Addenda, Exhibits and
Schedules hereto constitute the final complete expression of the intent and
understanding of Buyer and Seller. This Agreement shall not be
altered or modified except by a subsequent writing, signed by Buyer and
Seller.
Section 19.6. Governing
Law/Choice of Forum. This Agreement shall be construed, and
the rights and obligations of Seller and Buyer hereunder determined, in
accordance with the laws of the state of New York (the "State"). Each of
Buyer and Seller hereby consents to the exclusive jurisdiction of the federal
and state courts in New York in connection with any action or proceeding
initiated concerning this Agreement and agrees that service by mail to the
address specified on the cover page of this Agreement or Exhibit
I, as applicable, shall be sufficient to confer jurisdiction over Buyer
and Seller in such court.
Section
19.7. Calculation of
Calendar/Business Days. If any date (whether calculated on the
basis of calendar days or Business Days) upon which or by which action is
required under this Agreement is a Saturday, Sunday or legal holiday recognized
by the Federal Government, then the date for such action shall be extended to
the first day that is after such date and is not a Saturday, Sunday or legal
holiday recognized by the Federal Government.
Section
19.8 Titles Not
Substantive. The section headers and titles in this Agreement
are for informational purposes only and shall not be read or otherwise used to
determine the intent of the parties.
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Section
19.9 Dedicated
Transfer Resources. The following persons will serve as the
primary point of contact for at least ninety (90) days to facilitate the sale
transaction and the Buyer’s integration into Resurgent’s servicer
network.
Buyer’s
Contact Name:
Phone
Number:
Email
Address:
Seller’s
Contact Name:
Phone
Number:
Email
Address:
Section
19.10 The parties agree that any closing may take place in
counterparts via facsimile, with original signatures to follow, or at such place
as shall be mutually agreed to between the parties. The undersigned
acknowledge and hereby agree that agreements and signatures transmitted by
electronic facsimile have the same legal effect as signatures on original or
copies.
[Signature
page to follow]
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IN TESTIMONY WHEREOF, the parties
hereto have executed this Agreement.
▇▇▇▇▇▇▇ Originator III
LLC
By: /s/ ▇▇▇ ▇.
▇▇▇▇▇▇▇
Name (print): ▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Title: Director
SELLERS: IDT CARMEL,
INC.
By: /s/ ▇▇▇▇▇▇▇
▇▇▇▇▇
Name (print): ▇▇▇▇▇▇▇
▇▇▇▇▇
Title: Chairman
|
|
IDT
CARMEL PORTFOLIO MANAGEMENT LLC.
|
By: /s/ ▇▇▇▇▇▇▇
▇▇▇▇▇
Name (print): ▇▇▇▇▇▇▇
▇▇▇▇▇
Title: Chairman
FFPM CARMEL HOLDINGS I
LLC
By: /s/ ▇▇▇▇▇▇▇
▇▇▇▇▇
Name (print): ▇▇▇▇▇▇▇
▇▇▇▇▇
Title: Chairman