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Execution Copy
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U.S. $100,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of September 30, 1998
Among
AMERICAN BUSINESS LEASE FUNDING CORPORATION
as the Seller
AMERICAN BUSINESS LEASING, INC.
as the Servicer
the INVESTORS
named herein
VARIABLE FUNDING CAPITAL CORPORATION
as a Purchaser
FIRST UNION CAPITAL MARKETS, a division of
WHEAT FIRST SECURITIES, INC.
as the Deal Agent
FIRST UNION NATIONAL BANK
as the Liquidity Agent
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
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.......................................................27
SECTION 1.3 COMPUTATION OF TIME PERIODS.......................................27
ARTICLE II THE PURCHASE FACILITY.............................................27
SECTION 2.1 PURCHASES OF ASSET INTERESTS......................................27
SECTION 2.2 THE INITIAL PURCHASE, SUBSEQUENT PURCHASES
AND INCREMENTAL PURCHASES.........................................28
SECTION 2.3 REDUCTION OF THE PURCHASE LIMIT; REPURCHASE.......................28
SECTION 2.4 DETERMINATION OF YIELD............................................28
SECTION 2.5 [RESERVED]........................................................29
SECTION 2.6 DIVIDING OR COMBINING ASSET INTERESTS.............................29
SECTION 2.7 NON-LIQUIDATION SETTLEMENT PROCEDURES.............................29
SECTION 2.8 SETTLEMENT PROCEDURES FOLLOWING THE
COMMITMENT TERMINATION DATE.......................................30
SECTION 2.9 SETTLEMENT PROCEDURES FOLLOWING A TERMINATION DATE................32
SECTION 2.10 COLLECTIONS AND ALLOCATIONS......................................33
SECTION 2.11 PAYMENTS, COMPUTATIONS, ETC......................................33
SECTION 2.12 OPTIONAL REPURCHASE..............................................34
SECTION 2.13 FEES.............................................................34
SECTION 2.14 INCREASED COSTS; CAPITAL ADEQUACY; ILLEGALITY....................35
SECTION 2.15 TAXES............................................................36
SECTION 2.16 ASSIGNMENT OF THE PURCHASE AGREEMENT.............................39
SECTION 2.17 SUBSTITUTION OF CONTRACTS........................................39
ARTICLE III CONDITIONS OF PURCHASES..........................................40
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE..........................40
SECTION 3.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND
REMITTANCES OF COLLECTIONS........................................41
SECTION 3.3 DELIVERY OF CONTRACT FILES........................................41
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................42
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER......................42
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF SELLER RELATING
TO THE AGREEMENT AND THE CONTRACTS................................46
SECTION 4.3 REPRESENTATIONS AND WARRANTIES OF THE SELLER RELATING
TO THE PURCHASE LIMIT AND CAPITAL LIMIT...........................47
ARTICLE V GENERAL COVENANTS OF THE SELLER AND THE ORIGINATOR.................47
SECTION 5.1 GENERAL COVENANTS.................................................47
SECTION 5.2 COVENANTS OF SELLER...............................................48
SECTION 5.3 RELEASE OF LIEN ON EQUIPMENT......................................52
SECTION 5.4 OPERATIONS ON TRANCHE RATE LOCK DATE..............................52
SECTION 5.5 RETRANSFER OF INELIGIBLE CONTRACTS................................54
SECTION 5.6 RETRANSFER OF ASSETS..............................................54
SECTION 5.7 YEAR 2000 COMPATIBILITY...........................................55
SECTION 5.8 COVENANTS OF THE ORIGINATOR.......................................55
ARTICLE VI ADMINISTRATION AND SERVICING OF CONTRACTS.........................56
SECTION 6.1 APPOINTMENT AND ACCEPTANCE; DUTIES................................56
SECTION 6.2 COLLECTION OF PAYMENTS............................................59
SECTION 6.3 SERVICER ADVANCES.................................................60
i
SECTION 6.4 REALIZATION UPON DEFAULTED CONTRACT...............................61
SECTION 6.5 MAINTENANCE OF INSURANCE POLICIES.................................61
SECTION 6.6 REPRESENTATIONS AND WARRANTIES OF SERVICER........................62
SECTION 6.7 REPRESENTATIONS AND WARRANTIES OF BACKUP SERVICER
AND COLLATERAL CUSTODIAN..........................................64
SECTION 6.8 COVENANTS OF SERVICER.............................................65
SECTION 6.9 COVENANTS OF BACKUP SERVICER AND COLLATERAL CUSTODIAN.............66
SECTION 6.10 [RESERVED].......................................................67
SECTION 6.11 [RESERVED].......................................................67
SECTION 6.12 PAYMENT OF CERTAIN EXPENSES BY SERVICER..........................67
SECTION 6.13 REPORTS..........................................................67
SECTION 6.14 ANNUAL STATEMENT AS TO COMPLIANCE................................68
SECTION 6.15 ANNUAL INDEPENDENT PUBLIC ACCOUNTANT'S SERVICING REPORTS.........68
SECTION 6.16 ADJUSTMENTS......................................................68
SECTION 6.17 MERGER OR CONSOLIDATION OF THE SERVICER..........................69
SECTION 6.18 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS...............69
SECTION 6.19 INDEMNIFICATION OF THE SELLER, THE BACKUP SERVICER, THE..........69
COLLATERAL CUSTODIAN, THE DEAL AGENT AND THE SECURED PARTIES.....69
SECTION 6.20 THE SERVICER NOT TO RESIGN.......................................70
SECTION 6.21 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION..................71
REGARDING THE CONTRACTS..........................................71
SECTION 6.22 BACKUP SERVICER..................................................71
SECTION 6.23 IDENTIFICATION OF RECORDS........................................74
SECTION 6.24 SERVICER DEFAULTS................................................74
SECTION 6.25 APPOINTMENT OF SUCCESSOR SERVICER................................75
SECTION 6.26 NOTIFICATION.....................................................77
SECTION 6.27 PROTECTION OF RIGHT, TITLE AND INTEREST TO ASSETS................77
SECTION 6.28 RELEASE OF CUSTODIAN'S CONTRACT FILES............................78
ARTICLE VII RESTRICTING EVENTS...............................................78
SECTION 7.1 [RESERVED]........................................................78
SECTION 7.2 RESTRICTING EVENTS................................................78
ARTICLE VIII INDEMNIFICATION.................................................80
SECTION 8.1 INDEMNITIES BY THE SELLER.........................................80
ARTICLE IX THE DEAL AGENT AND THE LIQUIDITY AGENT............................83
SECTION 9.1 AUTHORIZATION AND ACTION..........................................83
SECTION 9.2 DELEGATION OF DUTIES..............................................83
SECTION 9.3 EXCULPATORY PROVISIONS............................................84
SECTION 9.4 RELIANCE..........................................................85
SECTION 9.5 NON-RELIANCE ON DEAL AGENT, LIQUIDITY AGENT
AND OTHER PURCHASERS..............................................85
SECTION 9.6 REIMBURSEMENT AND INDEMNIFICATION.................................86
SECTION 9.7 DEAL AGENT AND LIQUIDITY AGENT IN THEIR
INDIVIDUAL CAPACITIES.............................................86
SECTION 9.8 SUCCESSOR DEAL AGENT OR LIQUIDITY AGENT...........................86
ARTICLE X ASSIGNMENTS; PARTICIPATIONS........................................87
SECTION 10.1 ASSIGNMENTS AND PARTICIPATIONS...................................87
ARTICLE XI MISCELLANEOUS.....................................................90
SECTION 11.1 AMENDMENTS AND WAIVERS...........................................90
SECTION 11.2 NOTICES, ETC.....................................................91
SECTION 11.3 RATABLE PAYMENTS.................................................91
SECTION 11.4 NO WAIVER, RIGHTS AND REMEDIES...................................92
SECTION 11.5 BINDING EFFECT; BENEFIT OF AGREEMENT.............................92
SECTION 11.6 TERM OF THIS AGREEMENT...........................................92
SECTION 11.7 GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF OBJECTION TO VENUE.....................................92
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SECTION 11.8 WAIVER OF JURY TRIAL.............................................93
SECTION 11.9 COSTS, EXPENSES AND TAXES........................................93
SECTION 11.10 NO PROCEEDINGS..................................................94
SECTION 11.11 RECOURSE AGAINST CERTAIN PARTIES................................94
SECTION 11.12 PROTECTION OF OWNERSHIP INTERESTS OF THE PURCHASERS;
INTENT OF PARTIES; SECURITY INTEREST............................95
SECTION 11.13 CONFIDENTIALITY.................................................96
SECTION 11.14 NOTICE OF BREACH OF REPRESENTATIONS AND WARRANTIES..............97
SECTION 11.15 EXECUTION IN COUNTERPARTS; SEVERABILITY; INTEGRATION............97
EXHIBITS
EXHIBIT A Form of Purchase Notice
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 Hedge Agreement (including Schedule and Confirmation)
EXHIBIT I Credit and Collection Policies
SCHEDULES
SCHEDULE I Conditions 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 Custodian's Contract Files
SCHEDULE V Contract List
iii
THIS RECEIVABLES PURCHASE AGREEMENT (the "Agreement") is made as of
September 30, 1998, among:
(1) AMERICAN BUSINESS LEASE FUNDING CORPORATION, a Delaware
corporation, as seller (the "Seller");
(2) AMERICAN BUSINESS LEASING, INC., a Pennsylvania corporation, as
servicer (the "Servicer");
(3) the financial institutions listed on the signature pages of this
Agreement under the heading "Investors" and their respective successors and
assigns (the "Investors");
(4) VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation
("VFCC");
(5) FIRST UNION CAPITAL MARKETS, a division of WHEAT FIRST SECURITIES,
INC. ("FCM"), as deal agent (the "Deal Agent") and as documentation agent (the
"Documentation Agent");
(6) FIRST UNION NATIONAL BANK ("First Union"), as liquidity agent (the
"Liquidity Agent"); and
(7) NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION ("Norwest") as
collateral custodian (the "Collateral Custodian") and as 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 and schedules, 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):
ABFS: American Business Financial Services, Inc., a Delaware corporation.
ABFS Residual: ABFS Residual Holding, Inc., a Delaware corporation.
ABL: American Business Leasing, Inc., a Pennsylvania corporation.
ADCB: On any date of determination, the sum of the Discounted Contract Balance
of each Eligible Contract (excluding all Defaulted Contracts, Casualty Loss
Contracts, Early Termination Contracts and Contracts subject to a Warranty
Event) included in the Asset Pool as of the date of such determination.
Addition Date: With respect to any Additional Contracts, the date on which such
Additional Contracts become Pool Assets.
Additional Contracts: All Contracts that become Pool Assets after the Closing
Date.
Additional Cut Off Date: Each date on and after which Collections on an
Additional Contract are to be transferred to the Asset Pool.
Adjusted Eurodollar Rate: On any day, an interest rate per annum equal to the
quotient, expressed as a percentage and rounded upwards (if necessary), to the
nearest 1/100 of 1%, obtained by dividing (i) the LIBOR Rate on such day by (ii)
the decimal equivalent of 100% minus the Eurodollar Reserve Percentage on such
day.
Administration Agreement: That certain Administration Agreement executed between
VFCC and FCM, as the same may be amended, supplemented, or otherwise modified
from time to time.
Adverse Claim: A lien, security interest, charge, encumbrance or other right or
claim of any Person.
Affected Party: As defined in Section 2.14(a).
Affiliate: With respect to a Person means any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" or "controlled" have meanings correlative
to the foregoing.
Agent's Account: A special account (account number 01 41 96 47) in the name of
the Deal Agent or, so long as VFCC is the sole Purchaser hereunder, in the name
of VFCC maintained at Bankers Trust Company.
Aggregate Unpaids: At any time, an amount equal to the sum of all Yield (accrued
and to accrue), Capital and all other amounts owed hereunder, under any Hedging
Agreement (including, without limitation, payments in respect of the termination
of any such Hedging Agreement) or under any fee letter delivered by the
Originator to the Deal Agent and the Purchasers at such time (whether due or
accrued).
Agreement: This Receivables Purchase Agreement, dated as of September 30, 1998,
as amended, modified, supplemented or restated from time to time.
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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, any Excluded Amounts and
any Equipment including all proceeds from any sale or other disposition
of such Equipment;
(ii) the Contract Files;
(iii) 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;
(iv) all Insurance Proceeds with respect to each such Contract;
(v) all Related Security;
(vi) all Source Agreements and Source Agreement Rights to the
extent that they relate to any Contract and any Equipment covered by the
Contracts; and
(vii) other than as specifically excluded in clause (i) above, 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 + R
-------
ADCB
where:
C = equals the Capital in respect of such Asset Interest.
R = equals the aggregate Reserves in respect of such Asset
Interest.
Asset Pool: At any time, all then outstanding Assets.
Assignment and Acceptance: An assignment and acceptance entered into by an
Investor and an Eligible Assignee, and accepted by the Deal Agent, in
substantially the form of Exhibit D hereto.
Backup Servicer: Norwest Bank Minnesota, National Association.
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Backup Servicer and Collateral Custodian Fee Letter: The letter dated as of the
Closing Date, among ABL, the Deal Agent, the Backup Servicer and Collateral
Custodian setting forth among other things the Backup Servicer Fee and the
Collateral Custodian Fee.
Backup Servicer Expenses: The reasonable out-of-pocket expenses to be paid to
the Backup Servicer under the Backup Servicer and Collateral Custodian Fee
Letter.
Backup Servicer Fee: The fee set forth as the "Backup Servicer Fee" in the
Backup Servicer and Collateral Custodian Fee Letter, dated as of the Closing
Date.
Backup Servicer Fee Rate: The rate per annum set forth as the "Backup Servicer
Fee Rate" in the Backup Servicer and Collateral Custodian Fee Letter, dated as
of the Closing Date.
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.
Breakage Costs: Any amount or amounts as shall compensate a Purchaser for any
loss, cost or expense incurred by such Purchaser (as reasonably determined by
such Purchaser) as a result of a prepayment by the Seller of Capital or Yield
pursuant to the terms hereof.
Business Day: Any day of the year other than a Saturday or a Sunday on which (a)
banks are not required or authorized to be closed in New York City,
Philadelphia, Pennsylvania, Minneapolis, Minnesota or Charlotte, North Carolina,
and (b) if the term "Business Day" is used in connection with the LIBOR 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, an amount equal to: (i) ADCB minus (ii) the product
of ADCB and the Minimum Overcollateralization Percentage.
Casualty Loss: With respect to any item of Equipment, the loss, theft, damage
beyond commercially reasonable repair or governmental condemnation or seizure of
such item of Equipment.
4
Casualty Loss Contract: Any Contract that is subject to a Casualty Loss.
Closing Date: October 15, 1998.
Code: The Internal Revenue Code of 1986, as amended.
Collateral Custodian: Norwest Bank Minnesota, National Association.
Collateral Custodian Expenses: The reasonable out-of-pocket expenses to be paid
to the Collateral Custodian under the Backup Servicer and Collateral Custodian
Fee Letter.
Collateral Custodian Fee Rate: The rate per annum set forth as the "Collateral
Custodian Fee" in the Backup Servicer and Collateral Custodian Fee Letter, dated
as of the Closing Date.
Collection Account: As defined in Section 6.2(f).
Collection Date: The date following the Termination Date on which the aggregate
outstanding Capital has been reduced to zero, the Purchasers have received all
Yield and other amounts due to the Purchasers in connection with this Agreement
each Hedge Transaction has been terminated and each Hedge Counterparty has
received all amounts owing to it under its respective Hedging Agreement and the
Deal Agent has received all amounts due to it in connection with this Agreement.
Collections: (a) All cash collections and other cash proceeds of any Asset,
including, without limitation, Scheduled Payments, Prepayments, Insurance
Proceeds and Recoveries, any Residual Proceeds, any payment due from the Obligor
of such Contract at the expiration or other termination of such Contract, any
payments in connection with a Warranty Event, all as related to amounts
attributable to the Contracts in the Asset Pool, but excluding any Excluded
Amounts, (b) any other funds received by the Seller or the Servicer with respect
to any Contract, and (c) all payments received pursuant to any Hedging Agreement
or Hedge Transaction.
Commercial Paper Notes: On any day, any short-term promissory notes issued by
VFCC with respect to financing its purchase of an Asset Interest hereunder.
Commitment: For each Investor, the commitment of such Investor to make purchases
from the Seller in an amount not to exceed the amount set forth opposite such
Investor's name on the signature pages of this Agreement, as such amount may be
modified in accordance with the terms hereof.
Commitment Termination Date: October 14, 1999 or such later date to which the
Commitment Termination Date may be extended (if extended) in the sole discretion
of VFCC and each Investor in accordance with the terms of Section 2.1(b).
Contract: Any lease of Equipment by the Originator or by a Source, in each case
as lessor, to an Obligor.
5
Contract File: With respect to each Contract, (1) a certified copy of the master
Contract, if applicable, (2) the executed original counterpart of the Contract
that constitutes "chattel paper" or an "instrument" for purposes of Sections
9-105(1)(b), 9-105(1)(i) or 9-305 of the UCC, legended to reflect the security
interest of the Deal Agent, as agent for the Secured Parties, (3) an original
certificate, executed by an Obligor, evidencing delivery and acceptance of the
Equipment, (4) Obligor's corporate resolutions and secretary's certificate, if
required under the Credit and Collection Policy, (5) a guaranty, if any, (6)
copies of documentation relating to the purchase of the Equipment, (7) documents
evidencing or related to any Insurance Policy (such documents required to be
included therein only with respect to Equipment which had an Original Equipment
Cost of more than $100,000), (8) evidence of filing or copies of all UCC
financing statements filed with respect to the Equipment or the Contract in
accordance with the Filing Requirements, (9) a certified copy of the related
sale and assignment between the Source and the related Originator if applicable,
(10) copies of any additional Contract documents evidencing any changes or
modifications of a Contract by the Servicer in accordance with the terms of the
Servicing Agreement, and (11) reference to the applicable contract management
code on the Contract Management System and any other documents relating thereto
held by American Business Leasing, Inc., as Servicer.
Contract List: The contract list provided by the Seller to the Deal Agent and
the Collateral Custodian, in the form of Schedule V hereto.
Contract Management System: The computerized electronic contract management
system maintained by the Servicer for all Contracts and other agreements similar
to the Contracts, as the same may be modified from time to time.
Contribution Agreement: The Contribution Agreement, dated as of the date hereof
between the Originator and ABFS Residual, as amended, modified, supplemented or
restated from time to time.
Credit and Collection Policy: The written credit and collection policies of the
Originator and Servicer in effect on the date hereof, and attached hereto as
Exhibit I, as the same may be amended or supplemented from time to time in
accordance with Section 4.1(j).
Custodian's Contract File: With respect to each Contract, (1) a certified copy
of the master Contract, if applicable, (2) the executed original counterpart of
the Contract, (3) a certified copy of the certificate evidencing delivery and
acceptance of the Equipment, (4) documents evidencing or related to any
Insurance Policy (such documents required to be included therein only with
respect to Equipment which had an Original Equipment cost of more than $100,000)
and (5) evidence of filing or copies of all UCC financing statements filed with
respect to the Equipment or Contracts in accordance with the Filing
Requirements.
Cut Off Date: With respect to each Existing Contract, October 1, 1998, and with
respect to each Additional Contract, the related Additional Cut Off Date.
Dealer Fee: The fee set forth as the "Dealer Fee" in the Fee Letter.
6
Dealer Fee Rate: The rate set forth as the "Dealer Fee Rate" in the Fee Letter.
Default Ratio: With respect to any Payment Date, twelve times the percentage
equivalent of a fraction, the numerator of which is equal to the Discounted
Contract Balances of all Contracts that become Defaulted Contracts during the
three (3) immediately preceding calendar months (regardless of whether a
Substitute Contract was provided therefor) less all Recoveries received during
the three (3) immediately preceding calendar months and the denominator of which
is equal to the ADCB of all Contracts as of the three (3) Determination Dates
immediately preceding such Payment Date.
Default Ratio Trigger Event: Unless waived by the Deal Agent (in its sole
discretion), any Payment Date on which the Default Ratio for such Payment Date
exceeds 2.75%.
Defaulted Contract: A Contract in the Asset Pool as to which (i) the Servicer
has determined or should have determined in accordance with its Credit and
Collection Policy that such Contract is not collectible, (ii) the Servicer has
elected not to make a Servicer Advance or for which the Servicer has determined
that a prior Servicer Advance is not recoverable, or (iii) the Obligor
thereunder is delinquent as to all or any part equal to more than 10% of more
than four Scheduled Payments; provided, however, if the Scheduled Payments with
respect to a Contract in the Asset Pool are due on a periodic basis less
frequently than monthly then in no event shall all or any part equal to more
than 10% of a Scheduled Payment be more than 120 days past its original due date
under the Contract.
Delinquency Ratio: With respect to any Payment Date, the percentage equivalent
of a fraction, the numerator of which is the Discounted Contract Balance of all
Contracts as to which all or any portion equal to more than 10% of a Scheduled
Payment remained unpaid for more than 60 days from its original due date under
the Contract determined as of the Determination Date immediately preceding such
Payment Date and the denominator of which is the ADCB as of such Determination
Date.
Delinquency Ratio Trigger Event: Unless waived by the Deal Agent (in its sole
discretion), any Payment Date on which the average Delinquency Ratios for such
Payment Date and the two immediately preceding Payment Dates exceeds 3.5%.
Delinquent Contract: A Contract in the Asset Pool as to which all or a portion
equal to more than 10% of any one or more Scheduled Payments is 30 days or more
past due.
Derivatives: Any exchange-traded or over-the-counter (i) forward, future,
option, swap, cap, collar, floor, foreign exchange contract, any combination
thereof, whether for physical delivery or cash settlement, relating to any
interest rate, interest rate index, currency, currency exchange rate, currency
exchange rate index, debt instrument, debt price, debt index, depositary
instrument, depositary price, depositary index, equity instrument, equity price,
equity index, commodity, commodity price or commodity index, (ii) any similar
transaction, contract, instrument, undertaking or security, or (iii) any
transaction, contract, instrument, undertaking or security containing any of the
foregoing.
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Determination Date: The last Business Day of each calendar month.
Discount Rate: (a) with respect to each Contract in a Floating Rate Tranche,
prior to the conversion of such Floating Rate Tranche to a Fixed Rate Tranche, a
rate per annum equal to the rate set upon the commencement of such Floating Rate
Tranche by the Deal Agent with the approval of the Seller which in no event may
exceed the greater of (i) the Treasury Rate plus 2.25%, or (ii) the Adjusted
Eurodollar Rate plus 2.25% (such rate to include the Program Fee Rate, the
Dealer Fee Rate, the Servicing Fee Rate, the Backup Servicing Fee Rate), and (b)
with respect to each Contract in a Fixed Rate Tranche, a rate per annum equal to
the sum of (i) the applicable Hedge Rate for such Tranche as identified by the
Servicer pursuant to the provisions of Section 5.4(a), (ii) the Program Fee
Rate, (iii) the Dealer Fee Rate, (iv) the Servicing Fee Rate, and (v) the Backup
Servicing Fee Rate; provided, however, that upon the occurrence of a Tranche
Rate Lock Event with respect to any Tranche, any remaining Scheduled Payments
due under a Contract in such Tranche shall be rediscounted using the Discount
Rate applicable to Contracts in a Fixed Rate Tranche.
Discounted Contract Balance: With respect to any Contract, as of any date of
determination, the present value of all remaining Scheduled Payments becoming
due under such Contract after such date discounted monthly at the applicable
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 unsecured debt rating is at
least A-1 from S&P and P-1 from Moody's, or whose obligations under this
Agreement are guaranteed by a Person whose short-term rating is at least A-1
from S&P and P-1 from Moody's, or (b) such other Person satisfactory to VFCC,
the Deal Agent and each of the rating agencies rating the Commercial Paper Notes
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:
8
(a) the information delivered under the Purchase Agreement 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, 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 30
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) such Contract complies with the Credit and Collection Policies of
the Originator and the Servicer and has not been rewritten, excluded or
otherwise modified, except in accordance with the Credit and Collection
Policies;
(f) the Contract is a valid and binding payment obligation of the
Obligor and is enforceable in all material respects 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 does not provide for any 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) 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) the Deal Agent, as agent for the
Secured Parties has a fully perfected Lien of the first priority in the Contract
and in any related Equipment;
(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 a first priority security 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;
9
(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 Initial Purchase Date, with respect to an Existing
Contract, or the Addition Date, with respect to an Additional Contract);
(o) the obligations of the related Obligor to the Seller 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) no adverse selection procedure was used in selecting the Contract
for the Asset Pool;
(q) 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 Credit and Collection Policies;
(r) the Contract is not a "consumer lease" as defined in Section
2A-103(l)(e) of the UCC;
(s) 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;
(t) 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;
(u) the Obligor under the Contract is required to maintain the
Equipment in good working order, subject to reasonable wear and tear, and bear
all costs of operating the Equipment (including the payment of Taxes);
(v) no provision of such Contract provides for a Prepayment Amount less
than the amount calculated in accordance with the definition of Prepayment
Amount;
(w) the Contract has not been terminated as a result of a Casualty Loss
to the related Equipment or for any other reason;
(x) 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;
10
(y) the Discounted Contract Balance of such Contract does not include
the amount of any security deposit held by the Servicer or the Seller;
(z) 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 Discount Rate plus any
past due amounts as of the date of determination;
(aa) 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;
(bb) 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;
(cc) except as otherwise noted in the Contract, such Contract provides
for Scheduled Payments to be made on a regular periodic basis and without any
balloon or lump sum payment;
(dd) the Obligor of such Contract is not an Affiliate of the Originator
or Servicer;
(ee) the Obligor thereunder is in possession of the Equipment related
to such Contract and the Obligor is the end-user of the Equipment and is not
sub-leasing such Equipment to any other sub-obligor;
(ff) any Equipment related to such Contract consisting of titled
vehicles shall be titled in the name of the Deal Agent, as agent for the Secured
Parties; and
(gg) the Source of such Contract is not Danco Leasing or any Affiliate
thereof.
Equipment: The tangible assets financed or leased, as applicable, by an Obligor
pursuant to a Contract, including software only.
ERISA: The U.S. Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
ERISA Affiliate: (a) Any corporation which is a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Code) as the
Seller; (b) A trade or business (whether or not incorporated) under common
control (within the meaning of Section 414(c) of the Code) with the Seller or
(c) A member of the same affiliated service group (within the meaning of Section
414(m) of the Code) as the Seller, any corporation described in clause (a) above
or any trade or business described in clause (b) above.
Eurocurrency Liabilities: As defined in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
11
Eurodollar Disruption Event: The occurrence of any of the following: (a) a
determination by a Purchaser that it would be contrary to law or to the
directive of any central bank or other governmental authority (whether or not
having the force of law) to obtain United States dollars in the London interbank
market to make, fund or maintain any Purchase, (b) the failure of one or more of
the Reference Banks to furnish timely information for purposes of determining
the Adjusted Eurodollar Rate, (c) a determination by a Purchaser that the rate
at which deposits of United States dollars are being offered to such Purchaser
in the London interbank market does not accurately reflect the cost to such
Purchaser of making, funding or maintaining any Purchase or (d) the inability of
a Purchaser to obtain United States dollars in the London interbank market to
make, fund or maintain any Purchase.
Eurodollar Reserve Percentage: Of any Reference Bank for any period, for any
Capital means the percentage applicable during such period (or, if more than one
such percentage shall be so applicable, the daily average of such percentages
for those days in such period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for such Reference Bank with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities having
a term of one, two or three months, as applicable based upon the related LIBOR
Rate.
Excluded Amounts: (a) Any collections on deposit in the Collection Account or
otherwise received by the Servicer on or with respect to the Asset Pool, 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, insurance fees, and
liquidation fees.
Existing Contracts: The Contracts purchased by the Seller under the Purchase
Agreement and owned by the Seller on the Initial Purchase Date.
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 H.15 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.
Federal Leasing: Federal Leasing Corp., a New Jersey corporation.
12
Fee Letter: The letter agreement, the Closing Date, among the Seller, the
Originator and the Deal Agent, setting forth, among other things, the
Structuring Fee, the Program Fee and the Dealer Fee.
Filing Requirements: (a) With respect to each Contract relating to Equipment
with an Original Equipment Cost of $25,000 or more, a UCC-1 financing statement
against the Equipment, naming the Obligor as debtor and related Originator as
secured party, and (b) with respect to each Contract relating to Equipment with
an Original Equipment Cost of $25,000 or more for which the related Source has
filed a UCC-1 financing statement naming the Obligor as debtor, a UCC-3
financing statement assigning the Source's lien on the Equipment to the related
Originator as secured party.
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
16th day of the immediately preceding calendar month (or, with respect to the
first Fixed Period, the Closing Date) and ending on, and including the 15th day
of the calendar month in which such Payment Date occurs.
Fixed Rate Contracts: All Contracts in a Fixed Rate Tranche.
Fixed Rate Tranche: Any one or more Contracts as to which a Tranche Rate Lock
Event has occurred and as to which the Servicer has identified a Hedging
Agreement.
Floating Rate Tranche: All Contracts as to which a Tranche Rate Lock Event has
not occurred.
GAAP: Generally accepted accounting principles as in effect from time to time
the United States.
Governmental Authority: With respect to any Person, any nation or government,
any state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator having jurisdiction over
such Person.
H.15: Federal Reserve Board Statistical Release H.15.
Hedge Breakage Costs: For any Hedge Transaction, any amount payable by the
Seller for the early termination of that Hedge Transaction or any portion
thereof.
Hedge Counterparty: Any entity which (a) on the date of entering into any Hedge
Transaction (i) is an interest rate swap dealer that is either a Purchaser or an
Affiliate of a Purchaser, or has been approved in writing by the Deal Agent
(which approval shall not be unreasonably withheld), and (ii) has a long-term
unsecured debt rating of not less than "A" by S&P and not less than "A-2" by
▇▇▇▇▇'▇ ("Long-term Rating Requirement") and a short-term unsecured debt rating
of not less than "A-1" by S&P and not less than "P-1" by ▇▇▇▇▇'▇ ("Short-term
Rating Requirement"), and (b) in a Hedging Agreement (i) consents to the
assignment of the Seller's rights under the Hedging Agreement to the Deal Agent
pursuant to Section 5.4(c) and (ii) agrees that in the event that ▇▇▇▇▇'▇ or S&P
reduces its long-term unsecured debt rating below the Long-term Rating
Requirement, or reduces its short-term unsecured debt rating below the
Short-term Rating Requirement, it shall transfer its rights and obligations
under each Hedging Transaction to another entity that meets the requirements of
clause (a) and (b) hereof and has entered into a Hedging Agreement with the
Seller on or prior to the date of such transfer.
13
Hedge Notional Amount: For any Purchase, the aggregate notional amount in effect
on any day under all Hedge Transactions entered into pursuant to Section 5.4 for
that Purchase.
Hedge Rate: For any Contract to which a Purchase relates, the "Fixed Rate" of
the Hedge Transaction to be used in computing the Discount Rate of that
Contract.
Hedge Transaction: Each interest rate swap transaction between the Seller and a
Hedge Counterparty which is entered into pursuant to Section 5.4 and is governed
by a Hedging Agreement.
Hedging Agreement: Each agreement between the Seller and a Hedge Counterparty
which governs one or more Hedge Transactions entered into pursuant to Section
5.4, which agreement shall consist of a "Master Agreement" in a form published
by the International Swaps and Derivatives Association, Inc., together with a
"Schedule" thereto substantially in the form of Exhibit H hereto or such other
form as the Deal Agent shall approve in writing, and each "Confirmation"
thereunder confirming the specific terms of each such Hedge Transaction.
Increased Costs: Any amounts required to be paid by the Seller to an Affected
Party pursuant to Section 2.14.
Incremental Purchase: Any Purchase that increases the aggregate outstanding
Capital hereunder.
Indebtedness: With respect to any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current liabilities incurred in the ordinary course of
business and payable in accordance with customary trade practices) or which is
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
of such Person under capital leases, (c) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (d) all
liabilities secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof,
and (e) all indebtedness, obligations or liabilities of that Person in respect
of Derivatives.
Indemnified Amounts: As defined in Section 8.1.
Indemnified Persons: As defined in Section 6.19.
Ineligible Contract: As defined in Section 5.5.
Initial Purchase Date: The Business Day that is two (2) Business Days after the
Closing Date.
14
Insolvency Event: With respect to a specified Person, (a) the filing of a decree
or order for relief by a court having jurisdiction in the premises in respect of
such Person or any substantial part of its property in an involuntary case under
any applicable Insolvency Law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Insolvency Law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
Insolvency Laws: The Bankruptcy Code of the United States of America and all
other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
or similar debtor relief laws from time to time in effect affecting the rights
of creditors generally.
Instrument: Any "instrument" (as defined in Article 9 of the UCC), other than an
instrument which constitutes part of chattel paper.
Insurance Policy: With respect to any Contract, an insurance policy covering
physical damage to or loss of the related Equipment.
Insurance Proceeds: Depending on the context, any amounts payable or any
payments made, to the Servicer under any Insurance Policy.
Investment: With respect to any Person, any direct or indirect loan, advance or
investment by such Person in any other Person, whether by means of share
purchase, capital contribution, loan or otherwise, excluding the acquisition of
Assets pursuant to the Purchase Agreement and the Contribution 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.
Jurisdictions: Pennsylvania and New Jersey.
LIBOR Rate: For any day, or the preceding Business Day if such day is not a
Business Day, an interest rate per annum equal to the 30 day LIBOR rate
appearing on the Telerate Page 3750 as of 11:00 a.m. (London time) 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 such
day, 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 of one month and
in an amount approximately equal to the Capital to be funded at a rate based
upon the LIBOR Rate.
15
Lien: With respect to any Asset, (a) any mortgage, lien, pledge, charge security
interest or encumbrance of any kind in respect of such Asset or (b) the interest
of a vendor or lessor under any conditional sale agreement, financing lease or
other title retention agreement relating to such Asset.
Liquidation Expenses: With respect to any Contract, the aggregate amount of all
out-of-pocket expenses reasonably incurred by the Servicer (including amounts
paid to any subservicer) and any reasonably allocated costs of internal counsel,
in each case in accordance with the Servicer's customary procedures in
connection with the repossession, refurbishing and disposition of any related
Equipment upon or after the expiration or earlier termination of such Contract
and other out-of-pocket costs related to the liquidation of any such Equipment,
including the attempted collection of any amount owing pursuant to such Contract
if it is a Defaulted Contract.
Liquidity Bank: Each liquidity bank that is from time to time a party to the
Liquidity Purchase Agreement dated as of September 30, 1998, among the
Purchaser, First Union, as liquidity agent, and each other liquidity bank a
party thereto.
Liquidity Purchase Agreement: The Liquidity Purchase Agreement, dated as of the
date hereof, between VFCC, as seller, the Investors, named therein, FCM, as deal
agent and documentation agent, FUNB, as liquidity agent.
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.
Market Servicing Fee: As defined in Section 6.26.
Market Servicing Fee Differential: On any date of determination, an amount equal
to the positive difference between the Market Servicing Fee and the Servicing
Fee.
16
Minimum Overcollateralization Percentage: Shall be: (A) 12%, or (B) after a term
securitization by the Seller or a special purpose subsidiary established by the
Seller (in the sole discretion of the Deal Agent), the greater of (i) 12%, or
(ii) the percentage equivalent of a fraction, the numerator of which is equal to
11 times the Discounted Contract Balances of all Contracts as to which all or a
portion of any one or more Scheduled Payment is 60 days or more past due as of
such date of determination and the denominator of which is the ADCB as of such
date of determination.
Monthly Period: As to any Determination Date, the calendar month ended on such
Determination Date.
Monthly Report: As defined in Section 6.13(a).
▇▇▇▇▇'▇: ▇▇▇▇▇'▇ 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.
Notice of Sale: A notice, substantially in the form of Exhibit A hereto,
delivered pursuant to Section 2.2 or 2.7(b).
Obligor: With respect to any Contract, the Person or Persons obligated to make
payments pursuant to a Contract, including any guarantor thereof. For purposes
of calculating any of the Portfolio Concentration Criteria, all Contracts in the
Asset Pool or to be transferred to the Asset Pool the Obligor of which is an
Affiliate of another Obligor shall be aggregated with all Contracts of such
other Obligor, for example, if Corporation A is an Affiliate of Corporation B;
and the aggregate Discounted Contract Balance of all of Corporation A's
Contracts in the Asset Pool constitutes 10% of the ADCB and the aggregate
Discounted Contract Balance of all of Corporation B's Contracts in the Asset
Pool constitutes 10% of the ADCB, the Obligor concentration for Corporation A
would be 20% and the Obligor concentration for Corporation B would be 20%.
Officer's Certificate: A certificate signed by any officer of the Seller or the
Servicer, as the case may be, and delivered to the Collateral Custodian.
Opinion of Counsel: A written opinion of counsel, who may be in-house 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.
Original Equipment Cost: The amount paid for the Equipment to be leased pursuant
to a Contract by the Seller. The Original Equipment Cost includes only the cost
of the actual Equipment being leased, and not any boot collateral included
therewith.
17
Originator: Individually and collectively, ABL and Federal Leasing.
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 positive difference between (i) the ADCB
on such day and (ii) the aggregate Capital on such day.
Overcollateralization Percentage: On any date of determination, the percentage
equivalent of a fraction, the numerator of which is equal to the ADCB on such
day minus the aggregate Capital outstanding on such day and the denominator of
which is equal to the ADCB 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, commencing on November 20, 1998.
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 ▇▇▇▇▇'▇;
(d) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clauses (a), (b) and (c) above
entered into with any bank of the type described in clause (c) above;
(e) commercial paper rated at least A-1 by S&P and P-1 by ▇▇▇▇▇'▇; 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 ▇▇▇▇▇'▇.
18
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 Secured Parties 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 and ABFS Residual created pursuant
to a Contribution Agreement and transferred to the Asset Pool hereunder
and (iv) Liens in favor of the Deal Agent as agent for the Secured
Parties 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.
Pledge and Security Agreement: The Pledge and Security Agreement, dated as of
the date hereof, between ABFS Residual and FCM.
Pool Asset: 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 (i) $450,000 and (ii)
1.5% of the ADCB on such day;
(b) the Contract has a remaining term to maturity of not greater than
60 months, provided, however, that up to 5% (by ADCB) may have a remaining term
to maturity of not greater than 84 months;
(c) the sum of the Discounted Contract Balances of the 25 Obligors with
the largest aggregate Discounted Contract Balances is limited to 15% of the
ADCB;
(d) the sum of the Discounted Contract Balances of Contracts whose
Obligors (including its Affiliates) located in any one state is limited to 10%
of the ADCB (with the exception of the state of California which is limited to
30% of the ADCB and the state of Florida which is limited to 15% of the ADCB);
(e) 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;
19
(f) the sum of the Discounted Contract Balances of Contracts the
payment terms of which are non-monthly is limited to 5% of the ADCB;
(g) no one Source (including its Affiliates) has originated more than
5% of the ADCB, except as consented to by the Deal Agent, and no more than 25%
of the ADCB will be originated by Sources;
(h) each Contract was either originated by an Originator or acquired by
an Originator from a Source;
(i) not more than 2% of the ADCB of the Contracts will represent
software only Contracts;
(j) as of any Cut Off Date, no Contract has a final Scheduled Payment
which is more than five times the amount of the regular Scheduled Payments on
such Contract;
(k) none of the Contracts relating to surveillance Equipment are
Contracts for which the related Originator is responsible for the provision of
maintenance services to or on behalf of the related Obligor; and
(l) the sum of the Discounted Contract Balances of Contracts whose
Obligors (including its Affiliates) are located in any territories of the United
States, governed by United States law, is limited to 1% of the ADCB;
(m) less than 1.5% of the Contracts by ADCB relate to Equipment which
is restaurant equipment;
(n) less than 0.5% of the Contracts by ADCB relate to Equipment which
is signs; and
(o) less than 5% of the Contracts by ADCB relate to Equipment which is
used equipment.
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.
20
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: The fee set forth as the "Program Fee" in the Fee Letter.
Program Fee Rate: The rate set forth as the "Program Fee Rate" in the Fee
Letter.
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 Initial Purchase Date, and as to any Incremental Purchase,
any Business Day that is (i) at least five (5) Business Days immediately
following the receipt by the Deal Agent of a written request by the Seller to
sell an Asset Interest, such notice to be in the form of Exhibit A hereto and to
conform to requirements of Section 3.2 hereof, and (ii) within two (2) Business
Days of the satisfaction of all the conditions set forth in this Agreement for
such Purchase, including but not limited to Sections 2.2 and 3.2.
Purchase Limit: At any time, $100,000,000, on or after the Termination Date, the
"Purchase Limit" shall mean the then 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.
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.
21
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).
Related Security: With respect to any Contract included as part of the Asset
Pool (i) all of the Seller's right, title and interest in and to the Contract or
other agreements that relate thereto (including each master lease to the extent
it relates to any Contract in the Asset Pool), (ii) all of the Seller's interest
in the Equipment related to such Contract, (iii) all of the Seller's right,
title and interest in all security interests or liens and property subject
thereto from time to time purporting to secure payment of such Contract,
including any security deposits and prepaid rent, (iv) all UCC financing
statements covering any collateral securing payment of such Contract, (v) all of
the Seller's right, title and interest in all guarantees and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Contract, and (vi) all of the Seller's rights or claims with
respect thereto under the Purchase and Sale Agreement. Related Security shall
not include any Excluded Amounts.
Replaced Contract: As defined in Section 2.17(a).
Reporting Date: The 18th day of the month or the first Business Day thereafter.
Required Investors: At a particular time, Investors with Commitments in excess
of 66 2/3 % of the Purchase Limit.
Required Reports: Collectively, the Monthly Report, the Servicer's Certificate
and the quarterly financial statement of the Servicer required to be delivered
to the Deal Agent pursuant to Section 6.13(c) hereof.
Requirements of Law: For any Person shall mean the certificate of incorporation
or articles of association and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or order or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act, and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
Reserve Percentage: For any day, a fraction, expressed as a percentage, the
numerator of which is the Minimum Overcollateralization Percentage and the
denominator of which is 100% minus the Minimum Overcollateralization Percentage.
22
Reserves: As to any Asset Interest on any day, an amount equal to the Reserve
Percentage multiplied by the Capital of such Asset Interest as of the close of
business of the Deal Agent on such day.
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, 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.
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 ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. and any successor thereto.
Scheduled Payments: On any Determination Date with respect to any Contract, 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.
Secured Party: (i) Each Purchaser and (ii) each Hedge Counterparty that is
either a Purchaser or an Affiliate of a Purchaser if that Affiliate is a Hedge
Counterparty executes a counterpart of this Agreement agreeing to be bound by
the terms of this Agreement applicable to a Secured Party.
Seller: American Business Lease Funding Corporation, or any permitted successor
thereto.
Servicer: American Business 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(a).
Servicing Fee Rate: A rate equal to 0.50% per annum.
23
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.
Source: A third party from whom the Originator acquired the Contracts.
Source Agreement: An agreement between the Originator and a Source pursuant to
which the Originator acquired all right, title and interest of the Source in and
to a Contract and related Equipment.
Source Agreement Rights: Any and all rights of the Originator under the Source
Agreement with respect to such Source to the extent such Source Agreement
relates to any Contract and any Equipment covered by the Contracts.
Structuring Fee: The structuring fee agreed to between the Seller and the Deal
Agent in the Fee Letter.
Substitute Contract: On any day, an Eligible Contract which meets each of the
conditions for substitution set forth in Section 2.17.
Successor Servicer: As defined in Section 6.25(a).
Taxes: Any present or future taxes, levies, imposts, duties, charges,
assessments or fees of any nature (including interest, penalties, and additions
thereto) that are imposed by any government or other taxing authority.
Termination Date: The earliest of (a) the date of termination of the Purchase
Limit pursuant to Section 2.3, (b) the date of the occurrence of a Restricting
Event pursuant to Section 7.2, (c) the date the Liquidity Purchase Agreement
shall cease to be in full force and effect, and (d) Commitment Termination Date.
Termination Notice: As defined in Section 6.24.
Tranche: The Floating Rate Tranche or any Fixed Rate Tranche, as the context may
require.
Tranche Rate Lock Date: The date that is no more than two (2) Business Days
after the occurrence of any Tranche Rate Lock Event.
24
Tranche Rate Lock Event: The occurrence of any of the following events: (i) the
Adjusted Eurodollar Rate, as of any date of determination, plus 1.75% is greater
than or equal to the Discount Rate with respect to such Tranche, (ii) the three
year treasury rate plus 1.25% is greater than or equal to the Discount Rate with
respect to such Tranche, (iii) the designation of a date by the Seller provided
that the Deal Agent and Purchasers shall receive written notice at least two (2)
Business Days prior to the date designated by the Seller, or (iv) a Restricting
Event.
Transaction: As defined in Section 3.2.
Transaction Documents: This Agreement, the Purchase Agreement, the Contribution
Agreement, the Liquidity Purchase Agreement, the Pledge and Security Agreement
and any additional document the execution of which is necessary or incidental to
carrying out the terms of the foregoing documents.
Transition Costs: The reasonable costs and expenses incurred by the Backup
Servicer in transitioning to Servicer; provided, that in no event shall such
costs exceed $50,000 in the aggregate.
Treasury Rate: With respect to each Tranche, the interpolated treasury rate
based on the weighted average life of such Tranche. The treasury rates to be
used in the calculation shall be obtained from Bloomberg's "PX1" screen at 11:00
a.m. New York City time two (2) Business Days preceding such Purchase Date.
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 sum of the products
(for each day during such Fixed Period) of:
YR x C x 1
---
360
where:
C = the Capital of such Asset Interest.
YR = the Yield Rate applicable on such day.
25
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: With respect to any Fixed Period and for each Asset
Interest purchased by a Purchaser for each day during such period, a rate equal
to the daily Adjusted Eurodollar Rate; provided, however, the Yield Rate shall
be the Base Rate if the relevant Lender shall have notified the Deal Agent that
a Eurodollar Disruption Event has occurred.
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 during the period from the date hereof to but not including
the Termination Date, at its option, sell and assign Asset Interests to the
Purchasers. The Deal Agent may act on behalf of and for the benefit of the
Purchasers in this regard. VFCC may, in its sole discretion, purchase, or if
VFCC shall decline to purchase, the Liquidity Agent shall purchase on behalf of
the Investors, Asset Interests from time to time during the period from the date
hereof to but not including the Termination Date. Under no circumstances shall
any Purchaser make the initial Purchase or any Incremental Purchase if, after
giving effect to such Purchase or Incremental Purchase, the aggregate Capital
outstanding hereunder would exceed the lesser of (i) the Purchase Limit or (ii)
the Capital Limit. Each Asset Interest purchased by any Purchaser hereunder is
subject to the interests of the Hedge Counterparties under Sections 2.7(a)(i),
2.8(a)(i) and 2.9 (b)(i) of this Agreement.
(b) The Seller may, within 60 days, but no later than 45 days, prior to
the then existing Commitment Termination Date, by written notice to the Deal
Agent, make written request for VFCC and the Investors to extend the Commitment
Termination Date for an additional period of 364 days. The Deal Agent will give
prompt notice to VFCC and each of the Investors of its receipt of such request
for extension of the Commitment Termination Date. VFCC and each Investor shall
make a determination, in their sole discretion and after a full credit review,
not less than 15 days prior to the then applicable Commitment Termination Date
as to whether or not it will agree to extend the Commitment Termination Date;
provided, however, that the failure of VFCC or any Investor to make a timely
response to the Seller's request for extension of the Commitment Termination
Date shall be deemed to constitute a refusal by VFCC or the Investor, as the
case may be, to extend the Commitment Termination Date. The Commitment
Termination Date shall only be extended upon the consent of both (i) VFCC and
(ii) 100% of the Investors.
26
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 five (5)
Business Days prior to such proposed Purchase Date and each such notice shall
specify (i) the aggregate amount of such initial Purchase or Incremental
Purchase which amount must satisfy the applicable minimum requirement set forth
in the following sentence and (ii) the date of such Purchase or Incremental
Purchase. The Seller may deliver up to two notices in a calendar month (or more
frequently subject to the prior written consent of the Deal Agent), and each
amount specified in any such notice must satisfy the following minimum
requirements, as applicable, as a condition to the related Purchase the initial
Purchase and each Incremental Purchase hereunder shall be in an amount equal to
$1,000,000 or an integral multiple of $1.00 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.
27
Section 2.3 Reduction of the Purchase Limit; Repurchase.
The Seller may, upon at least five (5) 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 shall be irrevocable.
Section 2.4 Determination of Yield.
The Deal Agent shall determine the Yield (including unpaid Yield, if
any, due and payable on a prior Payment Date) to be paid on each Payment Date
for the Fixed Period and shall advise the Servicer thereof on the first Business
Day after the Fixed Period.
Section 2.5 [reserved].
Section 2.6 Dividing or Combining Asset Interests.
The Deal Agent may, with the consent of a Purchaser, take any of the
following actions at the end of such Fixed Period with respect to any Asset
Interest: (i) divide the Asset Interest owned by such Purchaser into two or more
portions of Asset Interests having aggregate Capital equal to the Capital of
such divided Asset Interest, (ii) combine one portion of an Asset Interest of
such Purchaser with another portion of an Asset Interest of such Purchaser with
a Fixed Period ending on the same day, creating a new portion of an Asset
Interest having Capital equal to the Capital of the two portions of Asset
Interest combined or (iii) combine the Asset Interest of such Purchaser with the
Asset Interest to be purchased on such day by such Purchaser, creating a new
Asset Interest having Capital equal to the Capital of the two Asset Interests
combined; provided, that an Asset Interest of VFCC may not be combined with an
Asset Interest of the Investors.
Section 2.7 Non-Liquidation Settlement Procedures.
The provisions of this Section 2.7 shall apply during the term of this
Agreement prior to the occurrence of the Termination Date.
(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 pursuant to Section 6.3, the following amounts
in the following order of priority:
(i) FIRST, pro rata to each Hedge Counterparty, any amounts,
including any Hedge Breakage Costs, owing that Hedge Counterparty under
its respective Hedging Agreement in respect of any Hedge
Transaction(s), for the payment thereof;
(ii) SECOND, to the Servicer, in an amount equal to any
Unreimbursed Servicer Advances, for the payment thereof;
28
(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 by ABL, 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 by ABL, 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, Dealer 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 not paid by ABL, to the Backup
Servicer and to the Collateral Custodian, and to any Successor
Servicer, as applicable, in an amount equal to any accrued and unpaid
Transition Costs, Backup Servicer Expenses, Collateral Custodian
Expenses, and Market Servicing Fee Differential, for the payment
thereof;
(x) TENTH, to the extent that funds are available, any
remaining amounts may be reinvested in Eligible Contracts; provided,
however, that if the aggregate Capital exceeds the lesser of (i) the
Capital Limit, or (ii) the Purchase Limit an amount equal to such
excess shall be paid to the Deal Agent to pay down Capital outstanding;
(xi) ELEVENTH, to the extent funds are available to satisfy
any unpaid Indemnified Amounts, amounts required to be paid by the
Seller pursuant to the indemnification provisions of Section 8.1 and
any other amounts due hereunder; and
(xii) TWELFTH, any remaining amount shall be distributed to
the Seller.
(b) Notwithstanding anything to the contrary contained in this Section
2.7 or any other provision in this Agreement, if on any Business Day prior to
the Termination Date the Overcollateralization Percentage is less than the
Minimum Overcollateralization Percentage then, prior to any reinvestment of
funds as set forth in item TENTH of Section 2.7(a) and in any event no later
than the close of business of the Deal Agent on the third succeeding Business
Day, a Notice of Sale shall be delivered by the Seller to the Deal Agent which
will result in an increase in the Overcollateralization Percentage to an amount
equal to the Minimum Overcollateralization Percentage.
29
Section 2.8 Settlement Procedures Following The Commitment Termination
Date.
The provisions of this Section 2.8 shall apply during the term of this
Agreement after the occurrence of the Commitment Termination Date; provided that
no other Restricting Event has occurred:
(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 pursuant to Section 6.3, the following amounts
in the following order of priority:
(i) FIRST, pro rata to each Hedge Counterparty, any amounts,
including any Hedge Breakage Costs, owing that Hedge Counterparty under
its respective Hedging Agreement in respect of any Hedge
Transaction(s), for the payment thereof;
(ii) SECOND, to the Servicer, in an amount equal to any
Unreimbursed Servicer Advances, for the payment thereof;
(iii) THIRD, to the Servicer, in an amount equal to any
accrued and unpaid Servicing Fee arrearage, for the payment thereof;
(iv) FOURTH, to the Servicer, in amount equal to any accrued
and unpaid Servicing Fee, for the payment thereof;
(v) FIFTH, to the extent not paid by ABL, 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 by ABL, 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, Dealer Fee and Yield for such Payment Date;
(viii) EIGHTH, to the Deal Agent for the ratable payment to
each Purchaser in reduction of aggregate Capital to an amount equal to
the lesser of (i) the Capital Limit or (ii) the Purchase Limit;
(ix) NINTH, to the Deal Agent, in the amount of unpaid
Increased Costs and/or Taxes, for payment to the Purchasers in respect
thereof;
(x) TENTH, to the extent not paid by ABL, to the Backup
Servicer, to the Collateral Custodian, and to any Successor Servicer,
as applicable, in an amount equal to any accrued and unpaid Transition
Costs, Backup Servicer Expenses, Collateral Custodian Expenses, and
Market Servicing Fee Differential, for the payment thereof;
30
(xi) ELEVENTH, to the extent funds are available to satisfy
any unpaid Indemnified Amounts, amounts required to be paid by the
Seller pursuant to the indemnification provisions of Section 8.1 and
any other amounts due hereunder; and
(xii) TWELFTH, any remaining amount shall be distributed to
the Seller
Section 2.9 Settlement Procedures Following a Termination Date.
The provisions of this Section 2.9 shall apply during the term of this
Agreement after the occurrence of the Termination Date:
(a) [reserved].
(b) On each Payment Date, the Servicer shall pay to the following
Persons, from (i) the Collection Account, to the extent available funds and (ii)
a Servicer Advance if made or required pursuant to Section 6.3, the following
amounts in the following order of priority:
(i) FIRST, pro rata to each Hedge Counterparty, any amounts,
including any Hedge Breakage Costs, owing that Hedge Counterparty under
its respective Hedging Agreement in respect of any Hedge
Transaction(s), for the payment thereof;
(ii) SECOND, to the Servicer, in an amount equal to any
Unreimbursed Servicer Advances, for the payment thereof;
(iii) THIRD, to the Servicer, in an amount equal to any accrued and
unpaid Servicing Fee arrearage, for the payment thereof;
(iv) FOURTH, to the Servicer, in an amount equal to any accrued and
unpaid Servicing Fee, for the payment thereof;
(v) FIFTH, to the extent not paid by ABL, 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 by ABL, 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, Dealer 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 not paid by ABL, to the Backup Servicer,
to the Collateral Custodian, and to any Successor Servicer, as
applicable, in an amount equal to any accrued and unpaid Transition
Costs, Backup Servicer Expenses, Collateral Custodian Expenses, and
Market Servicing Fee Differential, for the payment thereof;
31
(x) TENTH, to the Deal Agent for payment to the Purchasers in
reduction of aggregate Capital;
(xi) ELEVENTH, to the extent funds are available to satisfy any
unpaid Indemnified Amounts required to be paid by the Seller pursuant
to the indemnification provisions of Section 8.1, and any other amounts
due hereunder; and
(xii) TWELFTH, upon reduction of the Capital to zero and the
payment in full of the Aggregate Unpaids, any remaining amount shall be
distributed to the Seller.
(c) If at any time on or after the occurrence of a Restricting Event,
the Deal Agent or the Seller determines that as of the close of business on the
day immediately preceding the Termination Date the outstanding amount of Capital
exceeded the lesser of (i) the Purchase Limit, or (ii) the Capital Limit, then
the Seller shall immediately remit to the Deal Agent, for the benefit of the
Purchasers, a payment (to be applied by the Deal Agent to outstanding Capital
allocated to Monthly Periods selected by the Deal Agent, in its reasonable
discretion) in such amount as may be necessary to reduce the amount of Capital
to the lesser of (i) the Purchase Limit, or (ii) the Capital Limit as of the
close of business on the date immediately preceding the 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 Tuesday
and Thursday during each calendar week in which 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 by wire transfer, in immediately available
funds.
(b) Initial Deposits. On the Initial Purchase 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 Initial Purchase 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.
32
Section 2.11 Payments, Computations, Etc.
(a) Unless otherwise expressly provided herein, all amounts to be paid
or deposited by the Seller or the Servicer hereunder shall be paid or deposited
in accordance with the terms hereof no later than 11:00 A.M. (Charlotte, North
Carolina time) on the day when due in lawful money of the United States in
immediately available funds to the Agent's Account. The Seller shall, to the
extent permitted by law, pay to the Secured Parties interest on all amounts not
paid or deposited when due hereunder at 1% per annum above the Base Rate,
payable on demand; provided, however, that such interest rate shall not at any
time exceed the maximum rate permitted by applicable law. Such interest shall be
retained by the Deal Agent except to the extent that such failure to make a
timely payment or deposit has continued beyond the date for distribution by the
Deal Agent of such overdue amount to the Secured Parties, in which case such
interest accruing after such date shall be for the account of, and distributed
by the Deal Agent to the Secured Parties. All computations of interest and all
computations of Yield and other fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of Yield, interest or any fee payable hereunder, as the
case may be.
(c) If any Purchase or Incremental Purchase requested by the Seller and
approved by a Purchaser and the Deal Agent pursuant to Section 2.2, is not, for
any reason whatsoever related to a default or nonperformance by the Seller, made
or effectuated, as the case may be, on the date specified therefor, the Seller
shall indemnify such Purchaser against any reasonable loss, cost or expense
incurred by such Purchaser, including, without limitation, any loss cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Purchaser to fund or maintain such Purchase or
Incremental Purchase, as the case may be, during such Monthly Period.
Section 2.12 Optional Repurchase.
At any time following the Termination Date when the ADCB is less than
ten percent of the ADCB as of the Termination Date, the Servicer may notify the
Deal Agent in writing of its intent to purchase all remaining Assets in the
Asset Pool, provided that all Hedge Transactions have been terminated. On the
Payment Date next succeeding any such notice, the Servicer shall purchase all
such Assets for a price equal to the sum of (i) the Aggregate Unpaids, and (ii)
all accrued and unpaid Backup Servicing Fees, Collateral Custodial Fees,
Increased Costs, Taxes, Hedge Breaking Costs, Breakage Costs and any other
amounts payable by the Seller hereunder or under or with respect to any Hedging
Agreement, and the proceeds of such purchase will be deposited into the
Collection Account and paid in accordance with Section 2.9(b).
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Section 2.13 Fees.
(a) The Servicer shall be entitled to receive a fee (the "Servicing
Fee"), monthly in arrears in accordance with Section 2.7(a), 2.8(a) or 2.9(b),
as applicable, which fee shall be equal to the quotient of (a) the product of
(i) the Servicing Fee Rate and (ii) ADCB for the immediately preceding
Determination Date, and (b) 12.
(b) The Seller shall pay to the Deal Agent from the Collection Account
on each Payment Date, monthly in arrears, the Program Fee in accordance with
Section 2.7(a), 2.8(a) or 2.9(b) as applicable.
(c) The Seller shall pay to the Deal Agent from the Collection Account
on each Payment Date, monthly in arrears, the Dealer Fee in accordance with
Section 2.7(a), 2.8(a) or 2.9(b) as applicable.
(d) The Backup Servicer shall be entitled to receive the Backup
Servicing Fee in accordance with Section 2.7(a), 2.8(a) 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(a) or 2.9(b), as applicable.
(f) The Seller shall pay to the Deal Agent, on or prior to the Initial
Purchase 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 based on the overall net income or
net worth 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 (10) Business 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.
(f) Notwithstanding anything to the contrary contained in this Section
2.14, an Affected Party shall provide the Seller with prompt notice of such
Affected Party becoming subject to any additional or increased cost incurred or
reduction suffered by it as described in this Section 2.14; provided, however,
the failure of such Affected Party to provide the Seller with such prompt notice
shall not relieve the Seller of its obligation to indemnify such Affected Party
hereunder.
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 required to pay 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.
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(b) The Seller will indemnify each Purchaser and the Deal Agent for the
full amount of Taxes in respect of which the Seller is required to pay
Additional Amounts (including, without limitation, any Taxes imposed by any
jurisdiction on such Additional Amounts) paid by such Purchaser or the Deal
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto; provided, however, the
Purchaser or the Deal Agent, as appropriate, shall provide the Seller with a
copy of whatever notice it receives in connection with any such Taxes, and shall
give the Seller a reasonable opportunity to challenge in good faith the payment
of such Taxes provided that the Seller provides reasonable assurance
satisfactory to the Purchaser or the Deal Agent, as appropriate, that such
challenged Taxes will be paid upon the resolution of the Seller's challenge and
indemnifies the Purchaser or the Deal Agent for the full amount of such Taxes;
provided, further, however, the failure of the Purchaser or the Deal Agent, as
appropriate, to provide the Seller with notice of such Taxes shall not relieve
the Seller of its obligation to indemnify the Purchaser or the Deal Agent, as
appropriate, hereunder. The 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 (10) Business 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, Form W-8
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.
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(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 the Servicer on behalf of the
Seller therefor, the Deal Agent and the Purchasers, as appropriate, shall
execute and deliver to the Seller such certificates, forms or other documents
which can be furnished consistent with the facts and which are reasonably
necessary to assist the Seller in applying for refunds of Taxes remitted
hereunder; provided, however, that the Deal Agent and the Purchasers shall not
be required to deliver such certificates forms or other documents if it is
determined that the deliverance of such certificate, form or other document
would have a material adverse affect on the Deal Agent or any Purchaser and
provided further, however, that the Seller shall reimburse the Deal Agent or any
such Purchaser for any reasonable expenses incurred in the delivery of such
certificate, form or other document.
(g) If, in connection with an agreement or other document providing
liquidity support, credit enhancement or other similar support to the Purchasers
in connection with this Agreement or the funding or maintenance of Purchases
hereunder, the Purchasers are required to compensate a bank or other financial
institution in respect of Taxes under circumstances similar to those described
in this section then within ten days after demand by the Purchasers, the Seller
shall pay to the Purchasers such additional amount or amounts as may be
necessary to reimburse the Purchasers for any amounts paid by them.
(h) Without prejudice to the survival of any other agreement of the
Seller hereunder, the agreements and obligations of the Seller contained in this
section shall survive the termination of this Agreement.
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Section 2.16 Assignment of the Purchase Agreement.
The Seller hereby represents, warrants and confirms to the Deal Agent
that the Seller has assigned to the Deal Agent, for the ratable benefit of the
Secured Parties hereunder, all of the Seller's right and title to and interest
in the Purchase Agreement. The Seller confirms that following a Restricting
Event the Deal Agent shall have the sole right to enforce the Seller's rights
and remedies under the Purchase Agreement for the benefit of the Secured
Parties, but without any obligation on the part of the Deal Agent, the
Purchasers or any of their respective Affiliates, to perform any of the
obligations of the Seller under the Purchase Agreement. The Seller further
confirms and agrees that such assignment to the Deal Agent shall terminate upon
the Collection Date; provided, however, that the rights of the Deal Agent and
the Secured Parties pursuant to such assignment with respect to rights and
remedies in connection with any indemnities and any breach of any
representation, warranty or covenants made by the Originator pursuant to the
Purchase Agreement, which rights and remedies survive the termination of the
Purchase Agreement, shall be continuing and shall survive any termination of
such assignment.
Section 2.17 Substitution of Contracts.
On any day prior to the occurrence of a Restricting Event, the Seller
may, subject to the conditions set forth in this Section 2.17, replace any
Contract subject to a Warranty Event or in respect of which the Obligor
thereunder has requested the rewriting and/or restructuring of such Contract
with one or more other Contracts (each, a "Substitute Contract"), provided that
no such replacement shall occur unless each of the following conditions is
satisfied as of the date of such replacement and substitution:
(a) the Seller has previously recommended to the Deal Agent (with a
copy to the Collateral Custodian) in writing that the Contract to be replaced
should be replaced (each a "Replaced Contract");
(b) each Substitute Contract is an Eligible Contract on the date of
substitution;
(c) after giving effect to any such substitution, the aggregate of all
outstanding Capital does not exceed the lesser of the (i) Purchase Limit and
(ii) the Capital Limit;
(d) after giving effect to any such substitution the ADCB (at the
applicable Discount Rate) attributable to Substitute Contracts in the Asset Pool
does not exceed ten (10%) percent of the ADCB of the Contracts (at the
applicable Discount Rate) as of the initial Purchase Date after giving effect to
any Purchase on such Date;
(e) the aggregate Discounted Contract Balance (at the applicable
Discount Rate) of such Substitute Contracts shall be equal to or greater than
the aggregate Discounted Contract Balances (at the applicable Discount Rate as
of the date of the inclusion of such Contract in the Asset Pool) of Contracts
being replaced;
(f) such Substitute Contracts, at the time of substitution by the
Seller, shall have approximately the same weighted average life as the Replaced
Contracts;
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(g) 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;
(h) the substitution of any Substitute Contract does not cause a
Restricting Event to occur; and
(i) 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 Custodian's Contract File as required by Section 3.3. In connection with
any such substitution, the Deal Agent as agent for the Secured Parties shall,
automatically and without further action, be deemed to transfer to the Seller,
free and clear of any Lien created pursuant to this Agreement, all of the right,
title and interest of the Deal Agent as agent for the Secured Parties in, to and
under such Replaced Contract, and the Deal Agent as agent for the Secured
Parties shall be deemed to represent and warrant that it has the corporate
authority and has taken all necessary corporate action to accomplish such
transfer, including execution of any UCC-3 termination statements or other UCC
filings that might be required in connection with the transfer to the Seller of
such Replaced Contract, but without any other representation and warranty,
express or implied. Any right of the Deal Agent as agent for the Secured Parties
to substitute any Contract in the Asset Pool pursuant to this Section 2.17 shall
be in addition to, and without limitation of, any other rights and remedies that
the Deal Agent as agent for the Secured Parties or any Secured Party may have to
require the Seller or the Servicer, as applicable, to substitute for, or accept
retransfer of, any Contract pursuant to the terms of this Agreement.
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.1 Conditions Precedent to Initial Purchase.
The initial Purchase hereunder is subject to the condition precedent
that the Deal Agent shall have received on or before the date of such Purchase
the items listed in Schedule I, each (unless otherwise indicated) dated such
date, in form and substance satisfactory to the Deal Agent and the Purchasers.
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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 at least 5 days prior to the date of such
Purchase (other than the initial Purchase, in which case such items shall be
dated at least 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 Restricting Event;
(iii) On and as of such day, after giving effect to such
Transaction, the outstanding Capital does not exceed the lesser of (x)
the Purchase Limit, or (y) the Capital Limit;
(iv) On and as of such day, the Seller and the Servicer each
has performed all of the agreements contained in this Agreement to be
performed by such person at or prior to such day; and
(v) No law or regulation shall prohibit, and no order,
judgment or decree of any federal, state or local court or governmental
body, agency or instrumentality shall prohibit or enjoin, the making of
such Purchase, remittance of Collections or Incremental Purchase by the
Purchaser in accordance with the provisions hereof; and
(c) on the date of such Transaction, the Deal Agent shall have received
such other approvals, opinions or documents as the Deal Agent may reasonably
require.
Section 3.3 Delivery of Contract Files.
As a condition subsequent to each Purchase or substitution of
Substitute Contracts made hereunder, the Seller shall deliver to the Collateral
Custodian, within 10 calendar days after such Purchase or substitution, the
Custodian's Contract Files.
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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) a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, (b) 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, (c) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or conduct of
its business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, have a Material Adverse Effect.
(b) Due Authorization. The Seller has the corporate power and
authority, and the legal right, to make, deliver and perform this Agreement and
each other Transaction Document to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement and each other Transaction Document to which it is a party.
(c) Due Execution. This Agreement has been, and each other Transaction
Document to which the Seller is a party will be, duly executed and delivered on
behalf of the Seller.
(d) No Conflict. The execution and delivery of this Agreement and each
other Transaction Document to which the Seller is a party, the performance by
the Seller of the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not conflict with or result in
any breach of any of the material terms and provisions of, and will not
constitute (with or without notice or lapse of time or both) a default under,
any indenture, contract, agreement, mortgage, deed of trust, or other instrument
to which the Seller is a party or by which it or any of its property is bound.
(e) No Violation. The execution and delivery of this Agreement and each
other Transaction Document to which the Seller is a party, the performance of
the transactions contemplated hereby and thereby and the fulfillment of the
terms hereof and thereof will not conflict with or violate, any Requirements of
Law or contractual obligation applicable to the Seller and will not result in,
or require the creation or imposition of any Lien on any of its properties or
revenues pursuant to any such Requirement of Law or contractual obligation,
except as may be provided herein.
(f) No Proceedings. There are no proceedings, litigation or
investigations pending or, to the knowledge of the Seller, threatened by or
against the Seller or against any of its properties or revenues, before any
court, regulatory body, administrative agency, arbitrator, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
any other Transaction Document to which the Seller is a party, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement any other Transaction Document to which the Seller is a party or (iii)
seeking any determination or ruling that could reasonably be expected to be
adversely determined, and if adversely determined, would have a Material Adverse
Effect.
(g) All Consents Required. All approvals, authorizations, consents,
orders, notices to, filings with, or other actions of any Person or of any
Governmental Authority required in connection with the execution, delivery and
performance, validity or enforceability of this Agreement or any other
Transaction Document to which the Seller is a party have been obtained.
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(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 by it. The Seller has paid or
made adequate provisions for the payment of all Taxes and all assessments made
against it or any of its property (other than any amount of Tax the validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in accordance with generally accepted accounting
principles have been provided on the books of the Seller), and no Tax lien has
been filed and, to the Seller's knowledge, no claim is being asserted, with
respect to any such Tax, fee or other charge.
(l) Agreements Enforceable. This Agreement constitutes, and each other
Transaction Document when executed and delivered will constitute, the legal,
valid and binding obligation of the Seller enforceable against the Seller in
accordance with their respective terms, except as such enforceability may be
limited by Insolvency Laws and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity).
(m) Exchange Act Compliance. No proceeds of any Purchase or Incremental
Purchase will be used by the Seller to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(n) No Liens. Each Asset, together with the Contract related thereto,
shall, at all times, be owned by the Seller free and clear of any Adverse Claim
except as provided herein, and upon each Purchase, remittance of Collections or
Incremental Purchase, the relevant Secured Party shall acquire (subject to
recordation where necessary) a valid and perfected first priority undivided
ownership interest in each Asset then existing or thereafter arising and
Collections with respect thereto, free and clear of any Adverse Claim except as
provided hereunder. No effective financing statement or other instrument similar
in effect covering any Asset or Collections with respect thereto shall at any
time be on file in any recording office except such as may be filed in favor of
the Deal Agent relating to this Agreement.
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(o) Reports Accurate. No Monthly Report (if prepared by the Seller, or
to the extent that information contained therein is supplied by the Seller),
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by the Seller to the Deal Agent or a Purchaser in
connection with this Agreement is or will be inaccurate in any material respect
as of the date it is or shall be dated or (except as otherwise disclosed to the
Deal Agent or such Purchaser, as the case may be, at such time) as of the date
so furnished, and no such document contains or will contain any material
misstatement of fact or omits or shall omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(p) Location of Offices. The principal place of business and chief
executive office of the Seller and the office where the Seller keeps all the
Records are located at the address of the Seller referred to in Section 11.2
hereof (or at such other locations as to which the notice and other requirements
specified in Section 5.2(m) shall have been satisfied).
(q) Lock-Boxes. The names and addresses of all the Lock-Box Banks,
together, with the account numbers of the Lock-Box Accounts of the Seller at
such Lock-Box Banks and the names, addresses and account numbers of all accounts
to which Collections of the Assets outstanding before the initial Purchase
hereunder have been sent, are specified in Schedule II (which shall be deemed to
be amended in respect of terminating or adding any Lock-Box Account or Lock-Box
Bank upon satisfaction of the notice and other requirements specified in respect
thereof).
(r) Tradenames. Except as described in Schedule III, the Seller has no
trade names, fictitious names, assumed names or "doing business as" names or
other names under which it has done or is doing business.
(s) Purchase Agreement. The Purchase Agreement is the only agreement
pursuant to which the Seller purchases Assets.
(t) Value Given. The Seller shall have given reasonably equivalent
value to the Originator in consideration for the transfer to the Seller of the
Assets under the Purchase Agreement, no such transfer shall have been made for
or on account of an antecedent debt owed by the Originator to the Seller, and no
such transfer is or may be voidable or subject to avoidance under any section of
the Bankruptcy Code; no event or circumstance has occurred that would constitute
a Restricting Event pursuant to Section 7.2.
(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.
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(v) Accounting. The Seller accounts for the transfers to it from the
Originator of interests in Assets and Collections under the Purchase Agreement
as sales of such Assets and transfers of Asset Interests as sales of such Asset
Interests in its books, records and financial statements, in each case
consistent with GAAP and with the requirements set forth herein.
(w) Separate Entity. The Seller is operated as an entity with assets
and liabilities distinct from those of the Originator and any Affiliates thereof
(other than the Seller), and the Seller hereby acknowledges that the Deal Agent
and the Secured Parties are entering into the transactions contemplated by this
Agreement in reliance upon the Seller's identity as a separate legal entity from
the Originator and from each such other Affiliate of the Originator.
(x) Security Interest. Except for Permitted Liens, the Seller has
granted a security interest (as defined in the UCC) to the Deal Agent, as agent
for the Secured Parties, in the Assets and Collections in the Asset Pool, which
is enforceable in accordance with applicable law upon execution and delivery of
this Agreement. Upon the filing of UCC-1 financing statements naming the Deal
Agent as secured party and the Seller as debtor, the Deal Agent, as agent for
the Secured Parties, shall have a first priority perfected security interest in
the Assets and Collections (except for any Permitted Liens). All filings
(including, without limitation, such UCC filings) as are necessary in any
Jurisdiction to perfect the interest of the Deal Agent as agent for the Secured
Parties, in the Assets and Collections have been (or prior to the applicable
Purchase will be) made.
(y) Investments. The Seller does not own or hold directly or
indirectly, any capital stock or equity security of, or any equity interest in,
any Person.
(z) Business. Since its incorporation, the Seller has conducted no
business other than the purchase and receipt of Contracts and related assets
from the Originator under the Purchase Agreement, the sale of Contracts under
this Agreement and such other activities as are incidental to the foregoing.
(aa) Investment Company Act. The Seller is not an "investment company"
or a company "controlled" by an "investment" company within the meaning of the
Investment Company Act of 1940, as amended.
(bb) Accuracy of Representations and Warranties. Each representation or
warranty by the Seller contained herein or in any certificate or other document
furnished by the Seller pursuant hereto or in connection herewith is true and
correct in all material respects.
The representations and warranties set forth in this section shall
survive the transfer of the Assets to the Deal Agent as agent for the Secured
Parties. Upon discovery by the Seller, the Servicer, any Secured Party, the
Liquidity Agent or the Deal Agent of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the others.
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Section 4.2 Representations and Warranties of Seller Relating to the
Agreement and the Contracts.
The Seller hereby represents and warrants to the Deal Agent, each
Secured Party, the Liquidity Agent and each Investor that, as of the Initial
Purchase Date and as of each Addition Date:
(a) Binding, Obligation, Valid Transfer and Security Interest.
(i) This Agreement and the Purchase Agreement each constitute
legal, valid and binding obligations of the Seller, enforceable against
the Seller in accordance with its terms, except as such enforceability
may be limited by Insolvency Laws and except as such enforceability may
be limited by general principles of equity (whether considered in a
suit at law or in equity).
(ii) This Agreement constitutes either (A) a valid transfer to
the Deal Agent as agent for the Secured Parties of all right, title and
interest of the Seller in, to and under all Assets in the Asset Pool to
the extent of the Asset Interest, and such transfer will be free and
clear of any Lien of any Person claiming through or under the Seller or
its Affiliates, except for Permitted Liens, or (B) a grant of a
security interest in all Assets in the Asset Pool to the Deal Agent as
agent for the Secured Parties.
(b) Eligibility of Contracts. As of the Initial Purchase 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 Initial Purchase Date and the information contained therein with
respect to the identity of such Contracts and the amounts owing thereunder is
true and correct in all material respects as of the related Cut Off Date, (ii)
each such Contract is an Eligible Contract, (iii) each such Contract and the
related Equipment is free and clear of any Lien of any Person (other than
Permitted Liens) and in compliance with all Requirements of Law applicable to
the Seller and (iv) with respect to each such Contract, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by the Seller
in connection with the transfer of an interest in such Contract and the related
Equipment to the Deal Agent as agent for the Secured Parties have been duly
obtained, effected or given and are in full force and effect. On each Addition
Date on which Additional Contracts are added by the Seller to the Asset Pool,
the Seller shall be deemed to represent and warrant that (i) such Additional
Contract referenced on the related Purchase Certificate delivered pursuant to
Section 2.2(b) hereof is an Eligible Contract, (ii) each such Additional
Contract and the related Equipment is free and clear of any Lien of any Person
(other than Permitted Liens) and in compliance with all Requirements of Law
applicable to Seller and/or the Originator, (iii) with respect to each such
Additional Contract, all consents, licenses, approvals, authorizations,
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Seller in connection with the addition of
such Contract and the related Equipment to the Asset Pool have been duly
obtained, effected or given and are in full force and effect and (iv) the
representations and warranties set forth in Section 4.2(a) are true and correct
with respect to each Contract transferred on such day as if made on such day.
(c) Survival of Representations and Warranties. The representations and
warranties set forth in this Section 4.2 shall survive the transfer of an
interest in the respective Contracts and related Equipment, or interests
therein, to the Deal Agent as agent for the Secured Parties.
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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 AND THE ORIGINATOR
Section 5.1 General Covenants.
Until the date on which all Aggregate Unpaids have been indefeasibly
paid in full, the Seller hereby covenants that:
(a) Compliance with Laws, Preservation of Corporate Existence. The
Seller will comply in all material respects with all applicable laws, rules,
regulations and orders and preserve and maintain its corporate existence,
rights, franchises, qualifications and privileges.
Section 5.2 Covenants of Seller.
The Seller hereby covenants that:
(a) Contracts Not to be Evidenced by Instruments. The Seller will take
no action to cause any Contract which is not, as of the Closing Date or the
related Addition Date, as the case may be, evidenced by an Instrument, to be so
evidenced except in connection with the enforcement or collection of such
Contract.
(b) Security Interests. The Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Contract in the Asset Pool or related Equipment, whether now
existing or hereafter transferred hereunder, or any interest therein, and the
Seller will not sell, pledge, assign or suffer to exist any Lien on its
interest, if any, hereunder. The Seller will promptly notify the Deal Agent of
the existence of any Lien on any Contract in the Asset Pool or related Equipment
and the Seller shall defend the right, title and interest of the Deal Agent as
agent for the Secured Parties in, to and under the Contracts in the Asset Pool
and the related Equipment, against all claims of third parties, provided,
however, that nothing in this section 5.2(b) shall prevent or be deemed to
prohibit the Seller from suffering to exist Permitted Liens upon any of the
Contracts in the Asset Pool or any related Equipment.
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(c) Delivery of Collections. The Seller agrees to pay to the Servicer
promptly (but in no event later than two Business Days after receipt) all
Collections received by Seller in respect of the Contracts in the Asset Pool.
(d) Compliance with the Law. Seller hereby agrees to comply in all
material respects with all Requirements of Law applicable to Seller, the
Contracts and the Equipment.
(e) Activities of Seller. The Seller shall not engage in any business
or activity of any kind, or enter into any transaction or indenture, mortgage,
instrument, agreement, contract, lease or other undertaking, which is not
incidental to the transactions contemplated and authorized by this Agreement or
the Purchase Agreement.
(f) Indebtedness. The Seller shall not create, incur, assume or suffer
to exist any Indebtedness or other liability whatsoever, except (i) obligations
incurred under this Agreement or under any Hedging Agreement required by Section
5.4(b), 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 Agreement, 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 Restricting Event has occurred and is continuing and no Restricting 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.
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(k) Agreements. The Seller shall not become a party to, or permit any
of its properties to be bound by, any indenture, mortgage, instrument, contract,
agreement, lease or other undertaking, except the Transaction Documents, or
amend or modify the provisions of its Certificate of Incorporation without the
consent of the Deal Agent or issue any power of attorney except to the Deal
Agent or the Servicer.
(l) Separate Corporate Existence. The Seller shall:
(i) Maintain its own deposit account or accounts, separate from
those of any Affiliate, with commercial banking institutions. The funds
of the Seller will not be diverted to any other Person or for other
than corporate uses of the Seller.
(ii) Ensure that, to the extent that it shares the same officers or
other employees as any of its stockholders or Affiliates, the salaries
of and the expenses related to providing benefits to such officers and
other employees shall be fairly allocated among such entities, and each
such entity shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees.
(iii) Ensure that, to the extent that it jointly contracts with any
of its stockholders or Affiliates to do business with vendors or
service providers or to share overhead expenses, the costs incurred in
so doing shall be allocated fairly among such entities, and each such
entity shall bear its fair share of such costs. To the extent that the
Seller contracts or does business with vendors or service providers
when the goods and services provided are partially for the benefit of
any other Person, the costs incurred in so doing shall be fairly
allocated to or among such entities for whose benefit the goods and
services are provided, and each such entity shall bear its fair share
of such costs. All material transactions between Seller and any of its
Affiliates shall be only on an arm's length basis.
(iv) Maintain a principal executive and administrative office
through which its business is conducted separate from those of its
Affiliates. To the extent that Seller and any of its stockholders or
Affiliates have offices in the same location, there shall be a fair and
appropriate allocation of overhead costs among them, and each such
entity shall bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with its Certificate
of Incorporation and observe all necessary, appropriate and customary
corporate formalities, including, but not limited to, holding all
regular and special stockholders, and directors' meetings appropriate
to authorize all corporate action, keeping separate and accurate
minutes of its meetings, passing all resolutions or consents necessary
to authorize actions taken or to be taken, and maintaining accurate and
separate books, records and accounts, including, but not limited to,
payroll and intercompany transaction accounts.
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(vi) Take or refrain from taking, as applicable, each of the
activities specified in the "non-substantive consolidation" opinion of
Blank Rome ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP delivered on the Closing Date, upon
which the conclusions expressed therein are based.
(m) Location of Seller, Records; Instruments. The Seller (x) shall not
move outside the State 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
Initial Purchase Date, without 30 days' prior written notice to the Deal Agent
and (z) will promptly take all actions required of each relevant jurisdiction in
order to continue the first priority perfected security interest of the Deal
Agent as agent for the Secured Parties in all Assets in the Asset Pool. The
Seller will give the Deal Agent prompt notice of a change within the State of
Delaware 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. (i) The Seller has (A) fully complied in all
material respects with all provisions of ERISA and any all other laws, rules,
and regulations applicable to Benefit Plans and (B) timely filed and distributed
all reports, descriptions and notices required by ERISA, the Code or any state
or federal law or any ruling or regulation of any state or federal
administrative agency with respect to any Benefit Plan; and (ii) 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 (whether or not waived), 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 in accordance with the Filing
Requirements 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.
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(q) Transactions with Affiliates. The Seller will not enter into, or be
a party to, any transaction with any of its Affiliates, except (i) the
transactions permitted or contemplated by the Transaction Documents, and (ii)
other transactions (including, without limitation, the lease of office space or
computer equipment or software by the Seller to or from an Affiliate) (A) in the
ordinary course of business, (B) pursuant to the reasonable requirements of the
Seller's business, (C) upon fair and reasonable terms that are no less favorable
to the Seller than could be obtained in a comparable arm's-length transaction
with a Person not an Affiliate of the Seller, and (D) not inconsistent with the
factual assumptions set forth in the opinion letters issued by Blank Rome
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and delivered to the Deal Agent as a condition to the
initial Purchase as such assumptions may be modified in any subsequent opinion
letters delivered to the Deal Agent hereunder pursuant to Section 3.2(c) or
otherwise. It is understood that any compensation arrangement for officers shall
be permitted under clause (ii)(A) through (C) above if such arrangement has been
expressly approved by the board of directors of the Seller.
(r) Change in the Purchase Agreement. The Seller will not amend,
modify, waive or terminate any terms or conditions of the Purchase Agreement,
without the prior written consent of Deal Agent.
(s) Amendment to Certificate of Incorporation. Notwithstanding anything
to the contrary contained herein, the Seller will not amend, modify or otherwise
make any change to its Certificate of Incorporation which would delete or
otherwise nullify or circumvent the provisions set forth on Exhibit C hereto.
(t) Credit and Collection Policy. The Seller shall not cause or permit
any changes to be made to the Credit and Collection Policy in any manner that
would materially and adversely affect the collectibility of the Contracts sold
hereunder without the prior written consent of the Deal Agent, which consent
shall not be unreasonably withheld.
Section 5.3 Release of Lien on Equipment.
At the same time as (i) any Contract in the Asset Pool expires by its
terms and all amounts in respect thereof other than Excluded Amounts 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 Operations on Tranche Rate Lock Date.
(a) On each Tranche Rate Lock Date, the Servicer shall determine, if a
Fixed Rate Tranche or Tranches exist prior to such Tranche Rate Lock Date,
whether (i) the Contracts that became Fixed Rate Contracts on such Tranche Rate
Lock Date ("Current Fixed Rate Contracts") shall be identified to a separate new
Fixed Rate Tranche (a "New Fixed Rate Tranche"), or (ii) if the Current Fixed
Rate Contracts shall be combined with one or more of the previously existing
Fixed Rate Tranches into a single new Fixed Rate Tranche (a "Combined Fixed Rate
Tranche"). On any Tranche Rate Lock Date on which a New Fixed Rate Tranche or a
Combined Fixed Rate Tranche is established, the Servicer shall identify a
Hedging Agreement to such Tranche and shall recalculate the ADCB by discounting
the Fixed Rate Contracts identified to such Tranche at the applicable Discount
Rate (giving effect to Hedge Rate for the Hedging Agreement identified to such
Tranche).
(b) On or prior to each Tranche Rate Lock Date, in accordance with the
provisions of Section 5.4(a), the Seller shall enter into one or more Hedge
Transactions, provided that each such Hedge Transaction shall:
(i) be entered into with a Hedge Counterparty and governed by a
Hedging Agreement;
(ii) have a schedule of monthly payment periods the first of which
commences during the next Fixed Period following the Tranche Rate Lock
Date of the Tranche or Tranches and the last of which ends on the last
Scheduled Payment due to occur under the Fixed Rate Contracts in such
Tranche;
(iii) have an amortizing notional amount such that the Hedge
Notional Amount in effect during any monthly payment period shall be
equal to at least ninety percent (90%) of the Capital outstanding of
all Fixed Rate Contracts in such Tranche or Tranches on such Tranche
Rate Lock Date; and
(iv) provide for two series of monthly payments to be netted
against each other, one such series being payments to be made by the
Seller to a Hedge Counterparty (solely on a net basis) by reference to
a fixed rate to be used in computing the Discount Rate for that Tranche
or Tranches, and the other such series being payments to be made by the
Hedge Counterparty to the Deal Agent (solely on a net basis) by
reference to the USD-LIBOR-LIBO Rate, as defined in the 1991 ISDA
Definitions for a 30-day maturity as in effect on the first day of each
monthly period, the net amount of which shall be paid into the
Collection Account (if payable by the Hedge Counterparty) or from the
Collection Account to the extent funds are available under Section
2.7(a), 2.8(a) and 2.9(b) of this Agreement (if payable by the Seller);
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(c) As additional security hereunder, Seller hereby assigns to the Deal
Agent, as agent for the Secured Parties, all right, title and interest of Seller
in each Hedging Agreement, each Hedge Transaction, and all present and future
amounts payable by a Hedge Counterparty to Seller under or in connection with
the respective Hedging Agreement and Hedge Transaction(s) with that Hedge
Counterparty ("Hedge Collateral"), and grants a security interest to the Deal
Agent, as agent for the Secured Parties, in the Hedge Collateral. Seller
acknowledges that, as a result of that assignment, Seller may not, without the
prior written consent of the Deal Agent, exercise any rights under any Hedging
Agreement or Hedge Transaction, except for Seller's right under any Hedging
Agreement to enter into Hedge Transactions in order to meet the Seller's
obligations under Section 5.4(b) hereof. Nothing herein shall have the effect of
releasing the Seller from any of its obligations under any Hedging Agreement or
any Hedge Transaction, nor be construed as requiring the consent of the Deal
Agent or any Secured Party for the performance by Seller of any such
obligations.
(d) On any Tranche Rate Lock Date, the Discounted Contract Balances of
each Fixed Rate Contract identified to the New Fixed Rate Tranche or Combined
Fixed Rate Tranche shall be recalculated using the Discount Rate applicable on
such Tranche Rate Lock Date. To the extent that either (i) the
Overcollateralization is less than the Minimum Overcollateralization Percentage
or (ii) the aggregate Capital exceeds the Capital Limit, the Seller shall cure
such deficiency within one (1) Business Day. To the extent that the aggregate
Capital is less than the Capital Limit then the Seller may request an
Incremental Purchase pursuant to the provisions of Section 2.2 of this
Agreement.
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 2.17, substitute for such Ineligible Contract a Substitute Contract.
In any of the foregoing instances, the Seller shall accept the retransfer of
each such Ineligible Contract, and the ADCB shall be reduced by the Discounted
Contract Balance (calculated using the applicable 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 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.
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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 has a material adverse affect on the rights of
the Secured Parties or the Deal Agent, as agent of the Secured Parties, or on
the ability of the Seller to perform its obligations hereunder, by notice then
given in writing to the Seller, the Deal Agent may direct the Seller to accept
the retransfer of all of the Assets, in which case the Seller shall be obligated
to accept retransfer of such Assets on a Payment Date specified by the Seller
(such date, the "Retransfer Date") and to terminate all Hedge Transactions prior
to the Retransfer Date. The Seller shall deposit on the Retransfer Date an
amount equal to the deposit amount provided below for such Assets in the
Collection Account for distribution to the Secured Parties in accordance with
Section Section 2.7(a), 2.8(a) or 2.9(b), as applicable. The deposit amount (the
"Retransfer Amount") for such retransfer will be equal to the (A) sum of (i) the
Aggregate Unpaids, and (ii) all Hedge Breakage Costs and any other amounts
payable by Seller under or with respect to any Hedging Agreement minus (B) the
amount, if any, available in the Collection Account on such Payment Date. On the
Retransfer Date, provided that full Retransfer Amount has been deposited into
the Collection Account, the Assets shall be transferred to the Seller; and the
Deal Agent as agent for the Secured Parties shall, at the sole expense of the
Servicer, execute and deliver such instruments of transfer, in each case without
recourse, representation or warranty, as shall be prepared and reasonably
requested by the Servicer on behalf of the Seller to vest in the Seller, or its
designee or assignee, all right, title and interest of the Deal Agent as agent
for the Secured Parties in, to and under the Assets. If the Deal Agent gives a
notice directing the Seller to accept such a retransfer as provided above, the
obligation of Seller to accept a retransfer pursuant to this Section 5.6 shall
constitute the sole remedy respecting a breach of the representations and
warranties contained in Section 4.2 available to the Secured Parties and the
Deal Agent on behalf of the Secured Parties.
Section 5.7 Year 2000 Compatibility.
The Seller shall take all action necessary to assure that, prior to
January 1, 2000, the Seller's computer system (if it owns and maintains its own
system) is able to operate and effectively process data including dates on and
after January 1, 2000. At the request of the Deal Agent or the Backup Servicer,
the Seller shall provide assurance reasonably acceptable to the Deal Agent or
the Backup Servicer of the Seller's Year 2000 Compatibility. The Seller shall
provide to the Deal Agent and the Backup Servicer, on or before June 30, 1999,
an officer's certificate certifying its computer system is year 2000 compatible.
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Section 5.8 Covenants of the Originator.
The Originator hereby covenants that:
(a) The Originator will not amend, modify, waive or terminate any terms
or provisions of the Contribution Agreement, without the prior written consent
of the Deal Agent.
(b) Backup Servicer and Collateral Custodian Fee Letter. The Originator
will not amend, modify, waive or terminate any terms or provisions of the Backup
Servicer or Collateral Custodian Fee Letter without the prior written consent of
the Deal Agent.
ARTICLE VI
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 6.1 Appointment and Acceptance; Duties.
(a) Appointment of Initial Servicer and Collateral Custodian. ABL is
hereby appointed as Servicer pursuant to this Agreement. ABL accepts the
appointment and agrees to act as the Servicer pursuant to this Agreement.
Norwest is hereby appointed as Collateral Custodian pursuant to this Agreement.
Norwest accepts the appointment and agrees to act as the Collateral Custodian
pursuant to this Agreement.
(b) General Duties. The Servicer will manage, service, administer,
collect and enforce the Assets in the Asset Pool on behalf of the Purchasers
(the "Servicing Duties") and will have full power and authority to do any and
all things in connection with the performance of the Servicing Duties which it
deems necessary or desirable provided, however, nothing it does may contravene
the provisions of this Agreement. The Servicer will perform the Servicing Duties
with reasonable care, using that degree of skill and attention that a prudent
person engaging in such activities would exercise, but in any event shall not
act with less care than the Servicer exercises with respect to all comparable
contracts that it services for itself or others. The Servicing Duties will
include, without limitation, collection and posting of all payments, responding
to inquiries of Obligors regarding the Assets in the Asset Pool, investigating
delinquencies and making Servicer Advances, remitting payments to the Deal Agent
in a timely manner, furnishing monthly, quarterly and annual statements with
respect to collections and payments in accordance with the provisions of this
Agreement, and using its best efforts to maintain the perfected first priority
security interest of the Deal Agent as agent for the Secured Parties in the
Assets. The Servicer will follow customary standards, policies, and procedures
and will have full power and authority, acting alone, to do any and all things
in connection with the performance of the Servicing Duties that it deems
necessary or desirable. If the Servicer commences a legal proceeding to enforce
a Defaulted Contract or commences or participates in a legal proceeding
(including a bankruptcy proceeding) relating to or involving an Asset in the
Asset Pool, the Deal Agent as agent for the Secured Parties will be deemed to
have automatically assigned the related Contract to the Servicer for purposes of
commencing or participating in any such proceeding as a party or claimant, and
the Servicer is authorized and empowered by the Secured Parties, pursuant to
this Section 6.1(b), to execute and deliver, on behalf of itself and the Deal
Agent as agent for the Secured Parties, any and all instruments of satisfaction
or cancellation, or partial or full release or discharge, and all other notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceedings. If in any enforcement suit
or legal proceeding it is held that the Servicer may not enforce a Contract on
the ground that it is not a real party in interest or a holder entitled to
enforce the Contract, then the Deal Agent will, at the Servicer's expense and
direction, take steps on behalf of the Deal Agent as agent for the Secured
Parties to enforce the Contract, including bringing suit in the name of the Deal
Agent as agent for the Secured Parties.
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(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 Custodian's Contract Files delivered by the Seller pursuant to
Section 3.3 hereof in accordance with the terms and conditions of this
Agreement, all for the benefit of the Secured Parties and subject to the Lien
thereon in favor of the Deal Agent as agent for the Secured Parties. Within five
Business Days of its receipt of any Custodian's 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 Custodian's
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 within two (2) Business Days 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 File not referenced on such list of Contracts to the Seller. Other than
the foregoing, the Collateral Custodian shall not have any responsibility for
reviewing any Custodian's Contract File.
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In taking and retaining custody of the Custodian's Contract Files, the
Collateral Custodian shall be deemed to be acting as the agent of the Deal Agent
as agent for the Secured Parties, provided, however, that the Collateral
Custodian makes no representations as to the existence, perfection or priority
of any Lien on the Custodian's 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 Custodian's 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 Custodian's 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
Custodian's 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 Custodian's Contract Files are the sole
property of the Seller and that the Seller has granted an interest therein to
the Deal Agent on behalf of the Secured Parties. In performing its duties, the
Collateral Custodian shall use the same degree of care and attention as it
employs with respect to similar Contracts which it holds as Collateral
Custodian.
(f) Concerning the Collateral Custodian.
(i) The Collateral Custodian may conclusively rely on and shall be
fully protected in acting upon any certificate, instrument, opinion,
notice, letter, telegram or other document delivered to it and which in
good faith it reasonably believes to be genuine and which has been
signed by the proper party or parties. The Collateral Custodian may
rely conclusively on and shall be fully protected by in acting upon (A)
the written instructions of any designated officer of the Deal Agent or
(B) the verbal instructions of the Deal Agent.
(ii) The Collateral Custodian may consult counsel satisfactory to
it and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(iii) The Collateral Custodian shall not be liable to the Seller,
the Deal Agent or any other Purchaser for any error of judgment, or for
any act done or step taken or omitted by it, in good faith, or for any
mistakes of fact or law, or for anything which it may do or refrain
from doing in connection herewith except in the case of its willful
misconduct or grossly negligent performance or omission.
(iv) The Collateral Custodian makes no warranty or representation
and shall have no responsibility (except as expressly set forth in this
Agreement) as to the content, enforceability, completeness, validity,
sufficiency, value, genuineness, ownership or transferability of the
Contracts, and will not be required to and will not make any
representations as to the validity or value (except as expressly set
forth in this Agreement) of any of the Contracts. The Collateral
Custodian shall not be obligated to take any legal action hereunder
which might in its judgment involve any expense or liability unless it
has been furnished with an indemnity reasonably satisfactory to it.
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(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.
(g) Resignation or Termination of Collateral Custodian. The Collateral
Custodian may resign at any time by providing not less than 120 days prior
written notice to the Deal Agent, the Liquidity Agent, the Servicer, the Seller
and the Originator. In addition, the Collateral Custodian may be removed without
cause by the Deal Agent by notice then given in writing to the Servicer, the
Seller, and the Collateral Custodian. In the event of any such resignation or
removal, the Collateral Custodian 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.
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; except that 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) (i) the product of 88% and the Discounted Contract Balance as of the
most recent Determination Date plus (ii) one month's interest at the applicable
rate under such Prepaid Contract, (B) any outstanding Servicer Advances thereon
(and to the extent not included therein any accrued and unpaid interest) and (C)
all Hedge Breakage Costs owing to the relevant Hedge Counterparty for any
termination of one or more Hedge Transactions, in whole or in part, as required
by the terms of any Hedging Agreement as the result of any such Contract
becoming a Prepaid Contract. After a Restricting Event has occurred, the
Servicer may not permit a Contract in the Asset Pool to become a Prepaid
Contract (which shall not include a Contract that becomes a Prepaid Contract due
to a Casualty Loss), unless the Servicer collects an amount equal to the sum of
(A) the Discounted Contract Balance on the date of such prepayment calculated
using the applicable Discount Rate in effect on the date of payment, (B) any
outstanding Servicer Advances thereon (and to the extent not included therein
any accrued and unpaid interest) and (C) all Hedge Breakage Costs owing to the
relevant Hedge Counterparty for any termination of one or more Hedge
Transactions, in whole or in part, as required by the terms of any Hedging
Agreement as the result of any such Contract becoming a Prepaid Contract.
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(c) Acceleration. The Servicer shall accelerate the maturity of all or
any Scheduled Payments under any Contract in the Asset Pool under which a
default under the terms thereof has occurred and is continuing (after the lapse
of any applicable grace period) promptly after such Contract becomes a Defaulted
Contract.
(d) Taxes and other Amounts. To the extent provided for in any Contract
in the Asset Pool, the Servicer will use its best efforts to collect all
payments with respect to amounts due for taxes, assessments and insurance
premiums relating to such Contracts or the Equipment and remit such amounts to
the appropriate Governmental Authority or insurer on or prior to the date such
payments are due.
(e) Payments to Lock-Box Account. On or before the Initial Purchase
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 Initial Purchase Date, and maintained in the
name of the Deal Agent as agent for the Secured Parties, with an office or
branch of a depository institution or trust company organized under the laws of
the United States of America or any one of the States thereof or the District of
Columbia (or any domestic branch of a foreign bank) a segregated corporate trust
account (the "Collection Account"); provided, however, that at all times such
depository institution or trust company shall be a depository institution
organized under the laws of the United States of America or any one of the
States thereof or the District of Columbia (or any domestic branch of a foreign
bank), (i) (A) which has either (1) a long-term unsecured debt rating of A- or
better by S&P and A-3 or better by Moody's or (2) a short-term unsecured debt
rating or certificate of deposit rating of A-1 or better by S&P or P-1 or better
by Moody's, (B) the parent corporation of which has either (1) a long-term
unsecured debt rating of A- or better by S&P and A-3 or better by Moody's or (2)
a short-term unsecured debt rating or certificate of deposit rating of A-1 or
better by S&P and P-1 or better by Moody's or (C) is otherwise acceptable to the
Deal Agent and (ii) whose deposits are insured by the Federal Deposit Insurance
Corporation (any such depository institution or trust company, a "Qualified
Institution").
(g) Remittances. The Servicer is hereby authorized and directed to
allocate and deposit all Collections in accordance with Section 2.10 hereof and
will apply such Collections as set forth in Section 2.7, 2.8 or 2.9, as
applicable.
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Section 6.3 Servicer Advances.
For each Monthly Period, if the Servicer determines that any Scheduled
Payment (or portion thereof) which was due and payable pursuant to a Contract in
the Asset Pool during such Monthly Period was not received prior to the end of
such Monthly Period, the Servicer may make an advance in an amount up to the
amount of such delinquent Scheduled Payment (or portion thereof); in addition,
if on any day there are not sufficient funds on deposit in the Collection
Account to pay accrued Yield of any Asset Interest the Monthly Period of which
ends on such day, the Servicer shall make an advance in the amount necessary to
pay such Yield (in either case, any such advance, a "Servicer Advance").
Notwithstanding the preceding sentence, (i) the Servicer shall be required to
make a Servicer Advance with respect to any Contract if, and only if, the
Servicer determines (such determination to be conclusive and binding) in good
faith that such Servicer Advance will ultimately be recoverable from future
collections on, or the liquidation of, the Asset Pool and payments by one or
more Hedge Counterparties under one or more Hedging Agreements, (ii) the
Servicer's obligation to make a Servicer Advance for any Contract shall cease on
the day such Contract becomes a Defaulted Contract or is charged-off pursuant to
the Servicer's Credit and Collection Policies and (iii) any successor Servicer,
including the Backup Servicer, will not be obligated to make any Servicer
Advances. The Servicer will deposit any Servicer Advances into the Collection
Account on or prior to 11:00 a.m. (Charlotte, North Carolina time) on the
related Payment Date, in immediately available funds.
Section 6.4 Realization Upon Defaulted Contract.
The Servicer will use reasonable efforts to repossess or otherwise
comparably convert the ownership of any Equipment relating to a Defaulted
Contract in the Asset Pool 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.
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Section 6.5 Maintenance of Insurance Policies.
The Servicer will use commercially reasonable 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 Servicer 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, but shall not be required to, purchase and maintain
such insurance on behalf of, and at the expense of, the Obligor. In connection
with its activities as Servicer, the Servicer agrees to present, on behalf of
the Deal Agent as agent for the Secured Parties, claims to the insurer under
each Insurance Policy and any such liability policy, and to settle, adjust and
compromise such claims, in each case, consistent with the terms of each
Contract. The Servicer's Insurance Policies with respect to the related
Equipment will insure against liability for personal injury and property damage
relating to such Equipment. The Servicer hereby disclaims any and all rights,
title or interest in or to the proceeds of any Insurance Policy with respect to
any Contract or Equipment in the Asset Pool including any Insurance Policy it is
named as loss payee with respect to, and agrees that it has no equitable,
beneficial or other interest in the Insurance Policies other than being named as
loss payee; provided, however, nothing herein shall limit or otherwise affect
the rights of ABL, in its individual capacity and not as the Servicer, with
respect to the Insurance Policies and any proceeds thereof. The Servicer
acknowledges that with respect to the Insurance Policies and any proceeds
thereof that it is acting solely in the capacity as agent for the Deal Agent, as
agent for the Secured Parties.
Section 6.6 Representations and Warranties of Servicer.
The Servicer represents and warrants to the Deal Agent, as agent for
the Secured Parties, the Secured Parties, the Collateral Custodian and Backup
Servicer that, as of the Closing Date and on each Addition Date, insofar as any
of the following affects the Servicer's ability to perform its obligations
pursuant to this Agreement or any Transaction Document to which it is a party in
any material respect:
(a) Organization and Good Standing. The Servicer is (a) a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, (b) 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, (c) is
duly qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or conduct
of its business requires such qualification and (d) is in compliance with all
Requirements of Law, except to the extent that the failure to comply therewith
would not cause a Material Adverse Effect or materially and adversely affect the
performance of the Servicer's obligations under this Agreement and each other
Transaction Document to which it is a party.
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(b) Due Authorization. The Servicer has the corporate power and
authority, and the legal right, to make, deliver and perform this Agreement and
each other Transaction Document to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement and each other Transaction Document to which it is a party.
(c) Due Execution. This Agreement has been, and each other Transaction
Document to which the Servicer is a party will be, duly executed and delivered
on behalf of the Servicer.
(d) No Conflict. The execution and delivery of this Agreement and each
other Transaction Document to which the Servicer is a party, the performance by
the Servicer 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 Servicer is a party or by which it or any of its property is bound.
(e) No Violation. The execution and delivery of this Agreement and each
other Transaction Document to which the Servicer is a party, 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 or contractual obligation applicable to the
Servicer and will not result in, or require the creation or imposition of any
Lien on any of its properties or revenues pursuant to any such Requirement of
Law or contractual obligation.
(f) No Proceedings. There are no proceedings, litigation or
investigations pending or, to the knowledge of the Servicer, threatened by or
against the Servicer or against any of its properties or revenues, before any
court, regulatory body, administrative agency, arbitrator, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
any other Transaction Document to which the Servicer is a party, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any other Transaction Document to which the Servicer is a party 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 of the Servicer's obligations under this
Agreement or any other Transaction Document or the rights and remedies of the
agents, Purchasers or Investors hereunder.
(g) All Consents Required. All approvals, authorizations, consents,
orders, notices to, filings with, or other actions of any Person or of any
Governmental Authority required in connection with the execution and delivery
and performance, validity or enforceability of this Agreement or any other
Transaction Document have been obtained.
(h) Agreements Enforceable. This Agreement constitutes, and each other
Transaction Document to which it is a party when executed and delivered will
constitute, the legal, valid and binding obligation of the Servicer enforceable
against the Servicer 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).
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(i) Accuracy of Representations and Warranties. Each representation or
warranty by the Servicer contained herein or in any certificate or other
document furnished by the Servicer pursuant hereto or in connection herewith is
true and correct in all material respects.
(j) 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 Seller, the Servicer, and the Deal Agent, as agent for the
Secured Parties, and the Secured Parties that, as of the Closing Date and on
each Addition Date, insofar as any of the following affects the Backup
Servicer's or the Collateral Custodian's, as the case may be, ability to perform
its obligations pursuant to this Agreement in any material respect:
(a) Organization and Good Standing. Norwest is (a) a national banking
association duly organized, validly existing and in good standing under the laws
of the United States, (b) 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 (c) is
in compliance with all Requirements of Law, except to the extent that the
failure to comply therewith would not materially and adversely affect Norwest's
performance of its obligations under this Agreement or any other Transaction
Document to which it is a party.
(b) Power and Authority. Each of the Backup Servicer and the Collateral
Custodian has the corporate power and authority, and the legal right to make,
deliver and perform this Agreement and each has taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement.
(c) Due Execution. This Agreement has been duly executed and delivered
on behalf of each of the Backup Servicer and the Collateral Custodian.
(d) No Violation. 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, any term of any 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 or require 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 other Requirements of
Law, or (iii) violate any Requirements of Law applicable to Norwest or any of
its properties.
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(e) No Consent. No consent, approval, authorization, order, notice,
registration, filing, qualification, license or permit (collectively, the
"Consents") of or with any Governmental Authority 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 such consents,
approvals, authorizations, registrations and qualifications as have been
obtained.
(f) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of Norwest, enforceable against the Backup Servicer and the
Collateral Custodian in accordance with its terms, except as such enforceability
may be limited by applicable 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).
(g) No Proceedings. There are no proceedings, litigation, or
investigations pending or, to the best of its knowledge, threatened, against the
Backup Servicer or the Collateral Custodian or against any of their respective
properties, 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 could reasonably be expected to be adversely determined, and if
adversely determined would materially and adversely affect the performance by
the Backup Servicer or the Collateral Custodian of its obligations under, this
Agreement or any other Transaction Document or the rights and remedies of the
agents, Purchasers or Investors hereunder.
Section 6.8 Covenants of Servicer.
The Servicer hereby covenants that:
(a) Compliance with Law. The Servicer will comply in all material
respects with all laws and regulations of any Governmental Authority applicable
to the Servicer or the Contracts in the Asset Pool and related Equipment and
Custodian's Contract Files or any part thereof.
(b) Obligations with Respect to Contracts; Modifications. The Servicer
will duly fulfill and comply with all obligations on the part of the Seller to
be fulfilled or complied with under or in connection with each Contract in the
Asset Pool and will do nothing to impair the rights of the Deal Agent as agent
for the Secured Parties or of the Secured Parties in, to and under the Assets in
the Asset Pool. The Servicer will perform such obligations under the Contracts
in the Asset Pool and will not change or modify the Contracts.
(c) Preservation of Security Interest. The Servicer will execute and
file such financing and continuation statements and any other documents which
may be required by any law or regulation of any Governmental Authority to
preserve and protect fully the interest of the Deal Agent as agent for the
Secured Parties in, to and under the Assets.
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(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 6.8(d) will survive the termination
of this Agreement.
(e) Year 2000 Compatibility. The Servicer shall take all action
necessary to assure that, prior to January 1, 2000, the Servicer's Contract
Management System is able to operate and effectively process data including
dates on and after January 1, 2000. At the request of the Deal Agent or the
Backup Servicer, the Servicer shall provide assurance reasonably acceptable to
the Deal Agent or the Backup Servicer of the Servicer's Year 2000 Compatibility.
The Servicer shall provide to the Deal Agent and Backup Servicer, on or before
June 30, 1999, an officer's certificate certifying that its Contract Management
System is year 2000 compatible.
Section 6.9 Covenants of Backup Servicer and Collateral Custodian.
Each of the Backup Servicer and the Collateral Custodian hereby
covenants that:
(a) Custodian's Contract Files. The Collateral Custodian will not
dispose of any documents constituting the Custodian's Contract Files in any
manner which is inconsistent with the performance of its obligations as the
Collateral Custodian pursuant to this Agreement and will not dispose of any
Contract except as contemplated by this Agreement.
(b) Compliance with Law. Each of the Backup Servicer and the Collateral
Custodian will comply with all laws and regulations of any Governmental
Authority applicable to the Backup Servicer and the Collateral Custodian.
(c) No Bankruptcy Petition. Prior to the date that is one year and one
day after the payment in full of all amounts owing in respect of all outstanding
commercial paper issued by VFCC, neither the Backup Servicer nor the Collateral
Custodian will institute against the Seller or VFCC, or join any other Person in
instituting against the Seller or VFCC, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States. This
Section 6.9(c) will survive the termination of this Agreement.
(d) Location of Contract Files. The Custodian's Contract Files shall
remain at all times in the possession of the Collateral Custodian at the address
set forth herein unless notice of a different address is given in accordance
with the terms hereof.
(e) No Changes in Backup Servicer and Collateral Custodian Fee. The
Backup Servicer and Collateral Custodian will not make any changes to the fees
set forth in the Backup Servicer and Collateral Custodian Fee Letter without the
prior written approval of the Deal Agent.
(f) Year 2000 Compatibility. The Backup Servicer and Collateral
Custodian shall take all action necessary to assure that, prior to January 1,
2000, the Backup Servicer and Collateral Custodian's computer system is able to
operate and effectively process data including dates on and after January 1,
2000. At the request of the Deal Agent, the Backup Servicer and Collateral
Custodian shall provide assurance reasonably acceptable to the Deal Agent of the
Backup Servicer and Collateral Custodian's Year 2000 Compatibility.
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Section 6.10 [Reserved].
Section 6.11 [Reserved].
Section 6.12 Payment of Certain Expenses by Servicer.
The Servicer will be required to pay all expenses incurred by it in
connection with its activities under this Agreement, including fees and
disbursements of independent accountants, Taxes imposed on the Servicer,
expenses incurred in connection with payments and reports pursuant to this
Agreement, and all other fees and expenses not expressly stated under this
Agreement for the account of the Seller, but excluding Liquidation Expenses
incurred as a result of activities contemplated by Section 6.4. The Servicer
will be required to pay all reasonable fees and expenses owing to any bank or
trust company in connection with the maintenance of the Collection Account and
the Lock-Box Account. The Servicer shall be required to pay such expenses for
its own account and shall not be entitled to any payment therefor other than the
Servicing Fee.
Section 6.13 Reports.
(a) Monthly Report. With respect to each Determination Date and the
related Monthly Period, the Servicer will provide to the Seller, the Deal Agent
and the Backup Servicer, on the related Reporting Date, a monthly statement (a
"Monthly Report"), signed by a Responsible Officer of the Servicer and
substantially in the form of Exhibit E.
(b) Servicer's Certificate. Together with each Monthly Report, the
Servicer shall submit to the Purchaser a certificate (a "Servicer's
Certificate"), signed by a Responsible Officer of the Servicer and substantially
in the form of Exhibit F.
(c) Financial Statements. The Servicer will submit to the Purchaser and
the Backup Servicer, within 75 days of the end of each of its fiscal quarters,
commencing September 30, 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 120
days of the end of each of its fiscal years, commencing June 30, 1998 audited
financial statements (including an analysis of delinquencies and losses for each
fiscal year describing the causes thereof and sufficient to determine whether a
Restricting 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.
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Section 6.14 Annual Statement as to Compliance.
The Servicer will provide to the Deal Agent and the Backup Servicer, on
or prior to April 30 of each year, commencing April 30, 1999, 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 April 30 of
each year, commencing April 30, 1999, (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.
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Section 6.17 Merger or Consolidation of the Servicer.
The Servicer shall not consolidate with or merge into any other Person
or convey or transfer its properties and assets substantially as an entirety to
any Person, unless the Servicer is the surviving entity and unless:
(i) the Servicer has delivered to the Deal Agent and the
Backup Servicer an Officer's Certificate and an Opinion of Counsel each
stating that any consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 6.17 and that all
conditions precedent herein provided for relating to such transaction
have been complied with and, in the case of the Opinion of Counsel,
that such supplemental agreement is legal, valid and binding with
respect to the Servicer and such other matters as the Deal Agent may
reasonably request;
(ii) the Servicer shall have delivered notice of such
consolidation, merger, conveyance or transfer to the Deal Agent; and
(iii) after giving effect thereto, no Restricting 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 expressly provided herein, neither the Servicer nor any of
the directors or officers or employees or agents of the Servicer shall be under
any liability to the Deal Agent, the Secured Parties or any other Person for any
action taken or for refraining from the taking of any action pursuant to this
Agreement whether arising from express or implied duties under this Agreement;
provided, however, that this provision shall not protect the Servicer or any
such Person against any liability which would otherwise be imposed by reason of
its willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of its willful misconduct hereunder. The Servicer may
conclusively rely on and shall be fully protected in acting upon (A) the written
instructions of any designated officer of the Deal Agent or (B) the verbal
instructions of the Deal Agent.
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Section 6.19 Indemnification of the Seller, the Backup Servicer, the
Collateral Custodian, the Deal Agent and the Secured
Parties.
The Servicer shall indemnify and hold harmless the Seller, the Backup
Servicer, the Collateral Custodian, the Deal Agent, the Liquidity Agent and each
Secured Party and their respective officers, directors, employees and agents
(collectively, the "Indemnified Persons") from and against any loss, liability,
expense, damage or injury suffered or sustained by any Indemnified Person by
reason of any acts or omissions of the Servicer, including, but not limited to
any judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim, but excluding allocations of overhead expenses of
any such Indemnified Party or other non-monetary damages of any such Indemnified
Party. Notwithstanding the foregoing, the Servicer shall not indemnify an
Indemnified Person if such loss, liability, expense, damage or injury results or
arises (i) as a result of fraud, gross negligence or breach of fiduciary duty by
such Indemnified Person; and (ii) under any federal, state or local income or
franchise taxes or any other Tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Seller, the Backup Servicer, the
Collateral Custodian, the Deal Agent, the Liquidity Agent or the Secured Parties
in connection herewith to any taxing authority. Notwithstanding the foregoing,
the Servicer shall not indemnify the Collateral Custodian and the Backup
Servicer for any damages or injury arising from such party losing any Contract.
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 6.19 and such payment fully
indemnified the recipient thereof and the recipient thereafter collects any
payments from others in respect of such Indemnified Amounts, the recipient shall
repay to the Servicer an amount equal to the amount it has collected from others
in respect of such indemnified amounts.
If for any reason the indemnification provided above in this Section
6.19 is unavailable to the Indemnified Person or is insufficient to hold an
Indemnified Person harmless, then Servicer shall contribute to the amount paid
or payable by such Indemnified Person as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnified Person on the one hand and Servicer on the
other hand but also the relative fault of such Indemnified Person as well as any
other relevant equitable considerations.
The parties hereto agree that the provisions of this Section 6.19 shall
not be interpreted to provide recourse to the Seller against loss by reason of
the bankruptcy or insolvency (or other credit condition) of, or default by, the
related Obligor or third party 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.
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Section 6.21 Access to Certain Documentation and Information Regarding
the Contracts.
The Collateral Custodian shall provide to the Deal Agent access to the
Custodian's Contract Files and all other documentation regarding the Contracts
in the Asset Pool and the related Equipment in such cases where the Deal Agent
is required in connection with the enforcement of the rights or interests of the
Secured Parties, or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (i) upon two
business days prior written request, (ii) during normal business hours and (iii)
subject to the Servicer's and Collateral Custodian's normal security and
confidentiality procedures. Prior to the Closing Date and quarterly 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 Credit and Collection Policies, as well as with
this Agreement and may conduct an audit of the Contracts and Custodian's
Contract Files in conjunction with such a review, such access being afforded
without charge but only (i) upon two (2) 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. Such
review shall be reasonable in scope and shall be completed in a reasonable
period of time. The first such audit and one quarterly audit per year may be
conducted by an independent auditor retained by the Deal Agent. The Seller shall
be obligated to pay all expenses related to such independent auditor and
reimburse the Deal Agent for any out-of-pocket expenses related to any audit
conducted pursuant to this Section 6.21.
Section 6.22 Backup Servicer.
(a) On or before the date on which the initial Purchase occurs, until
the receipt by the Servicer of a Termination Notice, the Backup Servicer shall
perform, on behalf of the Deal Agent and the Secured Parties, the following
duties and obligations:
(i) On or before the Initial Purchase 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 in an
electronic format acceptable to the Servicer and the Backup Servicer.
(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 as of the related Determination
Date, the Scheduled Payments for each Contract, the Discount Rate for
each Contract, the maturity date for each Contract and any other
information set forth in the Monthly Report (the "Tape").
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The Servicer shall provide the Tape on each Reporting Date as described
above. If the Servicer fails to provide the Tape to the Backup Servicer by the
time set forth in clause (ii) above, the Backup Servicer shall have the greater
of (i) two (2) Business Days, or (ii) such other period of time provided herein,
to perform the review set forth in clause (b)(i) below.
(b) Prior to each Payment Date, and until the receipt by the Servicer
of a Termination Notice, the Backup Servicer shall perform, on behalf of the
Secured Parties and the Deal Agent, the following duties and obligations:
(i) Prior to the related Payment Date, the Backup Servicer
shall review the Monthly Report to ensure that it is complete on its
face and that the following items in such Monthly Report have been
accurately calculated, if applicable, and reported: (A) the ADCB, (B)
the average ADCB, (C) the Discounted Contract Balances of the Contracts
that are 30-60 days past due, (D) the Discounted Contract Balances of
the Contracts that are 61-90 days past due, (E) the Discounted Contract
Balances of the Contracts that are 90+ days past due, (F) the
Discounted Contract Balances of the Contracts that are Defaulted
Contracts, (G) the Delinquency Ratio and (H) the Default Ratio. The
Backup Servicer shall notify the Deal Agent and the Servicer of any
disagreements with the Monthly Report based on such review not later
than the Business Day preceding such Payment Date to such Persons.
(ii) If the Servicer disagrees with the report provided under
paragraph (i) above by the Backup Servicer or if the Servicer or any
subservicer has not reconciled such discrepancy, the Backup Servicer
agrees to confer with the Servicer to resolve such disagreement on or
prior to the next succeeding Determination Date and shall settle such
discrepancy with the Servicer if possible, and notify the Deal Agent of
the resolution thereof. The Servicer hereby agrees to cooperate, at its
own expense, with the Backup Servicer in reconciling any discrepancies
herein. If within 20 days after the delivery of the report provided
under paragraph (i) above by the Backup Servicer, such discrepancy is
not resolved, the Backup Servicer shall promptly notify the Deal Agent
of the continued existence of such discrepancy. Following receipt of
such notice by the Deal Agent, the Servicer shall deliver to the Deal
Agent, the Secured Parties, and the Backup Servicer no later than the
related Payment Date a certificate describing the nature and amount of
such discrepancies and the actions the Servicer proposes to take with
respect thereto.
With respect to the foregoing, the Backup Servicer, in the performance
of its duties and obligations hereunder, is entitled to rely conclusively, and
shall be fully protected in so relying, on the contents of each Tape, including,
but not limited to, the completeness and accuracy thereof, provided by the
Servicer.
(c) After the receipt of an effective Termination Notice by the
Servicer in accordance with this Agreement, all authority, power, rights and
responsibilities of the Servicer, under this Agreement, whether with respect to
the Contracts or otherwise shall pass to and be vested in the Backup Servicer,
subject to and in accordance with the provisions of Section 6.25, as long as the
Backup Servicer is not prohibited by an applicable provision of law from
fulfilling the same, as evidenced by an Opinion of Counsel.
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(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 providing not less
than 120 days prior written notice to the Deal Agent, the Liquidity Agent, the
Servicer, the Seller and the Originator. In addition, the Backup Servicer may be
removed without cause by the Deal Agent by notice then given in writing to the
Servicer, the Seller and the Backup Servicer. In the event of any such
resignation or removal, the Backup Servicer may be replaced by (i) the Servicer,
acting with the consent of the Deal Agent or (ii) if no such replacement is
appointed within 30 days following such removal or resignation, by the Deal
Agent.
(g) The Backup Servicer undertakes to perform only such duties and
obligations as are specifically set forth in this Agreement, it being expressly
understood by all parties hereto that there are no implied duties or obligations
of the Backup Servicer hereunder. Without limiting the generality of the
foregoing, the Backup Servicer, except as expressly set forth herein, shall have
no obligation to supervise, verify, monitor or administer the performance of the
Servicer. The Backup Servicer may act through its agents, attorneys and
custodians in performing any of its duties and obligations under this Agreement,
it being understood by the parties hereto that the Backup Servicer will be
responsible for any misconduct or negligence on the part of such agents,
attorneys or custodians acting on the routine and ordinary day-to-day operations
for and on behalf of the Backup Servicer. Neither the Backup Servicer nor any of
its officers, directors, employees or agents shall be liable, directly or
indirectly, for any damages or expenses arising out of the services performed
under this Agreement other than damages or expenses which result from the gross
negligence or willful misconduct of it or them or the failure to perform
materially in accordance with this Agreement.
(h) The Backup Servicer shall not be liable for any obligation of the
Servicer contained in this Agreement or for any errors of the Servicer contained
in any computer tape, certificate or other data or document delivered to the
Backup Servicer hereunder or on which the Backup Servicer must rely in order to
perform its obligations hereunder, and the Seller, Secured Parties, Deal Agent,
Liquidity Agent, Collateral Custodian and Backup Servicer, shall look only to
the Servicer to perform such obligations. The Backup Servicer and the Collateral
Custodian shall have no responsibility and shall not be in default hereunder or
incur any liability for any failure, error, malfunction or any delay in carrying
out any of their respective duties under this Agreement if such failure or delay
results from the Backup Servicer acting in accordance with information prepared
or supplied by a Person other than the Backup Servicer or the failure of any
such other Person to prepare or provide such information. The Backup Servicer
shall have no responsibility, shall not be in default and shall incur no
liability for (i) any act or failure to act of any third party, including the
Servicer (ii) any inaccuracy or omission in a notice or communication received
by the Backup Servicer from any third party, (iii) the invalidity or
unenforceability of any Asset or Contract under applicable law, (iv) the breach
or inaccuracy of any representation or warranty made with respect to any Asset,
Contract or any item of Equipment, or (v) the acts or omissions of any successor
Backup Servicer.
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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 ABL is Servicer, any payment
required to be made under the Backup Servicer and Collateral Custodian Fee
Letter, or to deliver any required Monthly Report or other Required Reports
hereunder on or before the date occurring two Business Days after the date such
payment, transfer, deposit, instruction of notice or report is required to be
made or given, as the case may be, under the terms of this Agreement;
(b) any failure on the part of the Servicer duly to observe or perform
in any material respect any other covenants or agreements of the Servicer set
forth in this Agreement or the Purchase Agreement which has a material adverse
effect on the Secured Parties, which continues unremedied for a period of 30
days after the first to occur of (i) the date on which written notice of such
failure requiring the same to be remedied shall have been given to the Servicer
by the Deal Agent and (ii) the date on which the Servicer becomes aware thereof;
(c) any representation, warranty or certification made by the Servicer
in this Agreement or in any certificate delivered pursuant to this Agreement
shall prove to have been incorrect when made, which has a material adverse
effect on the Secured Parties and which continues to be unremedied for a period
of 30 days after the first to occur of (i) the date on which written notice of
such incorrectness requiring the same to be remedied shall have been given to
the Servicer by the Deal Agent and (ii) the date on which the Servicer becomes
aware thereof;
(d) an Insolvency Event shall occur with respect to the Servicer or
ABFS;
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(e) any material delegation of the Servicer's duties which is not
permitted by Section 7.2;
(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 or ABFS 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 or ABFS 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 control of the Servicer or ABFS which takes the
form of either a merger or consolidation in which the Servicer or ABFS, as the
case may be, is not the surviving entity;
(j) ABFS shall fail to have a GAAP net worth (excluding goodwill) of at
least $20,000,000; or
(k) (i) the average Delinquency Ratio for any Payment Date and the two
immediately preceding Payment Dates exceeds 4.0%, or (ii) the average Default
Ratio for any Payment Date exceeds 3.5%.
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.
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(b) Upon its appointment, the Backup Servicer (subject to Section
6.25(a)) or the Successor Servicer, as applicable, shall be the successor in all
respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Backup Servicer or the Successor Servicer, as applicable.
(c) All authority and power granted to the Servicer under this
Agreement shall automatically cease and terminate upon termination of this
Agreement and shall pass to and be vested in the Seller and, without limitation,
the Seller is hereby authorized and empowered to execute and deliver, on behalf
of the Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights. The
Servicer agrees to cooperate with the Seller in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing on the
Contracts in the Asset Pool.
(d) Upon the Backup Servicer receiving notice that it is required to
serve as the Servicer hereunder pursuant to the foregoing provisions of this
Section 6.25, the Backup Servicer will promptly begin the transition to its role
as Servicer.
(e) The Backup Servicer shall be entitled to receive its reasonable
costs incurred in transitioning to Servicer.
Section 6.26 Market Servicing Fee.
Notwithstanding anything to the contrary herein, in the event that a
successor Servicer is appointed Servicer, the Servicing Fee shall equal the
market rate for comparable servicing duties to be fixed upon the date of such
appointment by such successor Servicer and the Trustee with the consent of the
Deal Agent; in the event that the Backup Servicer becomes the successor
Servicer, the Backup Servicer shall solicit three bids, with a copy to the Deal
Agent, from not less than three entities experienced in the servicing of
contracts similar to the Contracts and that are not Affiliates of the Backup
Servicer, the Servicer or the Seller, and the Servicing Fee shall be equal to
the average of the fees proposed as determined by the Backup Servicer and with
the consent of the Deal Agent (the "Market Servicing Fee").
Section 6.27 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 6.28 Protection of Right, Title and Interest to Assets.
(a) The Servicer shall cause this Agreement, all amendments hereto
and/or all financing statements and continuation statements and any other
necessary documents covering the right, title and interest of the Deal Agent as
agent for the Secured Parties and of the Secured Parties to the Assets to be
promptly recorded, registered and filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the Deal
Agent as agent for the Secured Parties hereunder to all property comprising the
Assets, excluding those documents delivered to the Collateral Custodian to be
included as part of the Custodian's Contract File. 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 6.28(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 Custodian's Contract Files or of its principal
executive office and whether, as a result of such relocation, the applicable
provisions of the UCC or any other applicable law governing the perfection of
interests in property would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements or amendments as may be
necessary to continue the perfection of the security interest of the Deal Agent
as agent for the Secured Parties in the Contracts in the Asset Pool and the
proceeds thereof. The Servicer will at all times maintain each office from which
it services Contracts in the Asset Pool within the United States of America.
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Section 6.29 Release of Custodian's 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 Custodian's 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
Custodian's Contract Files so requested to the Seller.
ARTICLE VII
RESTRICTING EVENTS
Section 7.1 [Reserved].
Section 7.2 Restricting Events.
If any of the following events ("Restricting Events") shall occur:
(a) as of any Payment Date, a Servicer Default occurs and is
continuing;
(b) as of any Payment Date, a Default Ratio Trigger Event exists;
(c) as of any Payment Date, a Delinquency Ratio Trigger Event exists;
(d) the passage of 60 days following receipt by the Purchaser of a
written notification of the Seller's intent to terminate the revolving period;
(e) 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;
(f) the Seller is not in compliance with the Portfolio Concentration
Criteria, and such noncompliance is not cured by the next Payment Date;
(g) the Seller does not continue to maintain a first priority perfected
security interest in the Assets in favor of the Deal Agent, as agent for the
Secured Parties;
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(h) there has been any occurrence which, in the judgment of the Deal
Agent, would have a material adverse effect on (i) the assets, liabilities,
financial condition, business or operations of the Originator, the Seller or the
Servicer, or (ii) the ability of the Originator, the Seller or the Servicer to
meet its obligations under the Transaction Documents;
(i) (i) failure on the part of the Originator or the Seller to make any
payment or deposit required by the terms of this Agreement, the Purchase
Agreement or the Contribution Agreement on the day such payment or deposit is
required to be made; or
(ii) failure on the part of the Originator or the Seller to observe
or perform any of its covenants or agreements set forth in this Agreement, the
Purchase Agreement or the Contribution Agreement, which failure has a material
adverse effect on the interests of the Deal Agent, any Secured Party, the
Liquidity Agent or any Investor and which continues unremedied for a period of
30 days or more after written notice to the Originator or the Seller as the case
may be;
(j) any representation or warranty made by the Originator or the Seller
in this Agreement, the Purchase Agreement or the Contribution Agreement or any
information required to be given pursuant to this Agreement, the Purchase
Agreement or the Contribution 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;
(k) the Seller defaults under any other agreement with respect to any
Indebtedness;
(l) the occurrence of an Insolvency Event relating to the Originator or
the Seller;
(m) the Termination Date shall have occurred;
(n) the aggregate Capital outstanding exceeds the Capital Limit and the
Seller does not, within three (3) Business Days deliver a Notice of Sale to the
Deal Agent which would cure such deficiency;
(o) any law, treaty, rule or regulation applicable to any Purchaser
shall have been enacted, amended or rescinded and, in the sole discretion of the
related Purchaser, such enactment, amendment or rescindment, as the case may be,
shall have a material adverse effect on any such Purchaser under the Transaction
Documents;
(p) 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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(q) on any day, the aggregate Hedge Notional Amount in effect for that
day under all Hedge Transactions is less than 90% of the Capital outstanding of
all Fixed Rate Contacts on that day, and the Seller does not cure such
deficiency within one (1) Business Day;
(r) any term or provision in the Purchase Agreement, Contribution
Agreement or the Backup Servicer and Collateral Custodian Fee Letter is amended,
modified, waived or terminated without the prior written consent of the Deal
Agent.
then, and in any such event, the Termination Date shall be deemed to have
occurred automatically upon the occurrence of such event. Upon any such
occurrence, the Deal Agent and the Purchasers shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of the applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnities by the Seller.
Without limiting any other rights which the Deal Agent, the Backup
Servicer, the Collateral Custodian, the Liquidity Agent, the Secured Parties or
any of their respective Affiliates may have hereunder or under applicable law,
the Seller hereby agrees to indemnify the Deal Agent, the Backup Servicer, the
Collateral Custodian, the Liquidity Agent, the Secured Parties, and each of
their respective Affiliates and officers, directors, employees and agents
thereof from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by, but excluding allocations
of overhead expenses of any such Indemnified Party or other non-monetary damages
of any such Indemnified Party any of them arising out of or as a result of this
Agreement or the ownership of the Asset Interest or in respect of any Asset or
any Contract, excluding, however, (a) Indemnified Amounts to the extent
resulting from negligence or willful misconduct on the part of the Deal Agent,
the Backup Servicer, the Collateral Custodian, the Liquidity Agent, such Secured
Parties or such Affiliate and (b) recourse (except with respect to payment and
performance of obligations provided for in this Agreement) for Defaulted
Contracts. If the Seller has made any indemnity payment pursuant to this Section
8.1 and such payment fully indemnified the recipient thereof and the recipient
thereafter collects any payments from others in respect of such Indemnified
Amounts then, the recipient shall repay to the Seller an amount equal to the
amount it has collected from others in respect of such indemnified amounts.
Without limiting the foregoing, the Seller shall indemnify the Deal Agent, the
Backup Servicer, the Collateral Custodian, the Liquidity Agent, the Secured
Parties and each of their respective Affiliates and officers, directors,
employees and agents thereof for Indemnified Amounts relating to or resulting
from:
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(i) any Purchased Asset treated as or represented by the Seller to
be an Eligible Contract which is not at the applicable time an Eligible
Contract;
(ii) reliance on any representation or warranty made or deemed made
by the Seller, the Servicer (if the Originator or one of its
Affiliates) or any of their respective officers under this Agreement or
any Transaction Document and the transactions contemplated hereby and
thereby, 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;
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(ix) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever
sort arising out of or in connection with merchandise or services which
are the subject of any Asset or Contract;
(x) the failure by Seller to pay when due any Taxes for which the
Seller is liable, including without limitation, sales, excise or
personal property taxes payable in connection with the Pool Assets;
(xi) any repayment by the Deal Agent, the Liquidity Agent or a
Secured Party of any amount previously distributed in reduction of
Capital or payment of Yield or any other amount due hereunder or under
any Hedging Agreement, in each case which amount the Deal Agent, the
Liquidity Agent or a Secured Party believes in good faith is required
to be repaid;
(xii) the commingling of Collections of Pool Assets at any time
with other funds;
(xiii) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Purchases or reinvestments or the
ownership of the Asset Interest or in respect of any Asset or Contract;
(xiv) any failure by the Seller to give reasonably equivalent value
to the Originator in consideration for the transfer by the Originator
to the Seller of any Assets or any attempt by any Person to void or
otherwise avoid any such transfer under any statutory provision or
common law or equitable action, including, without limitation, any
provision of the Bankruptcy Code; or
(xv) the failure of the Seller, the Originator or any of their
respective agents or representatives to remit to the Servicer or the
Deal Agent, Collections of Pool Assets remitted to the Seller or any
such agent or representative.
Any amounts subject to the indemnification provisions of this Section 8.1 shall
be paid by the Seller solely pursuant to the provisions of Sections 2.7, 2.8 or
2.9 hereof as the case may be.
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 Secured Party hereby designates and appoints the Deal Agent as
Deal Agent hereunder, and authorizes the Deal Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Deal
Agent by the terms of this Agreement together with such powers as are reasonably
incidental thereto. The Deal Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Deal
Agent shall be read into this Agreement or otherwise exist for the Deal Agent.
In performing its functions and duties hereunder, the Deal Agent shall act
solely as agent for the Secured Parties and does not assume nor shall be deemed
to have assumed any obligation or relationship of trust or agency with or for
the Seller or any of its successors or assigns. The Deal Agent shall not be
required to take any action which exposes the Deal Agent to personal liability
or which is contrary to this Agreement or applicable law. The appointment and
authority of the Deal Agent hereunder shall terminate at the indefeasible
payment in full of the Aggregate Unpaids.
(b) Each Investor hereby designates and appoints FUNB as Liquidity
Agent hereunder, and authorizes the Liquidity Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the
Liquidity Agent by the terms of this Agreement together with such powers as are
reasonably incidental thereto. The Liquidity Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Liquidity Agent shall be read into this Agreement or otherwise exist for the
Liquidity Agent. In performing its functions and duties hereunder, the Liquidity
Agent shall act solely as agent for the Investors and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for the Seller or any of its successors or assigns. The Liquidity Agent shall
not be required to take any action which exposes the Liquidity Agent to personal
liability or which is contrary to this Agreement or applicable law. The
appointment and authority of the Liquidity Agent hereunder shall terminate at
the indefeasible payment in full of the Aggregate Unpaids.
Section 9.2 Delegation of Duties.
(a) The Deal Agent may execute any of its duties under this Agreement
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Deal Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
(b) The Liquidity Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Liquidity Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
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Section 9.3 Exculpatory Provisions.
(a) Neither the Deal Agent nor any of its directors, officers, agents
or employees shall be (i) liable for any action lawfully taken or omitted to be
taken by it or them under or in connection with this Agreement (except for its,
their or such Person's own gross negligence or willful misconduct or, in the
case of the Deal Agent, the breach of its obligations expressly set forth in
this Agreement), or (ii) responsible in any manner to any of the Secured Parties
for any recitals, statements, representations or warranties made by the Seller
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished
in connection herewith, or for any failure of the Seller to perform its
obligations hereunder, or for the satisfaction of any condition specified in
Article III. The Deal Agent shall not be under any obligation to any Secured
Party to ascertain or to inquire as to the observance or performance of any of
the agreements or covenants contained in, or conditions of, this Agreement, or
to inspect the properties, books or records of the Seller. The Deal Agent shall
not be deemed to have knowledge of any Restricting Event unless the Deal Agent
has received notice from the Seller or a Secured Party.
(b) Neither the Liquidity Agent nor any of its directors, officers,
agents or employees shall be (i) liable for any action lawfully taken or omitted
to be taken by it or them under or in connection with this Agreement (except for
its, their or such Person's own gross negligence or willful misconduct or, in
the case of the Liquidity Agent, the breach of its obligations expressly set
forth in this Agreement), or (ii) responsible in any manner to the Deal Agent or
any of the Secured Parties for any recitals, statements, representations or
warranties made by the Seller contained in this Agreement or in any certificate,
report, statement or other document referred to or provided for in, or received
under or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other document furnished in connection herewith, or for any failure of the
Seller to perform its obligations hereunder, or for the satisfaction of any
condition specified in Article III. The Liquidity Agent shall not be under any
obligation to the Deal Agent or any Secured Party to ascertain or to inquire as
to the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Seller. The Liquidity Agent shall not be deemed to have knowledge
of any Restricting Event unless the Liquidity Agent has received notice from the
Seller, the Deal Agent or a Secured Party.
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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 communication believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Seller), independent accountants and other
experts selected by the Deal Agent. The Deal Agent shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any
other document furnished in connection herewith unless it shall first receive
such advice or concurrence of VFCC or the Required Investors or all of the
Secured Parties, as applicable, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Secured Parties, provided that unless and
until the Deal Agent shall have received such advice, the Deal Agent may take or
refrain from taking any action, as the Deal Agent shall deem advisable and in
the best interests of the Secured Parties. The Deal Agent shall in all cases be
fully protected in acting, or in refraining from acting, in accordance with a
request of VFCC or the Required Investors or all of the Secured Parties, as
applicable, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Secured Parties.
(b) The Liquidity Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Seller), independent accountants
and other experts selected by the Liquidity Agent. The Liquidity Agent shall in
all cases be fully justified in failing or refusing to take any action under
this Agreement or any other document furnished in connection herewith unless it
shall first receive such advice or concurrence of Required Investors as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Investors, provided that unless and until the Liquidity Agent shall have
received such advice, the Liquidity Agent may take or refrain from taking any
action, as the Liquidity Agent shall deem advisable and in the best interests of
the Investors. The Liquidity Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of the
Required Investors and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Investors.
Section 9.5 Non-Reliance on Deal Agent, Liquidity Agent and Other
Purchasers.
Each Secured Party expressly acknowledges that neither the Deal Agent,
the Liquidity Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Deal Agent or the Liquidity Agent
hereafter taken, including, without limitation, any review of the affairs of the
Seller, shall be deemed to constitute any representation or warranty by the Deal
Agent or the Liquidity Agent. Each Secured Party represents and warrants to the
Deal Agent and to the Liquidity Agent that it has and will, independently and
without reliance upon the Deal Agent, the Liquidity Agent or any other Secured
Party and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations,
property, prospects, financial and other conditions and creditworthiness of the
Seller and made its own decision to enter into this Agreement or Hedging
Agreement, as the case may be.
Section 9.6 Reimbursement and Indemnification.
The Investors agree to reimburse and indemnify VFCC, the Deal Agent,
the Liquidity Agent and each of their respective officers, directors, employees,
representatives and agents ratably according to their pro rata shares, to the
extent not paid or reimbursed by the Seller (i) for any amounts for which VFCC,
the Liquidity Agent, acting in its capacity as Liquidity Agent, or the Deal
Agent, acting in its capacity as Deal Agent, is entitled to reimbursement by the
Seller hereunder and (ii) for any other expenses incurred by VFCC, the Liquidity
Agent, acting in its capacity as Liquidity Agent, or the Deal Agent, in its
capacity as Deal Agent and acting on behalf of the Secured Parties, in
connection with the administration and enforcement of this Agreement.
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Section 9.7 Deal Agent and Liquidity Agent in their Individual
Capacities.
The Deal Agent, the Liquidity Agent and each of their respective
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Seller or any Affiliate of the Seller as though the
Deal Agent or the Liquidity Agent, as the case may be, were not the Deal Agent
or the Liquidity Agent, as the case may be, hereunder. With respect to the
acquisition of Asset Interests pursuant to this Agreement, the Deal Agent, the
Liquidity Agent and each of their respective Affiliates shall have the same
rights and powers under this Agreement as any Purchaser and may exercise the
same as though it were not the Deal Agent or the Liquidity Agent, as the case
may be, and the terms "Investor," "Purchaser," "Investors" and "Purchasers"
shall include the Deal Agent or the Liquidity Agent, as the case may be, in its
individual capacity.
Section 9.8 Successor Deal Agent or Liquidity Agent.
(a) The Deal Agent may, upon 5 days' notice to the Seller and the
Secured Parties, and the Deal Agent will, upon the direction of all of the
Secured Parties (other than the Deal Agent, in its individual capacity) resign
as Deal Agent. If the Deal Agent shall resign, then the Required Investors
during such 5-day period shall appoint from among the Secured Parties a
successor agent. If for any reason no successor Deal Agent is appointed by the
Required Investors during such 5-day period, then effective upon the expiration
of such 5-day period, the Second Parties shall perform all of the duties of the
Deal Agent hereunder and the Seller shall make all payments in respect of the
Aggregate Unpaids or under any fee letter delivered by the Originator to the
Deal Agent and the Secured Parties directly to the applicable Secured Party and
for all purposes shall deal directly with the Secured Party. After any retiring
Deal Agent's resignation hereunder as Deal Agent, the provisions of this Article
VIII and Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Deal Agent under this Agreement.
(b) The Liquidity Agent may, upon 5 days' notice to the Seller, the
Deal Agent and the Investors, and the Liquidity Agent will, upon the direction
of all of the Investors (other than the Liquidity Agent, in its individual
capacity) resign as Liquidity Agent. If the Liquidity Agent shall resign, then
the Required Investors during such 5-day period shall appoint from among the
Investors a successor Liquidity Agent. If for any reason no successor Liquidity
Agent is appointed by the Required Investors during such 5-day period, then
effective upon the expiration of such 5-day period, the Investors shall perform
all of the duties of the Liquidity Agent hereunder and all payments in respect
of the Aggregate Unpaids. After any retiring Liquidity Agent's resignation
hereunder as Liquidity Agent, the provisions of this Article VIII and Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Liquidity Agent under this Agreement.
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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 ▇▇▇▇▇'▇, assign to one or more banks or
other entities all or a portion of its rights and obligations under this
Agreement; provided, however, that (i) each such assignment shall be of a
constant, and not a varying percentage of all of the assigning Investor's rights
and obligations under this Agreement, (ii) the amount of the Commitment of the
assigning Investor being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than the lesser of (A) $15,000,000 or an integral
multiple of $1,000,000 in excess of that amount and (B) the full amount of the
assigning Investor's Commitment, (iii) each such assignment shall be to an
Eligible Assignee, (iv) the parties to each such assignment shall execute and
deliver to the Deal Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500 or such lesser amount as shall be approved by the Deal Agent, (v) the
parties to each such assignment shall have agreed to reimburse the Deal Agent,
the Liquidity Agent and VFCC for all fees, costs and expenses (including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for each of the Deal Agent, the Liquidity Agent and VFCC) incurred by the Deal
Agent, the Liquidity Agent and VFCC, respectively, in connection with such
assignment and (vi) there shall be no increased costs, expenses or taxes
incurred by the Deal Agent, the Liquidity Agent or VFCC upon such assignment or
participation, and provided further that upon the effective date of such
assignment the provisions of Section 3.03(f) of the Administration Agreement
shall be satisfied. Upon such execution, delivery and acceptance by the Deal
Agent and the Liquidity Agent and the recording by the Deal Agent, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be the date of acceptance thereof by the Deal Agent and the
Liquidity Agent, unless a later date is specified therein, (i) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of an Investor hereunder and (ii)
the Investor assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Investor's rights and obligations under
this Agreement, such Investor shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Investor assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Investor makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Investor makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of VFCC or the performance or observance by VFCC of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of such financial statements and other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Deal Agent or the
Liquidity Agent, such assigning Investor or any other Investor and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assigning Investor and such assignee confirm that such
assignee is an Eligible Assignee; (vi) such assignee appoints and authorizes
each of the Deal Agent and the Liquidity Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
such agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as an Investor.
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(c) The Deal Agent shall maintain at its address referred to herein a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Investors and the
Commitment of, and the Capital of, each Asset interest owned by each investor
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and VFCC, the
Seller and the Investors may treat each Person whose name is recorded in the
Register as an Investor hereunder for all purposes of this Agreement. The
Register shall be available for inspection by VFCC, the Liquidity Agent or any
Investor at any reasonable time and from time to time upon reasonable prior
notice.
(d) Subject to the provisions of Section 10.1(a), upon its receipt of
an Assignment and Acceptance executed by an assigning Investor and an assignee,
the Deal Agent and the Liquidity Agent shall each, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit D
hereto, accept such Assignment and Acceptance, and the Deal Agent shall then (i)
record the information contained therein in the Register and (ii) give prompt
notice thereof to VFCC.
(e) Each Investor may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment and
each Asset Interest owned by it); provided, however, that (i) such Investor's
obligations under this Agreement (including, without limitation, its Commitment
hereunder) shall remain unchanged, (ii) such Investor shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Deal Agent and the other Investors shall continue to deal solely
and directly with such Investor in connection with such Investor's rights and
obligations under this Agreement, and provided further that the Deal Agent shall
have confirmed that upon the effective date of such participation the provisions
of Section 3.03(f) of the Administration Agreement shall be satisfied.
Notwithstanding anything herein to the contrary, each participant shall have the
rights of an Investor (including any right to receive payment) under Sections
2.12 and 2.13; provided, however, that no participant shall be entitled to
receive payment under either such Section in excess of the amount that would
have been payable under such Section by the Seller to the Investor granting its
participation had such participation not been granted, and no Investor granting
a participation shall be entitled to receive payment under either such Section
in an amount which exceeds the sum of (i) the amount to which such Investor is
entitled under such Section with respect to any portion of any Asset Interest
owned by such Investor which is not subject to any participation plus (ii) the
aggregate amount to which its participants are entitled under such Sections with
respect to the amounts of their respective participations. With respect to any
participation described in this Section 10.1, the participant's rights as set
forth in the agreement between such participant and the applicable Investor to
agree to or to restrict such Investor's ability to agree to any modification,
waiver or release of any of the terms of this Agreement or to exercise or
refrain from exercising any powers or rights which such Investor may have under
or in respect of this Agreement shall be limited to the right to consent to any
of the matters set forth in Section 11.1 of this Agreement.
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(f) Each Investor may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.1, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Seller or VFCC furnished to such
Investor by or on behalf of the Seller or VFCC.
(g) In the event (i) an Investor ceases to qualify as an Eligible
Assignee, or (ii) an Investor makes demand for compensation pursuant to Section
2.12 or Section 2.13, VFCC may, and, upon the direction of the Seller and prior
to the occurrence of a Restricting Event, shall, in any such case,
notwithstanding any provision to the contrary herein, replace such Investor with
an Eligible Assignee by giving three Business Days' prior written notice to such
Investor. In the event of the replacement of an Investor, such Investor agrees
(i) to assign all of its rights and obligations hereunder to an Eligible
Assignee selected by VFCC upon payment to such Investor of the amount of such
Investor's Asset Interests together with any accrued and unpaid Yield thereon,
all accrued and unpaid commitment fees owing to such Investor and all other
amounts owing to such Investor hereunder and (ii) to execute and deliver an
Assignment and Acceptance and such other documents evidencing such assignment as
shall be necessary or reasonably requested by VFCC or the Deal Agent. In the
event that any Investor ceases to qualify as an Eligible Assignee, such affected
Investor agrees (1) to give the Deal Agent, the Seller and VFCC prompt written
notice thereof and (2) subject to the following proviso, to reimburse the Deal
Agent, the Liquidity Agent, the Seller, VFCC and the relevant assignee for all
fees, costs and expenses (including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for each of the Deal Agent, the Liquidity
Agent, the Seller and VFCC and such assignee) incurred by the Deal Agent, the
Liquidity Agent, the Seller, VFCC and such assignee, respectively, in connection
with any assignment made pursuant to this Section 10.1(g) by such affected
Investor; provided, however, that such affected Investor's liability for such
costs, fees and expenses shall be limited to the amount of any up-front fees
paid to such affected Investor at the time that it became a party to this
Agreement.
(h) Nothing herein shall prohibit any Investor from pledging or
assigning as collateral any of its rights under this Agreement to any Federal
Reserve Bank in accordance with applicable law and any such pledge or collateral
assignment may be made without compliance with Section 10.1(a) or Section
10.1(b).
(i) In the event any Investor causes increased costs, expenses or taxes
to be incurred by the Deal Agent, Liquidity Agreement or VFCC in connection with
the assignment or participation of such Investor's rights and obligations under
this Agreement to an Eligible Assignee then such Investor agrees that it will
make reasonable efforts to assign such increased costs, expenses or taxes to
such Eligible Assignee in accordance with the provisions of this Agreement.
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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 Servicer, the Deal Agent and the
Required Investors; provided, however, that no such amendment, waiver or
modification affecting the rights or obligations of any Hedge Counterparty, the
Backup Servicer or the Collateral Custodian shall be effective as against that
Hedge Counterparty, the Backup Servicer and/or the Collateral Custodian, as the
case may be, without the written agreement of such Persons. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No amendment, waiver or other modification of this Agreement shall:
(i) without the consent of each affected Purchaser, (A) extend the
Commitment Termination Date or the date of any payment or deposit of
Collections by the Seller or the Servicer, (B) reduce the rate or
extend the time of payment of Yield (or any component thereof), (C)
reduce any fee payable to the Deal Agent for the benefit of the
Purchasers, (D) except pursuant to Article X hereof, change the amount
of the Capital of any Purchaser, an Investor's pro rata share or an
Investor's Commitment, (E) amend, modify or waive any provision of the
definition of Required Investors or this Section 11.1(b), (F) consent
to or permit the assignment or transfer by the Seller of any of its
rights and obligations under this Agreement or (G) amend or modify any
defined term (or any defined term used directly or indirectly in such
defined term) used in clauses (A) through (E) above in a manner which
would circumvent the intention of the restrictions set forth in such
clauses; or
(ii) without the written consent of the Deal Agent, amend, modify
or waive any provision of this Agreement if the effect thereof is to
affect the rights or duties of such Agent.
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(c) Notwithstanding the foregoing provisions of this Section 11.1,
without the consent of the Investors, the Deal Agent may, with the consent of
the Seller amend this Agreement solely to add additional Persons as Investors
hereunder. Any modification or waiver shall apply to each of the Purchasers
equally and shall be binding upon the Seller, the Purchasers and the Deal Agent.
Section 11.2 Notices, Etc.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted or delivered,
as to each party hereto, at its address set forth under its name on the
signature pages hereof or specified in such party's Assignment and Acceptance or
at such other address as shall be designated by such party in a written notice
to the other parties hereto. All such notices and communications shall be
effective, upon receipt, or in the case of (a) notice by mail, five days after
being deposited in the United States mail, first class postage prepaid, (b)
notice by telex, when telexed against receipt of answer back, or (c) notice by
facsimile copy, when verbal communication of receipt is obtained, except that
notices and communications pursuant to Article 11 shall not be effective until
received with respect to any notice sent by mail or telex.
Section 11.3 Ratable Payments.
If any Secured Party, whether by setoff or otherwise, has payment made
to it with respect to any portion of the Aggregate Unpaids owing to such Secured
Party (other than payments received pursuant to Section 8.1 in a greater
proportion than that received by any other Secured Party), such Secured Party
agrees, promptly upon demand, to purchase for cash without recourse or warranty
a portion of the Aggregate Unpaids held by the other Secured Parties so that
after such purchase each Secured Party will hold its ratable proportion of the
Aggregate Unpaids; provided, however, that if all or any portion of such excess
amount is thereafter recovered from such Secured Party, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
Section 11.4 No Waiver, Rights and Remedies.
No failure on the part of the Deal Agent, the Collateral Custodian, the
Backup Servicer or a Secured Party to exercise, and no delay in exercising, any
right or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right. The rights and
remedies herein provided are cumulative and not exclusive of any rights and
remedies provided by law.
Section 11.5 Binding Effect; Benefit of Agreement.
This Agreement shall be binding upon and inure to the benefit of the
Seller, the Deal Agent, the Backup Servicer, the Collateral Custodian, the
Secured Parties and their respective successors and permitted assigns and, in
addition, the provisions of 2.7(a)(i), 2.8(a)(i) and 2.9(b)(i) shall inure to
the benefit of each Hedge Counterparty, whether or not that Hedge Counterparty
is a Secured Party.
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Section 11.6 Term of this Agreement.
This Agreement, including, without limitation, the Seller's obligation
to observe its covenants set forth in Article V, and the Servicer's obligation
to observe its covenants set forth in Article VI, shall remain in full force and
effect until the Collection Date; provided, however, that the rights and
remedies with respect to any breach of any representation and warranty made or
deemed made by the Seller pursuant to Articles III and IV and the
indemnification and payment provisions of Article VIII and Article IX and the
provisions of Section 11.9 and Section 11.10 shall be continuing and shall
survive any termination of this Agreement.
Section 11.7 Governing Law; Consent to Jurisdiction; Waiver of
Objection to Venue.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. EACH OF THE SECURED PARTIES, THE SELLER, THE
LIQUIDITY AGENT AND THE DEAL AGENT HEREBY AGREES TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK AND THE
EASTERN DISTRICT OF PENNSYLVANIA. EACH OF THE PARTIES HERETO AND EACH SECURED
PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 11.8 Waiver of Jury Trial.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE SECURED PARTIES,
THE SELLER AND THE DEAL AGENT WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 11.9 Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the Deal
Agent, the Liquidity Agent, the Backup Servicer, the Collateral Custodian, the
Secured Parties and its or their Affiliates and officers, directors, employees
and agents thereof under Article VIII hereof, the Seller agrees to pay on demand
all costs and expenses of the Deal Agent, the Liquidity Agent, the Backup
Servicer, the Collateral Custodian and the Secured Parties incurred in
connection with the preparation, execution, delivery, administration (including
periodic auditing), amendment or modification of, or any waiver or consent
issued in connection with, this Agreement and the other documents to be
delivered hereunder or in connection herewith (excluding any Hedging Agreement),
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Deal Agent, the Liquidity Agent, the Backup Servicer, the
Collateral Custodian and the Secured Parties with respect thereto and with
respect to advising the Deal Agent, the Liquidity Agent, the Backup Servicer,
the Collateral Custodian and the Secured Parties as to their respective rights
and remedies under this Agreement and the other documents to be delivered
hereunder or in connection herewith (excluding any Hedging Agreement), and all
costs and expenses, if any (including reasonable counsel fees and expenses),
incurred by the Deal Agent, the Liquidity Agent, the Backup Servicer, the
Collateral Custodian or the Secured Parties in connection with the enforcement
of this Agreement and the other documents to be delivered hereunder or in
connection herewith (including any Hedging Agreement).
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(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 privilege, net worth, or income taxes) incurred by any Issuer or any
shareholder of such Issuer ("Other Costs"), including, without limitation, all
costs and expenses incurred by the Deal Agent in connection with periodic audits
of the Seller's or the Servicer's books and records and the cost of rating such
Issuer's commercial paper with respect to financing its purchase of Asset
Interests hereunder by independent financial rating agencies.
Section 11.10 No Proceedings.
Each of the Seller, the Deal Agent, the Liquidity Agent, the Servicer,
the Backup Servicer, the Collateral Custodian and the Secured Parties hereby
agrees that it will not institute against, or join any other Person in
instituting against VFCC any proceedings of the type referred to in Section
6.8(d) and 6.9(c) so long as any commercial paper issued by VFCC shall be
outstanding and there shall not have elapsed one year and one day since the last
day on which any such commercial paper shall have been outstanding.
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Section 11.11 Recourse Against Certain Parties.
(a) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of any Secured Party as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any manager or administrator of such
Secured Party or any incorporator, affiliate, stockholder, officer, employee or
director of such Secured Party or of any such manager or administrator, as such,
by the enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise; it being expressly agreed and understood
that the agreements of such Secured Party contained in this Agreement and all of
the other agreements, instruments and documents entered into by it pursuant
hereto or in connection herewith are, in each case, solely the corporate
obligations of such Secured Party, and that no personal liability whatsoever
shall attach to or be incurred by any manager or administrator of such Secured
Party or any incorporator, stockholder, affiliate, officer, employee or director
of such Secured Party or of any such manager or administrator, as such, or any
other of them, under or by reason of any of the obligations, covenants or
agreements of such Secured Party contained in this Agreement or in any other
such instruments, documents or agreements, or which are implied therefrom, and
that any and all personal liability of every such manager or administrator of
such Secured Party and each incorporator, stockholder, affiliate, officer,
employee or director of such Secured Party or of any such manager or
administrator, or any of them, for breaches by such Secured Party of any such
obligations, covenants or agreements, which liability may arise either at common
law or at equity, by statute or constitution, or otherwise, is hereby expressly
waived as a condition of and in consideration for the execution of this
Agreement.
(b) Notwithstanding anything in this Agreement or any other Transaction
Document to the contrary, VFCC shall have no obligation to pay any amount
required to be paid by it hereunder or thereunder in excess of any amount
available to VFCC after paying or making provision for the payment of its
Commercial Paper Notes. All payment obligations of VFCC hereunder are contingent
on the availability of funds in excess of the amounts necessary to pay
Commercial Paper Notes; and each of the Seller, the Servicer, the Backup
Servicer, the Deal Agent, the Liquidity Agent and the Secured Parties agree that
they shall not have a claim under Section 101(5) of the Bankruptcy Code if and
to the extent that any such payment obligation exceeds the amount available to
VFCC to pay such amount after paying or making provision for the payment of its
Commercial Paper Notes.
(c) The provisions of this Section 11.11 shall survive the termination
of this Agreement.
Section 11.12 Protection of Ownership Interests of the Purchasers;
Intent of Parties; Security Interest.
(a) The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may reasonably be necessary or desirable, or that the Deal Agent
may reasonably request, to perfect, protect or more fully evidence the Asset
Interests and the undivided ownership interest in the Assets in the Asset Pool
represented by such Asset Interests, or to enable the Deal Agent or the Secured
Parties to exercise and enforce their rights and remedies hereunder.
(b) If the Seller or the Servicer fails to perform any of its
obligations hereunder after five Business Days' notice from the Deal Agent, the
Deal Agent or any Secured Party may (but shall not be required to) perform, or
cause performance of, such obligation; and the Deal Agent's or such Secured
Party's costs and expenses incurred in connection therewith shall be payable by
the Seller (if the Servicer that fails to so perform is the Seller or an
Affiliate thereof) as provided in Article VIII, as applicable. The Seller
irrevocably authorizes the Deal Agent and appoints the Deal Agent as its
attorney-in-fact to act on behalf of the Seller (i) to execute on behalf of the
Seller as debtor and to file financing statements necessary or desirable in the
Deal Agent's sole discretion to perfect and to maintain the perfection and
priority of the interest of the Secured Parties in the Assets and (ii) to file a
carbon, photographic or other reproduction of this Agreement or any financing
statement with respect to the Assets as a financing statement in such offices as
the Deal Agent in its sole discretion deems necessary or desirable to perfect
and to maintain the perfection and priority of the interests of the Secured
Parties in the Assets. This appointment is coupled with an interest and is
irrevocable.
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(c) The parties hereto intend that the conveyance of Asset Interests by
the Seller to the Purchasers shall be treated as sales for all purposes. If,
despite such intention, a determination is made that such transactions shall not
be treated as sales, then the parties hereto intend that this Agreement
constitutes a security agreement and the transactions effected hereby constitute
secured loans by the Purchasers to the Seller under applicable law. For such
purpose, the Seller hereby transfers, conveys, assigns and grants to the Deal
Agent, for the benefit of the Secured Parties, a continuing security interest in
all Assets, all Collections, all Hedging Agreements and the proceeds of the
foregoing to secure the repayment of all Capital, all payments at any time due
or accrued in respect of the Yield on any Asset Interest and all other payments
at any time due (whether accrued or due) by the Seller hereunder (including
without limit any amount owing under Article VIII hereof), under any Hedging
Agreement (including, without limitation, payments in respect of the termination
of any such Hedging Agreement) or under any fee letter to the Deal Agent and
each Purchaser.
Section 11.13 Confidentiality
(a) Each of the Deal Agent, the Secured Parties, the Liquidity Agent,
the Servicer, the Collateral Custodian, the Backup Servicer and the Seller shall
maintain and shall cause each of its employees and officers to maintain the
confidentiality of the Agreement and all information with respect to the other
parties, including all information regarding the business of the Seller and the
Servicer hereto and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that each such party and its officers and employees
may (i) disclose such information to its external accountants, attorneys,
investors, potential investors and the agents of such Persons ("Excepted
Persons"), provided, however, that each Excepted Person shall, as a condition to
any such disclosure, agree for the benefit of the Deal Agent, the Secured
Parties, the Liquidity Agent, the Servicer, the Collateral Custodian, the Backup
Services and the Seller that such information shall be used solely in connection
with such Excepted Person's evaluation of, or relationship with, the Seller and
its affiliates, (ii) disclose the existence of the Agreement, but not the
financial terms thereof, (iii) disclose such information as is required by an
applicable law or an order of an judicial or administrative proceeding and (iv)
disclose the Agreement and such information in any suit, action, proceeding or
investigation (whether in law or in equity or pursuant to arbitration) involving
any of the Transaction Documents or any Hedging Agreement for the purpose of
defending itself, reducing its liability, or protecting or exercising any of its
claims, rights, remedies, or interests under or in connection with any of the
Transaction Documents or any Hedging Agreement. It is understood that the
financial terms that may not be disclosed except in compliance with this Section
11.13(a) include, without limitation, all fees and other pricing terms, and all
Restricting Events, Servicer Defaults, and priority of payment provisions.
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(b) Anything herein to the contrary notwithstanding, the Seller and the
Servicer each hereby consents to the disclosure of any nonpublic information
with respect to it (i) to the Deal Agent, the Liquidity Agent, the Collateral
Custodian, the Backup Servicer or the Secured Parties by each other, (ii) by the
Deal Agent or the Purchasers to any prospective or actual assignee or
participant of any of them or (iii) by the Deal Agent, the Liquidity Agent or a
Purchaser to any Rating Agency, Commercial Paper dealer or provider of a surety,
guaranty or credit or liquidity enhancement to a Purchaser and to any officers,
directors, employees, outside accountants and attorneys of any of the foregoing,
provided each such Person is informed of the confidential nature of such
information. In addition, the Secured Parties, the Liquidity Agent and the Deal
Agent may disclose any such nonpublic information as required pursuant to any
law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
(c) Notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, (ii) disclosure of any and all information
(A) if required to do so by any applicable statute, law, rule or regulation, (B)
to any government agency or regulatory body having or claiming authority to
regulate or oversee any respects of the Seller's, the Servicer's, the Collateral
Custodian's or the Backup Servicer's business or that of their affiliates, (C)
pursuant to any subpoena, civil investigative demand or similar demand or
request of any court, regulatory authority, arbitrator or arbitration to which
the Collateral Custodian or Backup Servicer or an affiliate or an officer,
director, employer or shareholder thereof is a party, (D) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated herein approved in advance by the
Seller or Servicer or (E) to any affiliate, independent or internal auditor,
agent, employee or attorney of the Collateral Custodian or Backup Servicer
having a need to know the same, provided that the Collateral Custodian or Backup
Servicer advises such recipient of the confidential nature of the information
being disclosed, or (iii) any other disclosure authorized by the Seller or
Servicer.
Section 11.14 Notice of Breach of Representations and Warranties.
Upon the discovery by the Seller, the Servicer, any Secured Party, the
Deal Agent, the Liquidity Agent of any Investor of a breach of any of the
representations and warranties contained in Section 4.2 herein, the party
discovering such breach shall give prompt notice to the others.
Section 11.15 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
94
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: AMERICAN BUSINESS LEASE FUNDING CORPORATION
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
THE SERVICER: AMERICAN BUSINESS LEASING, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
THE INVESTORS: FIRST UNION NATIONAL BANK
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Commitment: $100,000,000
First Union National Bank
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No: (▇▇▇) ▇▇▇-▇▇▇▇
VFCC: VARIABLE FUNDING CAPITAL
CORPORATION
By First Union Capital Markets, a division of
Wheat First Securities, Inc. as attorney-in-fact
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
Variable Funding Capital Corporation
c/o First Union Capital Markets, a division of
Wheat First Securities, Inc.
One First ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
Attention: Conduit Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Lord Securities Corp.
Attention: Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE DEAL AGENT: FIRST UNION CAPITAL MARKETS, a division
of WHEAT FIRST SECURITIES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
First Union Capital Markets, a division of
Wheat First Securities, Inc.
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Attention: Conduit Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE LIQUIDITY AGENT: FIRST UNION NATIONAL BANK
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
First Union National Bank
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE COLLATERAL CUSTODIAN: NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Collateral Custodian
/s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
------------------------------
By: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Corporate Trust Officer
Norwest Bank Minnesota, National Association
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Attention: Custody Vault
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE BACKUP SERVICER: NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Backup Servicer
/s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
------------------------------
By: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Corporate Trust Officer
Norwest Bank Minnesota, National Association
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Services
Asset-Backed Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
AMERICAN BUSINESS LEASING: AMERICAN BUSINESS LEASING
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
FEDERAL LEASING CORP.: FEDERAL LEASING CORP.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President