EXHIBIT 99.1
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (this "Agreement"), dated as of December
__, 2003, by and among DVI, INC. ("XXX"), XXX BUSINESS CREDIT CORPORATION
("XXXXX"), XXX FINANCIAL SERVICES INC. ("DVIFS"), as contributor (in such
capacity, the "Contributor") and servicer (in such capacity, the "Servicer"),
U.S. BANK NATIONAL ASSOCIATION ("U.S. Bank" or "Trustee"), in its capacity as
trustee for the Securitizations (defined below and executing this Agreement
subject to Section 23 hereof), each Receivables Corporation (as defined herein),
each Issuer (as defined herein), THE AD HOC COMMITTEE OF NOTEHOLDERS (the "Ad
Hoc Committee") and LYON FINANCIAL SERVICES, INC. D/B/A US BANCORP PORTFOLIO
SERVICES as successor servicer (in such capacity, the "Successor Servicer"),
recites and provides as follows:
RECITALS
WHEREAS, DVIFS, transferred certain specified assets to its
subsidiaries in connection with each of the securitization transactions listed
on Exhibit A (each a "Securitization" and, collectively, the "Securitizations")
and agreed to service such assets, in each case on the terms and conditions set
forth in the applicable Contribution and Servicing Agreement listed on Exhibit A
(each a "Contribution and Servicing Agreement" and collectively, the
"Contribution and Servicing Agreements");
WHEREAS, each of the limited liability companies listed on Exhibit A
(each, an "Issuer" and collectively the "Issuers") issued notes secured by the
Contributed Property (as defined in the Appendices which relate to each
Contribution and Servicing Agreement) or by a security interest therein, in each
case pursuant to an Indenture listed on Exhibit A (each an "Indenture" and
collectively, the "Indentures");
WHEREAS, U.S. Bank serves as trustee (in such capacity, the
"Trustee") under each Indenture on behalf of the Noteholders and Swap Providers
with respect to each Securitization;
WHEREAS, DVIFS, together with DVI and DVIBC Corporation
(collectively, the "Debtors") commenced voluntary cases under Chapter 11 of the
United States Bankruptcy Code (the "Bankruptcy Code") on August 25, 2003 (the
"Chapter 11 Cases") in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court");
WHEREAS, the parties hereto have agreed that certain provisions of
the Contribution and Servicing Agreements and the Indentures are ambiguous or
operate in a manner inconsistent with the preservation of the interests of the
Trustee, DVIFS and/or the Noteholders, and desire to amend such provisions;
WHEREAS, the Contribution and Servicing Agreements and the
Indentures grant authority to the Trustee to negotiate modified compensation
arrangements for a Successor Servicer thereunder;
WHEREAS, the parties hereto desire to preserve the trust estates
created in the Securitizations for purposes of fulfilling the purposes of each
trust and maximizing the value thereof for the benefit of the Noteholders and
the Debtors, and desire to enter into this Agreement for purposes thereof;
WHEREAS, pursuant to section 365 of the Bankruptcy Code, DVIFS has
proposed to assume each of the Contribution and Servicing Agreements, and assign
the Contribution and Servicing Agreements, as amended pursuant to the terms of
this Agreement, to the Successor Servicer (such assumption and assignment, the
"Servicing Transfer Transaction"), in each case on the terms and conditions set
forth herein;
WHEREAS, the Trustee and the Ad Hoc Committee, in order to preserve,
protect and maintain the trust estates created by the securitizations and after
consultation with their independent advisors, desire that the Successor Servicer
assume the obligations of DVIFS pursuant to and as amended by the terms of this
Agreement but shall not be required to perform the obligations of DVIFS as
Contributor;
WHEREAS, the Trustee has asserted certain claims against DVIFS in
connection with the Securitizations and the Contribution and Servicing
Agreements, including but not limited to the cure of certain breaches of
representations and warranties under the Contribution and Servicing Agreements,
the failure to make certain payments of sales, personal property and franchise
taxes, the misapplication of proceeds belonging to the Securitization Trusts,
and claims relating to the failure to pay vendors or advance funds to customers
with respect to equipment contracts transferred to the Securitization Trusts;
WHEREAS, the Debtors or its creditors may have claims against the
Securitization Trusts in connection with the Securitizations and the
Contribution and Servicing Agreements;
WHEREAS, in order to maximize value for the Debtors' estates and the
Securitization Trusts and settle and resolve claims relating to the
Securitizations, the parties hereto have agreed to settle their respective
claims and to effectuate the Servicing Transfer Transaction upon the terms and
conditions set forth herein; and
WHEREAS, in the event this Agreement is not approved by the
Bankruptcy Court, nothing contained herein, including the acknowledgments set
forth in Section 4 of this Agreement, shall constitute or be construed as an
admission of liability or a waiver of claims, or be used for any purpose.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. Definitions. Except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms used and not otherwise
defined herein shall have
2
the meanings assigned to them in the Contribution and Servicing Agreements. In
addition, the following terms shall have the following definitions:
"Ableco" shall mean Ableco Finance LLC.
"Ad Hoc Committee" shall have the meaning set forth in the preamble
to this Agreement.
"Agreement" shall mean this Settlement Agreement.
"Ancillary Payments" shall have the meaning set forth in Section 6
of this Agreement.
"Assignment Fee" shall have the meaning set forth in Section 3(d) of
this Agreement.
"Bankruptcy Code" shall have the meaning set forth in the recitals
to this Agreement.
"Bankruptcy Court" shall have the meaning set forth in the recitals
to this Agreement.
"Chapter 11 Cases" shall have the meaning set forth in the recitals
to this Agreement.
"Closing Date" shall mean the date on which all conditions set forth
in Section 11 of this Agreement have been satisfied or waived in writing by all
beneficiaries thereof.
"Collections Order" shall have the meaning set forth in Section 5 of
this Agreement.
"Consenting Parties" shall mean, collectively, U.S. Bank, as Trustee
on behalf of the Noteholders and the Swap Providers, the Ad Hoc Committee of
Noteholders, DVIFS, each Receivables Corporation and each Issuer.
"Contract Deficiencies" shall have the meaning set forth in Section
12 of this Agreement.
"Contributor" shall have the meaning set forth in the preamble to
this Agreement.
"Contribution and Servicing Agreements" shall have the meaning set
forth in the recitals to this Agreement.
"CSA Reserve Account" shall have the meaning set forth in Section
9(a) of this Agreement.
"CSA Reserve Account Agreement" shall have the meaning set forth in
Section 9(a).
3
"CSA Reserve Account Trustee" shall have the meaning set forth in
Section 9(c) of this Agreement.
"Debtors" shall have the meaning set forth in the recitals to this
Agreement.
"DIP Lenders" shall mean Goldman, as loan agent, administrative
agent and lender under the Debtors' post-petition credit agreement and Ableco,
as loan agent and lender under the Debtors' post-petition credit agreement, and
A3 Funding LP, as lender under the Debtors' post-petition credit agreement.
"DVIFS" shall have the meaning set forth in the preamble to this
Agreement.
"Final Order" shall mean an order or judgment entered by the
Bankruptcy Court that (i) is effective, (ii) has not been reversed, stayed,
modified or amended, (iii) is not the subject of a pending appeal or motion for
review or reconsideration, (iv) has not been and may no longer be appealed from
or otherwise reviewed or reconsidered, and (v) is final and non-appealable in
accordance with applicable law, including, without limitation, Rule 8002 of the
Federal Rules of Bankruptcy Procedure.
"Goldman" shall mean Xxxxxxx Xxxxx Credit Partners LP.
"Indentures" shall have the meaning set forth in the recitals to
this Agreement.
"Issuers" shall have the meaning set forth in the recitals to this
Agreement.
"Netting Amount" shall have the meaning set forth in Section 7 of
this Agreement.
"Noteholders" shall mean the record or beneficial holders of Notes
issued pursuant to the terms of the Indentures.
"Official Committee" shall mean the Official Committee of Unsecured
Creditors of DVI, DVIFS, and DVIBC.
"Receivables Corporation" shall mean each of receivables
corporations created pursuant to the Securitizations and identified on Exhibit
A.
"Securitizations" shall have the meaning set forth in the recitals
to this Agreement.
"Securitization Trusts" shall mean the trusts created under the
terms of the Indentures, Contribution and Servicing Agreements or other related
documents relating to the Securitizations that are the subject hereof.
"Servicer" shall have the meaning set forth in the preamble to this
Agreement.
"Servicer Advance Claim" shall have the meaning set forth in Section
7 of this Agreement.
4
"Servicing Transfer Transaction" shall have the meaning set forth in
the recitals to this Agreement.
"Specified Securitizations" shall have the meaning set forth in
Section 2 of this Agreement.
"Successor Servicer" shall have the meaning set forth in the
preamble to this Agreement.
"Trustee" shall have the meaning set forth in the recitals to this
Agreement.
"Unpaid Fees" shall have the meaning set forth in Section 6 of this
Agreement.
"9019 Order" shall mean an order of the Bankruptcy Court in the form
attached hereto as Exhibit E.
2. Amendment of Contribution and Servicing Agreements, Appendices
and Indentures. Subject to compliance with the conditions set forth in Section
11 of this Agreement (or waiver thereof as provided therein), each of the
Consenting Parties hereby irrevocably agrees that the terms and conditions of
the Contribution and Servicing Agreements and the Indentures (including the
Appendices thereto) shall be amended as described in Exhibit B hereto, each such
amendment to become effective on the Closing Date without any further
documentation thereof.
Each Consenting Party agrees that the Successor Servicer shall be
entitled to receive an aggregate amount not to exceed $50,000 for its reasonable
out-of-pocket expenses incurred in connection with transferring servicing from
DVIFS pursuant to the terms hereof, except as provided in the last sentence
hereof, pro rata (i.e., 20% each) from Securitizations 2001-1, 2001-2, 2002-1,
2002-2 and 2003-1 (the "Specified Securitizations"), in each case in accordance
with Section 3.07(c) of the applicable Indentures out of the Successor Servicer
Reserve Fund for such Specified Securitizations, to the extent there are
sufficient funds available therefor. Each Consenting Party further confirms that
the payment of the fees of the Successor Servicer for short-term servicing
support provided to DVIFS commencing on December 9, 2003, and continuing until
the Closing Date shall be paid from such Successor Servicer Reserve Funds, pro
rata as described above, to the extent there are sufficient funds available
therefor. The $50,000 limit set forth above shall not include (i) the reasonable
cost to the Successor Servicer of transferring all working servicer files from
DVIFS's facilities to the Successor Servicer's facilities and (ii) the fees of
the Successor Servicer for such short-term servicing support provided to DVIFS.
3. Assumption, Assignment to Successor Servicer and Severance.
Subject to compliance with the conditions set forth in Section 11 of this
Agreement (or waiver thereof as provided therein), and on the terms and
conditions hereof, the Consenting Parties and the Successor Servicer hereby
irrevocably consent to and agree to the following:
(a) As consideration for the resolutions, settlements and
compromises contained herein, the Successor Servicer shall not be
obligated to perform the obligations designated to be performed by the
Contributor under the terms of the Contribution and Servicing Agreements,
and all such obligations shall terminate effective as of the Closing Date
as set forth in the amendments to the Contribution and Servicing
Agreements included in Exhibit B to this Agreement;
5
(b) On the Closing Date and upon obtaining the Final Order
approving the Servicing Transfer Transaction and providing the requisite
authority, and consistent with (a) above, DVIFS as Servicer hereby assumes
the Contribution and Servicing Agreements as amended in a manner
consistent with this Agreement, pursuant to Section 365 of the Bankruptcy
Code; and
(c) On the Closing Date and upon obtaining the Final Order
approving the Servicing Transfer Transaction and providing the requisite
authority, DVIFS as Servicer shall assign the Contribution and Servicing
Agreements, as amended consistent with this Agreement, to the Successor
Servicer, and the Successor Servicer shall accept such assignment and
agrees to be bound by all the terms of conditions of such Contribution and
Servicing Agreements, as amended consistent with this Agreement. Lyon
Financial Services, Inc. d/b/a US Bancorp Portfolio Services shall
constitute a "Successor Servicer" for all purposes under the Indentures,
as amended hereby, and Contribution and Servicing Agreements, as amended
hereby.
(d) The Successor Servicer shall pay to DVIFS Six Million
Dollars ($6,000,000) as consideration for its receipt of the servicing
rights under the Contribution and Servicing Agreements (the "Assignment
Fee"). The Assignment Fee shall be paid in twelve (12) Five Hundred
Thousand Dollar ($500,000) consecutive monthly installments, the first
installment beginning thirty (30) days after the Closing Date. DVIFS's
right to receive such payments shall be absolute, unconditional and
without right of setoff.
The parties hereto agree that DVIFS shall cure any defaults under
the Contribution and Servicing Agreements and all claims with respect thereto
solely through the creation and funding of the CSA Reserve Account described in
Section 9 hereof; provided that DVIFS shall cooperate with the Trustee with
respect to Contract Deficiencies to the extent set forth in Section 12. The
Successor Servicer shall not be liable for any breach by DVIFS of any of its
obligations contained in the Contribution and Servicing Agreements or in any
related document or agreement.
4. Releases. DVIFS acknowledges and agrees that the Trustee and the
Noteholders have certain claims against it with respect to breaches of
representations and warranties, covenants, failure to make certain payments to
Equipment vendors, failure to pay taxes, Servicer Events of Default,
misappropriation of funds and other matters. The Trustee, the Ad Hoc Committee
and the Issuers, acknowledge that the Debtors have alleged certain claims
against them and the Securitization Trusts with respect to repurchases or
substitutions of Contracts and Equipment that the Debtors allege may constitute
fraudulent conveyances or preferences under applicable law. Subject to
compliance with the conditions set forth in Section 11 of this Agreement (or
waiver thereof as provided therein), and in consideration of the mutual releases
herein, each of the Consenting Parties, the Debtors and each of the DIP Lenders,
hereby irrevocably and absolutely releases, remises, acquits, and discharges
each other Consenting Party (including the Trustee in its individual capacity
and each other capacity in which it serves in connection with the
Securitizations), Debtor and DIP Lender and each of such Consenting Party's,
Debtor's and DIP Lender's current and former officers, directors, trustees,
employees, attorneys, agents, affiliates, consultants, shareholders, successors
and assigns from all such claims and from any and all other claims, demands,
causes of action, actions, liabilities, damages, losses, expenses and costs, of
any kind or nature whatsoever (whether in law, equity or otherwise), including
without limitation claims arising under sections 544 through 553 of the
Bankruptcy Code, absolute or contingent, matured or unmatured, liquidated or
unliquidated, now known or subsequently discovered, that (i) arise out of or in
any way relate to the settlement set forth herein and/or any transactions
contemplated hereby or (ii) arise out of or in any way relate
6
to the Securitizations, the Indentures, the Contribution and Servicing
Agreements, the Contracts, the Equipment and/or the entry into or performance of
any of the foregoing except that (A) any claims, in each case, to the extent
arising from any performance or nonperformance by such person of its obligations
under this Agreement, including without limitation its obligations under Section
9 hereof, or any misrepresentation or breach of warranty herein or resulting
from any future performance or nonperformance (i.e., after the Closing Date) of
any continuing obligations of such party under the Indentures, the Contribution
and Servicing Agreements or the other Securitization documents, in each case as
amended hereby, shall not be released, (B) the claims of DVIFS with respect to
Unpaid Fees shall be released only upon payment thereof as provided in Section 6
of this Agreement; (C) the claims of DVIFS with respect to the Servicer Advance
Claim shall be released only upon payment thereof as provided in Section 7 of
this Agreement; (D) solely with respect to any fraudulent conveyance or
preference claims against the Issuers and the Securitization Trusts, such claims
shall be released with respect to the Noteholders, the Swap Providers, the
Trustee and the Successor Servicer, but shall not be released against the
Issuers and the Securitization Trusts; (E) this Settlement Agreement and the
releases herein relate to the Noteholders only in their capacity as Noteholders
and not in any other capacity or on account of any other relationship they may
have, directly or indirectly (including through affiliates), with the Debtors or
the Issuers, including without limitation, their capacity as underwriters for
the Securitizations; and (F) this Settlement Agreement and the releases herein
relate to U.S. Bank National Association only in its capacity as Trustee for the
Securitizations and in its individual capacity with respect to the
Securitizations, but do not relate to U.S. Bank National Association in any
other capacity or on account of any other relationship it may have, directly or
indirectly (including through Affiliates), with the Debtors or the Issuers,
including without limitation its capacity as lender to any Debtor or Affiliate
thereof and its capacity as trustee for any securitization transaction other
than the Securitizations. Payment of any fraudulent conveyance or preference
claims against the Issuers and the Securitization Trusts shall be subordinated
to the payment in full of the Noteholders, the Swap Providers, the Trustee (in
its individual capacity) and the Successor Servicer under the Indentures and the
Contribution and Servicing Agreements. The Trustee, the Ad Hoc Committee and the
Issuers agree that DVIFS has alleged claims against the Issuers and the
Securitization Trusts with respect to fraudulent conveyances and preferences in
and in settlement of such claims agree that the Issuers and the Securitization
Trusts shall pay in the aggregate $50,000,000 (the Trustee agreeing that, solely
in its capacity as Trustee, it shall make such payments on behalf of the
Securitization Trusts as provided in the applicable Indentures, as amended
hereby, and on the basis of the Monthly Servicer Reports), but only after and
subject to payment in full in cash of all amounts owing the Noteholders, the
Swap Providers, the Trustee (in its individual capacity) and the Successor
Servicer under the Indentures and the Contribution and Servicing Agreements. So
long as the subordinated payments are made to DVIFS in accordance with the
Indentures, as amended hereby (and after payment in full in cash of the
Noteholders, the Swap Providers, the Trustee (in its individual capacity) and
the Successor Servicer), the Debtors shall not take any action to enforce such
fraudulent conveyance or preference claims. The parties hereto agree that,
effective as of the Closing Date, any Indenture Event of Default or Servicer
Event of Default alleged to have occurred prior to such Closing Date shall be
waived; provided, however, that nothing contained herein shall act as a waiver
of any Indenture Event of Default or Servicer Event of Default occurring after
the Closing Date.
The Trustee agrees to withdraw its motion to terminate DVIFS as
Servicer and the Ad Hoc Committee consents to such withdrawal and directs and
instructs the Trustee to withdraw such motion. DVIFS agrees to take all action
necessary to exercise its rights with respect to any claims and causes of action
asserted by the Official Committee that attempt to assert any claims released or
subordinated in accordance with this Section 4, and to endeavour to cause such
actions to be dismissed with prejudice.
7
5. Servicing Transfer and Other Assistance. DVIFS as Servicer and
Lyon Financial Services, Inc. d/b/a US Bancorp Portfolio Services, as Successor
Servicer agree that, commencing on the Closing Date, each will use its best
efforts to transition servicing as expeditiously as possible from the Servicer
to the Successor Servicer; provided that DVIFS shall not be obligated to replace
personnel who voluntarily resign or to continue to employ the personnel involved
in its servicing function for a period of more than 30 days after the Closing
Date. To the extent the Successor Servicer determines in its sole discretion
that a formal transition servicing protocol would be advisable in connection
with the transition of servicing, DVIFS shall negotiate such a transition of
servicing protocol with the Successor Servicer in good faith and shall use
commercially reasonable efforts to execute a final agreement as to such protocol
no later than the Closing Date. Without limiting the foregoing, DVIFS shall
provide copies of applicable documentation relating to the Contracts, access to
and downloads from all databases relating to the Contracts and the collection
thereof, and assistance in transitioning mailboxes, bank and lockbox accounts
used in servicing the Contracts. To the extent DVIFS receives payments on the
Contracts after the Closing Date, it shall forward such payments to the
Successor Servicer as promptly as practicable. To the extent DVIFS receives
notices of bankruptcy filings, cease-and-desist letters or other similar
correspondence relating to the Obligors and the Contracts, it shall forward such
notices, letters, etc. to the Successor Servicer as promptly as practicable.
After the Closing Date, DVIFS shall not engage in any further collection
activity on the Contracts, except to the extent of its role as subservicer as
provided below, and solely to the extent set forth in this Section 5. In
addition, the Debtors shall use commercially reasonable efforts to obtain from
the Bankruptcy Court, in cooperation with the Consenting Parties promptly after
the Closing Date, a Final Order or Final Orders providing, among other things,
and all in form and substance reasonably satisfactory to the Trustee and the Ad
Hoc Committee (collectively, the "Collections Orders")that vendor claims for
payment and other relief in respect of any Equipment sold under the Contracts to
the Debtors are general unsecured claims that may be prosecuted solely against
the Debtors, and barring such vendors from asserting any liens, claims or
encumbrances against the Securitizations, the Trustee, the Successor Servicer,
the Equipment or any Obligor.
DVIFS agrees that it will accept appointment and act as subservicer
to the extent necessary to pursue any claims against the Obligors brought within
the Bankruptcy Court; provided, however, that the Successor Servicer shall make
all decisions with respect to actions on the Contracts brought against the
Obligors pursuant to the Collections Orders; provided, further, that DVIFS shall
not assume any fiduciary, contractual or other responsibilities to the
Securitizations as a result of such appointment as subservicer; and provided,
further, that DVIFS shall not incur any legal or other out-of-pocket costs as
subservicer (other than the costs of obtaining the Collections Orders), all of
which shall be borne by the Successor Servicer subject
8
to reimbursement by the Securitizations. DVIFS shall not be entitled to receive
any fee or other compensation as subservicer except as specifically set forth in
this Agreement.
DVIFS hereby appoints the Successor Servicer, effective as of the
Closing Date, its attorney in fact solely and exclusively for the purpose of
executing and endorsing in the name of DVIFS documents with respect to Contracts
owned by the Securitization Trusts, but only to the extent that the Successor
Servicer reasonably determines that the signature of DVIFS is necessary to
collect or otherwise enforce such Contracts, and that the signature of the
Successor Servicer or the Trustee will be insufficient for such purpose; and
provided, further, that the Successor Servicer shall not have the authority to
make representations, warranties or covenants in the name of DVIFS. This
appointment is coupled with an interest and is irrevocable.
6. Unpaid Fees. The parties hereto agree that DVIFS is entitled to
payment of unpaid servicing fees, late fees and other compensation in the
aggregate amount of Seven Million Nine Hundred Eleven Thousand Eight Hundred
Forty Five Dollars ($7,911,845), as detailed by securitization transaction on
Exhibit C hereto, plus additional servicing fees, including late fees and other
compensation and amounts ("Ancillary Payments"), accrued between the date hereof
and the Closing Date, to be agreed upon by the Trustee, the Successor
Servicer and DVIFS in good faith and in accordance with the terms of the
Indentures and the Contribution and Servicing Agreements on the Closing Date
(collectively, the "Unpaid Fees"). To the extent that the amount of Ancillary
Payments estimated for the month of December 2003 (relating to the January
payment date) is finally determined on or prior to the Closing Date, the amount
of Unpaid Fees will be adjusted to reflect the final amount. The Trustee shall
pay from funds held by it in the Securitization Trusts such Unpaid Fees to DVIFS
on the Closing Date and, to the extent not paid pursuant to Section 11(d)
hereof, the unpaid fees and expenses of the Trustee, each to the extent that
funds are held by the Securitization Trusts. As soon as reasonably practicable
following the Closing Date, the Successor Servicer and DVIFS shall determine the
final amount of Unpaid Fees and Ancillary Payments for all months after December
2003 (or, if such amounts have not been finally determined for December 2003 on
or prior to the Closing Date, for all months after November 2003) up to and
including the month in which the Closing Date occurs. Fees for the month in
which the Closing Date occurs shall be pro rated between DVIFS and the Successor
Servicer (such pro ration to be determined based on the number of days in the
month prior to the Closing Date, which will determine DVIFS's share of such
amounts, and the number of dates in the month including and after the Closing
Date, which will determine the Successor Servicer's share of such amounts,
provided that (A) Ancillary Payments with respect to maintenance, sales tax and
insurance shall not be pro rated but shall be (1) paid to DVIFS to the extent
DVIFS has already made pass-through payments with respect to such amounts, and
(2) otherwise paid to the Successor Servicer for payment to the appropriate
parties and (B) DVIFS shall pay to the Successor Servicer 50% of the amount of
Unpaid Fees it receives for periods on and after January 1, 2004, after giving
effect to such pro ration). The parties will make a final calculation of the
amounts that DVIFS should have received with respect to Unpaid Fees and
Ancillary Payments for any period for which an estimate was used, taking into
account the pro ration provisions of the previous sentence, and to the extent
DVIFS received a higher amount it shall pay within 5 business days of its
notification thereof the difference to the Trustee or the Successor Servicer, as
applicable, as an administrative expense, and to the extent DVIFS received a
smaller amount it shall be paid the difference by the Trustee from funds held by
it in the Securitization Trusts within 5 business days of such final
determination.
9
7. Return of Servicer Advances.
(a) The parties hereto agree that, as consideration for entering
into this Agreement and the releases and other obligations provided for herein,
DVIFS shall be entitled to a claim against the Securitization Trusts in the
aggregate amount of Twenty-One Million Three Hundred Twenty-One Thousand One
Hundred Twenty-Nine Dollars and 90 cents ($21,321,129.90) for the reimbursement
of Servicer Advances, as detailed by securitization transaction on Exhibit D
hereto (the "Servicer Advance Claim"), less the Netting Amount (as hereinafter
defined). The Trustee shall pay from funds held by it in the Securitization
Trusts such Servicer Advance Claims, less the Netting Amount, to DVIFS on the
Closing Date. For purposes of this Section 7, the "Netting Amount" shall be an
amount equal to $2,500,000.
(b) The Trustee shall charge the Netting Amount against the
Securitizations on the Closing Date on a pro rata basis, based on the aggregate
Servicer Advance Claim made in respect of each Securitization.
8. Ownership of Assets. Each Consenting Party agrees that each
purported sale or contribution of Contributed Property by DVIFS to the
Receivables Corporations (or, if applicable, to DVI Funding Corp. or DVI
Receivables Corp. XV, but solely, in such instance, to the extent DVI Funding
Corp. or DVI Receivables Corp. XV, directly or indirectly, retransferred such
Contributed Property to a Receivables Corporation or an Issuer in connection
with the Securitizations) shall be deemed to have transferred absolutely and
irrevocably all right, title and interest of DVIFS in such Contributed Property
(including, if applicable, any Substitute Contracts and the related Equipment,
and any cash payments made by DVIFS to repurchase Contracts or Equipment). Each
Consenting Party further agrees that each purported sale of Company Assets by
each Receivables Corporation to the related Issuer (or, if applicable, each
purported sale of assets by DVI Funding Corp. to DVI Funding L.L.C. or by DVI
Receivables Corp. XV to DVI Receivables XV, L.L.C., but solely, in such
instance, to the extent that DVI Funding L.L.C. or DVI Receivables XV L.L.C.
retransferred such assets to an Issuer in connection with the Securitizations)
shall be deemed to have transferred absolutely and irrevocably all right, title
and interest of such Receivables Corp. (or, if applicable, DVI Funding Corp. or
DVI Receivables Corp. XV) to such Issuer (or, if applicable, to DVI Funding
L.L.C. or DVI Receivables XV, L.L.C.). Each Consenting Party agrees that each
purported grant of a security interest in Equipment by each Receivables
Corporation to the related Issuer shall be deemed to be a first-priority
perfected security interest in such Equipment, prior and superior to any other
lien or interest in such Equipment. Each Consenting Party agrees that no
Receivables Corporation or Issuer shall be consolidated with or merged into
DVIFS.
Notwithstanding the foregoing or any possible conflicting
interpretation of the Indentures, the Contribution and Servicing Agreements or
any other Securitization agreement or document, and for the avoidance of doubt,
each Consenting Party agrees that the following assets, which represent Retained
Interests of the Contributor or the Receivables Corporations, Excluded Assets,
or otherwise were intended to be excluded from such purported sales and
contributions and excluded from the lien of the Indenture, shall be treated as
follows:
(i) any periodic payment set forth in a Contract in respect of
maintenance, insurance or taxes shall be retained by or paid to the
Successor Servicer and
10
shall be applied by such Successor Servicer in accordance with the terms
of the Contract and, with respect to any such tax payments, applicable
law;
(ii) except as set forth in Section 9 of this Agreement, each
Purchase Option Payment (including each Balloon Payment that is not an
Eligible Balloon Payment) and any other payment set forth in a Contract
other than Contract Payments or payments in respect of maintenance,
insurance or taxes, with respect to Contracts transferred to any Issuer
shall be paid to DVIFS; provided, however, that until an aggregate of
$9,250,000 has been deposited in the CSA Reserve Account subject to
Section 9 of this Agreement the Trustee will have a lien on such payments;
(iii) any Broker Agreement Rights relating to any Contract
owned by DVI Receivables XII, L.L.C., DVI Receivables XIV, L.L.C., DVI
Receivables XVI, L.L.C., DVI Receivables XVII, L.L.C., DVI Receivables
XVIII, L.L.C. and DVI Receivables XIX, L.L.C. shall belong to the
Successor Servicer for the benefit of the Securitizations ;
(iv) after the final Contract Payment with respect to any
Contract has been paid, the related Equipment and any applicable rights
thereto and proceeds thereof shall belong exclusively to DVIFS except as
set forth in Section 9 of this Agreement, such Equipment (and any related
assets such as proceeds and Insurance Policies) shall be released from the
lien of the Indenture and transferred to DVIFS, and the Trustee and the
applicable Receivables Corporation shall promptly execute any document
reasonably requested by the Successor Servicer or DVIFS to effect such
release and transfer;
(v) if DVIFS, DVIBC, or any Affiliate (other than the Issuers
or the Receivables Corporations) of DVIBC owned or had an interest in, on
August 25, 2003, any note, payment obligation, credit agreement or other
evidence of indebtedness or payment obligation of any Obligor on any
Contract (other than any interest in any Contract included in any
Securitization), then upon written request by any Debtor, (A) the
accounts receivable of each such Obligor shall be free and clear of any
lien of the Trustee, each Issuer and each Receivables Corporation, (B) the
Trustee shall provide a power of attorney to the Successor Servicer
permitting the Successor Servicer to file UCC-3 financing statements or
execute any other document necessary to evidence that the Trustee does not
have any such lien on the accounts receivables of the Obligor and (C) the
Successor Servicer shall file all necessary papers and take any such other
acts necessary to release any such liens on the accounts receivable (it
being understood that no other liens the Trustee may have with respect to
interests in the Equipment or assets of the Obligors shall be released by
this clause (v));
(vi) if none of DVIFS, DVIBC, or any Affiliate (other than the
Issuers or the Receivables Corporations) of DVIBC owned or had an interest
in, on August 25, 2003, any note, payment obligation, credit agreement or
other evidence of indebtedness or payment obligation of any Obligor on any
Contract (other than any interest in any Contract included in any
Securitization), then DVIFS shall assign to the Trustee, on behalf of the
Noteholders and
11
Swap Providers, any security interest in assets of such Obligor, including
any security interest in accounts receivable of such Obligor, then held by
DVIFS; and
(vii) earnings on amounts on deposit in each Collection
Account shall remain in such Collection Account and be distributed as
Available Funds and, pursuant to the CSA Reserve Account Agreement,
earnings on amounts on deposit in the CSA Reserve Account shall be
deposited monthly pro rata by principal amount of Notes outstanding from
each Securitization Trust into the Collection Account for each
Securitization as set forth in the Monthly Servicer Reports and shall
constitute Available Funds under the applicable Indenture.
9. CSA Reserve Accounts.
(a) The CSA Reserve Account Trustee shall establish and maintain an
interest-bearing trust account for the benefit of the Securitization
Trusts, the Noteholders, the Swap Providers and the Trustee (the
"CSA Reserve Account") pursuant to an agreement between the CSA
Reserve Account Trustee and the Trustee (the "CSA Reserve Account
Agreement"). The Successor Servicer shall, from and after the
Closing Date, deposit (i) any Purchase Option Payment (including any
Balloon Payment that is not an Eligible Balloon Payment), (ii) any
other payment that is not (x) a Contract Payment or (y) a payment in
respect of maintenance, insurance or taxes and (iii) the net
proceeds from the sale of any Equipment after the final Contract
Payment with respect thereto, in each case received on or after the
Closing Date, into the CSA Reserve Account until such time as the
Successor Servicer shall have deposited an aggregate of Nine Million
Two Hundred Fifty Thousand Dollars ($9,250,000.00) into the CSA
Reserve Account after which time all such payments and proceeds
shall be paid in accordance with Section 8 and this Section 9 of
this Agreement. Earnings on amounts on deposit in the CSA Reserve
Account shall be retained in the CSA Reserve Account until
distributed in accordance with Section 8(vii) of this Agreement and
the CSA Reserve Account Agreement.
(b) The CSA Reserve Account shall be available to the Trustee, for the
benefit of the respective Noteholders and Swap Providers, to pay
unpaid prepetition sales tax payments (to the extent the
Securitizations, the Trustee, or the Successor Servicer has
liability therefore) or for diminution or actual loss of any
Contract Payments arising from or related to any vendor payment
issues or other action or inaction by DVIFS that would constitute a
breach of any covenant of DVIFS in the applicable Contribution and
Servicing Agreement or the failure of any representation or warranty
of DVIFS in respect of any Contract to be true and correct when
made, or any breach or default by DVIFS under any Contract, to pay
or reimburse the Trustee on behalf of the Noteholders and Swap
Providers for any loss suffered by them as a result thereof, and in
addition, to pay or reimburse the Trustee for the reasonable fees
and expenses of curing any Contract Deficiencies (as defined in
Section 12 below) related to the Securitizations; provided, however,
that the aggregate amount that is paid or transferred with respect
to any Securitization shall not exceed an amount equal to the
product of the aggregate amount deposited into the CSA Reserve
Account as of any date of determination and a fraction, the
numerator of which is the outstanding principal balance of the
12
Notes issued in such Securitization and the denominator of which is
the outstanding principal balance of all Notes issued in all the
Securitizations, in each case as of the Closing Date. Payment from
the CSA Reserve Account shall be the sole remedy with respect to
such claims against the parties to this Agreement, which are
otherwise released as set forth in Section 4 of this Agreement. Any
withdrawal from the CSA Reserve Account shall be deposited in the
applicable Collection Account and shall constitute Available Funds
under the applicable Indenture. The CSA Reserve Account Agreement
shall contain appropriate provisions to implement this provision.
The CSA Reserve Account shall be subject to the lien of the Trustee
for the Trustee's unpaid fees and expenses.
(c) The Trustee hereby appoints U.S. Bank National Association as CSA
Reserve Account trustee hereunder (in such capacity, the "CSA
Reserve Account Trustee") to own the CSA Reserve Account on behalf
of the Noteholders and Swap Providers, and the CSA Reserve Account
shall be held in the name of the CSA Reserve Account Trustee. The
CSA Reserve Account Trustee shall have the sole authority to make
withdrawals from the CSA Reserve Account at the request of the
Trustee, subject to the terms of a CSA Reserve Account Agreement. On
March 31, 2011, (i) eighty percent (80%) of any amount then
remaining on deposit in the CSA Reserve Account shall be paid to
DVIFS or its successor and (ii) twenty percent (20%) of any amount
then remaining on deposit in the CSA Reserve Account shall be paid
to the Successor Servicer. The CSA Reserve Account Agreement shall
contain appropriate provisions to implement this provision.
10. Monthly Servicer Reports; Amortization Event Continuing.
(a) DVIFS and the Successor Servicer agree that promptly after the
Closing Date, each shall use its best efforts to prepare replacement monthly
servicer reports for each applicable reporting period commencing August 2003
through the Closing Date. The Trustee shall provide any information with respect
to funds held or paid out by it as shall be necessary for such preparation. Such
replacement servicer reports shall (1) reflect that an Amortization Event
occurred August 25, 2003 and is continuing, (2) reflect that no Servicer
Advances have been or will be made after that date and (3) recognize that
interest and swap payments have been made with respect to each Securitization
Trust for each applicable reporting period and reconcile all such interest and
swap payments made by the Trustee to amounts required to have been paid with
respect thereto and (4) provide a complete reconciliation of amounts deposited
in the Collection Accounts and made available for distribution to Noteholders.
Upon receipt and review of the replacement servicer reports required pursuant to
this Section 10, the Trustee will make all payments required under such servicer
reports as soon as reasonably practicable from funds held by it in trust under
each Indenture. For the avoidance of doubt, all amounts in the respective
Reserve Accounts will be applied to pay principal sequentially to the Notes.
(b) Notwithstanding anything herein to the contrary, it is
understood and agreed by all parties hereto that an Amortization Event is and
shall be continuing under the terms of the Indentures for all purposes hereunder
and thereunder without right of cure or waiver thereof, or ability to amend any
provision of the Indentures to remove such Amortization Event or the effect
thereof. Without limiting the generality of the foregoing, all CSA Reserve
Account payments and other amounts collected or received by each Securitization
shall be applied pursuant to Section 3.04(b) of the applicable Indentures on the
basis that an Amortization Event is continuing.
11. Conditions Precedent to the Effectiveness of this Agreement.
Notwithstanding anything to the contrary contained herein, the consents,
waivers, amendments
13
and obligations of the parties under this Agreement shall not become effective
or arise until each of the following conditions is satisfied (or waived) to the
reasonable satisfaction of all beneficiaries of such condition, as evidenced by
an officer's certificate from each party to such effect.
(a) Adequate notice of the resolution and an opportunity to appear and
be heard with respect thereto shall be provided to all Noteholders.
(b) The 9019 Order shall be a Final Order.
(c) This Agreement shall have been executed by all parties hereto and
such signatures shall have been delivered to all other parties
hereto.
(d) DVIFS shall have paid to the Trustee any accrued and unpaid trustee
fees and the unpaid reasonable fees and expenses of its counsel
through the Closing Date.
12. Continuing Representations, Warranties and Covenants. DVIFS and
the Successor Servicer each represent, warrant and covenant that they will use
commercially reasonable efforts to resolve and to assist the Trustee to resolve
any documentation exceptions, lien perfection deficiencies or any other matters
relating to the Contracts (collectively "Contract Deficiencies"), but solely to
the extent that any of DVIFS or the Successor Servicer has determined, in its
commercially reasonable judgment, that such Contract Deficiencies are reasonably
likely to result in an actual loss under the affected Contracts. All costs of
resolving such Contract Deficiencies shall be payable from the CSA Reserve Fund.
13. Representations and Warranties. Except as noted below, each of
the parties hereby represents and warrants to the others that each of the
following statements is true and accurate as of the date hereof.
(i) This Agreement has been duly authorized and validly
executed and delivered by such party and constitutes such party's legal,
valid and binding obligation, enforceable against such party in accordance
with its terms, except the authority of the Trustee and the Debtors to
consummate the transaction set forth herein shall be deemed received at
the time the 9019 Order shall become a Final Order finding the resolution
to be fair, reasonable and prudent.
(ii) Subject, in the case of each of the Debtors, to the
authority of the Bankruptcy Court, such party is not subject to any
restriction, agreement or law, order, writ, injunction, decree, rule or
regulation of any court, administrative agency or other governmental
authority that, with or without the giving of notice, the passage of time
or both, would prohibit, contravene, be violated by, or be inconsistent
with the execution, delivery and performance by such party of this
Agreement or the consummation of the transaction effected hereby or
contemplated herein.
(iii) There is no action, suit or proceeding pending or, to
the best of such party's knowledge and belief, threatened against such
party that questions the validity of, in any way legally impairs, or seeks
to enjoin or otherwise prevent the execution, delivery and/or performance
by such party of this Agreement or, if adversely
14
determined, would have a material adverse effect on such party's ability
to perform such party's obligations hereunder.
(iv) The Ad Hoc Committee hereby represents and warrants that,
by resolution duly adopted, the members of the Ad Hoc Committee duly
authorized the execution of this Agreement on its behalf by the
undersigned officer of the Ad Hoc Committee. All of the members of the Ad
Hoc Committee, whether or not individually signing this Agreement, shall
be bound by this Agreement and shall be deemed to hereby direct and
instruct the Trustee to execute and perform this Agreement.
14. Consent to Jurisdiction. Each of the parties hereby agrees that,
unless all parties agree otherwise, all actions, suits or other proceedings for
enforcement of the terms of this Agreement shall be brought in the Bankruptcy
Court. Each of the parties hereby knowingly, voluntarily, intelligently,
absolutely and irrevocably waives and agrees not to assert any objection it may
now or hereafter have to the laying of venue of all actions, suits or
proceedings for enforcement of the terms of this Agreement in the Bankruptcy
Court, and irrevocably submits to the jurisdiction of the Bankruptcy Court and
such courts for such purposes. Each of the parties hereby knowingly,
voluntarily, intelligently, absolutely and irrevocably waives and agrees not to
assert in any such action, suit or proceeding that it is not subject to the
personal jurisdiction of the Bankruptcy Court, suit or proceeding should be
transferred to a different venue under forum non conveniens principles or
statutes embodying such principles.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW).
16. Notices. All demands, notices and communications hereunder shall
be in writing and shall be deemed to have been duly given if personally
delivered at, delivered by nationally recognized overnight courier to, or mailed
by registered mail, postage prepaid, addressed as follows, or such other address
as may be furnished by proper notice as described herein (facsimile numbers are
provided below for convenience of communication and not as an alternative means
of delivery of notice):
If to the Trustee:
U.S. Bank National Association, as Trustee
Attention: Xxxxxxx Pillar
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
(000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxx
Xxxxxxx and Xxxxxx
15
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
If to DVIFS:
DVI Financial Services, Inc.
Attention: Chief Executive Officer
0000 Xxxx Xxxx
Xxxxxxx, XX 00000
(000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx LLP
Attention: Xxxxx Xxxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (fax)
If to the Successor Servicer:
US Bancorp Portfolio Services
Attention: Xxx Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
000-000-0000
000-000-0000 (fax)
with a copy to:
Xxxxxx & Whitney
Attention: Xxxx Xxxxxxxxxxx, Esq.
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
000-000-0000
000-000-0000 (fax)
16
If to the DIP Lenders:
Xxxxxxx Sachs Credit Partners L.P.
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: A. Xxxxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxx, Xxxxx & Co.
Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
and
Obsidian Finance Group, LLC
XX Xxx 0000
00 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy: 000-000-0000
17. Relationship of Parties. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.
18. Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Counterparts may be delivered by facsimile or by e-mail, each of which shall be
deemed to be an original.
19. Term. The term of this Agreement shall extend until satisfaction
of all obligations of the parties hereunder and until payment in full of any and
all amounts required to be paid hereunder or under the terms of any Contribution
and Servicing Agreement, as amended hereby, or Indenture, as amended hereby.
This Agreement shall be of no force or effect unless the conditions set forth in
Section 11 of this Agreement have been fulfilled, and shall terminate if
17
such conditions have not been fulfilled by March 31, 2004 unless extended by all
of the parties hereto in writing.
20. Entire Agreement; Amendment. This Agreement constitutes the
entire agreement and understanding between the parties concerning the subject
matter hereof and supersedes and terminates all prior written and oral
agreements, proposals, promises and representations of the parties respecting
the subject matter hereof. No representation or promise hereafter made, nor any
modification or amendment of this Agreement, shall be binding upon either party,
unless made in writing and signed by the parties hereto. If any provision of
this Agreement is found to be unenforceable or invalid, all other provisions of
this Agreement shall no longer be valid.
21. Assignment; Binding Effect. None of the parties hereto may
assign its rights hereunder or delegate its duties and obligations hereunder
without the express prior written consent of each of each other party hereto,
except that the Debtors may assign any rights hereto to a Liquidating Trustee
under the terms of a confirmed Plan of Liquidation. Subject to all terms and
conditions hereof, this Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and permitted assigns. Upon entry
of the Final Order, all Noteholders shall be bound by, and shall be deemed to
have directed the Trustee to enter into and to have consented to, the terms of
this Agreement.
22. Fees and Expenses. With the exception of the Trustee (whose fees
and expenses are payable pursuant to Section 11(d) of this Agreement), each
party hereto shall bear its own costs and expenses incurred in connection with
this Agreement and the Chapter 11 Cases, except to the extent otherwise provided
by the Bankruptcy Court.
23. Execution by Trustee. U.S. Bank is executing this Agreement
solely in its capacity as Trustee to the respective Securitizations pursuant to
the direction of certain Noteholders and the Ad Hoc Committee. None of U.S.
Bank, in its individual capacity, or its officers, directors, shareholders or
agents shall be liable for any obligation or liability arising out of this
Agreement. It is understood and agreed that Lyon Financial Services, Inc. d/b/a
US Bancorp Portfolio Services is a separate and distinct legal entity from U.S.
Bank and that nothing in this Section 23 shall limit the obligations or
liabilities of Lyon Financial Services, Inc. d/b/a US Bancorp Portfolio
Services as Successor Servicer.
24. Direction to Trustee. The members of the Ad Hoc Committee who
are holders of Notes each hereby directs the Trustee to enter into and perform
its obligations under this Agreement.
[Signature Page Follows]
18
IN WITNESS WHEREOF, each of the parties hereto has caused this
Settlement Agreement to be executed and delivered by its duly authorized officer
thereunto as of the day and year first above written.
U.S. BANK NATIONAL ASSOCIATION, as
trustee
By: _________________________
Name:
Title:
DVI FINANCIAL SERVICES INC.
By: _________________________
Name:
Title:
DVI, INC.
By: _________________________
Name:
Title:
DVI BUSINESS CREDIT CORPORATION
By: _________________________
Name:
Title:
LYON FINANCIAL SERVICES, INC.
D/B/A US BANKCORP PORTFOLIO
SERVICES as successor servicer
By: _________________________
Name:
Title:
THE AD HOC COMMITTEE OF
NOTEHOLDERS, BY ITS COUNSEL,
DAY, XXXXX & XXXXXX, LLP
By: _________________________
Name: , partner
Accepted and agreed to, solely with respect to Section 4:
XXXXXXX SACHS CREDIT PARTNERS LLC, as loan agent,
administrative agent and lender under the Debtors'
post-petition credit facility
By: __________________________
Name:
Title:
ABLECO FINANCE LLC, as loan agent and lender under the
Debtors' post-petition credit facility
By: __________________________
Name:
Title:
A3 FUNDING LP, as lender under the Debtors'
post-petition credit facility
By: __________________________
Name:
Title:
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES CORP. X
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES CORP. XI
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES CORP. XII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES CORP. XIV
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES CORP. XVI
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES CORP. XVII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES CORP. XVIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES CORP. XIX
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES VIII, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES X, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES XI, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES XII, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES XIV, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES XVI, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES XVII, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES XVIII, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
DVI RECEIVABLES XIX, L.L.C.,
BY ITS MANAGING MEMBER,
DVI RECEIVABLES CORP. VIII
BY:________________________________
NAME:
TITLE:
EXHIBIT A
SECURITIZATIONS/CONTRIBUTIONS AND SERVICING AGREEMENTS/ISSUERS/INDENTURES
(a) Asset Backed Notes, Series 1999-9
Issuer: DVI Receivables VIII, L.L.C.
Receivables Corporation: DVI Receivables Corp. VIII
Indenture: Amended and Restated Indenture, dated as of December 1, 1998, by and
between the Issuer and U.S. Bank National Association (as successor to U.S. Bank
Trust National Association), as Trustee.
Contribution and Servicing Agreement: Amended and Restated Contribution and
Servicing Agreement, dated as of December 1, 1998, by and between DVI Financial
Services, Inc., as Contributor and Servicer, and DVI Receivables Corp. VIII, as
Transferor.
(b) Asset Backed Notes, Series 1999-2
Issuer: DVI Receivables X, L.L.C.
Receivables Corporation: DVI Receivables Corp. X
Indenture: Amended and Restated Indenture, dated as of June 1, 1999, by and
between the Issuer and U.S. Bank National Association (as successor to U.S. Bank
Trust National Association), as Trustee.
Contribution and Servicing Agreement: Amended and Restated Contribution and
Servicing Agreement, dated as of June 1, 1999, by and between DVI Financial
Services Inc., as Contributor and Servicer, and DVI Receivables Corp. X, as
Transferor.
(c) Asset Backed Notes, Series 2000-1
Issuer: DVI Receivables XI, L.L.C.
Receivables Corporation: DVI Receivables Corp. XI
Indenture: Amended and Restated Indenture, dated as of December 1, 1999, by and
between the Issuer and U.S. Bank National Association (as successor to U.S. Bank
Trust National Association), as Trustee.
Contribution and Servicing Agreement: Amended and Restated Contribution and
Servicing Agreement, dated as of December 1, 1999, by and between DVI Financial
Services Inc., as Contributor and Servicer, and DVI Receivables Corp. XI, as
Transferor.
(d) Asset Backed Notes, Series 2000-2
Issuer: DVI Receivables XII, L.L.C.
Receivables Corporation: DVI Receivables Corp. XII
Indenture: Amended and Restated Indenture, dated as of April 1, 2000, by and
between the Issuer and U.S. Bank National Association (as successor to U.S. Bank
Trust National Association), as Trustee.
Contribution and Servicing Agreement: Amended and Restated Contribution and
Servicing Agreement, dated as of April 1, 2000, by and between DVI Financial
Services, Inc., as Contributor and Servicer, and DVI Receivables Corp. XII, as
Transferor.
(e) Asset Backed Notes, Series 2001-1
Issuer: DVI Receivables XIV, L.L.C.
Receivables Corporation: DVI Receivables Corp. XIV
Indenture: Amended and Restated Indenture, dated as of December 1, 2000, by and
between the Issuer and U.S. Bank National Association (as successor to U.S. Bank
Trust National Association), as Trustee.
Contribution and Servicing Agreement: Amended and Restated Contribution and
Servicing Agreement, dated as of December 1, 2000, by and between DVI Financial
Services, Inc., as Contributor and Servicer, and DVI Receivables Corp. XIV, as
Transferor.
(f) Asset Backed Notes, Series 2001-2
Issuer: DVI Receivables XVI, L.L.C.
Receivables Corporation: DVI Receivables Corp. XVI
Indenture: Indenture, dated as of November 1, 2001, by and between the Issuer
and U.S. Bank National Association (as successor to U.S. Bank Trust National
Association), as Trustee.
Contribution and Servicing Agreement: Contribution and Servicing Agreement,
dated as of November 1, 2001, by and between DVI Financial Services, Inc., as
Contributor and Servicer, and DVI Receivables Corp. XVI, as Transferor.
(g) Asset Backed Notes, Series 2002-1
Issuer: DVI Receivables XVII, L.L.C.
Receivables Corporation: DVI Receivables Corp. XVII
Indenture: Indenture, dated as of May 1, 2002, by and between the Issuer and
U.S. Bank National Association (as successor to U.S. Bank Trust National
Association), as Trustee.
Contribution and Servicing Agreement: Contribution and Servicing Agreement,
dated as of May 1, 2002, by and between DVI Financial Services, Inc., as
Contributor and Servicer and DVI Receivables Corp. XVII, as Transferor.
(h) Asset Backed Notes, Series 2002-2
Issuer: DVI Receivables XVIII, L.L.C.
Receivables Corporation: DVI Receivables Corp. XVIII
Indenture: Indenture, dated as of November 1, 2002, by and between the Issuer
and U.S. Bank National Association (as successor to U.S. Bank Trust National
Association), as Trustee.
Contribution and Servicing Agreement: Contribution and Servicing Agreement,
dated as of November 1, 2002, by and between DVI Financial Services, Inc., as
Contributor and Servicer, and DVI Receivables Corp. XVIII, as Transferor.
(i) Asset Backed Notes, Series 2003-1
Issuer: DVI Receivables XIX, L.L.C.
Receivables Corporation: DVI Receivables Corp. XIX
Indenture: Indenture, dated as of May 1, 2003, by and between the Issuer and
U.S. Bank National Association, as Trustee.
Contribution and Servicing Agreement: Contribution and Servicing Agreement,
dated as of May 1, 2003, by and between DVI Financial Services, Inc., as
Contributor and Servicer and DVI Receivables Corp. XIX, as Transferor.
Exhibit B
CSA and Indenture Amendments
A. The following amendments are made to the Contribution and Servicing
Agreements:
1. Section 1.01(d) is deleted in its entirety.
2. Section 2 is deleted in its entirety; provided, however, that
notwithstanding the deletion of Section 2, the representations and warranties
previously set fourth therein shall continue to be available as the basis for a
claim with respect to the CSA Reserve Account.
3. Section 4.01(e) is amended and restated in its entirety as follows:
(e) The Service will maintain, or cause to be maintained, general
liability insurance in the amount of $5,000,000. Such policy shall be in full
force and effect at all times. All premiums in respect of such policies shall
be paid in full by the Servicer, at its own expense.
4. The first paragraph of Section 4.02(a) is amended and restated in
its entirety as follows:
(a) In performing its obligations hereunder, the Servicer may,
acting in the name of the Transferor and without the necessity of obtaining the
prior consent of the Transferor, the Issuer or the Trustee, enter into and grant
modifications, waivers and amendments to the terms of any Contract except for
modifications, waivers or amendments that (i) are inconsistent with the
servicing standards set forth in Section 4.01 above, or (ii) would extend the
Stated Maturity Date of the Notes; provided, however, that the Servicer shall
not agree to any modification, waiver or amendment that would (A) decrease the
Discounted Contract Balance of any Contract, or (B) materially reduce or
materially adversely affect, individually or in the aggregate, the Obligor's
obligation to maintain, service, insure and care for the Equipment or would
permit the alteration of any item of Equipment in any way which could reasonably
be expected to materially adversely affect its present or future value, unless,
in each such case, the Servicer has determined in its reasonable business
judgment that such modification, waiver or amendment is nonetheless in the best
interests of the Transferor, the Issuer, the Trustee, the Swap Providers and the
Noteholders. Notwithstanding the foregoing, the Servicer may enter into an
amendment, modification or waiver by requiring that the Obligor pay, in lieu of
all future Contract Payments with respect to such Contract, an amount which
equals or exceeds the applicable Prepayment Amount for such Contract as of 11:00
A.M. New York time on the second Business Day prior to the Payment Date next
succeeding the making of such payment; provided, however, that the Servicer will
not be permitted to allow prepayment by an Obligor if there are any amounts due
under the related Contract after such prepayment. The Servicer shall not be
liable for any actions it takes under this Section 4.02(a) unless such actions
constitute willful misconduct or gross negligence. From and after the date on
which all interests of the Noteholders and the Swap Providers have been paid in
full, the Servicer shall, if and to the extent requested by DVIFS,
consult with and accept direction from DVIFS with respect to Contract
modifications, waivers and amendments under this Section 4.02(a).
5. Section 4.02(b) is deleted in its entirety.
6. Section 4.03(a) is amended by adding the following sentence at the
end thereof:
Any such action may include, but shall not be limited to, amending,
modifying or waiving the terms of any such Contract in accordance with Section
4.02(a).
7. Section 4.04(a) shall be amended and restated in its entirety as
follows:
(a) All costs of servicing each Contract in the manner required by
this Section 4 shall be borne by the Servicer, but the Servicer shall be
entitled to retain, out of any amounts actually recovered by the Servicer in the
performance of its obligations under Section 4.03 hereof with respect to any
Contract or Equipment subject thereto, the following:
(i) the Servicer's actual out-of-pocket expenses reasonably
incurred in the course of such performance with respect to such Contract or
Equipment (for all purposes of this Section 4, the Servicer's "out-of-pocket
expenses" means only those expenses incurred to non-Affiliated third parties
(e.g., outside counsel in a collection suit) and shall not include salaries,
operating costs, overtime wages and other such "overhead" costs or expenses of
the Servicer or its Affiliates, and shall not include expenses of or payments to
an agent or subservicer allowed under Section 11.02, except that out-of-pocket
expenses for the fees and expenses of an agent used to remarket Equipment
subject to Contracts shall be included as "out-of-pocket expenses");
(ii) for any Contract for which the Discounted Contract Balance
for purposes of calculating the Servicing Fee has been determined to be zero as
set forth in the definition thereof, the Servicer will be entitled to receive a
special servicing fee in lieu of the regular servicing fee equal to the
percentage, determined in accordance with the Special Servicing Fee Table set
forth below, of any net amounts recovered on behalf of the Trustee, the
Noteholders and the Swap Provider and deposited into the Collection Account;
(iii) for any Contract for which the Discounted Contract Balance
for purposes of calculating the Servicing Fee has been determined to be zero as
set forth in the definition thereof, and with respect to which there has been a
loss due to (A) the repossession or foreclosure of the Equipment (other than by
the Servicer), (B) damage, destruction or other loss of the Equipment or (C) a
compromise or short payoff of a Contract in connection with an amendment,
modification or waiver permitted under Section 4.01, if the Servicer
subsequently recovers from the Obligor, a third party or a guarantor all or any
portion of such loss, the Servicer will be entitled to receive its out-of-pocket
expenses incurred in connection with such recovery and shall be entitled to a
special servicing fee in lieu of the regular servicing fee equal to the
percentage, determined in accordance with the Special Servicing Fee Table set
forth below, of any net amounts so recovered; provided, however, that no such
special servicing fee shall be payable with respect to any insurance proceeds
paid with respect to a loss as described in clause (B); and
(iv) for any Equipment that the Servicer has recovered through
repossessions following defaults or upon the termination of any Contract, if the
Servicer determines, based on its experience and industry expertise, that it is
likely to recover more from the disposition of such Equipment by using its
internal staff rather than a third party, the Servicer will be entitled to a
special servicing fee in lieu of the regular servicing fee equal to the
percentage, determined in accordance with the Special Servicing Fee Table set
forth below, of the net proceeds realized from such disposition.
Special Servicing Fee Table
% of Discounted Contract Balance Recovered
and Subject to Special Servicing Fee USBPS Special Servicing Fee
0.00% to 20.00% 9.00%
20.01% to 35.00% 11.00%
35.01% 50.00% 13.00%
50.01% + 15.00%
For purposes of the foregoing table, the Discounted Contract
Balance of each Contract for which the Servicer is entitled to a Special
Servicing Fee shall be determined as if such Discounted Contract Balance had not
been written to zero by the Servicer or deemed to be zero for purposes of
computing the Servicing Fee pursuant to the definition of "Discounted Contract
Balance." Each special servicing fee described in clause (ii), (iii) or (iv)
shall be a "Special Servicing Fee." Notwithstanding the foregoing provisions,
(A) if the disposition of Equipment is to the Obligor or an Affiliate or agent
of the Obligor, the Servicer shall be entitled to such special servicing fee
only to the extent that the disposition proceeds exceed the fair market value of
the Equipment as determined by an independent appraiser, and (B) the Servicer
shall not be entitled to any special servicing fee relating to any proceeds that
would constitute a Purchase Option Payment, Balloon Payment or any other final
payment obligation under the Indenture or that is otherwise permitted or
described under the terms of the Contract. In no event shall the Servicer
receive a Special Servicing Fee under more than one of clause (ii), (iii) or
(iv) with respect to the same recovery or proceeds. The Servicer shall use
commercially reasonable efforts to recover Equipment by repossessing such
Equipment following an Obligor default on the related Contract or upon
termination of any Contract, consistent with its servicing obligations under
Section 4.01.
In addition, the Servicer shall be entitled to recover any out-of-pocket
expenses, including losses or damages paid to third parties, and reasonable
expenses, including attorneys' fees, incurred in enforcing Contracts, defending
claims, or obtaining recoveries on Defaulted Contracts; provided, however, that
the Servicer shall not be entitled to recover any such losses or damages to the
extent caused by the Servicer's gross negligence or willful misconduct.
8. Section 4.04(b) is amended and restated in its entirety as follows:
(b) As compensation to the Servicer for its servicing of the
Contracts, the Servicer will be entitled to receive on each Payment Date from
amounts on deposit in the Collection Account a servicing fee in an amount equal
to the greater of (x) the product of (i) one-
twelfth, (ii) the Servicing Fee Rate and (iii) the Aggregate Discounted Contract
Balance as of the beginning of the related Collection Period and (y) $2,750
(such fees, together with the Special Servicing Fee, the "Servicing Fee"). In
addition, the Servicer will be entitled to receive as additional compensation on
each Payment Date from amounts on deposit in the Collection Account late payment
fees, the penalty portion of interest paid on past due amounts, origination
fees, documentation fees, other administrative fees or similar charges allowed
by applicable law with respect to the Contracts, and certain other similar fees
paid by the Obligors ("Servicing Charges"). Any earnings from Eligible
Investments of amounts on deposit in the Collection Account shall remain in the
Collection Account and be disbursed as Available Funds.
9. Section 4.04(c) is hereby deleted in its entirety.
10. Section 4.06(a) is amended and restated in its entirety as follows:
Subject to Section 4.06(b), the Servicer shall remit or cause
each Lock-Box Bank to remit all payments received by it on or in respect of any
Contract or Equipment (other than any Residual Payment or other payment with
respect to any Retained Interest in a Contract) during such Collection Period
into the Collection Account (including any such amounts then held by the
Servicer) as soon as practicable, but in any event within two Business Days
after receipt thereof. The Servicer shall apply any Residual Payment or other
payment with respect to any Retained Interest in a Contract as follows: (i) any
portion of such Residual Payment or other payment with respect to any Retained
Interest in a Contract that consists of a Purchase Option Payment, any other
payment that is not (x) a Contract Payment or (y) a payment with respect to
maintenance, insurance or taxes, or net proceeds from the sale of any Equipment
after the final Contract Payment with respect thereto, shall be deposited into
the CSA Reserve Account, until the total amount that has been deposited in such
CSA Reserve Account from all applicable sources shall equal $9,250,000, and
thereafter any portion of such Residual Payment or other payment with respect to
any Retained Interest in a Contract that consists of a Purchase Option Payment,
any other payment that is not (x) a Contract Payment or (y) a payment with
respect to maintenance, insurance or taxes, or net proceeds from the sale of any
Equipment after the final Contract Payment with respect thereto, shall be paid
to DVI and (ii) any other portion of such Residual Payment or other payment with
respect to any Retained Interest in a Contract shall be paid to DVI or its
designee.
11. Section 4.06(c) is amended and restated in its entirety as follows:
Notwithstanding the provisions of paragraph (a) hereof, the
Servicer may retain, or will be entitled to be reimbursed, from amounts
otherwise payable into, or on deposit in, the Collection Account with respect to
a Collection Period, amounts previously deposited in the Collection Account but
later determined to have resulted from a Purchase Option Payment, any other
payment that is not a Contract Payment, net proceeds from the sale of any
Equipment after the final Contract Payment with respect thereto related to a
Contract, mistaken deposits or payments due before or on the Cut-Off Date or
postings of checks returned for insufficient funds (provided that the Servicer
accounts for such amounts in the Monthly Servicer's Report for the related
Collection Period). The amount to be retained or reimbursed hereunder shall not
be
included in funds available for distribution with respect to the related Payment
Date. Except with respect to mistaken deposits or postings of checks returned
for insufficient funds (if such funds were advanced by the Servicer) the
Servicer shall not retain or be reimbursed for such amounts for its own account,
but shall pay such amounts to the CSA Reserve Account, to the appropriate third
parties for payments with respect to maintenance, insurance or taxes, or to DVI,
as applicable and as provided elsewhere in this Agreement.
12. Section 4.07 is amended and restated in its entirety as follows:
A. With respect to the Securitizations by DVI Receivables XIV, L.L.C., DVI
Receivables XVI, L.L.C., DVI Receivables XVII, L.L.C., DVI Receivables XVIII,
L.L.C and DVI Receivables XIX, L.L.C.:
At the election of any of the Servicer, DVIFS, the Managing Member or any
successor or assignee thereof, the obligations and responsibilities of the
Servicer with respect to all of the Contracts shall terminate on any Payment
Date on which the Aggregate Discounted Contract Balance is less than 10% of the
Initial Aggregate Discounted Contract Balance so long as the Servicer, DVIFS,
the Managing Member or any successor or assignee thereof deposits or causes to
be deposited into the Collection Account the fair market value of all Contracts
outstanding at such time. The person making such election shall notify the
Trustee, the Servicer, DVIFS and the Managing Member, as applicable, not less
than 30 days prior to such Payment Date, in each case specifying the Payment
Date and the proposed fair market value. To the extent that either (i) the
proposed fair market value of such Contracts is less than the outstanding
principal amount of the Notes at such time, plus accrued interest thereon to but
excluding such Payment Date, or (ii) such election is not made by DVIFS or any
successor or assignee thereof, such election shall only be permitted if (a) the
person exercising the option has solicited bids from at least three third
parties who are in the business of acquiring portfolios of assets of the same
type and similar aggregate value as the Contracts and the proposed "fair market
value" reflects the highest bid on reasonable terms from such third parties and
(b) in connection with a fair market value described in clause (i) above,
Noteholders holding at least 25% of the outstanding principal amount of the
Notes shall not have objected in writing to such proposed deposit by the 10th
day preceding such Payment Date.
B. With respect to the Securitizations by DVI Receivables VIII, L.L.C.,
DVI Receivables X, L.L.C., DVI Receivables XI, L.L.C. or DVI Receivables XII,
L.L.C.:
At the election of any of the Servicer, DVIFS, the Trustee, the
Managing Member or any successor or assignee thereof, the obligations and
responsibilities of the Servicer with respect to all of the Contracts shall
terminate on any Payment Date on which the Pool A Aggregate Discount Contract
Balance is less than 10% of the Pool A Aggregate Discount Contract Balance on
the Closing Date and the Pool B Aggregate Discount Contract Balance is less than
20% of the Pool B Aggregate Discount Contract Balance on the Closing Date so
long as the Servicer, DVIFS, the Trustee, the Managing Member or any successor
or assignee thereof deposits or causes to be deposited into the Collection
Account the fair market value of all Contracts outstanding at such time. The
person making such election shall notify the Trustee,
the Servicer, DVIFS and the Managing Member, as applicable, not less than 30
days prior to such Payment Date, and the Trustee shall notify the Noteholders
within 5 days thereafter, in each case specifying the Payment Date and the
proposed fair market value. To the extent that either (i) the proposed fair
market value of such Contracts is less than the outstanding principal amount of
the Notes at such time, plus accrued interest thereon to but excluding such
Payment Date, or (ii) such election is not made by DVIFS or any successor or
assignee thereof, such election shall only be permitted if (a) the person
exercising the option has solicited bids from at least three third parties who
are in the business of acquiring portfolios of assets of the same type and
similar aggregate value as the Contracts and the proposed "fair market value"
reflects the highest bid on reasonable terms from such third parties and (b) in
connection with a fair market value described in clause (i) above, Noteholders
holding at least 25% of the outstanding principal amount of the Notes shall not
have objected in writing to such proposed deposit by the 10th day preceding such
Payment Date.
13. Section 5 is hereby deleted in its entirety.
14. The following shall be added at the end of Section 6.01:
The Servicer agrees that, for so long as the Issuer is required to
file periodic reports with the Securities and Exchange Commission, the Servicer
will provide to the Issuer and the Managing Member such information, including
backup certification as to the performance of the Servicer's servicing
obligations, sufficient in scope and substance to allow the Issuer, the Managing
Member or their successors and assigns, to meet the certifications requirements
imposed under the securities law, including without limitation the
Xxxxxxxx-Xxxxx Act. The Issuer and the Managing Member agree that the Servicer
shall have no further obligations with respect to such certification
requirements and in no event shall the Servicer be required to execute the
certification required by Section 302 of the Xxxxxxxx-Xxxxx Act. The Servicer
will permit the Issuer, the Managing Member and such successors and assigns to
file the Monthly Servicer Reports as attachments to such periodic reports.
15. Section 6.04 is amended and restated in its entirety as follows:
The Trustee, for so long as the Issuer, the Managing Member or
their successors or assigns are required to file periodic reports with the
Securities and Exchange Commission, and thereafter if so requested in writing by
holders of Notes representing 10% or more of the Aggregate Note Balance, shall
cause a firm of independent certified public accountants (who may also render
other services to the Servicer) to deliver to the Trustee, the Rating Agencies
and each Noteholder within 90 days following each June 30, beginning with June
30, 2004, a written statement to the effect that such firm has examined, in
accordance with generally accepted practices, samples of the accounts, records,
and computer systems of the Servicer for the year ended on such June 30 relating
to the Contracts (which accounts, records, and computer systems shall be
described in one or more schedules to such statement), that such firm has
compared the information contained in the Servicer's reports delivered in the
relevant period and that, on the basis of such examination and comparison, such
firm is of the opinion that the Servicer has, during the relevant period,
serviced the Contracts in compliance with such servicing procedures, manuals and
guides and in the same manner as it services comparable leases for itself or
others, and that such certificates, accounts, records and computer systems have
been properly prepared and maintained in all material respects, except in each
case for (a) such exceptions as such firm
shall believe to be immaterial and (b) such other exceptions as shall be set
forth in such statement. Copies of all information furnished pursuant to this
Section shall also be furnished to the Rating Agencies. The Servicer shall
cooperate fully with such audit upon five days' written notice. All expenses
related to such an audit will be the responsibility of the Trustee, for which it
will be entitled to be reimbursed pursuant to Section 3.04(b)(i) of the
Indenture.
16. Section 7 is hereby deleted in its entirety.
17. The first sentence of Section 8.10 is deleted and replaced with the
following:
The Servicer shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy with a minimum
coverage of $2,000,000, with coverage appropriate and customary in the industry
with responsible companies on all officers, employees or other persons acting in
any capacity with regard to the Contracts to handle funds, money, documents and
papers relating to the Contracts. Copies of such fidelity bonds and policies
shall be provided to the Trustee on the Servicer Transition Date and on each
date of renewal thereof, together with evidence of payment therefor.
18. For the Securitization by DVI Receivables XIX, L.L.C., Section 8.11
is hereby deleted in its entirety.
19. Section 9, other than Section 9.04 thereof, is deleted in its
entirety.
20. Section 10.01(i) is amended by deleting clause (B) thereof.
21. Section 12 is deleted in its entirety.
22. All notices to be given to the Servicer as set forth in Section
13.04 shall be given to:
US Bank Portfolio Services
Attention: Xxx Xxxxxxx
0000 Xxxxxx Xx.
Xxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx & Whitney
Attn: Xxxx Xxxxxxxxxxx, Esq.
00 Xxxxx Xxxxx Xx.
Xxxxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
23. Section 13.05 is deleted in its entirety.
B. The following amendments are made to the definitions in Appendix I to
the Indenture:
1. The definition of "Defaulted Contract" shall be amended by replacing
clause (ii) thereof with the following:
(ii) reserved,
2. The definition of Discounted Contract Balance is amended and restated
as follows:
"Discounted Contract Balance": means, with respect to any Contract, on any
date of determination, an amount equal to the sum of (a) the present value of
each remaining Contract Payment (for the avoidance of doubt, not including any
amounts, such as insurance, maintenance or sales taxes, that are payable by the
Servicer to third parties under the terms of the applicable Contract, or, with
respect to sales taxes, under applicable law) to become due under a Contract
before the last day of the month prior to the month of the Stated Maturity Date,
discounted monthly from the last day of the Collection Period in which such
Contract Payment is to become due at a rate equal to one-twelfth of the Discount
Rate and (b) one hundred percent (100%) of the unpaid balance, as of such date
of determination, of Contract Payments due with respect to such Contract on or
prior to such date; provided, however, that except for purposes of computing the
Servicing Fee, on the date a Contract becomes a Defaulted Contract, the
Discounted Contract Balance for such Contract will be zero. For purposes of
computing the Servicing Fee, on the date a Contract becomes a Defaulted
Contract, the Discounted Contract Balance shall continue to be determined as set
forth in clauses (a) and (b) above without giving effect to the foregoing
proviso; provided, however, that on the date the Servicer determines, in its
good faith judgment (which shall be evidenced by an Officer's Certificate
delivered to the Trustee and the Transferor), that it will not be able to
recover any additional amounts from the Obligor on such Contract or from
disposition of the related Equipment, the Discounted Contract Balance of such
Contract will be zero for all purposes. For purposes of calculating the
Discounted Contract Balance of a Contract, any Contract Payment for which the
Contributor received, on or prior to the Cut-off Date, a security deposit or an
advance payment, shall be deemed to be zero. For the avoidance of doubt,
Purchase Option Payments shall not be included for any purpose in the
calculation of Discounted Contract Balance for any Contract. For the avoidance
of doubt, a Contract that has become a Defaulted Contract under the definition
thereof (including any such Contract that is 180 days or more delinquent), shall
be treated as a Defaulted Contract for purposes of preparing the Monthly
Servicer Reports but shall not be treated as a Defaulted Contract for purposes
of computing the Servicing Fee or determining the Servicer's entitlement to a
Special Servicing Fee unless the Servicer has determined, in its good faith
judgment (which shall be evidenced by an Officer's Certificate delivered to the
Trustee and the Transferor), that it will not be able to recover any additional
amounts from the Obligor on such Contract or from disposition of the related
Equipment.
3. A definition of Servicer Transition Date is added as follows:
"Servicer Transition Date" shall mean the Closing Date as defined
in the Settlement Agreement dated as of December __, 2003, among DVIFS, the
Trustee, the Successor Servicer and the other parties named therein.
4. A definition of Special Servicing Fee is added as follows:
"Special Servicing Fee" shall have the meaning given to it in
Section 4.04(a) of the Contribution and Servicing Agreement.
5. A definition of Issuers is added as follows:
"Issuers" shall mean DVI Receivables VIII, L.L.C., DVI
Receivables X, L.L.C., DVI Receivables XX, X.X.X., XXX Xxxxxxxxxxx XXX, X.X.X.,
XXX Receivables XIV, L.L.C., DVI Receivables XVI, L.L.C., DVI Receivables XVII,
L.L.C., DVI Receivables XVIII, L.L.C. and DVI Receivables XIX, L.L.C.
6. A definition of Indentures is added as follows:
"Indentures" shall mean all the Indentures entered into between
one of the Issuers, on the one hand, and U.S. Bank National Association, as
Trustee, on the other hand.
7. A definition of CSA Reserve Account is added as follows:
"CSA Reserve Account" shall mean the account established pursuant
to Section 9(a) of the Settlement Agreement, dated as of December __ 0000, xxxxx
XXX, Xxx., XXX, XXX Business Credit Corporation, the Issuers, the Trustee, Lyon
Financial Services, Inc. d/b/a US Bancorp Portfolio Services, the Ad Hoc
Committee of Securitization Noteholders and the other parties named therein.
8. The second sentence of the definition of "Delinquent Contract" is
amended and restated as follows:
The delinquency of a Contract Payment shall be measured based on
the Contract Payments required to be made during the term of such Contract as of
the date such Contract became part of the Trust Property without giving effect
to any modifications, waivers or extensions subsequently granted by the Servicer
(other than such modifications, waivers or extensions approved in accordance
with Section 4.02 of the Contribution and Servicing Agreement).
9. The definition of "Lock-Box Agreement" is amended and restated in its
entirety as follows:
"Lock-Box Agreement" shall mean any agreement between the
Servicer and a Lock-Box Bank (including any such agreement transferred to the
Servicer by any predecessor servicer) that establishes a Lock-Box Account for
the benefit of the Noteholders. The Servicer shall furnish to the Trustee a copy
of each Lock-Box Agreement promptly upon its execution thereof, and shall
similar promptly furnish to the Trustee any amendments thereof.
10. For the Securitizations by DVI Receivables VIII, L.L.C., DVI
Receivables X, L.L.C. and DVI Receivables XI, L.L.C., a new definition of
Trustee Fee is added as follows:
"Trustee Fee" means the reasonable fees of the Trustee.
11. For the Securitizations by DVI Receivables VIII, L.L.C., DVI
Receivables X, L.L.C., DVI Receivables XI, L.L.C., DVI Receivables XII, L.L.C.
and DVI Receivables XIV, L.L.C. , a new definition is added:
"Contribution and Servicing Agreement" shall mean the Amended and
Restated Contribution and Servicing Agreement.
12. For the Securitizations by DVI Receivables VIII, L.L.C., DVI
Receivables X, L.L.C., DVI Receivables XI, L.L.C., DVI Receivables XII, L.L.C.
and DVI Receivables XIV, L.L.C., a new definition is added:
"Indenture" shall mean the Amended and Restated Indenture.
13. A definition of Contribution and Servicing Agreements is added as
follows:
"Contribution and Servicing Agreements" shall mean all the Contribution
and Servicing Agreements entered into between DVI, on the one hand, and any of
DVI Receivables Corp. VIII, DVI Receivables Corp. X, DVI Receivables Corp. XX,
XXX Xxxxxxxxxxx Xxxx. XXX, XXX Receivables Corp. XIV, DVI Receivables Corp.
XVI, DVI Receivables Corp. XVII, DVI Receivables Corp. XVIII or DVI Receivables
Corp. XIX, on the other hand.
C. The following amendments are made to the Indentures:
1. All notices to be given to the Servicer as set forth in Section 1.05
shall be given to:
US Bank Portfolio Services
Attention: Xxx Xxxxxxx
0000 Xxxxxx Xx.
Xxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
or at any other address furnished in writing by the Servicer to the Trustee, the
Issuer and DVI.
with a copy to:
Xxxxxx & Whitney
Attn: Xxxx Xxxxxxxxxxx, Esq.
00 Xxxxx Xxxxx Xx.
Xxxxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
In the event that the Servicer, DVIFS, the Managing Member or any successor or
assignee thereof, elects to cause the obligations and responsibilities of the
Servicer with respect to all of the Contracts to terminate on any Payment Date
pursuant to Section 4.07 of the Contribution and Servicing Agreement, the
Trustee shall notify the Noteholders of such election within 5 business days of
receiving notice thereof.
2. The last sentence of Section 3.03(a) is amended and restated as
follows:
If at any time the Issuer shall receive any payment on or in respect of
any Contract or Equipment (other than any Residual Payment or other payment
with respect to any Retained Interest in a Contract), it shall hold such
payment in trust for the benefit of the Trustee, the Swap Providers and the
Noteholders, shall segregate such payment from the other property of the
Issuer, and shall, within two Business Days of receipt, deliver such payment in
immediately available funds to the Servicer. If at any time the Issuer shall
receive any Residual Payment or other payment with respect to any Retained
Interest in a Contract, the Issuer shall within two Business Days of receipt
transfer such payment to the Servicer for application as follows: (i) any
portion of such Residual Payment or other payment with respect to any Retained
Interest in a Contract that consists of a Purchase Option Payment, any other
payment that is not (x) a Contract Payment or (y) a payment with respect to
maintenance, insurance or taxes, or net proceeds from the sale of any Equipment
after the final Contract Payment with respect thereto, shall be deposited into
the CSA Reserve Account, until the total amount that has been deposited in such
CSA Reserve
Account from all applicable sources shall equal $9,250,000, and thereafter any
portion of such Residual Payment or other payment with respect to any Retained
Interest in a Contract that consists of a Purchase Option Payment, any other
payment that is not (x) a Contract Payment or (y) a payment with respect to
maintenance, insurance or taxes, or net proceeds from the sale of any Equipment
after the final Contract Payment with respect thereto, shall be paid to DVI and
(ii) any other portion of such Residual Payment or other payment with respect to
any Retained Interest in a Contract shall be paid to DVI. Any payment with
respect to maintenance, insurance or taxes shall be paid to the Servicer and
shall be applied by such Servicer in accordance with the terms of the Contract
and, with respect to any such tax payments, applicable law.
3. Section 3.03(b) is amended and restated as follows:
(b) If at any time the Trustee shall receive any payment on or in respect
of any Contract or Equipment (other than any Residual Payment or other payment
with respect to any Retained Interest in a Contract, which shall be subject to
Section 3.03(c)), it shall, within two Business Days of receipt, deposit such
payment into the Collection Account in accordance with the written direction of
the Servicer.
4. Section 3.03(c) is amended and restated as follows:
(c) If at any time the Trustee shall receive any Residual Payment or other
payment with respect to any Retained Interest in a Contract in respect of any
Contract or Equipment (other than in its role as CSA Reserve Account Trustee),
it shall within two Business Days of receipt transfer such payment to the
Servicer in accordance with the written instructions of the Servicer for
application as follows: (i) any portion of such Residual Payment or other
payment with respect to any Retained Interest in a Contract that consists of a
Purchase Option Payment, any other payment that is not (x) a Contract Payment or
(y) a payment with respect to maintenance, insurance or taxes, or net proceeds
from the sale of any Equipment after the final Contract Payment with respect
thereto, shall be deposited into the CSA Reserve Account, until the total amount
that has been deposited in such CSA Reserve Account from all applicable sources
shall equal $9,250,000, and thereafter any portion of such Residual Payment or
other payment with respect to any Retained Interest in a Contract that consists
of a Purchase Option Payment, any other payment that is not (x) a Contract
Payment or (y) a payment with respect to maintenance, insurance or taxes, or net
proceeds from the sale of any Equipment after the final Contract Payment with
respect thereto, shall be paid to DVI and (ii) any other portion of such
Residual Payment or other payment with respect to any Retained Interest in a
Contract shall be paid to DVI.
5. Section 3.04(a)(v) is amended and restated as follows:
(v) Reserved;
6. Section 3.04(a)(vi) is amended and restated as follows:
(vi) promptly upon receipt, any proceeds received by the Trustee
pursuant to any insurance policy covering Equipment or any other amounts
received by the Trustee relating to a Contract or Equipment and required to be
deposited in the Collection Account pursuant to Section 3.03(b); and
7. Section 3.04(a)(vii) is amended and restated as follows:
(vii) promptly upon receipt, any amounts the Trustee receives
with are not required to be deposited or transferred elsewhere in accordance
with Section 3.03;
8. For the Securitizations by DVI Receivables XII, L.L.C., DVI Receivables
XIV, L.L.C., DVI Receivables XVI, L.L.C., DVI Receivables XVII, L.L.C., DVI
Receivables XVIII, L.L.C, and DVI Receivables XIX, L.L.C., Section 3.04(b)(i) is
amended by adding the following at the end of clause (B) thereof:
and all reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, fraud, willful misconduct or bad faith.
9. For the Securitizations by DVI Receivables VIII, L.L.C., DVI
Receivables X, L.L.C. and DVI Receivables XI, L.L.C., Section 3.04(b)(i) is
amended by inserting "(A)" at the beginning thereof and adding the following at
the end thereof:
and (B) to the Trustee, the Trustee Fee and all reasonable
expenses, disbursements, and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
gross negligence, fraud, willful misconduct or bad faith.
10. Section 3.04(b)(ii) is amended and restated as follows:
(ii) Reserved;
11. For the Securitizations by DVI Receivables XIV, L.L.C. and DVI
Receivables XVI, L.L.C., Section 3.04(b)(xv) is amended and restated, for the
Securitizations by DVI Receivables XVII, L.L.C and DVI Receivables XVIII, L.L.C,
Section 3.04(b)(xvi) is amended and restated, and for the Securitization by DVI
Receivables XIX, L.L.C., Section 3.04(b)(xxi) is amended and restated, in each
case as follows:
any remaining Available Funds on deposit in the Collection
Account shall be paid to DVI in payment of its claims against the Issuer for
fraudulent conveyances and preferences; provided, however, that after the
aggregate amount of payments from all of the Issuers pursuant to Section 3.04,
3.07, 3.08 or 6.06 of their respective Indentures with respect to
claims for fraudulent conveyances and preferences equals $50,000,000, such
remaining Available Funds shall be paid to DVI Receivables Corp. VIII, as sole
member of the Issuer.
12. For the Securitizations by DVI Receivables VIII, L.L.C., DVI
Receivables X, L.L.C., DVI Receivables XI, L.L.C. and DVI Receivables XII,
L.L.C., Section 3.04(b)(xv) is amended and restated as follows:
any remaining Available Funds on deposit in the Collection
Account shall be paid to DVI in payment of its claims against the Issuer for
fraudulent conveyances and preferences; provided, however, that after the
aggregate amount of payments from all of the Issuers pursuant to Section 3.04,
3.08 or 6.06 of their respective Indentures with respect to claims for
fraudulent conveyances and preferences equals $50,000,000, such remaining
Available Funds shall be paid to DVI Receivables Corp. VIII, as sole member of
the Issuer.
13. For the Securitizations by DVI Receivables XVII, L.L.C., DVI
Receivables XVIII, L.L.C. and DVI Receivables XIX, L.L.C., Section 3.04(d) is
deleted in its entirety.
14. For the Securitizations by DVI Receivables XIV, L.L.C., DVI
Receivables XVI, L.L.C., DVI Receivables XVII, L.L.C., DVI Receivables XVIII,
L.L.C. and DVI Receivables XIX, L.L.C., Section 3.07(c) is amended and restated
as follows:
(c) If on any Payment Date, the payments required to be made
pursuant to clause (i) of Section 3.04(b) include (x) any payments then due and
payable in connection with the selection of, or transition to, a Successor
Servicer or (y) any shortfall between the Deposited Available Funds and the
servicing fees then due and payable to the Successor Servicer, then the Trustee
shall withdraw from the Successor Servicer Reserve Account in accordance with
Section 3.04(c) hereof; provided, however, to the extent such payments required
to be made pursuant to clause (i) of Section 3.04(b) include amounts described
in clause (x) of this subsection (c), the Trustee shall withdraw from the
Successor Servicer Reserve Account to make payments to a Successor Servicer
(other than U.S. Bank Portfolio Services) only with the consent of the
Noteholders representing more than 50% of the Voting Rights (such consent not to
be unreasonably withheld). On each Payment Date, if, after giving effect to all
deposits and withdrawals therefrom on such Payment Date, the balance in the
Successor Servicer Reserve Account is greater than the Initial Successor
Servicer Reserve Account Deposit Amount, the Trustee shall release and, at the
instruction of the Servicer, shall pay the amount of the excess to DVI in
payment of its claims against the Issuer for fraudulent conveyances and
preferences; provided, however, that after the aggregate amount of payments from
all of the Issuers pursuant to Section 3.04, 3.07, 3.08 or 6.06 of their
respective Indentures with respect to claims for fraudulent conveyances and
preferences equals $50,000,000, such excess shall be paid to the Issuer or its
designee. Amounts properly paid to DVI, the Issuer or its designee pursuant to
this Section 3.07, either directly from the Distribution Account without deposit
in the Successor Servicer Reserve Account or from the Successor Servicer Reserve
Account, shall be deemed released from the Trust Property, and DVI, the Issuer
or its designee, shall not in any event thereafter be required to refund any
such paid amounts.
15. For the Securitizations by DVI Receivables XIV, L.L.C., DVI
Receivables XVI, L.L.C., DVI Receivables XVII, L.L.C., DVI Receivables XVIII,
L.L.C. and DVI Receivables XIX, L.L.C., Section 3.07(e) is amended and restated
as follows:
(e) Upon termination of this Indenture, any amounts on deposit in the
Successor Servicer Reserve Account, after payment of all amounts due to the
Class A Noteholders, the Class B Noteholders, the Class C Noteholders, the Class
D Noteholders, and the Class E Noteholders shall be paid to DVI in payment of
its claims against the Issuer for fraudulent conveyances and preferences;
provided, however, that after the aggregate amount of payments from all of the
Issuers pursuant to Section 3.04, 3.07, 3.08 or 6.06 of their respective
Indentures with respect to claims for fraudulent conveyances and preferences
equals $50,000,000, such remaining funds shall, upon the Managing Member's
written request to the Trustee, be paid to the Managing Member (as sole
beneficial owner of the Issuer).
16. For the Securitizations by DVI Receivables VIII, L.L.C., DVI
Receivables X, L.L.C., DVI Receivables XX, X.X.X., XXX Xxxxxxxxxxx XXX, X.X.X.,
XXX Receivables XIV, L.L.C., DVI Receivables XVI, L.L.C. and DVI Receivables
XVII, L.L.C., Section 3.08(b) is amended and restated as follows:
(b) On each Payment Date, the Trustee shall, on the basis of the Monthly
Servicer Report, deposit in the Reserve Account, pursuant to Section 3.04(b), an
amount equal to the Reserve Account Deposit Amount. If on any Payment Date,
Deposited Available Funds are less than the Priority Payments, the Trustee shall
withdraw from the Reserve Account the excess of the Priority Payments over the
Available Funds in accordance with Section 3.04(c) hereof. On each Payment Date,
if, after giving effect to all deposits and withdrawals therefrom on such
Payment Date, the balance in the Reserve Account is greater than the Reserve
Account Requirement, the Trustee shall release and, at the instruction of the
Servicer, shall pay the amount (such amount, a "RESERVE ACCOUNT WITHDRAWAL") of
the excess to DVI in payment of its claims against the Issuer for fraudulent
conveyances and preferences; provided, however, that after the aggregate amount
of payments from all of the Issuers pursuant to Section 3.04, 3.07 (if
applicable), 3.08 or 6.06 of their respective Indentures with respect to claims
for fraudulent conveyances and preferences equals $50,000,000, such excess shall
be paid to the Issuer or its designee. Amounts properly paid to DVI., the Issuer
or its designee, pursuant to this Section 3.08, either directly from the
Distribution Account without deposit in the Reserve Account or from the Reserve
Account, shall be deemed released from the Trust Property, and DVI, the Issuer
or its designee, shall not in any event thereafter be required to refund any
such paid amounts.
17. For the Securitizations by DVI Receivables XVIII, L.L.C. and DVI Receivables
XIX, L.L.C., Section 3.08(b) is amended and restated as follows:
(b) On each Payment Date, the Trustee shall, on the basis of the Monthly
Servicer Report, deposit in the Reserve Account, pursuant to Section 3.04(b), an
amount equal to the Reserve Account Deposit Amount. If on any Payment Date,
Deposited Available Funds are less than the Priority Payments, the Trustee shall
withdraw from the Reserve Account the excess of the Priority Payments over the
Available Funds in accordance with Section 3.04(c) hereof. On
each Payment Date after the appointment of a Successor Servicer as a result of
the occurrence and continuance of a Servicer Event of Default, such Successor
Servicer (as long as no Servicer Event of Default has occurred with respect to
such Successor Servicer) may withdraw from amounts on deposit in the Reserve
Account any expenses incurred by such Successor Servicer in connection with the
rehabilitation of any Delinquent Contracts and/or Defaulted Contracts; provided
that, except with respect to the Special Servicing Fee as described in the
Contribution and Servicing Agreement, the amount of any such reimbursement shall
not exceed the lesser of (x) one-half of one percent (0.50%) of the Initial
Aggregate Discounted Contract Balance and (y) one-half of one percent (0.50%) of
the Aggregate Discounted Contract Balance as of such Payment Date. On each
Payment Date, if, after giving effect to all deposits and withdrawals therefrom
on such Payment Date, the balance in the Reserve Account is greater than the
Reserve Account Requirement, the Trustee shall release and, at the instruction
of the Servicer, shall pay the amount (such amount, a "RESERVE ACCOUNT
WITHDRAWAL") of the excess to DVI in payment of its claims against the Issuer
for fraudulent conveyances and preferences; provided, however, that after the
aggregate amount of payments from all of the Issuers pursuant to Section 3.04,
3.07, 3.08 or 6.06 of their respective Indentures with respect to claims for
fraudulent conveyances and preferences equals $50,000,000, such excess shall be
paid to the Issuer or its designee. Amounts properly paid to DVI, the Issuer or
its designee, pursuant to this Section 3.08, either directly from the
Distribution Account without deposit in the Reserve Account or from the Reserve
Account, shall be deemed released from the Trust Property, and DVI, the Issuer
or its designee, shall not in any event thereafter be required to refund any
such paid amounts.
18. Section 3.08(d) is amended and restated as follows:
(d) Upon termination of this Indenture, any amounts on deposit in the
Reserve Account, after payment of amounts due to the Class A Noteholders, the
Class B Noteholders, the Class C Noteholders, the Class D Noteholders, and the
Class E Noteholders, shall be paid to DVI in payment of its claims against the
Issuer for fraudulent conveyances and preferences; provided, however, that after
the aggregate amount of payments from all of the Issuers pursuant to Section
3.04, 3.07 (if applicable), 3.08 or 6.06 of their respective Indentures with
respect to claims for fraudulent conveyances and preferences equals $50,000,000,
such remaining funds shall, upon the Managing Member's written request to the
Trustee, be paid to the Managing Member (as sole beneficial owner of the
Issuer).
19. Sections 4.01, 4.02 and 4.03 are deleted in their entirety; provided,
however, that notwithstanding the deletion of Section 4.01, the representations
and warranties previously set forth therein shall continue to be available as
the basis for a claim with respect to the CSA Reserve Account.
20. Section 4.04(a) is amended and restated in its entirety as follows:
(a) In the event that the Trustee shall have received written
certification from an Authorized Officer of the Servicer that the Trustee has
received from amounts paid by the Obligor or from the proceeds of the Equipment
subject to any Contract (i) the final Contract Payment due and payable under any
Contract or (ii) a Prepayment Amount in respect of any Contract and, following
such final Contract Payment or Prepayment Amount, no other payments (other than
any Excluded Amounts, Purchase Option Payments and any other payments under such
Contract not included in the determination of Discounted Contract Balance for
such
Contract as set forth in the related Contract Schedule) on, or in respect of,
such Contract are or will be due and payable, such Contract and the Equipment
subject thereto shall be released from the lien of this Indenture.
21. Section 4.04(b) is deleted in its entirety.
22. For the Securitizations by DVI Receivables XVII, L.L.C., DVI
Receivables XVIII, L.L.C. and DVI Receivables XIX, L.L.C., Section 4.06 is
amended and restated by deleting from the end thereof the following: "(although
such amounts shall remain subject to the repayment and reinvestment requirements
of Section 4.03 of this Indenture)."
23. For the Securitizations by DVI Receivables VIII, L.L.C., DVI
Receivables X, L.L.C., DVI Receivables XX, X.X.X., XXX Xxxxxxxxxxx XXX, X.X.X.,
XXX Receivables XIV, L.L.C. and DVI Receivables XVI, L.L.C., a new Section 4.06
is added as follows:
Upon the occurrence of any release pursuant to Section 4.03 or Section
4.04 hereof, the definition of "Trust Property" will be automatically amended to
exclude all right, title and interest of the Trustee in (a) any Contract which
has been released from the lien of the Indenture, (b) the Equipment related to
such Contract and (c) all income, payments and proceeds of any of the foregoing
or relating thereto accruing after the effective date of such release.
24. For the Securitizations by DVI Receivables XVI, L.L.C., DVI
Receivables XVII, L.L.C., DVI Receivables XVIII, L.L.C. and DVI Receivables XIX,
L.L.C., Section 6.01(iii) is amended by deleting the following: "or of any DVI
Party to the Contribution and Servicing Agreement."
25. Section 6.01(iv) is amended and restated as follows;
(iv) Reserved;
26. Section 6.06 is amended by amending clauses SECOND and THIRD thereof
as follows:
Clause SECOND is restated to read: "SECOND, Reserved";
Clause THIRD is restated to read: "THIRD, only in the event that DVI is no
longer the Servicer, any unpaid Servicing Fees to the Servicer, including, if
the Servicer has, in its good faith and reasonable business judgment, deemed the
Servicing Fee to be commercially unreasonable, then, the amount agreed upon
between the then Servicer and the Trustee, each in their good faith and
commercially reasonable judgment, as necessary to make the Servicing Fee
commercially reasonable and to cover the reasonable costs in transferring the
servicing obligations, and in addition, if all or any portion of the Trust
Property is sold in accordance with Section 6.15, then with respect to each such
portion sold, (i) if sold within 12 months of the Servicer Transition Date,
0.25% of the Aggregate Discounted Contract Balance of the Contracts so sold,
(ii) if sold 12 months or more after the Servicer Transition Date, but less than
24 months
after the Servicer Transition Date, 0.125% of the Aggregate Discounted Contract
Balance of the Contracts so sold or (iii) nothing if sold 24 months or more
after the Servicer Transition Date.
27. Section 6.06 is further amended by restating, for the Securitizations
by DVI Receivables VIII, L.L.C., DVI Receivables X, L.L.C., DVI Receivables XX,
X.X.X., XXX Xxxxxxxxxxx XXX, X.X.X., XXX Receivables XIV, L.L.C. and DVI
Receivables XVI, L.L.C., clause SEVENTEENTH thereof, for the Securitizations by
DVI Receivables XVII, L.L.C. and DVI Receivables XVIII, L.L.C., clause
EIGHTEENTH thereof, and for the Securitization by DVI Receivables XIX, L.L.C.,
clause TWENTY-THIRD thereof, in each to read as follows:
To DVI in payment of its claims against the Issuer for fraudulent
conveyances and preferences; provided, however, that after the aggregate amount
of payments from all of the Issuers pursuant to Section 3.04, 3.07 (if
applicable), 3.08 or 6.06 of their respective Indentures with respect to claims
for fraudulent conveyances and preferences equals $50,000,000, to the Issuer or
its designee.
28. Section 7.06(a) is amended and restated in its entirety as follows:
(a) The Trustee shall be compensated and/or reimbursed for all services
rendered by it hereunder, on each Payment Date, from Available Funds on deposit
in the Collection Account, an amount equal to the Trustee Fee and the reasonable
administrative fee of the Lock-Box Banks;
29. Section 7.06(b) is deleted.
30. Section 8.02(b) is deleted.
31. Section 8.06 is deleted.
32. Section 8.07(d) is amended and restated as follows:
(d) The Issuer shall, and the Servicer shall use good faith efforts to
assist the Issuer, to update any information required to be provided pursuant to
Rule 144A(d) (4) of the Securities Act to subsequent purchasers of the Class E
Notes to prevent such information from becoming materially false and materially
misleading in a manner adverse to any Noteholder; provided that the Servicer
shall not be obligated to determine the materiality of any such information to
be disclosed or determine whether the disclosure thereof omits a material fact
required to be stated therein or necessary to make any such statements therein
not misleading.
Exhibit C
UNPAID FEES
DVI FINANCIAL SERVICES, INC.
SUMMARY OF SERVICING AND OTHER FEES
MONTHLY REPORT (A)
------------------------------------------------------------------
SEPT. OCT. NOV. DEC. JAN. TOTAL
---------- ---------- ---------- ---------- ---------- -----------
Servicing fees
1999-1 $ 10,984 $ 10,150 $ 9,326 $ 8,028 $ 7,240* $ 45,729
1999-2 20,005 19,097 18,174 17,083 15,987* 90,347
2000-1 28,236 26,972 25,834 24,715 23,319* 129,076
2000-2 32,720 31,617 30,481 29,427 28,385* 152,630
2001-1 48,958 47,423 44,595 43,088 41,426* 225,491
2001-2 132,174 133,099 124,911 120,160 115,111* 625,455
2002-1 188,273 184,158 179,926 173,888 168,418* 894,664
2002-2 236,657 231,510 226,677 221,207 214,851* 1,130,904
2003-1 271,376 263,140 256,542 249,812 244,269* 1,285,140
---------- ---------- ---------- ---------- ---------- -----------
Subtotal 969,385 947,168 916,466 887,408 859,007 4,579,433
Late fees, taxes, maintenance, other
1999-1 24,895 34,707 48,438 30,953 30,953* 169,945
1999-2 54,759 57,941 61,957 48,663 48,663* 271,983
2000-1 56,397 76,815 72,730 71,079 71,079* 348,100
2000-2 67,313 65,586 67,004 50,840 50,840* 301,582
2001-1 70,525 63,009 130,564 94,216 94,216* 452,531
2001-2 189,312 153,039 149,922 150,288 150,288* 792,850
2002-1 138,170 157,137 162,199 115,898 115,898* 689,302
2002-2 204,042 162,766 185,884 194,181 194,181* 941,053
2003-1 224,169 136,153 186,178 157,264 157,264* 861,026
---------- ---------- ---------- ---------- ---------- -----------
Subtotal 1,029,582 907,153 1,064,875 913,381 913,381 4,828,372
Amounts already received (sales taxes) (469,332) (516,228) (510,401) (1,495,961)
---------- ---------- ---------- ---------- ---------- -----------
$1,529,635 $1,338,092 $1,470,940 $1,800,789 $1,772,388 $ 7,911,845
========== ========== ========== ========== ========== ===========
----------
(A) Reporting on prior month's activity.
* =estimate.
DVI FINANCIAL SERVICES, INC.
SETTLEMENT AGREEMENT POTENTIAL ECONOMICS
OLD NEW
----------- -----------
Servicer advances $21,435,425 $21,435,425
Accrued servicing fees 4,579,433 4,579,433
Servicing rights purchase price 6,000,000 6,000,000
----------- -----------
32,014,858 32,014,858
August calculation error (1,183,887)
Misapplied cash (3,057,002) (2,500,000)
----------- -----------
Net to DVI $27,773,969 $29,514,858
=========== ===========
Deficiency $(2,226,031)
EXHIBIT D
SERVICER ADVANCES
CUMULATIVE SERVICER ADVANCES BY SECURITIZATION
CUMULATIVE
SERVICER
TRUST ADVANCE
------------------- --------------
1999-1 $ 763,924.27
1999-2 966,007.09
2000-1 1,635,099.97
2000-2 1,451,565.76
2001-1 2,202,936.16
2001-2 4,220,529.99
2002-1 3,637,348.68
2002-2 2,837,899.95
2003-1 3,605,818.03
--------------
Total $21,321,129.90
==============
SUMMARY OF RETURN OF SERVICER ADVANCES
AUGUST SEPTEMBER OCTOBER NOVEMBER TOTAL
---------- ---------- ---------- ---------- -----------
1999-1 $ 47,162 $ 183,936 $ 238,418 $ 65,882 $ 535,397
1999-2 114,330 153,963 425,481 157,980 851,754
2000-1 253,455 266,467 172,867 410,530 1,103,319
2000-2 207,305 258,090 651,803 194,093 1,311,290
2001-1 664,413 489,423 688,392 267,699 2,109,927
2001-2 639,450 674,801 658,826 374,473 2,347,550
2002-1 332,721 560,871 1,446,112 278,091 2,617,795
2002-2 244,838 640,797 1,089,608 577,742 2,552,985
2003-1 190,840 608,038 1,242,278 483,050 2,524,206
---------- ---------- ---------- ---------- -----------
Total $2,694,513 $3,836,385 $6,613,785 $2,809,540 $15,954,224
========== ========== ========== ========== ===========
EXHIBIT E
FORM OF ORDER
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
DVI, INC., ) Case Nos. 03-12656 through
DVI FINANCIAL SERVICES INC. and ) 03-12658 (MJW)
DVI BUSINESS CREDIT CORPORATION, )
) Jointly Administered
Debtors. )
)
---------------------------------------------
ORDER PURSUANT TO SECTIONS 105 AND 365 OF THE BANKRUPTCY CODE AND FEDERAL RULE
OF BANKRUPTCY PROCEDURE 9019 APPROVING (I) THE DEBTORS' ASSUMPTION AND
ASSIGNMENT OF CERTAIN CONTRIBUTION AND SERVICING AGREEMENTS, AS MODIFIED, AND
(II) A
SETTLEMENT AGREEMENT BETWEEN DEBTORS, EACH RECEIVABLES CORPORATION, EACH
ISSUER, U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, THE AD HOC COMMITTEE OF
NOTEHOLDERS AND LYON FINANCIAL SERVICES, INC.
D/B/A US BANCORP PORTFOLIO SERVICES
This matter coming on to be heard on the Motion of the Debtors and
Debtors-in-Possession for Order Pursuant to Sections 105 and 365 of the
Bankruptcy Code and Federal Rule of Bankruptcy Procedure 9019 Approving (i) the
Debtors' Assumption and Assignment of Certain Contribution and Servicing
Agreements, as Modified, and (ii) a Settlement Agreement Between Debtors, U.S.
Bank National Association, as Trustee, each Receivables Corporation, each
Issuer, the Ad Hoc Committee of Noteholders and Lyon Financial Services, Inc.
d/b/a US Bancorp Portfolio Services (the "Motion") filed by the above-captioned
debtors and debtors-in-possession (the "Debtors"); the Court having reviewed the
Motion and the Settlement Agreement (attached hereto as Exhibit A and
incorporated herein by reference, the "Settlement Agreement")(1) and having
heard the statements
--------
1 Capitalized terms not otherwise defined in this Order shall have the
meanings ascribed to them in the Motion.
of counsel in support of the relief requested therein at the hearing conducted
on January __, 2004 (the "Hearing"); the Court finding that (a) the Court has
jurisdiction over this matter pursuant to 28 U.S.C. Section 157 and 1334,
(b) this is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2), (c) the
compromise and settlement set forth in the Settlement Agreement is fair and
reasonable and in the best interest of the Debtors' estates; the Court finding
that notice of the Motion given by the Debtors was sufficient under the
circumstances; and the Court being fully advised in the premises and having
determined that the legal and factual bases set forth in the Motion and at the
Hearing on the Motion establish just cause for the relief herein granted;
IT IS HEREBY ORDERED THAT:
1. The Motion shall be, and hereby is, GRANTED.
2. Pursuant to 11 U.S.C. Section 105(a) and Rule 9019(a) of the Federal
Rules of Bankruptcy Procedure, the Settlement Agreement and the compromises and
releases embodied therein are hereby approved as fair, adequate and reasonable
under all of the circumstances, to the Noteholders, Securitization Trusts, the
Debtors and their bankruptcy estates and the Settlement Related Parties (as
hereinafter defined). The Settlement Agreement is determined by this Court to be
a fair, prudent and reasonable result for all Noteholders, and is in the best
interest of all Noteholders, the Securitization Trusts, the Debtors and the
Settlement Related Parties. The Debtors and the Settlement Related Parties have
acted reasonably and prudently in seeking this Order.
3. Effective automatically on the Closing Date, the amendments to the
Contribution and Servicing Agreements and the Indentures set forth in Exhibit B
to the Settlement Agreement shall be, and hereby are, approved notwithstanding
the amendment requirements set forth in the respective Contribution and
Servicing Agreements and Indentures.
4. The Debtors are hereby authorized in accordance with 11 U.S.C. Sections
105(a) and 365 to (a) assume and assign to the Successor Servicer, effective
upon the Closing Date, the Contribution and Servicing Agreements (as amended by
and in accordance with the Settlement Agreement) free and clear of all interests
of any kind or nature whatsoever, and (b) execute and deliver to the Successor
Servicer such documents or other instruments as may be necessary to assign and
transfer the Contribution and Servicing Agreements to the Successor Servicer.
5. Upon the Closing Date, the Contribution and Servicing Agreements shall
be transferred to, and, except to the extent amended by the Settlement
Agreement, remain in full force and effect in accordance with their respective
terms (as amended by the Settlement Agreement), notwithstanding any provision in
any such Contribution and Servicing Agreement or Indenture (including those of
the type described in sections 365(b)(2) and (f) of the Bankruptcy Code) that
prohibits, restricts, or conditions such assignment or transfer and, except as
specifically provided in the Settlement Agreement, the Debtors shall, pursuant
to 11 U.S.C. Section 365(k), be relieved from any further liability with
respect to the Contribution and Servicing Agreements after such assignment to
and assumption by the Successor Servicer.
6. By entering into the Settlement Agreement, the Debtors and the
Successor Servicer, as applicable, have (i) cured, or have provided adequate
assurance of cure of, any and all defaults under all of the Contribution and
Servicing Agreements, within the meaning of 11 U.S.C. Section 365(b)(1)(A), (ii)
provided compensation or adequate assurance of compensation to the Trustee and
any other party for any actual pecuniary loss to such party resulting from any
and all defaults under all of the Contribution and Servicing Agreements, within
the meaning of 11 U.S.C. Section 365(b)(1)(B), and (iii) provided adequate
assurance of future performance of and under
the Contribution and Servicing Agreements (as modified by the Settlement
Agreement), within the meaning of 11 U.S.C. Section 365(b)(1)(C). All
pre-petition and post-petition defaults or other obligations of the Debtors
under the Contribution and Servicing Agreements arising or accruing prior to the
Closing Date of the Settlement Agreement shall be deemed cured upon the Closing
Date; provided, that an Amortization Event shall be continuing under and as
defined in the Indentures, as set forth in paragraph 10(b) of the Settlement
Agreement.
7. Effective upon the Closing Date, the releases set forth in the
Settlement Agreement shall be, and hereby are, approved. Except for the
obligations of the Debtors and Successor Servicer under the Settlement
Agreement, each non-Debtor party to each Contribution and Servicing Agreement
hereby is forever barred, estopped, and permanently enjoined from asserting
against the Debtors or the Successor Servicer, or their property, successors or
assigns, any right, claim or cause of action released in the Settlement
Agreement, including, without limitation, any default by any Debtor existing as
of the date of the entry of this Order or, against the Successor Servicer, any
counterclaim, defense, setoff or any other claim asserted or assertable against
the Debtors.
8. All of the Noteholders are bound by, and are deemed to have consented
to, the terms of this Order and the Settlement Agreement and are deemed to have
directed and instructed the Trustee to execute and perform under the Settlement
Agreement, including, without limitation, the amendments of the Contribution and
Servicing Agreements and the Indentures set forth in the Settlement Agreement.
The parties to the Contribution and Servicing Agreements and Indentures are
directed to perform their obligations thereunder as amended by the Settlement
Agreement, and to pay from the Successor Servicer
Reserve Accounts the fees and expenses of the Successor Servicer required to be
paid from such accounts under the Settlement Agreement. Having found the
compromises and releases set forth in the Settlement Agreement to be fair and
reasonable, the Court finds no bona fide basis for any actions or claims against
the Debtors, the Trustee, the Successor Servicer, the DIP Lenders, the Ad Hoc
Committee of Noteholders (the "Ad Hoc Committee" and, together with the Trustee
and the Successor Servicer and the DIP Lenders, collectively, the "Settlement
Related Parties") and the Debtors' and the Settlement Related Parties' financial
and/or legal advisors as a result of this Order and the terms hereof. None of
the Debtors or the Settlement Related Parties (or the Debtors' and the
Settlement Related Parties' financial and/or legal advisors) shall have any
liability for any claims, demands, suits, actions or causes of action by reason
of any facts, events, acts, conduct or omissions arising out of participation in
the negotiation and implementation of this Order or the matters resolved hereby
or by the Settlement Agreement. All Persons shall be and are forever barred,
estopped and permanently enjoined from asserting, prosecuting or otherwise
pursuing against the Debtors' and the Settlement Related Parties (and the
Debtors' or the Settlement Related Parties' financial and/or legal advisors),
their property, their successors and assigns or their affiliates any claims
relating in any way to the Securitization Trusts prior to the date hereof, any
modifications to servicing agreements and protocol, or any other matter which in
any way is the subject of this Order, except as otherwise specifically set forth
in the Settlement Agreement.
9. The Motion of U.S. Bank National Association as Trustee to Lift the
Automatic Stay to Terminate Certain Equipment Contract Contribution and
Servicing Agreements or in the Alternative to Compel the Debtors to Assume or
Reject Certain Contribution and Servicing Agreements (Docket No. 625) and the
Addendum to the Motion of U.S. Bank National Association as Trustee to Lift the
Automatic Stay to Terminate Certain Equipment Contract Contribution and
Servicing Agreements or in the Alternative to Compel the Debtors to Assume or
Reject Certain Contribution and Servicing Agreements (Docket No. 740) are moot
and are deemed withdrawn.
10. The Motion of the Official Committee of Unsecured Creditors for Leave
to Commence Action on Behalf of the Debtors' Estates Against U.S. Bank National
Association and Other Defendants Effective Nunc Pro Tunc to November 4, 2003
(Docket No. 737) is moot and is deemed withdrawn with prejudice.
11. The security interest or ownership interest of the Trustee in and to
the individual Contracts owned by the Securitizations, and the security interest
of the Trustee in and to the Equipment supporting such Contracts and owned by
the Receivables Corporations, to the extent not already perfected by virtue of
prior filings with an appropriate governmental agency, shall be deemed to be
perfected by virtue of this Order without any further filing or action being
required to be taken by any party, in each case as set forth in the Settlement
Agreement, and the interests of DVIFS and the Successor Servicer in such
Contracts and Equipment shall be as set forth in the Settlement Agreement.
12. Notwithstanding anything in the Settlement Agreement or this Order to
the Contrary, (A) if DVI Financial Services Inc. ("XXXXX"), XXX Business
Credit Corporation ("DVIBC"), or any Affiliate (other than the Issuers or the
Receivables Corporations) of DVIBC owned or had an interest in, on August 25,
2003, any note, payment obligation, credit agreement or other evidence of
indebtedness or payment obligation of any Obligor on any Contract (other than
any interest in any such Contract included in any Securitization), then, upon
written request by the Debtors, (i) the accounts receivable of each such
Obligor shall be free and clear of any lien of the Trustee, each Issuer and
each Receivables Corporation, (ii) the Successor Servicer shall have a power of
attorney to file UCC-3 financing statements or execute any other document
necessary to evidence that the Trustee does not have any such lien and (iii)
the Successor Servicer shall file all necessary papers and take any such other
acts necessary to release any such lien and (B) if none of DVIFS, DVIBC or any
Affiliate (other than the Issuers or the Receivables Corporations) of DVIBC
owned or had an interest in, on August 25, 2003, and note, payment obligation,
credit agreement or other evidence of indebtedness or payment obligation of any
Obligor on any Contract (other than any interest in any Contract included in
any Securitization), then DVIFS shall assign to the Trustee, on behalf of the
Noteholders and Swap Providers, any security interest in assets of such
Obligor, including any security interest in accounts receivable of such
Obligor, then held by DVIFS.
13. All of the obligations of the Debtors under the Settlement Agreement
shall constitute administrative expenses under sections 503(b)(1)(A) and
507(a)(1) of the Bankruptcy Code.
14. To the extent necessary, the automatic stay imposed by section 362(a)
of the Bankruptcy Code, and any other applicable provision of the Bankruptcy
Code, is deemed modified to permit the parties to fulfill and enforce the terms
of the Settlement Agreement.
15. The stay of orders authorizing the use, sale or lease of property as
provided in Bankruptcy Rules 6004(g) shall not apply to this Order, and this
Order is immediately effective and enforceable.
16. The provisions of this Order shall be binding on the Debtors and their
respective estates, creditors, successors, assigns and representatives
(including, without limitation, any trustee hereinafter appointed as
representative of the estate of any of the Debtors, or any other representative
who qualifies in a case under the Bankruptcy Code or in connection with any
other similar state or federal proceedings). The terms and conditions of this
Order and any actions taken pursuant thereto shall survive the filing of any
subsequent case or proceedings for any of the Debtors or the entry of any order
in the case of any of the Debtors confirming a plan of reorganization,
dismissing any such case, converting any such case to any other chapter under
the Bankruptcy Code, withdrawing the reference of any such case from this Court
or abstaining from handling any such case.
17. Pursuant to 28 U.S.C. Section 157(b), the Court shall (i) retain
exclusive jurisdiction over any matter or dispute arising from or relating to
the implementation and enforcement of this Order and/or the Settlement Agreement
and (ii) have exclusive jurisdiction over claims brought by DVIFS
as subservicer for enforcement of payment obligations owing by the Obligors or
liens granted by the Obligors, in each case under and in respect of the
Contracts; provided, that nothing in this Order shall be deemed to hold that
this Court has personal or subject matter jurisdiction over the Securitizations
or their assets except to the extent necessary to effectuate the transactions
set forth in the Settlement Agreement.
18. This Order shall constitute findings of facts and conclusions of law
and shall take effect and be fully enforceable upon all parties in interest for
all purposes immediately upon entry hereof.
Dated: January ___, 2004
Wilmington, Delaware
---------------------------------------
UNITED STATES BANKRUPTCY JUDGE
