Exhibit 10.1
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PURCHASE AND SALE AGREEMENT
Dated as of March 31, 1999
Between
ACS FUNDING TRUST I
as Buyer
and
AMERICAN CAPITAL STRATEGIES, LTD.
as Seller
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TABLE OF CONTENTS
ARTICLE I GENERAL............................................................1
Section 1.1 Certain Defined Terms...................................1
Section 1.2 Other Definitional Provisions...........................2
ARTICLE II SALE AND CONVEYANCE...............................................3
Section 2.1 Sale....................................................3
Section 2.2 Assignments, Etc........................................4
ARTICLE III PURCHASE PRICE AND PAYMENT; MONTHLY REPORT.......................5
Section 3.1 Purchase Price..........................................5
Section 3.2 Payment of Purchase Price...............................5
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................6
Section 4.1 Seller's Representations and Warranties.................6
Section 4.2 Seller's Representations and Warranties Regarding
the Agreement and the Loans.............................9
Section 4.3 Representations and Warranties of the Buyer.............10
ARTICLE V COVENANTS..........................................................11
Section 5.1 Seller Covenants........................................11
ARTICLE VI REPURCHASE OBLIGATION.............................................14
Section 6.1 Repurchase of Ineligible Loans..........................14
Section 6.2 [Reserved]..............................................15
Section 6.3 [Reserved]..............................................15
Section 6.4 [Reserved]..............................................15
ARTICLE VII CONDITIONS PRECEDENT.............................................15
Section 7.1 Conditions to the Buyer's Obligations Regarding Loans...15
ARTICLE VIII TERM AND TERMINATION............................................15
Section 8.1 Termination.............................................15
ARTICLE IX MISCELLANEOUS PROVISIONS..........................................16
Section 9.1 Amendment...............................................16
Section 9.2 Governing Law...........................................16
Section 9.3 Notices.................................................16
Section 9.4 Severability of Provisions..............................17
Section 9.5 Assignment..............................................17
Section 9.6 Further Assurances......................................18
Section 9.7 No Waiver; Cumulative Remedies..........................18
Section 9.8 Counterparts............................................19
Section 9.9 Binding Effect; Third-Party Beneficiaries...............19
Section 9.10 Merger and Integration.................................19
Section 9.11 Headings...............................................19
Section 9.12 Schedules and Exhibits.................................19
Section 9.13 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller.............................19
Section 9.14 Costs, Expenses and Taxes..............................20
Section 9.15 Recourse Against Certain Parties.......................21
Schedule I Loan List
Schedule II Tradenames, Fictitious Names and "Doing Business As" Names
Exhibit A Form of Assignment
Exhibit B Form of Notice of Sale
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of March 31, 1999 by and between
American Capital Strategies, Ltd., a Delaware corporation, as seller (the
"Seller"), and ACS Funding Trust I, a Delaware trust, as buyer (the "Buyer").
W I T N E S S E T H :
WHEREAS, the Buyer desires to purchase from the Seller and the Seller
desires to sell to the Buyer certain loans originated or purchased by the Seller
in its normal course of business, together with, among other things, the related
rights of payment thereunder and the interest of the Seller in the related
property and other interests securing the payments to be made under such loans.
NOW, THEREFORE, it is hereby agreed by and between the Buyer and the
Seller as follows:
ARTICLE I
GENERAL
Section 1.1 Certain Defined Terms.
Certain capitalized terms used throughout this Agreement are defined
above or in this Section 1.1. In addition, capitalized terms used but not
defined herein have the meanings given to such terms in the Loan Funding
Agreement.
Agreement: This Purchase and Sale Agreement, as the same shall be
amended, supplemented, restated or replaced from time to time.
Ineligible Loan: Defined in Section 6.1.
Loan Funding Agreement: The Loan Funding and Servicing Agreement, dated
as of March 31, 1999, by and among the Buyer, as borrower thereunder, the
Seller, as servicer, Variable Funding Capital Corporation, as a lender, the
Investors named therein, Norwest Bank Minnesota, National Association, as backup
servicer and as collateral custodian, First Union Capital Markets Corp., as deal
agent, and First Union National Bank, as liquidity agent, as the same may be
amended, supplemented, restated or replaced from time to time.
Notice of Sale: A written notice, in the form of Exhibit B, to be used
for each transfer hereunder.
Pledge and Security Agreement: The Pledge and Security Agreement,
dated as of the date hereof, between the Seller and Buyer.
Purchase: Any transfer made hereunder pursuant to Section 2.1.
Purchase Date: Any Business Day on which any Purchased Asset is
acquired by the Buyer pursuant to the terms of this Agreement.
Purchase Price: Defined in Section 3.1.
Purchased Assets: The interests and property purchased pursuant to
Sections 2.1(a).
Purchased Loans: The Loans listed on Schedule I hereto.
Sale Papers: Defined in Section 4.1(a).
Servicer: Initially, the Seller in its capacity as the Servicer under
the Loan Funding Agreement, and its permitted successors and assigns, and
thereafter any Person appointed as successor as provided therein to service the
Loans thereunder.
Substitute Loan: Any Loan which is substituted for an Ineligible Loan
pursuant to Section 6.1, which satisfies each of the following conditions: (a)
such Loan is an Eligible Loan on the date of such substitution: (b) the
aggregate Purchased Loan Balance of such Loan shall be equal to or greater than
the Purchased Loan Balance of the Loan to be replaced; (c) all representations
and warranties of the Seller contained in Section 4.1 and 4.2 shall be true and
correct as of the date of substitution of any such Substitute Loan; (d) the
substitution of any Substitute Loan does not cause a Termination Event to occur
under the Loan Funding Agreement; and (e) the Seller shall deliver to the Buyer
on the date of such substitution a certificate of a Responsible Officer
certifying that each of the foregoing is true and correct as of such date.
Substitution Date: Any date on which the Seller transfers a Substitute
Loan to the Buyer.
Section 1.2 Other Definitional Provisions.
The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement or any Sale Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, Subsection, Schedule and Exhibit references contained in this Agreement
are references to Sections, Subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
In the event that any term or provision contained herein shall conflict
with or be inconsistent with any term or provision contained in the Loan Funding
Agreement, the terms and provisions contained herein shall govern with respect
to this Agreement.
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ARTICLE II
SALE AND CONVEYANCE
Section 2.1 Sale.
(a) On each Purchase Date, the Seller will sell, transfer, assign and
set over and otherwise convey to the Buyer and the Buyer will purchase from the
Seller, without recourse, all right, title and interest of the Seller in, to and
under the following property, whether now existing or hereafter created or
acquired:
(i) the Loans identified on the applicable Loan List delivered
by the Seller to the Buyer at least two (2) Business Days before the
requested Purchase Date, together with all monies due or to become due
in payment of such Loans on and after such Purchase Date;
(ii) the Related Property securing such Loans, including all
proceeds from any sale or other disposition of such Related Property;
(iii) the Loan Documents related to such Loans;
(iv) subject to Section 2.1(b) below, all Supplemental
Interests related to any Transferred Loans to the extent that the Buyer
has any ownership interest therein;
(v) all Collections and all other payments made or to be made
in the future with respect to such Loans or by the Obligor thereunder
and under any guarantee or similar credit enhancement with respect to
such Loans; and
(vi) all income and proceeds of the foregoing.
(b) On and after the Approval Date, but in no event later than three
(3) Business Days thereafter, the Seller will transfer, assign and set over and
otherwise convey to the Buyer, without recourse, as a capital contribution, all
right, title and interest of the Seller in, to and under the Supplemental
Interests. Prior to the Approval Date, the Seller will grant a first priority
perfected security interest in the Supplemental Interests to the Buyer, pursuant
to the Pledge and Security Agreement.
(c) In connection with the sale of any Purchased Assets, the Seller
agrees (i) to record and file, at its own expense, any financing statements,
assignments of financing statements (and continuation statements with respect to
such financing statements when applicable) and Assignments of Mortgage, as the
case may be, with respect to the Purchased Assets, meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to evidence the sale of the Purchased Assets and to perfect, and maintain the
perfection of, the transfer of the Purchased Assets from the Seller to the Buyer
on and after the applicable Purchase Date, (ii) that such financing statements,
assignments of financing statements and Assignments of Mortgage, as the case may
be, shall name the Seller, as seller/debtor/assignor, and the Buyer,
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as purchaser/secured party/assignee, of the Purchased Assets and (iii) to
deliver a file-stamped copy of such financing statements or other evidence of
such filings (excluding continuation statements, which shall be delivered as
filed) and a recorded original of each Assignment of Mortgage, as the case may
be, to the Buyer on or prior to the related Purchase Date; provided, however,
that the recorded original of each Assignment of Mortgage shall be delivered to
the Buyer immediately upon receipt thereof.
(d) In connection with the sale of the Purchased Assets, the Seller
further agrees that it will, at its own expense, indicate clearly and
unambiguously in its computer files, on or prior to the related Purchase Date,
that such Loans have been sold to the Buyer pursuant to this Agreement. The
Seller further agrees to deliver to the Buyer a computer file or microfiche list
containing a true and complete list of all Transferred Loans, identified by
account number and Outstanding Loan Balance as of each Purchase Date. Such file
or list shall be marked as Schedule I to this Agreement, shall be delivered to
the Buyer as confidential and proprietary, and is hereby incorporated into and
made a part of this Agreement.
(e) It is the intention of the parties hereto that the conveyance of
the Loans and the other Purchased Assets by the Seller to the Buyer as provided
in this Section 2.1 be, and be construed as, an absolute sale, without recourse,
of the Loans and the other Purchased Assets by the Seller to the Buyer.
Furthermore, it is not intended that such conveyance be deemed a pledge of the
Loans and the other Purchased Assets by the Seller to the Buyer to secure a debt
or other obligation of the Seller. If, however, notwithstanding the intention of
the parties, the conveyance provided for in this Section 2.1 is determined, for
any reason, not to be an absolute sale, then the parties intend that this
Agreement shall be deemed to be a "security agreement" within the meaning of
Article 9 of the UCC and the Seller hereby grants to the Buyer a "security
interest" within the meaning of Article 9 of the UCC in all of the Seller's
right, title and interest in and to the Loans and the other Purchased Assets,
now existing and hereafter created, to secure a loan in an amount equal to the
aggregate Purchase Price and each of the Seller's other payment obligations
under this Agreement.
Section 2.2 Assignments, Etc.
(a) The Seller shall on or prior to any Purchase Date with respect to
the Purchased Assets execute and deliver to the Buyer a written assignment from
Seller to the Buyer substantially in the form of Exhibit A hereto. From and
after such Purchase Date, such Purchased Assets shall be deemed to be part of
the Purchased Assets hereunder.
(b) Covenants of the Seller In Connection With Additions. On or before
any Purchase Date with respect to any Loans and other Purchased Assets acquired
by the Buyer, the Seller shall:
(i) clearly indicate in its files that such Loans and other
Purchased Assets have been sold to the Buyer and deliver to the Buyer a
list that the Seller shall represent to contain a true and complete
list of such Loans and the Purchased Assets, identified by
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account number, which computer file or microfiche list shall be as of
such date incorporated into and made a part of this Agreement;
(ii) provide the Buyer with an Officer's Certificate
certifying as follows: (A) each such Loan was, as of the related
Purchase Date, an Eligible Loan, (B) no selection procedures believed
by the Seller to be adverse to the interest of the Buyer were utilized
in selecting such Loans from the available Eligible Loans in the
Seller's portfolio, (C) such Loans and other Purchased Assets and all
proceeds thereof will be conveyed to the Buyer free and clear of any
lien of any Person claiming through or under the Seller or any of its
Affiliates, and (D) as of the related Purchase Date, (x) no Insolvency
Event with respect to the Seller has occurred, and (y) the sale of such
Loans and other Purchased Assets to the Buyer has not been made in
contemplation of the occurrence of any Insolvency Event with respect to
the Seller;
(iii) record and file financing statements and Assignments of
Mortgage with respect to such Loans and other Purchased Assets meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale of such Loans and
other Purchased Assets by the Seller to the Buyer.
ARTICLE III
PURCHASE PRICE AND PAYMENT; MONTHLY REPORT
Section 3.1 Purchase Price.
The purchase price for each Purchased Asset sold to the Buyer by the
Seller under this Agreement (the "Purchase Price") shall be the outstanding
principal balance of such Loan plus any accrued interest thereon (each,
calculated as of such Purchase Date), discounted, if at all, for the
collectability thereof, and the anticipated cost of funding such purchase and
shall be determined and fixed prior to such purchase.
Section 3.2 Payment of Purchase Price.
(a) The Purchase Price shall be paid by the Buyer on each related
Purchase Date either (i) in cash or (ii) if the Buyer does not have sufficient
cash to pay the full amount of the Purchase Price, by means of a capital
contribution by the Seller to the Buyer.
(b) Unless otherwise specified herein, all payments of the Purchase
Price of any Purchased Asset sold hereunder shall be made not later than 3:00
p.m. (New York City time) on the date specified therefor in lawful money of the
United States in same day funds by depositing such amounts in the bank account
designated in writing by the Seller to the Purchaser.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations and Warranties.
The Seller hereby represents and warrants to the Buyer, as of the
Closing Date and each Purchase Date, that:
(a) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing in good standing under the laws of the
jurisdiction of its formation and has full power, authority and legal right to
own its properties and conduct its business as such properties are presently
owned and as such business is presently conducted and to execute, deliver and
perform its obligations under this Agreement and each other document or
instrument to be delivered by the Seller hereunder (collectively, the "Sale
Papers").
(b) Due Qualification. The Seller is duly qualified to do business and
is in good standing as a foreign corporation and has obtained all necessary
licenses and approvals, in each jurisdiction in which failure to so qualify or
to obtain such licenses and approvals would have a material adverse effect on
its ability to perform its obligations hereunder or under the Sale Papers.
(c) Due Authorization. The execution and delivery of this Agreement and
each of the Sale Papers, and the consummation of the transactions provided for
herein and therein have been duly authorized by the Seller by all necessary
corporate action on the part of the Seller.
(d) No Conflict. The execution and delivery of this Agreement and each
of the Sale Papers, the performance of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof, will not conflict
with, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material default
under, any material indenture, Loan, agreement, mortgage, deed of trust, or
other instrument to which the Seller is a party or by which it or any of its
property is bound.
(e) No Violation. The execution and delivery of this Agreement and each
of the Sale Papers, the performance of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof (including, without
limitation, the sale of Purchased Assets by the Seller or remittance of
Collections in accordance with the provisions of this Agreement), will not
conflict with or violate, in any material respect, any requirements of laws
applicable to the Seller.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of the Seller, threatened against the Seller before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
any of the Sale Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Sale Papers, or (iii)
seeking any determination or ruling that could reasonably be expected to be
adversely determined, and if adversely
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determined, would materially and adversely affect the performance by the Seller
of its obligations under this Agreement or any of the Sale Papers.
(g) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority required
in connection with the execution and delivery of this Agreement and the Sale
Papers, the performance of the transactions contemplated by this Agreement and
the Sale Papers and the fulfillment of or terms hereof and thereof, have been
obtained.
(h) Bulk Sales. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" law by the Seller.
(i) Solvency. The transactions contemplated under this Agreement and
the Sale Papers do not and will not render the Seller insolvent.
(j) Selection Procedures. No selection procedures believed by the
Seller to be adverse to the interests of the Buyer were utilized by the Seller
in selecting the Loans to be sold, assigned, transferred, set-over and otherwise
conveyed hereunder.
(k) Use of Proceeds. No proceeds of the sale of the Purchased Assets
hereunder received by the Seller will be used by the Seller to purchase or carry
any margin security.
(l) Not an Investment Company. The Seller is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or is exempt from all provisions of such Act.
(m) Other Names. The legal name of the Seller is as set forth in this
Agreement and within the preceding five years the Seller has not used, and the
Seller currently does not use, any tradenames, fictitious names, assumed names
or "doing business as" names other than those set forth on Schedule II hereto.
(n) Taxes. The Seller has filed or caused to be filed all tax returns
that, to its knowledge, are required to be filed by it and has paid all taxes
shown to be due and payable on such returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any amount
of tax due the validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in accordance with
generally accepted accounting principles have been provided on the books of the
Seller); no tax lien has been filed and, to the Seller's knowledge, no claim is
being asserted, with respect to any such tax, fee or other charge.
(o) Place of Business. The principal executive offices of the Seller
are at 0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, and the
offices where the Seller keeps its records concerning the Loans are at 0
Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000.
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(p) Quality of Title. Each Purchased Asset, together with the Loan
related thereto, is, immediately prior to the sale hereunder to the Buyer, owned
by the Seller free and clear of any Lien, and upon the sale, transfer or
assignment hereunder, the Buyer shall acquire absolute title to and valid
ownership of each such Purchased Asset and the Collections with respect thereto,
free and clear of any lien and no effective financing statement or other
instrument similar in effect covering any Purchased Asset or the Collections
with respect thereto shall at any time be on file in any recording office except
such as may be filed in favor of the Buyer in accordance with the terms of this
Agreement.
(q) Security Interest. As described in Section 2.1(e) hereof, it is the
intention of the parties hereto that the conveyance of the Loans and the other
Purchased Assets by the Seller to the Buyer be, and be construed as, an absolute
sale, without recourse. If, however, notwithstanding the intention of the
parties, such conveyance is determined for any reason not to be an absolute
sale, the Seller grants a security interest (as defined in the UCC) to the Buyer
in the Purchased Assets and Collections, which is enforceable in accordance with
the UCC upon execution and delivery of this Agreement. Upon the filing of UCC-1
financing statements naming the Buyer as secured party and the Seller as debtor
and the recording of Assignments of Mortgage (if required), or in the case of
instruments the taking of possession thereof by the Buyer, the Buyer shall have
a first priority perfected security interest in the Purchased Assets and
Collections. All filings (including, without limitation, such UCC filings) as
are necessary in any jurisdiction to perfect the interest of the Buyer in the
Purchased Assets and Collections have been (or prior to the applicable purchase
hereunder will be) made.
(r) Accounting. The Seller will account for the transfers by it to the
Buyer of interests in Purchased Assets and Collections under this Agreement as
sales of such Purchased Assets in its books, records and financial statements,
in each case consistent with GAAP, as applicable, and with the requirements set
forth herein.
(s) Separate Entity. The Seller is operated as an entity with assets
and liabilities distinct from those of the Buyer and any Affiliates thereof, and
the Seller hereby acknowledges that the Deal Agent and the Lenders under the
Loan Funding Agreement are entering into the transactions contemplated by the
Loan Funding Agreement in reliance upon the Seller's identity as a separate
legal entity from the Buyer and from each such Affiliate of the Buyer.
(t) Value Given. The Purchase Price received by the Seller for each
Purchased Asset under this Agreement constitutes reasonably equivalent value
therefor and the transfer by the Seller thereof to the Buyer was not made for or
on account of an antecedent debt owed by the Seller to the Buyer, and such
transfer was not and is not voidable or subject to avoidance under any section
of the Bankruptcy Code.
(u) Reports Accurate. No report, information, exhibit, financial
statement, document, book, record or report, whether written, verbal or
electronic, furnished by the Seller to the Buyer in connection with this
Agreement is or was inaccurate in any material respect as of the date it is or
was dated or as of the date so furnished, and no such document contains or
contained any
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material misstatement of fact or omits or shall omit to state a material fact or
any fact necessary to make the statements contained therein not misleading.
(v) Accuracy of Representations and Warranties. Each representation or
warranty by the Seller contained herein or in any certificate or other document
furnished by the Seller pursuant hereto or in connection herewith is true and
correct in all material respects.
The representations and warranties set forth in this Section 4.1 shall
survive the sale, transfer and assignment of the Purchased Assets to the Buyer.
Upon discovery by the Seller or the Buyer of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice thereof to the other immediately upon obtaining knowledge
of such breach.
Section 4.2 Seller's Representations and Warranties Regarding the
Agreement and the Loans.
The Seller hereby represents and warrants to the Buyer, as of each
Purchase Date that:
(a) Binding Obligation; Valid Transfer and Security Interest.
(i) This Agreement and each of the Sale Papers constitutes a
legal, valid and binding obligation of the Seller, enforceable against
the Seller in accordance with its terms, except as such enforceability
may be limited by Insolvency Laws and except as such enforceability may
be limited by general principles of equity (whether considered in a
suit at law or in equity) or by an implied covenant of good faith and
fair dealing.
(ii) This Agreement constitutes a valid transfer to the Buyer
of all right, title and interest of the Seller in, to and under the
Purchased Assets, and such transfer is free and clear of any lien of
any Person claiming through or under the Seller or its Affiliates.
(b) Eligibility of Loans. As of each Purchase Date, (i) the computer
file or microfiche or written list delivered in connection therewith is an
accurate and complete listing in all material respects of all the Loans and the
other Purchased Assets transferred hereunder as of such date and the information
contained therein with respect to the identity of such Loans and the other
Purchased Assets and the amounts owing thereunder is true and correct in all
material respects as of such date, (ii) each such Loan is an Eligible Loan,
(iii) each such Loan and the Seller's interest in the Related Property and other
related Purchased Assets, has been transferred absolutely to the Buyer free and
clear of any lien of any Person and in compliance, in all material respects,
with all requirements of laws applicable to the Seller and (iv) with respect to
each such Loan and other related Purchased Assets, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by the Seller
in connection with the transfer of such Loan and the Related Property and other
related Purchased Assets to the Buyer have been duly obtained, effected or given
and are in full force and effect.
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(c) Representations; Covenants and Notice of Breach. The
representations and warranties set forth in this Section 4.2 shall be true and
correct and the covenants set forth in Section 5.1 to be performed shall have
been performed, in each case as of each Purchase Date and, further, shall
survive the transfer and assignment of the respective Loans, Related Property
and other related Purchased Assets, or interests therein, to the Buyer. Upon
discovery by the Seller or the Buyer of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
written notice thereof to the other immediately upon obtaining knowledge of such
breach.
Section 4.3 Representations and Warranties of the Buyer.
The Buyer hereby represents and warrants to the Seller, as of the
Closing Date and each Purchase Date, that:
(a) Organization and Good Standing. The Buyer is a trust duly organized
and validly existing in good standing under the laws of the State of Delaware,
and has full trust power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its obligations under
this Agreement and each of the Sale Papers.
(b) Due Qualification. The Buyer is duly qualified to do business and
is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained or will obtain all necessary licenses and
approvals, in each jurisdiction in which failure to so qualify or to obtain such
licenses and approvals would have a material adverse effect on its ability to
perform its obligations hereunder or under the Sale Papers.
(c) Due Authorization. The execution and delivery of this Agreement and
each of the Sale Papers and the consummation of the transactions provided for
herein or therein have been duly authorized by the Buyer by all necessary
corporate action on the part of the Buyer.
(d) No Conflicts. The execution and delivery of this Agreement and each
of the Sale Papers, the performance of the transactions contemplated hereby or
thereby and the fulfillment of the terms hereof and thereof will not conflict
with, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material default
under, any material indenture, loan, agreement, mortgage, deed of trust, or
other instrument to which the Buyer is a party or by which it or any of its
property is bound.
(e) No Violation. The execution and delivery of this Agreement and each
of the Sale Papers, the performance of the transactions contemplated hereby and
thereby, and the fulfillment of the terms hereof and thereof (including, without
limitation, the purchase of Purchased Assets by the Buyer in accordance with the
provisions of this Agreement) will not conflict with or violate, in any material
respect, any requirements of law applicable to the Buyer.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of the Buyer, threatened against the Buyer, before any
court, regulatory body,
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administrative agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of this Agreement or any of the Sale Papers, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Agreement or any of the Sale Papers, or (iii) seeking any determination or
ruling that could reasonably be expected to be adversely determined, and if
adversely determined, would materially and adversely affect the performance by
the Buyer of its obligations under this Agreement or any of the Sale Papers.
(g) Separate Entity. The Buyer is operated as an entity with assets and
liabilities distinct from those of the Seller and any Affiliates thereof, and
the Buyer hereby acknowledges that the Deal Agent and the Lenders under the Loan
Funding Agreement are entering into the transactions contemplated by the Loan
Funding Agreement in reliance upon the Buyer's identity as a separate legal
entity from the Seller and from each Affiliate of the Seller.
ARTICLE V
COVENANTS
Section 5.1 Seller Covenants.
The Seller hereby covenants that:
(a) Preservation of Corporate Existence. The Seller will preserve and
maintain its corporate existence, rights, franchises, qualifications and
privileges.
(b) Security Interests. Except for the transfers hereunder, the Seller
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any lien on any Loan transferred hereunder or
on any Related Property or other Purchased Assets, whether now existing or
hereafter transferred hereunder, or any interest therein, and Seller will not
sell, pledge, assign or suffer to exist any lien on any Purchased Asset. The
Seller will immediately notify the Buyer of the existence of any lien on any
Loan transferred hereunder or on any Related Property or other Purchased Asset;
and the Seller shall defend the right, title and interest of the Buyer in, to
and under the Loans transferred hereunder and the Related Property or other
Purchased Asset, against all claims of third parties.
(c) Delivery of Collections. Consistent with the Buyer's ownership of
the Purchased Assets, in the event the Seller shall receive any Collections in
respect of any Purchased Assets after the Purchase Date therefore, the Seller
agrees to promptly pay to the Buyer, or an account designated by the Buyer, (but
in no event later than two (2) Business Days after receipt) such Collections.
Further, on or before the related Purchase Date for any Purchased Asset, the
Seller shall instruct all banks or financial institutions to which Collections
received from the related Obligor are directed to (i) change the name on all
accounts at such banks or financial institutions in which such Collections are
deposited (each an "Obligor Account") to the name of the Buyer, to the extent
any such account is in the name of the Seller or any Affiliate of the Seller
(other than the Buyer) such that such Obligor Account shall be in the name of
the Buyer and shall be a segregated account and the funds deposited therein
shall not be commingled with other funds of
11
the Buyer, Seller or any Affiliate thereof and (ii) Buyer shall notify each such
bank or financial institution and the Lockbox Bank to transfer all funds on
deposit in each Obligor Account to the Lockbox Account, by wire transfer in
immediately available funds two times on each day on which such bank or
financial institution is open for business.
(d) Compliance with Law. The Seller hereby agrees to comply in all
respects with all requirements of laws applicable to the Seller, the Loans and
the Related Property and the related Purchased Assets, to the extent that the
failure to so comply would have a material adverse effect on the Seller, the
Loans, the Related Property and the other related Purchased Assets.
(e) Activities of the Seller. The Seller shall not engage in any
business or activity of any kind with the Buyer, or enter into any transaction
or indenture, mortgage, instrument, agreement, loan, lease or other undertaking
with the Buyer, which is not directly related to the transactions contemplated
and authorized by this Agreement, and the Trust Agreement of the Buyer.
(f) Guarantees. The Seller shall not become or remain liable, directly
or contingently, in connection with any Indebtedness or other liability of the
Buyer, whether by guarantee, endorsement (other than endorsements of negotiable
instruments for deposit or collection in the ordinary course of business),
agreement to purchase or repurchase, agreement to supply or advance funds, or
otherwise.
(g) Merger; Sales. The Seller shall not enter into any transaction of
merger or consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or acquire or, subject to Section 9.13 be acquired
by any Person, or convey, sell, lease or otherwise dispose of all or
substantially all of its property or business, except as provided for in this
Agreement.
(h) Location of Seller, Records; Instruments. The Seller (x) shall not
move outside the State of Maryland, the location of its chief executive office,
without 30 days' prior written notice to the Buyer and the Deal Agent and (y)
shall not move the location of the Loan Files from the locations thereof on the
Closing Date, without 30 days' prior written notice to the Buyer and the Deal
Agent and (z) will promptly take all actions required (including, but not
limited to, all filings and other acts necessary or advisable under the UCC or
other applicable law, of each relevant jurisdiction in order to continue, in
accordance with Section 4.1(g), the ownership and security interest of the Buyer
in all Loans transferred hereunder. The Seller will give the Buyer and the Deal
Agent prompt notice of a change within the State of Maryland of the location of
its chief executive office.
(i) Accounting of Purchases. The Seller will not account for or treat
(whether in financial statements or otherwise) the transactions contemplated
hereby in any manner other than the sale of Purchased Assets by the Seller to
the Buyer or a capital contribution by the Seller to the Buyer.
(j) ERISA Matters. The Seller will not (a) engage in any prohibited
transaction for which an exemption is not available or has not previously been
obtained from the United States
12
Department of Labor; (b) permit to exist any accumulated funding deficiency, as
defined in Section 302(a) of ERISA and Section 412(a) of the Code, or funding
deficiency with respect to any Benefit Plan other than a Multiemployer Plan; (c)
fail to make any payments to an Multiemployer Plan that the Seller may be
required to make under the agreement relating to such Multiemployer Plan or any
law pertaining thereto; (d) terminate any Benefit Plan so as to result in any
liability; or (e) permit to exist any occurrence of any reportable event
described in Title IV of ERISA that represents a material risk of a liability of
the Seller under ERISA or the Code.
(k) Exemptive Order.
(i) The Seller covenants to the Buyer that within ten (10)
days of the date hereof, it will file with the Securities and Exchange
Commission (the "SEC") an Application for An Order under Section 6(c)
of the Investment Company Act of 1940 for An Exemption from Section
12(d)(i), 18(a), 61(a) and 19(b) of the Investment Company Act of 1940
(the "Application"). The Seller further covenants to the Buyer hereto
that it will provide a true and complete copy of such Application to
the Buyer with five (5) Business Days after the Closing Date.
(ii) The Seller agrees to use its best efforts to obtain an
order from the SEC relating to the Application granting the exemptions
requested in the Application (such order being hereinafter referred to
as the "Order"). The Seller further agrees to promptly notify the Buyer
of: (i) communications the Seller or its counsel may from time to time
have with the SEC relating to the Application or the Order including,
without limitation, prompt delivery to the Buyer of copies of any
written communications by and between the Seller or its counsel and the
SEC; and (ii) the publication by the SEC of notice regarding the
Application. Immediately upon receiving such Order, the Seller agrees
to deliver written notice thereof, together with a copy thereof, to the
Buyer (such notice being the "Order Notice").
(iii) Upon receipt by the Buyer of the Order Notice and the
Order, the Buyer shall deliver same to the Deal Agent, on behalf of the
Secured Parties and the Investors, who shall review such Order, and if
such Order is satisfactory to the Deal Agent, in its sole discretion
(subject to any objection by VFCC or any Investor), the Deal Agent
shall notify the Buyer that such Order has been approved (such approval
being the "Order Approval" and the date of such approval by the Deal
Agent being the "Approval Date") and the Buyer shall then immediately
notify the Seller of such Order Approval.
(iv) The Seller and the Buyer each agree to at all times
comply with each and every condition and/or requirement set forth in
the Application and the Order to the extent any such condition and/or
requirement pertains to such Person.
13
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1 Repurchase of Ineligible Loans.
In the event of a breach of any representation or warranty set forth in
Section 4.2 with respect to a Loan or other Purchased Asset transferred
hereunder (each such Loan, Related Property and other Related Purchased Asset an
"Ineligible Loan"), no later than 30 days after the earlier of (i) knowledge of
such breach on the part of the Seller and (ii) receipt by the Seller of written
notice thereof given by the Buyer, the Seller shall either (a) repurchase each
such Ineligible Loan to which such breach relates on the terms and conditions
set forth below, or (b) substitute for such Ineligible Loan a Substitute Loan;
provided, however, that no such repurchase shall be required to be made with
respect to such Ineligible Loan (and such Loan shall cease to be an Ineligible
Loan) if, on or before the expiration of such 30-day period, the representations
and warranties in Section 4.2 with respect to such Ineligible Loan shall be made
true and correct in all material respects with respect to such Ineligible Loan
as if such Ineligible Loan had been transferred to the Buyer on such day.
Notwithstanding anything contained in this Section 6.1 to the contrary, in the
event a of breach of any representation and warranty set forth in Section 4.2
with respect to each Loan, Related Property and other related Purchased Assets
having been (A) conveyed to the Buyer free and clear of any lien of any Person
claiming through or under the Seller and its Affiliates and (B) in compliance,
in all material respects, with all requirements of laws applicable to the
Seller, immediately upon the earlier to occur of the discovery of such breach by
the Seller or receipt by the Seller of written notice of such breach given by
the Buyer, the Seller shall repurchase and the Buyer shall convey, free and
clear of any Lien created pursuant to this Agreement or the Loan Funding
Agreement, all of the Buyer's right, title and interest in such Ineligible Loan,
and the Buyer shall, in connection with such conveyance and without further
action, be deemed to represent and warrant that it has the corporate authority
and has taken all necessary corporate action to accomplish such conveyance, but
without any other representation or warranty, express or implied. In the
foregoing instances, the Seller shall repurchase each such Ineligible Loan and
on and after the date of such repurchase, each Ineligible Loan so repurchased
shall not be included in the pool of Purchased Assets. In consideration of any
such repurchase the Seller shall, on the date of repurchase of such Ineligible
Loan, remit to the Buyer in immediately available funds an amount equal to the
Purchased Price therefore, after giving effect to the receipt of Collections
thereon. Upon each repurchase of such Ineligible Loan, the Buyer shall
automatically and without further action be deemed to transfer, assign and
set-over to the Seller all the right, title and interest of the Buyer in, to and
under such Ineligible Loan and all monies due or to become due with respect
thereto, all proceeds thereof and all rights to security for any such Ineligible
Loan, and all proceeds and products of the foregoing. The Buyer shall, at the
sole expense of the Seller, execute such documents and instruments of transfer
as may be prepared by the Seller and take such other actions as shall reasonably
be requested by the Seller to effect the transfer of such Ineligible Loan
pursuant to this Section 6.1.
14
Section 6.2 [Reserved]
Section 6.3 [Reserved]
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to the Buyer's Obligations Regarding
Loans.
The obligations of the Buyer to purchase Purchased Assets from the
Seller on any Purchase Date shall be subject to the satisfaction of the
following conditions:
(a) all representations and warranties of the Seller contained in
Sections 4.1 and 4.2 shall be true and correct in all material respects on and
as of such day as though made on and as of such date;
(b) on and as of such day, the Seller shall have performed all
obligations required to be performed by it on or prior to such day pursuant to
the provisions of this Agreement;
(c) no event has occurred and is continuing, or would result from such
purchase that constitutes a Termination Event;
(d) no law or regulation shall prohibit, and no order, judgment or
decree of any federal, state or local court or governmental body, agency or
instrumentality shall prohibit or enjoin, the making of any such purchase by the
Buyer in accordance with the provisions hereof; and
(e) all corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Buyer, and the Buyer shall have
received from the Seller copies of all documents (including, without limitation,
records of corporate proceedings, approvals and opinions) relevant to the
transactions herein contemplated as the Buyer may reasonably have requested.
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 Termination.
This Agreement shall commence as of the date of execution and delivery
hereof and shall continue in full force and effect until the later of (i) the
occurrence of the Collection Date pursuant to the Loan Funding Agreement or (ii)
either party terminates this Agreement upon 90 days prior written notice to the
other party; provided, however, that the termination of this Agreement pursuant
to this Section 8.1 shall not discharge any Person from obligations incurred
15
prior to any such termination of this Agreement, including, without limitation,
any obligations to repurchase Loans sold prior to such termination pursuant to
Section 6.1 hereof.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment.
This Agreement and the rights and obligations of the parties hereunder
may not be amended, waived or changed orally, but only by an instrument in
writing signed by the Buyer and the Seller. The Buyer shall provide not less
than ten (10) Business Days prior written notice of any such amendment to the
Deal Agent.
Section 9.2 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY AGREES TO
THE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH
OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS,
AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 9.3 Notices.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted or delivered,
as to each party hereto, at its address set forth below or at such other address
as shall be designated by such party in a written notice to the other party
hereto. All such notices and communications shall be effective upon receipt, or
in the case of (a) notice by mail, five days after being deposited in the United
States mail, first class postage prepaid, (b) notice by telex, when telexed
against receipt of answer back, or (c) notice by facsimile copy, when verbal
communication of receipt is obtained.
16
(a) In the case of notice to the Buyer, to:
ACS Funding Trust I
c/o American Capital Strategies, Ltd.
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
(b) In the case of notice to the Seller, to:
American Capital Strategies, Ltd.
0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
(c) In the case of notice to the Deal Agent, to:
First Union Capital Markets Corp.
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Conduit Administration
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Section 9.4 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement or any of the Sale Papers shall for any reason whatsoever be held
invalid, then such covenants, agreements, provisions, or terms shall be deemed
severable from the remaining covenants, agreements, provisions, or terms of this
Agreement and the Sale Papers and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or any of the Sale
Papers.
Section 9.5 Assignment.
(a) Notwithstanding anything to the contrary contained herein, this
Agreement may not be assigned by the Buyer or the Seller except as permitted by
this Section 9.5. Simultaneously with the execution and delivery of this
Agreement, the Buyer shall assign all of
17
its right, title and interest herein to the Deal Agent as agent for the Secured
Parties under the Loan Funding Agreement as provided in the Loan Funding
Agreement, to which assignment the Seller hereby expressly consents. The Seller
agrees that the Deal Agent, as agent for the Secured Parties under the Loan
Funding Agreement, shall be a third party beneficiary hereof. The Deal Agent as
agent for the Secured Parties under the Loan Funding Agreement may enforce the
provisions of this Agreement, exercise the rights of the Buyer and enforce the
obligations of the Seller hereunder following a Termination Event and as
provided in of the Loan Funding Agreement. This Agreement may not be assigned by
the Seller except in connection with a merger or consolidation of the Seller
with or into, or disposition of the Seller's properties and assets to, another
Person, provided, however, that any such merger, consolidation or disposition
shall satisfy the requirements of Section 9.13, and shall be upon not less than
ten (10) Business Days' prior written notice to the Buyer and the Deal Agent.
(b) In connection with any permitted assignment of this Agreement by
the Seller, the Seller shall deliver to the Buyer and the Deal Agent an
Officer's Certificate that such assignment complies with this Section 9.5, and
shall cause such assignee to execute an agreement supplemental hereto, in form
and substance satisfactory to the Seller, pursuant to which such assignee shall
expressly assume and agree to the performance of every covenant and obligation
of the Seller hereunder, to provide for the delivery of an Opinion of Counsel
that such supplemental agreement is legal, valid and binding with respect to
such assignee, and to take such other actions and execute such other instruments
as may reasonably be required to effectuate such assignment.
Section 9.6 Further Assurances.
The Buyer and the Seller agree to do and perform, from time to time,
any and all acts and to execute any and all further instruments required or
reasonably requested by the other party more fully to effect the purposes of
this Agreement and the Sale Papers, including, without limitation, the execution
of any financing statements, continuation statements, termination statements,
releases or equivalent documents relating to the Purchased Assets for filing
under the provisions of the UCC or other applicable laws of any applicable
jurisdiction.
Section 9.7 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Buyer or the Seller, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privilege provided by law.
18
Section 9.8 Counterparts.
This Agreement may be executed in two or more counterparts including
telefax transmission thereof (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 9.9 Binding Effect; Third-Party Beneficiaries.
This Agreement shall inure to the benefit of and the obligations
thereunder shall be binding upon the parties hereto and their respective
successors and permitted assigns. Any permitted assigns of the Buyer shall be
third-party beneficiaries of this Agreement.
Section 9.10 Merger and Integration.
Except as specifically stated otherwise herein, this Agreement,
together with the Loan Funding Agreement and the other Transaction Documents, to
the extent that a party is a signatory thereto, sets forth the entire
understanding of the parties relating to the subject matter hereof, there are no
other agreements between the parties for transactions relating to or similar to
the transactions contemplated by this Agreement, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 9.11 Headings.
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
Section 9.12 Schedules and Exhibits.
The schedules and exhibits attached hereto and referred to herein shall
constitute a part of this Agreement and are incorporated into this Agreement for
all purposes.
Section 9.13 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller.
The Seller shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the Person formed by such consolidation or into which the
Seller is merged or the Person that acquires by conveyance or transfer
the properties and assets of the Seller substantially as an entirety
shall be, if the Seller is not the surviving entity, organized and
existing under the laws of the United States of America or any State or
the District of Columbia and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Buyer, in form
satisfactory to the Buyer, the performance of every covenant and
obligation of the Seller hereunder (to the extent that any right,
19
covenant or obligation of the Seller, as applicable hereunder, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity); and
(ii) the Seller shall have delivered to the Buyer an Officer's
Certificate that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section 9.13 and that all
conditions precedent herein provided for relating to such transaction
have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with respect to the
successor entity and that the entity surviving such consolidation,
conveyance or transfer is organized and existing under the laws of the
United States of America or any State or the District of Columbia. The
Deal Agent shall receive prompt written notice of such merger or
consolidation of the Seller.
Section 9.14 Costs, Expenses and Taxes.
(a) The Seller agrees to pay on demand all costs and expenses of the
Buyer incurred in connection with the preparation, execution, delivery,
administration (including periodic auditing), amendment or modification of, or
any waiver or consent issued in connection with, this Agreement and the other
documents to be delivered hereunder or in connection herewith to which the
Seller is a party, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Buyer with respect thereto and with
respect to advising the Buyer as to its rights and remedies under this Agreement
and the other documents to be delivered hereunder or in connection herewith to
which the Seller is a party, and all costs and out-of-pocket expenses, if any
(including reasonable counsel fees and expenses), incurred by the Buyer in
connection with the enforcement of this Agreement and the other documents to be
delivered hereunder or in connection herewith to which the Seller is a party.
(b) The Seller shall pay on demand any and all stamp, sales, excise and
other taxes (excluding income and franchise taxes of the Buyer) and fees payable
or determined to be payable in connection with the execution, delivery, filing
and recording of this Agreement or any agreement or other document delivered in
connection with this Agreement
(c) The Seller shall pay on demand any and all damages, losses, claims,
liabilities, fees and related costs and expenses, including attorney's fees and
expenses (collectively, the "Indemnified Amounts"), incurred by or awarded
against the Buyer or any of its Affiliates (each, an "Indemnified Party")
arising out of or resulting from any breach by the Seller of any representation,
warranty or covenant under this Agreement or any Transaction Document to which
the Seller is a party or the use by the Seller of the proceeds of any purchase
hereunder or in respect of any Purchased Asset in violation of the terms hereof,
excluding, however, (a) Indemnified Amounts to the extent resulting from the
gross negligence or willful misconduct of an Indemnified Party or the breach of
a requirement of law by an Indemnified Party, and (b) Indemnified Amounts which
have the effect of constituting recourse for uncollectible or uncollected
Purchased Assets.
20
Section 9.15 Recourse Against Certain Parties.
(a) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of the Seller as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any administrator of the Seller or any
incorporator, officer, employee, shareholder or director of the Seller or of any
such administrator, as such, by the enforcement of any assessment or by any
legal or equitable proceeding, by virtue of any statute or otherwise; it being
expressly agreed and understood that the agreements of the Seller contained in
this Agreement and all of the other agreements, instruments and documents
entered into by it pursuant hereto or in connection herewith are, in each case,
solely the corporate obligations of the Seller, and that no personal liability
whatsoever shall attach to or be incurred by any administrator of the Seller or
any incorporator, officer, employee, shareholder or director of the Seller or of
any such administrator, as such, or any other them, under or by reason of any of
the obligations, covenants or agreements of the Seller contained in this
Agreement or in any other such instruments, documents or agreements, or that are
implied therefrom, and that any and all personal liability of every such
administrator of the Seller and each incorporator, officer, employee or director
of the Seller or of any such administrator, or any of them, for breaches by the
Seller of any such obligations, covenants or agreements, which liability may
arise either at common law or at equity, by statute or constitution, or
otherwise, is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement. The provisions of this Section 9.16(a) shall
survive the termination of this Agreement.
(b) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of the Buyer as contained in this Agreement or any other agreement,
instrument or document entered into by it pursuant hereto or in connection
herewith shall be had against any administrator of the Buyer or any
incorporator, officer, employee, shareholder or director of the Buyer or of any
such administrator, as such, by the enforcement of any assessment or by any
legal or equitable proceeding, by virtue of any statute or otherwise; it being
expressly agreed and understood that the agreements of the Buyer contained in
this Agreement and all of the other agreements, instruments and documents
entered into by it pursuant hereto or in connection herewith are, in each case,
solely the corporate obligations of the Buyer, and that no personal liability
whatsoever shall attach to or be incurred by any administrator of the Buyer or
any incorporator, officer, employee, shareholder or director of the Buyer or of
any such administrator, as such, or any other them, under or by reason of any of
the obligations, covenants or agreements of the Buyer contained in this
Agreement or in any other such instruments, documents or agreements, or that are
implied therefrom, and that any and all personal liability of every such
administrator of the Buyer and each incorporator, officer, employee or director
of the Buyer or of any such administrator, or any of them, for breaches by the
Buyer of any such obligations, covenants or agreements, which liability may
arise either at common law or at equity, by statute or constitution, or
otherwise, is hereby expressly waived as a condition of and in consideration for
21
the execution of this Agreement. The provisions of this Section 9.16(b) shall
survive the termination of this Agreement.
(c) From and after the Closing Date, the Buyer shall have the right, in
its discretion, to direct all Obligors to henceforth direct their payments to
the respective Obligor Account.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
22
IN WITNESS WHEREOF, the Buyer and the Seller have caused this Agreement
to be duly executed by their respective officers as of the day and year first
above written.
ACS FUNDING TRUST I
By:_______________________________
AMERICAN CAPITAL STRATEGIES, LTD.
By:_______________________________
SCHEDULE I
LOAN LIST
[to be delivered for initial Purchase]
SCHEDULE II
TRADENAMES, FICTITIOUS NAMES AND "DOING BUSINESS AS" NAMES
None
EXHIBIT A
FORM OF ASSIGNMENT
ASSIGNMENT, dated as of ______, from American Capital Strategies, Ltd.,
a Delaware corporation (the "Seller"), to ACS Funding Trust I, a Delaware
business trust (the "Buyer").
1. We refer to the Purchase and Sale Agreement, dated as of March 31,
1999 (as amended, modified, supplemented or restated from time to time, the
"Agreement"), by and between the Seller and the Buyer. All capitalized terms
used herein shall have the meanings set forth in the Agreement.
2. The Seller does hereby convey, set over and assign to the Buyer,
without recourse, all of the Seller's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which the Seller
now has or hereafter acquires an interest and wherever the same may be located
(collectively, the "Purchased Assets"):
(i) the Loans identified on the applicable Loan List delivered
by the Seller to the Buyer at least two (2) Business Days before the
requested Purchase Date, together with all monies due or to become due
in payment of such Loans on and after such Purchase Date;
(ii) the Related Property securing such Loans, including all
proceeds from any sale or other disposition of such Related Property;
(iii) the Loan Documents related to such Loans;
(iv) subject to Section 2.1(b) of the Agreement, all
Supplemental Interests related to any Transferred Loans to the extent
that the Buyer has any ownership interest therein;
(v) all Collections and all other payments made or to be made
in the future with respect to such Loans or by the Obligor thereunder
and under any guarantee or similar credit enhancement with respect to
such Loans; and
(vi) all income and proceeds of the foregoing.
3. Simultaneously with the execution and delivery hereof the Seller has
delivered to or at the direction of the Buyer such endorsements and assignments,
made without recourse, of the Loan Files as are necessary to properly complete
the absolute assignment of the Purchased Assets to the Buyer.
A-1
4. THIS CERTIFICATE OF ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CHOICE OF LAW PROVISIONS.
IN WITNESS WHEREOF, the Seller has caused this Assignment to be
executed by its authorized officer as of the date first above written.
AMERICAN CAPITAL STRATEGIES, LTD.
By:______________________________
Name:_______________________
Title:______________________
A-2
EXHIBIT B
[FORM OF ]
NOTICE OF SALE
AMERICAN CAPITAL STRATEGIES, LTD.
I, _______________________, _____________________ of AMERICAN CAPITAL
STRATEGIES, LTD. ("ACS"), hereby certify that, with respect to that certain
Purchase and Sale Agreement (as amended, modified, supplemented or restated from
time to time, the "Agreement"), dated as of March 31, 1999, by and between ACS,
as seller, and ACS FUNDING TRUST I.
ACS hereby certifies as follows:
1. The Purchase to be made will be in accordance with the following
terms:
(a) The aggregate Purchase Price of such Purchase shall
be $_____________.
(b) The date of such Purchase shall be _________________.
2. The representations and warranties contained in Sections 4.1 and 4.2
of the Agreement are true and correct as though made on the date thereof.
3. On and as of such day, ACS has each performed in all material
respects all of the agreements contained in the Agreement and all other
Transaction Documents to which it is a party, to be performed by ACS at or prior
to such day.
4. No law, rule or regulation prohibits, and no order, judgment or
decree of any federal, state or local court or governmental body, agency or
instrumentality prohibits or enjoins, the making of such Purchase.
IN WITNESS WHEREOF, the undersigned has caused this Purchase Notice to
be duly executed this __________ day of ______, ________ .
AMERICAN CAPITAL STRATEGIES, LTD.,
as Seller
By:_______________________________
Name:_________________________
Title:________________________
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