Exhibit 10.1
MVA DRAFT DATE: 3/6/02
TRANSFER AND SERVICING AGREEMENT
among
GREATAMERICA LEASING RECEIVABLES 2002-1, L.L.C.
as Issuer,
GREATAMERICA LEASING CORPORATION
as Servicer and as Originator
and
JPMORGAN CHASE BANK
as Indenture Trustee
Dated as of March 1, 2002
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS....................................................................................................... 1
Section 1.01. Definitions........................................................................................... 1
Section 1.02. Usage of Terms........................................................................................ 30
Section 1.03. Section References.................................................................................... 30
Section 1.04. Calculations.......................................................................................... 30
Section 1.05. Accounting Terms...................................................................................... 30
ARTICLE II TRANSFER OF CONTRACT ASSETS...................................................................................... 30
Section 2.01. Transfer of Contract Assets........................................................................... 30
Section 2.02. Conditions to Transfer of Conveyed Assets to the Issuer............................................... 32
Section 2.03. Acceptance by Issuer.................................................................................. 34
Section 2.04. Conveyance of Substitute Contracts.................................................................... 34
Section 2.05. Release of Released Amounts........................................................................... 36
Section 2.06. Instruments........................................................................................... 36
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................................................................. 36
Section 3.01. Representations and Warranties Regarding the Originator............................................... 37
Section 3.02. Representations and Warranties Regarding Each Contract and as to Certain Contracts in the Aggregate... 40
Section 3.03. Representations and Warranties Regarding the Initial Contracts in the Aggregate....................... 41
Section 3.04. Representations and Warranties Regarding the Contract Files........................................... 41
Section 3.05. Representations and Warranties Regarding Concentrations of Initial Contracts.......................... 41
Section 3.06. Representations and Warranties Regarding the Issuer................................................... 42
Section 3.07. Representations and Warranties Regarding the Servicer................................................. 47
Section 3.08. [Reserved]............................................................................................ 48
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS...................................................... 48
Section 4.01. Custody of Contracts.................................................................................. 48
Section 4.02. Filing................................................................................................ 48
Section 4.03. Name Change or Relocation............................................................................. 49
Section 4.04. Chief Executive Office................................................................................ 49
Section 4.05. Costs and Expenses.................................................................................... 49
Section 4.06. Sale Treatment........................................................................................ 49
Section 4.07. Separateness from Issuer.............................................................................. 50
Section 4.08. Insurance Policy of the Originator.................................................................... 50
ARTICLE V SERVICING OF CONTRACTS............................................................................................ 50
Section 5.01. Appointment and Acceptance; Responsibility for Contract Administration................................ 50
Section 5.02. General Duties........................................................................................ 50
Section 5.03. Consent to Assignment or Replacement.................................................................. 51
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Section 5.04. Disposition upon Termination of Contract.............................................................. 51
Section 5.05. Subservicers.......................................................................................... 51
Section 5.06. Further Assurance..................................................................................... 52
Section 5.07. Notice to Obligors.................................................................................... 52
Section 5.08. Collection Efforts; Modification of Contracts......................................................... 52
Section 5.09. Prepaid Contract...................................................................................... 53
Section 5.10. Acceleration.......................................................................................... 53
Section 5.11. Taxes................................................................................................. 54
Section 5.12. Insurance Premiums.................................................................................... 54
Section 5.13. Remittances........................................................................................... 54
Section 5.14. Servicer Advances..................................................................................... 54
Section 5.15. Realization upon Defaulted Contract................................................................... 54
Section 5.16. Maintenance of Insurance Policies..................................................................... 55
Section 5.17. Other Servicer Covenants.............................................................................. 55
Section 5.18. Servicing Compensation................................................................................ 56
Section 5.19. Payment of Certain Expenses by Servicer............................................................... 56
Section 5.20. Records............................................................................................... 57
Section 5.21. Inspection............................................................................................ 57
Section 5.22. Indenture Trustee and Issuer to Cooperate in Releases................................................. 57
ARTICLE VI COVENANTS OF THE ISSUER.......................................................................................... 58
Section 6.01. Limited Liability Company Existence................................................................... 58
Section 6.02. Contracts Not to Be Evidenced by Promissory Notes..................................................... 58
Section 6.03. Security Interests.................................................................................... 58
Section 6.04. Delivery of Collections............................................................................... 58
Section 6.05. Regulatory Filings.................................................................................... 58
Section 6.06. Compliance with Law................................................................................... 59
Section 6.07. Activities............................................................................................ 59
Section 6.08. Indebtedness.......................................................................................... 59
Section 6.09. Guarantees............................................................................................ 59
Section 6.10. Investments........................................................................................... 59
Section 6.11. Merger; Sales......................................................................................... 59
Section 6.12. Payments.............................................................................................. 60
Section 6.13. Other Agreements...................................................................................... 60
Section 6.14. Separate Entity Existence............................................................................. 60
Section 6.15. Location; Records..................................................................................... 61
Section 6.16. Liability of Issuer; Indemnities...................................................................... 61
Section 6.17. Bankruptcy Limitations................................................................................ 62
Section 6.18. Limitation on Liability of Issuer and Others.......................................................... 62
Section 6.19. Chief Executive Office................................................................................ 62
ARTICLE VII ESTABLISHMENT OF ACCOUNTS; DISTRIBUTIONS; RESERVE FUND.......................................................... 63
Section 7.01. Trust Accounts; Collections........................................................................... 63
Section 7.02. Reserve Fund Deposit.................................................................................. 64
Section 7.03. Trust Account Procedures.............................................................................. 64
Section 7.04. Noteholder Distributions.............................................................................. 65
Section 7.05. Allocations and Distributions......................................................................... 65
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ARTICLE VIII SERVICER DEFAULT; SERVICE TRANSFER............................................................................. 73
Section 8.01. Servicer Default...................................................................................... 73
Section 8.02. Servicer Transfer..................................................................................... 74
Section 8.03. Appointment of Successor Servicer; Reconveyance; Successor Servicer to Act............................ 75
Section 8.04. Notification to Noteholders........................................................................... 76
Section 8.05. Effect of Transfer.................................................................................... 76
Section 8.06. Database File......................................................................................... 76
Section 8.07. Successor Servicer Indemnification.................................................................... 77
Section 8.08. Responsibilities of the Successor Servicer............................................................ 77
Section 8.09. Rating Agency Condition for Servicer Transfer......................................................... 78
ARTICLE IX REPORTS.......................................................................................................... 78
Section 9.01. Monthly Reports....................................................................................... 78
Section 9.02. Officer's Certificate................................................................................. 78
Section 9.03. Other Data............................................................................................ 78
Section 9.04. Annual Report of Accountants.......................................................................... 78
Section 9.05. Annual Statement of Compliance from Servicer.......................................................... 79
Section 9.06. Annual Summary Statement.............................................................................. 79
ARTICLE X TERMINATION....................................................................................................... 80
Section 10.01. Sale of Pledged Assets................................................................................ 80
ARTICLE XI REMEDIES UPON MISREPRESENTATION; REPURCHASE OPTION............................................................... 80
Section 11.01. Repurchases of, or Substitution for, Contracts for Breach of Representations and Warranties........... 80
Section 11.02. Reassignment of Repurchased or Substituted Contracts.................................................. 81
ARTICLE XII ORIGINATOR INDEMNITIES.......................................................................................... 81
Section 12.01. Originator's Indemnification.......................................................................... 81
Section 12.02. Liabilities to Obligors............................................................................... 82
Section 12.03. Tax Indemnification................................................................................... 82
Section 12.04. Real Property Collateral.............................................................................. 83
Section 12.05. Operation of Indemnities.............................................................................. 83
ARTICLE XIII MISCELLANEOUS.................................................................................................. 83
Section 13.01. Amendment............................................................................................. 83
Section 13.02. Protection of Title................................................................................... 84
Section 13.03. Governing Law......................................................................................... 85
Section 13.04. Notices............................................................................................... 86
Section 13.05. Severability of Provisions............................................................................ 87
Section 13.06. Third Party Beneficiaries............................................................................. 87
Section 13.07. Counterparts.......................................................................................... 88
Section 13.08. Headings.............................................................................................. 88
Section 13.09. No Bankruptcy Petition................................................................................ 88
Section 13.10. Jurisdiction.......................................................................................... 88
Section 13.11. Prohibited Transactions with Respect to the Issuer.................................................... 88
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Section 13.12. Merger or Consolidation of Originator or Servicer..................................................... 89
Section 13.13. Assignment or Delegation by the Originator............................................................ 89
EXHIBITS
Exhibit A Form of Assignment.............................................. A-1
Exhibit B Form of Closing Certificate of Issuer........................... B-1
Exhibit C Form of Closing Certificate of Servicer/Originator.............. C-1
Exhibit D [Reserved]...................................................... D-1
Exhibit E [Reserved]...................................................... E-1
Exhibit F Form of Certificate Regarding Repurchased Contracts............. F-1
Exhibit G List of Contracts............................................... G-1
Exhibit H Form of Monthly Report to Noteholders........................... H-1
Exhibit I Form of Subsequent Transfer Agreement........................... I-1
Exhibit J Forms of Contracts.............................................. J-1
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This TRANSFER AND SERVICING AGREEMENT, dated as of March 1, 2002, is
among GREATAMERICA LEASING RECEIVABLES 2002-1, L.L.C. (together with its
successors and assigns, the "Issuer"), JPMorgan Chase Bank (solely in its
capacity as Indenture Trustee, together with its successors and assigns, the
"Indenture Trustee"), GREATAMERICA LEASING CORPORATION (together with its
successors and assigns, "GreatAmerica," in its capacity as Servicer, together
with its successor and assigns, the "Servicer" and in its capacity as
originator, together with its successor and assigns, the "Originator").
WHEREAS, in the regular course of its business, the Originator
originates and purchases Contracts (as defined herein);
WHEREAS, the Issuer desires to acquire the Initial Contracts from the
Originator and may acquire from time to time thereafter certain Substitute
Contracts (such Initial Contracts and Substitute Contracts, together with
certain related property as more fully described herein, being the Contract
Assets as defined herein);
WHEREAS, it is a condition to the Issuer's acquisition of the Contracts
Pool from the Originator that the Originator make certain representations and
warranties regarding the Contract Assets for the benefit of the Issuer;
WHEREAS, the Issuer is willing to purchase and accept assignment of the
Contract Assets from the Originator pursuant to the terms hereof; and
WHEREAS, on the Closing Date, the Issuer will grant, transfer, assign
and otherwise convey all its right, title and interest in the Conveyed Assets to
JPMorgan Chase Bank, as Indenture Trustee pursuant to an Indenture, dated as of
the date hereof (the "Indenture") between the Issuer and the Indenture Trustee.
WHEREAS, the Servicer is willing to service the Contracts for the
benefit and account of the Issuer and the Indenture Trustee on behalf of the
Noteholders pursuant to the terms hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
"Accrual Period" means the period from and including the most recent
Payment Date to but excluding the following Payment Date, provided that the
initial Accrual Period following the Closing Date shall be the period from and
including the Closing Date to but excluding the first Payment Date following the
Closing Date.
"Addition Notice" means, with respect to any transfer of Substitute
Contracts to the Issuer pursuant to Section 2.04, a notice, which shall be given
at least three (3) Business Days prior to the related Subsequent Transfer Date,
identifying the Substitute Contracts to be transferred, the Principal Balance of
such Substitute Contracts and the related Substitution Event (with respect to an
identified Contract or Contracts then in the Contracts Pool) to which such
Substitute Contract relates, with such notice to be signed by the Originator.
"Additional Principal" means, with respect to a Payment Date (i) if the
Class B Target Investor Principal Amount, the Class C Target Investor Principal
Amount and the Class D Target Investor Principal Amount exceed the Class B
Floor, the Class C Floor and the Class D Floor, respectively, an amount of $0;
or (ii) if any of the conditions in clause (i) are not satisfied, an amount
equal to the excess, if any, of (A) the Monthly Principal Amount, over (B) the
sum of the Class A Principal Payment Amount, Class B Principal Payment Amount,
Class C Principal Payment Amount and the Class D Principal Payment Amount for
such Payment Date.
"Affiliate" of any specified Person means any other Person controlling
or controlled by, or under common control with, such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Aggregate Loss Amount" means the excess, if any, of (x) the aggregate
amount of the Principal Balances (calculated with respect to a Defaulted
Contract as of the date immediately before such Contract became a Defaulted
Contract) of all the Contracts that became Defaulted Contracts during all prior
Collection Periods (including such Collection Period) over (y) the aggregate
amount of all Recoveries collected by the Servicer with respect to those
Defaulted Contracts.
"Aggregate Principal Amount" means, with respect to any group of Notes,
at any date of determination, the sum of the Principal Amounts of such Notes on
such date of determination.
"Agreement" means this Transfer and Servicing Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Assignment" means the Assignment, substantially in the form of Exhibit
A relating to the assignment, transfer and conveyance of the Initial Contracts
and related property by the Originator to the Issuer.
"Available Amounts" means, as of any Payment Date, the sum of (i)
except for Excluded Amounts, all amounts on deposit in the Collection Account as
of the immediately preceding Determination Date on account of Scheduled Payments
due on or before, Prepayments received on or before, the last day of the
Collection Period immediately preceding such Payment Date (other than Excluded
Amounts) and Servicer Advances received for Scheduled Payments due in such
Collection Period; (ii) Recoveries on account of previously Defaulted Contracts
received as of the last day of the immediately preceding Collection Period;
(iii) amounts received related to Vendor recourse; (iv) Residual Receipts
received during the preceding Collection Period; (v)
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amounts on deposit in the Payahead Account received in previous Collection
Periods and (a) due in the related Collection Period, (b) made with respect to
any Contract repurchased by the Originator or (c) with respect to each Contract
for which a prepayment insufficient to prepay the Contract in full has been made
by or on behalf of the Obligor for the related Collection Period; (vi)
Investment Earnings credited to the Collection Account, the Reserve Fund, the
Residual Account or the Payahead Account as of the last day of the immediately
preceding Collection Period and (vii) proceeds of any of the foregoing.
"Booked Residual Value" means, with respect to any Contract and the
related Equipment on any date of determination, the estimated residual value of
the Equipment subject to such Contract recorded on the Originator's books, in
accordance with the Originator's standard policies, as of the applicable Cut-Off
Date.
"Business Day" means any day that is neither a Saturday or a Sunday,
nor another day on which banking institutions in the city of Cedar Rapids, Iowa
or New York, New York are authorized or obligated by law, executive order, or
governmental decree to be closed.
"Casualty Loss" means, with respect to any item of Equipment, the loss,
theft, damage beyond repair or governmental condemnation or seizure of such item
of Equipment.
"Class" means any of the group of Notes identified herein as, as
applicable, the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, or the Class D Notes.
"Class A Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 Notes.
"Class A Percentage" means 83.2%.
"Class A Principal Payment Amount" means, with respect to a Payment
Date, the amount necessary to reduce the Outstanding Aggregate Principal Amount
of the Class A-1 Notes, the Class A-2 Notes, Class A-3 Notes, and Class A-4
Notes to the Class A Target Investor Principal Amount.
"Class A Target Investor Principal Amount" means, with respect to a
Payment Date, an amount equal to the product (i) the Class A Percentage and (ii)
the Pool Balance as of the last day of the related Collection Period.
"Class A-1 Interest Rate" means [_____]% per annum (calculated on the
basis of a year of 360 days and actual days elapsed in the Accrual Period).
"Class A-1 Maturity Date" means the April, 2003 Payment Date.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
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"Class A-1 Notes" means the [$65,419,401] aggregate initial principal
amount GreatAmerica Leasing Receivables 2002-1, L.L.C., Class A-1
Receivable-Backed Notes, Series 2002-1, issued pursuant to the Indenture.
"Class A-2 Interest Rate" means [_____]% per annum (calculated on the
basis of a year of 360 days and twelve 30-day months).
"Class A-2 Maturity Date" means the November, 2003 Payment Date.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
is registered in the Note Register.
"Class A-2 Notes" means the [$12,827,334] aggregate initial principal
amount GreatAmerica Leasing Receivables 2002-1, L.L.C., Class A-2
Receivable-Backed Notes, Series 2002-1, issued pursuant to the Indenture.
"Class A-3 Interest Rate" means [_____]% per annum (calculated on the
basis of a year of 360 days and twelve 30-day months).
"Class A-3 Maturity Date" means the November, 2005 Payment Date.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.
"Class A-3 Notes" means the [$107,749,602] aggregate initial principal
amount GreatAmerica Leasing Receivables 2002-1, L.L.C., Class A-3
Receivable-Backed Notes, Series 2002-1, issued pursuant to the Indenture.
"Class A-4 Interest Rate" means [_____]% per annum (calculated on the
basis of a year of 360 days and twelve 30-day months).
"Class A-4 Maturity Date" means the November, 2006 Payment Date.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Class A-4 Notes" means the [$27,450,494] aggregate initial principal
amount GreatAmerica Leasing Receivables 2002-1, L.L.C., Class A-4
Receivable-Backed Notes, Series 2002-1, issued pursuant to the Indenture.
"Class B Floor" means, with respect to a Payment Date,
(i) 3.66% of the Original Pool Balance plus
(ii) the Cumulative Loss Amount as of such date, minus
(iii) the sum of (a) the outstanding Principal Amount of
the Class C Notes and Class D Notes as of the immediately preceding
Payment Date after giving effect to all principal payments made on such
Payment Date, (b) the Overcollateralization Balance as
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of the immediately preceding Payment Date and (c) the amount on deposit
in the Reserve Fund and the Residual Account after giving effect to
amounts to be withdrawn on such Payment Date.
"Class B Interest Rate" means [_____]% per annum (calculated on the
basis of a year of 360 days and twelve 30-day months).
"Class B Maturity Date" means the June, 2007 Payment Date.
"Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.
"Class B Notes" means the [$10,774,960] aggregate initial principal
amount GreatAmerica Leasing Receivables 2002-1, L.L.C., Class B
Receivable-Backed Notes, Series 2002-1, issued pursuant to the Indenture.
"Class B Percentage" means 4.20%.
"Class B Principal Payment Amount" means, with respect to a Payment
Date, the lesser of (1) the excess, if any, of (a) the Monthly Principal Amount
over (b) the Class A Principal Payment Amount and (2) the excess, if any, of (a)
the Outstanding Aggregate Principal Amount of the Class B Notes over (b) the
greater of (x) the Class B Target Investor Principal Amount and (y) the Class B
Floor.
"Class B Target Investor Principal Amount" means, with respect to a
Payment Date, an amount equal to the product of (i) the Class B Percentage and
(ii) the Pool Balance as of the last day of the related Collection Period.
"Class C Floor" means, with respect to a Payment Date,
(i) 2.82% of the Original Pool Balance plus
(ii) the Cumulative Loss Amount as of such date, minus
(iii) the sum of (a) the outstanding Principal Amount of
the Class D Notes as of the immediately preceding Payment Date after
giving effect to all principal payments made on such date, (b) the
Overcollateralization Balance as of the immediately preceding Payment
Date and (c) the amount on deposit in the Reserve Fund and the Residual
Account after giving effect to amounts to be withdrawn on such date;
provided, however, that if the Class B Target Investor Principal Amount as of
such Payment Date is less than or equal to the Class B Floor on such Payment
Date, the Class C Floor will be an amount equal to the Principal Amount of the
Class C Notes utilized in the calculation of the Class B Floor for such Payment
Date.
"Class C Interest Rate" means [_____]% per annum (calculated on the
basis of a year of 360 days and twelve 30-day months).
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"Class C Maturity Date" means the July, 2007 Payment Date.
"Class C Noteholder" means the Person in whose name a Class C Note is
registered in the Note Register.
"Class C Notes" means the [$10,903,234] aggregate initial principal
amount GreatAmerica Leasing Receivables 2002-1, L.L.C., Class C
Receivable-Backed Notes, Series 2002-1, issued pursuant to the Indenture.
"Class C Percentage" means 4.25%.
"Class C Principal Payment Amount" means, with respect to a Payment
Date, the lesser of (1) the excess, if any, of (a) the Monthly Principal Amount
over (b) the sum of the Class A Principal Payment Amount and the Class B
Principal Payment Amount and (2) the excess, if any, of (a) the Outstanding
Aggregate Principal Amount of the Class C Notes over (b) the greater of (x) the
Class C Target Investor Principal Amount and (y) the Class C Floor.
"Class C Target Investor Principal Amount" means, with respect to a
Payment Date, an amount equal to the product of (i) the Class C Percentage and
(ii) the Pool Balance as of the last day of the related Collection Period.
"Class D Floor" means, with respect to a Payment Date,
(i) 1.97% of the Original Pool Balance plus
(ii) the Cumulative Loss Amount as of such date, minus
(iii) the sum of (a) the Overcollateralization Balance as
of the immediately preceding Payment Date and (b) the amount on deposit
in the Reserve Fund and the Residual Account after giving effect to
amounts to be withdrawn on such date;
provided, however, that if the Class C Target Investor Principal Amount as of
such Payment Date is less than or equal to the Class C Floor on such Payment
Date, the Class D Floor will be an amount equal to the Principal Amount of the
Class D Notes utilized in the calculation of the Class C Floor for such Payment
Date.
"Class D Interest Rate" means [_____]% per annum (calculated on the
basis of a year of 360 days and twelve 30-day months).
"Class D Maturity Date" means the December, 2008 Payment Date.
"Class D Noteholder" means the Person in whose name a Class D Note is
registered in the Note Register.
"Class D Notes" means the [$13,725,247] aggregate initial principal
amount GreatAmerica Leasing Receivables 2002-1, L.L.C., Class D
Receivable-Backed Notes, Series 2002-1, issued pursuant to the Indenture.
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"Class D Percentage" means 5.35%.
"Class D Principal Payment Amount" means, with respect to a Payment
Date, the lesser of (1) the excess, if any, of (a) the Monthly Principal Amount
over (b) the sum of the Class A Principal Payment Amount, the Class B Principal
Payment Amount and the Class C Principal Payment Amount and (2) the excess, if
any, of (a) the Outstanding Aggregate Principal Amount of the Class D Notes over
(b) the greater of (x) the Class D Target Investor Principal Amount and (y) the
Class D Floor.
"Class D Target Investor Principal Amount" means, with respect to a
Payment Date, an amount equal to the product of (i) the Class D Percentage and
(ii) the Pool Balance as of the last day of the related Collection Period.
"Closing Date" means March ___, 2002.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning given such term in the "granting clause"
of the Indenture.
"Collection Account" means the Trust Account so designated established
pursuant to Section 7.01.
"Collection Period" means a period beginning on and including the first
day of a calendar month and ending on and including, the last day of such
calendar month, provided that the first Collection Period shall be the period
beginning on the Initial Cutoff Date and ending on and including the last day of
the calendar month in which the Initial Cutoff Date occurs.
"Collections" means all payments received on or with respect to the
Contracts in the Contracts Pool or the related Equipment, including, without
limitation, Scheduled Payments, Prepayments, Residual Receipts and Recoveries,
all as related to amounts attributable to the Contracts in the Contracts Pool or
the related Equipment (including any such amounts derived from Vendor recourse
provisions), but excluding any Excluded Amounts.
"Commission" means the United States Securities and Exchange
Commission.
"Computer Records" means the computer records generated by the Servicer
that provide information relating to the Contracts and that were used by the
Originator in selecting the Contracts conveyed to the Issuer pursuant to Section
2.01 (and any Substitute Contracts conveyed to the Issuer pursuant to Section
2.04).
"Contract" means each Lease, Secured Note, Purchase Order, Software
Only Agreement or other Financing Agreement covering Financed Items, originated
or purchased by the Originator, and including both Initial Contracts and
Substitute Contracts.
"Contract Assets" has the meaning assigned in Section 2.01 (and Section
2.04, as applicable in the case of Substitute Contracts).
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"Contract File" means, with respect to each Contract, the fully
executed original counterpart (for UCC purposes) of the Contract, the original
certificate of title or other title document with respect to the related
Equipment (if applicable), the UCC filing, if any, and any assignments thereof,
evidence of ratings of the Obligors by Moody's, S&P or Dun & Bradstreet and
otherwise such documents, if any, that the Servicer keeps on file in accordance
with its customary procedures, evidencing ownership of such Equipment (if
applicable) and all other documents originally delivered to the Originator or
held by the Servicer with respect to any Contract.
"Contracts Pool" as of any date means the Initial Contracts and the
Substitute Contracts (if any), other than any such Contracts that (i) have been
reconveyed by the Indenture Trustee to the Issuer, and concurrently by the
Issuer to the Originator, pursuant to Section 11.02 hereof, or (ii) have been
paid (or prepaid) in full.
"Conveyed Assets" has the meaning given to such term in Section 2.01(b)
hereof (and in Section 2.04(a) hereof in respect of Substitute Contracts and
related assets transferred to the Issuer pursuant to Subsequent Transfer
Agreements).
"Corporate Trust Office" means, with respect to the Indenture Trustee,
the office of the Indenture Trustee at which at any particular time its
corporate trust business shall be principally administered, which office at the
date of the execution of this Agreement is located at the addresses set forth in
Section 13.04.
"Cumulative Loss Amount" means, with respect to a Payment Date, an
amount equal to the excess, if any, of:
(i) the total of
(A) the Outstanding Principal Amount of the
Notes as of the immediately preceding Payment Date after
giving effect to all principal payments made on such date,
plus
(B) the Overcollateralization Balance as of the
immediately preceding Payment Date, minus
(C) the lesser of: (1) the Monthly Principal
Amount and (2) Available Amounts remaining after payment of
amounts owing to the Servicer, including Unreimbursed Servicer
Advances and Servicing Fees, and after payment of interest on
the Notes on such date; over
(ii) the Pool Balance as of the last day of the
immediately preceding Collection Period.
"Cumulative Net Loss Percentage" means, with respect to a Determination
Date, the percentage equivalent of a fraction, (a) the numerator of which is the
Aggregate Loss Amount as of the last day of the immediately preceding Collection
Period and (b) the denominator of which is the Original Pool Balance.
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"Custodian Agreement" means the Custodian Agreement dated as of the
date hereof between GreatAmerica Leasing Corporation, as custodian and the
Indenture Trustee.
"Cutoff Date" means either or both (as the context may require) the
Initial Cutoff Date and any Subsequent Cutoff Date, as applicable to the
Contract or Contracts in question.
"Defaulted Contract" means a Contract in the Contracts Pool with
respect to which there has occurred one or both of the following: (i) less than
ninety percent of any Scheduled Payment under the Contract has been received
from the related Obligor for 120 days or such shorter period as the Servicer may
determine consistent with its collection policy or (ii) the Servicer has
determined, in accordance with its usual and customary practices (and taking
into account any available Vendor recourse), that such Contract is not
collectible.
"Determination Date" means, with respect to any Payment Date, the third
Business Day prior to such Payment Date or, if such day is not a Business Day,
the Business Day preceding such day.
"Discount Rate" means the rate of [_____]% which is equal to the sum of
(a) the weighted average of the Class A-1 Interest Rate, the Class A-2 Interest
Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate, the Class B
Interest Rate, the Class C Interest Rate and the Class D Interest Rate, each
weighted by (i) the initial principal balance of the Class A-1 Notes, the
initial principal balance of the Class A-2 Notes, the initial principal balance
of the Class A-3 Notes, the initial principal balance of the Class A-4 Notes,
the initial principal balance of the Class B Notes, the initial principal
balance of the Class C Notes and the initial principal balance of the Class D
Notes and (ii) the weighted average life to call of the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes,
the Class C Notes and the Class D Notes under a 0% conditional prepayment rate
and assuming no loss scenario and that the Issuer will exercise its option to
redeem the Notes when the aggregate Principal Balance of the Contracts is less
than 15% of the Original Pool Balance, (b) the Servicer Fee Rate and (c) 0.025%.
"Dollar" and "$" means lawful currency of the United States of America.
"Eligible Contract" means at any date of determination, each Contract
with respect to which each of the following is true (to the extent applicable to
such type of Contract):
(A) the Contract is a valid and binding payment
obligation of the Obligor, is enforceable in accordance with
its terms (except as may be limited by applicable Insolvency
Laws and the availability of equitable remedies) and contains
a clause that has the effect of unconditionally and
irrevocably obligating the Obligor to make periodic Scheduled
Payments (including taxes, if any) to the assignee of the
Contract, notwithstanding any rights the Obligor may have
against the assignor and is in full force and effect and has
not been satisfied, subordinated or rescinded as of the Cutoff
Date;
(B) the Contract is noncancellable by the
Obligor and does not contain any early termination options
(except for Contracts that contain early termination
9
or prepayment clauses, but require full repayment upon
cancellation of the contract);
(C) all payments payable under the Contract are
absolute, unconditional obligations of the Obligor and the
Contract does not provide for offset for any reason and
provides for acceleration of the Scheduled Payments upon
default by the Obligor;
(D) the Contract (other than each Purchase Order
and each Software Only Agreement) is a triple net lease and
requires the Obligor to maintain the Equipment in good working
order, to bear all the costs of operating the Equipment,
including taxes, if any, and insurance relating thereto and to
assume all risk of loss or malfunction of the related
Equipment;
(E) all requirements of federal, state and local
laws, and regulations thereunder, including, without
limitation, usury laws, if any, in respect of the Contract
have been compiled with, and the Contract complied at the time
it was originated or made and as of the Closing Date or
related Cutoff Date will comply with all legal requirements of
the jurisdiction in which it was originated;
(F) no proceedings or investigations are pending
or, to the best of the Originator's knowledge after due
inquiry, have been threatened before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality asserting the invalidity of the Contract
seeking to prevent payment and performance of such Contract,
or seeking any determination or ruling that might adversely
and materially affect the validity or enforceability of any
Contract;
(G) the Contract was not originated nor was it
subject to the laws of any jurisdiction the laws of which
would make unlawful the sale, transfer and assignment of such
Contract under the Transfer and Servicing Agreement;
(H) the Contract requires that (i) the Obligor
will obtain insurance and list GreatAmerica as the loss payee
in an amount not less than the replacement cost of the
Equipment related thereto; and (ii) in the event of a Casualty
Loss, the Servicer may require the Obligor (A) to pay at a
minimum the remaining Principal Balance of the Contract or (B)
to replace the Equipment with like Equipment in good repair,
acceptable to the Servicer, at the Obligor's expense;
(I) in addition to the insurance maintained by
the Obligors with respect to the Equipment, the Originator
maintains, with an insurer with a general policy rating of A
or better with a class of VI or better by A.M. Best & Co., a
general liability insurance policy with coverage in the amount
of $1,000,000 per occurrence and coverage in the aggregate
amount of $2,000,000. The policy is in full force and effect
and covers all Equipment owned by the Originator. All premiums
in respect of such policies have been paid. The Indenture
Trustee is named as an additional insured on such liability
policies;
10
(J) immediately prior to the transfer of such
Contract and any related Equipment (or security interest
therein) to the Issuer, and immediately prior to the Issuer's
concurrent transfer thereof to the Indenture Trustee, such
Contract was owned by the Originator (and by the Issuer
following the transfer by the Originator) free and clear of
any adverse claim, other than with respect to any Permitted
Liens;
(K) the Contract and any related Equipment or
interest therein has been transferred to the Issuer free and
clear of any liens (except for Permitted Liens) and is
assignable without prior written consent of the Obligor (or
such consent has been obtained); with respect to leases that
are not true leases, the Originator has transferred its first
priority perfected security interest (if the book value is
$25,000 or more and where the related Obligor was rated below
(1) Baa3 or better by Moody's, (2) BBB or better by S&P or (3)
3A2 or better by Dun & Bradstreet) in the Equipment to the
Issuer, free and clear of adverse claims, except Permitted
Liens and the Originator had the power to convey such contract
and its interest in the Equipment free and clear of any liens
or encumbrances;
(L) the Contract does not provide for the
substitution, addition or exchange of any item of equipment
subject to such contract that would result in any reduction,
or change the timing of, payments due, or modification of the
Obligor's other obligations under such Contract;
(M) the Contract has an original maturity of not
greater than 85 months;
(N) the Obligor on the Contract has paid at
least one Scheduled Payment to the Originator or paid the
security deposit;
(O) the Contract is a U.S. dollar-denominated
obligation and, at inception, the Obligor and the associated
Equipment were and will continue to be located in the United
States, the United States territories of the Virgin Islands
and Puerto Rico and will continue to be located in the United
States, the United States territories of the Virgin Islands
and Puerto Rico;
(P) there is not more than one "secured party's
original" counterpart of the Contract and the sole manually
executed counterpart of the Contract that constitutes an
instrument is in the possession of the Custodian and has been
properly endorsed through the proper chain of title to the
Indenture Trustee;
(Q) immediately prior to the Closing Date or the
related Cutoff Date, the Originator will have possession of
the original Contract, and immediately prior to the
Originator's execution and delivery of the Transfer and
Servicing Agreement, there will be no other custodial
agreements in effect adversely affecting the rights of the
Originator to make, or cause to be made, any delivery required
thereunder;
11
(R) the Contract is not a consumer contract or a
"consumer lease" as defined in Section 2A-103(1)(e) of the
UCC;
(S) the Obligor of such Contract is a
corporation, partnership, limited liability company, or
unincorporated business association not using the related
Equipment for personal, family or household purposes, and no
item of Equipment has been repossessed;
(T) the Contract is not subject to any guaranty
by the Originator, nor has the Originator established any
specific credit reserve with respect to the related Obligor;
(U) the Contract was either originated or
purchased in a true sale transaction, by the Originator in the
ordinary course of its business in accordance with its
customary underwriting practices and credit policies and no
adverse selection procedure was used in selecting the Contract
for transfer to the Issuer;
(V) the Originator has duly fulfilled all
material obligations on its part to be fulfilled under, or in
connection with, the Contract and has done nothing to
materially impair the rights of the Issuer, the Indenture
Trustee or the Noteholders in such Contract, the Equipment,
the Scheduled Payments or any income or proceeds with respect
thereto;
(W) the origination and collection practices
used by the Originator with respect to the Contract have been
in all respects, legal and customary in the equipment
financing and servicing business and complies in all material
respects to the Originator's customary underwriting practice
and credit policies;
(X) the Obligor with respect to the Contract has
accepted the Equipment under such Contract therefore as being
in good working condition, after adequate opportunity to test
and inspect, has not notified the Originator of any defects
therein and the Originator has no knowledge of any material
equipment malfunction or other claim by the Obligor with
respect to the material performance of the Equipment under the
Contract;
(Y) at the time that any item of Equipment is
assigned, transferred and contributed pursuant to the Transfer
and Servicing Agreement, such Equipment has not suffered any
loss or damage except for such Equipment that has been
restored to its original value, ordinary wear and tear
excepted;
(Z) the Contract is not the subject of
litigation;
(AA) the Obligor of the Contract is not, as of
the applicable Cutoff Date, subject to bankruptcy or other
insolvency proceedings;
(BB) the Contract is not more than 60 days past
due;
(CC) the Contract is not a Defaulted Contract;
12
(DD) the operation of any of the terms of the
Contract or the exercise by the Issuer, the Indenture Trustee
or the Servicer of any right under any Contract will not
render the Contract unenforceable in whole or in part, and no
right of rescission, set-off, counterclaim or defense has been
asserted in writing with respect thereto;
(EE) the information with respect to the Contract
and the Equipment, where the Contract relates to Equipment
being currently acquired is true and correct in all material
respects;
(FF) no provision of the Contract has been
waived, altered or modified in any respect, except by
instruments or documents contained in the Contract File and
the Contract is for the item of Equipment identified therein;
(GG) the original date of the final Scheduled
Payment of the Contract has not been extended more than once
since the origination of such Contract;
(HH) except as otherwise reflected in the List of
Contracts, the Contract has not been amended prior to the
Closing Date or the related Cutoff Date such that the amount
of any Scheduled Payment or the aggregate Scheduled Payments
have been decreased, or any other obligations of the Obligor
under the Contact have been diminished;
(II) all filings necessary to evidence the
conveyance or transfer the Originator's ownership interest in
the Contract, and the Originator's corresponding interest in
the related Equipment, to the Issuer (as well as the
concurrent pledge of such property from the Issuer to the
Indenture Trustee), have been made; provided, that Uniform
Commercial Code financing statement filings with respect to
Equipment that name the Originator as secured party have not
been amended to indicate either the Issuer or the Indenture
Trustee as an assignee;
(JJ) no item of Equipment has been relocated from
the jurisdiction set forth in the Contract;
(KK) the transfer, assignment and contribution to
the Issuer of the Contract and the Originator's right, title
and interest in and to any item of Equipment will not violate
the terms or provisions of any such Contract or any other
agreement to which the Originator then is a party or by which
it is bound;;
(LL) the Originator has obtained a security
interest (subject to Permitted Liens) in the Equipment related
to the Contract, which interest shall be a first priority
perfected security interest in the case of Equipment with an
original book value of $25,000 or more unless the related
Obligor was rated (1) Baa3 or better by Moody's, (2) BBB or
better by S&P or (3) 3A2 or better by Dun & Bradstreet;
(MM) if the Contract is a lease of Equipment
subject to certificate of title statutory requirements, the
title is held either in the name of the lessee and the
13
certificate of title indicates the Originator as lienholder or
in the name of the Originator as lessor;
(NN) the Contract constitutes "chattel paper" or
"instruments" as defined under the UCC;
(OO) in the case of each Contract that consists
of a master lease and one or more exhibits or schedules
thereto, (i) the Originator has not assigned, and will not
assign, such master lease in its entirety or in part (except
for the assignment of its rights under such master lease as
collateral in connection with the financing of a schedule
issued pursuant to and incorporating the terms of such master
lease and not constituting a Contract), and has not delivered
and will not deliver physical possession of such master lease,
to any person other than the Indenture Trustee or the
Servicer, (ii) such exhibits or schedules constitute a
separate Contract to which all representations and warranties
referred to herein apply and are not part of any other
Contract not sold to the Issuer, and (iii) no schedule shall
be related to an upgrade of equipment unless the entire item
of equipment is financed under such schedule; and
(PP) such Contract is on a form substantially
similar to one of the Forms of Contracts attached as Exhibit
J.
"Eligible Deposit Account" means either (a) a segregated account with a
Qualified Institution, or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
Untied States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), and acting as a trustee for
funds deposited in such account, so long as any of the securities of such
depository institution shall have a credit rating from each Rating Agency in one
of its short-term credit rating categories that signifies investment grade.
"Eligible Investments" with respect to any Payment Date means
negotiable instruments or securities or other investments maturing on or before
such Payment Date (a) that, except in the case of demand or time deposits,
investments in money market funds and Eligible Repurchase Obligations, are
represented by instruments in bearer or registered form or ownership of which is
represented by book entries by a Clearing Agency or by a Federal Reserve Bank in
favor of depository institutions eligible to have an account with such Federal
Reserve Bank who hold such investments on behalf of their customers, (b) which,
as of any date of determination, mature by their terms on or prior to the
Payment Date immediately following such date of determination, and (c) which
evidence:
(i) direct obligations of, and obligations fully
guaranteed as to full and timely payment by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America);
(ii) demand deposits, time deposits or certificates of
deposit of depository institutions or trust companies incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal or
14
state banking or depository institution authorities; provided, however,
that at the time of the Issuer's investment or contractual commitment
to invest therein, the commercial paper, if any, and short-term
unsecured debt obligations (other than such obligation whose rating is
based on the credit of a Person other than such institution or trust
company) of such depository institution or trust company shall have a
credit rating from each Rating Agency in the Highest Required
Investment Category granted by such Rating Agency;
(iii) commercial paper, or other short term obligations,
having, at the time of the Issuer's investment or contractual
commitment to invest therein, a rating in the Highest Required
Investment Category granted by each Rating Agency;
(iv) demand deposits, time deposits or certificates of
deposit that are fully insured by the FDIC and either have a rating on
their certificates of deposit or short-term deposits from Moody's and
S&P of P-1 and A-1+, respectively, and, if rated by Fitch, from Fitch
of F1+, or otherwise have a rating acceptable to the Rating Agencies;
(v) notes that are payable on demand or bankers'
acceptances issued by any depository institution or trust company
referred to in (ii) above;
(vi) investments in JPMorgan Prime Money Market Funds or
other regulated investment companies having, at the time of the
Issuer's investment or contractual commitment to invest therein, a
rating of the Highest Required Investment Category from each Rating
Agency or if otherwise approved of in writing by the Rating Agencies;
(vii) Eligible Repurchase Obligations with a rating
acceptable to the Rating Agencies; and
(viii) any negotiable instruments or securities or other
investments in which the investment by the Issuer therein has been
approved in writing by each Rating Agency.
The Indenture Trustee may purchase or sell to itself or an Affiliate,
as principal or agent, the Eligible Investments described above.
"Eligible Repurchase Obligations" means repurchase obligations with
respect to any security that is a direct obligation of, or fully guaranteed by,
the United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with a depository institution or
trust company (acting as principal) described in clauses (c)(ii) and (c)(v) of
the definition of Eligible Investments.
"Eligible Servicer" has the meaning given to such term in Section 8.03
hereof.
"Equipment" means the tangible assets financed or leased by an Obligor
pursuant to a Contract and the related security interest granted by such Obligor
in such assets.
"ERISA" means the United States Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
15
"Event of Default" shall have the meaning specified in Section 5.01 of
the Indenture.
"Excess Contract," as of any date of determination, means each Contract
selected by the Servicer in accordance with Section 11.01 at such time as there
shall have been discovered a breach of any of the representations and warranties
set forth in Section 3.05, the removal of which pursuant to Section 11.01 and
the Originator's repurchase thereof or substitution of a Substitute Contract
therefor pursuant to Section 11.01, shall remedy such breach.
"Exchange Act" means the Securities Exchange Act of 1934, as amended or
supplemented from time to time.
"Excluded Amounts" means any collections on deposit in the Collection
Account or otherwise received by the Servicer on or with respect to the
Contracts Pool or related Equipment, which collections are attributable to (i)
any (a) late charges or (b) any taxes and fees or other charges imposed by any
Governmental Authority, (ii) reimbursements of insurance premiums or payments
for services that were not financed by the Originator, (iii) indemnity payments
or maintenance payments, (iv) other non-contract charges (including
documentation fees) reimbursable to the Servicer in accordance with the
Servicer's customary policies and procedures, (v) any collections with respect
to repurchased or expired Contracts, and (vi) amounts due to be paid to the
Originator prior to the applicable Cutoff Date.
"FDIC" shall mean the Federal Deposit Insurance Corporation, or any
successor thereto.
"Financed Items" means, with respect to a Contract, the specifically
identified Equipment and other property, together with all accessions thereto,
securing indebtedness of an Obligor under such Contract.
"Financing Agreement" means each financing agreement covering Financed
Items other than a Secured Note, a Purchase Order, a Software Only Agreement or
a Lease.
"Fitch" means Fitch, Inc. or any successor thereto.
"Forms of Contracts" means the forms of contracts attached hereto as
Exhibit J.
"Governmental Authority" means the United States of America, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.
"Highest Required Investment Category" means (i) with respect to
ratings assigned by Fitch (if such investment is rated by Fitch), F1+ for
short-term instruments and AAA for long-term instruments, (ii) with respect to
ratings assigned by Moody's, A2 or P-1 for one month instruments, A1 or P-1 for
three month instruments, Aa3 or P-1 for six month instruments and Aaa or P-1 for
instruments with a term in excess of six months and (iii) with respect to
ratings assigned by S&P, A-1+ for short-term instruments and AAA for long-term
instruments.
"Holder" means with respect to a Note, the Person in whose name such
Note is registered in the Note Register.
16
"Indebtedness" means, with respect to any Person at any date, (a) all
indebtedness of such person for borrowed money or for the deferred purchase
price of property or services (other than current liabilities incurred in the
ordinary course of business and payable in accordance with customary trade
practices) or that is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under capital leases, (c) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person, and (d) all liabilities secured by any Lien on any
property owned by such Person even though such person has not assumed or
otherwise become liable for the payment thereof.
"Indenture" means the Indenture, dated as of the date hereof, between
the Issuer and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Independent," when used with respect to any specified Person, means
such a Person who (i) is in fact independent of each of the Issuer or the
Servicer, (ii) is not a director, officer or employee of any Affiliate of any of
the Issuer or the Servicer, (iii) is not a person related to any officer or
director of any of the Issuer or the Servicer or any of their respective
Affiliates, (iv) is not a holder (directly or indirectly) of more than 10% of
any voting securities of any of the Issuer or the Servicer or any of their
respective Affiliates, and (v) is not connected with any of the Issuer or the
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
"Independent Director" means a director of a corporation who shall at
no time be employed by, or hold any beneficial interest in any Affiliate of the
Issuer, and who shall at no time hold any beneficial interest in the Issuer.
"Ineligible Contract" has the meaning specified in Section 11.01.
"Initial Class A-1 Principal Amount" means [$65,419,401].
"Initial Class A-2 Principal Amount" means [$12,827,334].
"Initial Class A-3 Principal Amount" means [$107,749,602].
"Initial Class A-4 Principal Amount" means [$27,450,494].
"Initial Class B Principal Amount" means [$10,774,960].
"Initial Class C Principal Amount" means [$10,903,234].
"Initial Class D Principal Amount" means [$13,725,247].
"Initial Contracts" means those Contracts conveyed to the Issuer and
pledged to the Indenture Trustee on the Closing Date.
"Initial Cutoff Date" means March 1, 2002.
17
"Initial Principal Amount" means, when used in the context of a
reference to an individual Class of Notes, the initial class principal amount
applicable to such Class as defined above, and otherwise means, collectively,
the sum of the Initial Class A-1 Principal Amount, the Initial Class A-2
Principal Amount, the Initial Class A-3 Principal Amount, the Initial Class A-4
Principal Amount, the Initial Class B Principal Amount, the Initial Class C
Principal Amount and the Initial Class D Principal Amount i.e., $248,850,272.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Insolvency Law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed or undismissed and in effect for a period
of 60 consecutive days; or (b) the commencement by such person of a voluntary
case under any applicable Insolvency Law now or hereafter in effect, or the
consent by such person to the entry of an order for relief in an involuntary
case under such law, taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of this property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Insolvency Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar debtor relief laws from time to time in effect affecting
the rights of creditors generally.
"Insolvency Proceeds" has the meaning specified in Section 10.01.
"Insurance Policy" means, with respect to any Contract, an insurance
policy covering physical damage to or loss of the related Equipment.
"Insurance Proceeds" means any amounts payable or any payments made to
the Servicer under any Insurance Policy.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Investment Earnings" means the investment earnings (net of losses and
investment expenses) on amounts on deposit in the Collection Account, the
Reserve Fund, the Residual Account and the Payahead Account, to be credited to
the Collection Account on each Payment Date pursuant to Section 7.03.
"Late Charges" means any late payment fees paid by Obligors in
accordance with the Servicer's customary policies.
"Lease" means each agreement and, as applicable, schedules,
subschedules, supplements and amendments to a master lease, pursuant to which
the Originator, as lessor, leased specified
18
assets to an Obligor at a specified monthly, quarterly, periodic (but in no
event less frequently than annually) or annual rental or pursuant to a similar
agreement for which the Originator is the assignee of a named lessor's rights.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), equity
interest, participation interest, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing.
"Liquidation Expenses" means, with respect to any Contract, the
aggregate amount of all out-of-pocket expenses reasonably incurred by the
Servicer (including amounts paid to any subservicer) in accordance with the
Servicer's customary procedures in connection with (i) the attempted collection
of any amount owing pursuant to such Contract if it is a Defaulted Contract and
(ii) the repossession, refurbishing and disposition of any related Equipment
upon or after the expiration or earlier termination of such Contract and other
out-of-pocket costs related to the liquidation of any such Equipment.
"Liquidation Proceeds" means, with respect to a Defaulted Contract,
proceeds from the sale, lease or re-lease of the Equipment, proceeds of the
related Insurance Policy and any other recoveries with respect to such Defaulted
Contract and the related Equipment, net of Liquidation Expenses and amounts, if
any, so received that are required either to be refunded to the Obligor on such
Contract or paid to a third party other than the Originator.
"List of Contracts" means the list identifying each Contract
constituting part of the Conveyed Assets, which list shall consist of the
initial List of Contracts reflecting the Initial Contracts transferred to the
Issuer on the Closing Date, together with any Subsequent List of Contracts
amending the most current List of Contracts reflecting the Substitute Contracts
transferred to the Issuer on the related Subsequent Transfer Date (together with
a deletion from such list of the related Contract or Contracts identified on the
corresponding Addition Notice with respect to which a Substitution Event has
occurred), and which list in each case (a) identifies by account number each
Contract included in the Contracts Pool, and (b) sets forth as to each such
Contract (i) the Principal Balance as of the applicable Cutoff Date, and (ii)
the maturity date, and which list (as in effect on the Closing Date) is attached
to this Agreement as Exhibit G.
"Material Modification" means a termination or release (including
pursuant to prepayment), or an amendment, modification or waiver, or equivalent
similar undertaking or agreement, by the Servicer with respect to a Contract
that would not otherwise be permitted under the standards and criteria set forth
in Sections 5.08 and/or 5.09 hereof, as applicable.
"Maturity Date" means, as applicable, the Class A-1 Maturity Date,
Class A-2 Maturity Date, Class A-3 Maturity Date, Class A-4 Maturity Date, Class
B Maturity Date, Class C Maturity Date or the Class D Maturity Date.
"Monthly Delinquency Percentage" means with respect to any Payment
Date, the percentage equivalent of a fraction, (a) the numerator of which is the
contract balance remaining
19
of all Contracts (other than Defaulted Contracts) that are 31 days or more
delinquent as of the last day of the immediately preceding Collection Period,
and (b) the denominator of which is the aggregate contract balance remaining of
all Contracts (other than Defaulted Contracts) as of the last day of the
immediately preceding Collection Period.
"Monthly Principal Amount" means, with respect to a Payment Date, the
excess, if any, of (i) the sum of the Aggregate Principal Amount of the Notes
and the Overcollateralization Balance both as of the immediately preceding
Payment Date (after making any principal payments on such date) over (ii) the
Pool Balance as of the last day of the Collection Period completed immediately
prior to such Payment Date.
"Monthly Residual Realization Percentage" means with respect to any
Payment Date, the percentage equivalent of a fraction, (a) the numerator of
which is the cumulative amount of residual receipts collected on all Contracts
(other than with respect to Defaulted Contracts) as to which the Servicer,
during the related Collection Period, determined that the full amount of
residual receipts to be received with respect to the related Equipment has been
collected, and (b) the denominator of which is equal to the aggregate Booked
Residual Value (other than with respect to Defaulted Contracts) with respect to
such Contracts.
"Monthly Report" has the meaning specified in Section 9.01.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
thereto.
"Note" means any one of the notes of the Issuer of any Class executed
and authenticated in accordance with the Indenture.
"Note Distribution Account" means the account established and
maintained as such pursuant to Section 7.01.
"Noteholders" means the registered holders of the Notes.
"Note Register" has the meaning given such term in Section 2.04 of the
Indenture.
"Obligor" means, with respect to any Contract, the Person or Persons
obligated to make payments with respect to such Contract, including any
guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by any officer
of the Issuer or the Servicer and delivered to the Indenture Trustee and the
Issuer (if from the Servicer), as the case may be.
"Opinion of Counsel" means a written opinion of counsel, who may be
outside counsel, or internal counsel (except with respect to federal securities
law (including the Trust Indenture Act) or tax law matters), for the Issuer or
the Servicer and who shall be reasonably acceptable to the Indenture Trustee, as
the case may be.
"Original Pool Balance" means the aggregate Principal Balance of the
Contracts transferred to the Issuer as of March 1, 2002, equal to
$256,546,671.20.
20
"Originator" means GreatAmerica Leasing Corporation, in its capacity as
Originator of a Contract under this Agreement (including in respect of a
Substitute Contract pursuant to a Subsequent Transfer Agreement).
"Outstanding" has the meaning given such term in the Indenture.
"Overcollateralization Balance" means, with respect to a Payment Date,
an amount equal to the excess, if any, of (i) the Pool Balance as of the last
day of the Collection Period completed immediately prior to such Payment Date
over (ii) the Outstanding Aggregate Principal Amount of the Notes as of such
date after giving effect to all principal payments made to the Noteholders on
such date.
"Payahead" means with respect to a Contract, any early payment, other
than Prepayments, by or on behalf of Obligors that do not constitute Scheduled
Payments due in the current Collection Period.
"Payahead Account" means the Payahead Account established and
maintained pursuant to Section 7.01 hereof.
"Paying Agent" means as described in Section 3.03 of the Indenture.
"Payment Date" shall mean the fifteenth day of each calendar month or,
if such fifteenth day is not a Business Day, the next succeeding Business Day,
with the first such Payment Date hereunder being April 15, 2002.
"Permitted Liens" means (a) with respect to Contracts in the Contracts
Pool:
(i) Liens for state, municipal and other local taxes if
such taxes shall not at the time be due and payable or if the Issuer
shall currently be contesting the validity thereof in good faith by
appropriate proceedings,
(ii) Liens in favor of the Issuer created by the
Originator and transferred to the Indenture Trustee pursuant to the
Indenture,
(iii) Liens in favor of the Indenture Trustee created
pursuant to this Agreement and/or the Indenture, and
(iv) Liens in favor of the Indenture Trustee created
pursuant to the Indenture and/or this Agreement;
and (b) with respect to the related Equipment:
(i) materialmen's, warehousemen's, mechanics' and other
liens arising by operation of law in the ordinary course of business
for sums not due or sums that are being contested in good faith,
21
(ii) Liens for state, municipal and other local taxes if
such taxes shall not at the time be due and payable or if the Issuer
shall currently be contesting the validity thereof in good faith by
appropriate proceedings,
(iii) Liens in favor of the Issuer created by the
Originator and transferred by the Issuer to the Indenture Trustee
pursuant to the Indenture,
(iv) Liens in favor of the Indenture Trustee created
pursuant to the Indenture and/or this Agreement.
"Person" means any individual, corporation, estate, partnership,
business trust, limited liability company, sole proprietorship, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof or other entity.
"Placement Agency Agreement" means, the Placement Agency Agreement,
dated as of March 1, 2002 between First Union Securities, Inc., as agent, the
Issuer and GreatAmerica Leasing Corporation.
"Pledged Assets" means the assets pledged to the Indenture Trustee by
the Issuer pursuant to the Indenture.
"Pool Balance" means, with respect to a Payment Date, an amount equal
to the aggregate remaining Principal Balance of the Contracts as of the last day
of the related Collection Period after giving effect to Defaulted Contracts,
Prepaid Contracts, Ineligible Contracts and Excess Contracts.
"Prepaid Contract" means any Contract that has terminated or been
prepaid in full prior to its scheduled expiration date (including because of a
Casualty Loss), other than a Defaulted Contract.
"Prepayment Amount" has the meaning specified in Section 5.09.
"Prepayments" means any full prepayments on a Contract that expressly
permitted the related Obligor to make, in advance of its scheduled due date, and
any and all cash proceeds or rents realized from the sale, lease, re-lease or
re-financing of Equipment under a Prepaid Contract (net of Liquidation
Expenses), Liquidation Proceeds, amounts received in respect of Transfer Deposit
Amounts and payments upon an optional termination pursuant to Section 5.09.
"Principal Amount" means, with respect to a Class of Notes, the
aggregate Initial Principal Amount thereof reduced by the aggregate amount of
any distributions applied in reduction of such principal amount.
"Principal Balance" means, with respect to a Contract (i) as of the
related Cutoff Date, the present value of all the remaining Scheduled Payments
becoming due under such Contract after the applicable Cutoff Date (including
Payaheads) discounted monthly at the Discount Rate, unless another rate is
specifically mentioned and (ii) as of any other date of determination, the
present value of all of the remaining Scheduled Payments becoming due under such
Contract
22
after such date of determination (including Payaheads) discounted monthly at the
Discount Rate, unless another rate is specifically mentioned; except that a
Defaulted Contract or an Excess Contract shall have a Principal Balance of $0.
Contracts which have been prepaid or otherwise terminated or released from the
lien of the Indenture shall also have a Principal Balance of $0.
"Prospectus" has the meaning given such term in the Underwriting
Agreement.
"Purchase Order" means any agreement pursuant to which the Originator
invoices an Obligor at a specified periodic payment or rental for specified
Equipment.
"Qualified Eligible Investments" means Eligible Investments acquired by
the Indenture Trustee in its name and in its capacity as Indenture Trustee at
the written direction of the Issuer, which are held by the Indenture Trustee in
the Collection Account, the Reserve Fund, the Residual Account or the Payahead
Account and with respect to which (a) the Indenture Trustee has noted its
interest therein on its books and records, and (b) the Indenture Trustee has
purchased such investments at the written direction of the Issuer for value
without notice of any adverse claim thereto (and, if such investments are
securities or other financial assets or interests therein, within the meaning of
Section 8-102 of the UCC as enacted in the State of New York, without acting in
collusion with a securities intermediary in violating such securities
intermediary's obligations to entitlement holders in such assets, under Section
8-504 of such UCC, to maintain a sufficient quantity of such assets in favor of
such entitlement holders), and (c) either (i) such investments are in the
possession of the Indenture Trustee, or (ii) such investments, (A) if
certificated securities and in bearer form, have been delivered to the Indenture
Trustee, or in registered form, have been delivered to the Indenture Trustee and
either registered by the issuer in the name of the Indenture Trustee or endorsed
by effective endorsement to the Indenture Trustee or in blank; (B) if
uncertificated securities, the ownership of which has been registered to the
Indenture Trustee on the books of the issuer thereof (or another person, other
than a securities intermediary, either becomes the registered owner of the
uncertified security on behalf of the Indenture Trustee or, having previously
become the registered owner, acknowledges that it holds for the Indenture
Trustee); or (C) if securities entitlements (within the meaning of Section 8-102
of the UCC as enacted in the State of New York) representing interests in
securities or other financial assets (or interests therein) held by a securities
intermediary (within the meaning of said Section 8-102), a securities
intermediary indicates by book entry that a security or other financial asset
has been credited to the Indenture Trustee's securities account with such
securities intermediary. Any such Qualified Eligible Investment may be purchased
by or through the Indenture Trustee or any of its Affiliates acting at the
written direction of the Issuer.
"Qualified Institution" means (a) the corporate trust department of the
Indenture Trustee, or (b) a depository institution organized under the laws of
the United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), (i) (A) which has either
(1) a long-term unsecured debt rating of AA- by each of the Rating Agencies, or
(2) a short-term unsecured debt rating or certificate of deposit rating of A-1+
by S&P, F1+ by Fitch and P-1 by Moody's, (B) the parent corporation of which has
either (1) a long-term unsecured debt rating of AA- by each of S&P and Fitch and
Aa3 by Moody's, or (2) a short-term unsecured debt rating or certificate of
deposit rating of A-1+ by S&P, F1+ by Fitch
23
and P-1 by Moody's, or (C) is otherwise acceptable to the Rating Agencies, and
(ii) whose deposits are insured by the FDIC and have a rating acceptable to the
Rating Agencies.
"Rating Agency" means each of S&P, Fitch and Moody's, so long as such
Persons maintain a rating on the Notes; and if any of S&P, Fitch or Moody's no
longer maintains a rating on the Notes, such other nationally recognized
statistical rating organization selected by the Issuer.
"Rating Agency Condition" means, with respect to any action or series
of related actions or any proposed transaction or series of related proposed
transactions, that each Rating Agency shall have notified the Issuer and the
Indenture Trustee in writing that such action or series of related actions or
the consummation of such proposed transaction or series of related transactions
will not result in a Ratings Effect.
"Ratings Effect" means, with respect to any action or series of related
actions or any proposed transaction or series of related proposed transactions,
a reduction or withdrawal of the rating of any outstanding Class with respect to
which a Rating Agency has previously issued a rating as a result of such action
or series of related actions or the consummation of any such proposed
transaction or series of related transactions.
"Record Date" means, with respect to a Payment Date, the Business Day
immediately preceding a Payment Date; provided, however, that if Definitive
Notes are issued, the Record Date shall be the last Business Day of the
preceding calendar month.
"Recoveries" means any and all recoveries on account of a Defaulted
Contract, including, without limitation, any and all cash proceeds or rents
realized from the sale, lease, re-lease or re-financing of repossessed Equipment
or other property, Insurance Proceeds, but in each case net of reimbursable
collection expenses, Servicer Advances and Liquidation Expenses.
"Released Amounts" means, with respect to any payment or collection
received with respect to any Contract on any Business Day (whether such payment
or collection is received by the Servicer or the Issuer), an amount equal to
that portion of such payment or collection constituting Excluded Amounts.
"Required Holders" means Noteholders evidencing more than 66 2/3% of
the Aggregate Principal Amount of all Notes Outstanding.
"Required Reserve Amount" means, with respect to a Payment Date, an
amount equal to the greater of (i) 1.00% of the Original Pool Balance or (ii)
1.50% of the Pool Balance.
"Requirements of Law" for any Person means the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
order or determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
24
"Reserve Fund" means the Reserve Fund established and maintained
pursuant to Section 7.01 hereof.
"Reserve Fund Initial Deposit" means [$2,565,466.71].
"Residual Account" means the Residual Account established and
maintained pursuant to Section 7.01 hereof.
"Residual Event" means the occurrence of one or more of the following:
(a) the occurrence of an Event of Default; (b) GreatAmerica Leasing Corporation
or a successor to GreatAmerica Leasing Corporation as described in Section
13.12(b) is no longer acting as the Servicer; (c) the Three-Month Residual
Realization Percentage on the related Determination Date is less than 85.00%
(unless such Three-Month Residual Realization Percentage has been less than
85.00% on any previous Determination Date, in which case the percentage for this
clause (c) shall be 100.00%); (d) the Three-Month Delinquency Percentage
calculated on the related Determination Date is greater than 6.00%; or (e) the
Cumulative Net Loss Percentage on the related Determination Date exceeds the
"loss trigger percentage" set forth below:
LOSS TRIGGER
COLLECTION PERIOD PERCENTAGE
----------------- ----------
1st through, and including, the 12th Collection Period: 3.40%
13th through, and including, the 24th Collection Period: 5.00%
25th Collection Period ongoing: 6.40%
Notwithstanding the foregoing: (i) the Residual Event referred to in
clause (c) above may be cured on any Payment Date if the Three-Month Residual
Realization Percentage is greater than or equal to 100% for the related
Determination Date and the five immediately preceding Determination Dates, (ii)
the Residual Event referenced in clause (d) may be cured on any Payment Date if
the Three-Month Delinquency Percentage as of the end of the immediately
preceding Collection Period is less than or equal to 6.00% for the related
Determination Date and the two immediately preceding Determination Dates, (iii)
the Residual Event referenced in clause (e) may be cured if the Cumulative Net
Loss Percentage is less than the associated "loss trigger percentage" for the
related Determination Date and the two immediately preceding Determination
Dates.
"Residual Receipts" means, with respect to any Contract, proceeds
realized from the sale or re-lease of the Equipment following the termination of
a Contract or from periodic payments made for the continued use of the Equipment
after the termination date of a Contract, other than any Equipment subject to
Defaulted Contracts or Contracts for which the Servicer has delivered a
Substitute Contract.
"Responsible Officer" means, with respect to the Issuer, any officer of
the Issuer with direct responsibility for the administration of this Agreement
and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject and with respect to the Indenture Trustee has the meaning
given to it in the Indenture.
25
"S&P" means Standard & Poor's Ratings Group.
"Scheduled Payment" means, with respect to any Contract, the monthly,
quarterly, periodic or annual rent or financing payment scheduled to be made by
the related Obligor under the terms of such Contract after the related Cutoff
Date and any such payment received after the related Cutoff Date, it being
understood that Scheduled Payments do not include any Excluded Amounts.
"Secured Note" means each promissory note with a related security
interest evidenced by written agreement, pursuant to which the purchase of
specified assets by an Obligor is financed or provided as collateral security
for specified monthly, quarterly, periodic or annual payments.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Servicer" means initially GreatAmerica Leasing Corporation, or its
successor, until any Servicer Transfer hereunder and thereafter means the
Successor Servicer appointed pursuant to Article VIII below with respect to the
duties and obligations required of the Servicer under this Agreement.
"Servicer Advance" means, with respect to any Payment Date, the
amounts, if any, deposited by the Servicer in the Collection Account for such
Payment Date in respect of Scheduled Payments pursuant to Section 5.14.
"Servicer Default" shall have the meaning specified in Section 8.01.
"Servicing Fee" has the meaning specified in Section 5.18.
"Servicing Fee Percentage" means 0.75%.
"Servicer Transfer" has the meaning assigned in Section 8.02(a).
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Indenture Trustee by the Servicer, as the same may be amended
from time to time.
"Software Only Agreement" means any installment sales contract or
agreement pursuant to which the Originator finances the licensing of software
for an Obligor at a specified periodic payment.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code; (b) the present fair saleable value of the
Property of such Person in an orderly liquidation of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person is able
to realize upon its Property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course
26
of business; (d) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature; and (e) such Person is not engaged in business or
a transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute unreasonably small capital.
"Subsequent Cutoff Date" means the date specified as such for
Substitute Contracts in the related Subsequent Transfer Agreement.
"Subsequent List of Contracts" means a list, in the form of the initial
List of Contracts delivered on the Closing Date, but listing each Substitute
Contract transferred to the Issuer pursuant to the related Subsequent Transfer
Agreement.
"Subsequent Transfer Agreement" means, with respect to any Substitute
Contracts, the agreement between the Originator and the Issuer pursuant to which
the Originator will transfer the Substitute Contracts to the Issuer, the form of
which is attached to hereto as Exhibit I.
"Subsequent Transfer Date" means any date on which Substitute Contracts
are transferred to the Issuer.
"Substitute Contract" means a Contract that is (a) transferred to the
Issuer under Section 2.04 with respect to which a related Substitution Event has
occurred with respect to a Contract or Contracts then held in the Contracts Pool
and identified in the related Addition Notice and (b) becomes part of the
Contracts Pool.
"Substitute Contract Qualification Conditions" means, with respect to
any Substitute Contract being transferred to the Issuer pursuant to Section
2.04, the accuracy of each of the following statements as of the related Cutoff
Date for such Contract:
(a) the aggregate Principal Balance of such Substitute Contracts
is not less than that of the Contract or Contracts identified on the related
Addition Notice as the Contract or Contracts to be released by the Indenture
Trustee to the Issuer and reconveyed to the Originator in exchange for such
Substitute Contracts; and
(b) the weighted average life of the Contracts Pool after giving
effect to all such substitutions will not be materially greater that the
weighted average life of the Contracts Pool prior to such substitutions;
(c) the sum of the aggregate Principal Balance and the Booked
Residual Value on such Substitute Contracts is not materially less than the sum
of the aggregate Principal Balance and the Booked Residual Value on the Contract
or Contracts identified on the related Addition Notice as the Contract or
Contracts to be released by the Indenture Trustee to the Issuer and reconveyed
to the Originator in exchange for such Substitute Contract; and
(d) if, instead of such Substitute Contract being added to the
Contracts Pool on the related Subsequent Transfer Date, such Substitute Contract
had instead been included in the Contracts Pool as of the Initial Cutoff Date,
and the related Contract or Contracts identified on the related Addition Notice
were not so included (and assuming such hypothetical inclusion satisfied the
criteria set forth in clause (a) and (b) above that would have been applicable
at such
27
time), the representations of the Originator set forth in Section
3.05(a)(i)-(xiv) concerning concentrations would not, as a result of such
inclusion, have become inaccurate or incorrect in any material respect;
(e) no adverse selection procedure shall have been employed in the
selection of such Substitute Contract from the Originator's portfolio;
(f) all actions or additional actions (if any) necessary to
perfect the security interest and assignment of such Substitute Contract and
related Equipment to the Issuer and Indenture Trustee shall have been taken as
of or prior to the Subsequent Transfer Date; and
(g) the maturity date for the last Scheduled Payment due under
such Substitute Contract is not later than December, 2007.
"Substitution Event" shall have occurred if one or more Contracts
pledged to the Indenture Trustee and identified in the related Addition Notice
is either (a) a Prepaid Contract, (b) a Defaulted Contract, (c) an Excess
Contract or (d) the subject of a breach of a representation or warranty under
this Agreement or other provision which breach or other provision, in the
absence of a substitution of a Substitute Contract for such Contract or
Contracts pursuant to Section 2.04, would require the payment of a Transfer
Deposit Amount to the Issuer in respect of such Contract pursuant to Section
11.01; provided, however, that no Substitution Event shall be deemed to occur
under clause (a) (if related to a Casualty Loss), (b), (c) or (d) to the extent
Contracts having initial aggregate Principal Balances of 10% or greater of the
Original Pool Balance have previously been substituted for under such clauses
and provided further, that no Substitution Event shall be deemed to occur under
clause (a) (other than related to a Casualty Loss), (c) or (d) to the extent the
Issuer has not consented to such substitution.
"Successor Servicer" has the meaning given such term in Section
8.02(b).
"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for federal income tax purposes, (i) following such action
the Issuer will not be deemed to be an association (or publicly traded
partnership) taxable as a corporation and (ii) such action will not affect the
tax characterization as debt of Notes of any outstanding Class issued by the
Issuer for which an Opinion of Counsel has been provided that such Notes are
debt.
"Three-Month Delinquency Percentage" means with respect to any Payment
Date commencing with the third Payment Date, the percentage equivalent of a
fraction, (a) the numerator of which is the sum of the Monthly Delinquency
Percentages for such Payment Date and the two immediately preceding Payment
Dates, and (b) the denominator of which is three.
"Three-Month Residual Realization Percentage" means with respect to any
Payment Date commencing with the third Payment Date, the percentage equivalent
of a fraction, (a) the numerator of which is the sum of the Monthly Residual
Realization Percentage for such Payment Date and the two immediately preceding
Payment Dates and (b) the denominator of which is three.
"Transaction Documents" means this Agreement, the Indenture, the
Custodian Agreement, the Placement Agency Agreement, any Subsequent Transfer
Agreement, the
28
Assignment, the Underwriting Agreement and any additional document the execution
of which is necessary or incidental to carrying out the terms of the transaction
contemplated by this Agreement.
"Transfer Date" means the Business Day immediately preceding each
Payment Date.
"Transfer Deposit Amount" means, with respect to each Ineligible
Contract or Excess Contract, on any date of determination, the sum of the
Principal Balances of such Contracts, the Booked Residual Value for each such
Contract and any related outstanding Servicer Advances thereon that have not
been waived by the Servicer entitled thereto.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, physical property, book-entry securities, uncertificated
securities or otherwise), including without limitation the Reserve Fund Initial
Deposit, and all proceeds of the foregoing.
"Trust Accounts" means, collectively, the Collection Account, the
Reserve Fund, the Residual Account, the Payahead Account and the Note
Distribution Account, or any of them.
"Trustee Cap" means with respect to any date of determination, the
lesser of (i) $200,000 and (ii) the product of (a) $10 and (b) the number of
Contracts in the Contracts Pool on such date.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"UCC Filing Locations" means the States of Delaware and Iowa.
"Underwriting Agreement" means the Underwriting Agreement, dated March
1, 2002, among First Union Securities, Inc. (as an underwriter thereunder), the
Issuer, and GreatAmerica Leasing Corporation.
"United States" means the United States of America.
"Unreimbursed Servicer Advances" means, at any time, the amount of all
previous Servicer Advances (or portions thereof) as to which the Servicer has
not been reimbursed as of such time pursuant to Sections 7.01 or 7.05.
"Vendor" means, with respect to a Contract, the equipment manufacturer,
dealer or distributor, or other Person that provided financing under such
Contract in connection with the acquisition or use by an Obligor of such party's
Equipment or other products.
"Vendor Assignment" means each assignment agreement pursuant to which
an individual Contract originated by a Vendor is assigned to the Originator.
"Vice President" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "Vice
President," who is a duly elected officer of such Person.
29
SECTION 1.02. USAGE OF TERMS.
With respect to all terms in this Agreement, the singular includes the
plural and the plural the singular; words importing any gender include the other
genders; references to "writing" include printing, typing, lithography and other
means of reproducing words in a visible form; references to agreements and other
contractual instruments include all amendments, modifications and supplements
thereto or any changes therein entered into in accordance with their respective
terms and not prohibited by this Agreement; references to Persons include their
permitted successors and assigns; and the term "including" means "including
without limitation."
SECTION 1.03. SECTION REFERENCES.
All section references, unless otherwise indicated, shall be to
Sections in this Agreement.
SECTION 1.04. CALCULATIONS.
Except as otherwise provided herein, all interest rate and basis point
calculations hereunder will be made on the basis of a 360-day year and twelve
30-day months and will be carried out to at least three decimal places.
SECTION 1.05. ACCOUNTING TERMS.
All accounting terms used but not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States.
ARTICLE II
TRANSFER OF CONTRACT ASSETS
SECTION 2.01. TRANSFER OF CONTRACT ASSETS.
(a) The Originator shall sell, assign and convey assets to the
Issuer pursuant to the terms and provisions hereof.
(b) Subject to and upon the terms and conditions set forth herein,
the Originator hereby sells, transfers, assigns, sets over and otherwise conveys
to the Issuer, for a purchase price consisting of [$__________] in cash, all the
right, title and interest of the Originator in and to (items (i) - (vi) below,
being collectively referred to herein as the "Contract Assets"):
(i) the Initial Contracts, and all monies received in
payment of such Contracts on and after the Initial Cutoff Date, any
Prepayment Amounts, any payments in respect of a casualty or early
termination, and any Recoveries received with respect thereto, but
excluding any Excluded Amounts;
(ii) the Equipment related to such Contracts, including
the security interest of the Originator in such Equipment and all
proceeds from any sale or other disposition of such Equipment (but
subject to the exclusion and release herein of Excluded Amounts);
30
(iii) the Contract Files;
(iv) all payments made or to be made in the future with
respect to such Contracts or the Obligor thereunder under any Vendor
Assignments and under any guarantee or similar credit enhancement with
respect to such Contracts (other than Excluded Amounts) and all other
rights under Vendor Assignments or other similar agreements;
(v) all Insurance Proceeds with respect to each such
Contract; and
(vi) all income from and proceeds of the foregoing.
In addition to the Contract Assets, the Originator hereby sells, transfers,
assigns, sets over and otherwise conveys to the Issuer the remittances, deposits
and payments made into the Trust Accounts from time to time, amounts in the
Trust Accounts from time to time (and any investments of such amounts) and all
proceeds and products of the foregoing, which together with the Contract Assets
are referred to as the "Conveyed Assets").
(c) The Originator and the Issuer acknowledge that the
representations and warranties of the Originator in Sections 3.01, 3.02, 3.03,
3.04 and 3.05 will run to and be for the benefit of the Indenture Trustee and
the Noteholders and the Indenture Trustee may enforce directly, without joinder
of the Issuer, the repurchase obligations of the Originator with respect to
breaches of such representations and warranties as set forth herein and in
Section 11.01.
(d) The sale, transfer, assignment, set-over and conveyance of the
Conveyed Assets by the Originator to the Issuer and by the Issuer to the
Indenture Trustee pursuant to this Agreement does not constitute and is not
intended to result in a creation or an assumption by the Issuer or the Indenture
Trustee of any obligation of the Originator in connection with the Contract
Assets, or any agreement or instrument relating thereto, including, without
limitation, any obligation to any Obligor, if any, not financed by the
Originator, or (1) any taxes, fees, or other charges imposed by any Governmental
Authority and (2) any insurance premiums that remain owing with respect to any
Contract at the time such Contract is sold hereunder.
(e) The Originator and the Issuer intend and agree that (i) the
transfer of the Contract Assets to the Issuer are intended to be a sale,
conveyance and transfer of ownership of the Conveyed Assets rather than the mere
granting of a security interest to secure a borrowing and (ii) such Conveyed
Assets shall not be part of the Originator's estate in the event of a filing of
a bankruptcy petition or other action by or against such Person under any
Insolvency Law. In the event, however, that notwithstanding such intent and
agreement, such transfer is deemed to be of a mere security interest to secure
indebtedness, the Originator shall be deemed to have granted the Issuer a
perfected first priority security interest in such Conveyed Assets and this
Agreement shall constitute a security agreement under applicable law, securing
the repayment of the purchase price paid hereunder and the obligations and/or
interests represented by the Notes, in the order and priorities, and subject to
the other terms and conditions of, this Agreement and the Indenture, together
with such other obligations or interests as may arise hereunder and thereunder
in favor of the parties hereto and thereto.
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If any such transfer of the Contract Assets is deemed to be the mere
granting of a security interest to secure a borrowing, the Issuer may, to secure
the Issuer's own borrowing under the Indenture (to the extent that the transfer
of the Contract Assets thereunder is deemed to be a mere granting of a security
interest to secure a borrowing) repledge and reassign (1) all or a portion of
the Contract Assets pledged to the Issuer by the Originator and with respect to
which the Issuer has not released its security interest at the time of such
pledge and assignment, and (2) all proceeds thereof. Such repledge and
reassignment may be made by the Issuer with or without a repledge and
reassignment by the Issuer of its rights under any agreement with the
Originator, and without further notice to or acknowledgment from the Originator.
The Originator waives, to the extent permitted by applicable law, all claims,
causes of action and remedies, whether legal or equitable (including any right
of setoff), against the Issuer or any assignee of the Issuer relating to such
action by the Issuer in connection with the transactions contemplated by this
Agreement.
SECTION 2.02. CONDITIONS TO TRANSFER OF CONVEYED ASSETS TO THE
ISSUER.
On or before the Closing Date, the Originator or the Issuer, as
applicable, shall deliver or cause to be delivered to the Indenture Trustee each
of the documents, certificates and other items as follows:
(i) A certificate of an officer of the Originator
substantially in the form of Exhibit C hereto;
(ii) A certificate of an officer of the Issuer
substantially in the form of Exhibit B hereto;
(iii) Opinions of counsel for the Originator and the Issuer
substantially in the form acceptable to the Underwriter and the Rating
Agencies (and including as an addressee thereof each Rating Agency);
(iv) Copies of resolutions of the Board of Directors of
the Originator or of the Executive Committee of the Board of Directors
of the Originator approving the execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a
party and the transactions contemplated hereunder and thereunder,
certified in each case by the Secretary or an Assistant Secretary of
the Originator;
(v) Officially certified recent evidence of due
incorporation and good standing of the Originator under the laws of
Iowa;
(vi) The initial List of Contracts, certified by the
Chairman of the Board, President, Executive Vice President or any Vice
President of the Originator, together with an Assignment substantially
in the form of Exhibit A (along with the delivery of any instruments as
required under Section 2.06 below);
(vii) A letter from Deloitte & Touche LLP, or another
nationally recognized accounting firm, addressed to the Originator and
the Issuer, stating that such firm has reviewed a sample of the Initial
Contracts and performed specific procedures for such
32
sample with respect to certain contract terms and which identifies
those Initial Contracts which do not conform;
(viii) Copies of resolutions of the board of directors of
the Issuer approving the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party
and the transactions contemplated hereunder and thereunder, certified
in each case by the Secretary of the Issuer;
(ix) Officially certified, recent evidence of due
formation and good standing of the Issuer under the laws of Delaware;
(x) Evidence of proper filing with appropriate offices in
the UCC Filing Locations of UCC financing statements executed by the
Originator, as debtor, naming the Issuer as secured party (and the
Indenture Trustee as assignee) and identifying the Contract Assets as
collateral; and evidence of proper filing with appropriate officer in
the UCC Filing Locations of UCC financing statements executed by the
Issuer, as debtor, naming the Indenture Trustee as secured party and
identifying the Pledged Assets as collateral;
(xi) An Officer's Certificate listing the Servicer's
Servicing Officers;
(xii) Evidence of deposit in the Collection Account of all
funds received with respect to the Initial Contracts after the Initial
Cutoff Date (other than Excluded Amounts) to the date two days
preceding the Closing Date, together with an Officer's Certificate from
the Servicer to the effect that such amount is correct;
(xiii) Evidence of deposit in the Reserve Fund of the
Reserve Fund Initial Deposit;
(xiv) Evidence of deposit in the Payahead Account of
Payaheads received with respect to the Initial Contracts after than the
Initial Cutoff Date to the date two days preceding the Closing Date,
together with an Officer's Certificate from the Servicer to the effect
that such amount is correct;
(xv) A fully executed Indenture;
(xvi) A fully executed Custodian Agreement;
(xvii) Opinions of Xxxxxxx and Xxxxxx to the effect that for
federal income tax purposes, the Class A Notes, Class B Notes, Class C
Notes and the Class D Notes will be characterized as debt and the
Issuer will not be characterized as an association (or publicly traded
partnership) taxable as a corporation; and
(xviii) An opinion of Xxxxxxx and Xxxxxx to the effect that
for Iowa tax purposes, the Issuer will not be subject to the Business
Tax on Corporations imposed by the State of Iowa under Chapter 422.32
of the Iowa Code or to the Iowa Business Corporation Act under Chapter
490.101 of the Iowa Code and Noteholders that are not
33
otherwise subject to income taxation by the State of Iowa will not
become subject to income taxation by the State of Iowa solely as a
result of their ownership of Notes.
SECTION 2.03. ACCEPTANCE BY ISSUER.
On the Closing Date, if the conditions set forth in Section 2.02 have
been satisfied, the Issuer shall issue, and the Indenture Trustee shall
authenticate, to, or upon the order of, the Issuer the Notes secured by the
Collateral. The Issuer hereby acknowledges its acceptance of the Conveyed
Assets, and declares that it shall maintain such right, title and interest in
accordance with the terms of this Agreement and the Indenture.
SECTION 2.04. CONVEYANCE OF SUBSTITUTE CONTRACTS.
(a) Subject to Sections 2.01(d) and (e) above and the satisfaction
of the conditions set forth in paragraph (b) below, at the option of the Issuer,
the Originator may at its option (but shall not be obligated to) sell, transfer,
assign, set over and otherwise convey to the Issuer (by delivery of an executed
Subsequent Transfer Agreement substantially in the form attached as Exhibit I
hereto), without recourse other than as expressly provided herein and therein
(and the Issuer shall be required to purchase through payment by exchange of one
or more related Contracts released by the Indenture Trustee to the Issuer on the
Subsequent Transfer Date), all the right, title and interest of the Originator
in and to (the property in clauses (i)-(vi) below, upon such transfer, becoming
part of the "Contract Assets"):
(i) the Substitute Contracts identified in the related
Addition Notice, and all monies received in payment of such Substitute
Contracts on and after the related Subsequent Cutoff Dates, any
Prepayment Amounts, any payments in respect of a Casualty Loss or early
termination, and any Recoveries received with respect thereto, but
excluding any Excluded Amounts;
(ii) the Equipment related to such Contracts, including
the security interest of the Originator in such Equipment and all
proceeds from any sale or other disposition of such Equipment (but
subject to the exclusion and release herein of Excluded Amounts);
(iii) the Contract Files;
(iv) all payments made or to be made in the future with
respect to such Contracts or the Obligor thereunder under any Vendor
Assignments with the Originator and under any guarantee or similar
credit enhancement with respect to such Contracts (other than Excluded
Amounts);
(v) all Insurance Proceeds with respect to each such
Contract; and
(vi) all income from and proceeds of the foregoing.
(b) The Originator shall transfer to the Issuer the Substitute
Contracts and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date (and the delivery
of a related Addition Notice by the Originator shall be deemed a representation
and
34
warranty by the Originator, that such conditions have been or will be, as of the
related Subsequent Transfer Date, satisfied):
(i) the Originator shall have provided the Issuer and the
Indenture Trustee with a timely Addition Notice complying with the
definition thereof contained herein, which notice shall in any event be
no later than three days prior to the date of addition;
(ii) there shall have occurred, with respect to each such
Substitute Contract, a corresponding Substitution Event with respect to
one or more Contracts then in the Contracts Pool;
(iii) the Substitute Contracts being conveyed to the Issuer
satisfy the Substitute Contract Qualification Conditions;
(iv) the Originator shall have delivered to the Issuer a
duly executed written assignment in substantially the form of Exhibit I
hereto (the "Subsequent Transfer Agreement"), which shall include a
Subsequent List of Contracts listing the Substitute Contracts;
(v) the Originator shall have deposited or caused to be
deposited in the Collection Account all Collections received with
respect to the Substitute Contracts on or after the related Subsequent
Cutoff Date;
(vi) as of each Subsequent Transfer Date, neither the
Originator nor the Issuer was insolvent nor will either of them have
been made insolvent by such transfer nor is either of them aware of any
pending insolvency;
(vii) no selection procedures believed by the Originator or
the Issuer to be adverse to the interests of the Noteholders shall have
been utilized in selecting the Substitute Contracts;
(viii) each of the representations and warranties made by
the Originator pursuant to Sections 3.02, and 3.04 applicable to the
Substitute Contracts shall be true and correct as of the related
Subsequent Transfer Date (provided that, with respect to clause (d) of
the definition of Substitute Contract Qualification Conditions, the
representations with respect to geographical diversity shall not apply)
and the Originator shall have performed all obligations to be performed
by it hereunder on or prior to such Subsequent Transfer Date;
(ix) the Originator shall, at its own expense, on or prior
to the Subsequent Transfer Date, indicate in its Computer Records that
ownership of the Substitute Contracts identified on the Subsequent List
of Contracts in the Subsequent Transfer Agreement has been sold to the
Issuer and pledged to the Indenture Trustee pursuant to this Agreement
and the Indenture;
(x) the aggregate Principal Balance of all Substitute
Contracts that shall be substituted for Prepaid Contracts that relate
to a Casualty Loss, Defaulted Contracts,
35
Excess Contracts or a Contract that is the subject of a breach of
representation or warranty cannot exceed 10% of the Original Pool
Balance.
SECTION 2.05. RELEASE OF RELEASED AMOUNTS.
(a) The Indenture Trustee hereby agrees to release to the Issuer
from the Pledged Assets an amount equal to the Released Amounts immediately upon
identification thereof and upon receipt of an Officer's Certificate of the
Servicer, which release shall be automatic and shall require no further act by
the Indenture Trustee, provided that the Indenture Trustee shall execute and
deliver such instruments of release and assignment, or otherwise confirm the
foregoing release, as may reasonably be requested by (and at the expense of the
Servicer) the Issuer in writing and prepared by the Servicer. Upon such release,
such Released Amounts shall not constitute and shall not be included in the
Pledged Assets.
(b) Immediately upon the release to the Issuer by the Indenture
Trustee of the Released Amounts, the Issuer hereby irrevocably agrees to release
to the Originator such Released Amounts, which release shall be automatic and
shall require no further act by the Issuer, provided that the Issuer shall
execute and deliver such instruments of release and assignment, or otherwise
confirming the foregoing release of any Excluded Amounts, as may be reasonably
requested by the Originator.
SECTION 2.06. INSTRUMENTS.
The Originator and the Issuer shall identify on the List of Contracts
(including any deemed amendment thereof associated with any Substitute
Contracts), whether by attached schedule or marking or other effective
identifying designation, all Contracts that are or are evidenced by instruments.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Originator makes, and upon execution of each Subsequent Transfer
Agreement is deemed to make, the following representations and warranties, on
which the Issuer will rely in pledging the Pledged Assets on the Closing Date
(and on any Subsequent Transfer Date) to the Indenture Trustee, and on which the
Indenture Trustee and the Noteholders will rely. The Issuer acknowledges that
such representations and warranties are being made by the Originator for the
benefit of the Indenture Trustee on behalf of the Noteholders.
Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date (or Subsequent Transfer
Date, as applicable), but shall survive the pledge, transfer and assignment of
the Contract Assets to the Indenture Trustee on behalf of the Noteholders. The
repurchase obligation or substitution obligation of the Originator set forth in
Section 11.01 constitutes the sole remedies available for a breach of a
representation or warranty of the Originator set forth in Sections 3.01, 3.02,
3.03, 3.04 or 3.05 of this Agreement. Notwithstanding the foregoing, the
Originator shall not be deemed to be remaking any of the representations set
forth in Section 3.03 or 3.05 on a Subsequent Transfer Date with respect to the
Substitute Contracts, as such representations relate solely to the composition
of the
36
Initial Contracts conveyed on the Closing Date, provided that any inaccurate
representation as to concentrations contained in any Addition Notice shall be
subject to the same remedies hereunder as if such representation were made under
Section 3.05 on the Closing Date with respect to an Initial Contract.
SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE
ORIGINATOR.
By its execution of this Agreement and each Subsequent Transfer
Agreement, the Originator represents and warrants that:
(a) Organization and Good Standing. The Originator is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization and has the requisite corporate power to
own or lease its assets and to transact the business in which it is currently
engaged. The Originator is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the character
of the business transacted by it or properties owned or leased by it requires
such qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial or
otherwise) of the Originator or the Issuer. The Originator is properly licensed
in each jurisdiction to the extent required by the laws of such jurisdiction in
order to originate, and (if the Originator is to be the Servicer) service the
Contracts in accordance with the terms of this Agreement.
(b) Authorization; Binding Obligation. The Originator has the
power and authority to make, execute, deliver and perform this Agreement and the
other Transaction Documents to which the Originator is a party and all of the
transactions contemplated under this Agreement and the other Transaction
Documents to which the Originator is a party, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Originator is a
party. This Agreement and the other Transaction Documents to which the
Originator is a party constitute the legal, valid and binding obligation of the
Originator enforceable in accordance with their terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
(c) No Consent Required. The Originator is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement and the other
Transaction Documents to which the Originator is a party.
(d) No Violations. The Originator's execution, delivery and
performance of this Agreement and the other Transaction Documents to which the
Originator is a party will not violate any provision of any existing law or
regulation or any order or decree of any court or the Certificate of
Incorporation or Bylaws of the Originator, or constitute (with or without notice
or lapse of time or both) a material breach of any mortgage, indenture, contract
or other agreement to which the Originator is a party or by which the Originator
or any of the Originator's properties may be bound.
37
(e) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Originator, threatened, against the Originator or any of its
respective properties or with respect to this Agreement or any other Transaction
Document to which the Originator is a party that, if adversely determined, would
have a material adverse effect on the business, properties, assets or condition
(financial or other) of the Originator or the transactions contemplated by this
Agreement or any other Transaction Document to which the Originator is a party.
(f) Place of Business; No Changes; No Trade Names. The
Originator's sole place of business or chief executive office (within the
meaning of Article 9 of the UCC) is as set forth in Section 13.04 below. The
Originator's state of incorporation is Iowa. The Originator has not changed its
name as set forth herein, whether by amendment of its Certificate of
Incorporation, by reorganization or otherwise, and has not changed the location
of its chief executive office, within the four months preceding the Closing Date
(or Subsequent Transfer Date, as applicable, except in accordance with the
requirements of Section 4.03). The legal name of the Originator is as set forth
in this Agreement and, within the five years preceding the Closing Date, the
Originator has not used, and currently does not use, any trade names, fictitious
names, assumed names, or "doing business as" names.
(g) No Bulk Sales. The execution, delivery and performance of this
Agreement by the Originator does not require compliance with any "bulk sales"
laws by the Originator.
(h) Solvency. The Originator on each date of and, after giving
effect to the transfer of the Contracts and any Substitute Contracts, as the
case may be, to the Issuer pursuant to the transfer agreement, dated as of the
date hereof, between the Originator and the Issuer, is Solvent.
(i) Use of Proceeds. No proceeds of the sale of any Initial
Contract or Substitute Contract hereunder received by the Originator will be
used by the Originator to purchase or carry any "margin stock" as such term is
defined in Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
(j) Not an Investment Company. The Originator is not an
"investment company" (and does not control, and is not under the control of, an
investment company) within the meaning of the Investment Company Act of 1940, as
amended (or the Originator is exempt from all provisions of such Act).
(k) Membership Interests. GreatAmerica is the sole equity member
of the Issuer.
(l) Taxes. (i) the Originator has filed all tax returns required
to be filed in the normal course of its business and has paid or made adequate
provisions for the payment of all taxes, assessments and other governmental
charges due from the Originator or is contesting any such tax, assessment or
other governmental charge in good faith through appropriate proceedings, (ii) no
tax lien has been filed with respect thereto, and (iii) no claim is being
asserted with respect to any such tax, fee or other charge.
(m) ERISA Plan. The Originator has fully funded any required
contribution to any "employee pension benefit plan" as such term is defined in
Section 3(2) of ERISA.
38
(n) Sale Treatment. The Originator has treated the transfer of
Contract Assets to the Issuer for all purposes (including financial accounting
purposes) as a sale and purchase on all of its relevant books, records,
financial statements and other applicable documents, and such transfer will be
treated as a valid sale and transfer of the Contracts and the related Equipment
to the Issuer.
(o) Marking of Files. The Originator will have, at its own
expense, within two Business Days after the Closing Date (i) indicated in its
Computer Records that ownership of the Contracts transferred by it to the Issuer
and identified on the List of Contracts have been sold to the Issuer and (ii)
affixed to the original copy of each Contract (including each note or
instrument) the following legend:
This Contract/Note is subject to a security interest granted
to JPMorgan Chase Bank, as Indenture Trustee, or its assignee,
on behalf of certain Holders of Notes issued by GreatAmerica
Leasing Receivables 2002-1, L.L.C. UCC-1 Financing Statements
covering this Contract/Note have been filed with the
Secretaries of State of both the State of Iowa and the State
of Delaware. Such lien will be released only in connection
with appropriate filings in such offices. Consequently,
potential purchasers of this Contract/Note must refer to such
filings to determine whether such lien has been released.
(p) Security Interest. The Originator has granted a security
interest (as defined in the UCC) to the Issuer, in the Contract Assets, which is
enforceable in accordance with applicable law upon execution and delivery of
this Agreement. Upon the filing of UCC-1 financing statements naming the Issuer
as secured party and the Originator as debtor, the Issuer shall have a first
priority perfected security interest in the Contract Assets (except for any
Permitted Liens). All filings (including, without limitation, such UCC filings)
as are necessary in any jurisdiction to perfect the interest of the Issuer in
the Contract Assets have been made.
(q) Security Interest in Equipment. The Issuer has a perfected
security interest in the Equipment and, upon the sale, transfer and assignment
of the Contract Assets hereunder, the Indenture Trustee will have a perfected
security interest in the Equipment.
(r) Title. If a Contract is a lease of Equipment subject to
certificate of title statutory requirements, the title is held either in the
name of the Obligor and the certificate of title indicates the Originator as
lienholder or in the name of the Originator as lessor.
(s) Selection Procedures. No selection procedures determined by
the Originator to be materially adverse to the interests of the Issuer or the
Noteholders were utilized by the Originator in selecting the Contracts to be
sold, assigned, transferred, set-over and otherwise conveyed hereunder.
(t) No Liens. The Issuer owns each Conveyed Asset to be sold by it
hereunder free and clear of any Liens except as provided herein, and upon the
sale, transfer or assignment hereunder, the Issuer shall (i) become the owner of
each Contract Asset then existing or thereafter arising, free and clear of any
Lien except as provided herein or in the Indenture or
39
(ii) acquire a first priority perfected security interest in such Conveyed
Asset; provided, however, that the security interest in the Equipment will only
be perfected if the purchase price paid by the Originator to acquire such of
Equipment is $25,000 or more and where the Obligor was rated below (1) Baa3 or
better by Moody's, (2) BBB or better by S&P or (3) 3A2 or better by Dun &
Bradstreet. No effective financing statement or other instrument similar in
effect covering any Contract 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 Issuer relating to this Agreement or otherwise as provided under
the this Agreement or the Indenture.
(u) Separate Entity. The Originator is an entity with assets and
liabilities distinct from those of the Issuer, and any Affiliates thereof, and
the Issuer hereby acknowledges that the parties hereto are entering into the
transactions contemplated by this Agreement and the other Transaction Documents
in reliance upon the Originator's identity as a separate legal entity from the
Issuer and from each such Affiliate of the Issuer.
(v) Value Given. The cash payments received by the Originator in
respect of the purchase price of each Contract Asset sold hereunder constitutes
reasonably equivalent value in consideration for the transfer to the Issuer of
such Contract Asset under this Agreement, such transfer was not made for or on
account of an antecedent debt owed by the Originator to the Issuer, and such
transfer was not and is not voidable or subject to avoidance under any
Insolvency Law.
(w) No liens. The Originator will not sell, pledge, assign,
transfer or grant any lien on the Contracts or its interest in the Equipment,
except for Permitted Liens.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING EACH
CONTRACT AND AS TO CERTAIN CONTRACTS IN THE
AGGREGATE.
The Originator represents and warrants as of the Closing Date, and as
of each Subsequent Transfer Date with respect to each Substitute Contract, that:
(a) List of Contracts. The information set forth in the List of
Contracts (as the same may be amended or deemed amended in respect of a
conveyance of Substitute Contracts on a Subsequent Transfer Date) is true,
complete and correct as of the applicable Cutoff Date.
(b) Eligible Contract. Such Contract satisfies the criteria for
the definition of Eligible Contract set forth in this Agreement as of the date
of its conveyance hereunder.
(c) No Fraud. Each Contract was originated without any fraud or
material misrepresentation by the Originator or, to the best of the Originator's
knowledge, on the part of the Obligor or the Vendor.
(d) Contracts Secured by Fixtures. No material portion of the
aggregate Principal Balance of the Contracts Pool consists of Contracts secured
by Equipment constituting fixtures.
(e) Contracts Secured by Other Real Property. No material portion
of the aggregate Principal Balance of the Contracts Pool consists of Contracts
additionally secured by other real property (exclusive of or in addition to
Equipment constituting fixtures).
40
SECTION 3.03. REPRESENTATIONS AND WARRANTIES REGARDING THE INITIAL
CONTRACTS IN THE AGGREGATE.
The Originator represents and warrants, as of the Closing Date, that:
(a) Amounts. The Original Pool Balance of the Contracts as of the
Initial Cutoff Date equals the sum of the principal balance of the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class
B Notes, the Class C Notes and the Class D Notes on the Closing Date plus the
Overcollateralization Balance.
(b) Characteristics. The Initial Contracts have the following
additional characteristics: (i) no Contract has a remaining maturity of more
than 71 months; (ii) the final scheduled Payment Date on the Contract with the
latest maturity is not later than December, 2007; (iii) no Contract was
originated after the Initial Cutoff Date; (iv) not more than 3.10% of the
Initial Contracts (as measured by the Original Pool Balance) provide for
Scheduled Payments due on a basis other than monthly.
SECTION 3.04. REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACT
FILES.
The Originator represents and warrants as of the Closing Date with
respect to the Initial Contracts (or as of the Subsequent Transfer Date, with
respect to Substitute Contracts), that (i) immediately prior to such date (as
applicable), the Originator had possession of each original Contract and the
related complete Contract File, and there were no other custodial agreements
relating to the same in effect; (ii) each of such documents that is required to
be signed by the Obligor has been signed by the Obligor in the appropriate
spaces; (iii) all blanks on any form have been properly filled in and each form
has otherwise been correctly prepared; and (iv) the complete Contract File for
each Contract is in the possession of the Servicer.
SECTION 3.05. REPRESENTATIONS AND WARRANTIES REGARDING
CONCENTRATIONS OF INITIAL CONTRACTS.
The Originator represents and warrants as of the Closing Date, as to
the composition of the Initial Contracts in the Contracts Pool as of the Initial
Cutoff Date, that:
(i) the aggregate Principal Balance of all Contracts with
Obligors who finance, lease or are related to Equipment used in the
services industry does not exceed 48.00% of the aggregate Principal
Balance of the Contracts Pool;
(ii) the aggregate Principal Balance of all Contracts with
Obligors who comprise the ten (10) largest Obligors measured by
Principal Balance does not exceed 2.50% of the aggregate Principal
Balance of the Contracts Pool;
(iii) the aggregate Principal Balance of all Contracts of
each Obligor or affiliated group of Obligors shall not exceed 0.35% of
the aggregate Principal Balance of the Contracts Pool;
41
(iv) the aggregate Principal Balance of all Contracts with
Obligors located in a single State of the United States does not exceed
10.00% of the aggregate Principal Balance of the Contracts Pool;
(v) the aggregate Principal Balance of all Contracts with
Obligors who are the United States or any other state or local
government or any agency, department, subdivision, or instrumentally of
any such government does not exceed 3.85% of the aggregate Principal
Balance of the Contracts Pool;
(vi) the aggregate Principal Balance of all Contracts that
are true leases and ten percent purchase option leases shall not be
less than 35.00% of the aggregate Principal Balance of the Contracts
Pool;
(vii) the aggregate Principal Balance of all Purchase
Orders does not exceed 0.25% of the aggregate Principal Balance of the
Contracts Pool;
(viii) the aggregate Principal Balance of all Contracts that
are Software Only Agreements does not exceed 1.75% of the aggregate
Principal Balance of the Contracts Pool;
(ix) the aggregate Principal Balance of all Contracts that
relate to titled vehicles does not exceed 0.21% of the aggregate
Principal Balance of the Contracts Pool.
(x) the aggregate Principal Balance of all Contracts with
quarterly payments does not exceed 0.57% of the aggregate Principal
Balance of the Contracts Pool;
(xi) the aggregate Principal Balance of all Contracts with
annual payments does not exceed 0.26% of the aggregate Principal
Balance of the Contracts Pool;
(xii) the aggregate Principal Balance of all Contracts with
variable payments does not exceed 0.80% of the aggregate Principal
Balance of the Contracts Pool;
(xiii) the aggregate Principal Balance of all Contracts with
skip payments does not exceed 0.07% of the aggregate Principal Balance
of the Contracts Pool; and
(xiv) the aggregate Principal Balance of all Contracts with
balloon payments does not exceed 1.40% of the aggregate Principal
Balance of the Contracts Pool.
SECTION 3.06. REPRESENTATIONS AND WARRANTIES REGARDING THE ISSUER.
By its execution of this Agreement and each Subsequent Transfer
Agreement, the Issuer represents and warrants to the Indenture Trustee and the
Noteholders that:
(a) Confirmation of the Originator's Representations and
Warranties. The representations and warranties set forth in Section 3.01,
Section 3.02, Section 3.03, Section 3.04 and Section 3.05 of this Agreement are
true and correct.
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(b) Organization and Good Standing. The Issuer is duly organized,
validly existing and in good standing under the laws of Delaware and has the
requisite power to own its assets and to transact the business in which it is
currently engaged. The Issuer is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business transacted
by it or properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse effect on the
business, properties, assets, or condition (financial or other) of the Issuer.
(c) Authorization; Valid Pledge; Binding Obligations. The Issuer
has the power and authority to make, execute, deliver and perform this Agreement
and the other Transaction Documents to which it is a party and all of the
transactions contemplated under this Agreement and the other Transaction
Documents to which it is a party and cause it to make, execute, deliver and
perform its obligations under this Agreement and the other Transaction Documents
to which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party. The Indenture shall effect a valid
grant, transfer, assignment and conveyance of the Pledged Assets from the Issuer
to the Indenture Trustee, enforceable against the Issuer and creditors of and
purchasers from the Issuer. This Agreement and the other Transaction Documents
to which the Issuer is a party constitute the legal, valid and binding
obligation of the Issuer enforceable in accordance with their terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(d) No Consent Required. The Issuer is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any Governmental Authority in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement or the other Transaction Documents to which it is a party.
(e) No Violations. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party by the
Issuer, and the consummation of the transactions contemplated hereby and
thereby, will not violate any Requirement of Law applicable to the Issuer, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Issuer is a party or by which the Issuer or any of the
Issuer's properties may be bound, or result in the creation or imposition of any
security interest, lien, charge, pledge, preference, equity or encumbrance of
any kind upon any of its properties pursuant to the terms of any such mortgage,
indenture, contract or other agreement, other than as contemplated by the
Transaction Documents.
(f) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Issuer threatened, against the Issuer or any of its properties
or with respect to this Agreement, the other Transaction Documents to which it
is a party or the Notes (1) that, if adversely determined, would in the
reasonable judgment of the Issuer have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the Issuer
or the transactions contemplated by this Agreement or the other Transaction
Documents to which the Issuer is a party or (2) seeking to adversely affect the
federal income tax or other federal, state or local tax attributes of the Notes.
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(g) Bulk Sales. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" laws by the Issuer.
(h) Solvency. The Issuer, at the time of and after giving effect
to each conveyance of Pledged Assets under the Indenture, is Solvent on and as
of the date thereof.
(i) Taxes. The Issuer has filed or caused to be filed all tax
returns which, to its knowledge, are required to be filed and has put 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
Issuer); no tax lien has been filed and, to the Issuer's knowledge, no claim is
being asserted, with respect to any such tax, fee or other charge.
(j) Place of Business; No Changes. The Issuer's sole place of
business (within the meaning of Article 9 of the UCC) is as set forth in Section
13.04 below and its state of formation in Delaware. The Issuer has not changed
its name, whether by amendment of its certificate of formation, by
reorganization or otherwise, and has not changed the location of its place of
business or its state of formation, within the four months preceding the Closing
Date.
(k) Not an Investment Company. The Issuer is not an "investment
company" (and does not control, and is not under the control of, an investment
company) within the meaning of the Investment Company Act of 1940, as amended
(or the Issuer is exempt from all provisions of such act).
(l) Sale Treatment. The Issuer has treated the transfer of
Contract Assets from the Originator for all purposes (including financial
accounting purposes) as a sale and purchase on all of its relevant books,
records, financial statements and other applicable documents.
(m) Security Interest. The Issuer has granted a security interest
(as defined in the UCC) to the Indenture Trustee in the Pledged Assets that is
enforceable in accordance with applicable law upon execution and delivery of the
Indenture. Upon the filing of UCC-1 financing statements naming the Indenture
Trustee as secured party and the Issuer as debtor, the Indenture Trustee shall
have a first priority perfected security interest in the Pledged Assets (except
for Permitted Liens). All filings (including, without limitation, such UCC
filings) as are necessary in any jurisdiction to perfect the interest of both
the Indenture Trustee and the Issuer in the Pledged Assets and the Contract
Assets, respectively, have been made.
(n) Special Purpose Entity. The Issuer has not and shall not:
(i) engage in any business or activity other than the
purchase and receipt of Contract Assets from the Originator hereunder
and such other activities as are incidental thereto;
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(ii) acquire or own any material assets other than (A) the
Contract Assets from the Originator hereunder and (B) incidental
property as may be necessary for the operation of the Issuer;
(iii) merge into or consolidate with any Person or
dissolve, terminate or liquidate in whole or in part, transfer or
otherwise dispose of all or substantially all of its assets or change
its legal structure;
(iv) fail to preserve its existence as an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization or formation, or amend, modify,
terminate, fail to comply with the provisions of its Certificates of
Formation, or fail to observe entity formalities;
(v) own any subsidiary or make any investment in any
Person;
(vi) commingle its assets with the assets of any of its
Affiliates, or of any other Person, other than to the extent described
in Section 7.01;
(vii) incur any debt, secured or unsecured, direct or
contingent (including guaranteeing any obligation), other than
indebtedness created hereunder except for trade payables in the
ordinary course of its business, provided that such debt is not
evidenced by a note and paid when due;
(viii) become insolvent or fail to pay its debts and
liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and
bank accounts separate and apart from those of its principal and
Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its
principals or Affiliates or any other Person, except upon terms and
conditions that are commercially reasonable and intrinsically fair and
substantially similar to those that would be available on an
arms-length basis with third parties other than any principal or
Affiliates;
(xi) seek its dissolution or winding up in whole or in
part;
(xii) fail to correct any known misunderstandings regarding
the separate identity of Issuer or any principal or Affiliate thereof
or any other Person;
(xiii) guarantee, become obligated for, or hold itself out
to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party,
including any principal or Affiliate, or hold evidence of indebtedness
issued by any other Person (other than cash and investment-grade
securities);
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(xv) fail to file its own separate tax return, or file a
consolidated federal income tax return with any other Person;
(xvi) fail either to hold itself out to the public as a
legal entity separate and distinct from any other Person or to conduct
its business solely in its own name in order not (A) to mislead others
as to the identity with which such other party is transacting business,
or (B) to suggest that it is responsible for the debts of any third
party (including any of its principals or Affiliates);
(xvii) fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations;
(xviii) file or consent to the filing or any petition, either
voluntary or involuntary, to take advantage of any applicable
insolvency, bankruptcy, liquidation or reorganization statute, or make
an assignment for the benefit of creditors;
(xix) share any common logo with or hold itself out as or
be considered as a department or division of (A) any of its principals
or affiliates, (B) any Affiliate of a principal or (C) any other
Person;
(xx) permit any transfer (whether in any one or more
transactions) of any ownership interest in the Issuer;
(xxi) fail to maintain separate financial statements,
showing its assets and liabilities separate and apart from those of any
other Person;
(xxii) fail to pay its own liabilities and expenses only out
of its own funds;
(xxiii) fail to pay the salaries of its own employees in
light of its contemplated business operations;
(xxiv) acquire the obligations or securities of its
Affiliates or equity holders;
(xxv) fail to allocate fairly and reasonably any overhead
expenses that are shared with an Affiliate, including paying for office
space and services performed by any employee of an Affiliate;
(xxvi) fail to use separate invoices and checks bearing its
own name;
(xxvii) pledge its assets for the benefit of any other
Person;
(xxviii) fail at any time to have at least two Independent
Directors;
(xxix) fail to provide that the unanimous consent of all
directors (including the consent of the Independent Directors) is
required for the Issuer to (A) dissolve or
46
liquidate, in whole or part, or institute proceedings to be adjudicated
bankrupt or insolvent, (B) institute or consent to the institution of
bankruptcy or insolvency proceedings against it, (C) file a petition
seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy or insolvency, (D) seek or
consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian or any similar official for the
Issuer, (E) make any assignment for the benefit of the Issuer's
creditors, (F) admit in writing its inability to pay its debts
generally as they become due, or (G) take any action in furtherance of
any of the foregoing; and
(xxx) take or refrain from taking, as applicable, each of
the activities specified in the non-consolidation opinion of Xxxxxxx
and Xxxxxx, delivered on the Closing Date, upon which the conclusions
expressed therein are based.
(o) No Liens. The Issuer will not sell, pledge, assign, transfer
or grant any lien on the Contracts or its interest in the Equipment, except for
Permitted Liens.
Such representations speak as of the execution and delivery of this Agreement
and as of the Closing Date in the case of the Initial Contracts, and as of the
applicable Subsequent Transfer Date in the case of the Substitute Contracts, but
shall survive the sale, transfer and assignment of the Contracts to the
Indenture Trustee.
SECTION 3.07. REPRESENTATIONS AND WARRANTIES REGARDING THE
SERVICER.
The Servicer represents and warrants to the Issuer, the Indenture
Trustee and the Noteholders that:
(a) Organization and Good Standing. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Servicer is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or otherwise) of the Servicer. The
Servicer is properly licensed in each jurisdiction to the extent required by the
laws of such jurisdiction to service the Contracts in accordance with the terms
hereof.
(b) Authorization; Binding Obligations. The Servicer has the power
and authority to make, execute, deliver and perform this Agreement and the other
Transaction Documents to which the Servicer is a party and all of the
transactions contemplated under this Agreement and the other Transaction
Documents to which the Servicer is a party, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Servicer is a party.
This Agreement and the other Transaction Documents to which the Servicer is a
party constitute the legal, valid and binding obligation of the Servicer
enforceable in accordance with their terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of equitable
remedies.
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(c) No Consent Required. The Servicer is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any Governmental
Authority in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and the other Transaction Documents to which
the Servicer is a party.
(d) No Violations. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Servicer is a party
by the Servicer will not violate any Requirements of Law applicable to the
Servicer, or constitute a material breach of any mortgage, indenture, contract
or other agreement to which the Servicer is a party or by which the Servicer or
any of the Servicer's properties may be bound, or result in the creation of or
imposition of any security interest, lien, pledge, preference, equity or
encumbrance of any kind upon any of its properties pursuant to the terms of any
such mortgage, indenture, contract or other agreement, other than as
contemplated by the Transaction Documents.
(e) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Servicer threatened, against the Servicer or any of its
properties or with respect to this Agreement, or any other Transaction Document
to which the Servicer is a party that, if adversely determined, would have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Servicer or the transactions contemplated by
this Agreement or any other Transaction Document to which the Servicer is a
party.
(f) Reports. All reports, certificates and other written
information furnished by the Servicer with respect to the Contracts are correct
in all material respects.
SECTION 3.08. [RESERVED].
ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
SECTION 4.01. CUSTODY OF CONTRACTS.
The contents of each Contract File shall be held in the custody of the
Custodian under the Custodian Agreement for the benefit of, and as agent for,
the Indenture Trustee.
SECTION 4.02. FILING.
On or prior to the Closing Date, the Originator, Issuer and Servicer
shall cause the UCC financing statement(s) referred to in Section 2.02(x) hereof
to be filed, and from time to time the Servicer shall take and cause to be taken
such actions and execute such documents as are necessary or desirable or as the
Indenture Trustee (acting at the direction of the Required Holders) may
reasonably request to perfect and protect the Indenture Trustee's first priority
security interest in the Pledged Assets against all other persons, including,
without limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of
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transfer instruments and the making of notations on or taking possession of all
records or documents of title.
SECTION 4.03. NAME CHANGE OR RELOCATION.
(a) During the term of this Agreement, none of the Originator, the
Servicer and the Issuer shall change its name, identity or structure, state of
formation, or relocate its chief executive office without first giving at least
30 days' prior written notice to the Indenture Trustee and notice to the Rating
Agencies.
(b) If any change in either the Servicer's, the Originator's or
the Issuer's name, identity or structure or other action would make any
financing or continuation statement or notice of ownership interest or lien
relating to any Contract Asset seriously misleading within the meaning of
applicable provisions of the UCC or any title statute, the Servicer and/or the
Originator, no later than five days after the effective date of such change,
shall file such amendments as may be required to preserve and protect the
Issuer's and the Indenture Trustee's interests in the Contract Assets and the
Pledged Assets, respectively, and the proceeds thereof. In addition, neither the
Originator, the Servicer nor the Issuer shall change the place of its chief
executive office or its state of formation unless it has first taken such action
as is advisable or necessary to preserve and protect the Issuer's and the
Indenture Trustee's interests in the Contract Assets and the Pledged Assets,
respectively. Promptly after taking any of the foregoing actions, the Servicer
shall deliver to the Indenture Trustee and to the Rating Agencies an Opinion of
Counsel reasonably acceptable to the Indenture Trustee and the Rating Agencies
stating that, in the opinion of such counsel, all financing statements or
amendments necessary to preserve and protect the interests of the Indenture
Trustee in the Pledged Assets have been filed, and reciting the details of such
filing.
SECTION 4.04. CHIEF EXECUTIVE OFFICE.
During the term of this Agreement, and subject to the other terms and
provisions herein relating to changes in location, the Originator will maintain
its chief executive office in one of the States of the United States.
SECTION 4.05. COSTS AND EXPENSES.
The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Issuer's and Indenture Trustee's right, title and interest
in and to the Contract Assets and the Pledged Assets (including, without
limitation, the security interest in the Equipment related thereto to the extent
described in Section 3.06(m) and the security interests provided for in the
Indenture).
SECTION 4.06. SALE TREATMENT.
The Originator and the Issuer shall each treat the transfer of Contract
Assets made hereunder for all purposes as a sale and purchase on all of its
relevant books, records, financial statements and other applicable documents.
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SECTION 4.07. SEPARATENESS FROM ISSUER.
The Originator agrees to take or refrain from taking or engaging in
with respect to the Issuer each of the actions or activities specified in the
"substantive consolidation" opinion of Xxxxxxx and Xxxxxx (including any
certificates of the Originator attached thereto) delivered on the Closing Date,
upon which the conclusions therein are based.
SECTION 4.08. INSURANCE POLICY OF THE ORIGINATOR.
Originator maintains, with an insurer with a general policy rating of A
or better with a class of VI or better by A.M. Best & Co., a general liability
insurance policy with coverage in the amount of $1,000,000 per occurrence and
coverage in the aggregate amount of $2,000,000. The policy is in full force and
effect and covers all Equipment owned by the Originator. All premiums in respect
of such policies have been paid. The Indenture Trustee is named as an additional
insured on such liability policies.
ARTICLE V
SERVICING OF CONTRACTS
SECTION 5.01. APPOINTMENT AND ACCEPTANCE; RESPONSIBILITY FOR
CONTRACT ADMINISTRATION.
GreatAmerica is hereby appointed as Servicer and custodian (as
contemplated in Article IV hereof) pursuant to this Agreement. GreatAmerica
accepts the appointment and agrees to act as the Servicer and custodian pursuant
to this Agreement and also as custodian pursuant to the Custodian Agreement.
The Servicer will have the sole obligation to manage, administer,
service and make collections on the Contracts and perform or cause to be
performed all contractual and customary undertakings of the holder of the
Contracts to the Obligor. The Servicer is hereby appointed the servicer
hereunder until such time as any Servicer Transfer may be effected under Article
VIII.
SECTION 5.02. GENERAL DUTIES.
The Servicer will service, administer and enforce the Contracts in the
Contracts Pool on behalf of the Issuer and will have full power and authority to
do any and all things in connection with such servicing and administration which
it deems necessary or desirable and as shall not contravene the provisions of
this Agreement. The Servicer will manage, service, administer, and make
collections on the Contracts in the Contracts Pool with reasonable care, using
that degree of skill and attention that the Servicer exercises with respect to
all comparable contracts that it services for itself or others. The Servicer's
duties will include collection and posting of all payments, responding to
inquiries of Obligors regarding the Contracts in the Contracts Pool,
investigating delinquencies, accounting for collections, furnishing monthly and
annual statements with respect to collections and payments in accordance with
Article IX hereof and with its customary standards, policies and procedures, and
using its best efforts to maintain the
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perfected first priority security interest of the Indenture Trustee in the
Pledged Assets. The Servicer will follow its customary standards, policies, and
procedures and will have full power and authority, acting alone (and consistent
with its customary standards, policies and procedures, in its own name), to do
any and all things in connection with such managing, servicing, administration,
and collection, including, without limitation, litigation that it deems
necessary or desirable. If the Servicer commences a legal proceeding to enforce
a Defaulted Contract pursuant to Section 5.15 or commences or participates in a
legal proceeding (including a bankruptcy proceeding) relating to or involving a
Contract in the Contracts Pool, the Issuer will be deemed to have automatically
assigned such Contract to the Servicer immediately prior to commencement of any
such legal proceeding, for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Servicer is authorized and empowered
by the Issuer, pursuant to this Section 5.02, to execute and deliver, on behalf
of itself and the Issuer, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceedings. If in any enforcement suit
or legal proceeding it is held that the Servicer may not enforce a Contract on
the ground that it is not a real party in interest or a holder entitled to
enforce the Contract, then the Issuer will, at the Servicer's expense and
direction, take steps on behalf of the Issuer to enforce the Contract, including
bringing suit in the Issuer's name.
SECTION 5.03. CONSENT TO ASSIGNMENT OR REPLACEMENT.
At the request of an Obligor, the Servicer may in its sole discretion
consent to the assignment of the related Contract or the sublease of a unit of
the Equipment relating to a Contract, so long as such Obligor remains liable for
all of its obligations under such Contract. Upon the request of any Obligor, the
Servicer may, in its sole discretion, provide for the substitution or
replacement of any unit of Equipment for a substantially similar unit of
Equipment, so long as such Obligor remains liable for all of its obligations
under such Contract.
SECTION 5.04. DISPOSITION UPON TERMINATION OF CONTRACT.
Upon the termination of a Contract included in the Contracts Pool as a
result of a default by the Obligor thereunder, and upon any such Contract
becoming a Defaulted Contract, the Servicer will use commercially reasonable
efforts to dispose of any related Equipment. Without limiting the generality of
the foregoing, the Servicer may dispose of any such Equipment by purchasing such
Equipment or by selling such Equipment to any of its Affiliates for a purchase
price equal to the fair market value thereof as reasonably determined by the
Servicer. The Servicer will deposit any Prepayments of any such disposition in
accordance with Section 7.01.
SECTION 5.05. SUBSERVICERS.
The Servicer may enter into servicing agreements with one or more
subservicers (including any Affiliate of the Servicer) to perform all or a
portion of the servicing functions on behalf of the Servicer; provided that the
Servicer shall remain obligated and be liable to the Issuer for servicing and
administering the Contracts in the Contracts Pool in accordance with the
provisions of this Agreement without diminution of such obligation and liability
by virtue of the appointment of such subservicer, to the same extent and under
the same terms and conditions as
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if the Servicer alone were servicing and administering such Contracts. The fees
and expenses of the subservicer (if any) will be as agreed between the Servicer
and its subservicer and neither the Issuer, the Indenture Trustee nor the
Holders will have any responsibility therefor. All actions of a subservicer
taken pursuant to such a subservicer agreement will be taken as an agent of the
Servicer with the same force and effect as though performed by the Servicer.
SECTION 5.06. FURTHER ASSURANCE.
The Issuer and the Indenture Trustee will, at the written request and
expense of the Servicer, furnish the Servicer, and the Servicer will furnish any
subservicer, with any powers of attorney and other documents necessary or
appropriate to enable the Servicer or a subservicer, as applicable, to carry out
its servicing and administrative duties under this Agreement, the forms of which
documents shall be prepared by the Servicer and submitted for execution to the
Issuer or the Indenture Trustee, as the case may be. The Servicer shall not, nor
shall the Servicer permit any subservicer to, initiate any action in the
Indenture Trustee's name if such action were to require the Indenture Trustee to
become registered to do business in any state in which it was not already
registered and without both obtaining the Indenture Trustee's prior written
consent and indicating the Servicer's or such subservicer's representative
capacity.
SECTION 5.07. NOTICE TO OBLIGORS.
The Servicer will not be required to notify any Obligor that such
Obligor's Contract or related Equipment, or any security interest in such
Contract or such Equipment, has been sold, transferred, assigned, or conveyed
pursuant to this Agreement; provided that, in the event that the Servicer
resigns or is replaced, then if the place for payment pursuant to any Contract
is changed, the Successor Servicer must give each related Obligor prompt written
notice of the appointment of the Successor Servicer and the place to which such
Obligor should make payments pursuant to each such Contract.
SECTION 5.08. COLLECTION EFFORTS; MODIFICATION OF CONTRACTS.
(a) The Servicer will make reasonable efforts to collect all
payments called for under the terms and provisions of the Contracts in the
Contracts Pool as and when the same become due, and will follow those collection
procedures that it follows with respect to all comparable contracts that it
services for itself or others.
(b) The Servicer may, subject to Sections 5.09 and 5.10, at the
request of an Obligor and at the Servicer's option, waive, modify or otherwise
vary any other provision of a Contract in accordance with its customary and
usual credit and collection practices; provided, that no such waiver,
modification or variance shall (except as provided in Sections 5.09, 5.10 and
5.15), without the consent of each Rating Agency,
(i) have the effect of accelerating, delaying or
extending the date for or the amount of any payment of Scheduled
Payments with respect to such Contract;
(ii) be inconsistent with the servicing standards set
forth in Section 5.02; or
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(iii) have a material adverse effect on the interests of
any of the Issuer, the Indenture Trustee or the Noteholders.
Notwithstanding the foregoing, to the extent consistent with the Servicer's
customary and usual credit and collection practices, the Servicer may grant
extensions or adjustments on any Contract; provided, however, that if the
Servicer (i) extends a Contract by more than three months in any calendar year,
(ii) extends a Contract more than twice in the life of such Contract, (iii)
reduces the frequency of periodic payments under a Contract, (iv) reduces the
unpaid principal balance or the rate of interest with respect to a Contract, or
(v) extends a Contract in manner that is inconsistent with the Servicer's
customary and usual credit and collection practices, the Servicer shall purchase
the affected Contract no later than the next succeeding Determination Date by
either (a) depositing the unpaid Principal Balance of the Contract (plus any
related Unreimbursed Servicer Advances (unless the Servicer effectively waives
and releases its rights with respect to such Servicer Advances) and plus accrued
and unpaid interest) in the Collection Account, or (b) transferring a Substitute
Contract to the Issuer in exchange for such Contract. Additionally,
notwithstanding the foregoing, the Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing any Contract in the Contracts Pool.
SECTION 5.09. PREPAID CONTRACT.
The Servicer may, at its option and in accordance with its customary
and usual credit and collection practices, agree to permit a Contract in the
Contracts Pool that is not otherwise contractually prepayable by its terms to
become a Prepaid Contract (which shall not include a Contract that becomes an
Prepaid Contract due to a Casualty Loss); provided that the Servicer will not
permit the early termination or full prepayment of such a Contract unless (i)
such early termination or full prepayment would not result in the Issuer
receiving an amount (the "Prepayment Amount") less than the sum of (A) the
remaining Principal Balance on the date of such prepayment and delinquent
payments thereon and (B) any Unreimbursed Servicer Advances thereon (unless
effectively waived and released by the Servicer), or (ii) if such early
termination or full prepayment would result in the Indenture Trustee receiving a
Prepayment Amount less than the amount set forth in clause (i), the Originator
shall have agreed to pay the Issuer for remittance to the Indenture Trustee the
difference between the Prepayment Amount actually paid and the amount set forth
in clause (i) (such payment by the Originator also to be considered a
"Prepayment Amount"). At the option of the Originator, the Servicer may use the
Prepayment Amount to purchase a Substitute Contract for such Prepaid Contract
from the Originator.
The Servicer shall pay all Payaheads to the Payahead Account. With
respect to any Payment Date, the Indenture Trustee shall withdraw amounts from
the Payahead Account that reflect payments due in the related Collection Period,
for distribution to the Noteholders.
SECTION 5.10. ACCELERATION.
The Servicer, in its sole discretion and consistent with its customary
and usual credit and collection practices, may accelerate (or elect not to
accelerate) the maturity of all or any Scheduled Payments under any Contract in
the Contracts Pool under which a default under the
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terms thereof has occurred and is continuing (after the lapse of any applicable
grace period); provided that the Servicer is required to accelerate the
Scheduled Payments due under any Contract in the Contracts Pool (and take other
action in accordance with the Originator's past practice, including repossessing
the related Equipment, to realize upon the value of such Contract and the
related Equipment) to the fullest extent permitted by the terms of such
Contract, promptly after such Contract becomes a Defaulted Contract.
SECTION 5.11. TAXES.
To the extent provided for in any Contract in the Contracts Pool, the
Servicer will make reasonable efforts to collect (or cause to be collected) all
payments with respect to amounts due for taxes and assessments relating to such
Contracts or the Equipment and remit such amounts to the appropriate
Governmental Authority on or prior to the date such payments are due.
SECTION 5.12. INSURANCE PREMIUMS.
To the extent provided for in any Contract in the Contracts Pool and
consistent with the Servicer's customary collection procedures, the Servicer
will make reasonable efforts to collect (or cause to be collected) all payments
with respect to amounts due for insurance premiums relating to such Contracts or
the Equipment and remit such amounts to the appropriate insurer on or prior to
the date such payments are due.
SECTION 5.13. REMITTANCES.
The Servicer will service all Collections in accordance with Section
7.01 hereof.
SECTION 5.14. SERVICER ADVANCES.
For each Collection Period, if the Servicer determines that any
Scheduled Payment (or portion thereof) which was due and payable pursuant to a
Contract in the Contracts Pool during such Collection Period was not received
prior to the related Determination Date, the Servicer has the right to elect,
but is not obligated, to make a Servicer Advance in an amount up to the amount
of such delinquent Scheduled Payment (or portion thereof) if the Servicer
reasonably believes that the advance will be recovered from subsequent payments
with respect to that Contract. The Servicer will deposit any Servicer Advances
into the Collection Account on or prior to 11:00 a.m. (New York City time) on
the related Transfer Date, in immediately available funds. The Servicer will be
entitled to be reimbursed for Servicer Advances pursuant to Sections 7.05(a) and
7.05(b). The Successor Servicer shall have no obligation to make any Servicer
Advance.
SECTION 5.15. REALIZATION UPON DEFAULTED CONTRACT.
The Servicer will use its best efforts consistent with its customary
and usual credit and collection practices and procedures in its servicing of
contracts to repossess or otherwise comparably convert the ownership of any
Equipment relating to a Defaulted Contract and will either act as sales agent
for Equipment which it repossesses or retain a sales agent consistent with its
current practices. The Servicer will follow such other practices and procedures
as it deems necessary or advisable and as are customary and usual in its
servicing of contracts and other
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actions by the Servicer in order to realize upon such Equipment, which practices
and procedures may include reasonable efforts to enforce all obligations of
Obligors and repossessing and selling such Equipment at public or private sale
in circumstances other than those described in the preceding sentence. Without
limiting the generality of the foregoing, the Servicer may sell any such
Equipment to the Servicer or its Affiliates for a purchase price equal to the
then fair market value thereof. In any case in which any such Equipment has
suffered damage, the Servicer will not expend funds in connection with any
repair or toward the repossession of such Equipment unless it determines in its
discretion that such repair and/or repossession will increase the Liquidation
Proceeds by an amount greater than the amount of such expenses. The Servicer
will remit to the Collection Account the Liquidation Proceeds received in
connection with the sale or disposition of Equipment relating to a Defaulted
Contract in accordance with Section 7.01.
SECTION 5.16. MAINTENANCE OF INSURANCE POLICIES.
The Servicer will use its best efforts consistent with the Servicer's
customary policies and procedures to ensure that each Obligor maintains an
Insurance Policy with respect to the related Equipment in an amount at least
equal to the replacement cost of the Equipment; provided that the Servicer, in
accordance with its customary servicing procedures, may allow Obligors to
self-insure. Additionally, the Servicer will require that each Obligor maintain
property damage insurance and, in the case of Leases, also liability insurance,
during the term of each Contract in the Contracts Pool in amounts and against
risks customarily insured against. If an Obligor fails to maintain property
damage insurance, the Servicer may, but is under no obligation to, purchase and
maintain such insurance on behalf of, and at the expense of, the Obligor in
accordance with the Servicer's customary practices and policies. In connection
with its activities as Servicer of the Contracts, the Servicer agrees to
present, on behalf of itself, the Issuer, the Indenture Trustee and the Holders,
claims to the insurer under each Insurance Policy and any such liability policy,
and to settle, adjust and compromise such claims, in each case, consistent with
the terms of each Contract and the Servicer's customary practice and policies.
SECTION 5.17. OTHER SERVICER COVENANTS.
The Servicer hereby covenants that:
(a) Contract Files. The Servicer will, at its own cost and
expense, maintain all Contract Files in accordance with its customary
procedures. Without limiting the generality of the preceding sentence, the
Servicer will not dispose of any documents constituting the Contract Files in
any manner that is inconsistent with the performance of its obligations as the
Servicer pursuant to this Agreement and will not dispose of any Contract except
as contemplated by this Agreement.
(b) Compliance with Law. The Servicer will comply, in all material
respects, with all laws and regulations of any Governmental Authority applicable
to the Servicer or the Contracts in the Contracts Pool and related Equipment and
Contract Files or any part thereof; provided that the Servicer may contest any
such law or regulation in any reasonable manner which will not materially and
adversely affect the value of (or the rights of the Indenture Trustee on behalf
of the Noteholders, with respect to) the Pledged Assets.
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(c) Obligations with Respect to Contracts; Modifications. The
Servicer will duly fulfill and comply with, in all material respects, all
obligations on the part of the Issuer to be fulfilled or complied with under or
in connection with each Contract in the Contracts Pool and will do nothing to
impair the rights of the Indenture Trustee and the Holders in, to and under the
Pledged Assets. The Servicer will perform such obligations under the Contracts
in the Contracts Pool and will not change or modify the Contracts, except as
otherwise permitted hereby.
(d) No Bankruptcy Petition. Prior to the date that is one year and
one day after the payment in full of all amounts owing in respect of all
outstanding Notes, the Servicer will not institute against the Issuer or join
any other Person in instituting against the Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States. This Section 5.17(d) will survive the termination of this
Agreement.
(e) Location of Contract Files. The Contract Files shall remain at
all times in the possession of the Servicer.
(f) Regulatory Filings. The Servicer, on behalf of the Issuer,
shall make any filings, reports, notices, applications and registrations with,
and seek any consents or authorizations from, the Commission and any state
securities authority as may be necessary or that the Issuer deems advisable to
comply with any federal or state securities or reporting requirements laws.
SECTION 5.18. SERVICING COMPENSATION.
As compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in Section 5.19, the Servicer shall
be entitled to receive a monthly servicing fee in respect of any Collection
Period (or portion thereof) prior to the termination of the Indenture (with
respect to each Collection Period, the "Servicing Fee") equal to one-twelfth of
the product of (A) the Servicing Fee Percentage and (B) the aggregate remaining
Principal Balance of the Contracts Pool as of the first day of such Collection
Period. Notwithstanding anything else herein to the contrary, in no event shall
the Indenture Trustee be liable for any Servicing Fee or for any differential in
the amount of the servicing fee paid hereunder and the amount necessary to
induce any Successor Servicer to act as Successor Servicer under this Agreement
and the transactions set forth or provided for herein.
SECTION 5.19. PAYMENT OF CERTAIN EXPENSES BY SERVICER.
The Servicer will be required to pay all expenses incurred by it in
connection with its activities under this Agreement, including fees and
disbursements of independent accountants, the Issuer (including with respect to
an administrator acting on behalf of the Issuer), the Indenture Trustee, taxes
imposed on the Servicer, expenses incurred in connection with payments and
reports pursuant to this Agreement, and all other fees and expenses not
expressly stated under this Agreement for the account of the Issuer. The
Servicer will be required to pay all reasonable fees and expenses (including,
without limitation, legal fees, expenses and indemnity amounts) owing to the
Indenture Trustee in connection with the maintenance of the Trust Accounts. The
Servicer shall be required to pay such expenses for its own account and shall
not be entitled to any payment or reimbursement therefor other than the
Servicing Fee, and
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the reimbursement for Liquidation Expenses, to the extent funds are recovered
related to a Contract with respect to which such Liquidation Expenses were
incurred.
SECTION 5.20. RECORDS.
The Servicer shall, during the period it is Servicer hereunder,
maintain such books of account and other records as will enable the Issuer and
the Indenture Trustee to determine the status of each Contract.
SECTION 5.21. INSPECTION.
(a) At all times during the term hereof, the Servicer shall afford
the Issuer and the Indenture Trustee and their respective authorized agents
reasonable access during normal business hours to the Servicer's records
relating to the Contracts and will cause its personnel to assist in any
examination of such records by the Issuer or the Indenture Trustee, or such
authorized agents, and allow copies of the same to be made. The examination
referred to in this Section will be conducted in a manner which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Issuer or the Indenture Trustee may (but shall be under no obligation), using
generally accepted audit procedures, verify the status of each Contract and
review the Computer Records and other records relating thereto for conformity to
Monthly Reports prepared pursuant to Article Nine and compliance with the
standards represented to exist as to each Contract in this Agreement.
(b) At all times during the term hereof, the Servicer shall keep
available a copy of the List of Contracts at its principal executive office for
inspection by Noteholders.
(c) The Servicer shall, if given reasonable notice by the
Indenture Trustee after the end of any Collection Period, provide the Indenture
Trustee with a copy of the Computer Records.
SECTION 5.22. INDENTURE TRUSTEE AND ISSUER TO COOPERATE IN
RELEASES.
At the same time as (i) any Contract becomes a Prepaid Contract and in
connection therewith the Equipment related to such Prepaid Contract is sold, or
(ii) the Servicer substitutes or replaces any unit of Equipment as contemplated
in Section 5.03 (such events in subsections (i) and (ii) to be certified to the
Indenture Trustee by an Authorized Officer of the Servicer), the Issuer, and the
Indenture Trustee, on behalf of the Noteholders, will to the extent requested in
writing by the Servicer release the Indenture Trustee's and the Issuer's
interest in the Equipment relating to such Prepaid Contract or such substituted
or replaced Equipment, as the case may be; provided that such release will not
constitute a release of the their respective interests in the proceeds of such
sale. In connection with any sale of such Equipment, the Issuer and the
Indenture Trustee will execute and deliver to the Servicer any assignments,
bills of sale, termination statements and any other releases and instruments as
the Servicer may request in writing in order to effect such release and
transfer; provided that neither the Issuer nor the Indenture Trustee will make
any representation or warranty, express or implied, with respect to any such
Equipment in connection with such sale or transfer and assignment. Nothing in
this
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Section 5.22 shall diminish the Servicer's obligations pursuant to Section 7.01
with respect to the proceeds of any such sale.
ARTICLE VI
COVENANTS OF THE ISSUER
SECTION 6.01. LIMITED LIABILITY COMPANY EXISTENCE.
During the term of this Agreement, the Issuer will keep in full force
and effect its existence, rights and franchises as a limited liability company
under the laws of the jurisdiction of its formation and will obtain and preserve
its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Transaction Documents and each other
instrument or agreement necessary or appropriate to the proper administration of
this Agreement and the transactions contemplated hereby. In addition, all
transactions and dealings between the Issuer and its Affiliates will be
conducted on an arm's-length basis.
SECTION 6.02. CONTRACTS NOT TO BE EVIDENCED BY PROMISSORY NOTES.
The Issuer will take no action to cause any Contract not originally
evidenced by an instrument as described in Section 2.06 hereof, to be evidenced
by an instrument (as defined in the UCC), except in connection with the
enforcement or collection of such Contract.
SECTION 6.03. SECURITY INTERESTS.
Except as permitted by the Indenture, the Issuer will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on any Contract in the Contracts Pool or any related
Equipment owned by it, whether now existing or hereafter transferred to the
Issuer, or any interest therein. The Issuer will immediately notify the
Indenture Trustee of the existence of any Lien on any Contract in the Contracts
Pool or any related Equipment owned by it; and the Issuer shall defend the
right, title and interest of the Indenture Trustee in, to and under the
Contracts in the Contracts Pool and the related Equipment, against all claims of
third parties; provided, however, that nothing in this Section 6.03 shall
prevent or be deemed to prohibit the Issuer from suffering to exist Permitted
Liens upon any of the Contracts in the Contracts Pool or any related Equipment.
SECTION 6.04. DELIVERY OF COLLECTIONS.
The Issuer agrees to pay to the Servicer promptly (but in no event
later than two Business Days after receipt) all Collections received by the
Issuer in respect of the Contracts in the Contracts Pool, for application in
accordance with Section 7.01.
SECTION 6.05. REGULATORY FILINGS.
The Issuer shall make any filings, reports, notices, applications and
registrations with, and seek any consents or authorizations from, the Commission
and any state securities authority
58
as may be necessary or that the Issuer deems advisable to comply with any
federal or state securities or reporting requirements laws.
SECTION 6.06. COMPLIANCE WITH LAW.
The Issuer hereby agrees to comply in all material respects with all
Requirements of Law applicable to the Issuer.
SECTION 6.07. ACTIVITIES.
The Issuer shall not engage in any business or activity of any kind, or
enter into any transaction or indenture, mortgage, instrument, agreement,
contract, lease or other undertaking, which is not directly related to the
transactions contemplated and authorized by this Agreement or the other
Transaction Documents.
SECTION 6.08. INDEBTEDNESS.
The Issuer shall not create, incur, assume or suffer to exist any
Indebtedness or other liability whatsoever, except (i) obligations incurred
under this Agreement or (ii) liabilities incident to the maintenance of its
entity existence in good standing.
SECTION 6.09. GUARANTEES.
The Issuer shall not become or remain liable, directly or contingently,
in connection with any Indebtedness or other liability of any other Person,
whether by guarantee, endorsement (other than endorsements of negotiable
instruments for deposit or collection in the ordinary course of business),
agreement to purchase or repurchase, agreement to supply or advance funds.
SECTION 6.10. INVESTMENTS.
The Issuer shall not make or suffer to exist any loans or advances to,
or extend any credit to, or make any investments (by way of transfer of
property, contributions to capital, purchase of stock or securities or evidences
of indebtedness, acquisition of the business or assets, or otherwise) in, any
Person except (i) for purchases of Contract Assets from the Originator or (ii)
for investments in Eligible Investments in accordance with the terms of this
Agreement. Without limiting the generality of the foregoing, the Issuer shall
not provide credit to any Noteholder for the purpose of enabling such Noteholder
to purchase any Notes.
SECTION 6.11. MERGER; SALES.
The Issuer shall not enter into any transaction of merger or
consolidation, or liquidate or dissolve itself (or suffer any liquidation or
dissolution) or acquire or be acquired by any Person, or convey, sell, lease or
otherwise dispose of all or substantially all of its property or business,
except as provided for in this Agreement.
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SECTION 6.12. PAYMENTS.
The Issuer shall not declare or pay, directly or indirectly, any
dividend or make any other payment (whether in cash or other property) with
respect to the profits, assets or capital of the Issuer or any Person's interest
therein, or purchase, redeem or otherwise acquire for value any of its equity
ownership interests now or hereafter outstanding, except that so long as no
Event of Default has occurred and is continuing and no Event of Default would
occur as a result thereof or after giving effect thereto and the Issuer would
continue to be Solvent as a result thereof and after giving effect thereto, and
otherwise act in accordance with the Transaction Documents, the Issuer may
effect payments of its earnings in respect of Pledged Assets to its members.
SECTION 6.13. OTHER AGREEMENTS.
The Issuer shall not become a party to, or permit any of its properties
to be bound by, any indenture, mortgage, instrument, contract, agreement, lease
or other undertaking, except this Agreement and the other Transaction Documents
to which it is a party; nor shall it amend or modify the provisions of its
certificate of formation or its limited liability company agreement or issue any
power of attorney except to the Indenture Trustee or the Servicer except in
accordance with the Transaction Documents.
SECTION 6.14. SEPARATE ENTITY EXISTENCE.
The Issuer shall:
(i) Maintain its own deposit account or accounts, separate
from those of any Affiliate, with commercial banking institutions. The
funds of the Issuer will not be diverted to any other Person or for
other than authorized uses of the Issuer.
(ii) Ensure that, to the extent that it shares the same
officers or other employees as its member or Affiliates, the salaries
of and the expenses related to providing benefits to such officers and
other employees shall be fairly allocated among such entities, and each
such entity shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees.
(iii) Ensure that, to the extent that it jointly contracts
with its member or Affiliates to do business with vendors or service
providers or to share overhead expenses, the costs incurred in so doing
shall be allocated fairly among such entities, and each such entity
shall bear its fair share of such costs. To the extent that the Issuer
contracts or does business with vendors or service providers when the
goods and services provided are partially for the benefit of any other
Person, the costs incurred in so doing shall be fairly allocated to or
among such entities for whose benefit the goods and services are
provided, and each such entity shall bear its fair share of such costs.
All material transactions between Issuer and any of its Affiliates
shall be only on an arm's length basis.
(iv) To the extent that the Issuer, its member or Affiliates
have offices in the same location, there shall be a fair and
appropriate allocation of overhead costs among them, and each such
entity shall bear its fair share of such expenses.
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(v) Conduct its affairs strictly in accordance with its
certificate of formation or its limited liability company agreement and
observe all necessary, appropriate and customary company formalities,
including, but not limited to, holding all regular and special members'
meetings appropriate to authorize all entity action, keeping separate
and accurate records of its meetings, passing all resolutions or
consents necessary to authorize actions taken or to be taken, and
maintaining accurate and separate books, records and accounts,
including, but not limited to, payroll and intercompany transaction
accounts.
(vi) Take or refrain from taking, as applicable, each of the
activities specified in the "substantive consolidation" opinion of
Xxxxxxx and Xxxxxx, delivered on the Closing Date, upon which the
conclusions expressed therein are based.
SECTION 6.15. LOCATION; RECORDS.
The Issuer (x) shall not move outside the State of Iowa, the location
of its chief executive office or its state of formation, without 30 days' prior
written notice to the Indenture Trustee and (y) shall not move or permit the
Servicer to move the location of the Contract Files from the location(s) thereof
on the Closing Date, without 30 days' prior written notice to the Indenture
Trustee and (z) will promptly take all actions required (including, but not
limited to, all filings and other acts necessary or advisable under the UCC of
each relevant jurisdiction in order to continue the first priority perfected
security interest of the Indenture Trustee in all Contracts in the Contracts
Pool). The Issuer will give the Indenture Trustee prompt notice of a change
within the State of Iowa of the location of its chief executive office.
SECTION 6.16. LIABILITY OF ISSUER; INDEMNITIES.
The Issuer shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by the Issuer under this Agreement.
The Issuer shall indemnify, defend and hold harmless the Indenture
Trustee and the Servicer from and against any taxes that may at any time be
asserted against any such Person with respect to the transactions contemplated
herein and in the other Transaction Documents, including any sales, gross
receipts, general corporation, tangible personal property, Iowa personal
property replacement privilege or license taxes and costs and expenses in
defending against the same.
The Issuer shall indemnify, defend and hold harmless the Indenture
Trustee and the Noteholders from and against any loss, liability or expense
incurred by reason of the Issuer's willful misfeasance, bad faith or negligence
(other than errors in judgment) in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement.
The Issuer shall indemnify, defend and hold harmless the Indenture
Trustee, its officers, directors, agents and employees, from and against all
costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties herein and in the Indenture and any other document or transaction
contemplated in connection herewith or therewith, except to the extent that such
cost, expense, loss, claim,
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damage or liability, shall be due to the willful misfeasance, bad faith or
negligence of the Indenture Trustee.
The Issuer shall indemnify, defend and hold harmless the Indenture
Trustee, their officers, directors, agents and employees, from and against any
loss, liability or expense incurred by reason of the Issuer's violation of
federal or state securities laws in connection with the offering and sale of the
Notes.
Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Issuer shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter shall collect
any of such amounts from others, such Person shall promptly repay such amounts
to the Issuer, without interest.
SECTION 6.17. BANKRUPTCY LIMITATIONS.
The Issuer shall not, without the affirmative vote of the board of
directors of the Issuer (which must include the affirmative vote of the
Independent Directors) (A) dissolve or liquidate, in whole or in part, or
institute proceedings to be adjudicated bankrupt or insolvent, (B) consent to
the institution of bankruptcy or insolvency proceedings against it, (C) file a
petition seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy, (D) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the corporation or a substantial part of its property, (E) make a
general assignment for the benefit of creditors, (F) admit in writing its
inability to pay its debts generally as they become due, or (G) take any entity
action in furtherance of the actions set forth in clauses (A) through (F) above.
SECTION 6.18. LIMITATION ON LIABILITY OF ISSUER AND OTHERS.
The Issuer and any director or officer or employee or agent of the
Issuer may rely in good faith on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Issuer and any director or officer or employee or agent of the Issuer shall
be reimbursed by the Indenture Trustee for any liability or expense incurred by
reason of the Indenture Trustee's willful misfeasance, bad faith or gross
negligence (except errors in judgment) in the performance of its duties
hereunder, or by reason of reckless disregard of its obligations and duties
hereunder. The Issuer shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
SECTION 6.19. CHIEF EXECUTIVE OFFICE.
During the term of this Agreement, and subject to the other terms and
provisions herein relating to changes in location, the Issuer will maintain its
chief executive office in one of the States of the United States.
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ARTICLE VII
ESTABLISHMENT OF ACCOUNTS; DISTRIBUTIONS; RESERVE FUND
SECTION 7.01. TRUST ACCOUNTS; COLLECTIONS.
(a) On or before the Closing Date, the Issuer shall establish the
Collection Account, Note Distribution Account, Reserve Fund, the Residual
Account and the Payahead Account, each in the name of the Indenture Trustee for
the benefit of the Noteholders. The Residual Account, Reserve Fund, and Payahead
Account may be sub-accounts of the Collection Account. All of the Trust Accounts
shall be established and maintained at JPMorgan Chase Bank. The Servicer and
Indenture Trustee are hereby required to ensure that each of the Trust Accounts
is established and maintained as an Eligible Deposit Account with a Qualified
Institution. If any institution with which any of the accounts established
pursuant to this Section 7.01(a) are established ceases to be a Qualified
Institution, the Servicer, or if the Servicer fails to do so, the Indenture
Trustee shall within 10 Business Days establish a replacement account at a
Qualified Institution after notice of such event. In no event shall the
Indenture Trustee be responsible for monitoring whether such Eligible
Institution shall remain a Qualified Institution.
(b) The Servicer has established an account at LaSalle Bank, N.A. (the
"Primary Bank"), for the deposit of the amounts representing payments sent by
Obligors and the deposit of amounts representing payments sent by customers
relating to contracts that have not been pledged to the Indenture Trustee. The
Servicer, as agent of the Issuer, shall establish another account at the Primary
Bank (the "Lock Box Account"), which shall be an Eligible Deposit Account in the
name of the Indenture Trustee for the benefit of the Noteholders, for the
deposit of the amounts representing payments sent by Obligors. On each Business
Day the Servicer will cause the Primary Bank to deposit all Collections that
have been sent to the Primary Bank into the Lock Box Account, and within two
Business Days of the deposit into the Lock Box Account with the Primary Bank, at
no later than 12:00 noon, New York time, the Servicer will cause the Primary
Bank to cause the amounts in the Lock Box Account to be deposited into the
Collection Account. The Servicer, as agent of the Issuer, will also establish an
account at Xxxxx Fargo Bank Iowa, National Association (the "Secondary Bank")
for the deposit of the amounts representing payments sent by Obligors and the
deposit of amounts representing payments sent by customers relating to lease
contracts which have not been pledged to the Indenture Trustee. The Servicer, as
agent of the Issuer, shall establish another account at the Secondary Bank (a
"Lock Box Account"), which shall be an Eligible Deposit Account in the name of
the Indenture Trustee for the benefit of the Noteholders, for the deposit of the
amounts representing payments sent by Obligors. On each Business Day the
Servicer will cause the Secondary Bank to deposit all Collections that have been
sent to its LockBox Account, and within two Business Days of the deposit into
such LockBox Account with the Secondary Bank, the Servicer shall cause the
Secondary Bank to cause the amounts in such LockBox Account to be deposited into
the Collection Account. The Primary Bank and the Secondary Bank are collectively
referred to herein as the "Local Banks."
(c) On each Business Day, the Servicer shall review the amounts that
have been sent to the Local Banks and direct the Local Banks to transfer any
Excluded Amounts to the Servicer. If the Servicer receives any payments relating
to Collections, the Servicer shall hold in trust for
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the benefit of the Noteholders any such payment until such time as the Servicer
transfers any such payment to the Indenture Trustee for deposit in the
Collection Account. The Servicer shall remit such payments to the Indenture
Trustee for deposit in the Collection Account within two Business Days of
receipt.
(d) Notwithstanding Sections 7.01(b) and (c), the Servicer shall not be
required to deposit or cause to be deposited Collections on any Contracts in the
Contracts Pool on which (and to the extent that) the Servicer has previously
made a Servicer Advance that has not been reimbursed, which amounts the Servicer
may retain (as reimbursement of such Servicer Advance).
(e) Notwithstanding Sections 7.01(b) and (c), if (i) the Servicer makes
a deposit into the Collection Account in respect of a Collection of a Contract
in the Contract Pool and such Collection was received by the Servicer in the
form of a check that is not honored for any reason, or (ii) the Servicer makes a
mistake with respect to the amount of any Collection and deposits an amount that
is less than or more than the actual amount of such Collection, the Servicer
shall appropriately adjust the amount subsequently deposited into the Collection
Account to reflect such dishonored check or mistake. Any Scheduled Payment in
respect of which a dishonored check is received shall be deemed not to have been
paid.
SECTION 7.02. RESERVE FUND DEPOSIT.
On the Closing Date, the Issuer shall deposit the Reserve Fund Initial
Deposit into the Reserve Fund from the net proceeds of the Notes.
SECTION 7.03. TRUST ACCOUNT PROCEDURES.
If the Servicer so directs, in writing, the Indenture Trustee shall
accept such directions as directions of the Issuer and shall invest the amounts
in the Trust Accounts in Qualified Eligible Investments of the type specified in
such written direction that mature or are withdrawable not later than one
Business Day prior to the next succeeding Payment Date. Once such funds are
invested, the Indenture Trustee shall not change the investment of such funds.
Any loss on such investments shall be deposited in the applicable Trust Account
by the Servicer out of its own funds immediately as realized. Subject to the
restrictions herein, the Indenture Trustee may purchase a Qualified Eligible
Investment from itself or an Affiliate. Subject to the other provisions hereof,
the Indenture Trustee shall have sole control over each such investment and the
income thereon, and any certificate or other instrument evidencing any such
investment, if any, shall be delivered directly to the Indenture Trustee or its
agent, together with each document of transfer, if any, necessary to transfer
title to such investment to the Indenture Trustee in a manner which complies
with this Section 7.03. All Investment Earnings on investments of funds in the
Trust Accounts shall be deposited in the Collection Account pursuant to Section
7.01 and distributed on the next Payment Date pursuant to Section 7.05. The
Issuer agrees and acknowledges that the Indenture Trustee is to have "control"
(within the meaning of Section 8-102 of the UCC as enacted in Iowa) of
collateral comprised of "Investment Property" (within the meaning of Section
9-102(a)(49) of the UCC as enacted in Iowa) for all purposes of this Agreement.
In the absence of timely written direction from the Servicer, the Indenture
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Trustee shall invest amounts in the Trust Accounts in Qualified Eligible
Investments of the type specified in clause (vi) of the definition of Eligible
Investments herein.
SECTION 7.04. NOTEHOLDER DISTRIBUTIONS.
(a) Each Noteholder as of the related Record Date shall be entitled to
distributions payable to the Noteholder on the next succeeding Payment Date by
check mailed to such Noteholder at the address for such Noteholder appearing on
the Note Register or by wire transfer if such Noteholder provides written
instructions to the Indenture Trustee at least ten days prior to such Payment
Date.
(b) The Indenture Trustee shall serve as the Paying Agent hereunder and
shall make the payments to the Noteholders required hereunder. The Indenture
Trustee hereby agrees that all amounts held by it for payment hereunder will be
held in trust for the benefit of the Noteholders.
SECTION 7.05. ALLOCATIONS AND DISTRIBUTIONS.
(a) Allocations and Distributions Prior to an Event of Default. On each
Payment Date prior to an Event of Default, the Servicer, pursuant to written
monthly payment instructions and notification received by the Indenture Trustee
no later than the related Determination Date, shall instruct the Indenture
Trustee to withdraw, and on such Payment Date the Indenture Trustee acting in
accordance with such written instructions shall withdraw, the amounts required
to be withdrawn from the Collection Account pursuant to this Section and
deposited to the Note Distribution Account (pursuant to Sections 3.01 and
8.02(b) of the Indenture) in order to make the following payments or allocations
from the Available Amounts for such Payment Date (in each case, such payment or
transfer to be made only to the extent funds remain available therefor after all
prior payments and transfers for such Payment Date have been made), in the
following order of priority:
(i) pay to the Servicer, the amount of any Unreimbursed
Servicer Advance to the extent that such Unreimbursed Servicer Advance
relates to a Scheduled Payment on a Contract that has subsequently been
received or that the Servicer determines that such Unreimbursed
Servicer Advance will not be recovered from the Contract with respect
to which it relates;
(ii) pay to the Indenture Trustee the costs and expenses
associated with the appointment of a Successor Servicer and the
transition relating thereto (which amount shall not, taken in the
aggregate with all other amounts withdrawn for such purpose during the
term of the transaction, exceed the Trustee Cap);
(iii) pay to the Servicer, the monthly Servicing Fee for the
preceding Collection Period together with any amounts in respect of the
Servicing Fee that were due in respect of prior Collection Periods that
remain unpaid;
(iv) pay to the Indenture Trustee (A) any amounts for the fees
(to the extent such fees have not paid by the Servicer), expenses and
indemnity payments, if any, due and payable to the Indenture Trustee
and (B) until such time as a Successor Servicer has been appointed
pursuant to Section 8.03, an amount equal to the product of (1)
one-
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twelfth, (2) 0.025% and (3) the aggregate remaining Principal Balance
of the Contracts Pool as of the first day of the related Collection
Period;
(v) pay to the Noteholders, pro rata, an amount equal to any
indemnity payments that Noteholders may have elected to pay to the
Indenture Trustee in accordance with the terms of the Indenture;
(vi) pay to the Indenture Trustee on behalf of the Class A-1
Noteholders, Class A-2 Noteholders, Class A-3 Noteholders and Class A-4
Noteholders an amount equal to interest accrued in respect of the
related Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4
Notes at the Class A-1 Interest Rate, Class A-2 Interest Rate, Class
A-3 Interest Rate and Class A-4 Interest Rate, respectively, for the
Accrual Period immediately preceding such Payment Date, together with
any such amounts that accrued in respect of prior Accrual Periods for
which no allocation was previously made together with interest on such
unpaid amounts from prior Collection Periods at the applicable interest
rate for such Class of Notes; provided that if the Available Amounts
remaining to be allocated pursuant to this clause are less than the
full amount required to be so allocated, such remaining Available
Amounts shall be allocated to each Holder of a Class A Note pro rata
based upon the outstanding Principal Amount thereof;
(vii) pay to the Indenture Trustee on behalf of the Class B
Noteholders an amount equal to the interest accrued thereon at the
Class B Interest Rate for the Accrual Period immediately preceding such
Payment Date, together with any amounts that accrued in respect of
prior Accrual Periods for which no allocation was previously made
together with interest on such unpaid amounts from prior Collection
Periods at the Class B Interest Rate; provided that if the Available
Amounts remaining to be allocated pursuant to this clause are less than
the full amount required to be so paid, such remaining Available Amount
shall be paid to each Class B Noteholder pro rata based on the
outstanding Principal Amount thereof;
(viii) pay to the Indenture Trustee on behalf of the Class C
Noteholders, an amount equal to the interest accrued thereon at the
Class C Interest Rate for the Accrual Period immediately preceding such
Payment Date, together with any such amounts that accrued in respect of
prior Accrual Periods for which no allocation was previously made
together with interest on such unpaid amounts from prior Collection
Periods at the Class C Interest Rate; provided that if the Available
Amounts remaining to be allocated pursuant to this clause are less than
the full amount required to be so paid, such remaining Available
Amounts shall be paid to each Class C Noteholder pro rata based on the
outstanding Principal Amount thereof;
(ix) pay to the Indenture Trustee on behalf of the Class D
Noteholders, an amount equal to the interest accrued thereon at the
Class D Interest Rate for the Accrual Period immediately preceding such
Payment Date, together with any such amounts that accrued in respect of
prior Accrual Periods for which no allocation was previously made
together with interest on such unpaid amounts from prior Collection
Periods at the Class D Interest Rate; provided that if the Available
Amounts remaining to be allocated pursuant to this clause are less than
the full amount required to be so paid, such
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remaining Available Amounts shall be paid to each Class D Noteholder
pro rata based on the outstanding Principal Amount thereof;
(x) pay to the Indenture Trustee, on behalf of the Class A-1
Noteholders, the Class A Principal Payment Amount for such Payment
Date; provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amounts shall be allocated to each Class
A-1 Note pro rata based on the outstanding principal amount thereof;
(xi) pay to the Indenture Trustee, on behalf of the Class A-2
Noteholders, (A) $0 until the Payment Date on which the Principal
Amount of the Class A-1 Notes is $0; (B) on the Payment Date on which
the Principal Amount of the Class A-1 Notes is being reduced to $0, the
excess of the Monthly Principal Amount over the amount necessary to
reduce the Principal Amount of the Class A-1 Notes to $0 on such date,
but only up to the amount of the Class A Principal Payment Amount, and
(C) on each subsequent Payment Date, the Class A Principal Payment
Amount; provided that if the Available Amounts remaining to be
allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be
allocated to each Class A-2 Note pro rata based on the outstanding
principal amount thereof;
(xii) pay to the Indenture Trustee, on behalf of the Class A-3
Noteholders, (A) $0 until the Payment Date on which the Principal
Amount of the Class A-1 Notes and Class A-2 Notes is $0, (B) on the
Payment Date on which the Principal Amount of the Class A-2 Notes is
being reduced to $0, the excess of the amount necessary to reduce the
Principal Amount of the Class A-2 Notes to $0 on such date, but only to
the amount of the Class A Principal Payment Amount and (C) on each
subsequent Payment Date, the Class A Principal Payment Amount; provided
that if the Available Amounts remaining to be allocated pursuant to
this clause are less than the full amount required to be so paid, such
remaining Available Amounts shall be allocated to each Class A-3 Note
pro rata based on the outstanding principal amount thereof;
(xiii) pay to the Indenture Trustee, on behalf of the Class
A-4 Noteholders, (A) $0 until the Payment Date on which the Principal
Amount of the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes is
$0, (B) on the Payment Date on which the Principal Amount of the Class
A-3 Notes is being reduced to $0, the excess of the amount necessary to
reduce the Principal Amount of the Class A-3 Notes to $0 on such date,
but only to the amount of the Class A Principal Payment Amount and (C)
on each subsequent Payment Date, the Class A Principal Payment Amount;
provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amounts shall be allocated to each Class
A-4 Note pro rata based on the outstanding principal amount thereof;
(xiv) pay to the Indenture Trustee, on behalf of the Class B
Noteholders, the Class B Principal Payment Amount; provided that if the
Available Amounts remaining to be allocated pursuant to this clause are
less than the full amount required to be so paid, such remaining
Available Amounts shall be allocated to each Class B Note pro rata
based on the outstanding principal amount thereof;
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(xv) pay to the Indenture Trustee, on behalf of the Class C
Noteholders, the Class C Principal Payment Amount; provided that if the
Available Amounts remaining to be allocated pursuant to this clause are
less than the full amount required to be so paid, such remaining
Available Amounts shall be allocated to each Class C Note pro rata
based on the outstanding principal amount thereof;
(xvi) pay to the Indenture Trustee, on behalf of the Class D
Noteholders, the Class D Principal Payment Amount; provided that if the
Available Amounts remaining to be allocated pursuant to this clause are
less than the full amount required to be so paid, such remaining
Available Amounts shall be allocated to each Class D Note pro rata
based on the outstanding principal amount thereof;
(xvii) pay to the Indenture Trustee,
(A) on behalf of the Class A-1 Noteholders, on each
subsequent Payment Date, the Additional Principal, if any,
until the Principal Amount of the Class A-1 Notes is $0;
provided that if the Additional Principal exceeds the amount
needed to reduce the Principal Amount of the Class A-1 Notes
to $0, then such excess shall be paid to the Class A-2
Noteholders;
(B) on behalf of the Class A-2 Noteholders, (1) $0
until the Payment Date on which the Principal Amount of the
Class A-1 Notes is $0 and (2) on each subsequent Payment Date,
the Additional Principal, if any, until the Principal Amount
of the Class A-2 Notes is $0; provided that if the Additional
Principal exceeds the amount needed to reduce the Principal
Amount of the Class A-2 Notes to $0, then such excess shall be
paid to the Class A-3 Noteholders;
(C) on behalf of the Class A-3 Noteholders, (1) $0
until the Payment Date on which the Principal Amount of the
Class A-1 Notes and Class A-2 Notes is $0 and (2) on each
subsequent Payment Date, the Additional Principal, if any,
until the Principal Amount of the Class A-3 Notes is $0;
provided that if the Additional Principal exceeds the amount
needed to reduce the Principal Amount of the Class A-3 Notes
to $0, then such excess shall be paid to the Class A-4
Noteholders;
(D) on behalf of the Class A-4 Noteholders, (1) $0
until the Payment Date on which the Principal Amount of the
Class A-1 Notes, Class A-2 Notes and Class A-3 Notes is $0 and
(2) on each subsequent Payment Date, the Additional Principal,
if any, until the Principal Amount of the Class A-4 Notes is
$0; provided that if the Additional Principal exceeds the
amount needed to reduce the Principal Amount of the Class A-4
Notes to $0, then such excess shall be paid to the Class B
Noteholders;
(E) on behalf of the Class B Noteholders, (1) $0
until the Payment Date on which the Principal Amount of the
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class
A-4 Notes is $0 and (2) on each subsequent Payment Date, the
Additional Principal, if any, until the Principal Amount of
the Class B
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Notes is $0; provided that if the Additional Principal exceeds
the amount needed to reduce the Principal Amount of the Class
B Notes to $0, then such excess shall be paid to the Class C
Noteholders;
(F) on behalf of the Class C Noteholders, (1) $0
until the Payment Date on which the Principal Amount of the
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes and Class B Notes is $0 and (2) on each subsequent
Payment Date, the Additional Principal, if any, until the
Principal Amount of the Class C Notes is $0; and
(G) on behalf of the Class D Noteholders, (1) $0
until the Payment Date on which the Principal Amount of the
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes, Class B Notes and Class C Notes is $0 and (2) on each
subsequent Payment Date, the Additional Principal, if any,
until the Principal Amount of the Class D Notes is $0; and
(H) if the sum of (i) the remaining Available
Amounts, (ii) any other funds available in the Collection
Account as of the Determination Date (which for purposes of
this subparagraph (H) will be deemed to be "Available
Amounts") and (iii) the remaining amounts held in the Reserve
Fund, the Residual Account and the Payahead Account equals or
exceeds the sum of the remaining Principal Amount of the Notes
and any accrued and unpaid Servicing Fee, pay to the Indenture
Trustee on behalf of the Noteholders an amount equal to such
remaining Principal Amount minus the aggregate amount of any
distributions then on deposit in the Note Distribution
Account, if any, for such Class of Notes established in
accordance with the Indenture and to be applied in reduction
of such principal amount in accordance with such Indenture;
(xviii) unless the Principal Amount of all Notes will be fully
paid on such Payment Date, pay to the Indenture Trustee, for deposit
into the Reserve Fund, such remaining Available Amounts up to such
amount as may be required to cause the amounts on deposit in the
Reserve Fund to equal the Required Reserve Amount;
(xix) unless the Principal Amount of all Notes will be fully
paid on such Payment Date, if a Residual Event shall have occurred and
be continuing, pay to the Indenture Trustee for deposit into the
Residual Account, the lesser of (A) the remaining Available Amounts and
(B) the aggregate amount of Residual Receipts actually collected and
included in Available Amounts for that Payment Date;
(xx) pay to the Indenture Trustee all amounts due it and not
paid pursuant to Section 7.05(a)(ii) by reason of the limitation in
such clause;
(xxi) pay any remaining Available Amounts to the Issuer.
Prior to the occurrence of an Event of Default, if the Available
Amounts are less than the amount required to make in full the payments and
allocations set forth in Sections 7.05(a)(i)-(xvii) above or to make principal
payments due with respect to any payment at final maturity of any Notes, amounts
held in the Residual Account shall be withdrawn in order
69
for any of such payments or allocations to be made and such amounts will be
considered as Available Amounts for such purpose only.
Prior to the occurrence of an Event of Default, if the Available
Amounts and any amounts available from the Residual Account are less than the
amount required to make in full the payments and allocations set forth in
Sections 7.05(a)(i)-(xvii) above or to make principal payments due with respect
to any payment at final maturity of any Notes, amounts held in the Reserve Fund
shall be withdrawn in order for any of such payments or allocations to be made
and such amounts will be considered as Available Amounts for such purpose only.
(b) Allocations and Payments after an Event of Default. On each Payment
Date after the occurrence and during the continuance of an Event of Default, the
Servicer, pursuant to monthly payment instructions and notification received by
the Indenture Trustee no later than the related Determination Date, shall
instruct the Indenture Trustee in writing to withdraw, and on such Payment Date
the Indenture Trustee acting in accordance with such instructions shall
withdraw, the amounts required to be withdrawn from the Collection Account
pursuant to this Section and deposited to the Note Distribution Account
(pursuant to Sections 3.01 and 8.02(b) of the Indenture) in order to make the
following payments or allocations from the Available Amounts for such Payment
Date (in each case, such payment or transfer to be made only to the extent funds
remain available therefor after all prior payments and transfers for such
Payment Date have been made), in the following order of priority:
(i) pay, first, to the Indenture Trustee (to the extent not
paid by the Servicer) (A) the amount of any accrued and unpaid fees,
expenses and indemnity payments due it either as Indenture Trustee or
as a paying agent of the Issuer, any tax, fee, expense, charge or other
loss incurred by it (to the extent not previously reimbursed)
(including, without limitation, the expense of sale, taking or other
proceeding, attorneys' fees and expenses, court costs, and any other
expenditures incurred or expenditures or advances made by the Indenture
Trustee in the protection, exercise or enforcement of any right, power
or remedy or any damages sustained by the Indenture Trustee, liquidated
or otherwise, upon the Event of Default giving rise to such
expenditures or advances) and shall be applied by the Indenture Trustee
in reimbursement of such costs and expenses, (B) the costs and expenses
associated with the appointment of a Successor Servicer and the
transition relating thereto (which amount described in clause (B) shall
not, taken in the aggregate with all other amounts withdrawn in
accordance with this Section 7.05(b)(i)(B) and Section 7.05(a)(ii)
during the term of the transaction, exceed the Trustee Cap) and (C)
until such time as a Successor Servicer has been appointed pursuant to
Section 8.03, an amount equal to the product of (1) one-twelfth, (2)
0.025% and (3) the aggregate remaining Principal Balance of the
Contracts Pool as of the first day of the related Collection Period;
(ii) pay to the Noteholders, pro rata, an amount equal to any
indemnity payments that Noteholders may have elected to pay to the
Indenture Trustee in accordance with the terms of the Indenture;
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(iii) pay to the Servicer, the monthly Servicing Fee for the
preceding monthly period together with any amounts in respect of the
Servicing Fee that were due in respect of prior monthly periods that
remain unpaid;
(iv) pay to the Indenture Trustee on behalf of the Class A-1
Noteholders, Class A-2 Noteholders, Class A-3 Noteholders and Class A-4
Noteholders an amount equal to interest accrued in respect of the
related Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4
Notes at the Class A-1 Interest Rate, Class A-2 Interest Rate, Class
A-3 Interest Rate and Class A-4 Interest Rate, respectively, for the
Accrual Period immediately preceding such Payment Date, together with
any such amounts that accrued in respect of prior Accrual Periods for
which no allocation was previously made together with interest on such
unpaid amounts from prior Collection Periods at the applicable interest
rate for such Class of Notes; provided that if the Available Amounts
remaining to be allocated pursuant to this clause are less than the
full amount required to be so allocated, such remaining Available
Amounts shall be allocated to each Holder of a Class A Note pro rata
based upon the outstanding Principal Amount thereof;
(v) pay to the Indenture Trustee on behalf of the Class B
Noteholders an amount equal to the interest accrued thereon at the
Class B Interest Rate for the Accrual Period immediately preceding such
Payment Date, together with any amounts that accrued in respect of
prior Accrual Periods for which no allocation was previously made
together with interest on such unpaid amounts from prior Collection
Periods at the Class B Interest Rate; provided that if the Available
Amounts remaining to be allocated pursuant to this clause are less than
the full amount required to be so paid, such remaining Available Amount
shall be paid to each Class B Noteholder pro rata based on the
outstanding Principal Amount thereof;
(vi) pay to the Indenture Trustee on behalf of the Class C
Noteholders, an amount equal to the interest accrued thereon at the
Class C Interest Rate for the Accrual Period immediately preceding such
Payment Date, together with any such amounts that accrued in respect of
prior Accrual Periods for which no allocation was previously made
together with interest on such unpaid amounts from prior Collection
Periods at the Class C Interest Rate; provided that if the Available
Amounts remaining to be allocated pursuant to this clause are less than
the full amount required to be so paid, such remaining Available
Amounts shall be paid to each Class C Noteholder pro rata based on the
outstanding Principal Amount thereof;
(vii) pay to the Indenture Trustee on behalf of the Class D
Noteholders, an amount equal to the interest accrued thereon at the
Class D Interest Rate for the Accrual Period immediately preceding such
Payment Date, together with any such amounts that accrued in respect of
prior Accrual Periods for which no allocation was previously made
together with interest on such unpaid amounts from prior Collection
Periods at the Class D Interest Rate; provided that if the Available
Amounts remaining to be allocated pursuant to this clause are less than
the full amount required to be so paid, such remaining Available
Amounts shall be paid to each Class D Noteholder pro rata based on the
outstanding Principal Amount thereof;
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(viii) pay to the Indenture Trustee, on behalf of Class A-1
Noteholders, the Principal Amount of the Class A-1 Notes;
(ix) pay to the Indenture Trustee, on behalf of the Class A-2
Noteholders, Class A-3 Noteholders and Class A-4 Noteholders, the
Principal Amounts of the Class A-2 Notes, Class A-3 Notes and Class A-4
Notes; provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amounts shall be allocated to each Class
A-2 Note, Class A-3 Note and Class A-4 Note pro rata based on the
outstanding principal amount of each such Class of Notes;
(x) pay to the Indenture Trustee, on behalf of the Class B
Noteholders, the Principal Amount of the Class B Notes for such Payment
Date; provided (i) that if the Available Amounts remaining to be
allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be
allocated to each Class B Note pro rata based on the outstanding
principal amount thereof, and (ii) if the amount to be allocated
pursuant to this clause exceeds the amount needed to repay outstanding
Class B Note principal in full, then such excess shall be applied in
repayment of principal on the Class C Notes;
(xi) pay to the Indenture Trustee, on behalf of the Class C
Noteholders, the Principal Amount of the Class C Notes for such Payment
Date; provided (i) that if the Available Amounts remaining to be
allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be
allocated to each Class C Note pro rata based on the outstanding
principal amount thereof, and (ii) if the amount to be allocated
pursuant to this clause exceeds the amount needed to repay outstanding
Class C Note principal in full, then such excess shall be applied in
repayment of principal on the Class D Notes;
(xii) pay to the Indenture Trustee, on behalf of the Class D
Noteholders, the Principal Amount of the Class D Notes for such Payment
Date; provided (i) that if the Available Amounts remaining to be
allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be
allocated to each Class D Note pro rata based on the outstanding
principal amount thereof, and (ii) if the amount to be allocated
pursuant to this clause exceeds the amount needed to repay outstanding
Class D Note principal in full, then such excess shall be applied as
set forth in (xi) and (xiv) below;
(xiii) pay to the Indenture Trustee all amounts due it and not
paid pursuant to Section 7.05(b)(i)(B) by reason of the limitation in
such clause;
(xiv) pay to the Servicer, the amount of any Unreimbursed
Servicer Advance to the extent that such Unreimbursed Servicer Advance
relates to Scheduled Payment on a Contract that has subsequently been
received or that the Servicer determines that such Unreimbursed
Servicer Advance will not be recovered from the Contract with respect
to which it relates; and
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(xv) pay all other remaining Available Amounts to the Issuer.
Following the occurrence and during the continuance of an Event of
Default, if the Available Amounts are less than the amount required to make in
full the payments and allocations set forth in Sections 7.05(b)(i)-(xii) above,
amounts held in the Residual Account shall be withdrawn in order for the
payments or allocations set forth in Sections 7.05(b)(i)-(xii) to be made and
such amounts will be considered as Available Amounts for such purpose only.
Amounts withdrawn from the Residual Account pursuant to the preceding sentence
shall be applied to repay principal of such Notes in such order of priority set
forth in 7.05(b)(i)-(xii) until the Residual Account is exhausted.
Following the occurrence and during the continuance of an Event of
Default, if the Available Amounts and any amounts available from the Residual
Account are less than the amount required to make in full the payments and
allocations set forth in Sections 7.05(b)(i)-(xii) above, amounts held in the
Reserve Fund shall be withdrawn in order for the payments or allocations set
forth in Sections 7.05(b)(i)-(xii) to be made and such amounts will be
considered as Available Amounts for such purpose only. Amounts withdrawn from
the Reserve Fund pursuant to the preceding sentence shall be applied to repay
principal of such Notes in such order of priority set forth in 7.05(b)(i)-(xii)
until the Reserve Fund is exhausted.
ARTICLE VIII
SERVICER DEFAULT; SERVICE TRANSFER
SECTION 8.01. SERVICER DEFAULT.
"Servicer Default" means the occurrence of any of the following:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Issuer or Indenture Trustee
pursuant to this Agreement on or before the date occurring three Business Days
after the date such payment, transfer, deposit, or such instruction or notice or
report is required to be made or given, as the case may be, under the terms of
this Agreement; or
(b) failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set forth
in this Agreement that has a material adverse effect on the Noteholders, which
continues unremedied for a period of 30 days after the first to occur of (i) the
date on which written notice of such failure requiring the same to be remedied
shall have been given to the Servicer by the Indenture Trustee or the Issuer or
to the Servicer and the Indenture Trustee by the Noteholders or the Indenture
Trustee on behalf of such Noteholders of Notes aggregating not less than 25% of
the Principal Amount of any Class adversely affected thereby and (ii) the date
on which the Servicer becomes aware thereof and such failure continues to
materially adversely affect such Noteholders for such period; or
(c) any representation, warranty or certification made by the Servicer
in this Agreement or in any certificate delivered pursuant to this Agreement
shall prove to have been incorrect when made, which has a material adverse
effect on the Noteholders and that continues to be incorrect in any material
respect for a period of 30 days after the first to occur of (i) the
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date on which written notice of such incorrectness requiring the same to be
remedied shall have been given to the Servicer by the Indenture Trustee or the
Issuer, or to the Servicer, the Issuer and the Indenture Trustee by Noteholders
or by the Indenture Trustee on behalf of Noteholders of Notes aggregating not
less than 25% of the Principal Amount of any Class adversely affected thereby
and (ii) the date on which the Servicer becomes aware thereof, and such
incorrectness continues to materially adversely affect such Holders for such
period; or
(d) an Insolvency Event shall occur with respect to the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (a) above for a period of five Business Days or
referred to under clause (b) or (c) for a period of 60 days (in addition to any
period provided in clause (a), (b) or (c)) shall not constitute a Servicer
Default until the expiration of such additional five Business Days or 60 days,
respectively, if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure was caused by an
act of God or other events beyond the Servicer's control. Upon the occurrence of
any such event the Servicer shall not be relieved from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Indenture Trustee and the Issuer
prompt notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations. The Servicer shall immediately notify the
Indenture Trustee in writing of any Servicer Default.
SECTION 8.02. SERVICER TRANSFER.
(a) If a Servicer Default has occurred and is continuing, (x) the
Required Holders, or (y) the Indenture Trustee may, by written notice (a
"Termination Notice") delivered to the parties hereto, terminate the Servicer's
management, administrative, servicing, custodial and collection functions.
(b) Upon delivery of the notice required by Section 8.02(a) (or, if
later, on a date designated therein), and on the date that a successor Servicer
shall have been appointed pursuant to Section 8.03 (such appointment being
herein called a "Servicer Transfer"), all rights, benefits, fees, indemnities,
authority and power of the Servicer under this Agreement, whether with respect
to the Contracts, the Contract Files or otherwise, shall pass to and be vested
in such successor (the "Successor Servicer") pursuant to and under this Section
8.02; and, without limitation, the Successor Servicer is authorized and
empowered to execute and deliver on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do any and all
acts or things necessary or appropriate to effect the purposes of such notice of
termination. The Servicer agrees to cooperate with the Successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer
hereunder, including, without limitation, the transfer to the Successor Servicer
for administration by it of all cash amounts which shall at the time be held by
the Servicer for deposit, or have been deposited by the Servicer, in the
Collection Account, or for its own account in connection with its services
hereafter or thereafter received with respect to the Contracts. The Servicer
shall transfer to the Successor Servicer (i) all records held by the Servicer
relating to the Contracts in such electronic form as the Successor Servicer may
reasonably request and (ii) any Contract Files in the Servicer's possession. In
addition, the Servicer shall permit access to its premises (including all
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computer records and programs) to the Successor Servicer or its designee. Upon a
Servicer Transfer, the Successor Servicer shall be entitled to receive the
Servicing Fee for performing the obligations of the Servicer.
SECTION 8.03. APPOINTMENT OF SUCCESSOR SERVICER; RECONVEYANCE;
SUCCESSOR SERVICER TO ACT.
Upon delivery of the notice required by Section 8.02(a) (or, if later,
on a date designated therein), the Servicer shall continue to perform all
servicing functions under this Agreement until the date specified in the
Termination Notice or, if no such date is specified, until a date mutually
agreed by the Servicer and the Indenture Trustee. The Indenture Trustee shall as
promptly as possible after the giving of or receipt of a Termination Notice,
either (i) appoint a Successor Servicer, and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to the
Indenture Trustee or (ii) succeed to all the responsibilities, duties and
liabilities of the Servicer under this Agreement. It is the intention of the
Indenture Trustee to appoint Textron Business Services Inc., if Textron Business
Services, Inc. is an Eligible Servicer at the time of such transition. It is
also the intention of the Indenture Trustee that on or before the Closing Date,
the Indenture Trustee shall enter into an arrangement with Textron Business
Services, Inc. whereby Textron Business Services, Inc. has agreed to accept its
appointment as Successor Servicer and perform all the responsibilities, duties
and liabilities as Servicer for a fee not to exceed the Servicing Fee based upon
a Servicing Fee Percentage equal to 0.75%. If (i) the Indenture Trustee does not
appoint Textron Business Services, Inc. as Successor Servicer or (ii) the
Indenture Trustee is unable to act as Successor Servicer or (iii) within 60 days
of delivery of a Termination Notice the Indenture Trustee is unable to obtain
any bids from Eligible Servicers and the Servicer shall have yet to cure the
Servicer Default, then the Indenture Trustee shall offer the Issuer, and the
Issuer shall offer the Originator, the right to accept retransfer of all the
Pledged Assets, and such parties may accept retransfer of such Pledged Assets in
consideration of the Issuer's delivery to the Collection Account on or prior to
the next upcoming Payment Date of a sum equal to (i) the Aggregate Principal
Amount of all Notes then outstanding, together with accrued and unpaid interest
thereon through such date of deposit (provided that the Indenture Trustee, if so
directed by the Required Holders in writing, need not accept and effect such
reconveyance in the absence of evidence (which may include valuations of an
investment bank or similar entity) reasonably acceptable to the Indenture
Trustee or Required Holders that such retransfer would not constitute a
fraudulent conveyance of the Issuer or the Originator) and (ii) all amounts
owing to the Indenture Trustee under the Indenture and hereunder.
In the event that a Successor Servicer has not been appointed and has
not accepted its appointment at the time when the then Servicer has ceased to
act as Servicer, the Indenture Trustee without further action shall
automatically be appointed the Successor Servicer. Notwithstanding the
foregoing, if the Indenture Trustee is legally unable or prohibited from so
acting, it shall petition a court of competent jurisdiction to appoint any
established financial institution having a net worth of at least $50,000,000 and
whose regular business includes the servicing of contracts similar to the
Contracts (each an "Eligible Servicer") as the Successor Servicer hereunder. On
or after a Servicer Transfer, the Successor Servicer shall be the successor in
all respects to the Servicer in its capacity as servicer under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and the
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terminated Servicer shall be relieved of such responsibilities, duties and
liabilities arising after such Servicer Transfer; provided, however, that (i)
the Successor Servicer will not assume any obligations of the Servicer described
in Section 8.02 and (ii) the Successor Servicer shall not be liable for any acts
or omissions of the Servicer occurring prior to such Servicer Transfer or for
any breach by the Servicer of any of its representations and warranties
contained herein or in any related document or agreement. As compensation
therefor, the Successor Servicer shall be entitled to receive reasonable
compensation equal to the monthly Servicing Fee. The Noteholders and the
Indenture Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession. To the
extent the terminated Servicer has made Servicer Advances, it shall be entitled
to reimbursement of the same notwithstanding its termination hereunder, to the
same extent as if it had continued to service the Contracts hereunder. In
addition, it is understood and agreed that if an Event of Default has occurred
and a Servicer Transfer is being effected by action of the Indenture Trustee
hereunder, any documented expenses reasonably incurred by the Indenture Trustee
in connection with effecting such Servicer Transfer shall be deemed expenses
reimbursable from Available Amounts after an Event of Default pursuant to
Section 7.05(b)(i) hereof and Section 5.06(a)(first) of the Indenture.
SECTION 8.04. NOTIFICATION TO NOTEHOLDERS.
(a) Promptly following the occurrence of any Servicer Default, the
Servicer shall give written notice thereof to the Indenture Trustee, the Issuer
and each Rating Agency at the addresses described in Section 13.04 hereof and to
the Noteholders at their respective addresses appearing on the Note Register.
(b) Within 10 days following any termination or appointment of a
Successor Servicer pursuant to this Article VIII, the Indenture Trustee shall
give written notice thereof to each Rating Agency and the Issuer at the
addresses described in Section 13.04 hereof, and to the Noteholders at their
respective addresses appearing on the Note Register.
SECTION 8.05. EFFECT OF TRANSFER.
(a) After a Servicer Transfer, the terminated Servicer shall have no
further obligations with respect to the management, administration, servicing,
custody or collection of the Contracts and the Successor Servicer appointed
pursuant to Section 8.03 shall have all of such obligations, except that the
terminated Servicer will transmit or cause to be transmitted directly to the
Successor Servicer for its own account, promptly on receipt and in the same form
in which received, any amounts (properly endorsed where required for the
Successor Servicer to collect them) received as payments upon or otherwise in
connection with the Contracts.
(b) A Servicer Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer)
other than those relating to the management, administration, servicing, custody
or collection of the Contracts.
SECTION 8.06. DATABASE FILE.
Monthly and otherwise upon reasonable request by the Indenture Trustee,
the predecessor Servicer will provide the Successor Servicer with a magnetic
tape containing the database file for
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each Contract (i) as of the Cutoff Date, (ii) the Subsequent Cutoff Dates, (iii)
thereafter, as of the last day of the preceding Collection Period on the
Determination Date prior to a Servicer Default and (iv) on and as of the
Business Day before the actual commencement of servicing functions by the
Successor Servicer following the occurrence of a Servicer Default.
SECTION 8.07. SUCCESSOR SERVICER INDEMNIFICATION.
The original Servicer shall defend, indemnify and hold the Successor
Servicer and any officers, directors, employees or agents of the Successor
Servicer harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments and any other costs, fees,
and expenses that the Successor Servicer may sustain in connection with the
claims asserted at any time by third parties against the Successor Servicer
which result from (i) any willful or negligent act taken or omission by the
Servicer or (ii) a breach of any representations of the Servicer in Section 3.07
hereof. The indemnification provided by this Section 8.07 shall survive the
termination of this Agreement and the removal or resignation of the Successor
Servicer.
SECTION 8.08. RESPONSIBILITIES OF THE SUCCESSOR SERVICER.
The Successor Servicer will not be responsible for delays attributable
to the Servicer's failure to deliver information, defects in the information
supplied by the Servicer or other circumstances beyond the control of the
Successor Servicer.
The Successor Servicer will make arrangements with the Servicer for the
prompt and safe transfer of, and the Servicer shall provide to the Successor
Servicer, all necessary servicing files and records, including (as deemed
necessary by the Successor Servicer at such time): (i) microfiche loan
documentation, (ii) servicing system tapes, (iii) Contract payment history, (iv)
collections history and (v) the trial balances, as of the close of business on
the day immediately preceding conversion to the Successor Servicer, reflecting
all applicable Contract information. The current Servicer shall be obligated to
pay the costs associated with the transfer of the servicing files and records to
the Successor Servicer.
The Successor Servicer shall have no responsibility and shall not be in
default hereunder nor incur any liability for any failure, error, malfunction or
any delay in carrying out any of its duties under this Agreement if any such
failure or delay results from the Successor Servicer acting in accordance with
information prepared or supplied by a Person other than the Successor Servicer
or the failure of any such Person to prepare or provide such information. The
Successor Servicer shall have no responsibility, shall not be in default and
shall incur no liability (i) for any act or failure to act by any third party,
including the Servicer, the Issuer or the Indenture Trustee or for any
inaccuracy or omission in a notice or communication received by the Successor
Servicer from any third party or (ii) which is due to or results from the
invalidity, unenforceability of any Contract with applicable law or the breach
or the inaccuracy of any representation or warranty made with respect to any
Contract.
If the Indenture Trustee or any other Successor Servicer assumes the
role of Successor Servicer hereunder, such Successor Servicer shall be entitled
to the benefits of (and subject to the provisions of) Section 5.05 concerning
delegation of duties to subservicers.
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SECTION 8.09. RATING AGENCY CONDITION FOR SERVICER TRANSFER.
Notwithstanding the foregoing provisions relating to a Servicer
Transfer, no Servicer Transfer shall be effective hereunder unless prior written
notice thereof shall have been given to the Rating Agencies.
ARTICLE IX
REPORTS
SECTION 9.01. MONTHLY REPORTS.
With respect to each Payment Date and the related Collection Period,
the Servicer will provide to the Indenture Trustee, each Rating Agency and First
Union Securities, Inc., on the related Determination Date, a monthly statement
(a "Monthly Report") substantially in the form of Exhibit H hereto.
SECTION 9.02. OFFICER'S CERTIFICATE.
Each Monthly Report delivered pursuant to Section 9.01 shall be
accompanied by a certificate of a Servicing Officer certifying the accuracy of
the Monthly Report and that no Servicer Default or event that with notice or
lapse of time or both would become a Servicer Default has occurred, or if such
event has occurred and is continuing, specifying the event and its status.
SECTION 9.03. OTHER DATA.
In addition, the Servicer shall, upon the request of the Indenture
Trustee, or any Rating Agency, furnish the Indenture Trustee or Rating Agency,
as the case may be, such underlying data used to generate a Monthly Report as
may be reasonably requested. The Servicer will also forward to the Indenture
Trustee each Rating Agency and First Union Securities, Inc. (a) within 120 days
after each fiscal quarter (other than the fiscal quarter which is also the end
of a fiscal year), commencing with the quarter ending August 31, 2002, the
unaudited quarterly financial statement of the Servicer and (b) within 120 days
after each fiscal year of the Servicer, commencing with the fiscal year ending
May 31, 2002, the annual financial statement of the Servicer, together with the
related report of the independent accountants to the Servicer. On the Payment
Date following the receipt of each such financial statements and report, the
Indenture Trustee will forward to each Noteholder of record a copy of such
financial statements and report.
SECTION 9.04. ANNUAL REPORT OF ACCOUNTANTS.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "Independent Accountants"), who
may also render other services to the Servicer or its Affiliates, to deliver to
the Indenture Trustee, the Issuer and each Rating Agency, on or before August 31
(90 days after the end of the Servicer's fiscal year) of each year, beginning on
August 31, 2002, a report addressed to the Board of Directors of the Servicer
and the Indenture Trustee indicating that (i) with respect to the twelve months
ended the immediately preceding May 31 to the effect that such Independent
Accountants have audited the financial
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statements of the Servicer, that as part of that audit, nothing came to the
attention of such Independent Accountant that causes them to believe that the
Servicer was not in compliance with any of the terms, covenants, provisions or
conditions of the relevant sections of the Agreement, insofar as they relate to
accounting matters, except for such exceptions as such Independent Accountants
shall believe to be immaterial and such other exceptions as shall be set forth
in such report, (ii) in connection with Independent Accountant's audit of the
Servicer, there were no exceptions or errors in records related to equipment
leases and loans serviced by the Servicer, except for such exceptions as such
Independent Accountants shall believe to be immaterial and such other exceptions
as shall be set forth in such report, and (iii) the Independent Accountant has
performed certain procedures as agreed by the Servicer, the Indenture Trustee
(subject to the provisions of this Section 9.04(a)) whereby the Independent
Accountant will obtain the Monthly Report for four months with respect to the
twelve months ended the immediately preceding May 31 and for each Monthly Report
the Independent Accountant will agree all amounts in the Monthly Report to the
Servicer's computer, accounting and other reports, which will include in such
report any amounts which were not in agreement. In the event such firm of
Independent Accountants requires the Indenture Trustee to agree to the
procedures performed by such firm of Independent Accountants, the Servicer shall
direct the Indenture Trustee in writing to so agree; it being understood and
agreed that the Indenture Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Servicer, and the Indenture
Trustee will not make any independent inquiry or investigation as to, and shall
have no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.
(b) The Independent Accountant's report shall also indicate that the
firm is independent of the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
SECTION 9.05. ANNUAL STATEMENT OF COMPLIANCE FROM SERVICER.
The Servicer will deliver to the Indenture Trustee, and each of the
Rating Agencies, on or before August 31 of each year commencing August 31, 2002,
an Officer's Certificate stating that (a) a review of the activities of the
Servicer during the prior fiscal year and of its performance under this
Agreement was made under the supervision of the officer signing such certificate
and (b) to such officer's knowledge, based on such review, the Servicer has
fully performed or cause to be performed in all material respects all its
obligations under this Agreement and no Servicer Default has occurred or is
continuing, or, if there has been any default in the performance of any
obligation of the Servicer, specifying each such default known to such officer
and the nature and status thereof and the steps being taken or necessary to be
taken to remedy such event. A copy of such certificate may be obtained by any
Noteholder by a request in writing to the Indenture Trustee.
SECTION 9.06. ANNUAL SUMMARY STATEMENT.
On or prior to August 31 of each year, commencing August 31, 2002, the
Servicer shall prepare and provide to the Indenture Trustee, and each Rating
Agency, a cumulative summary of the information required to be included in the
Monthly Reports for the Collection Periods ending during the immediately
preceding fiscal year.
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ARTICLE X
TERMINATION
SECTION 10.01. SALE OF PLEDGED ASSETS.
(a) Upon any sale of the Pledged Assets pursuant to the Indenture, the
Servicer shall instruct the Indenture Trustee in writing to deposit the proceeds
from such sale after all payments and reserves therefrom have been made (the
"Insolvency Proceeds") in the Collection Account. On the Payment Date on which
the Insolvency Proceeds are deposited in the Collection Account (or, if such
proceeds are not so deposited on a Payment Date, on the Payment Date immediately
following such deposit), the Servicer shall instruct the Indenture Trustee in
writing to allocate and apply (after the application on such Payment Date of
Available Amounts and funds on deposit in the Reserve Fund, the Residual Account
and the Payahead Account pursuant to Section 7.04) the Insolvency Proceeds as if
(and in the same order of priority as) the Insolvency Proceeds were Available
Amounts being allocated and distributed on such date pursuant to Section
7.04(b).
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the Issuer will
succeed to the rights of the Noteholders hereunder.
ARTICLE XI
REMEDIES UPON MISREPRESENTATION; REPURCHASE OPTION
SECTION 11.01. REPURCHASES OF, OR SUBSTITUTION FOR, CONTRACTS FOR
BREACH OF REPRESENTATIONS AND WARRANTIES.
Upon a discovery by the Servicer, the Issuer or the Indenture Trustee
of a breach of a representation or warranty of the Originator as set forth in
Section 3.01, Section 3.02, Section 3.03, Section 3.04, and Section 3.05 or as
made or deemed made in any Addition Notice or any Subsequent Transfer Agreement
relating to Substitute Contracts that materially adversely affects the interest
of the Noteholders, the Issuer or their successors or assigns in such Contract
(without regard to the benefits of the Reserve Fund or the Residual Account) (an
"Ineligible Contract"), or of an inaccuracy with respect to the representations
as to concentrations of the Initial Contracts made under Section 3.05, the party
discovering the breach shall give prompt written notice to the other parties
(and the Servicer shall, with respect to an inaccuracy concerning
concentrations, select one or more Contracts, without employing adverse
selection, to be the related Excess Contract for purposes of this Section),
provided, that the Indenture Trustee shall have no duty or obligation to inquire
or to investigate the breach by the Originator of any of such representations or
warranties. The Originator shall repurchase each such Ineligible Contract or
Excess Contract, at a repurchase price equal to the Transfer Deposit Amount, not
later than the next succeeding Determination Date following the date the
Originator becomes aware of, or receives written notice from the Indenture
Trustee, the Servicer or the Issuer of, any such breach or inaccuracy and which
breach or inaccuracy has not otherwise been cured; provided, however, that if
the Originator is able to effect a substitution for any such Ineligible
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Contract or Excess Contract in compliance with Section 2.04, the Originator may,
in lieu of repurchasing such Contract, effect a substitution for such affected
Contract with a Substitute Contract (subject to the 10% limitation set forth in
Section 2.04 (b)(x)) not later than the date a repurchase of such affected
Contract would be required hereunder, and provided further that with respect to
a breach of representation or warranty relating to the Contracts in the
aggregate and not to any particular Contract the Originator may select Contracts
(without adverse selection) to repurchase (or substitute for) such that had such
Contracts not been included as part of the Conveyed Assets (and, in the case of
a substitution, had such Substitute Contract been included as part of the
Conveyed Assets instead of the selected Contract) there would have been no
breach of such representation or warranty. Notwithstanding any other provision
of this Agreement, the obligation of the Originator described in this Section
11.01 shall not (a) terminate or be deemed released by any party hereto upon a
Servicer Transfer pursuant to Article VIII or (b) include any obligation to make
payment on account of a breach of a Contract by an Obligor subsequent to the
date on which such Contract was transferred to the Issuer. The repurchase
obligation described in this Section 11.01 is in no way to be satisfied with
monies in the Reserve Fund, the Residual Account or the Payahead Account.
SECTION 11.02. REASSIGNMENT OF REPURCHASED OR SUBSTITUTED CONTRACTS.
Upon receipt by the Indenture Trustee for deposit in the Collection
Account of the amounts described in Section 11.01 or Section 11.03 (or upon the
Subsequent Transfer Date related to a Substitute Contract described in Section
11.01), and upon receipt of an Officer's Certificate of the Servicer in the form
attached hereto as Exhibit F, the Indenture Trustee shall assign to the Issuer
and the Issuer shall assign to the Originator all of the Issuer's right, title
and interest in the repurchased or substituted Contract and related Conveyed
Assets without recourse, representation or warranty. Such reassigned Contract
shall no longer thereafter be included in any calculations of Principal Balances
required to be made hereunder or otherwise be deemed a part of the Conveyed
Assets.
ARTICLE XII
ORIGINATOR INDEMNITIES
SECTION 12.01. ORIGINATOR'S INDEMNIFICATION.
The Originator will defend and indemnify the Issuer, the Indenture
Trustee, any agents of the Indenture Trustee and the Noteholders (any of which,
an "Indemnified Party") against any and all costs, expenses, losses, damages,
claims and liabilities, joint or several, including reasonable fees and expenses
of counsel and expenses of litigation (collectively, "Costs") arising out of or
resulting from (i) this Agreement, the Transaction Documents or any document or
transaction contemplated in connection herewith or therewith or the use,
ownership or operation of any Equipment by the Originator or the Servicer or any
Affiliate of either, (ii) any representation or warranty or covenant made by the
Originator in this Agreement being untrue or incorrect (subject to the
limitations described in the preamble to Article Three of this Agreement), and
(iii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or in any amendment thereto or the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in light of the
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circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement was made in conformity with information furnished to Issuer by the
Originator specifically for use therein; provided, however, that the Originator
shall not be required to so indemnify any such Indemnified Party for such Costs
to the extent that such Cost shall be due to or arise from the willful
misfeasance, bad faith or negligence of such Indemnified Party. Notwithstanding
any other provision of this Agreement, the obligation of the Originator under
this Section 12.01 shall not terminate upon a Servicer Transfer pursuant to
Article Eight of this Agreement and shall survive any termination of that
agreement or this Agreement and the earlier removal or resignation of the
Indenture Trustee.
SECTION 12.02. LIABILITIES TO OBLIGORS.
No obligation or liability to any Obligor under any of the Contracts is
intended to be assumed by the Indenture Trustee, the Issuer or the Noteholders
under or as a result of this Agreement and the transactions contemplated hereby.
SECTION 12.03. TAX INDEMNIFICATION.
(a) The Originator agrees to pay, and to indemnify, defend and hold
harmless the Issuer, Indenture Trustee or the Noteholders from, any taxes which
may at any time be asserted with respect to, and as of the date of, the transfer
of the Contracts to the Issuer and the pledge by the Issuer to the Indenture
Trustee, including, without limitation, any sales, gross receipts, general
corporation, personal property, privilege or license taxes and costs, expenses
and reasonable counsel fees in defending against the same, whether arising by
reason of the acts to be performed by the Originator or the Servicer under this
Agreement or imposed against the Issuer, a Noteholder or otherwise.
Notwithstanding any other provision of this Agreement, the obligation of the
Originator under this Section 12.03 shall not terminate, with respect to
obligations incurred by the Servicer prior to a Servicer Transfer, upon a
Servicer Transfer pursuant to Article Eight of this Agreement and shall survive
any termination of this Agreement.
(b) The Originator agrees to pay and to indemnify, defend and hold
harmless the Issuer and the Indenture Trustee, on an after-tax basis (as
hereinafter defined), from any state or local personal property taxes, gross
rent taxes, leasehold taxes or similar taxes which may at any time be asserted
with respect to the ownership of the Contracts (including security interests
therein) and the receipt of rentals therefrom by the Issuer, and costs, expenses
and reasonable counsel fees in defending against the same, excluding, however,
taxes based upon or measured by gross or net income or receipts (other than
taxes imposed specifically with respect to rentals). As used in this Section,
the term "after-tax basis" shall mean, with respect to any payment to be
received by an indemnified person, that the amount to be paid by the Originator
shall be equal to the sum of (i) the amount to be received without regard to
this sentence, plus (ii) any additional amount that may be required so that
after reduction by all taxes imposed under any federal, state and local law, and
taking into account any current credits or deductions arising therefrom,
resulting either from the receipt of the payments described in both clauses (i)
and (ii) hereof, such sum shall be equal to the amount described in clause (i)
above.
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SECTION 12.04. REAL PROPERTY COLLATERAL.
The Originator hereby agrees that if any real property collateral
securing any Contract described in Section 3.02(e) hereof becomes the subject of
any claims, proceedings, liens or encumbrances with respect to any material
violation or claimed material violation of any federal or state environmental
laws or regulations, such Contract shall for all purposes hereunder be, at and
following the time of discovery by the Originator, the Issuer, the Servicer or
the Indenture Trustee (it being understood and agreed that the Indenture Trustee
is under no duty of investigation) of such fact, deemed an Ineligible Contract
subject to the same remedial and recourse provisions hereunder as other
Contracts determined to be Ineligible Contracts hereunder.
SECTION 12.05. OPERATION OF INDEMNITIES.
Indemnification under this Article Twelve shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Originator has made any indemnity payments to the Issuer or the Indenture
Trustee pursuant to this Article Twelve and the Issuer or the Indenture Trustee
thereafter collects any of such amounts from others, the Issuer or the Indenture
Trustee will repay such amounts collected to the Originator.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. AMENDMENT.
(a) This Agreement may be amended by the Originator, the Issuer, the
Servicer and the Indenture Trustee, collectively, without the consent of any
Noteholders, to cure any ambiguity, to correct or supplement any provisions in
this Agreement which are inconsistent with the provisions herein, or to add any
other provisions with respect to matters or questions arising under this
Agreement that shall not be inconsistent with the provisions of this Agreement,
provided, however that any such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder.
(b) This Agreement may also be amended from time to time by the
Originator, the Issuer, the Servicer and the Indenture Trustee, with the consent
of the Required Holders, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders; provided, however, that
no such amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of or change the method of calculating (A)
Collections of payments on the Contracts or distributions that shall be required
to be made on any Note (including by way of amendment of related definitions),
or (B) the manner in which the Reserve Fund or Residual Account is applied, or
(ii) change in any manner (including through amendment of related definitions),
the Holders which are required to consent to any such amendment, (iii) make any
Note payable in money other than Dollars, without the consent of the Holders of
all Notes of the relevant affected Class then outstanding or (iv) change the
definition
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of or the manner of calculating the Class A-1 Principal Payment Amount, the
Class A-2 Principal Payment Amount, the Class A-3 Principal Payment Amount, the
Class A-4 Principal Payment Amount, the Class B Principal Payment Amount, the
Class C Principal Payment Amount, the Class C Principal Payment Amount, the
Class D Principal Payment Amount, the Additional Principal, the Discounted
Contract Balance, the Required Holders, the amounts available for distribution
to noteholders or the principal amount of the notes without the consent of each
noteholder.
(c) Prior to the execution of any such amendment or consent, the
Indenture Trustee shall furnish written notification of the substance of such
amendment or consent, together with a copy thereof, to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Indenture Trustee shall furnish written notification of the substance of such
amendment or consent to each Noteholder. It shall not be necessary for the
consent of Noteholders pursuant to Section 13.01(b) to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization by Noteholders of the execution
thereof shall be subject to such reasonable requirements as the Indenture
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Indenture Trustee shall be entitled to receive and conclusively rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized
and permitted by this Agreement. The Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Indenture
Trustee's own rights, duties, indemnities or immunities under this Agreement or
otherwise.
SECTION 13.02. PROTECTION OF TITLE.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain and
protect the interest of the Issuer, the Noteholders and the Indenture Trustee in
the Contracts and in the proceeds thereof. The Servicer shall deliver (or cause
to be delivered) to the Indenture Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Originator, the Issuer nor the Servicer shall change
its name, identity or corporate structure in any manner that would, could or
might make any financing statement or continuation statement filed in accordance
with Section 4.02(a) seriously misleading within the meaning of Section 9-506 of
the UCC, unless it shall have given the Issuer and the Indenture Trustee at
least 30 days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Originator, the Issuer and the Servicer shall give the
Indenture Trustee at least 30 days' prior written notice of any relocation of
the principal executive office of the Originator, the Issuer or the Servicer if,
as a result of such relocation, the applicable provisions of the UCC would
require filing of any amendment of any previously filed financing or
84
continuation statement or of any new financing statement, and the Servicer shall
promptly file or cause to be filed any such amendment or new financing
statement. The Servicer shall at all times maintain each office from which it
shall service Contracts, and its principal executive office, within the United
States.
(d) The Servicer shall maintain or cause to be maintained accounts and
records as to each Contract accurately and in sufficient detail to permit (i)
the reader thereof to know at any time the status of such Contract, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to) each
Contract and the amounts from time to time deposited in or credited to the
Collection Account in respect of each Contract.
(e) The Servicer shall maintain or cause to be maintained its computer
systems so that, from and after the time of sale under this Agreement of the
Contracts, the Servicer's master computer records (including any backup
archives) that shall refer to a Contract indicate clearly the interest of the
Issuer and the Indenture Trustee in such Contract and that such Contract is
owned by the Issuer and has been pledged to the Indenture Trustee. Indication of
the Issuer's ownership of and the Indenture Trustee's interest in a Contract
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the related Contract shall have been paid in full or repurchased or
substituted for.
(f) The Servicer shall deliver to the Issuer, the Indenture Trustee and
each Rating Agency promptly after the execution and delivery of this Agreement
and of each amendment hereto, an Opinion of Counsel either (A) stating that, in
the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to preserve and
protect the interest of the Issuer and the Indenture Trustee and reciting the
details of each filing or referring to prior Opinions of Counsel in which such
details are given, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interest.
SECTION 13.03. GOVERNING LAW.
(a) This Agreement shall be construed in accordance with the laws of
the State of New York and the obligations, rights, and remedies of the parties
under the Agreement shall be determined in accordance with such laws.
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. Each party hereto (i) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 13.03(b).
85
SECTION 13.04. NOTICES.
All notices, demands, certificates, requests and communications
hereunder ("notices") shall be in writing and shall be effective (a) upon
receipt when sent through the U.S. mails, registered or certified mail, return
receipt requested, postage prepaid, with such receipt to be effective the date
of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date transmitted by
legible telecopier transmission with a confirmation of receipt, in all cases
addressed to the recipient as follows:
(i) If to the Servicer or Originator:
GreatAmerica Leasing Corporation
000 Xxxxx Xxxxxx XX, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Chief Financial Officer
Fax No.: (000) 000-0000
(ii) If to the Issuer:
GreatAmerica Leasing Receivables 2002-1, L.L.C.
000 Xxxxx Xxxxxx XX, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: President
Fax No.: (000) 000-0000
(iii) If to the Indenture Trustee:
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services,
GreatAmerica Leasing Receivable 2002-1
Fax No.: (000) 000-0000
(iv) If to S&P:
Standard & Poor's Ratings Group
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance: Asset Backed Services
Fax No.: (000) 000-0000
86
(v) If to Fitch:
Fitch, Inc.
00 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: ABS Monitoring
Fax No.: (000) 000-0000
(vi) If to Moody's:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Fax No.: (000) 000-0000
(vii) If to the Underwriter:
First Union Securities, Inc.
One First Union Center, Mail Code: NC0610
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Asset Securitization Division
Fax No.: (000) 000-0000
Each party hereto may, by notice given in accordance herewith to each of the
other parties hereto, designate any further or different address to which
subsequent notices shall be sent.
SECTION 13.05. SEVERABILITY OF PROVISIONS.
If one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever 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 shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Notes or the rights of the Holders thereof.
SECTION 13.06. THIRD PARTY BENEFICIARIES.
Except as otherwise specifically provided herein, the parties hereto
hereby manifest their intent that no third party, other than the Indenture
Trustee, shall be deemed a third party beneficiary of this Agreement, and
specifically that the Obligors are not third party beneficiaries of this
Agreement.
87
SECTION 13.07. COUNTERPARTS.
This Agreement may be executed by facsimile signature and in several
counterparts, each of which shall be an original and all of which shall together
constitute but one and the same instrument.
SECTION 13.08. HEADINGS.
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 13.09. NO BANKRUPTCY PETITION.
Each of the Originator, the Indenture Trustee, the Servicer, the Issuer
and each Holder (by acceptance of the applicable Notes) covenants and agrees
that, prior to the date that is one year and one day after the payment in full
of all amounts owing in respect of all Outstanding Notes, it will not institute
against the Issuer or join any other Person in instituting against the Issuer,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United States or
any state of the United States provided, however, that nothing herein shall
prohibit the Indenture Trustee from filing proofs of claim or otherwise
participating in any such proceedings instituted by any other Person. This
Section 13.09 will survive the termination of this Agreement.
SECTION 13.10. JURISDICTION.
Any legal action or proceeding with respect to this Agreement may be
brought in the courts of the United States for the Southern District of New
York, and by execution and delivery of this Agreement, each party hereto
consents, for itself and in respect of its property, to the non-exclusive
jurisdiction of those courts. Each such party irrevocably waives any objection,
including any objection to the laying of venue or based on the grounds of forum
non conveniens, which it may now or hereafter have to the bringing of any action
or proceeding in such jurisdiction in respect of this Agreement or any document
related hereto.
SECTION 13.11. PROHIBITED TRANSACTIONS WITH RESPECT TO THE ISSUER.
The Originator shall not:
(a) Provide credit to any Noteholder for the purpose of enabling such
Noteholder to purchase Notes, respectively;
(b) Purchase any Notes in an agency or trustee capacity; or
(c) Except in its capacity as Servicer as provided in this Agreement,
lend any money to the Issuer.
88
SECTION 13.12. MERGER OR CONSOLIDATION OF ORIGINATOR OR SERVICER.
(a) Each of the Originator and the Servicer will keep in full force and
effect its existence, rights and franchise as a Iowa corporation, and each of
the Originator and the Servicer will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and of any of the Contracts and to perform its
duties under this Agreement.
(b) Any person into which the Originator or the Servicer, as the case
may be, may be merged or consolidated, or any corporation resulting from such
merger or consolidation to which the Originator or the Servicer, as the case may
be, is a party, or any person succeeding by acquisition or transfer to
substantially all of the assets and the business of the Originator or the
Servicer, as the case may be, shall be the successor to the Originator or the
Servicer, as the case may be, hereunder, without execution or filing of any
paper or any further act on the part of any of the parties hereto,
notwithstanding anything herein to the contrary.
(c) Upon the merger or consolidation of the Originator or the Servicer,
as the case may be, as described in this Section 13.12, the Originator or the
Servicer, as the case may be, shall provide the Indenture Trustee and the Rating
Agencies notice of such merger, consolidation or transfer of substantially all
of the assets and business within thirty (30) days after completion of the same.
SECTION 13.13. ASSIGNMENT OR DELEGATION BY THE ORIGINATOR.
Except as specifically authorized hereunder, the Originator may not
convey and assign or delegate any of its rights or obligations hereunder absent
the prior written consent of the Issuer and the Indenture Trustee, and any
attempt to do so without such consent shall be void.
89
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
GREATAMERICA LEASING RECEIVABLES 2002-1, L.L.C.
By: GREATAMERICA LEASING CORPORATION,
as Member
By:
-------------------------------------------
Printed Name:
---------------------------------
Title:
----------------------------------------
GREATAMERICA LEASING CORPORATION,
as Servicer and as Originator
By:
-------------------------------------------
Printed Name:
---------------------------------
Title:
----------------------------------------
JPMORGAN CHASE BANK, not in its individual capacity
but solely as Indenture Trustee
By:
-------------------------------------------
Printed Name:
---------------------------------
Title:
----------------------------------------
EXHIBIT A
FORM OF ASSIGNMENT
In accordance with the Transfer and Servicing Agreement (the "Transfer
and Servicing Agreement") dated as of March 1, 2002 made by and between the
undersigned, as Issuer ("Issuer"), GreatAmerica Leasing Corporation, as Servicer
and as Originator and JPMorgan Chase Bank, as Indenture Trustee, the undersigned
does hereby sell, transfer, convey and assign, set over and otherwise convey to
the Issuer (i) all the right, title and interest of the Originator in and to the
Initial Contracts listed on the initial List of Contracts delivered on the
Closing Date (including, without limitation, all rights to receive Collections
with respect thereto on or after the Initial Cutoff Date, but excluding any
rights to receive payments which were collected pursuant thereto prior to the
Initial Cutoff Date), and (ii) all other Contract Assets relating to the
foregoing.
Capitalized terms used herein have the meaning given such terms in the
Transfer and Servicing Agreement.
This Assignment is made pursuant to and in reliance upon the
representation and warranties on the part of the undersigned contained in
Article III of the Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ___ day of __________, 2002.
GREATAMERICA LEASING CORPORATION
By:
-----------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
EXHIBIT B
FORM OF CLOSING CERTIFICATE OF ISSUER
GREATAMERICA LEASING RECEIVABLES 2002-1, L.L.C.
OFFICER'S CERTIFICATE
The undersigned certifies that he/she is [___________] of GreatAmerica
Leasing Receivables 2002-1, L.L.C., a Delaware limited liability company (the
"Issuer"), and that as such is duly authorized to execute and deliver this
certificate on behalf of the Issuer in connection with the Transfer and
Servicing Agreement (the "Agreement") dated as of March 1, 2002 (the "Effective
Date") by and among the Issuer, JPMorgan Chase Bank (the "Indenture Trustee"),
as Indenture Trustee and GreatAmerica Leasing Corporation ("GreatAmerica"), as
Servicer and as Originator (all capitalized terms used herein without definition
having the respective meanings set forth in the Agreement), and further
certifies as follows:
(1) Attached hereto as Exhibit I is a true and correct copy of
the Certificate of Formation of the Issuer, together with all
amendments thereto as in effect on the date hereof.
(2) There has been no other amendment or other document filed
affecting the Certificate of Formation of the Issuer since __________
___, 2002 and no such amendment has been authorized by the members of
the Issuer.
(3) Attached hereto as Exhibit II is a Certificate of the
Secretary of State of the State of Delaware dated __________ ___, 2002
stating that the Issuer is duly formed under the laws of the State of
Delaware and is in good standing.
(4) Attached hereto as Exhibit III is a true and correct copy
of the Limited Liability Company Agreement of the Issuer, as amended,
which were in full force and effect on __________ ___, 2002, and at all
times subsequent thereto.
(5) Attached hereto as Exhibit IV is a true and correct copy
of resolutions adopted pursuant to the unanimous written consent of the
board of directors of the Issuer relating to the execution, delivery
and performance of (among other things) the Agreement; the Indenture
(as defined in the Agreement); the Underwriting Agreement (as defined
in the Agreement) the Placement Agency Agreement (as defined in the
Agreement) (collectively, the "Transaction Agreements"). Said
resolutions have not been amended, modified, annulled or revoked, and
are on the date hereof in full force and effect and are the only
resolutions relating to these matters which have been adopted by the
members.]
(6) No event with respect to the Issuer has occurred and is
continuing which would constitute an Event of Default or an event that,
with notice or the passage of time or both, would become an Event of
Default as defined in the Agreement. To the best of my knowledge after
reasonable investigation, there has been no material adverse change
in the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Issuer, whether or not arising in
the ordinary course of business since the respective dates as of which
information is given in the Prospectus and except as set forth therein.
(7) All federal, state and local taxes of the Issuer due and
owing as of the date hereof have been paid.
(8) All representations and warranties of the Issuer contained
in the Transaction Agreements or any other related documents, or in any
document, certificate or financial or other statement delivered in
connection therewith are true and correct as of the date hereof.
(9) There is no action, investigation or proceeding pending
or, to our knowledge, threatened against the Issuer before any court,
administrative agency or other tribunal (a) asserting the invalidity of
the Transaction Agreements; (b) seeking to prevent the consummation of
any of the transactions contemplated by the Transaction Agreements; or
(c) which is likely materially and adversely to affect the Issuer's
performance of its obligations under, or the validity or enforceability
of, the Transaction Agreements.
(10) No consent, approval, authorization or order of, and no
notice to or filing with, any governmental agency or body or state or
federal court is required to be obtained by the Issuer for the Issuer's
consummation of the transactions contemplated by the Transaction
Agreements, except such as have been obtained or made and such as may
be required under the blue sky laws of any jurisdiction in connection
with the issuance and sale of the Notes.
(11) The Issuer is not a party to any agreements or
instruments evidencing or governing indebtedness for money borrowed or
by which the Issuer or its property is bound (other than the
Transaction Agreements). Neither the Originator's transfer and
assignment of the Conveyed Assets to the Issuer, the Issuer's
concurrent transfer and assignment of the Collateral by the Issuer to
the Indenture Trustee nor the issuance and sale of the Notes, nor the
execution and delivery of the Transaction Agreements, nor the
consummation of any other of the transactions contemplated therein,
will violate or conflict with any agreement or instrument to which the
Issuer is a party or by which it is otherwise bound.
(12) In connection with the transfer of Contracts and related
collateral contemplated in the Agreement, (a) the Issuer has not made
such transfer with actual intent to hinder, delay or defraud any
creditor of the Issuer, and (b) the Issuer has not received less than a
reasonably equivalent value in exchange for such transfer, is not on
the date thereof insolvent (nor will become insolvent as a result
thereof), is not engaged (or about to engage) in a business or
transaction for which it has unreasonably small capital, and does not
intend to incur or believe it will incur debts beyond its ability to
pay when matured.
(13) Each of the agreements and conditions of the Issuer to be
performed on or before the Closing Date pursuant to the Transaction
Agreements have been performed in all material respects.
* * * *
In Witness Whereof, I have affixed my signature hereto this ___ day of
__________, 2002.
By:
--------------------------------------
Printed Name:
-------------------------
Title:
--------------------------------
EXHIBIT C
[FORM OF CLOSING CERTIFICATE OF SERVICER/ORIGINATOR]
GREATAMERICA LEASING CORPORATION
OFFICER'S CERTIFICATE
The undersigned certifies that he/she is ____________ of GreatAmerica
Leasing Corporation ("GreatAmerica"), and that as such he/she is duly authorized
to execute and deliver this certificate on behalf of GreatAmerica, as Servicer
and Originator, in connection with the Transfer and Servicing Agreement (the
"Agreement") dated as of March 1, 2002 (the "Effective Date") by and among
GreatAmerica, as Servicer and Originator, GreatAmerica Leasing Receivables
2002-1, L.L.C. ("Issuer"), JPMorgan Chase Bank as Indenture Trustee, (all
capitalized terms used herein without definition having the respective meanings
set forth in the Agreement), and further certifies as follows (it being
understood that these certifications are being relied upon by, among others,
Xxxxxxx and Xxxxxx in connection with its delivery of a legal opinion (the
"Opinion") required in connection with the subject transactions addressing,
among other things, enforceability and UCC perfection issues, and by the
Underwriter in connection with its undertakings in connection with the subject
transactions):
(1) Attached hereto as Exhibit I is a true and correct copy of
the Certificate of Incorporation of GreatAmerica, together with all
amendments thereto as in effect on the date hereof.
(2) There has been no other amendment or other document filed
affecting the Certificate of Incorporation of GreatAmerica since
________, 199__, and no such amendment has been authorized by the Board
of Directors or shareholders of GreatAmerica.
(3) Attached hereto as Exhibit II is a Certificate of the
Secretary of State of the State of Iowa dated __________ ___, 2002
stating that GreatAmerica is duly incorporated under the laws of the
State of Iowa and is in good standing.
(4) Attached hereto as Exhibit III is a true and correct copy
of the Bylaws of GreatAmerica which were in full force and effect on
__________ ___, 2002 and at all times subsequent thereto.
(5) Attached hereto as Exhibit IV is a true and correct copy
of resolutions adopted pursuant to a unanimous written consent of the
Executive Committee of the Board of Directors of GreatAmerica and
relating to the authorization, execution, delivery and performance of
(among other things) the Agreement; the Underwriting Agreement (as
defined in the Agreement). Said resolutions have not been amended,
modified, annulled or revoked, and are on the date hereof in full force
and effect and are the only resolutions relating to these matters which
have been adopted by the Board of Directors.
(6) No event with respect to GreatAmerica has occurred and is
continuing which would constitute an Event of Default or Servicer
Default or an event that, with notice or the passage of time, would
constitute an Event of Default or Servicer Default as defined in the
Transfer and Servicing Agreement. To the best of my knowledge after
reasonable investigation, there has been no material adverse change in
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of GreatAmerica, whether or not arising
in the ordinary course of business, since the respective dates as of
which information is given in the Prospectus and except as set forth
therein.
(7) All federal, state and local taxes of GreatAmerica due and
owing as of the date hereof have been paid.
(8) All representations and warranties of GreatAmerica
contained in the Agreement and the Underwriting Agreement
(collectively, the "Transaction Agreements") or in any document,
certificate or financial or other statement delivered in connection
therewith are true and correct as of the date hereof.
(9) There is no action, investigation or proceeding pending
or, to my knowledge, threatened against GreatAmerica before any court,
administrative agency or other tribunal (a) asserting the invalidity of
any Transaction Agreement to which GreatAmerica is a party; or (b)
which is likely materially and adversely to affect GreatAmerica's
performance of its obligations under, or the validity or enforceability
of, the Transaction Agreements.
(10) No consent, approval, authorization or order of, and no
notice to or filing with, any governmental agency or body or state or
federal court is required to be obtained by GreatAmerica for
GreatAmerica's consummation of the transactions contemplated by the
Transaction Agreements, except such as have been obtained or made and
such as may be required under the blue sky laws of any jurisdiction in
connection with the issuance and sale of the Notes.
(11) Neither GreatAmerica's transfer and assignment of the
Contract Assets to the Issuer, the Issuer's concurrent transfer and
assignment of the Pledged Assets to the Indenture Trustee, nor the
issuance and sale of the Notes or the entering into of the Transaction
Agreements, nor the consummation of any other of the transactions
contemplated therein, will violate or conflict with any agreement or
instrument to which GreatAmerica is a party or by which it is otherwise
bound.
(12) In connection with the transfers of Contracts and related
assets contemplated in the Agreement, (a) GreatAmerica has not made
such transfer with actual intent to hinder, delay or defraud any
creditor of GreatAmerica, and (b) GreatAmerica has not received less
than a reasonably equivalent value in exchange for such transfer, is
not on the date hereof insolvent (nor will GreatAmerica become
insolvent as a result thereof), is not engaged (or about to engage) in
a business or transaction for which it has unreasonably small capital,
and does not intend to incur or believe it will incur debts beyond its
ability to pay when matured.
(13) Each of the agreements and conditions of GreatAmerica to
be performed or satisfied on or before the Closing Date under the
Transaction Agreements has been performed or satisfied in all material
respects.
(14) GreatAmerica has not executed for filing any UCC
financing statements listing the Conveyed Assets as collateral other
than financing statements, except such financing statements that have
been or will be released or terminated as of the Closing Date, relating
to the transactions contemplated in the Agreement.
* * * * * *
IN WITNESS WHEREOF, I have affixed my signature hereto this ____ day of
__________, 2002.
By:
---------------------------------------
Printed Name:
--------------------------
Title:
---------------------------------
EXHIBIT D
[RESERVED]
EXHIBIT E
[Reserved]
EXHIBIT F
FORM OF CERTIFICATE REGARDING REPURCHASED CONTRACTS
GREATAMERICA LEASING CORPORATION
CERTIFICATE REGARDING REPURCHASED CONTRACTS
The undersigned certifies that he/she is a ______________ of
GreatAmerica Leasing Corporation, an Iowa corporation (the "Servicer"), and that
as such he/she is duly authorized to execute and deliver this certificate on
behalf of the Servicer pursuant to Section 11.02 of the Transfer and Servicing
Agreement (the "Agreement") dated as of March 1, 2002 by and among GreatAmerica
Leasing Receivables 2002-1, L.L.C., as Issuer, the Servicer, GreatAmerica
Leasing Corporation, as Originator and JPMorgan Chase Bank, as Indenture Trustee
(all capitalized terms used herein without definition having the respective
meanings specified in the Agreement), and further certifies that:
1. The Contracts on the attached schedule are to be repurchased
by the Originator on the date hereof, or substituted for by
the Originator, pursuant to and in accordance with Section
11.01 of the Agreement.
2. Upon deposit of the Transfer Deposit Amount for such Contracts
(or the effective conveyance of one or more Substitute
Contracts therefor), such Contracts may, pursuant to Section
11.02 of the Agreement, be assigned by the Issuer to the
Originator.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of ___________, ____.
GREATAMERICA LEASING CORPORATION
By:
------------------------------------
Printed Name:
-----------------------
Title:
------------------------------
EXHIBIT G
LIST OF CONTRACTS
EXHIBIT H
[FORM OF MONTHLY REPORT TO NOTEHOLDERS]
EXHIBIT I
[FORM OF SUBSEQUENT TRANSFER AGREEMENT]
SUBSEQUENT TRANSFER AGREEMENT (the "Agreement"), dated as of
[_________], [_____], by and among GreatAmerica Leasing Receivables 2002-1,
L.L.C., a Delaware limited liability company (the "Issuer"), GreatAmerica
Leasing Corporation, an Iowa corporation ("GreatAmerica" or the "Originator"),
and JPMorgan Chase Bank as Indenture Trustee (the "Indenture Trustee") pursuant
to the Transfer and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS, the Issuer, the Originator and the Indenture Trustee are
parties to the Transfer and Servicing Agreement, dated as of March 1, 2002 (the
"Transfer and Servicing Agreement");
WHEREAS, pursuant to the Transfer and Servicing Agreement, the
Originator wishes to sell the Substitute Contracts to the Issuer, and the Issuer
wishes to purchase the same, for the purchase price set forth in Section 3
below; and
WHEREAS, the Originator has timely delivered an Addition Notice related
to such conveyance as required in the Transfer and Servicing Agreement).
NOW, THEREFORE, the Originator and the Issuer, hereby agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used herein shall have the
meanings ascribed to them in the Transfer and Servicing Agreement unless
otherwise defined herein.
"Subsequent Cutoff Date" shall mean, with respect to the
Substitute Contracts transferred hereby, ___________.
"Substitute Contracts" shall mean, for purposes of this
Agreement, the Substitute Contracts listed in the Subsequent List of
Contracts attached hereto as Exhibit A.
"Subsequent Transfer Date" shall mean, with respect to the
Substitute Contracts transferred hereby, ___________.
SECTION 2. SUBSEQUENT LIST OF CONTRACTS. The Subsequent List of
Contracts attached hereto as Exhibit A is an amendment to the initial List of
Contracts attached as Exhibit G to the Transfer and Servicing Agreement, as
contemplated in the definition of List of Contracts set forth therein. The
Subsequent List of Contracts separately identifies (by attached schedule, or
marking or other effective identifying designation) the Substitute Contracts to
be transferred pursuant to this Agreement on the Subsequent Transfer Date, and
also further separately identifies (by attached schedule, or marking or other
effective identifying designation) the related Contract or Contracts with
respect to which a Substitution Event has occurred and which
Contracts are being deleted from the List of Contracts by virtue of the delivery
of the Subsequent List of Contracts.
SECTION 3. TRANSFER OF SUBSTITUTE CONTRACTS. Subject to and upon the
terms and conditions set forth in Section 2.04 of the Transfer and Servicing
Agreement and this Agreement, the Originator hereby sells, transfers, assigns,
sets over and otherwise conveys to the Issuer, in consideration of the Issuer's
(x) payment of $_________ as the purchase price therefor, representing the
prepayment proceeds received with respect to the related Substitution Event (if
applicable) or (y) release and redelivery to the Originator of the related
Contract Assets with respect to which a Substitution Event has occurred (if
applicable), all of the Originator's rights, title and interests in:
(i) the Substitute Contracts identified in the related
Addition Notice, and all monies received in payment of such Contracts
on and after the related Subsequent Cutoff Dates, any Prepayment
Amounts, any payments in respect of a casualty or early termination,
and any Recoveries received with respect thereto, but excluding any
Excluded Amounts;
(ii) the Equipment related to such Contracts, including all
proceeds from any sale or other disposition of such Equipment (but
subject to the exclusion and release herein of Excluded Amounts);
(iii) the Contract Files;
(iv) all payments made or to be made in the future with
respect to such Contracts or the Obligor thereunder under any Vendor
Assignments with the Originator;
(v) all Insurance Proceeds with respect to each such Contract;
and
(vi) all income from and proceeds of the foregoing.
It is the intention of the Originator and the Issuer that the transfer
contemplated by this Agreement shall constitute a sale of the Substitute
Contracts from the Originator to the Issuer, conveying good title thereto free
and clear of any Liens, and that the Substitute Contracts shall not be part of
the Originator's estate in the event of the filing of a bankruptcy petition by
or against the Originator under any bankruptcy or similar law.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR.
(a) The Originator hereby represents and warrants to the Issuer that
the representations and warranties of the Originator in Section 3.01 of the
Transfer and Servicing Agreement are true and correct as of the Subsequent
Transfer Date.
(b) The Originator hereby repeats and remakes with respect to the
Substitute Contracts as of the Subsequent Transfer Date, the representations and
warranties set forth in the Transfer and Servicing Agreement and deemed to be
made with respect to such Substitute Contracts thereunder.
(c) The Originator hereby represents and warrants that (i) the Pool
Balance of the Substitute Contracts listed on the Subsequent List of Contracts
and conveyed to the Issuer pursuant to this Agreement is $_______ as of the
Subsequent Cutoff Date, and (ii) the conditions set forth in Section 2.04(b) of
the Transfer and Servicing Agreement have been satisfied as of the Subsequent
Transfer Date.
SECTION 5. RATIFICATION OF AGREEMENT. As supplemented by this
Agreement, the Transfer and Servicing Agreement is in all respects ratified and
confirmed and, as so supplemented by this Agreement, shall be read, taken and
construed as one and the same instrument.
SECTION 6. COUNTERPARTS. This Agreement may be executed by facsimile
signatures and in two or more counterparts (and by different parties in separate
counterparts), each of which shall be an original but all of which together
shall constitute one and the same instrument.
SECTION 7. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
[remainder of page intentionally blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
GREATAMERICA LEASING RECEIVABLES 2002-1,
L.L.C.
By:
-------------------------------------------
Printed Name:
------------------------------
Title:
-------------------------------------
GREATAMERICA LEASING CORPORATION
By:
-------------------------------------------
Printed Name:
------------------------------
Title:
-------------------------------------
JPMORGAN CHASE BANK, NOT IN ITS INDIVIDUAL
CAPACITY BUT SOLELY AS INDENTURE TRUSTEE
By:
-------------------------------------------
Printed Name:
------------------------------
Title:
-------------------------------------
EXHIBIT J
[FORMS OF CONTRACTS]
