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RECEIVABLES SALE AGREEMENT
BETWEEN
MCII FUNDING INC.,
as Seller
AND
MCII FUNDING II, INC.,
as Purchaser
Dated as of May 2, 2000
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RECEIVABLES SALE AGREEMENT
This RECEIVABLES SALE AGREEMENT, dated as of May 2, 2000 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "AGREEMENT"), between MCII FUNDING INC., a Delaware corporation, as seller
(in such capacity, the "SELLER") and MCII FUNDING II, INC., a Delaware
corporation, as purchaser (in such capacity, the "PURCHASER").
W I T N E S S E T H :
WHEREAS, the Purchaser desires to purchase certain accounts
receivable existing on the Closing Date;
WHEREAS, the Seller desires to sell and assign such accounts
receivable to the Purchaser upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed by
and between the Purchaser, the Seller and Motor Coach as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined). All
capitalized terms used herein but not defined herein shall have the respective
meanings specified in, or incorporated by reference into, the Receivables
Purchase Agreement, dated as of May 2, 2000 (as amended, supplemented or
otherwise modified and in effect from time to time, the "RECEIVABLES PURCHASE
AGREEMENT"), by and between MCII Funding II, Inc., as seller thereunder,
Canadian Imperial Bank of Commerce, as administrative agent thereunder, Special
Purpose Accounts Receivable Cooperative Corporation, as purchaser thereunder,
BusLease, Inc., as servicer thereunder and BNY Asset Solutions LLC, as backup
servicer thereunder.
"ADMINISTRATIVE AGENT" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"ADVERSE CLAIM" means, in respect of the property of any
Person, any ownership interest of any other Person, any mortgage, deed of trust,
hypothecation, pledge, lien, security interest, grant of a power to confess
judgment, preference, right to priority payment, charge or other encumbrance or
security arrangement of any nature whatsoever, including, without limitation,
any conditional sale or title retention arrangement, and any assignment, deposit
arrangement, consignment or lease intended as, or having the effect of,
security.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"BLOCKED ACCOUNT" has the meaning set forth in the Receivables
Purchase Agreement or the Secondary Purchase Agreement, as applicable.
"BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day on which banks are not authorized or
required to close in New York, New York, and (ii) with respect to all notices
and determinations in connection with the LIBOR Rate, any day which is a
Business Day described in clause (i) above and which is also a day for trading
by and between banks in dollar deposits in the London interbank market.
"BUSLEASE" has the meaning set forth in the Receivables
Purchase Agreement or the Secondary Purchase Agreement, as applicable.
"CASH COLLATERAL ACCOUNT" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"CASH MANAGEMENT SYSTEMS" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"CHARGES" means (i) all federal, state, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the PBGC at the time due and payable); (ii) all levies, assessments, charges, or
claims of any governmental entity or any claims of statutory lienholders, the
nonpayment of which could give rise by operation of law to a Lien on the
Receivables, the related Contracts or the related Vehicles or any other property
of the Seller or any Transferor and (iii) any such taxes,
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levies, assessment, charges or claims which constitute a lien or encumbrance
on any property of the Seller or any Transferor.
"CLOSING DATE" means the date on which all of the conditions
set forth in Section 3.01 of the Receivables Purchase Agreement are satisfied or
waived by SPARC.
"COLLECTIONS" mean, with respect to any Receivable, all cash
collections and other proceeds of such Receivable (including fees and interest
arising thereon, and all Recoveries with respect thereto).
"CONTRACT" means either a Vehicle Lease or a Vehicle Loan.
"CONTRACT FILE" has the meaning set forth in the Receivables
Purchase Agreement or the Secondary Purchase Agreement, as applicable.
"CONTRACT PAYMENT" means each periodic installment payable by
an Obligor under a Contract for rent, principal and/or interest, excluding all
supplemental or additional payments required by the terms of such Contract with
respect to sales or other taxes, insurance, maintenance, ancillary products and
services, late fees, penalties, default interest and other specific charges.
"CREDIT AND COLLECTION POLICY" has the meaning set forth in
the Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"DEFAULTED RECEIVABLE" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"DISCOUNT PERCENTAGE" means [**]%.
"ELIGIBLE INVESTMENT" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"ELIGIBLE RECEIVABLE" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"ENVIRONMENTAL LAWS" means all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time,
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and any applicable judicial or administrative interpretation thereof,
including any applicable judicial or administrative order, consent decree,
order or judgment, imposing liability or standards of conduct for or relating
to the regulation and protection of human health, safety, the environment and
natural resources (including ambient air, surface water, groundwater,
wetlands, land surface or subsurface strata, wildlife, aquatic species and
vegetation). Environmental Laws include, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. Sections 9601 ET SEQ.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. Sections 5101 ET
SEQ.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Sections 136 ET SEQ.; the Solid Waste Disposal Act (42 U.S.C.
Sections 6901 ET SEQ.); the Toxic Substance Control Act (15 U.S.C.
Sections 2601 ET SEQ.); the Clean Air Act (42 U.S.C. Sections
7401 ET SEQ.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 ET SEQ.); the Occupational Safety and Health Act (29
U.S.C. Sections 651 ET SEQ.); and the Safe Drinking Water Act (42
U.S.C. Sections 300(f) ET SEQ.), each as from time to time amended, and
any and all regulations promulgated thereunder, and all analogous state,
local and foreign counterparts or equivalents and any transfer of ownership
notification or approval statutes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"EVENT OF BANKRUPTCY" shall mean, with respect to any Person,
(i) that such Person (a) shall generally not pay its debts as such debts become
due or (b) shall admit in writing its inability to pay its debts generally or
(c) shall make a general assignment for the benefit of creditors; (ii) any
proceeding shall be instituted by or against such Person seeking to adjudicate
it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial part of
its property or (iii) if such Person is a corporation, such Person or any
Subsidiary shall take any corporate action to authorize any of the actions set
forth in the preceding clauses (i) or (ii).
"FINANCE CHARGE RECEIVABLE" means a Receivable created in
respect of Finance Charges.
"FINANCE CHARGES" means, with respect to any Receivable, the
portion
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of any Scheduled Contract Payment due under the Contract giving rise to
such Receivable which represents finance charges, together with any late fees,
collection charges, delinquency fees, extension fees, documentation fees and
maintenance fees paid by the related Obligor, as specified in the related
Contract.
"FINANCED VEHICLE" means a motor coach sold to or financed by
a Transferor pursuant to a Contract, including all goods installed in or
otherwise affixed thereto.
"FSA" means Financial Security Assurance Inc., a New York
monoline insurance company incorporated under the laws of the State of New York,
or successors thereto.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, consistently applied.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"INDEBTEDNESS" has the meaning set forth in the Receivables
Purchase Agreement or the Secondary Purchase Agreement, as applicable.
"INSURANCE AGREEMENT EVENT OF DEFAULT" has the meaning set
forth in the Receivables Purchase Agreement.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended.
"LEASED VEHICLE" means a Vehicle subject to a Vehicle Lease.
"LIBOR RATE" has the meaning set forth in the Secondary
Purchase Agreement.
"LIEN" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any
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of the foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the UCC or comparable law of
any jurisdiction).
"LOCKBOX ACCOUNT" means the lockbox account to which the
Obligors are directed to remit Collections in accordance with this Agreement,
the Receivables Purchase Agreement and the Secondary Purchase Agreement.
"MANUFACTURER" means, with respect to any Vehicle, the Person
who manufactured such Vehicle.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, assets, operations or financial or other condition of the
Purchaser, the Seller, the Servicer, or any Transferor, (b) the Seller's ability
to pay any of the Obligations in accordance with the terms of the Receivables
Purchase Agreement; (c) the Purchaser's, the Seller's or the Servicer's ability
to perform its obligations in accordance with the terms of the Receivables
Purchase Agreement and the other Related Documents; (d) the Receivables, the
related Vehicles or the Collections with respect thereto or the Liens created
under this Agreement and the other Related Documents or the priority of any such
Liens or (e) Administrative Agent's, SPARC's or the Transaction L/C Issuer's
rights and remedies under the Receivables Purchase Agreement and the other
Related Documents.
"MOTOR COACH" means Motor Coach Industries International,
Inc., a Delaware corporation, and its permitted successors and assigns.
"MOTOR COACH ENTITIES" means Motor Coach or its Affiliates,
but excluding the Seller.
"OBLIGOR" means each Person obligated to make payments under a
Contract.
"OUTSTANDING BALANCE" means, with respect to a Receivable at
any time of determination, all amounts in respect of which the related Obligor
is obligated as of such time of determination, including all Principal
Receivables and Finance Charge Receivables not paid by such Obligor as of such
time of determination.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
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"PERMITTED RESTRUCTURING" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"PERSON" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"PRINCIPAL RECEIVABLE" means, with respect to any Receivable,
the portion of any Scheduled Contract Payment due under the Contract giving rise
to such Receivable which does not represent Finance Charges.
"PURCHASE" has the meaning specified in SECTION 2.01(a) of the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"PURCHASE DATE" has the meaning set forth in Section 3.2(a)
hereof.
"PURCHASE PRICE" has the meaning set forth in Section 3.1
hereof.
"PURCHASER" has the meaning set forth in the recital to this
Agreement.
"PURCHASE TERMINATION DATE" has the meaning set forth in
Section 8.1 hereof.
"RECEIVABLE" means, with respect to any Obligor:
(1) indebtedness of such Obligor arising under a Contract
(whether constituting an account, chattel paper, document, instrument or general
intangible) including the right to payment of any Scheduled Contract Payments,
interest or finance charges and other obligations of such Obligor with respect
thereto;
(2) all Liens and property subject thereto from time to time
securing or purporting to secure any such indebtedness of such Obligor
(including any security deposits made or required to be made by such Obligor to
secure such indebtedness);
(3) all guaranties, indemnities and warranties, insurance
policies, financing statements and other agreements or arrangements of whatever
character from time to time supporting or securing payment of any such
indebtedness;
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(4) all Collections with respect to any of the foregoing; and
(5) all Records with respect to any of the foregoing.
In each case, it is understood that "Receivable," for purposes of this
Agreement, refers only to "Receivables" in which the Seller has a property
interest.
"RECEIVABLES PURCHASE AGREEMENT" has the meaning specified in
the first paragraph of this Section 1.1.
"RECORDS" means all Contracts and other documents, books,
records and other information (including computer programs, tapes, disks, data
processing software and related property and rights) prepared and maintained by
or on behalf of the Seller with respect to Receivables and the Obligors
thereunder and/or the related Vehicles, including, without limitation, all
documents, books, records and other information prepared and maintained by the
Purchaser, the Transferors, or the Servicer with respect to such Receivables,
Obligors or Vehicles.
"RECOVERIES" means, with respect to a Defaulted Receivable,
the sum of all amounts, whether in the form of cash, checks, drafts, insurance
proceeds or other instruments, received by the Seller, the related Transferor or
the Servicer in payment of, or applied to, any amount owed by an Obligor on
account of such Defaulted Receivable.
"RELATED DOCUMENTS" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"SCHEDULED CONTRACT PAYMENTS" means the regularly scheduled
Contract Payments due under each Contract.
"SECONDARY PURCHASE AGREEMENT" has the meaning set forth in
the Receivables Purchase Agreement.
"SECONDARY PURCHASER" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"SELLER" has the meaning set forth in the recital to this
Agreement.
"SERVICER" has the meaning set forth in the Receivables
Purchase Agreement or the Secondary Purchase Agreement, as applicable.
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"SERVICER TERMINATION EVENT" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"SPARC" means Special Purpose Accounts Receivable Cooperative
Corporation, together with its permitted successors and assigns.
"SUBSIDIARY" has the meaning set forth in the Receivables
Purchase Agreement or the Secondary Purchase Agreement, as applicable.
"TRANSACTION L/C ISSUER" has the meaning set forth in the
Receivables Purchase Agreement or the Secondary Purchase Agreement, as
applicable.
"TRANSFER AGREEMENTS" has the meaning set forth in the
Receivables Purchase Agreement.
"TRANSFEROR" has the meaning set forth in the Receivables
Purchase Agreement or the Secondary Purchase Agreement, as applicable.
"UCC" means the Uniform Commercial Code as the same may, from
time to time be enacted and in effect in the State of New York; PROVIDED,
HOWEVER, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Administrative Agent's security
interest in any Purchased Receivables, the related Vehicles or Collections with
respect thereto is governed by the Uniform Commercial Code as enacted and in
effect in a jurisdiction other than the State of New York, the term "UCC" shall
mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.
"VEHICLE" means a Financed Vehicle and/or a Leased Vehicle.
"VEHICLE LEASE" means an agreement between an Obligor and a
Transferor providing for the leasing of a Vehicle to the Obligor, provided that
such agreement would not be classified for purposes of GAAP as a Finance Lease
and not an Operating Lease.
"VEHICLE LOAN" means an agreement between an Obligor and a
Transferor providing for the extension of credit to such Obligor by such
Transferor, in connection with such Obligor's purchase of a Vehicle from a
Manufacturer.
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SECTION 1.2. OTHER TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the UCC, and not
specifically defined herein, are used herein as defined in such Article 9.
SECTION 1.3. COMPUTATION OF TIME PERIODS. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES
SECTION 2.1. SALES. (a) Upon the terms and subject to the
conditions set forth herein, the Seller hereby sells, assigns, transfers and
conveys to the Purchaser, and the Purchaser hereby purchases from the Seller all
of the Seller's right, title and interest, whether now owned or hereafter
acquired and wherever located, in, to and under all Receivables with respect to
all Obligors outstanding on the Closing Date, together with all Contracts and
Leased Vehicles with respect thereto and all proceeds of the foregoing. Such
undivided interest in the Receivables, expressed as a dollar amount, shall be
equal to the aggregate unpaid balance of the Receivables. Any sale, assignment,
transfer and conveyance hereunder does not constitute an assumption by the
Purchaser of any obligations of the Seller or any other Person to Obligors or to
any other Person in connection with the Receivables or under any other agreement
or instrument relating to the Receivables.
(a) In connection with such sale, the Seller agrees to record
and file on or prior to the Closing Date, at its own expense, a financing
statement or statements with respect to the Receivables and the other property
described in Section 2.1(a) sold by the Seller hereunder meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect and protect the interests of the Purchaser created
hereby under the UCC against all creditors of, and purchasers from, the Seller,
and to deliver either the originals of such financing statements or a
file-stamped copy of such financing statements or other evidence of such filings
to the Purchaser on or prior to the Closing Date.
(b) The Seller agrees that, at its expense, it will promptly
execute
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and deliver all instruments and documents and take all actions as may be
necessary or as the Purchaser may reasonably request in order to perfect or
protect the interest of the Purchaser in the Receivables and Vehicles
purchased hereunder or to enable the Purchaser to exercise or enforce any of
its rights hereunder. Without limiting the foregoing, the Seller will, in
order to accurately reflect this purchase and sale transaction, execute and
file such financing or continuation statements or amendments thereto or
assignments thereof (as permitted pursuant hereto) as may be requested by the
Purchaser and xxxx its master data processing records (or related subledger)
and other documents with a legend describing the purchase by the Purchaser of
the Receivables and the lien of the Administrative Agent pursuant to the
Receivables Purchase Agreement and stating "An interest in these receivables
has been granted to Canadian Imperial Bank of Commerce, as Administrative
Agent, on behalf of SPARC, the Secondary Purchaser and FSA, pursuant to a
Receivables Purchase Agreement dated as of May 2, 2000". The Seller shall,
upon request of the Purchaser, obtain such search reports as the Purchaser
shall request. To the fullest extent permitted by applicable law, the
Purchaser shall be permitted to sign and file continuation statements and
amendments thereto and assignments thereof without the Seller's signature.
Carbon, photographic or other reproduction of this Agreement or any financing
statement shall be sufficient as a financing statement.
(c) It is the express intent of the Seller and the Purchaser
that the conveyance of Receivables and Leased Vehicles by the Seller to the
Purchaser pursuant to this Agreement be construed as a sale of such Receivables
and Leased Vehicles by the Seller to the Purchaser. Further, it is not the
intention of the Seller and the Purchaser that such conveyance be deemed a grant
of a security interest in the Receivables by the Seller to the Purchaser to
secure a debt or other obligation of the Seller. However, in the event that,
notwithstanding the intent of the parties, the Receivables and Leased Vehicles
are construed to constitute property of the Seller, then (i) this Agreement also
shall be deemed to be, and hereby is, a security agreement within the meaning of
the UCC; and (ii) the conveyances by the Seller provided for in this Agreement
shall be deemed to be, and the Seller hereby grants to the Purchaser, a security
interest in, to and under all of the Seller's right, title and interest in, to
and under, whether now owned or hereafter acquired, the Receivables with respect
to all Obligors, together with all Contracts, Leased Vehicles and Collections
with respect thereto and all proceeds of the foregoing, to secure the
obligations of the Seller set forth in this Agreement or as may be determined in
connection therewith by applicable law. The Seller and the Purchaser shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Receivables and Leased Vehicles to secure a debt or other obligation, such
security interest would be deemed
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to be a perfected security interest in favor of the Purchaser under
applicable law and will be maintained as such throughout the term of this
Agreement. The Seller represents and warrants that the Receivables are being
transferred with the intention of removing them from the Seller's estate
pursuant to Section 541 of the Bankruptcy Code, as the same may be amended
from time to time.
SECTION 2.2. SERVICING OF RECEIVABLES. The servicing,
administering and collection of the Receivables shall be conducted by BusLease,
who hereby agrees to perform, take or cause to be taken all such action as may
be necessary or advisable to collect each Receivable from time to time, all in
accordance with applicable laws, rules and regulations and with the care and
diligence which BusLease employs in servicing similar receivables for its own
account, in accordance with the Credit and Collection Policy. The Purchaser
hereby appoints BusLease as its agent to enforce the Purchaser's rights and
interests in, to and under the Receivables, together with the Leased Vehicles
and the Collections with respect thereto. Notwithstanding anything to the
contrary contained herein, from and after the occurrence of a Servicer
Termination Event, the Purchaser shall, at the request of SPARC, the Secondary
Purchaser or the Administrative Agent, terminate BusLease servicing activities
described in this Section 2.2 and shall appoint a successor Servicer acceptable
to or as directed by SPARC, the Secondary Purchaser or the Administrative Agent,
as applicable. In consideration of the foregoing, the Purchaser agrees to pay
BusLease a servicing fee of [**] percent ([**]%) per annum on the aggregate
amount of Receivables sold, payable monthly, for its performance of the duties
and obligations described in this Section 2.2; PROVIDED that any such monthly
payment shall be reduced by any amounts payable in such month to BusLease in
accordance with Section 2.03(c)(ii) of the Receivables Purchase Agreement or the
Secondary Purchase Agreement, as applicable.
The obligations of BusLease hereunder in the administration,
servicing and collection of Receivables may be delegated from time to time by
BusLease to any of its Affiliates; PROVIDED that no such delegation of duties
shall relieve BusLease of any of its duties and obligations hereunder.
ARTICLE III
CONSIDERATION AND PAYMENT; REPORTING
SECTION 3.1. PURCHASE PRICE. The purchase price for the
Receivables, Leased Vehicles and related property conveyed to the Purchaser by
the Seller pursuant to Section 2.1(a) the Closing Date shall be a dollar amount
equal to
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the product of (i) the aggregate Outstanding Balance of the Receivables
at such time and (ii) one MINUS the then applicable Discount Percentage
(expressed as a decimal) (the "PURCHASE PRICE"). The Purchase Price for the
Receivables shall be paid or provided for on the Closing Date by payment in cash
in immediately available funds.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. SELLER'S REPRESENTATIONS AND WARRANTIES. The
Seller represents and warrants to the Purchaser as of the Closing Date:
(a) CORPORATE EXISTENCE. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified to do business, and is in
good standing, in every jurisdiction in which the nature of its business and the
performance of its obligations hereunder and under the other Related Documents
to which it is a party requires it to be so qualified.
(b) CORPORATE POWER AND AUTHORITY. The Seller has the power
and authority to own, pledge, mortgage, operate and convey all of its
properties, to conduct its business as now or proposed to be conducted and to
execute and deliver this Agreement and the Related Documents to which it is a
party and to perform the transactions contemplated hereby.
(c) CORPORATE AUTHORIZATION; CONTRAVENTION. The execution,
delivery and performance by the Seller of this Agreement, each other Related
Document to which it is a party and all other agreements, instruments and
documents which may be delivered by it pursuant hereto or thereto and the
transactions contemplated hereby and thereby (i) have been duly authorized by
all necessary corporate or other action on the part of the Seller, (ii) do not
contravene or cause the Seller to be in default in any material respect under
(A) its certificate or articles of incorporation or by-laws, (B) any contractual
restriction with respect to any Indebtedness of the Seller or contained in any
indenture, loan or credit agreement, lease, mortgage, security agreement, bond,
note or other agreement or instrument binding on or affecting it or its
property, or (C) any law, rule, regulation, order, license, requirement, writ,
judgment, award, injunction or decree applicable to, binding on or affecting it
or its property, and (iii) do not result in or require the creation of any Lien
upon or with respect to any of its properties (other than Liens created pursuant
to this Agreement or any other Related Document).
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(d) EXECUTION AND DELIVERY. This Agreement and each other
Related Document to which the Seller is a party have been duly executed and
delivered by the Seller.
(e) GOVERNMENTAL AUTHORIZATION. No approval, consent of,
notice to, filing with or permits, licenses, qualifications or other action by
any Governmental Authority or any other party is required or necessary (i) for
the conduct of the Seller's business as currently conducted, for the ownership,
use, operation or maintenance of its properties and for the due execution,
delivery and performance by the Seller of this Agreement or any of the Related
Documents, (ii) for the perfection of or the exercise by each of FSA, SPARC as
purchaser, The Bank of New York, as custodian, including any successor thereto,
or the Canadian Imperial Bank of Commerce as administrative agent of any of its
rights or remedies under the Receivables Purchase Agreement or hereunder, or
(iii) to ensure the legality, validity, or enforceability of this Agreement in
any jurisdiction in which the Seller does business, in each case other than
consents, notices, filings and other actions which have been obtained or made
and complete copies of which have been provided to FSA, SPARC as purchaser, The
Bank of New York, as custodian, including any successor thereto, or the Canadian
Imperial Bank of Commerce as administrative agent under the Receivables Purchase
Agreement and continuation statements in respect of any such filings.
No transaction contemplated by the Agreement requires
compliance with any bulk sales act or similar law.
(f) LEGALITY; VALIDITY; ENFORCEABILITY. This Agreement and
each other Related Document to which it is a party is the legal, valid and
binding obligation of the Seller enforceable against the Seller in accordance
with its respective terms subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the enforceability of creditors' rights generally and
general equitable principles, whether applied in a proceeding at law or in
equity.
(g) NO LITIGATION. There is no material pending or, to the
best of the Seller's knowledge, threatened, action, suit or proceeding against
or affecting the Seller, its officers or directors, or the property of the
Seller, in any court or tribunal, before any arbitrator of any kind or before or
by any Governmental Authority.
(h) LEGAL COMPLIANCE. The Seller has complied and will comply
in all material respects with all applicable laws, rules, regulations,
judgments,
14
agreements, decrees and orders, and has obtained all necessary approvals,
consents, permits, licenses and qualifications from all Governmental
Authorities, with respect to its business and properties and the Receivables
and Contracts serviced by it, in each case except where failure to so comply
or obtain could not reasonably be expected, in the aggregate, to have a
Material Adverse Effect.
(i) NO ORDERS. No injunction, writ, restraining order or other
order of any nature adverse to the Seller or the conduct of its business or
which is inconsistent with the due consummation of the transactions contemplated
by this Agreement and the Related Documents has been issued by a Governmental
Authority.
(j) TAX STATUS. The Seller has timely filed all tax returns
(federal, state and local) required to be filed by it, is not liable for taxes
payable by any other Person (except for the payment of any amount as a result of
the filing of consolidated tax returns) and has paid or has made adequate
provision for the payment of all taxes, fees, assessments and other governmental
charges due from the Seller, except where the Seller is contesting such tax,
fee, assessment or other governmental charge in good faith through appropriate
proceedings as to which adequate reserves are being maintained in accordance
with GAAP and with respect to which no Lien for payment has been filed or is
otherwise enforceable. No tax lien or similar Lien has been filed, and no claim
has been filed or is being asserted, with respect to any such tax, fee,
assessment or other governmental charge, except for any contested proceedings as
described in the immediately preceding sentence. Any taxes, fees and other
governmental charges payable by the Seller in connection with the transactions
contemplated by this Agreement and the Related Documents and the execution and
delivery of this Agreement and the Related Documents have been paid or shall
have been paid at or prior to the Closing Date.
(k) ACCURACY OF INFORMATION. All information heretofore or
hereafter furnished by or on behalf of the Seller to the Purchaser, FSA or the
Administrative Agent in connection with this Agreement or the Related Documents,
or any transaction contemplated hereby or thereby, is and will be true and
complete in all material respects and does not and will not omit to state a
material fact necessary to make the statements contained therein not misleading.
(l) PLACE OF BUSINESS. The principal place of business and
chief
15
executive office of the Seller are located at 00 Xxxx Xxxx Xxxx, Xxx Xxxxxxx,
Xxxxxxxx, 00000, and the offices where the Seller keeps all its Records, are
located at 00 Xxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxx, 00000, or such other
locations notified to the Purchaser in accordance with this Agreement in
jurisdictions where all action required by the terms of this Agreement has
been taken and completed. There are currently no, and during the past four
months (or such shorter time as the Seller has been in existence) there have
not been any other locations where the Seller is located (as that terms is
used in the UCC of the jurisdiction where such principal place of business is
located) or keeps Records.
(m) OWNERSHIP; SECURITY INTEREST. Immediately after the
creation of a property interest of the Purchaser in a Receivable pursuant to
this Agreement, the Purchaser shall be the legal and beneficial owner of the
Receivables and Leased Vehicles so sold, free and clear of any Adverse Claim.
This Agreement is effective to transfer and assign to the Purchaser (and the
Purchaser shall acquire from the Seller) a valid security interest (as defined
in the UCC) in, to and under the Receivables and Leased Vehicles, free and clear
of any Adverse Claim. No effective financing statement or other instrument
similar in effect covering any Receivables or Collections or Leased Vehicles or
Contracts with respect thereto is on file in any recording office, except (a)
those filed in favor of the Administrative Agent pursuant to the Receivables
Purchase Agreement and the Secondary Purchase Agreement and, (b) those filed in
favor of the Purchaser pursuant to this Agreement.
(n) FAIR CONSIDERATION; NO AVOIDANCE FOR RECEIVABLES. With
respect to each Receivable sold hereunder, the Seller sold such Receivable to
the Purchaser in exchange for payment, made in accordance with the provisions of
this Agreement, in an amount which constitutes fair consideration and reasonably
equivalent value. Each such sale referred to in the preceding sentence shall not
have been made for or on account of an antecedent debt owed by the Seller to the
Purchaser and, accordingly, no such sale is or may be voidable or subject to
avoidance under Title 11 of the United States Bankruptcy Code and the rules and
regulations xxxxxxxxxx.Xx addition, no such sale shall have been made with the
intent to hinder or delay payment to or defraud any creditor of the Seller.
(o) ELIGIBILITY OF RECEIVABLES. Each Receivable sold
hereunder shall at the time of such sale be an Eligible Receivable. At the time
of such sale, no event has occurred and is continuing which is reasonably likely
to materially and adversely affect the collectibility of such Receivable.
(p) TRUE SALE. Each Receivable sold hereunder shall have been
16
sold by the Seller to the Purchaser in a "true sale".
(q) PRINCIPAL PLACE OF BUSINESS. The principal place of
business and chief executive office of the Seller, and the offices where the
Seller keeps its Records and the original copies of the Related Documents are
located at the address of the Seller for notices under SECTION 9.3 Between July
2000 and August 2000, the Seller plans to relocate its headquarters to the
second address of the Seller for notices under SECTION 9.3. Other than these two
addresses, there are currently no, and during the past four months (or such
shorter time as the Seller has been in existence) there have not been, any other
locations where the Seller is located (as that term is used in the UCC of the
jurisdiction where such principal place of business is located) or keeps
Records.
(r) ADAQUATE CAPITALIZATION; NO INSOLVENCY. The Seller is
adequately capitalized and will not become insolvent after giving effect to the
transactions contemplated by this Agreement and the Related Documents. The
Seller has no Indebtedness other than pursuant to this Agreement and the Related
Documents. The Seller is adequately capitalized for its business as proposed to
be conducted in the foreseeable future and does not expect the commencement of
any insolvency, bankruptcy or similar proceedings or the appointment of a
receiver, liquidator or similar official in respect of its assets. The Seller
executed and delivered each of the Related Documents to which it is a party for
fair consideration and without the intent to hinder, delay or defraud any of its
creditors or any other Person.
(s) ABSOLUTE ASSIGNMENT. Immediately prior to a Purchase
hereunder, for accounting purposes, the Seller will treat all of the Receivables
and Leased Vehicles as its own property, and will account for the purchase,
assignment or transfer of any such Receivable or Leased Vehicle pursuant to this
Agreement as a purchase or absolute assignment of its right, title and ownership
interest in such Receivable or Leased Vehicle and the Seller has not in any
other manner accounted for or treated the transactions under this Agreement,
except that such transactions shall be treated as debt for tax purposes.
(t) TRUE AND COMPLETE INFORMATION. All information heretofore
or hereafter furnished by or on behalf of the Seller to any of Canadian Imperial
Bank of Commerce as administrative agent or purchaser, The Bank of New York, as
custodian, SPARC as purchaser, or FSA as such terms are used in the Receivables
Purchase Agreement, in connection with this Agreement, the Receivables Purchase
Agreement or the Related Documents, or any transaction contemplated hereby or
thereby, is and will be true and complete in all material respects and does not
and
17
will not omit to state a material fact necessary to make the statements
contained therein not misleading.
(u) ERISA. The Seller is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC (or any
successor thereto) under ERISA.
(v) NOT AN INVESTMENT COMPANY. The Seller is not an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act. The making of the Purchases by the Purchaser, the
application of the proceeds thereof by the Seller and the consummation of the
transactions contemplated by this Agreement and the other Related Documents to
which the Seller is a party will not violate any provision of the Investment
Company Act or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder.
(w) PAYMENT IN FULL. The Seller has no knowledge of any fact
which leads it or should have led a reasonable person to expect that any
payments on any Receivable at the time of Purchase will not be paid in full when
due or to expect any other material adverse effect on (A) the performance by the
Seller of its obligations under this Agreement or any of the Related Documents,
(B) the validity or enforceability of this Agreement or any of the Related
Documents, or (C) the Receivables or the Contracts or the Leased Vehicles or the
interests of the Seller therein.
(x) CONSIDERATION FOR RECEIVABLES. With respect to each
Receivable, the Seller purchased such Receivable in exchange for payment, made
in accordance with the provisions of this Agreement, in an amount which
constitutes fair consideration and reasonably equivalent value. Each such sale
referred to in the preceding sentence shall not have been made for or on account
of an antecedent debt owed by the applicable Transferor to the Seller and,
accordingly, no such sale is or may be voidable or subject to avoidance under
Title 11 of the United States Code, and the rules and regulations thereunder.
(y) CONSIDERATION FOR LEASED VEHICLES. With respect to each
Leased Vehicle, the Seller purchased the related Vehicle from a Transferor in
exchange for payment, made in accordance with the provisions of this Transfer
Agreement, in an amount which constitutes fair consideration and reasonably
18
equivalent value. Each such sale referred to in the preceding sentence shall not
have been made for or on account of an antecedent debt owed by the applicable
Transferor or the applicable Manufacturer to the Seller and, accordingly, no
such sale is or may be voidable or subject to avoidance under Title 11 of the
United States Bankruptcy Code, and the rules and regulations thereunder.
(z) REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT.Each of
the representations and warranties of the Seller contained in the Related
Documents (other than this Agreement) is true and correct in all respects and
the Seller hereby makes each such representation and warranty to, and for the
benefit of, Canadian Imperial Bank of Commerce as administrative agent, The Bank
of New York, as custodian, SPARC as purchaser, or FSA as such terms are used in
the Receivables Purchase Agreement, as if the same were set forth in full
herein.
(aa) NO TERMINATION EVENT; EVENT OF DEFAULT. No Servicer
Termination Event or Insurance Agreement Event of Default has occurred and is
continuing.
(ab) CREDIT AND COLLECTION POLICY. Attached as Schedule A is a
true and correct copy of the Credit and Collection Policy as in effect on the
date hereof. All of the Receivables, Leased Vehicles and Contracts acquired from
a Transferor have been originated in accordance with the credit policy described
in the applicable Transfer Agreement, and are being serviced in accordance with
the Credit and Collection Policy.
(ac) CHATTEL PAPER. Each Contract included in the related
Contract File is "chattel paper" (as such term is defined in the UCC) and is the
sole original of such Contract in existence and has been stamped with the
notation "original copy".
(ad) NO BROKERS OR FINDERS. No broker or finder acting on
behalf of the Seller was employed or utilized in connection with this Agreement
or the other Related Documents or the transactions contemplated hereby or
thereby and the Seller has no obligation to any Person in respect of any
finder's or brokerage fees in connection therewith.
(ae) SALE TREATMENT UNDER GAAP. The Seller is treating the
conveyance of the Receivables, the Leased Vehicles and the Collections under
this Agreement as a sale for purposes of GAAP.
19
(af) LEGAL AND BENEFICIAL OWNER OF RECEIVABLES. Immediately
prior to a Purchase hereunder, the Seller shall be the legal and beneficial
owner of the Receivables and Leased Vehicles, free and clear of any Adverse
Claim. This Agreement is effective to, and shall, upon each Purchase and the
filing of the financing statements referred to in Section 2.1(b), transfer and
assign to the Purchaser (and the Purchaser shall acquire from the Seller) a
valid and perfected first priority security interest (as defined in the UCC) in
and to the Receivables, all free and clear of any Adverse Claim. No effective
financing statement or other instrument similar in effect covering any
Receivables or Collections or Leased Vehicles or Contract with respect thereto
is on file in any recording office, except (a) those filed in favor of the
Administrative Agent pursuant to this Agreement and the Receivables Purchase
Agreement and, (b) those filed in favor of the Seller pursuant to a Transfer
Agreement.
(ag) INVESTMENTS IN RECEIVABLES AND ELIGIBLE INVESTMENTS. The
Seller does not have any Subsidiaries and does not have any investments in, or
loans or advances of money to, any Person except for Receivables and Eligible
Investments.
SECTION 4.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES
BY THE SELLER; NOTICE OF BREACH. On the Closing Date the Seller, by accepting
the proceeds of such sale, shall be deemed to have certified that all
representations and warranties described in Section 4.1 are true and correct on
and as of such day with respect to such Receivables and Leased Vehicles as
though made on and as of such day. The representations and warranties set forth
in Section 4.1 shall survive (i) the conveyance of the Receivables and Leased
Vehicles to the Purchaser, (ii) the termination of the rights and obligations of
the Purchaser and the Seller under this Agreement and (iii) the termination of
the rights and obligations of the Purchaser and the Administrative Agent under
the Receivables Transfer Agreement. Upon discovery by the Purchaser or the
Seller of a breach of any of the foregoing representations and warranties, the
party discovering such breach shall give prompt written notice to the other and
to Motor Coach within three (3) Business Days of such discovery.
ARTICLE V
COVENANTS OF THE SELLER
SECTION 5.1. COVENANTS OF THE SELLER. The Seller hereby
covenants and agrees with the Purchaser that, for so long as this Agreement is
in
20
effect, and until all Receivables and Leased Vehicles, an interest in which
has been sold to the Purchaser pursuant hereto, shall have been paid in full
or written-off as uncollectible, and all amounts owed by the Seller pursuant
to this Agreement have been paid in full, unless the Purchaser otherwise
consents in writing:
(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The Seller
shall perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it and its business and properties, including the Contracts, the
Receivables and the related Vehicles and all proceeds thereof, including those
relating to truth in lending, retail installment sales, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices,
privacy, licensing, taxation, ERISA and labor matters and Environmental Laws,
except to the extent that the failure to so comply, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(b) MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. The
Seller shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder; and (iii) at all times maintain, preserve
and protect all of its licenses, permits, charters and registrations which are
reasonably necessary for the conduct of its business.
(c) CASH MANAGEMENT SYSTEMS; DEPOSIT OF COLLECTIONS. The
Seller shall direct all Obligors to make payments on the Receivables directly to
the Lockbox Account and shall deposit or cause to be deposited promptly into the
Lockbox Account and in any event no later than the second Business Day after
receipt thereof, all Collections it may receive with respect to any Receivable
or any other proceeds of any Receivable.
(d) BOOKS AND RECORDS. The Seller shall keep proper books of
record and account in which full and correct entries shall be made of all
financial transactions and the assets and business of the Seller in accordance
with GAAP; maintain and implement administrative and operating procedures
(including, without limitation, the ability to recreate records evidencing the
Receivables and the Outstanding Balances thereof in the event of the destruction
of the originals thereof); and keep and maintain all documents, books, records
and other information necessary or reasonably advisable for the collection of
all Receivables and the disposition of all Vehicles.
21
(e) ACCESS; INSPECTION. The Seller shall permit the Purchaser,
at the Seller's expense, to make or cause to be made inspections and audits of
any books, records and papers of the Seller and to make extracts therefrom and
copies thereof, or to make inspections and examinations of any properties and
facilities of the Seller, including ongoing inspections of the Vehicles which
are in the Seller's possession or under its control, from time to time as
required in order to assure that the Seller is and will be in compliance with
its obligations under this Agreement and the Related Documents; PROVIDED, that
unless a Servicer Termination Event has occurred and is continuing, or the
Purchaser has reason to believe that a Servicer Termination Event is imminent
(x) such audits shall be upon reasonable notice and shall be conducted during
normal business hours and (y) no more than four (4) full audits per calendar
year shall be made at the Seller's expense, which audits shall be conducted by
FSA who shall provide the Administrative Agent, SPARC and the Secondary
Purchaser with written notice at least five (5) Business Days prior ro
conducting any such audit and the opportunity to accompany FSA on such audit.
Notwithstanding the preceding sentence, the Seller shall only be liable to the
Purchaser for the actual out-of-pocket expenses incurred by the Purchaser in
connection with such inspections and audits. The Seller shall, upon reasonable
notice and during normal business hours, make available its officers, directors,
employees, representatives, agents and accountants to discuss with the Purchaser
all financial statements and other information relating to the Seller, the
Receivables or the Leased Vehicles and shall deliver any document or instrument
necessary for the Purchaser as it may from time to time request, to obtain
records from any service bureau or other Person which maintains records for the
Seller. Representatives of other Affected Parties may accompany the Purchaser's
representatives on regularly scheduled audits at no charge to the Seller.
(f) PAYMENT, PERFORMANCE AND DISCHARGE OF OBLIGATIONS. The
Seller shall pay, perform and discharge or cause to be paid, performed and
discharged promptly all Charges payable by it, including (A) Charges imposed
upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for labor,
materials, supplies and services or otherwise before any thereof shall become
past due.
(g) ERISA. The Seller shall not, and shall not cause or permit
any of its ERISA Affiliates to, cause or permit to occur an event that could
result in the imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA.
22
(h) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION
POLICY. The Seller shall, at its expense, timely and fully perform and comply
with all provisions, covenants and other promises required to be observed by it
under any Contracts and shall comply with the Credit and Collection Policy with
respect to all such Contracts and the Receivables and Vehicles relating thereto,
except where the failure to so comply is not reasonably likely to result is an
Material Adverse Effect.
(i) REMARKETING. The Seller shall, at its expense, repossess
and sell, lease or otherwise dispose of, or cause to be repossessed and sold,
leased or otherwise disposed of, not later than 180 days after the date on which
any Receivable becomes a Defaulted Receivable, each Financed Vehicle subject to
the related Contract.
(j) INDEMNIFICATION. The Seller agrees to indemnify, defend
and hold the Purchaser harmless from and against any and all loss, liability,
damage, judgment, claim, deficiency, or expense (including interest, penalties,
reasonable attorneys' fees and amounts paid in settlement) to which the
Purchaser may become subject insofar as such loss, liability, damage, judgment,
claim, deficiency, or expense arises out of or is based upon a breach by the
Seller of its representations, warranties and covenants contained herein, or any
information certified in any schedule or certificate delivered by the Seller
hereunder or in connection with the Related Documents, being untrue in any
material respect at any time; PROVIDED that in no event shall this Section
5.1(j) be construed to include uncollectibility of any Receivable for
credit-related reasons pertaining to the related Obligor. The obligations of the
Seller under this Section 5.1(j) shall be considered to have been relied upon by
the Purchaser, the Secondary Purchaser, the Administrative Agent, SPARC and FSA
and shall survive the execution, delivery, performance and termination of this
Agreement for a period of three (3) years following the Purchase Termination
Date, regardless of any investigation made by the Purchaser or the
Administrative Agent or on behalf of either of them.
(k) LIENS. The Seller shall not create, incur, assume or
permit to exist any Lien on or with respect to the Receivables, Vehicles,
Contracts, the Lockbox Account, the Cash Collateral Account, the Blocked
Accounts, any other deposit accounts into which Collections of any Receivables
or other proceeds of any Receivables are deposited, or any other properties or
assets (whether now owned or hereafter acquired).
(l) MODIFICATIONS OF RECEIVABLES OR CONTRACTS. The Seller
shall not extend, amend, forgive, discharge, compromise, waive, cancel or
otherwise
23
modify the terms of any Receivable or amend, modify or waive any term or
condition of any Contract related thereto, except for Permitted
Restructurings and such other modifications of past due Receivables as the
Seller deems reasonably necessary to maximize the collection thereof to the
extent expressly permitted by the Credit and Collection Policy.
(m) CHANGES IN INSTRUCTIONS WITH RESPECT TO PAYMENTS ON
RECEIVABLES. The Seller shall not make any change in its instructions to
Obligors regarding the deposit of Collections with respect to the Receivables,
including its instructions with respect to payments to the Lockbox Account, or
in its instructions to any Person obligated to make payments in respect of any
other Receivables.
(n) SEPARATE EXISTENCE. The Seller shall be operated in such
a manner that the separate corporate existence of the Seller and the Motor Coach
Entities would not be disregarded in the event of a bankruptcy or insolvency of
the Seller or any Motor Coach Entity, and, without limiting the foregoing:
(i) the Seller shall at all times be a limited
purpose corporation whose activities are restricted as set forth in its
certificate or articles of incorporation;
(ii) no Motor Coach Entity shall be involved in the
day-to-day management of the Seller (except to the extent expressly
contemplated by this Agreement or any other Related Document);
(iii) other than the sale of Receivables and Leased
Vehicles pursuant to this Agreement and other actions permitted under
this Agreement, the Seller shall not engage in any intercorporate
transactions with any other Motor Coach Entity.
(iv) the Seller shall maintain separate corporate
records and books of account from each Motor Coach Entity, hold regular
corporate meetings and otherwise observe corporate formalities and have
separate office space from each Motor Coach Entity, if any;
(v) the financial statements and books and records of
Motor Coach and any other entity whose financial statements are
consolidates with the Seller prepared after the
24
Initial Closing Date shall reflect the separate corporate existence
of the Seller;
(vi) the Seller shall not act as agent for any Motor
Coach Entity and shall hold itself out to the public as a corporation
separate from each such Motor Coach Entity;
(vii) the Seller shall maintain its assets separately
from the assets of any Motor Coach Entity (including through the
maintenance of separate bank accounts and except for any Records to the
extent necessary for the servicing of the Receivables); the Seller's
funds and assets, and records relating thereto, shall not be commingled
with those of any Motor Coach Entity; and the separate creditors of the
Seller will be entitled to be satisfied out of the Seller's assets
prior to any value in the Seller becoming available to the Seller's
equity holders;
(viii) except as expressly contemplated under this
Agreement and the Related Documents and those associated with the
creation and organization of the Seller and the preparation of this
Agreement and the Related Documents, no Motor Coach Entity shall (A)
pay the Seller's expenses; (B) guarantee the Seller's obligations, or
(C) advance funds to the Seller for the payment of expenses or
otherwise; and
(ix) all business correspondence of the Seller and
other communications shall be conducted in the Seller's own name, on
its own stationery and through a separately-listed telephone number.
(o) SALE OF ASSETS. The Seller shall not sell, transfer,
convey, assign or otherwise dispose of, or assign any right to receive income in
respect of, any of its properties or other assets, including any Financed Leased
Vehicle, Receivable or Contract or any Related Document or any of its rights
with respect to Lockbox Account or any other deposit account in which any
Collections of any Receivable or other proceeds of any Receivable are deposited,
except as expressly permitted by this Agreement or any other Related Document.
(p) CHANGE OF NAME, ETC. The Seller shall not change its
name, identity or structure or its chief executive office, unless at least ten
(10) days prior to
25
the effective date of any such change the Seller delivers to the Purchaser
and the Administrative Agent financing statements under the UCC, executed by
the Seller necessary to reflect such change and to continue the perfection of
the Purchaser's interest in the Receivables and the Related Vehicles.
(q) USE OF PROCEEDS. The Seller shall utilize the proceeds of
the Purchases made hereunder solely for (i) the purchase of Receivables and
Leased Vehicles from the Transferors pursuant to a Transfer Agreement from time
to time after the Closing Date, (ii) the payment of routine administrative or
operating expenses, in each case only as expressly permitted by and in
accordance with the terms of this Agreement and the other Related Documents, and
(iii) the payment of expenses hereunder.
(r) CAPITAL STRUCTURE AND BUSINESS . The Seller shall not (i)
make any changes in any of its business objectives, purposes or operations, (ii)
without the prior written consent of the Administrative Agent, the Purchaser
and, provided that an FSA Default has not occurred, FSA, amend its certificate
or articles of incorporation or bylaws or (iii) engage in any business other
than the businesses currently engaged in by it or contemplated to be engaged in
by it under this Agreement and the other Related Documents.
(s) MERGERS, SUBSIDIARIES, ETC. The Seller shall not directly
or indirectly, by operation of law or otherwise, (i) form or acquire any
Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially
all of the assets or Capital Stock of, or otherwise combine with or acquire, any
Person.
(t) SALE CHARACTERIZATION. The Seller shall not make
statements or disclosures, prepare any financial statements or in any other
respect account for or treat the transactions contemplated by this Agreement
(including for accounting, tax and reporting purposes) in any manner other than
as a true sale or absolute assignment of the title to and sole record and
beneficial ownership interest of the Receivables, Contracts and Leased Vehicles
sold or purported to be sold hereunder.
(u) RESTRICTED PAYMENTS. Other than as contemplated by the
Related Documents, the Seller shall not enter into any lending relationship with
any of its Affiliates. The Seller shall not at any time declare any dividends,
repurchase any Capital Stock, return any capital, or make any other payment or
distribution of cash or other property or assets in respect of the Seller's
Capital Stock if, at the time of or after giving effect to any such dividend,
repurchase,
26
return or other payment or distribution, a Service Termination Event shall
have occurred and be continuing.
(v) INDEBTEDNESS. The Seller shall not create, incur, assume
or permit to exist any Indebtedness except for (i) Indebtedness expressly
contemplated under this Agreement or the Related Documents (ii) deferred taxes,
and (iii) endorser liability in connection with the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
(w) PROHIBITED TRANSACTIONS AND AMENDMENTS. The Seller shall
not enter into, or be a party to, any transaction with any Person except as
expressly contemplated hereunder or under any other Related Document. The Seller
shall not amend, waive or otherwise modify the Credit and Collection Policy or
any provision of any Related Document to which it is a party.
(x) INVESTMENTS. Except as otherwise expressly permitted
hereunder or under the other Related Documents, the Seller shall not make any
investment in, or make or accrue loans or advances of money to, any Person,
including any stockholder, director, officer or employee of the Seller or any of
its Affiliates, through the direct or indirect lending of money, holding of
securities or otherwise, except with respect to the purchases of Receivables and
Leased Vehicles contemplated hereunder and Eligible Investments.
(y) COMMINGLING. The Seller shall not deposit or permit the
deposit of any funds that do not constitute Collections of Receivables or other
proceeds of Receivables into any Lockbox Account.
ARTICLE VI
REPURCHASE OBLIGATION
SECTION 6.1. RECONVEYANCE UNDER CERTAIN CIRCUMSTANCES. The
Seller agrees that, with respect to any Receivable an interest in which has been
sold hereunder,
(i) in the event either (w) any of the
representations and warranties set forth in (A) Section 4.1(m) are
no longer true
27
or (B) Section 4.1(n) or (o) were not true when made, with respect
to any such Receivable, (x) the Seller shall fail to perform or
observe any term, covenant or agreement contained in Section 5.1(p),
or (y) the Seller or the Servicer shall extend, amend or otherwise
modify the terms of any such Receivable (except in connection with a
Permitted Restructuring), or amend, modify or waive the terms or
conditions of the Contract under which such Receivable arises
(except in connection with a Permitted Restructuring), the Seller
shall be deemed to have received on such day a Collection in an
amount equal to the Outstanding Balance of such Receivable in full
and shall on such day pay to the Purchaser in immediately available
funds an amount equal to such Outstanding Balance; and
(ii) if on any day any of the representations or
warranties contained in Section 4.1(h), (k), (s) or (ac) are no longer
true with respect to any Receivable, the Seller may, in its discretion,
repurchase such Receivable on such day for a purchase price in an
amount equal to the Outstanding Balance of such Receivable, which
purchase price shall be paid to the Purchaser in immediately available
funds.
SECTION 6.2. DILUTIONS, ETC. The Seller agrees that if, on
any day, the Outstanding Balance of a Receivable an interest in which has been
sold by the Seller hereunder is either reduced or adjusted as a result of
defective, or rejected Vehicles or otherwise, or any setoff by the Obligor
against BusLease or the Seller shall occur with respect thereto, the Seller
shall be deemed to have received on such day a Collection of such Receivable in
the amount of such reduction, adjustment or setoff and shall on such day pay to
the Purchaser in immediately available funds an amount equal to such reduction,
adjustment or setoff.
SECTION 6.3. ASSUMPTION OF OBLIGATIONS. In order to
facilitate the transactions contemplated hereby and to induce the Purchaser to
enter into this Agreement, Motor Coach hereby agrees to assume the obligations
of the Seller with respect to this Article VI in the event the Seller is not
able, for any reason whatsoever, to satisfy such obligations in full.
ARTICLE VII
CONDITIONS PRECEDENT
28
SECTION 7.1. CONDITIONS PRECEDENT. The obligations of the
Purchaser to pay the Purchase Price for any Receivables shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of the Seller contained
in this Agreement shall be true and correct on each Business Day on which a
Receivable arises hereunder, with the same effect as though such representations
and warranties had been made on such date;
(b) All information concerning the Receivables provided to the
Purchaser shall be true and correct in all material respects as of the date any
Receivable arises under this Agreement;
(c) The Seller shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement and the
other Related Documents to which it is a party;
(d) The Seller shall have either filed or caused to be filed
the financing statement(s) required to be filed pursuant to Section 2.1(b);
(e) All corporate and legal proceedings, and all instruments
in connection with the transactions contemplated by this Agreement and the other
Related Documents shall be satisfactory in form and substance to the Purchaser,
and the Purchaser shall have received from the Seller copies of all documents
(including, without limitation, records of corporate proceedings) relevant to
the transactions herein contemplated as the Purchaser may reasonably have
requested; and
(f) the Purchase Termination Date shall not have occurred.
29
ARTICLE VIII
TERM AND TERMINATION
SECTION 8.1. TERM. This Agreement shall commence as of the
first day on which all of the conditions precedent have been satisfied and shall
continue in full force and effect until the date following the earlier of (i)
the date designated by the Purchaser or the Seller as the Purchase Termination
Date at any time following ten (10) days' written notice to the other (with a
copy thereof to the Administrative Agent, FSA and Motor Coach), (ii) the date on
which a Servicer Termination Event occurs pursuant to the Receivables Purchase
Agreement, (iii) upon the occurrence of an Event of Bankruptcy with respect to
either the Purchaser or the Seller or (iv) Motor Coach becomes unable for any
reason to re-purchase the interest of the Purchaser in any Receivable in
accordance with the provisions of this Agreement or otherwise defaults on its
obligations hereunder, which default continues unremedied for more than ten (10)
days after written notice (any such date being a "PURCHASE TERMINATION DATE");
PROVIDED, HOWEVER, that the termination of this Agreement pursuant to this
Section 8.1 hereof shall not discharge any Person from any obligations incurred
prior to such termination, including, without limitation, any obligations to
make any payments with respect to the interest of the Purchaser in any
Receivable sold prior to such termination.
SECTION 8.2. EFFECT OF TERMINATION. No termination, rejection
or failure to assume the executory obligations of this Agreement in any Event of
Bankruptcy with respect to the Seller or the Purchaser shall be deemed to impair
or affect the obligations pertaining to any executed sale or executed
obligations, including, without limitation, pre-termination breaches of
representations and warranties by the Seller or the Purchaser. Without limiting
the foregoing, prior to termination, the failure of the Seller to deliver
computer records of Receivables, the Related Vehicles or any reports regarding
the Receivables shall not render such transfer or obligation executory, nor
shall the continued duties of the parties pursuant to this Agreement render an
executed sale executory.
30
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. AMENDMENTS, ETC. This Agreement and the rights
and obligations of the parties hereunder may not be amended, supplemented,
waived or otherwise modified except in an instrument in writing signed by the
Purchaser, the Seller, BusLease and Motor Coach and consented to in writing by
the Administrative Agent and FSA. Any reconveyance executed in accordance with
the provisions hereof shall not be considered an amendment or modification to
this Agreement.
SECTION 9.2. GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(b) The parties hereto hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in The City of New York for
purposes of all legal proceedings arising out of or relating to this agreement
or the transactions contemplated hereby. Each party hereto hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 9.2
shall affect the right of the Purchaser to bring any other action or proceeding
against the Seller or its property in the courts of other jurisdictions.
SECTION 9.3. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt requested,
to:
(a) in the case of the Purchaser:
Prior to August 2000: MCII FUNDING II, INC.
00 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000-0000
31
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
After August 2000: MCII FUNDING II, INC.
Xxxxx 000
0000 X. Xxxx Xx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) in the case of the Seller:
Prior to August 2000: MCII FINANCIAL SERVICES II, INC.
00 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
After August 2000: MCII FINANCIAL SERVICES II, INC.
Xxxxx 000
0000 X. Xxxx Xx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(c) in the case of Motor Coach:
Prior to August 2000: MOTOR COACH INDUSTRIES INTERNATIONAL, INC.
00 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
After August 2000: MOTOR COACH INDUSTRIES INTERNATIONAL, INC.
Suite 300
32
0000 X. Xxxx Xx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
in each case, with a copy to:
CANADIAN IMPERIAL BANK OF COMMERCE
as Administrative Agent
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Securitization Group
Telephone:
Telecopy: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
SECTION 9.4. SEVERABILITY OF PROVISIONS. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining covenants,
agreements, provisions, or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement.
SECTION 9.5. ASSIGNMENT. This Agreement may not be assigned
by the parties hereto, except that the Purchaser may assign its rights hereunder
pursuant to the Receivables Purchase Agreement to the Administrative Agent for
the benefit of SPARC or pursuant to the Secondary Purchase Agreement for the
benefit of the Secondary Purchaser, in each case as security for the Purchaser's
repayment obligations under the Receivables Purchase Agreement, the Secondary
Purchase Agreement and the other Related Documents. The Purchaser hereby
notifies (and the Seller hereby acknowledges that) the Purchaser, pursuant to
the Receivables Transfer Agreement, has assigned its rights (but not its
obligations) hereunder to the Administrative Agent for the benefit of SPARC. All
rights of the Purchaser hereunder may be exercised by the Administrative Agent
to the extent of its rights hereunder and under the other Related Documents.
SECTION 9.6. FURTHER ASSURANCES. The Purchaser, the Seller
and
33
Motor Coach agree to do and perform, from time to time, any and all acts and
to execute any and all further instruments required or reasonably requested by
the other party more fully to effect the purposes of this Agreement and the
other Related Documents, including, without limitation, the execution of any
financing statements or continuation statements or equivalent documents relating
to the Receivables and the Related Vehicles for filing under the provisions of
the UCC or other laws of any applicable jurisdiction.
SECTION 9.7. NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Purchaser, the Seller,
Motor Coach or the Administrative Agent, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privilege
provided by law.
SECTION 9.8. COUNTERPARTS. This Agreement may be executed in
two or more counterparts including telecopy transmission thereof (and by
different parties on separate counterparts), each of which shall be an original,
but all of which together shall constitute one and the same instrument.
SECTION 9.9. BINDING EFFECT; THIRD-PARTY BENEFICIARIES. This
Agreement and the other Related Documents will inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. SPARC, FSA, the Secondary Purchaser and the Administrative Agent are
each intended by the parties hereto to be third-party beneficiaries of this
Agreement.
SECTION 9.10. MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement and the other Related Documents set
forth the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by this
Agreement and the other Related Documents.
SECTION 9.11. HEADINGS. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
34
IN WITNESS WHEREOF, the Purchaser and the Seller each have
caused this Receivables Sales Agreement to be duly executed by their respective
officers as of the day and year first above written.
MCII FINANCIAL SERVICES II, INC.,
as Seller
By:_______________________________
Name:
Title:
MCII FUNDING II, INC.,
as Purchaser
By:_______________________________
Name:
Title:
Accepted and agreed as
of the date first above written:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By:____________________________
Name:
Title:
BUSLEASE, INC.
By:____________________________
Name:
Title:
MOTOR COACH INDUSTRIES
INTERNATIONAL, INC.
By:_______________________
Name:
Title:
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS
SECTION 1.1. Definitions................................................................................1
SECTION 1.2. Other Terms................................................................................6
SECTION 1.3. Computation of Time Periods................................................................6
ARTICLE II PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES
SECTION 2.1. Sales......................................................................................7
SECTION 2.2. Servicing of Receivables...................................................................8
ARTICLE III CONSIDERATION AND PAYMENT; REPORTING
SECTION 3.1. Purchase Price............................................................................10
SECTION 3.2. Payment of Purchase Price.................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Seller's Representations and Warranties...................................................11
SECTION 4.2. Reaffirmation of Representations and Warranties by the Seller; Notice
of Breach....................................................................14
ARTICLE V COVENANTS OF THE SELLER
SECTION 5.1. Covenants of the Seller...................................................................15
ii
ARTICLE VI REPURCHASE OBLIGATION
SECTION 6.1. Mandatory Repurchase......................................................................20
SECTION 6.2. Dilutions, Etc............................................................................20
ARTICLE VII CONDITIONS PRECEDENT
SECTION 7.1. Conditions Precedent......................................................................21
ARTICLE VIII TERM AND TERMINATION
SECTION 8.1. Term......................................................................................23
SECTION 8.2. Effect of Termination.....................................................................23
ARTICLE IX MISCELLANEOUS PROVISIONS
SECTION 9.1. Amendments, Etc...........................................................................24
SECTION 9.2. Governing Law; Submission to Jurisdiction.................................................24
SECTION 9.3. Notices...................................................................................24
SECTION 9.4. Severability of Provisions................................................................25
SECTION 9.5. Assignment................................................................................26
SECTION 9.6. Further Assurances........................................................................26
SECTION 9.7. No Waiver; Cumulative Remedies............................................................26
SECTION 9.8. Counterparts..............................................................................26
SECTION 9.9. Binding Effect; Third-Party Beneficiaries.................................................26
SECTION 9.10. Merger and Integration...................................................................27
SECTION 9.11. Headings.................................................................................27
ATTACHMENTS
Schedule A. Credit and Collection Policy
iii
