Exhibit 4(d)
LOAN SALE AGREEMENT
Dated as of September 25, 2003,
between
GENERAL ELECTRIC CAPITAL CORPORATION,
as Seller,
and
CEF EQUIPMENT HOLDING, LLC,
as Purchaser
Loan Sale Agreement
This LOAN SALE AGREEMENT ("Agreement" or "Sale Agreement") is entered
into as of September 25, 2003, by and among GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation and CEF EQUIPMENT HOLDING, LLC, a Delaware
limited liability company (the "Purchaser").
In consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in Section 1 of
Annex A.
Section 1.2 Rules of Construction. For purposes of this
Agreement, the rules of construction set forth in Section 2 of Annex A shall
govern. All Annexes, Exhibits and Schedules hereto, are incorporated herein by
reference and, taken together with this Agreement, shall constitute but a single
agreement.
ARTICLE II
SALES OF CEF ASSETS
Section 2.1 Sale of Loans. (a) Subject to the terms and
conditions hereof the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse (subject to the obligations
herein) all right, title and interest of the Seller in:
(i) the Loans, including the Loan Files, and all
obligations of the Obligors thereunder, including all
obligations of such Obligor with respect thereto due
or to become due on or after the Cutoff Date;
(ii) all Related Security and Collections with respect
thereto;
(iii) all other property now or hereafter in the possession
or custody of, or in transit to, the Issuer, the
Servicer, any Sub-Servicer or the Seller relating to
any of the foregoing;
(iv) all Records with respect to any of the foregoing; and
(v) all Proceeds of the foregoing (collectively the "CEF
Assets").
(b) On or before the Closing Date, the Seller shall (i)
indicate in its computer files that the CEF Assets have been sold to
the Purchaser pursuant to this Agreement by so identifying the CEF
Assets with an appropriate notation and (ii) deliver to the Purchaser
or its designee and the following documents (collectively, the "Loan
Files"):
Loan Sale Agreement
(i) the original fully executed copy of the Loan;
(ii) a record or facsimile of the original credit
application fully executed by the Obligor;
(iii) the original certificate of title or file stamped
copy of the UCC financing statement or such other
documents evidencing the security interest of the
Purchaser in the Equipment; and
(iv) any and all other documents relating to a Loan, an
Obligor or any of the Equipment.
Section 2.2 Grant of Security Interest. The parties hereto intend
that the sale pursuant to Section 2.1 hereof shall constitute a purchase and
sale and not a loan. Notwithstanding anything to the contrary set forth in this
Section 2.2, if a court of competent jurisdiction determines that the sale
provided for herein constitutes a loan and not a purchase and sale, then the
parties hereto intend that this Agreement shall constitute a security agreement
under applicable law and that the Seller shall be deemed to have granted, and
the Seller hereby grants, to the Purchaser a first priority lien and security
interest in and to all of the Seller's right, title and interest in, to and
under the CEF Assets. The possession by the Purchaser of notes and such other
goods, money, documents, chattel paper or certificated securities shall be
deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to the Uniform Commercial Code in force in the
relevant jurisdiction (including, without limitation, Section 9-313(c)(1)
thereof). Notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, bailees or
agents (as applicable) of the Purchaser for the purpose of perfecting such
security interest under applicable law (except that nothing in this sentence
shall cause any Person to be deemed to be an agent of the Purchaser for any
purpose other than for perfection of such security interest unless, and then
only to the extent, expressly appointed and authorized by the Purchaser in
writing).
Section 2.3 Sale Price. (a) As consideration for the sale of the
CEF Assets pursuant to Section 2.1 hereof, the Purchaser shall pay to the Seller
on the Closing Date, the CEF Cash Purchase Price for the CEF Assets sold and
transferred by the Seller to the Purchaser on the Closing Date. The CEF Cash
Purchase Price for the sale of CEF Assets shall be an amount equal to the fair
market value thereof prior to such sale.
(b) The CEF Cash Purchase Price for the CEF Assets sold
by the Seller under this Agreement shall be payable in full in cash by
the Purchaser on the Closing Date. On the Closing Date, the Purchaser
shall, upon satisfaction of the applicable conditions set forth in
Article III, make available to the Seller the CEF Cash Purchase Price
in same day funds.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Sale. The sale hereunder shall be
subject to satisfaction of each of the following conditions precedent (any one
or more of which, except clause (e) below, may be waived in writing by the
Purchaser) as of the Closing Date:
(a) This Agreement or counterparts hereof shall have been
duly executed by, and delivered to, the Seller and the Purchaser, and
the Purchaser shall have received such documents, instruments,
agreements and legal opinions as the Purchaser shall reasonably request
in connection with the transactions contemplated by this Agreement,
each in form and substance reasonably satisfactory to the Purchaser.
(b) The Purchaser shall have received satisfactory
evidence that the Seller has obtained all required consents and
approvals of all Persons, including all requisite Governmental
Authorities, to the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby.
(c) The Seller shall be in compliance in all material
respects with all applicable foreign, federal, state and local laws and
regulations, including those specifically referenced in Section 4.2(c),
except to the extent that the failure to so comply, individually or in
the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(d) The representations and warranties of the Seller
contained herein or in any other Related Document shall be true and
correct in all material respects (or, to the extent any such
representation or warranty is qualified by a materiality standard, such
representation or warranty shall be true and correct) as of the Closing
Date, both before and after giving effect to such sale, except to the
extent that any such representation or warranty expressly relates to an
earlier date and except for changes therein expressly permitted by this
Agreement.
(e) At the time of such sale, the Purchaser shall have
sufficient funds on hand to pay the CEF Cash Purchase Price.
(f) The Seller shall be in compliance with each of its
covenants and other agreements set forth herein.
(g) The Seller shall have taken such other action,
including delivery of approvals, consents, opinions, documents and
instruments to the Purchaser as the Purchaser may reasonably request.
The consummation by the Seller of the sale of CEF Assets on the Closing Date
shall be deemed to constitute, as of the Closing Date, a representation and
warranty by the Seller that the conditions in clauses (d), (f) and (g) of this
Section 3.1 have been satisfied.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1 Representations and Warranties of the Seller. To
induce the Purchaser to purchase the CEF Assets, the Seller makes the following
representations and warranties to the Purchaser, as of the Closing Date, each
and all of which shall survive the execution and delivery of this Agreement.
(a) Corporate Existence; Power and Authority. The Seller
(i) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; and (ii)
has all requisite power and authority and licenses to conduct its
business, to own its properties and to execute, deliver and perform its
obligations under this Agreement.
(b) UCC Information. The true legal name of the Seller as
registered in the jurisdiction of its organization, and the current
location of the Seller's jurisdiction of organization are set forth in
Schedule 4.1(b) and such location has not changed within the past 12
months. During the prior five years, except as set forth in Schedule
4.1(b), the Seller has not been known as or used any corporate,
fictitious or trade name. In addition, Schedule 4.1(b) lists the
Seller's (i) federal employer identification number and (ii)
organizational identification number as designated by the jurisdiction
of its organization.
(c) Authorization, Compliance with Law. The execution,
delivery and performance by the Seller of this Agreement and the other
Related Documents and the creation and perfection of all Liens and
ownership interests provided for herein: (i) have been duly authorized
by all necessary corporate action, and (ii) do not violate any
provision of any law or regulation of any Governmental Authority, or
contractual or corporate restrictions, binding on the Seller, except
where such violations, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(d) Enforceability. On or prior to the Closing Date, each
of the Related Documents to which the Seller is a party shall have been
duly executed and delivered by the Seller and each such Related
Document shall then constitute a legal, valid and binding obligation of
the Seller enforceable against it in accordance with its terms, subject
as to enforcement to bankruptcy, receivership, conservatorship,
insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights and to
general principles of equity.
(e) Solvency. The Seller is Solvent.
(f) Use of Proceeds. No proceeds received by the Seller
under this Agreement will be used by it for any purpose that violates
Regulation U of the Federal Reserve Board.
(g) Investment Company Act. The Seller is not an
"investment company" or "controlled by" an "investment company," as
such terms are defined in the Investment Company Act.
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(h) Loans and Other CEF Assets. With respect to each Loan
and the other CEF Assets sold by the Seller on the Closing Date, the
Seller represents and warrants that (i) such Loan satisfies the
criteria for an Eligible Loan as of the Cut-Off Date; (ii) immediately
prior to sale to the Purchaser, such CEF Assets were owned by the
Seller free and clear of any Adverse Claim, and the Seller has had at
all relevant times the full right, power and authority to sell,
contribute, assign, transfer and pledge its interest therein as
contemplated under this Agreement and, upon such sale, the Purchaser
will acquire valid and properly perfected title to, and the sole record
and beneficial ownership interest in, such CEF Assets, free and clear
of any Adverse Claim or restrictions on transferability, and the Liens
granted to the Purchaser by the Seller pursuant to Section 2.2 will at
all times be fully perfected first priority Liens in and to such Loans
and, in addition, following such sale, such Loan will not be subject to
any Adverse Claim as a result of any action or inaction on the part of
the Seller (or any predecessor in interest); and (iii) if such Loan is
cross-collateralized with a loan that is not a CEF Asset conveyed
hereunder, as of the Closing Date, either (x) the repossession or
exercise of other rights with respect to the related Equipment by the
holder of such loan would not materially impair the security intended
to be afforded for such Loan and result in a material adverse effect on
the Noteholders or (y) the holder of such loan and the Purchaser or its
assigns as holder of the Loan have entered into an intercreditor
arrangement under which each holder has agreed to subordinate its
respective lien and rights of enforcement against the Equipment
financed by the other holder or its predecessor in interest.
The representations and warranties described in this Section 4.1 shall survive
the sale of the CEF Assets to the Purchaser, any subsequent assignment or sale
of the CEF Assets by the Purchaser, and the termination of this Agreement and
the other Related Documents and shall continue until the payment in full of all
CEF Assets.
Section 4.2 Affirmative Covenants of the Seller. The Seller
covenants and agrees that, unless otherwise consented to by the Purchaser, from
and after the Closing Date:
(a) Records. The Seller shall at its own cost and
expense, for not less than three years from the date on which each Loan
was originated, or for such longer period as may be required by law,
maintain adequate Records with respect to such Loan, including records
of all payments received, credits granted and merchandise returned with
respect thereto.
(b) Access. At any reasonable time, and from time to time
at the Purchaser's reasonable request, and upon at least seven days
prior notice to the Seller, the Seller shall permit the Purchaser (or
such Person as the Purchaser may designate), at the expense of the
Purchaser (or such Person as the Purchaser may designate), to conduct
audits or visit and inspect any of the properties of the Seller to
examine the records, internal controls and procedures maintained by the
Seller with respect to the CEF Assets and take copies and extracts
therefrom, and to discuss the Seller's affairs with its officers,
employees and, upon notice to the Seller, independent accountants. The
Seller shall authorize such officers, employees and independent
accountants to discuss with the Purchaser (or such Person as the
Purchaser may designate) the affairs of the Seller as such affairs
relate to the CEF Assets. Any audit provided for herein shall be
conducted in accordance with the
Loan Sale Agreement
5
Seller's rules respecting safety and security on its premises and
without materially disrupting operations. If an Event of Default shall
have occurred and be continuing, the Seller shall provide such access
at all times and without advance notice and shall provide the Purchaser
(or such Person as the Purchaser may designate) with access to its
suppliers and customers.
(c) Compliance With Agreements and Applicable Laws. The
Seller shall comply with all federal, state and local laws and
regulations applicable to it and the CEF Assets, including those
relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices,
privacy, licensing and taxation, except to the extent that the failure
to so comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(d) Maintenance of Existence and Conduct of Business. The
Seller shall preserve and maintain its corporate existence, rights,
franchise and privileges in the jurisdiction of its incorporation.
(e) Notice of Material Event. The Seller shall promptly
inform the Purchaser in writing of the occurrence of any of the
following, in each case setting forth the details thereof and what
action, if any, the Seller proposes to take with respect thereto:
(i) any Litigation commenced, or to the knowledge of the
Seller, threatened against the Seller or with respect
to or in connection with all or any substantial
portion of the CEF Assets or developments in such
Litigation in each case that the Seller believes has
a reasonable risk of being determined adversely to
the Seller and that could, if determined adversely,
have a Material Adverse Effect; or
(ii) the commencement of a case or proceeding by or
against the Seller seeking a decree or order in
respect of the Seller (A) under the Bankruptcy Code
or any other applicable federal, state or foreign
bankruptcy or other similar law, (B) appointing a
custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for the Seller or
for any substantial part of the Seller's assets, or
(C) ordering the winding-up or liquidation of the
affairs of the Seller.
(f) Separate Identity. The Seller shall, to the extent
applicable to it, act in a manner that is consistent with the
statements set forth in Exhibit 4.2(f).
(g) Deposit of Collections. The Seller shall transfer and
cause its Subsidiaries to transfer to the Purchaser or the Servicer on
its behalf, promptly, and in any event no later than the second
Business Day after receipt thereof, all Collections it may receive in
respect of CEF Assets.
(h) Sale Characterization. For accounting purposes, the
Seller shall treat the sale made hereunder as a sale of the CEF Assets.
The Seller shall also maintain its accounting books and records in a
manner which clearly reflects such sale of the CEF Assets to the
Purchaser.
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Section 4.3 Negative Covenants of the Seller. The Seller
covenants and agrees that, without the prior written consent of the Purchaser,
from and after the Closing Date and until the later of the Redemption Date or
the Maturity Date:
(a) Adverse Claims. The Seller shall not create, incur,
assume or permit to exist any Adverse Claim on or with respect to any
CEF Assets.
(b) [reserved].
(c) UCC Matters. The Seller shall not change its state of
organization or incorporation or its name, identity or corporate
structure such that any financing statement filed to perfect the
Purchaser's interests under this Agreement would become seriously
misleading, unless the Seller shall have given the Purchaser not less
than 30 days' prior written notice of such change.
(d) No Proceedings. From the Closing Date and until the
date one year plus one day following the date on which all amounts due
with respect to the Notes have been paid in full in cash, Seller shall
not, directly or indirectly, institute or cause to be instituted
against the Purchaser any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceeding under any
federal or state bankruptcy or similar law; provided that the foregoing
shall not in any way limit the Seller's right to pursue any other
creditor rights or remedies that the Seller may have under applicable
law.
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification. Without limiting any other rights
that the Purchaser or any of its Stockholders, officers, directors, employees,
attorneys, agents or representatives (each, a "Purchaser Indemnified Person")
may have hereunder or under applicable law, the Seller hereby agrees to,
indemnify and hold harmless each Purchaser Indemnified Person from and against
any and all Indemnified Amounts that may be claimed or asserted against or
incurred by any such Purchaser Indemnified Person to the extent arising from or
related to the failure of a Loan to be originated in compliance with all
requirements of law; provided, that the Seller shall not be liable for any
indemnification to a Purchaser Indemnified Person to the extent that any such
Indemnified Amounts result from (a) such Purchaser Indemnified Person's bad
faith, gross negligence or willful misconduct, (b) recourse for uncollectible
Loans, or (c) any income tax or franchise tax incurred by any Purchaser
Indemnified Person, except to the extent that the incurrence of any such tax
results from a breach of or default by the Seller under this Agreement.
NO PARTY TO THIS AGREEMENT SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO
THIS AGREEMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH
PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR
INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A
RESULT OF ANY TRANSACTION CONTEMPLATED HEREUNDER.
Loan Sale Agreement
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ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or whenever any of the parties
desires to give or serve upon any other parties any communication with respect
to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (a) upon the earlier of actual
receipt and three Business Days after deposit in the United States mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by telecopy or other similar facsimile
transmission (with such telecopy or facsimile promptly confirmed by delivery of
a copy by personal delivery or United States mail as otherwise provided in this
Section 6.1), (c) one Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number set forth below or to such other address (or
facsimile number) as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Purchaser) designated in any written communication
provided hereunder to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication. Notwithstanding the foregoing, whenever it is provided
herein that a notice is to be given to any other party hereto by a specific
time, such notice shall be effective only if actually received by such party
prior to such time, and if such notice is received after such time or on a day
other than a Business Day, such notice shall be effective only on the
immediately succeeding Business Day.
If to Seller:
General Electric Capital Corporation
00 Xxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Purchaser:
CEF Equipment Holding, LLC
00 Xxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Capital Markets Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Section 6.2 No Waiver; Remedies. (a) Either party's failure, at
any time or times, to require strict performance by the other party hereto of
any provision of this Agreement shall not waive, affect or diminish any right of
such party thereafter to demand strict compliance and performance herewith. Any
suspension or waiver of any breach or default hereunder shall not suspend, waive
or affect any other breach or default whether the same is prior or subsequent
thereto and whether of the same or a different type. None of the undertakings,
agreements, warranties, covenants and representations of either party contained
in this Agreement, and no breach or default by either party hereunder, shall be
deemed to have been suspended or waived by the other party hereto unless such
waiver or suspension is by an instrument in writing signed by an officer of or
other duly authorized signatory of such party and directed to the defaulting
party specifying such suspension or waiver.
(b) Upon discovery by the Seller or the Purchaser of any
breach of any representation, warranty, undertaking or covenant
described in Sections 4.1, 4.2 or 4.3, which breach is reasonably
likely to have a Material Adverse Effect, the party discovering the
same shall give prompt written notice thereof to the other party
hereto. As liquidated damages, the Purchaser shall, on the Transfer
Date relating to the Collection Period during which the breach is
discovered, request the Seller to, and the Seller shall pay to, or at
the direction of, the Purchaser the Purchase Amount for the applicable
CEF Assets (measured at the end of the Collection Period during which
such breach is discovered). Upon such payment, all rights, title and
interest of the Purchaser in and to such CEF Assets will be deemed to
be automatically released without the necessity of any further action
by the Purchaser, the Seller or any other party and such CEF Assets
will become the property of the Seller.
(c) Each party's rights and remedies under this Agreement
shall be cumulative and nonexclusive of any other rights and remedies
that such party may have under any other agreement, including the other
Related Documents, by operation of law or otherwise.
Section 6.3 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the Seller and the Purchaser and
their respective successors and permitted assigns, except as otherwise provided
herein. The Seller may not assign, transfer, hypothecate or otherwise convey its
rights, benefits, obligations or duties hereunder without the prior express
written consent of the Purchaser. Any such purported assignment, transfer,
hypothecation or other conveyance by the Seller without the prior express
written consent of the Purchaser shall be void. The Seller acknowledges that
under the Purchase and Sale Agreement the Purchaser will assign its rights
granted hereunder to Issuer, and upon such assignment, Issuer shall have, to the
extent of such assignment, all rights of the Purchaser hereunder and Issuer may
in turn transfer such rights. The terms and provisions of this Agreement are for
the purpose of defining the relative rights and obligations of the Seller and
the Purchaser with respect to the transactions contemplated hereby and no Person
shall be a third-party beneficiary of any of the terms and provisions of this
Agreement.
Section 6.4 Termination; Survival of Obligations. (a) This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall
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remain in full force and effect until the earlier of (i) the Maturity Date or
(ii) the Redemption Date.
(b) Except as otherwise expressly provided herein or in
any other Related Document, no termination or cancellation (regardless
of cause or procedure) of any commitment made by the Purchaser under
this Agreement shall in any way affect or impair the obligations,
duties and liabilities of the Seller or the rights of the Purchaser
relating to any unpaid portion of any and all recourse and indemnity
obligations of the Seller to the Purchaser, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring prior
to such termination, or any transaction or event, the performance of
which is required after the Maturity Date. Except as otherwise
expressly provided herein or in any other Related Document, all
undertakings, agreements, covenants, warranties and representations of
or binding upon the Seller, and all rights of the Purchaser hereunder
shall not terminate or expire, but rather shall survive any such
termination or cancellation and shall continue in full force and effect
until the earlier of (i) the Maturity Date or (ii) the Redemption Date;
provided, that the rights and remedies pursuant to Section 6.2(b), the
indemnification and payment provisions of Article V, and the provisions
of Sections 4.3(e), 6.3 and 6.12 shall be continuing and shall survive
any termination of this Agreement.
Section 6.5 Complete Agreement; Modification of Agreement. This
Agreement constitutes the complete agreement between the parties with respect to
the subject matter hereof, supersedes all prior agreements and understandings
relating to the subject matter hereof and thereof, and may not be modified,
altered or amended except as set forth in Section 6.6.
Section 6.6 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement, or any consent to any
departure therefrom by either party hereto, shall in any event be effective
unless the same shall be in writing and signed by each of the parties hereto and
their respective permitted successors and assigns. No consent or demand in any
case shall, in itself, entitle any party to any other consent or further notice
or demand in similar or other circumstances.
Section 6.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL IN
ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS
THEREOF EXCEPT SECTION 5-1401 OF THE GENERAL OBLIGATION LAW) AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE
STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO ANY
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MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT; PROVIDED, THAT
EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY
HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN
IN NEW YORK CITY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE THE PURCHASER FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON
THE CEF ASSETS OR ANY SECURITY FOR THE OBLIGATIONS OF THE SELLER
ARISING HEREUNDER OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF THE PURCHASER. EACH PARTY HERETO SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH
PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE
OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH
LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT ITS ADDRESS
DETERMINED IN ACCORDANCE WITH SECTION 6.1 AND THAT SERVICE SO MADE
SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL
RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL,
PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING
BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Loan Sale Agreement
11
Section 6.8 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement.
Section 6.9 Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
Section 6.10 Section Titles. The section titles and table of
contents contained in this Agreement are provided for ease of reference only and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.
Section 6.11 No Setoff. The Seller's obligations under this
Agreement shall not be affected by any right of setoff, counterclaim,
recoupment, defense or other right the Seller might have against the Purchaser,
all of which rights are hereby expressly waived by the Seller.
Section 6.12 Confidentiality. Notwithstanding anything herein to
the contrary, there is no restriction (express or implied) on any disclosure or
dissemination of the structure or tax aspects of the transaction contemplated by
the Related Documents. Furthermore, each party hereto acknowledges that it has
no proprietary rights to any tax matter or tax idea contemplated hereby or to
any element of the transaction structure contemplated hereby.
Section 6.13 Further Assurances. (a) The Seller shall, at its sole
cost and expense, upon request of the Purchaser, promptly and duly authorize,
execute and/or deliver, as applicable, any and all further instruments and
documents and take such further actions that may be necessary or desirable or
that the Purchaser may request to carry out more effectively the provisions and
purposes of this Agreement or to obtain the full benefits of this Agreement and
of the rights and powers herein granted, including authorizing and filing any
financing or continuation statements under the UCC with respect to the ownership
interests or Liens granted hereunder. The Seller hereby authorizes the Purchaser
to file any such financing or continuation statements without the signature of
the Seller to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Agreement or of any notice or financing statement
covering the CEF Assets or any part thereof shall be sufficient as a notice or
financing statement where permitted by law. If any amount payable under or in
connection with any of the CEF Assets is or shall become evidenced by any
instrument, such instrument, other than checks and notes received in the
ordinary course of business, shall be duly endorsed in a manner satisfactory to
the Purchaser immediately upon the Seller's receipt thereof and promptly
delivered to or at the direction of the Purchaser.
(b) If the Seller fails to perform any agreement or
obligation under this Section 6.13, the Purchaser may (but shall not be required
to) itself perform, or cause performance of, such agreement or obligation, and
the reasonable expenses of the Purchaser incurred in connection therewith shall
be payable by the Seller upon demand of the Purchaser.
Section 6.14 Accounting Changes. If any Accounting Changes occur
and such changes result in a change in the standards or terms used herein, then
the parties hereto agree to enter into
Loan Sale Agreement
12
negotiations in order to amend such provisions so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
financial condition of such Persons and their Subsidiaries shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
If the parties hereto agree upon the required amendments to this Agreement, then
after appropriate amendments have been executed and the underlying Accounting
Change with respect thereto has been implemented, any reference to GAAP
contained herein shall, only to the extent of such Accounting Change, refer to
GAAP consistently applied after giving effect to the implementation of such
Accounting Change. If such parties cannot agree upon the required amendments
within 30 days following the date of implementation of any Accounting Change,
then all financial statements delivered and all standards and terms used herein
shall be prepared, delivered and used without regard to the underlying
Accounting Change.
[Signatures Follow]
Loan Sale Agreement
13
IN WITNESS WHEREOF, the parties have caused this LOAN SALE AGREEMENT to
be executed by their respective duly authorized representatives, as of the date
first above written.
CEF EQUIPMENT HOLDING, L.L.C.
By: ________________________________________
Name: __________________________________
Title: _________________________________
GENERAL ELECTRIC CAPITAL CORPORATION
By: ________________________________________
Name: __________________________________
Title: _________________________________
Loan Sale Agreement
14
Schedule 4.1(b)
UCC INFORMATION
General Electric Capital Corporation
True Legal Name: General Electric Capital Corporation
Jurisdiction of Organization: Delaware
Executive Offices/Principal Place of 00 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx: Xxxxxxx, Xxxxxxxxxxx 00000
Collateral Locations: Danbury, Connecticut
El Paso, Texas
Mexico
India
Trade Names: GE Capital
FEIN: 00-0000000
Organizational Identification Number: 3174543
Loan Sale Agreement
Schedule I
Schedule of CEF Loans
Loan Sale Agreement
EXHIBIT 4.2(f)
SEPARATE IDENTITY PROVISIONS
The Purchaser, GECS and the Seller have and will continue (in each
case, to the extent within its control) to maintain the Purchaser's separate
existence and identity and have and will continue to take all steps necessary to
make it apparent to third parties that the Purchaser is an entity with assets
and liabilities distinct from those of the Seller or GECS or any other
subsidiary or affiliate of the Seller or GECS. In addition to the foregoing,
such steps and indicia of the Purchaser's separate identity include the
following:
(a) The Purchaser does and will maintain its own stationery and
other business forms separate from those of any other Person (including the
Seller and GECS), and will conduct business in its own name except that certain
Persons may act on behalf of the Purchaser as agents;
(b) The Purchaser maintains and will maintain separate office
space of its own as part of its operations, although such space is in a building
shared with the Seller. The corporate records, the other books and records, and
the other assets of the Purchaser are and will be segregated from the property
of the Seller and GECS, respectively;
(c) The Seller will issue consolidated financial statements, which
financial statements will not show CEF Assets that have been sold by the Seller
to the Purchaser as assets of the Seller and its consolidated subsidiaries. The
Seller, GECS and the Purchaser will take certain actions to disclose publicly
the Purchaser's separate existence and the transactions contemplated hereby,
including through the filing of the UCC Financing Statements. None of the
Seller, GECS or the Purchaser has concealed or will conceal from any interested
party any transfers contemplated by the Related Documents;
(d) The Purchaser will not have its own employees, and, as
indicated, the Purchaser's business relating to the CEF Assets may be conducted
through the agents. However, any allocations of direct, indirect or overhead
expenses for items shared between the Purchaser and the Seller or GECS that are
not included as part of the servicing fee are and will be made among such
entities to the extent practical on the basis of actual use or value of services
rendered and otherwise on a basis reasonably related to actual use or the value
of services rendered;
(e) Except as provided in paragraph (d) above regarding the
allocation of certain shared overhead items, the Purchaser does and will pay its
own operating expenses and liabilities from its own funds, except GECS did and
will pay all expenses of the Purchaser incurred in connection with the
transactions entered into pursuant to the Related Documents, including those
related to the Purchaser's organization;
(f) Each of the Seller, GECS and the Purchaser does and will
maintain its assets and liabilities in such a manner that it is not costly or
difficult to segregate, ascertain or otherwise identify the Purchaser's
individual assets and liabilities from those of the Seller or GECS or from those
of any other person or entity, including any other subsidiary or affiliate of
the Seller or GECS. Except as set forth below, the Purchaser does and will
maintain its own books of account and corporate records separate from the Seller
and GECS or any other subsidiary or affiliate of
Loan Sale Agreement
the Seller and GECS. Monetary transactions, including those with each other,
are and will continue to be properly reflected in their respective financial
records. The Purchaser does not and will not commingle or pool its funds or
other assets or liabilities with those of the Seller or GECS or any other
subsidiary or affiliate of the Seller or GECS except as specifically provided in
the Related Documents with respect to the temporary commingling of Collections
and with respect to, if applicable, any such Person's retention, in their
capacity as agent or Custodian for the Purchaser, of the books and records
pertaining to the CEF Assets. However, any such agent or Custodian will not
generally make the books and records relating to the CEF Assets available to any
of creditors or other interested persons of the Purchaser, the Seller or GECS.
The Purchaser does not and will not maintain joint bank accounts or other
depository accounts to which the Seller or GECS or any other subsidiary or
affiliate of the Seller or GECS (other than in their capacity as agent for the
Purchaser, if applicable) has independent access;
(g) The Purchaser will strictly observe corporate formalities, and
the Seller and GECS will strictly observe corporate formalities with respect to
its dealings with the Purchaser. Specifically, no transfer of assets between any
of the Seller and GECS, on the one hand, and the Purchaser, on the other, will
be made without adherence to corporate formalities;
(h) The transactions among the Purchaser and the Seller or GECS,
including the terms governing any servicer advances and the amount and payment
of the servicing fee, are on terms and conditions that are consistent with those
of arm's-length relationships. None of the Seller or GECS is or will be, or
holds or will hold itself out to be, responsible for the debts of the Purchaser,
except as provided in: the representations made by the Seller (including, if
applicable, as a servicer or a sub-servicer) to the Purchaser relating to the
CEF Assets and their prior ownership and servicing thereof. The Purchaser will
not guaranty the debts of the Seller or GECS;
(i) All distributions made by the Purchaser to GECS as its sole
member shall be in accordance with applicable law;
(j) Any other transactions between the Purchaser and the Seller or
GECS permitted by (although not expressly provided for in) the Related Documents
have been and will be fair and equitable to each of the parties, have been and
will be the type of transaction that would be entered into by a prudent person
or entity, and have been and will be on terms that are at least as favorable as
may be obtained from a third party Person; and
(k) The Purchaser is not named, or has entered into any agreement
to be named, directly or indirectly, as a direct or contingent beneficiary or
loss payee on any insurance policy covering the assets of the Seller or GECS.
* * * * * *
Loan Sale Agreement
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION............................................................. 1
Section 1.1 Definitions....................................................................... 1
Section 1.2 Rules of Construction............................................................. 1
ARTICLE II SALES OF CEF ASSETS........................................................................ 1
Section 2.1 Sale of Loans..................................................................... 1
Section 2.2 Grant of Security Interest........................................................ 2
Section 2.3 Sale Price........................................................................ 2
ARTICLE III CONDITIONS PRECEDENT....................................................................... 3
Section 3.1 Conditions to Sale................................................................ 3
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS.................................................. 4
Section 4.1 Representations and Warranties of the Seller...................................... 4
Section 4.2 Affirmative Covenants of the Seller............................................... 5
Section 4.3 Negative Covenants of the Seller.................................................. 6
ARTICLE V INDEMNIFICATION............................................................................ 7
Section 5.1 Indemnification................................................................... 7
ARTICLE VI MISCELLANEOUS.............................................................................. 8
Section 6.1 Notices........................................................................... 8
Section 6.2 No Waiver; Remedies............................................................... 9
Section 6.3 Successors and Assigns............................................................ 9
Section 6.4 Termination; Survival of Obligations.............................................. 9
Section 6.5 Complete Agreement; Modification of Agreement..................................... 10
Section 6.6 Amendments and Waivers............................................................ 10
Section 6.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...................... 10
Section 6.8 Counterparts...................................................................... 11
Section 6.9 Severability...................................................................... 12
Section 6.10 Section Titles.................................................................... 12
Section 6.11 No Setoff......................................................................... 12
Section 6.12 Confidentiality................................................................... 12
Section 6.13 Further Assurances................................................................ 12
Section 6.14 Accounting Changes................................................................ 12
Schedule 4.1(b) UCC Information
Exhibit 4.2(f) Separate Indemnity Provisions
Loan Sale Agreement
i
EXECUTION COPY
ANNEX A
to
LOAN SALE AGREEMENT
dated as of
September 25, 2003
Annex A to
Loan Sale Agreement
DEFINITIONS AND INTERPRETATION
SECTION 1. Definitions and Conventions. Capitalized terms used in the
Sale Agreement shall have (unless otherwise provided elsewhere therein) the
following respective meanings:
"Accounting Changes" means, with respect to any Person, an adoption of
GAAP different from such principles previously used for reporting purposes by
such Person as defined in the Accounting Principles Board Opinion Number 20.
"Administration Agreement" means the Administration Agreement, dated as
of September 25, 2003, between the Administrator and the Issuer.
"Administrator" means General Electric Capital Corporation, a Delaware
corporation, in its capacity as Administrator under the Administration
Agreement, or any other Person designated as a successor administrator.
"Adverse Claim" means any claim of ownership or any Lien, other than
any ownership interest or Lien created under the Sale Agreement or the Purchase
and Sale Agreement, any Lien created under the Indenture or any Permitted
Encumbrances.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, five percent (5%) or more of the stock having
ordinary voting power in the election of directors of such Person, (b) each
Person that controls, is controlled by, or is under common control with such
Person, or (c) each of such Person's officers, directors, joint venturers and
partners. For the purposes of this definition, "control" of a Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"Annual Percentage Rate" or "APR" of a Loan means, the interest rate or
annual rate of finance charges stated in or, if not explicitly stated, the
implicit finance charge used by the Seller to calculate periodic payments with
respect to the related Loan.
"Appendices" means, with respect to any Related Document, all exhibits,
schedules, annexes and other attachments thereto, or expressly identified
thereto.
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the State of New York
or the State of Connecticut.
"CEF Assets" is defined in Section 2.1(a) of the Sale Agreement.
Annex A to
Loan Sale Agreement
"CEF Cash Purchase Price" means, with respect to the sale of CEF
Assets, the portion of the sale price therefor determined by the Seller and the
Purchaser pursuant to Section 2.3(a) of the Sale Agreement to be paid in cash.
"CEF Limited Liability Company Agreement" means the Second Amended and
Restated Limited Liability Company Agreement of the Purchaser dated as of
September 25, 2003, as supplemented by the Series 2003-1 LLC Supplement.
"CEF Variable Funding Certificate" means the Variable Funding
Certificate issued by CEF Equipment Holding, L.L.C. pursuant to the Series
2003-1 LLC Supplement.
"CEF Variable Funding Certificateholder" means the registered holder of
the CEF Variable Funding Certificate.
"Closing Date" means September 25, 2003.
"Collection Period" means, with respect to any Payment Date, the
calendar month preceding the month in which the Payment Date occurs (or, if for
the first Payment Date, the period from and including the day after the Cut-off
Date to and including the last day of the calendar month preceding the calendar
month in which the first Payment Date occurs).
"Collections" means, with respect to any Payment Date all payments made
by or on behalf of the Obligors received during the related Collection Period,
any Recoveries received during the related Collection Period, any proceeds from
insurance policies covering the Equipment or related Obligor received during the
related Collection Period, Liquidation Proceeds received during the related
Collection Period, and payments made by a lessee pursuant to its obligation (if
any) to pay the Termination Value pursuant to the related Loan received during
the related Collection Period.
"Consumer Contract" means a contract entered into by an Obligor in
connection with a transaction in which the Obligor incurs the related
indebtedness primarily for personal, family, or household purposes.
"Credit and Collection Policies" or "Credit and Collection Policy"
means, with respect to each type of Loan, the policies, practices and procedures
of the commercial equipment financing division of General Electric Capital
Corporation, as adopted by the Issuer for providing equipment financing,
including the policies and procedures for determining the creditworthiness of
Obligors and the extension of credit to Obligors, or relating to the maintenance
of such types of loans and collections on such types of loans, as such policies
and procedures, as applicable, may be amended from time to time.
"Cut-off Date" means August 2, 2003.
"Defaulted Loan" means a Loan with respect to which (i) the Servicer on
behalf of the Issuer has repossessed the Equipment securing such Loan and which
is not a Liquidated Loan or (ii) any portion of the Loan Value is deemed
uncollectible in accordance with the Credit and Collection Policy.
"Dollars" or "$" means lawful currency of the United States of America.
Annex A to
Loan Sale Agreement
2
"Eligible Loan" means as to each CEF Asset as of the Closing Date:
(i) Characteristics of CEF Assets. Each CEF Asset: (A) was
either originated in the United States of America by Seller in
connection with the financing or lease of Equipment in the ordinary
course of Seller's business or acquired by the Seller in the ordinary
course of the Seller's business, and, in each case, was fully and
properly executed by the parties thereto, (B) has created a valid,
subsisting and enforceable first priority security interest (except to
the extent the Equipment secures any loan that is cross-collateralized
with such CEF Asset) in the Equipment in favor of Seller that, as of
the Closing Date, has been assigned by Seller to Purchaser, and (C)
contains customary and enforceable provisions such that the rights and
remedies of the holder thereof are adequate for realization against the
collateral of the benefits of the security.
(ii) Schedule of CEF Assets. The information set forth on
Schedule I of the Loan Sale Agreement is true and correct in all
material respects as of the opening of business on the Cutoff Date and
no selection procedures believed by Seller to be adverse to the
interests of the Purchaser were utilized in selecting the CEF Assets.
The computer tape regarding the CEF Assets made available to Purchaser
and its assigns is true and correct in all respects.
(iii) Compliance with Law. Each CEF Asset and the sale or
lease of the related the Equipment complied in all material respects at
the time it was originated or made and at the execution of this
Agreement with all requirements of applicable Federal, State and local
laws and regulations thereunder.
(iv) Binding Obligation. Each CEF Asset represents the
genuine, legal, valid and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its
terms.
(v) No Government Obligor. None of the CEF Assets is due from
the United States of America or any State or from any agency,
department or instrumentality of the United States of America or any
State.
(vi) Security Interest in the Equipment. Immediately prior to
the sale, assignment and transfer thereof, each CEF Asset shall be
secured by a validly perfected first priority security interest in the
Equipment (except to the extent the Equipment secures any loan that is
cross-collateralized with such CEF Asset) in favor of Seller as secured
party or all necessary and appropriate actions have been commenced that
would result in the valid perfection of a first priority security
interest in the Equipment in favor of Seller as secured party.
(vii) CEF Assets in Force. No CEF Asset has been satisfied,
subordinated or rescinded, nor has any Equipment been released from the
Lien granted by the related CEF Asset in whole or in part.
(viii) No Amendment or Waiver. No provision of a CEF Asset has
been waived, altered or modified in any respect, except pursuant to a
document, instrument or writing
Annex A to
Loan Sale Agreement
3
included in the Loan Files and no such amendment, waiver, alteration or
modification causes such CEF Asset not to be an Eligible Loan.
(ix) No Defenses. No right of rescission, setoff, counterclaim
or defense has been asserted or threatened or exists with respect to
any CEF Asset.
(x) Lawful Assignment. No CEF Asset has been originated in, or
is subject to the laws of, any jurisdiction under which the sale,
transfer and assignment of such CEF Asset or any CEF Asset under the
Loan Sale Agreement would be unlawful.
(xi) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give Purchaser a first priority
perfected ownership interest in the CEF Assets have been made (except
to the extent the Equipment secures any loan that is
cross-collateralized with such CEF Asset).
(xii) One Original. There is only one original executed copy
of each CEF Asset.
(xiii) Insurance. The Obligor on each CEF Asset is required to
maintain physical damage insurance covering the Equipment in accordance
with Seller's normal requirements.
(xiv) No Bankruptcies. No Obligor on any CEF Asset as of the
Cutoff Date was noted in the related Loan File as being the subject of
a bankruptcy proceeding.
(xv) No Repossessions. None of the Equipment securing any CEF
Asset is in repossession status.
(xvi) Instrument or Chattel Paper. Each CEF Asset constitutes
an "instrument" or "chattel paper" as defined in the UCC of each State
the law of which governs the perfection of the interest granted in it
and/or the priority of such perfected interest.
(xvii) U.S. Obligors. None of the CEF Assets is denominated
and payable in any currency other than United States Dollars or is due
from any Person that does not have a mailing address in the United
States of America.
(xviii) No Delinquent Loan. None of the CEF Assets is more
than 30 days past due.
(xix) No Consumer Contract. None of the CEF Assets constitutes
a Consumer Contract.
(xx) Finance Lease. Each CEF Asset qualifies as a finance
lease under the UCC and the terms of such CEF Asset provides that, by
the end of the lease term, the lessee may elect to purchase the related
Equipment upon the exercise of a nominal purchase option.
"Equipment" means any transportation equipment, industrial equipment,
furniture and fixtures, construction equipment, technology and
telecommunications equipment, maritime
Annex A to
Loan Sale Agreement
4
assets or other equipment, together with all accessions thereto securing an
Obligor's indebtedness under the respective Loan.
"Event of Default" is defined in Section 5.1 of the Indenture.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the Closing Date, modified by Accounting
Changes as GAAP is further defined in Section 2(a) of this Annex B.
"GECS" means General Electric Capital Services, Inc., a Delaware
corporation or any successors or assigns thereto.
"Governmental Authority" means any nation or government, any state,
county, city, town, district, board, bureau, office, commission, any other
municipality or other political subdivision thereof (including any educational
facility, utility or other Person operated thereby), and any agency, department
or other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Indemnified Amounts" means, with respect to any Person, any and all
suits, actions, proceedings, claims, damages, losses, liabilities and expenses
(including reasonable attorneys' fees and disbursements and other costs of
investigation or defense, including those incurred upon any appeal).
"Indenture" means the Indenture, dated September 25, 2003, between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Indenture Trustee" means JPMorgan Chase Bank, not in its individual
capacity but solely as Indenture Trustee under the Indenture, or any successor
Indenture Trustee under the Indenture.
"Investment Company Act" means the provisions of the Investment Company
Act of 1940, 15 U.S.C. Sections 80a et seq., and any regulations promulgated
thereunder.
"Issuer" means GE Commercial Equipment Financing LLC Series 2003-1, a
Delaware limited liability company, until a successor replaces it and,
thereafter, means the successor and, for purposes of any provision contained in
the Indenture and required by the Trust Indenture Act of 1939, each other
obligor on the Notes.
"Lien" means a security interest (as such term is defined in Section
1-201 of Article 1 of the UCC), lien, charge, pledge, equity or encumbrance of
any kind, other than tax liens, mechanics' liens and any liens that attach to
the related Loan by operation of law as a result of any act or omission by the
related Obligor.
"Limited Liability Company Agreement" means the Limited Liability
Company Agreement of the Issuer, dated as of September 25, 2003, among the
Managing Member and the Issuer, as the same may be amended or supplemented from
time to time.
Annex A to
Loan Sale Agreement
5
"Liquidated Loan" means any Loan (i) liquidated through the sale or
other disposition of all or a portion of the related Equipment, (ii) that has
been charged off in accordance with the Credit and Collection Policy without
realizing upon the Equipment or (iii) the due date of any Scheduled Payment of
which has been extended, at any time after the Cut-off Date for an aggregate
period of 12 or more calendar months.
"Liquidation Proceeds" means, with respect to any Liquidated Loan, the
amounts collected in respect thereof from whatever source (including the
proceeds of insurance policies with respect to the related Equipment or Obligor)
during the Collection Period in which it became a Liquidated Loan, net of the
sum of any amounts expended in connection with such liquidation and any amounts
required by law to be remitted to the Obligor on such Liquidated Loan or any
creditor of such Obligor to the extent required by applicable law or agreement.
"Litigation" means, with respect to any Person, any action, claim,
lawsuit, demand, investigation or proceeding pending or threatened against such
Person before any court, board, commission, agency or instrumentality of any
federal, state, local or foreign government or of any agency or subdivision
thereof or before any arbitrator or panel of arbitrators.
"Loan" means any Loan included in Schedule of Loan and any agreement
(including any invoice) pursuant to, or under which, an Obligor shall be
obligated to make payments with respect to any Loan.
"Loan Files" is defined in Section 2.1 of the Sale Agreement.
"Loan Value" is defined in the Purchase and Sale Agreement.
"Managing Member" means CEF Equipment Holding, L.L.C., a Delaware
limited liability company or any successor Managing Member under the Limited
Liability Company Agreement.
"Material Adverse Effect" means, with respect to any Person, a material
adverse effect on (a) the business, assets, liabilities, operations, prospects
or financial or other condition of such Person, (b) the ability of such Person
to perform any of its obligations under the Related Documents in accordance with
the terms thereof, (c) the validity or enforceability of any Related Document or
the rights and remedies of such Person under any Related Document or (d) the
Loans, as applicable, therefor, any interest related thereto or the ownership
interests or Liens of such Person thereon or the priority of such interests or
Liens.
"Maturity Date" is defined in the Indenture.
"Note Depository Agreement" means the agreement among the Issuer, the
Indenture Trustee and The Depository Trust Company, as the initial clearing
agency, dated as of the Closing Date.
"Notes" means the notes issued under the Indenture.
"Obligor" means, as to each Loan, any Person who owes payments under
the Loan.
Annex A to
Loan Sale Agreement
6
"Payment Date" means, with respect to each Collection Period, the 20th
day of the calendar month following the end of that Collection Period, or, if
such day is not a Business Day, the next Business Day, commencing on October 20,
2003.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental charges not yet due and payable;
(b) pledges or deposits securing obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation; (c) pledges or deposits securing bids, tenders, contracts (other
than contracts for the payment of money) or leases to which the Seller or any
Affiliate thereof is a party as lessee made in the ordinary course of business;
(d) deposits securing statutory obligations of the Seller or any Affiliate
thereof; (e) inchoate and unperfected workers', mechanics', suppliers' or
similar Liens arising in the ordinary course of business; (f) carriers',
warehousemen's or other similar possessory Liens arising in the ordinary course
of business and securing liabilities in an outstanding aggregate amount not in
excess of $100,000 at any one time; (g) deposits securing, or in lieu of,
surety, appeal or customs bonds in proceedings to which the Seller or any
Affiliate thereof is a party; (h) any attachment or judgment Lien not
constituting an Event of Default; (i) presently existing or hereinafter created
Liens in favor of the Purchaser, the Issuer or the Indenture Trustee; and (j)
presently existing or hereinafter created Liens on personal property or
Equipment which are subordinate to or pari passu with the Liens in favor of the
Purchaser, the Issuer or the Indenture Trustee.
"Person" means any individual, sole proprietorship, partnership, joint
venture, unincorporated organization, trust, association, corporation (including
a business trust), limited liability company, institution, public benefit
corporation, joint stock company, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Precomputed Loan" means any Loan under which the portion of a payment
allocable to earned interest (which may be referred to in the related Loan as an
add-on finance charge) and the portion allocable to principal are determined
according to the sum of periodic balances, the sum of monthly payments or any
equivalent method or are monthly actuarial loans.
"Purchase Amount" means, as of the close of business on the last day of
a Collection Period, an amount equal to the Loan Value of the applicable Loan,
as of the first day of the immediately following Collection Period (or, with
respect to any applicable Loan that is a Liquidated Loan, as of the day
immediately prior to such Loan becoming a Liquidated Loan less any Liquidation
Proceeds actually received by the Issuer) plus interest accrued and unpaid
thereon as of such last day at a rate per annum equal to the APR for such Loan.
"Purchase and Sale Agreement" means the Loan Purchase and Sale
Agreement dated as of September 25, 2003, by and between the Transferor and the
Issuer as the same may be amended from time to time.
"Purchaser" means CEF Equipment Holding, LLC, a Delaware limited
liability company as purchaser pursuant to the Sale Agreement.
"Purchaser Indemnified Person" is defined in Section 5.1 of the Sale
Agreement.
Annex A to
Loan Sale Agreement
7
"Records" means all notes, leases, security agreements 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 any of the Seller, the Servicer, any Sub-Servicer or the
Issuer with respect to the Loans and the Obligors thereunder, and the other CEF
Assets.
"Recoveries" means, with respect to any Liquidated Loan, monies
collected in respect thereof, from whatever source (other than from the sale or
other disposition of the Equipment), in any Collection Period after such Loan
became a Liquidated Loan.
"Redemption Date" is defined in the Indenture.
"Related Documents" means the Sale Agreement, the Purchase and Sale
Agreement, the Servicing Agreement, the Limited Liability Company Agreement, the
Variable Funding Certificates, the CEF Limited Liability Company Agreement, the
Administration Agreement, the Note Depository Agreement, the Swap Agreements,
and all other agreements, instruments, and documents and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, and all
other written matter whether heretofore, now or hereafter executed by or on
behalf of any Person, or any employee of any Person, and delivered in connection
with any of the foregoing. Any reference in the foregoing documents to a Related
Document shall include all Appendices thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to such Related
Document as the same may be in effect at any and all times such reference
becomes operative.
"Related Security" means with respect to any Loan: (a) any interest
(including security interests), if any, in the related Equipment; (b) all
guarantees, insurance or other agreements or arrangements of any kind from time
to time supporting or securing payment of such Loan (including rights (if any)
to receive proceeds on insurance policies covering the Obligors); and (c) all
Records relating to such Loan.
"Sale Agreement" means the Loan Sale Agreement, dated September 25,
2003, between Seller and the Purchaser.
"Schedule of Loans" is the schedule of Loans attached as Schedule I to
the Sale Agreement (which schedule may be in the form of microfiche).
"Scheduled Payment" on a Loan means that portion of the payment
required to be made by the Obligor during any Collection Period sufficient to
amortize the principal balance under (x) in the case of a Precomputed Loan, the
actuarial method or (y) in the case of a Simple Interest Loan, the simple
interest method, in each case, over the term of the Loan and to provide interest
at the APR, provided that Termination Values shall also constitute Scheduled
Payments.
"Securities Act" means the provisions of the Securities Act of 1933, 15
U.S.C. Sections 77a et seq., and any regulations promulgated thereunder.
"Securities Exchange Act" means the provisions of the Securities
Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any regulations
promulgated thereunder.
Annex A to
Loan Sale Agreement
8
"Seller" means General Electric Capital Corporation, a Delaware
corporation, its successors and assigns.
"Series 2003-1 LLC Supplement" means the Series 2003-1 LLC Supplement
to the Second Amended and Restated Limited Liability Company of CEF Equipment
Holding, L.L.C., dated as of September 25, 2003.
"Servicer" means General Electric Capital Corporation in its capacity
as Servicer under the Servicing Agreement, or any other Person designated as a
Successor Servicer under such agreement.
"Servicing Agreement" means the Servicing Agreement dated as of
September 25, 2003, by and between the Issuer and the Servicer, as the same may
be amended or supplemented from time to time.
"Servicing Fee" is defined in the Servicing Agreement.
"Simple Interest Loan" means any Loan under which the portion of a
payment allocable to interest and the portion allocable to principal is
determined by allocating a fixed level payment between principal and interest,
such that such payment is allocated first to the accrued and unpaid interest at
the Annual Percentage Rate for such Loan on the unpaid principal balance and the
remainder of such payment is allocable to principal.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets 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 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
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as Litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Stock" means all shares, options, warrants, membership interests in a
limited liability company, general or limited partnership interests or other
equivalents (regardless of how designated) of or in a corporation, partnership
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act).
"Stockholder" means, with respect to any Person, each holder of Stock
of such Person.
"Sub-Servicer" means any Person with whom the Servicer enters into a
Sub-Servicing Agreement.
Annex A to
Loan Sale Agreement
9
"Sub-Servicing Agreement" means any written contract entered into
between a Servicer and any Sub-Servicer pursuant to and in accordance with the
Servicing Agreement.
"Subsidiary" means, with respect to any Person, any corporation or
other entity (a) of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or indirectly
owned by such Person or (b) that is directly or indirectly controlled by such
Person within the meaning of control under Section 15 of the Securities Act.
"Successor Servicer" is defined in Section 6.2 of the Servicing
Agreement.
"Swap Agreements" is defined in the Indenture.
"Termination Value" means the "Termination Value" (if any) payable by
lessee pursuant to the applicable Loan.
"Transfer Date" is defined in the Indenture.
"Transferor" means CEF Equipment Holding, L.L.C. a Delaware limited
liability company, as seller under the Purchase and Sale Agreement.
"UCC" means, with respect to any jurisdiction, the Uniform Commercial
Code as the same may, from time to time, be enacted and in effect in such
jurisdiction.
"Variable Funding Certificates" is defined in the Indenture.
SECTION 2. Other Interpretive Matters. All terms defined directly or by
incorporation in the Sale Agreement shall have the defined meanings when used in
any certificate or other document delivered pursuant thereto unless otherwise
defined therein. For purposes of the Sale Agreement (including in this Annex B)
and all related certificates and other documents, unless the context otherwise
requires: (a) accounting terms not otherwise defined in such Agreement, and
accounting terms partly defined in such Agreement to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles; and unless otherwise provided, references to any month,
quarter or year refer to a fiscal month, quarter or year as determined in
accordance with the Seller fiscal calendar; (b) terms defined in Article 9 of
the UCC and not otherwise defined in such Agreement are used as defined in that
Article; (c) references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on such day; (d) the
words "hereof," "herein" and "hereunder" and words of similar import refer to
such Agreement (or the certificate or other document in which they are used) as
a whole and not to any particular provision of such Agreement (or such
certificate or document); (e) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to such Agreement (or the
certificate or other document in which the reference is made), and references to
any paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (f) the term "including" means "including without
limitation"; (g) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (h) references to any agreement refer to that agreement as from time
to time amended, restated or supplemented or as the terms of such agreement are
waived or modified in accordance with its terms; (i) references to any Person
Annex A to
Loan Sale Agreement
10
include that Person's successors and assigns; and (j) headings are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
Annex A to
Loan Sale Agreement
11
