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EXHIBIT 10.1
RECEIVABLES TRANSFER AGREEMENT
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BETWEEN
FIRST SIERRA FINANCIAL, INC.,
FIRST SIERRA RECEIVABLES III, INC.,
FIRST UNION NATIONAL BANK,
VARIABLE FUNDING CAPITAL CORPORATION,
FAIRWAY FINANCE CORPORATION,
BANKERS TRUST COMPANY
AND
FIRST SIERRA EQUIPMENT CONTRACT TRUST 1999-2, A COMMON LAW
TRUST ACTING THROUGH FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS OWNER TRUSTEE
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DATED AS OF
SEPTEMBER 1, 1999
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS...................................................................................3
SECTION 1.01 Definitions....................................................................3
SECTION 1.02 Other Definitional Provisions..................................................3
ARTICLE II TRANSFER OF CONVEYED ASSETS..................................................................4
SECTION 2.01 Direction; Acquisition of Initial Conveyed Assets..............................4
SECTION 2.02 Reserved.......................................................................5
SECTION 2.03 Custody of Contract Files......................................................5
SECTION 2.04 Intention of the Parties; Grant of Security Interest...........................5
ARTICLE III REPRESENTATIONS AND WARRANTIES..............................................................6
SECTION 3.01 Representations and Warranties.................................................6
SECTION 3.02 Removal of Non-Conforming Contracts by First Sierra...........................17
SECTION 3.03 Substitution of Contracts and Equipment by First Sierra.......................17
ARTICLE IV COVENANTS...................................................................................18
SECTION 4.01 Seller and First Sierra Covenants.............................................18
SECTION 4.02 Receivables III Covenants.....................................................21
SECTION 4.03 Transfer of Conveyed Assets...................................................23
ARTICLE V CONDITIONS PRECEDENT.........................................................................23
SECTION 5.01 Conditions to Trust Obligations...............................................23
ARTICLE VI TERMINATION.................................................................................24
SECTION 6.01 Termination...................................................................24
SECTION 6.02 Effect of Termination.........................................................24
ARTICLE VII MISCELLANEOUS PROVISIONS...................................................................25
SECTION 7.01 Amendment.....................................................................25
SECTION 7.02 GOVERNING LAW.................................................................25
SECTION 7.03 Notices.......................................................................25
SECTION 7.04 Severability of Provisions....................................................26
SECTION 7.05 Assignment....................................................................26
SECTION 7.06 Further Assurances............................................................26
SECTION 7.07 No Waiver; Cumulative Remedies................................................26
SECTION 7.08 Counterparts..................................................................26
SECTION 7.09 Binding Effect: Third-Party Beneficiaries.....................................26
SECTION 7.10 Merger and Integration........................................................27
SECTION 7.11 Headings......................................................................27
SECTION 7.12 Schedules and Exhibits........................................................27
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SECTION 7.13 No Bankruptcy Petition Against Receivables III or the Trust...................27
Exhibits, Schedules & Annexes
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Schedule 1 LIST OF INITIAL CONTRACTS
Annex A DEFINED TERMS
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RECEIVABLES TRANSFER AGREEMENT
THIS RECEIVABLES TRANSFER AGREEMENT (this "Agreement"), dated
as of September 1, 1999, is entered into among FIRST SIERRA FINANCIAL, INC.
("First Sierra"), a Delaware corporation located at 000 Xxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, in its individual capacity, FIRST SIERRA RECEIVABLES
III, INC. ("Receivables III"), a Delaware corporation located at 000 Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, FIRST UNION NATIONAL BANK (formerly
First Union National Bank of North Carolina) ("First Union") a Delaware
corporation located at One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, VARIABLE FUNDING CAPITAL CORPORATION
("VFCC") a Delaware corporation located at One First Union Center, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, FAIRWAY FINANCE
CORPORATION, ("FFC") a Delaware corporation located at 00 Xxxx Xxxxxx, Xxxxx 00
Xxxx, Xxxxxxx, Xxxxxxxx 00000, BANKERS TRUST COMPANY (the "Indenture Trustee") a
New York banking corporation located at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, not in its individual capacity but as Trustee of the First Sierra
Equipment Lease Trust 1997-A, the First Sierra Equipment Lease Trust 1997-B and
the First Sierra Equipment Lease Trust 1998-E (each as defined herein) and FIRST
SIERRA EQUIPMENT CONTRACT TRUST 1999-2, a Delaware common law trust acting
through First Union Trust Company, National Association, not in its individual
capacity but solely as Owner Trustee (the "Issuer" or the "Trust"), located at
One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000.
Receivables III and each Warehouse Trust (as defined below), are collectively
referred to herein as the "Sellers." First Union, VFCC and FFC are collectively
referred to herein as the "Investors."
WITNESSETH:
WHEREAS, First Sierra in the ordinary course of its business
acquires and originates equipment contracts in the United States; and
WHEREAS, Receivables III, First Sierra and Bankers Trust
Company have entered into an Amended and Restated Master Investment, Pooling and
Servicing Agreement, dated as of March 25, 1998 (the "Investment Agreement")
whereby Receivables III may, from time to time, sell pools of contracts,
contract receivables and equipment to one or more trusts to be formed pursuant
to the Investment Agreement and a supplement thereto; and
WHEREAS, pursuant to the Investment Agreement, the parties
thereto may, from time to time, execute a supplement to the Investment Agreement
and form a trust for the purpose of (i) accepting the transfer of a specific
pool of contracts, contract receivables, equipment and certain rights relating
thereto and arising therefrom from Receivables III, (ii) issuing senior
certificates ("Senior Certificates") and residual certificates ("Residual
Certificates" and, together with the Senior Certificates, the "Certificates")
representing beneficial ownership interests in the assets of each trust and
(iii) selling the Senior Certificates to investors; and
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WHEREAS, pursuant to a Series 1997-A Supplement, dated as of
June 30, 1997, as amended (the "Series 1997-A Supplement"), among Receivables
III, First Sierra, Bankers Trust Company and First Union, the parties thereto
formed a trust (the "First Sierra Equipment Lease Trust 1997-A"), issued a
Senior Certificate to First Union representing the senior beneficial ownership
interest in the Leases and Equipment conveyed by Receivables III to the First
Sierra Equipment Lease Trust 1997-A and issued a Residual Certificate to
Receivables III representing the residual beneficial ownership interest in the
Contracts and Equipment conveyed to the First Sierra Equipment Lease Trust
1997-A; and
WHEREAS, First Union and Receivables III, as the beneficial
owners of the Leases and Equipment in the First Sierra Equipment Lease Trust
1997-A, desire that Bankers Trust Company, as the Trustee of such trust, convey
such Contracts and Equipment to the Trust; and
WHEREAS, pursuant to a Series 1997-B Supplement, dated as of
June 26, 1997, as amended (the "Series 1997-B Supplement"), among Receivables
III, First Sierra, Bankers Trust Company, VFCC and First Union, the parties
thereto formed a trust (the "First Sierra Equipment Lease Trust 1997-B", issued
a Senior Certificate to VFCC representing the senior beneficial ownership
interest in the Leases and Equipment conveyed by Receivables III to the First
Sierra Equipment Lease Trust 1997-B and issued a Residual Certificate to
Receivables III representing the residual beneficial ownership interest in the
Contracts and Equipment conveyed to the First Sierra Equipment Lease Trust
1997-B; and
WHEREAS, VFCC and Receivables III, as the beneficial owners of
the Leases and Equipment in the First Sierra Equipment Lease Trust 1997-B,
desire that Bankers Trust Company, as trustee of such trust, convey such
Contracts and Equipment to the Trust; and
WHEREAS, pursuant to a Series 1998-E Supplement, dated as of
December 21, 1998 (the "Series 1998-E Supplement"), among Receivables III, First
Sierra, Bankers Trust Company, FFC and Xxxxxxx Xxxxx Securities, Inc., the
parties thereto formed a trust (the "First Sierra Equipment Lease Trust 1998-E"
and, together with the First Sierra Equipment Lease Trust 1997-A and the First
Sierra Equipment Lease Trust 1997-B, the "Warehouse Trusts"), issued a Senior
Certificate to FFC representing the senior beneficial ownership interest in the
Leases and Equipment conveyed by Receivables III to the First Sierra Equipment
Lease Trust 1998-E and issued a Junior Certificate representing the junior
beneficial ownership interest in the Leases and Equipment conveyed by
Receivables III to the First Sierra Equipment Lease Trust 1998-E and a Residual
Certificate to Receivables III representing the residual beneficial ownership
interest in the Leases and Equipment conveyed to the First Sierra Equipment
Lease Trust 1998-E; and
WHEREAS, FFC and Receivables III, as the beneficial owners of
the Leases and Equipment in the First Sierra Equipment Lease Trust 1998-E,
desire that
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Bankers Trust Company, as trustee of such trust, convey such Leases and
Equipment to the Trust; and
WHEREAS, each of the Sellers desires to convey, transfer,
contribute and assign all of its right, title and interest in and to the
Contracts and all of its right, title and interest in and to the Equipment and
certain of its rights under the Source Agreements (as such capitalized terms are
defined below) to the Owner Trustee, on behalf of the Trust, upon the terms and
conditions hereinafter set forth; and
WHEREAS, each of the Sellers and the Trust agree that all
representations, warranties, covenants and agreements made by it herein shall be
for the benefit of the Noteholders, the Certificateholders, any Owner Trustee
and any Indenture Trustee (as defined below).
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. Whenever used in this Agreement,
capitalized terms used and not defined herein shall have the meanings set forth
in Annex A to the Indenture.
SECTION 1.02 Other Definitional Provisions.
(a) Terms used in Related Documents. Each term defined in this
Agreement will have the meaning assigned to such term in this Agreement when
used in any certificate or other document made or delivered pursuant to this
Agreement, unless such term is otherwise defined therein.
(b) Accounting Terms. As used in this Agreement, accounting
terms which are not defined pursuant to Section 1.01 have the respective
meanings given to them under generally accepted accounting principles, as in
effect on the date of this Agreement. To the extent that the definitions of
accounting terms in this Agreement are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions contained
in this Agreement will control.
(c) "Hereof," etc. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement will refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and Section, Schedule and Exhibit references contained in this
Agreement are references to Sections, Schedules and Exhibits in or to this
Agreement, unless otherwise specified.
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(d) Number and Gender. Each defined term used in this
Agreement has a comparable meaning when used in its plural or singular form.
Each gender-specific term used in this Agreement has a comparable meaning
whether used in a masculine, feminine or gender-neutral form.
(e) Including. Whenever the term "including" (whether or not
that term is followed by the phrase "but not limited to" or "without limitation"
or words of similar effect) is used in this Agreement in connection with a
listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or exclusive listing of, the items within that classification.
ARTICLE II
TRANSFER OF CONVEYED ASSETS
SECTION 2.01 Direction; Acquisition of Initial Conveyed
Assets.
(a) In accordance with the terms of the Investment Agreement,
each of the Investors, as the Senior Certificateholders of the related Warehouse
Trust, and Receivables III, as the Junior Certificateholder and the Residual
Certificateholder of the Warehouse Trusts, together representing all of the
beneficial ownership interests in the Warehouse Trusts, hereby direct Bankers
Trust Company to convey to the Trust those assets of each Warehouse Trust and
Receivables III. Upon receipt of the consideration specified below, each of the
Investors hereby release all of its right, title and interest in, to and under
the Initial Conveyed Assets, such receipt being hereby acknowledged by execution
of this Agreement by each Investor.
(b) In consideration for (x) the issuance to Holding Trust II
of the Trust Certificate to be issued pursuant to the Trust Agreement, (y) the
receipt of $71,408,628.38 by First Sierra Equipment Lease Trust 1997-A,
$3,169,497.80 by First Sierra Equipment Lease Trust 1997-B, $91,006,909.53 by
First Sierra Equipment Lease Trust 1998-E and (z) other good and valuable
consideration, each of the Sellers hereby conveys to the Trust all of its right,
title and interest in, to and under the Initial Conveyed Assets (with respect to
each Seller individually, to the extent of such Seller's interest in such
Initial Conveyed Assets, whether now existing or hereinafter arising, without
recourse (except as may be set forth in the Servicing Agreement)).
(c) In connection with such sale and conveyance, each Seller
agrees to record and file, at the expense of First Sierra, financing statements
(and thereafter will file continuation statements with respect to such financing
statements) with respect to the related Initial Conveyed Assets contributed and
to be transferred to the Trust pursuant to this Agreement and the Substitute
Conveyed Assets, meeting the requirements of applicable state law and the Filing
Requirements in such manner and in such jurisdictions as are necessary to
perfect and to maintain the perfection of, the transfer, conveyance and
contribution of the related Initial Conveyed Assets and the related Substitute
Conveyed
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Assets (subject to the Filing Requirements with respect to the Equipment) from
each of the Sellers to the Trust and the transfer, assignment and pledge of the
Pledged Property from the Trust to the Indenture Trustee on behalf of the
Noteholders, pursuant to the Indenture, and to deliver a file-stamped copy of
such financing statements or other evidence of such filings to the Trust (and
copies to the Indenture Trustee) on or prior to each Conveyance Date; provided,
however, that the Contract Files (including each original executed Contract)
will not be physically delivered to the Trust but instead will be held by the
Indenture Trustee.
(d) In connection with such assignment and conveyance, First
Sierra shall, at its own expense, on or prior to the related Conveyance Date,
and with respect to Substitute Contracts, as soon as possible, but in no event
later than two (2) Business Days after the related Conveyance Date (i) cause the
Contract Management System to be marked with a specified code (the "Contract
Management Code") to show that the Initial Conveyed Assets or the Substitute
Conveyed Assets, as the case may be, have been assigned and transferred to the
Trust in accordance with this Agreement and pledged to the Indenture Trustee on
behalf of the Noteholders, pursuant to the Indenture and (ii) prepare and hold
in its capacity as Servicer on behalf of the Trust and the Indenture Trustee the
List of Initial Contracts on or prior to the Closing Date. Pursuant to Section
3.03 hereof, First Sierra from time to time may convey Substitute Contracts to
the Trust at any time by delivering a List of Substitute Contracts to the Trust
on each Conveyance Date containing for each Substitute Contract transferred on
such Conveyance Date the information set forth in the definition of List of
Substitute Contracts.
(e) Except for the obligations of First Sierra pursuant to the
Servicing Agreement and the Indenture with respect to any breach of a
representation, warranty or covenant made herein, the sale and conveyance of the
Conveyed Assets will be without recourse to the Sellers.
SECTION 2.02 Reserved.
SECTION 2.03 Custody of Contract Files. In connection with the
sale, assignment, transfer and conveyance of the Contracts to the Trust pursuant
to this Agreement, First Sierra, as Servicer under the Servicing Agreement and
as agent of the Indenture Trustee will retain the Contract Files and any related
evidence of insurance and payments; provided, however, that First Sierra will
physically convey the original executed counterparts of each Contract and the
related Certificate of Title, if applicable, to the Indenture Trustee in
accordance with the terms of the Indenture.
SECTION 2.04 Intention of the Parties; Grant of Security
Interest. It is the intention of the parties hereto that each transfer of the
Conveyed Assets to be made pursuant to the terms hereof shall constitute an
absolute assignment and a sale of such Contract by each Seller to the Trust and
not a loan. In the event, however, that a court of competent jurisdiction were
to hold that any such transfer constitutes a loan and not a sale, it is the
intention of the parties hereto that this Agreement is deemed to be a security
agreement and that each Seller shall be deemed to have granted to the Trust as
of the date
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hereof a first priority perfected security interest in all of such Seller's
right, title and interest in, to and under each Conveyed Asset, and all income
and proceeds thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties.
(a) First Sierra hereby makes the following representations
and warranties for the benefit of the Owner Trustee, the Indenture Trustee, the
Noteholders and the Trust. Such representations and warranties are made as of
any Conveyance Date with respect to Contracts transferred to the Trust on such
date and shall survive each assignment, transfer and conveyance by First Sierra
of the Conveyed Assets to the Trust and its successors and assigns.
(i) Organization and Good Standing. First Sierra is a
corporation duly organized, validly existing and in good
standing, under the laws of the State of Delaware, with
corporate power and authority to own its properties and to
conduct its business as such properties are currently owned
and such business is currently conducted, and had at all
relevant times, and now has, power, authority, and legal right
to acquire and own the Conveyed Assets;
(ii) Due Qualification. First Sierra is qualified as
a foreign corporation in any state where it is required to be
so qualified to conduct its business, to enforce the Source
Agreements to which it is a party, and to service the
Contracts as required by the Servicing Agreement and has
obtained all necessary licenses, consents and approvals as
required under federal and state law, in each case, where the
failure to be so qualified, licensed, consented to or approved
could reasonably be expected materially and adversely to
affect the ability of First Sierra to comply with the terms of
this Agreement or any other Transaction Document to which it
is a party;
(iii) Power and Authority. First Sierra has the
corporate power and authority to execute and deliver this
Agreement, the Source Agreements to which it is a party and
the Contracts and any other Transaction Document to which it
is a party, and to carry out their respective terms; and the
execution, delivery, and performance of this Agreement, the
Source Agreements, the Contracts and any other Transaction
Document to which it is a party, has been duly authorized by
First Sierra by all necessary corporate action;
(iv) Due Execution and Delivery. This Agreement and
each of the other Transaction Documents to which it is a party
have been duly executed and delivered on behalf of First
Sierra;
(v) Valid Assignment; Binding Obligations. This
Agreement and the other Transaction Documents to which First
Sierra is a party, when duly
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executed and delivered, will constitute legal, valid, and
binding obligations of First Sierra enforceable against First
Sierra in accordance with their respective terms subject as to
enforceability to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(vi) No Violation. The consummation of the
transactions contemplated by and the fulfillment of the terms
of this Agreement and each Transaction Document to which it is
a party will not conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the articles of
incorporation or bylaws of First Sierra, or any material term
of any indenture, agreement, mortgage, deed of trust, or other
instrument to which First Sierra is a party or by which it is
bound, or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust, or other
instrument, other than this Agreement or each Transaction
Document to which it is a party or violate any law or any
order, injunction, writ, rule, or regulation applicable to
First Sierra of any court or of any federal or state regulatory
body, administrative agency, or other Governmental Authority
having jurisdiction over First Sierra or any of its properties
which would have a material adverse effect on the Conveyed
Assets;
(vii) Ability to Perform. No event has occurred
which adversely affects First Sierra's operations or its
ability to perform its obligations under the Transaction
Documents to which it is a party;
(viii) No Proceedings. There are no Proceedings or
investigations pending, or, to the knowledge of First Sierra,
threatened, before any court, regulatory body, administrative
agency, or other tribunal or Governmental Authority (A)
asserting the invalidity of this Agreement or each other
Transaction Document to which it is a party, (B) seeking to
prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any
determination or ruling that might (in the reasonable judgment
of First Sierra) materially and adversely affect the
performance by First Sierra of its obligations under, or the
validity or enforceability of, this Agreement or each other
Transaction Document to which it is a party;
(ix) No Consent Required. First Sierra is not
required to obtain the consent of any other Person, or any
consent, license, approval or authorization or registration or
declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery or performance of
this Agreement and the Transaction Documents to which it is a
party, except for such as have been obtained, effected or made;
and
(x) Consolidated Return Taxable Income from the
Equipment and the Related Contracts. The Depositor and First
Sierra are members of an
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affiliated group within the meaning of Section 1504 of the Code
which has filed, and will continue to file, a consolidated
return for federal income tax purposes at all times until
satisfaction in full of all obligations (i) of First Sierra
hereunder and (ii) of First Sierra and the Depositor under the
Transaction Documents or other documents relating to the
financing contemplated hereby. The Depositor shall treat the
Contracts as owned by it for federal, state and local income
tax purposes, and the affiliated group of which the Depositor
is a member within the meaning of Section 1504 of the Code
shall treat the Contracts as owned by the Depositor and shall
report and include the rental and other income from the
Equipment and the Contracts in gross income.
(b) Receivables III hereby makes the following representations
and warranties for the benefit of the Indenture Trustee, the Noteholders and the
Trust. Such representations and warranties are made as of each Conveyance Date
and shall survive each sale, assignment, transfer and conveyance by the Sellers
of the respective Conveyed Assets to the Trust and its successors and assigns.
(i) Organization and Good Standing. Receivables III
is a corporation duly organized, validly existing and in good
standing, under the laws of the State of Delaware, with
corporate power and authority to own its properties and to
conduct its business as such properties are currently owned and
such business is currently conducted, and had at all relevant
times, and now has, power, authority, and legal right to
acquire and own the Conveyed Assets;
(ii) Due Qualification. Receivables III is qualified
as a foreign corporation in any state where it is required to
be so qualified to conduct its business and has obtained all
necessary licenses, consents and approvals as required under
federal and state law, in each case, where the failure to be so
qualified, licensed, consented to or approved could reasonably
be expected materially and adversely to affect the ability of
Receivables III to comply with the terms of this Agreement or
any other Transaction Document to which it is a party;
(iii) Legal Name. The legal name of Receivables III
is as set forth in the signature line of this Agreement and
Receivables III has not changed its name since its
incorporation and since its incorporation, Receivables III did
not use, nor does Receivables III now use, any trade names,
fictitious names, assumed name of "doing business as" names;
(iv) Power and Authority. Receivables III has the
corporate power and authority to execute and deliver this
Agreement and any other Transaction Document to which it is a
party, and to carry out their respective terms; Receivables III
has duly authorized the sale and assignment to the Owner
Trustee, on behalf of the Trust, of all of its right, title and
interest, if any, in the Conveyed Assets by all necessary
corporate action; and the execution, delivery, and performance
of this Agreement, and any other Transaction Document to which
it is a party, has been duly authorized by Receivables III by
all necessary corporate action;
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(v) Due Execution and Delivery. This Agreement has
been duly executed and delivered on behalf of Receivables III;
(vi) Valid Assignment; Binding Obligations. This
Agreement constitutes a valid assignment, transfer and
conveyance to the Owner Trustee, on behalf of the Trust, of all
right, title, and interest of Receivables III in, to and under
the Conveyed Assets, and the Conveyed Assets will be held by
the Trust free and clear of any Lien of any Person claiming
through or under Receivables III, except the lien on the
Conveyed Assets in favor of the Indenture Trustee granted
pursuant to the Indenture; and this Agreement, when duly
executed and delivered, will constitute the legal, valid, and
binding obligation of Receivables III enforceable against
Receivables III in accordance with their respective terms
subject as to enforceability to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(vii) Insolvency. Receivables III is not insolvent
and will not be rendered insolvent by the transactions
contemplated by this Agreement and has an adequate amount of
capital to conduct its business in the ordinary course and to
carry out its obligations hereunder and under each other
Transaction Document to which it is a party;
(viii) No Violation. The consummation of the
transactions contemplated by and the fulfillment of the terms
of this Agreement and each Transaction Document to which it is
a party will not conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the articles of
incorporation or bylaws of Receivables III, or any material
term of any indenture, agreement, mortgage, deed of trust, or
other instrument to which Receivables III is a party or by
which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust, or
other instrument, other than this Agreement and each
Transaction Document to which it is a party, or violate any law
or any order, injunction, writ, rule, or regulation applicable
to Receivables III of any court or of any federal or state
regulatory body, administrative agency, or other Governmental
Authority having jurisdiction over Receivables III or any of
its properties which would have a material adverse effect on
the Conveyed Assets;
(ix) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of Receivables
III, threatened, before any court, regulatory body,
administrative agency, or other tribunal or Governmental
Authority (A) asserting the invalidity of this Agreement or any
Transaction Document to which it is a party, (B) seeking to
prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any
determination or ruling that might (in the reasonable judgment
of Receivables III) materially and adversely affect the
performance by Receivables III of its
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obligations under, or the validity or enforceability of, this
Agreement or any Transaction Document to which it is a party;
(x) No Consent Required. Receivables III is not
required to obtain the consent of any other Person, or any
consent, license, approval or authorization or registration or
declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery or performance of
this Agreement and the Transaction Documents to which it is a
party, except for such having been obtained, effected or made;
(xi) Fair Consideration. The consideration received
by Receivables III as set forth herein is fair consideration
having value reasonably equivalent to or in excess of the value
of the Conveyed Assets conveyed by it and the performance of
Receivables III's obligation hereunder; and
(xii) Principal Place of Business. The principal
place of business and chief executive office of Receivables III
is located at 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000 and, there are now no, and during the past four months
there have not been, any other locations where Receivables III
is located (as that term is used in the UCC in the state of
such location) except that, with respect to such changes
occurring after the date of this Agreement, as shall have been
specifically disclosed to the Servicer and the Indenture
Trustee in writing. The principal place of business and chief
executive office of each of the Warehouse Trusts is located in
care of Bankers Trust Company, Four Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 and, there are now no, and during the past four
months there have not been, any other locations where each
Warehouse Trust is located (as that term is used in the UCC in
the state of such location).
(xiii) Valid Business Reasons. Receivables III has
valid business reasons for selling its interest in the Conveyed
Assets rather than obtaining a loan with the Conveyed Assets as
collateral;
(xiv) Absence of Event. No event has occurred which
adversely affects Receivables III's operations or its ability
to perform its obligations under the Transaction Documents to
which it is a party; and
(xv) Non Consolidation. First Sierra is operated in
such a manner that it will not be consolidated in the estate of
First Sierra such that the separate existence of Receivables
III and First Sierra would be disregarded in the event of a
bankruptcy or insolvency of First Sierra.
(c) First Union hereby makes the following representations and
warranties for the benefit of the Indenture Trustee, the Noteholders and the
Trust. Such representations and warranties are made as of each Conveyance Date
and shall survive each sale, assignment, transfer and conveyance by the Sellers
of the respective Conveyed Assets to the Trust and its successors and assigns:
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(i) Organization and Good Standing. First Union is a
national bank duly organized, validly existing and in good
standing, under the laws of the United States, with corporate
power and authority to own its properties and to conduct its
business as such properties are currently owned and such
business is currently conducted, and had at all relevant times,
and now has, power, authority, and legal right to acquire and
own the Conveyed Assets;
(ii) Due Qualification. First Union is qualified as
a foreign corporation in any state where it is required to be
so qualified to conduct its business and has obtained all
necessary licenses, consents and approvals as required under
federal and state law, in each case, where the failure to be so
qualified, licensed, consented to or approved could reasonably
be expected materially and adversely to affect the ability of
First Union to comply with the terms of this Agreement or any
other Transaction Document to which it is a party;
(iii) Power and Authority. First Union has the
corporate power and authority to execute and deliver this
Agreement and each Transaction Document to which it is a party,
and to carry out their respective terms; and the execution,
delivery, and performance of this Agreement and any other
Transaction Document to which it is a party, has been duly
authorized by First Union by all necessary corporate action;
(iv) Due Execution and Delivery. This Agreement has
been duly executed and delivered on behalf of First Union;
(v) Valid Assignment; Binding Obligations. This
Agreement constitutes a valid contribution, assignment,
transfer and conveyance to the Owner Trustee, on behalf of the
Trust, of all right, title, and interest of First Union in, to
and under the Conveyed Assets and the Conveyed Assets will be
held by the Trust free and clear of any Lien of any Person
claiming, through or under First Union, except the lien on the
Conveyed Assets in favor of the Indenture Trustee granted
pursuant to the Indenture; and this Agreement, when duly
executed and delivered, will constitute legal, valid, and
binding obligations of First Union enforceable against First
Union in accordance with their respective terms subject as to
enforceability to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(vi) No Violation. The consummation of the
transactions contemplated by and the fulfillment of the terms
of this Agreement will not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles
of incorporation or bylaws of First Union, or any material term
of any indenture, agreement,
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mortgage, deed of trust, or other instrument to which First
Union is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust, or other instrument, other than this
Agreement, or violate any law or any order, injunction, writ,
rule, or regulation applicable to First Union of any court or
of any federal or state regulatory body, administrative agency,
or other Governmental Authority having jurisdiction over First
Union or any of its properties which would have a material
adverse effect on the Conveyed Assets;
(vii) Valid Business Reasons. First Union has valid
business reasons for selling its interest in the Conveyed
Assets rather than obtaining a loan with the Conveyed Assets as
collateral;
(viii) Absence of Event. No event has occurred which
adversely affects First Union's operations or its ability to
perform its obligations under the Transaction Documents to
which it is a party;
(ix) Insolvency. First Union is not insolvent and
will not be rendered insolvent by the transactions contemplated
by this Agreement and has an adequate amount of capital to
conduct its business in the ordinary course and to carry out
its obligations hereunder and under each other Transaction
Document to which it is a party;
(x) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of First Union,
threatened, before any court, regulatory body, administrative
agency, or other tribunal or Governmental Authority (A)
asserting the invalidity of this Agreement, (B) seeking to
prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any
determination or ruling that might (in the reasonable judgment
of First Union) materially and adversely affect the performance
by First Union of its obligations under, or the validity or
enforceability of, this Agreement;
(xi) No Consent Required. First Union is not
required to obtain the consent of any other Person, or any
consent, license, approval or authorization or registration or
declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery or performance of
this Agreement and the Transaction Documents to which it is a
party, except for such having been obtained, effected or made;
(xii) Fair Consideration. The consideration received
by First Union as set forth herein is fair consideration having
value reasonably equivalent to or in excess of the value of the
Conveyed Assets conveyed by it and the performance of First
Union's obligations hereunder; and
(xiii) Accounting Treatment. First Union will treat
the assignment of the Conveyed Assets to the Trust pursuant to
Article II as a sale of the Conveyed Assets to the Trust for
financial reporting and accounting purposes.
(d) VFCC hereby makes the following representations and
warranties for the benefit of the Indenture Trustee and the Trust. Such
representations and warranties are made as of each Conveyance Date and shall
survive each sale, assignment,
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transfer and conveyance by the Sellers of the respective Conveyed Assets to the
Trust and its successors and assigns:
(i) Organization and Good Standing. VFCC is a
corporation duly organized, validly existing and in good
standing, under the laws of the State of Delaware, with
corporate power and authority to own its properties and to
conduct its business as such properties are currently owned and
such business is currently conducted, and had at all relevant
times, and now has, power, authority, and legal right to
acquire and own the Conveyed Assets;
(ii) Due Qualification. VFCC is qualified as a
foreign corporation in any state where it is required to be so
qualified to conduct its business and has obtained all
necessary licenses, consents and approvals as required under
federal and state law, in each case, where the failure to be so
qualified, licensed, consented to or approved could reasonably
be expected materially and adversely to affect the ability of
VFCC to comply with the terms of this Agreement or any other
Transaction Document to which it is a party;
(iii) Power and Authority. VFCC has the corporate
power and authority to execute and deliver this Agreement and
each Transaction Document to which it is a party, and to carry
out their respective terms; and the execution, delivery, and
performance of this Agreement and each other Transaction
Document to which it is a party, has been duly authorized by
VFCC by all necessary corporate action;
(iv) Due Execution and Delivery. This Agreement has
been duly executed and delivered on behalf of VFCC;
(v) Valid Assignment; Binding Obligations. This
Agreement constitutes a valid sale, assignment, transfer and
conveyance to the Owner Trustee, on behalf of the Trust, of all
right, title, and interest of VFCC in, to and under the
Conveyed Assets and the Conveyed Assets will be held by the
Trust free and clear of any Lien of any Person claiming,
through or under VFCC, except the lien on the Conveyed Assets
in favor of the Indenture Trustee granted pursuant to the
Indenture; and this Agreement, when duly executed and
delivered, will constitute the legal, valid, and binding
obligation of VFCC enforceable against VFCC in accordance with
their respective terms subject as to enforceability to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally and to
general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law);
(vi) No Violation. The consummation of the
transactions contemplated by and the fulfillment of the terms
of this Agreement will not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles
of incorporation or bylaws of VFCC, or any material term of any
indenture,
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agreement, mortgage, deed of trust, or other instrument to
which VFCC is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust, or other instrument, other than this
Agreement, or violate any law or any order, injunction, writ,
rule, or regulation applicable to VFCC of any court or of any
federal or state regulatory body, administrative agency, or
other Governmental Authority having jurisdiction over VFCC or
any of its properties which would have a material adverse
effect on the Conveyed Assets;
(vii) Valid Business Reasons. VFCC has valid
business reasons for selling its interest in the Conveyed
Assets rather than obtaining a loan with the Conveyed Assets as
collateral;
(viii) Absence of Event. No event has occurred which
adversely affects VFCC's operations or its ability to perform
its obligations under the Transaction Documents to which it is
a party;
(ix) Insolvency. VFCC is not insolvent and will not
be rendered insolvent by the transactions contemplated by this
Agreement and has an adequate amount of capital to conduct its
business in the ordinary course and to carry out its
obligations hereunder and under each other Transaction Document
to which it is a party
(x) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of VFCC,
threatened, before any court, regulatory body, administrative
agency, or other tribunal or Governmental Authority (A)
asserting the invalidity of this Agreement, (B) seeking to
prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any
determination or ruling that might (in the reasonable judgment
of VFCC) materially and adversely affect the performance by
VFCC of its obligations under, or the validity or
enforceability of, this Agreement;
(xi) No Consent Required. VFCC is not required to
obtain the consent of any other Person, or any consent,
license, approval or authorization or registration or
declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery or performance of
this Agreement and the Transaction Documents to which it is a
party, except for such having been obtained, effected or made;
(xii) Fair Consideration. The consideration received
by VFCC as set forth herein is fair consideration having value
reasonably equivalent to or in excess of the value of the
Conveyed Assets conveyed by it and the performance of VFCC's
obligations hereunder; and
(xiii) Accounting Treatment. VFCC will treat the
assignment of the Conveyed Assets to the Trust pursuant to
Article II as a sale of the Conveyed Assets to the Trust for
financial reporting and accounting purposes.
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(e) FFC hereby makes the following representations and
warranties for the benefit of the Indenture Trustee and the Trust. Such
representations and warranties are made as of each Conveyance Date and shall
survive each sale, assignment, transfer and conveyance by the Sellers of the
respective Conveyed Assets to the Trust and its successors and assigns:
(i) Organization and Good Standing. FFC is a
corporation duly organized, validly existing and in good
standing, under the laws of the State of Delaware, with
corporate power and authority to own its properties and to
conduct its business as such properties are currently owned and
such business is currently conducted, and had at all relevant
times, and now has, power, authority, and legal right to
acquire and own the Conveyed Assets;
(ii) Due Qualification. FFC is qualified as a
foreign corporation in any state where it is required to be so
qualified to conduct its business and has obtained all
necessary licenses, consents and approvals as required under
federal and state law, in each case, where the failure to be so
qualified, licensed, consented to or approved could reasonably
be expected materially and adversely to affect the ability of
FFC to comply with the terms of this Agreement or each
Transaction Document to which it is a party;
(iii) Power and Authority. FFC has the corporate
power and authority to execute and deliver this Agreement and
any other Transaction Document to which it is a party, and to
carry out their respective terms; and the execution, delivery,
and performance of this Agreement and each Transaction Document
to which it is a party, has been duly authorized by FFC by all
necessary corporate action;
(iv) Due Execution and Delivery. This Agreement has
been duly executed and delivered on behalf of FFC;
(v) Valid Assignment; Binding Obligations. This
Agreement constitute a valid sale, assignment, transfer and
conveyance to the Owner Trustee, on behalf of the Trust, of all
right, title, and interest of FFC in, to and under the Conveyed
Assets and the Conveyed Assets will be held by the Trust free
and clear of any Lien of any Person claiming, through or under
FFC, except the lien on the Conveyed Assets in favor of the
Indenture Trustee granted pursuant to the Indenture; and this
Agreement, when duly executed and delivered, will constitute
the legal, valid, and binding obligation of FFC enforceable
against FFC in accordance with their respective terms subject
as to enforceability to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(vi) No Violation. The consummation of the
transactions contemplated by and the fulfillment of the terms
of this Agreement will not conflict with, result in any breach
of any of the terms and provisions of, or
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constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of FFC, or any
material term of any indenture, agreement, mortgage, deed of
trust, or other instrument to which FFC is a party or by which
it is bound, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust, or other
instrument, other than this Agreement, or violate any law or
any order, injunction, writ, rule, or regulation applicable to
FFC of any court or of any federal or state regulatory body,
administrative agency, or other Governmental Authority having
jurisdiction over FFC or any of its properties which would have
a material adverse effect on the Conveyed Assets;
(vii) Valid Business Reasons. FFC has valid business
reasons for selling its interest in the Conveyed Assets rather
than obtaining a loan with the Conveyed Assets as collateral;
(viii) Absence of Event. No event has occurred which
adversely affects FFC's operations or its ability to perform
its obligations under the Transaction Documents to which it is
a party;
(ix) Insolvency. FFC is not insolvent and will not
be rendered insolvent by the transactions contemplated by this
Agreement and has an adequate amount of capital to conduct its
business in the ordinary course and to carry out its
obligations hereunder and under each other Transaction Document
to which it is a party
(x) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of FFC,
threatened, before any court, regulatory body, administrative
agency, or other tribunal or Governmental Authority (A)
asserting the invalidity of this Agreement, (B) seeking to
prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any
determination or ruling that might (in the reasonable judgment
of FFC) materially and adversely affect the performance by FFC
of its obligations under, or the validity or enforceability of,
this Agreement;
(xi) No Consent Required. FFC is not required to
obtain the consent of any other Person, or any consent,
license, approval or authorization or registration or
declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery or performance of
this Agreement and the Transaction Documents to which it is a
party, except for such having been obtained, effected or made;
(xii) Fair Consideration. The consideration received
by FFC as set forth herein is fair consideration having value
reasonably equivalent to or in excess of the value of the
Conveyed Assets conveyed by it and the performance of FFC's
obligations hereunder; and
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(xiii) Accounting Treatment. FFC will treat the
assignment of the Conveyed Assets to the Trust pursuant to
Article II as a sale of the Conveyed Assets to the Trust for
financial reporting and accounting purposes.
SECTION 3.02 Removal of Non-Conforming Contracts by First
Sierra. Upon the occurrence of a Warranty Event with respect to a Contract,
First Sierra will repurchase such Contract by depositing (or causing to be
deposited) to the Collection Account the Repurchase Amount with respect to such
Contract in accordance with the terms of Section 4.01 of the Indenture or
replace such Contract with a Substitute Contract pursuant to Section 3.03 hereof
and Section 4.02 of the Indenture.
SECTION 3.03 Substitution of Contracts and Equipment by First
Sierra.
(a) With respect to a substitution of Contracts in accordance
with the provisions of this Section 3.03 and Section 4.02 of the Indenture, each
proposed Substitute Contract must be an Eligible Contract, and be eligible to be
substituted by First Sierra pursuant to Section 4.02 of the Indenture.
(b) Any substitution of a Contract pursuant to this Agreement
will be effected by (i) delivery to the Indenture Trustee of the Contract File
for each such Substitute Contract, (ii) filing of any UCC financing statements
in accordance with the Filing Requirements necessary to perfect the interest of
the Indenture Trustee in the Substitute Contracts, (iii) delivery to the
Indenture Trustee of a List of Substitute Contracts reflecting such substitution
and (iv) delivery to the Indenture Trustee of a release request and the
originally executed trust receipt relating thereto.
(c) The parties hereto agree that in addition to the
obligation of First Sierra to repurchase or to substitute any Contract and the
related Equipment as to which a breach of the representations set forth in the
Servicing Agreement has occurred and is continuing, First Sierra will enforce
its remedies against any Source under any Source Agreement. In consideration of
the purchase of the Equipment and the Contract, First Sierra shall remit the
Repurchase Amount to the Servicer for allocation of such Repurchase Amount
pursuant to the terms of the Indenture. Except as may be set forth in the
Transaction Documents, it is understood and agreed that the obligations of First
Sierra with respect to a breach as provided in this Section 3.03 and Section
4.01 of the Indenture constitute the sole remedy against First Sierra for such
breach available to the Trust, the Indenture Trustee and Noteholders. The
representations and warranties set forth in Sections 3.01 and 3.02 hereof shall
survive the assignment of the Conveyed Assets to the Owner Trustee, on behalf of
the Trust, and the pledge of the Pledged Property to the Indenture Trustee.
(d) Except as provided in this Article III, upon each Seller's
transfer of its interest in the Conveyed Assets to the Trust, the Sellers will
not bear any further risk with respect to the ultimate collectibility of the
Contracts or the adequacy of the collateral securing the Contracts or the value
or sufficiency of the Equipment.
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ARTICLE IV
COVENANTS
SECTION 4.01 Seller and First Sierra Covenants. First Sierra
and the Sellers, as applicable, hereby covenant and agree with the Trust, the
Noteholders and the Indenture Trustee with respect to itself as follows:
(a) Preservation of Security Interest. The Sellers shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by the Filing Requirements and by law fully to preserve, maintain, and
protect the respective right, title and interest of the Owner Trustee, on behalf
of the Trust, and the Indenture Trustee in the Conveyed Assets. First Sierra
shall deliver (or cause to be delivered) to the Trust file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Obligations with Respect to Conveyed Assets. Each of the
Sellers will duly fulfill all obligations on its part to be fulfilled under or
in connection with each Contract and each Source Agreement, and will do nothing
to impair the rights of the Owner Trustee, on behalf of the Trust or the
Indenture Trustee in any of the Conveyed Assets.
(c) Compliance with Law. First Sierra will comply, in all
material respects, with all acts, rules, requisitions, orders, decrees and
directions of any Governmental Authority applicable to its business and to the
Conveyed Assets or any part thereof; provided, however, that First Sierra may
contest any act, regulation, order, decree or direction in any reasonable manner
which shall not materially and adversely affect the rights of the Trust, the
Indenture Trustee or the Owner Trustee in the Conveyed Assets.
(d) Conveyance of Conveyed Assets; Security Interests. Except
for the transfers and conveyances hereunder or under any other Transaction
Document, the Sellers will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien, on any
Conveyed Asset, or any interest therein and First Sierra shall defend the right,
title, and interest of the Owner Trustee, on behalf of the Trust, the Indenture
Trustee and their respective successors and assigns in, to, and under the
Conveyed Assets, against all claims of third parties claiming, through or under
the Sellers; provided, however, that nothing in this Section 4.01(d) shall
prevent or be deemed to prohibit First Sierra from suffering to exist upon any
of the Conveyed Assets any Liens for municipal or other local taxes if such
taxes shall not at the time be due and payable or if First Sierra shall
concurrently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto and such contests pose no risk of forfeiture.
(e) Notification of Breach. The Sellers will advise the Trust
and the Indenture Trustee promptly, in reasonable detail, upon discovery of the
occurrence of any
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breach by First Sierra of any of its representations, warranties and covenants
contained herein.
(f) Further Assurances.
(i) First Sierra will make, execute or endorse,
acknowledge and file or deliver to the Trust and the Indenture
Trustee from time to time such schedules, confirmatory
assignments, conveyances, transfer endorsements, powers of
attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the
Conveyed Assets and other rights covered by this Agreement, as
the Trust or the Indenture Trustee may request and reasonably
require, provided that no UCC filing will be required with
respect to the Equipment, except as required by the Filing
Requirements.
(ii) The Sellers hereby agree to do all acts,
transactions, and things and to execute and deliver all
agreements, documents, instruments, and papers by and on
behalf of the Sellers as the Trust or its counsel may
reasonably request in order to consummate the transfer of the
Conveyed Assets to the Trust and the subsequent pledge thereof
to the Indenture Trustee for the benefit of the Noteholders,
and the rating, issuance and sale of the Notes.
(g) Indemnification. First Sierra agrees to indemnify, defend
and hold the Trust, the Owner Trustee and the Indenture Trustee 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 any of them may become subject insofar as such
loss, liability, damage, judgment, claim, deficiency, or expense arises out of
or is based upon a breach by First Sierra of its representations and warranties
contained in Section 3.01 or its covenants contained in Section 4.01, or any
information certified or set forth in this Agreement or in any schedule
delivered by First Sierra hereunder, being untrue in any material respect at any
time. The obligations of First Sierra under this Section 4.01(g) shall be
considered to have been relied upon by the Trust, the Owner Trustee and the
Indenture Trustee and shall survive the execution, delivery, and performance of
this Agreement regardless of any investigation made by the Trust, the Owner
Trustee, the Indenture Trustee or on their respective behalf. THE
INDEMNIFICATION OBLIGATIONS OF FIRST SIERRA PURSUANT TO THE PRECEDING PROVISIONS
OF THIS PARAGRAPH SHALL APPLY REGARDLESS OF ANY NEGLIGENCE OR OTHER FAULT ON THE
PART OF THE TRUST, THE OWNER TRUSTEE, THE INDENTURE TRUSTEE OR ANY OF THEIR
RESPECTIVE OFFICERS, EMPLOYEES OR AGENTS.
(h) Notice of Liens. First Sierra shall notify the Trust and
the Indenture Trustee, promptly after becoming aware of any Lien on any Conveyed
Asset.
(i) Taxes. First Sierra shall promptly pay all applicable
taxes required to be paid in connection with the assignment of the Conveyed
Assets and acknowledges that the Trust shall have no responsibility with respect
thereto. First Sierra shall promptly pay and discharge, or cause the payment and
discharge of, all federal income taxes (and
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all other material taxes) when due and payable by each such Seller, except (i)
such as may be paid thereafter without penalty or (ii) such as may be contested
in good faith by appropriate proceedings and for which an adequate reserve has
been established and is maintained in accordance with GAAP. First Sierra shall
promptly notify the Trust, the Indenture Trustee and the Noteholders of any
material challenge, contest or proceeding pending by or against First Sierra
before any taxing authority. First Sierra and the Depositor shall enter into a
Tax Sharing Agreement, pursuant to which (i) First Sierra shall assume the sole
responsibility for making any required payments of taxes to the Internal Revenue
Service and shall agree to indemnify and hold the Depositor harmless against any
claims of liability for such taxes and (ii) the Depositor shall be required to
make certain payments to First Sierra in respect of its separate federal income
tax liability. So long as any Notes remain outstanding, First Sierra and the
Depositor shall not terminate or amend such Tax Sharing Agreement without the
prior written consent of the Indenture Trustee, except that First Sierra shall
not require the Depositor to make any payments to First Sierra, pursuant to the
Tax Sharing Agreement, which exceed the aggregate federal income tax liability
of the Depositor, on a separate return basis for all taxable years covered by
the Tax Sharing Agreement, that would arise if all allowable losses arising at
any time during such period were applied to reduce the Depositor's aggregate
separate taxable income for all such years.
(j) Taxes and Other Liabilities. First Sierra shall promptly
pay and discharge all material taxes, assessments, fees, claims and other
governmental charges when due and payable by First Sierra, the First Sierra
Group, or any member of the First Sierra Group, except (i) such as may be paid
thereafter without penalty or (ii) such as may be contested in good faith by
appropriate proceedings and for which an adequate reserve has been established
and is maintained in accordance with GAAP. First Sierra shall promptly notify
the Trust and the Indenture Trustee of any material challenge, contest or
proceeding pending by or against First Sierra or the First Sierra Group before
any taxing authority.
(k) Non-Consolidation. First Sierra shall be operated in such
a manner that Receivables III and/or the Holding Trust, the holder of the trust
certificate to be issued by the Trust, would not be substantively consolidated
with First Sierra, such that the separate corporate existence of First Sierra
and Receivables III, on the one hand, and Holding Trust II or the Trust, on the
other hand, would be ignored in the event of a bankruptcy of First Sierra.
(l) No Agency. First Sierra will not act as an agent of
Receivables III, Holding Trust II or the Trust in any capacity except to the
limited extent provided in the Transaction Documents, but instead will present
itself to the public as a corporation separate from Receivables III and/or
Holding Trust II or the Trust;
(m) Financial Statements. The financial statements and books
and records of First Sierra reflect the separate existence of Receivables III,
the Trust and Holding Trust II.
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SECTION 4.02 Receivables III Covenants. Receivables III hereby
covenants and agrees with the Trust and the Indenture Trustee as follows:
(a) Obligor's Quiet Enjoyment. Receivables III hereby
acknowledges and agrees that its rights in the Equipment are expressly subject
to the rights of the related Obligors in such Equipment pursuant to the
applicable Contracts. Receivables III covenants and agrees that, so long as an
Obligor shall not be in default of any of the provisions of the applicable
Contract, neither Receivables III nor any assignee of Receivables III will
disturb the Obligor's quiet and peaceful possession of the related Equipment and
the Obligor's use thereof for its intended purpose.
(b) Operation of Receivables III. Receivables III shall be
operated in such a manner that it would not be substantively consolidated in the
trust estate of another Person (that is, such that the separate legal existence
of Receivables III and such Person would be disregarded) and in that regard,
Receivables III shall:
(i) be a limited purpose corporation whose primary
activities are restricted in its certificate of incorporation;
(ii) not engage in any action that would cause the
separate legal identity of Receivables III not to be
respected, including, without limitation, (a) holding itself
out as being liable for the debts of any other party or (b)
acting other than through its duly authorized agents;
(iii) not be involved in the day-to-day management
of First Sierra and/or Holding Trust II;
(iv) not incur, assume or guarantee any
indebtedness except for such indebtedness as may be incurred
by Receivables III in connection with the issuance of the
Notes;
(v) not commingle its funds, assets and records
relating thereto with those of First Sierra or any other
entity;
(vi) entitle the separate creditors of Receivables
III to be satisfied out of Receivables III's assets prior to
any value in Receivables III becoming available to Receivable
III's equityholders, First Sierra's creditors or Holding Trust
II's creditors;
(vii) act solely in its own name in the conduct of
its business, including business correspondence and other
communications, and shall conduct its business so as not to
mislead others as to the identity of the entity with which
they are concerned;
(viii) maintain company records and books of
account and shall not commingle its company records and books
of account with the records and books of account of any
entity;
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(ix) not engage in any business or activity other
than in connection with or relating to its Certificate of
Incorporation and/or Bylaws;
(x) not form, or cause to be formed, any
subsidiaries;
(xi) comply with all restrictions and covenants in,
and shall not fail to comply with the corporate formalities
established in, its Certificate of Incorporation and/or
Bylaws;
(xii) maintain its assets separately from the
assets of First Sierra and/or the assets of the Holding Trust
II (including, in each case, through the maintenance of a
separate bank account);
(xiii) manage its day-to-day business without the
involvement of First Sierra and/or Holding Trust II;
(xiv) maintain a separate office from that of First
Sierra and/or Holding Trust II;
(xv) not act as an agent of First Sierra or Holding
Trust II, except to the limited extent provided in the
Transaction Documents; and
(xvi) maintain at all times two independent
directors as required by its Certificate of Incorporation
and/or Bylaws.
(C) Merger or Consolidation.
(i) Receivables III will keep in full effect its
existence, rights and franchises as a corporation and will
obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction which permits such
qualification and in which it is necessary to protect the
validity and enforceability of this Agreement, any other
Transaction Document to which it is a party or any of the
Contracts and to perform its duties under this Agreement and
each other Transaction Document to which it is a party.
(ii) Any partnership or corporation (i) into which
Receivables III may be merged or consolidated, (ii) resulting
from any merger, conversion, or consolidation to which
Receivables III shall be party, or (iii) succeeding to
Receivables III's business substantially as a whole, shall
execute an agreement of assumption to perform all of
Receivables III's obligations under this Agreement and any
other Transaction Document, and upon such execution will be
Receivables III's successor under this Agreement and any other
Transaction Document, without the execution or filing of any
document or any further act on the part of any of the parties
to this Agreement and any other Transaction Document, anything
in this Agreement and any other Transaction Document to the
contrary notwithstanding; provided, however, that (a)
immediately after giving effect to such transaction, no
covenant made pursuant to Section 4.02(c) shall have been
breached, (b) Receivables III shall have delivered to the
Trust, the
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Rating Agencies, the Owner Trustee and the Indenture Trustee
an Officer's Certificate and an opinion of counsel,
satisfactory to each of them, each stating that such
consolidation, conversion, merger, or succession and such
agreement of assumption comply with this Section 4.02(d) and
that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied
with, (c) Receivables III shall have delivered to the Trust,
the Owner Trustee, the Rating Agencies and the Indenture
Trustee an opinion of counsel, satisfactory to each of them,
either (1) stating that, in the opinion of such counsel, all
financing statements and continuation statements and
amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the
Owner Trustee, on behalf of the Trust, in the Contracts and
reciting the details of such filings, or (2) stating that, in
the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest and (d) such partnership
or corporation shall have organizational documents with
similar restrictions as those of Receivables III.
(d) Non-Consolidation. Receivables III shall be operated in
such a manner that Holding Trust II or the Trust, would not be substantively
consolidated with Receivables III, such that the separate corporate existence of
Receivables III, on the one hand, and Holding Trust II or the Trust, on the
other hand, would be ignored in the event of a bankruptcy of Receivables III.
(e) No Agency. Receivables III will not act as an agent of
Holding Trust II or the Trust in any capacity except to the limited extent
provided in the Transaction Documents, but instead will present itself to the
public as a corporation separate from Holding Trust II or the Trust.
SECTION 4.03 Transfer of Conveyed Assets. Each Seller,
Receivables III and each Investor understands that the Trust intends to pledge
the Pledged Property to the Indenture Trustee on behalf of the Noteholders,
pursuant to the Indenture. Each Seller and each Investor agrees that such
assignee of the Trust may exercise the rights of the Trust hereunder and shall
be entitled to all of the benefits of the Trust hereunder to the extent provided
for in such assignment.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 Conditions to Trust Obligations. The obligations
of the Trust to accept the transfer of the Initial Conveyed Assets on the
Closing Date shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of each Seller,
Receivables III and each Investor contained in this Agreement shall be true and
correct on the Closing Date with the same effect as though such representations
and warranties had been made on such date;
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(b) All information concerning the Initial Conveyed Assets
provided to the Trust shall be true and correct as of the Initial Cut-Off Date
in all material respects;
(c) Each Seller shall have delivered to the Trust a List of
Initial Contracts with respect to its respective Initial Contracts as of the
Initial Cut-Off Date and shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement;
(d) Each Seller shall have recorded and filed, at its expense,
any financing statement with respect to the Initial Contracts and the other
Initial Conveyed Assets to be transferred from time to time to the Owner
Trustee, on behalf of the Trust, from each Seller pursuant to this Agreement
meeting the requirements of applicable state law in such manner in such
jurisdictions as are necessary to perfect the transfer of the Initial Contracts
and the other Initial Conveyed Assets from each such Seller to the Owner
Trustee, on behalf of the Trust, and shall deliver a file-stamped copy of such
financing statements or other evidence of such filings to the Trust;
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Trust, and the Trust shall have
received from each Seller copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Trust may reasonably have requested; and
(f) All respective conditions necessary to vest in each Seller
good title, free and clear of all Liens (other than Liens permitted in the
proviso contained in Section 4.01(f) hereof), to its respective Initial
Contracts and interests in Original Equipment shall have been satisfied.
ARTICLE VI
TERMINATION
SECTION 6.01 Termination. The respective obligations and
responsibilities of each Seller, First Sierra and the Trust created by this
Agreement shall terminate upon the latest of (i) the maturity or other
liquidation of the last Contract and the disposition of any amounts received
upon disposition of any Defaulted Contracts and any Equipment leased thereunder;
and (ii) the termination of the Indenture in accordance with the terms thereof;
provided, however, that the indemnifications contained in Section 4.01(g) herein
shall survive the termination of this Agreement and the other Transaction
Documents.
SECTION 6.02 Effect of Termination.
No termination or rejection or failure to assume the
executory obligations of this Agreement in the bankruptcy of any Seller or the
Trust shall be deemed to impair or affect the obligations pertaining to any
executed sale or executed obligations,
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including, without limitation, pre-termination breaches of representations and
warranties by any Seller. Without limiting the foregoing, prior to termination,
neither the failure of the Trust to deliver a Trust Certificate pursuant to
Section 4.02, nor the failure of First Sierra to pay a Repurchase Amount shall
render such transfer or obligation executory, nor shall the continued duties of
the parties pursuant to Article 4 or Section 7.06 of this Agreement render an
executed sale executory.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01 Amendment. This Agreement may be amended from
time to time by the parties hereto only with (x) the prior written consent of
the Servicer and the Indenture Trustee and (y) prior written notice to the
Rating Agencies by the Servicer and, to the extent such amendment materially
affects the interests of the Owner Trustee, with the prior written consent of
the Owner Trustee.
SECTION 7.02 GOVERNING LAW. THIS AGREEMENT AND ANY AMENDMENT
HEREOF PURSUANT TO SECTION 7.01 SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
CHOICE OF LAW PRINCIPLES) APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
THEREIN AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 7.03 Notices. All demands, notices, and communications
under this Agreement shall be in writing and shall be deemed to have been duly
given, made and received (i) when delivered against receipt of registered or
certified mail or upon actual receipt of registered or certified mail, postage
prepaid, return receipt requested; (ii) when delivered by courier with
appropriate evidence of receipt; or (iii) upon transmission via facsimile or
telex with appropriate evidence of receipt (a) in the case of First Sierra, at
the following address: 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Fax
No.: (000) 000-0000, (b) in the case of Receivables III, at the following
address: 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Fax No.: (713)
000-0000, (c) in the case of First Union, One First Union Center, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, (d) in the case of the
Indenture Trustee, Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust and Agency Group Structure & Finance, Fax No.: (000) 000-0000,
(e) in the case of VFCC, One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, (f) in the case of FFC, c/o Nesbitt Xxxxx
Securities, Inc., 00 Xxxx Xxxxxx, Xxxxx 00 Xxxx, Xxxxxxx, Xxxxxxxx 00000 (g) in
the case of the Trust, c/o First Union Trust Company, National Association, One
Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: Corporate Trust Administration, Fax No.: (000) 000-0000, and (h) in
the case of the Indenture Trustee at its address set forth in Section 11.06 of
the Indenture. Either party may alter the address to which
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communications are to be sent by giving notice of such change of address in
conformity with the provisions of this Section 7.03 for giving notice and by
otherwise complying with any applicable terms of this Agreement, including, but
not limited to, subsections 4.01(b) and (c).
SECTION 7.04 Severability of Provisions. If any one or more of
the covenants, agreements, provisions, or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
SECTION 7.05 Assignment. Notwithstanding anything to the
contrary contained in this Agreement, this Agreement may not be assigned by
First Sierra, without the prior written consent of the Trust and the Indenture
Trustee (acting upon the written direction of the Controlling Parties) and,
except as provided in Section 4.03, this Agreement may not be assigned by the
Trust without the prior written consent of First Sierra and the Indenture
Trustee. Whether or not expressly stated, all representations, warranties,
covenants and agreements of First Sierra, Receivables III, the Investors and the
Trust in this Agreement, or in any document delivered by any of them in
connection with this Agreement, shall be for the benefit of, and shall be
exercisable by, the Owner Trustee and the Indenture Trustee for the benefit of
the Noteholders.
SECTION 7.06 Further Assurances. Each of the parties hereto
agrees to do such further acts and things and to execute and deliver to the
Indenture Trustee such additional assignments, agreements, powers and
instruments as are required by the Indenture Trustee to carry into effect the
purposes of this Agreement or to better assure and confirm unto the Indenture
Trustee its rights, powers and remedies hereunder.
SECTION 7.07 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trust or each Seller,
any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise hereof 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 7.08 Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which shall constitute one and
the same instrument.
SECTION 7.09 Binding Effect: Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the parties hereto.
The Indenture Trustee, the Owner Trustee and the Noteholders are intended third
party beneficiaries of this Agreement.
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SECTION 7.10 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets 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. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 7.11 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 7.12 Schedules and Exhibits. The schedules and
exhibits attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.
SECTION 7.13 No Bankruptcy Petition Against Receivables III or
the Trust. Each of the parties hereto agrees that, prior to the date that is one
year and one day after the payment in full of the latest maturing Notes issued
by the Trust, it will not institute against Receivables III or the Trust, or
join any other Person in instituting against Receivables III or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under the laws of the United States or any state of the
United States. This Section 7.13 shall survive the termination of this
Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this
Receivables Transfer Agreement to be duly executed by their respective officers
as of the day and year first above written.
FIRST SIERRA FINANCIAL, INC.,
in its individual capacity
By: /s/ E. Xxxxx Xxxxxxx
-------------------------------------------------
Name: E. Xxxxx Xxxxxxx
Title: Senior Vice President and Treasurer
FIRST SIERRA RECEIVABLES III, INC.
By: /s/ E. Xxxxx Xxxxxxx
-------------------------------------------------
Name: E. Xxxxx Xxxxxxx
Title: Senior Vice President and Treasurer
FIRST UNION NATIONAL BANK,
as Certificate holder of the First Sierra Equipment
Lease Trust 1997-A
By: /s/ C. Brand Xxxxxxx
-------------------------------------------------
Name: C. Brand Xxxxxxx
Title: Vice President
VARIABLE FUNDING CAPITAL
CORPORATION, as Certificateholder of the
First Sierra Equipment Lease Trust 1997-B
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
32
FAIRWAY FINANCE CORPORATION, as
Certificateholder of the First Sierra
Equipment Lease Trust 1998-E
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
BANKERS TRUST COMPANY, not in its individual capacity,
but solely as Trustee of each of the First Sierra
Equipment Lease Trust 1997-A, the First Sierra
Equipment Lease Trust 1997-B and the First Sierra
Equipment Lease Trust 1998-E
By: /s/ Xxxxxxxx X.X. Xxxxx
-------------------------------------------------
Name: Xxxxxxxx X.X. Xxxxx
Title: Vice President
FIRST SIERRA EQUIPMENT CONTRACT TRUST 1999-2, A COMMON
LAW TRUST ACTING THROUGH FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY
BUT SOLELY AS OWNER TRUSTEE, as Issuer
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
[Signature Page To Receivables Transfer Agreement]
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SCHEDULE 1
LIST OF INITIAL CONTRACTS
[On File With Xxxxx Xxxxxxxxxx LLP]
