Exhibit 4.1
TRANSFER AGREEMENT
AMONG
GREEN TREE LEASE FINANCE II, INC.
PURCHASER
AND
GREEN TREE VENDOR SERVICES CORPORATION
SELLER AND SERVICER
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DATED AS OF DECEMBER 1, 1998
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ..................................................... 2
SECTION 1.1 General ................................................... 2
SECTION 1.2 Specific Terms ............................................ 2
SECTION 1.3 Certain References ........................................ 3
SECTION 1.4 No Recourse ............................................... 3
SECTION 1.5 Action by or Consent of Noteholders ....................... 3
ARTICLE II CONVEYANCE OF THE LEASES ........................................ 4
SECTION 2.1 Conveyance of Leases and Related Assets ................... 4
SECTION 2.2 Intention of the Parties .................................. 5
ARTICLE III REPRESENTATIONS AND WARRANTIES .................................. 5
SECTION 3.1 Representations and Warranties of
Vendor Services ........................................... 5
SECTION 3.2 Representations and Warranties of Lease
Finance ................................................... 7
ARTICLE IV COVENANTS OF VENDOR SERVICES .................................... 10
SECTION 4.1 Protection of Title of Lease Finance and the LLC .......... 10
SECTION 4.2 Other Liens or Interests .................................. 12
SECTION 4.3 Costs and Expenses ........................................ 12
SECTION 4.4 Indemnification ........................................... 12
SECTION 4.5 Further Assurances ........................................ 14
SECTION 4.6 Negative Covenant ......................................... 14
ARTICLE V REPURCHASES ..................................................... 15
SECTION 5.1 Repurchase of Leases Upon Breach of
Representation or Warranty ................................ 15
SECTION 5.2 Reassignment of Purchased Leases and
Equipment ................................................. 15
SECTION 5.3 Waivers ................................................... 16
ARTICLE VI MISCELLANEOUS ................................................... 16
SECTION 6.1 [Reserved] ................................................ 16
SECTION 6.2 Merger or Consolidation of Vendor Services
or Lease Finance .......................................... 16
SECTION 6.3 Limitation on Liability of Vendor Services
and Others ................................................ 17
SECTION 6.4 Vendor Services May Own Notes ............................. 17
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SECTION 6.5 Amendment ................................................. 17
SECTION 6.6 Notices ................................................... 18
SECTION 6.7 Merger and Integration .................................... 19
SECTION 6.8 Severability of Provisions ................................ 20
SECTION 6.9 GOVERNING LAW ............................................. 19
SECTION 6.10 Counterparts .............................................. 19
SECTION 6.11 Conveyance of the Leases to the LLC ....................... 19
SECTION 6.12 Nonpetition Covenant ...................................... 20
SCHEDULES
Schedule A -- Schedule of Leases and Equipment
Schedule B -- Schedule of Representations and Warranties of Vendor Services
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TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT, dated as of December 1, 1998, executed between
Green Tree Lease Finance II, Inc., a Minnesota corporation, as purchaser ("Lease
Finance") and Green Tree Vendor Services Corporation, a Delaware corporation
("Vendor Services"), as seller and servicer (in such capacity, the "Servicer").
W I T N E S S E T H:
WHEREAS, Vendor Services owns certain Leases (the "Leases") as are more
particularly described in Schedule A attached hereto and has an ownership or
security interest in the items of Equipment subject thereto (the "Equipment"),
as more particularly described in Schedule A attached hereto; and
WHEREAS, Lease Finance has agreed to acquire the Leases and the
Equipment from Vendor Services, and Vendor Services has agreed to transfer the
Leases and the Equipment to Lease Finance; and
WHEREAS, pursuant to the terms of a Contribution and Servicing
Agreement, dated as of December 1, 1998 (the "Contribution and Servicing
Agreement"), by and among Green Tree Lease Finance 1998-1, LLC (the "LLC"),
Lease Finance, as contributor, and Vendor Services, in its individual capacity
and as Servicer, to be executed concurrently with the execution of this
Agreement, Lease Finance will convey the Leases and certain rights to the
proceeds of disposition of the Equipment ("Residual Realizations") to the LLC;
and
WHEREAS, pursuant to the terms of an Indenture, dated as of December 1,
1998 (the "Indenture"), between Green Tree Lease Finance 1998-1, LLC (the "LLC")
and U.S. Bank Trust National Association, as Trustee (the "Trustee"), to be
executed concurrently with this Agreement, the LLC will, on the Closing Date,
issue the Notes (as defined in the Indenture), secured by a pledge of the Leases
and the Residual Realizations.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt of which
is acknowledged, Lease Finance, Vendor Services and the Servicer, intending to
be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 General.
(a) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision, and Article, Section, Schedule and
Exhibit references, unless otherwise specified, refer to Articles and Sections
of and Schedules and Exhibits to this Agreement. All capitalized terms used
herein without definition shall have the respective meanings assigned to such
terms in the Contribution and Servicing Agreement or, if not defined in the
Contribution and Servicing Agreement, in the Indenture.
(b) With respect to all terms used in this Agreement, the singular
includes the plural and the plural the singular; words importing any gender
include the other gender; references to "writing" include printing, typing,
lithography, and other means of reproducing words in a visible form; references
to agreements and other contractual instruments include all subsequent
amendments thereto or changes therein entered into in accordance with their
respective terms and not prohibited by this Agreement or the Contribution and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."
SECTION 1.2 Specific Terms. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Agreement" means this Transfer Agreement and all amendments
hereof and supplements hereto.
"Closing Date" means December , 1998.
"Related Documents" means the Indenture, the Contribution and
Servicing Agreement, the Underwriting Agreement and related Terms Agreement with
the Underwriters of the Notes, and the Notes. The Related Documents to be
executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
"Repurchase Event" means, with respect to any Lease, the
occurrence of a breach of any of the representations and warranties set forth in
the Schedule of Representations that materially and adversely affects the value
of such Lease.
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"Schedule of Leases" means, collectively, the schedule of
Leases and Equipment attached hereto as Schedule A, as the same may be revised
from time to time in accordance with the Contribution and Servicing Agreement.
"Schedule of Representations" means the Schedule of
Representations and Warranties of Vendor Services attached hereto as Schedule B.
"Trust Assets" means the property and proceeds of every
description conveyed pursuant to Section 2.1 of the Contribution and Servicing
Agreement, together with the Trust Accounts (including all Eligible Investments
therein and all proceeds therefrom).
SECTION 1.3 Certain References. All references to the
Principal Balance of a Lease as of an Accounting Date shall refer to the close
of business on such day, or as of the first day of a Collection Period shall
refer to the opening of business on such day. All references to the last day of
a Collection Period shall refer to the close of business on such day.
SECTION 1.4 No Recourse. Without limiting the obligations of
Vendor Services hereunder, no recourse may be taken, directly or indirectly,
under this Agreement or any certificate or other writing delivered in connection
herewith or therewith, against any stockholder, officer or director, as such, of
any of Vendor Services, the Servicer, Lease Finance or the Trustee, or of any
predecessor or successor of any of Vendor Services, the Servicer, Lease Finance
or the Trustee.
SECTION 1.5 Action by or Consent of Noteholders. Whenever any
provision of this Agreement refers to action to be taken, or consented to, by
Noteholders, such provision shall be deemed to refer to Noteholders of record as
of the Record Date immediately preceding the date on which such action is to be
taken, or consent given, by such Noteholders. Solely for the purposes of any
action to be taken, or consented to, by Noteholders, any Note registered in the
name of any of Lease Finance, Vendor Services or any Affiliate thereof, shall be
deemed not to be outstanding, and the related Principal Balance, as applicable,
evidenced thereby shall not be taken into account in determining whether the
requisite Principal Balance necessary to effect any such action or consent has
been obtained; provided, however, that, solely for the purpose of determining
whether the Trustee is entitled to rely upon any such action or consent, only
Notes which the Trustee knows to be so owned shall be so disregarded.
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ARTICLE II
CONVEYANCE OF THE LEASES
SECTION 2.1 Conveyance of Leases and Related Assets.
(a) As a contribution to the capital of Lease Finance, Vendor
Services hereby sells, transfers, assigns, and otherwise conveys to Lease
Finance, without recourse (but without limitation of its obligations in this
Agreement), and Lease Finance hereby acquires, all right, title and interest,
including security interests, whether now owned or hereafter acquired, of Vendor
Services in and to the following:
(i) the Leases, including, without limitation, (A) all monies
at any time paid or payable thereon or in respect thereof from and after the
Initial Cut-Off Date or in the case of Substitute Leases, the applicable Cut-Off
Date, including but not limited to (1) Scheduled Payments (including those
Scheduled Payments due prior to, but not received as of, the Cut-Off Date, but
excluding those Scheduled Payments due on or after, but received prior to, the
Cut-Off Date), (2) Prepayments, (3) Liquidation Proceeds (including all net
proceeds from the disposition of the related Equipment), (4) Extension Fees, (5)
payments to be applied by the Servicer to the payment of insurance charges,
maintenance, taxes or other similar obligations, and (6) payments to be retained
by the Servicer in payment of Administrative Fees, (B) all security interests of
the lessor or secured party, as the case may be, in the related Equipment and
all present or future leases and other contracts relating to the Equipment and
all revenues, payments, rights to payment, profits, accounts, chattel paper,
products and contract rights arising from or related to the Equipment or any use
thereof or from any such lease or other contract, (C) all rights of the lessor
or secured party, as the case may be, in all Insurance Policies and all other
security for the payment of amounts due under the Leases (including all rights,
if any, the lessor or the secured party may have against vendors and other third
parties for payments of such amounts) and (D) all items contained in the related
Lease Files and any and all other documents that are kept on file in accordance
with Vendor Services's customary procedures relating to the Leases;
(ii) the Equipment and all proceeds thereof, including in any
event and without limitation, all present and future leases and other contracts
relating to the Equipment and all revenues, payments, rights to payment,
profits, accounts, chattel paper, products and contract rights arising from or
related to the Equipment or any use thereof or from any such lease or other
contract; and
(iii) any and all proceeds of any and all of the foregoing.
(b) LEASE FINANCE ACKNOWLEDGES THAT VENDOR SERVICES IS
TRANSFERRING THE EQUIPMENT "AS-IS, WHERE-IS," AND THAT VENDOR SERVICES MAKES NO
REPRESENTATION, EXPRESS OR IMPLIED,
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WITH RESPECT TO THE EQUIPMENT, INCLUDING WITHOUT LIMITATION ITS MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
SECTION 2.2 Intention of the Parties. The execution and
delivery of this Agreement shall constitute an acknowledgment by each of Vendor
Services and Lease Finance that they intend that each assignment and transfer
herein contemplated constitute a sale and assignment outright, and not for
security, of the property described in Section 2.1(a), conveying good title
thereto free and clear of any Liens, from Vendor Services to Lease Finance, and
that all such property shall not be a part of the estate of Vendor Services in
the event of the bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, or the occurrence of another similar event, of, or
with respect to Vendor Services. In the event that such conveyance is determined
to be made as security for a loan made by Lease Finance, the LLC or the
Noteholders to Vendor Services, Vendor Services hereby grants to Lease Finance a
security interest in all of Vendor Services's right, title and interest in and
to the property described in Section 2.1(a) to secure the loan determined to
have been made to Vendor Services and the payment and performance of the other
obligations of Vendor Services under this Agreement, and agrees that in such
event this Agreement shall constitute a security agreement under applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Vendor Services.
Vendor Services makes the following representations and warranties, on which
Lease Finance relies in purchasing the Leases and in transferring the Leases to
the LLC under the Contribution and Servicing Agreement. Such representations are
made as of the Closing Date, or with respect to each Substitute Lease, as of the
applicable Cut-Off Date, but shall survive the sale, transfer and assignment of
the Leases hereunder and the transfer of the Leases and the Residual
Realizations by Lease Finance to the LLC under the Contribution and Servicing
Agreement, and the Granting thereof under the Indenture. Vendor Services and
Lease Finance agree that Lease Finance will assign to the LLC, and the LLC will
immediately Grant to the Trustee, all of Lease Finance's rights under this
Agreement at the Closing Date and that the Trustee will thereafter be entitled
to enforce this Agreement against Vendor Services directly or on behalf of the
Noteholders.
(a) Schedule of Representations. With respect to each Lease,
the representations and warranties set forth on the Schedule of Representations
are true and correct as of the date specified therein.
(b) Organization and Good Standing. Vendor Services has been
duly organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such
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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,
own and sell the Leases transferred to Lease Finance.
(c) Due Qualification. Vendor Services is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in each jurisdiction in which the ownership or
lease of its property or the conduct of its business requires such qualification
and in which the failure to so qualify would have a material adverse impact on
its business or financial condition.
(d) Power and Authority. Vendor Services has the power and
authority to execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively, and the execution, delivery
and performance of this Agreement and all of Vendor Services's Related Documents
have been duly authorized by Vendor Services by all necessary corporate action.
(e) No Consents. Vendor Services holds all necessary licenses,
certificates and permits from all government authorities necessary for
conducting its business as it is presently conducted, and is not required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for such
consents, licenses, approvals or authorizations, or registrations or
declarations, as shall have been obtained or filed, as the case may be, prior to
the Closing Date.
(f) Valid Sale; Binding Obligations. This Agreement and each
of Vendor Services's Related Documents have been duly executed and delivered,
and effect a valid sale, transfer and assignment of the Leases and Vendor
Services's interest in the related Equipment, enforceable against Vendor
Services, and creditors of and purchasers from Vendor Services; and this
Agreement and each of Vendor Services's Related Documents constitute legal,
valid and binding obligations of Vendor Services, enforceable in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(g) No Violation. The execution and delivery of this
Agreement, the consummation of the transactions contemplated by this Agreement
and the Related Documents and the fulfillment of the terms of this Agreement and
the Related Documents shall 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, or both) a default under, the certificate of incorporation or bylaws of
Vendor Services, or any indenture, agreement, mortgage, deed of trust or other
instrument to which Vendor Services is a party or by which it is bound, or
result in the creation or imposition
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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, the Contribution and Servicing Agreement and the Indenture, or
violate any law, order, rule or regulation applicable to Vendor Services of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over Vendor Services or any of
its properties.
(h) No Proceedings. There are no proceedings or investigations
pending or, to the knowledge of Vendor Services, threatened against Vendor
Services, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over Vendor
Services or any properties of Vendor Services (i) asserting the invalidity of
this Agreement or any of the Related Documents, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii) seeking
any determination or ruling that might materially and adversely affect the
performance by Vendor Services of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or (iv)
seeking to affect adversely the federal income tax or other federal, state or
local tax attributes of, or seeking to impose any excise, franchise, transfer or
similar tax upon, the transfer and acquisition of the Leases hereunder or under
the Contribution and Servicing Agreement.
(i) Chief Executive Offices. The chief executive office of
Vendor Services is located at 1100 Landmark Towers, 000 Xx. Xxxxx Xxxxxx, Xx.
Xxxx, XX 00000, and the offices where Vendor Services keeps its records
concerning the Leases and related documents are at 0000 Xxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
SECTION 3.2 Representations and Warranties of Lease Finance.
Lease Finance makes the following representations and warranties, on which
Vendor Services relies in selling, assigning, transferring and conveying the
Leases to Lease Finance hereunder. Such representations are made as of the
Closing Date but shall survive the sale, transfer and assignment of the Leases
hereunder and the transfer thereof by Lease Finance to the LLC under the
Contribution and Servicing Agreement.
(a) Organization and Good Standing. Lease Finance has been
duly organized and is validly existing and in good standing as a corporation
under the laws of the State of Minnesota, with the 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 has, full power, authority and legal right to acquire and own the Leases and
to transfer the Leases to the LLC pursuant to the Contribution and Servicing
Agreement.
(b) Due Qualification. Lease Finance is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in each jurisdiction where the failure to do so
would materially and adversely affect (i) Lease
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Finance's ability to acquire the Leases, (ii) the validity or enforceability of
the Leases or (iii) Lease Finance's ability to perform its obligations hereunder
and under the Related Documents.
(c) Power and Authority. Lease Finance has the power and
authority to execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively, and to acquire the Leases and
the Equipment; and the execution, delivery and performance of this Agreement and
its Related Documents and all of the documents required pursuant hereto or
thereto have been duly authorized by Lease Finance by all necessary action.
(d) No Consents. Lease Finance holds all necessary licenses,
certificates and permits from all government authorities necessary for
conducting its business as it is presently conducted, and is not required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for such
consents, licenses, approvals or authorizations, or registrations or
declarations, as shall have been obtained or filed, as the case may be, prior to
the Closing Date.
(e) Binding Obligation. This Agreement and each of Lease
Finance's Related Documents constitutes a legal, valid and binding obligation of
Lease Finance, enforceable against Lease Finance in accordance with its terms;
and this Agreement and each of Lease Finance's Related Documents constitute
legal, valid and binding obligations of Lease Finance, enforceable in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(f) No Violation. The execution, delivery and performance by
Lease Finance of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the fulfillment of
the terms of this Agreement and the Related Documents do not and 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, or both) a default under
the articles of incorporation or bylaws of Lease Finance, or any indenture,
agreement, mortgage, deed of trust or other instrument to which Lease Finance is
a party or by which Lease Finance is bound or to which any of its properties are
subject, 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 the Contribution and Servicing
Agreement and the Indenture), or violate any law, order, rule or regulation,
applicable to Lease Finance or its properties, of any federal or state
regulatory body or any court, administrative agency, or other governmental
instrumentality having jurisdiction over Lease Finance or any of its properties.
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(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of Lease Finance, threatened against Lease
Finance, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality having jurisdiction over Lease Finance
or its properties: (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Related Documents,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by Lease Finance of its obligations under, or the
validity or enforceability of, this Agreement or any of the Related Documents or
(iv) that may adversely affect the federal or state income tax attributes of, or
seeking to impose any excise, franchise, transfer or similar tax upon, the
transfer and acquisition of the Leases hereunder or the transfer of the Leases
to the LLC pursuant to the Contribution and Servicing Agreement.
(h) Chief Executive Offices. The chief executive office of
Lease Finance is located at 1100 Landmark Towers, 000 Xx. Xxxxx Xxxxxx, Xx.
Xxxx, Xxxxxxxxx 00000, and the offices where Lease Finance keeps its records
concerning the Leases and related documents are at 0000 Xxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
In the event of any breach of a representation and warranty made by Lease
Finance hereunder, Vendor Services covenants and agrees that (i) it will not
take any action or pursue any remedy that it may have hereunder, in law, in
equity or otherwise, until a year and a day have passed since the date on which
all Notes have been paid in full, and (ii) any remedy it may have hereunder is
subject to Section 6.12. Each of Vendor Services and Lease Finance agree that
damages will not be an adequate remedy for breach of the foregoing covenant and
that this covenant may be specifically enforced by Lease Finance on behalf of
the LLC.
ARTICLE IV
COVENANTS OF VENDOR SERVICES
SECTION 4.1 Protection of Title of Lease Finance and the LLC.
(a) At or prior to the Closing Date, Vendor Services shall
have filed or caused to be filed UCC-1 financing statements, executed by Vendor
Services, as seller or debtor, naming Lease Finance as secured party and the LLC
as assignee and (i) describing the Leases and other property described in
Section 2.1 as collateral, filed with the office of the Secretary of State of
the State of Minnesota, and (ii) describing the Equipment as collateral, filed
with the appropriate filing office in those jurisdictions where Equipment
subject to Leases constituting at least 75% of the Initial Pool Principal
Balance and at least 75% of the aggregate Book Value as of the Initial Cut-Off
Date is located. Vendor Services shall deliver (or cause to be delivered) to
Lease Finance, the LLC and the Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing. In the event that
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Vendor Services fails to perform its obligations under this subsection, Lease
Finance or the LLC may do so at the expense of Vendor Services.
(b) If Vendor Services changes its name, identity, or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed by Vendor Services (or by Lease
Finance or the LLC on behalf of Vendor Services) in accordance with paragraph
(a) above, seriously misleading within the meaning of ss. 9-402(7) of the UCC,
it shall give Lease Finance and the LLC written notice thereof no later than 10
days following the occurrence of such change, and shall file appropriate
amendments to all such previously filed financing statements and continuation
statements within the time period required by the UCC.
(c) If Vendor Services relocates its principal executive
office and, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement, it shall give Lease
Finance, the LLC and the Trustee written notice thereof; and shall promptly file
such appropriate amendments or financing statements within the time period
required by the UCC.
(d) Vendor Services shall at all times maintain its principal
executive office, and any office from which it services Leases, within the
United States of America.
(e) Vendor Services shall maintain its computer systems so
that, from and after the time of sale under this Agreement of the Leases, the
Equipment and the other items described in Section 2.1(a) to Lease Finance, and
the conveyance of the Leases by Lease Finance to the LLC, the master computer
records (including archives) of Vendor Services that shall refer to a Lease, any
Equipment or any of the other items described in Section 2.1(a) indicate clearly
that such Lease, Equipment or other item described in Section 2.1(a) has been
sold to Lease Finance and that such Lease has been conveyed by Lease Finance to
the LLC. Indication of the LLC's ownership of a Lease shall be deleted from or
modified on any of Vendor Services's computer systems when, and only when, the
Lease has been paid in full, liquidated (including receipt of all recoveries
reasonably expected to be collected) or purchased by Vendor Services or Lease
Finance.
(f) If at any time Vendor Services shall propose to sell,
grant a security interest in, or otherwise transfer any interest in lease
contracts of a character similar to the Leases to any prospective purchaser,
lender or other transferee, Vendor Services shall give to such prospective
purchaser, lender, or other transferee computer tapes, records, or print-outs
(including any restored from archives) that, if they shall refer in any manner
whatsoever to any Lease, shall indicate clearly that such Lease has been sold to
Lease Finance and is owned by the LLC. Vendor Services and Lease Finance agree
that, if any one of them receives an inquiry from a bona fide potential creditor
regarding whether any lease contract or item of equipment is identified on the
Schedule of Leases, they will instruct the Trustee to disclose the contents of
the
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Schedule of Leases to such potential creditor in accordance with the provisions
of Section 11.17 of the Indenture.
(g) If Vendor Services receives payments in respect of Leases,
any Equipment or any of the other items described in Section 2.1(a), Vendor
Services agrees to pay or cause to be paid to the Servicer all such payments as
soon as practicable after identification thereof, but in no event later than two
Business Days after receipt thereof by Vendor Services.
(h) Vendor Services shall notify Lease Finance and the Trustee
within three Business Days after becoming aware of any Lien on any Lease,
Equipment or other item described in Section 2.1(a), other than the conveyances
hereunder or under the Contribution and Servicing Agreement.
(i) Vendor Services will promptly pay and discharge all taxes,
assessments, levies and other governmental charges imposed on it which may
materially and adversely affect any of the Leases, Equipment or other items
described in Section 2.1(a), or Lease Finance's rights with respect thereto.
(j) Vendor Services hereby agrees that it will perform its
obligations under the agreements relating to the Leases in conformity with its
customary and usual policies and procedures relating to the Leases.
(k) No later than 10 days after the Closing Date, Vendor
Services shall deliver to Lease Finance and the Trustee a written certification
that all notifications and consents required by paragraph (J) in the Schedule of
Representations hereto have been given or obtained, as applicable.
(l) With respect to lease transactions, Vendor Services's
credit underwriting standards generally require the filing of appropriate UCC
financing statements if the underlying equipment cost is over $25,000.
SECTION 4.2 Other Liens or Interests. Except for the
conveyances hereunder, with respect to any Lease and the related Equipment,
Vendor Services will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on such Lease or
Equipment or any interest therein, and Vendor Services shall defend the right,
title, and interest of Lease Finance and the LLC in and to such Lease and
Equipment against all claims of third parties claiming through or under Vendor
Services.
SECTION 4.3 Costs and Expenses. Vendor Services shall pay all
reasonable costs and disbursements in connection with the performance of its
obligations hereunder and under its Related Documents.
SECTION 4.4 Indemnification.
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Vendor Services shall defend, indemnify and hold harmless
Lease Finance, the LLC, the Trustee and the Noteholders from and against:
(a) any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from any breach of any representations
and warranties of Vendor Services contained herein (other than those set forth
in the Schedule of Representations, the exclusive remedies for which are
specified in Section 5.1);
(b) any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use, ownership or operation of
any item of Equipment (notwithstanding the disclaimer of Section 2.1(b)); and,
in addition, Vendor Services shall cause Lease Finance and the LLC to be named
as an additional insured under its liability insurance policies;
(c) any and all costs, expenses, losses, damages, claims and
liabilities arising out of or resulting from any action taken, or failed to be
taken, by it in respect of any portion of the Trust Assets other than any action
taken in accordance with this Agreement or any Related Document;
(d) any taxes that may at any time be asserted against Lease
Finance, the LLC, the Trustee and the Noteholders with respect to the
transactions contemplated in this Agreement, including, without limitation, any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes asserted with
respect to, and as of the date of, the sale, transfer and assignment of the
Leases to Lease Finance and of the Trust Assets to the LLC or the issuance and
original sale of the Notes, or asserted with respect to ownership of the Leases
or the Trust Assets, which shall be indemnified by Vendor Services pursuant to
clause (e) below), or federal, state or other income taxes, arising out of
distributions on the Notes or transfer taxes arising in connection with the
transfer of the Notes) and costs and expenses in defending against the same,
arising or imposed against such Persons by reason of the acts to be performed by
Vendor Services under this Agreement;
(e) any taxes which may at any time be asserted against such
Persons with respect to, and as of the date of, the conveyance or ownership of
the Leases and the conveyance or ownership of the Trust Assets under the
Transfer Agreement or the Contribution and Servicing Agreement or the issuance
and original sale of the Notes, including, without limitation, any sales, gross
receipts, personal property, tangible or intangible personal property, privilege
or license taxes (but not including any federal or other income taxes, including
franchise taxes, arising out of the transactions contemplated hereby or transfer
taxes arising in connection with the transfer of Notes) and costs and expenses
in defending against the same, arising or imposed against such Persons;
(f) any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon
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Lease Finance, the LLC, the Trustee and the Noteholders through the negligence,
willful misfeasance, or bad faith of Vendor Services in the performance of its
duties under this Agreement or by reason of reckless disregard of the
obligations and duties of Vendor Services under this Agreement;
(g) any loss, liability or expense incurred by reason of the
violation by Vendor Services or any of its Affiliates of federal or state
securities laws in connection with the registration or the sale of the Notes;
(h) any loss, liability or expense imposed upon, or incurred
by, Lease Finance, the LLC, the Trustee or the Noteholders as a result of the
failure of any Lease, or the sale of the related Equipment, to comply with all
requirements of applicable law, but only to the extent such loss, liability or
expense is not covered by the repurchase of such Lease and Equipment as required
by Section 5.1; and
(i) any loss, liability or expense imposed upon, or incurred
by, Lease Finance, the LLC, the Trustee or the Noteholders as a result of any
actions taken by or in the name of Lease Finance, the LLC or the Trustee at the
request of Vendor Services pursuant to the last sentence of Section 5.2.
Indemnification under this Section 4.4 shall include
reasonable fees and expenses of counsel and expenses of litigation and shall
survive termination of the Indenture. The indemnity obligations hereunder shall
be in addition to any obligation that Vendor Services may otherwise have.
Promptly after receipt by an indemnified party under this
Section 4.4 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be
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sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
SECTION 4.5 Further Assurances. Following the Closing Date,
Vendor Services shall, at the reasonable request of Lease Finance or the
Trustee, and at Vendor Services' expense, execute and deliver any further
instruments of transfer or other documents, and shall take all such other
actions that may be necessary, appropriate or desirable, to fully convey the
Leases and the Equipment (subject to Section 4.1(a)(ii)) to the Issuer or
otherwise to evidence, effectuate or implement the transactions contemplated
hereby. In addition, Vendor Services, as agent for Lease Finance, shall defend
the Leases and the Equipment against any and all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to that of
the Lease Finance.
SECTION 4.6 Negative Covenant. Vendor Services (a) shall not
engage in any transaction or series of transactions or otherwise take any action
or omit to take any action which could result in a determination that Vendor
Services shall have received less than reasonably equivalent value for the
transfer and conveyance of the Leases and the other property described in
Section 2.1(a) to Lease Finance either on the Closing Date or thereafter and (b)
in any event, shall not use the proceeds received from the transfer and
conveyance of the Leases and the other property described in Section 2.1(a)
either on the Closing Date or thereafter (i) to pay any dividend or make any
distribution on or in respect of its capital stock or (ii) to purchase, redeem
or otherwise acquire or retire for value any of its capital stock or the capital
stock of any of its affiliates (other than any of its wholly owned
subsidiaries), if, in the case of either (i) or (ii), at the time of any such
action and after giving effect thereto (x) the present fair saleable value of
the assets of Vendor Services is less than the amount that would be required to
be paid on or in respect of Vendor Services's total liabilities (including a
reasonable estimate of its contingent liabilities (net of tax benefits to the
extent reasonably likely to be realized)), (y) the assets of Vendor Services
constitute an unreasonably small capital to carry out Vendor Services's business
as it is then conducted or as Vendor Services then intends to conduct its
business or (z) Vendor Services has incurred, intends to incur, or believes that
it will incur, debts that would be beyond Vendor Services's ability to pay as
they mature.
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ARTICLE V
REPURCHASES
SECTION 5.1 Repurchase of Leases Upon Breach of Representation
or Warranty. Upon the occurrence of a Repurchase Event, Vendor Services shall,
unless such breach shall have been cured in all material respects by the end of
the second Collection Period after the date on which Vendor Services becomes
aware of or receives written notice from the Trustee or the Servicer of such
breach, (i) repurchase (or substitute a Substitute Lease for) such Lease from
the LLC and the related Equipment from Lease Finance and (ii) on or before the
related Deposit Date, Vendor Services shall either pay the Purchase Amount to
the Servicer on behalf of the LLC and Lease Finance pursuant to Section 2.6 of
the Contribution and Servicing Agreement or deliver a Substitute Lease pursuant
to Article IX of the Contribution and Servicing Agreement. It is understood and
agreed that, except as set forth in the following paragraph, the obligation of
Vendor Services to repurchase any Lease and the related Equipment as to which a
breach has occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against Vendor Services for such breach available to
Lease Finance, the LLC, the Noteholders or the Trustee on behalf of the
Noteholders. The provisions of this Section 5.1 are intended to grant the LLC
and the Trustee a direct right against Vendor Services to demand performance
hereunder, and in connection therewith, Vendor Services waives any requirement
of prior demand against Lease Finance with respect to such repurchase
obligation. Notwithstanding any other provision of this Agreement or the
Contribution and Servicing Agreement to the contrary, the obligation of Vendor
Services under this Section shall not terminate upon a termination of Vendor
Services as Servicer under the Contribution and Servicing Agreement and shall be
performed by Vendor Services in accordance with the terms hereof notwithstanding
the failure of the Servicer or Lease Finance to perform any of their respective
obligations with respect to such Lease under the Contribution and Servicing
Agreement.
In addition to the foregoing and notwithstanding whether the
related Lease and the related Equipment shall have been purchased by Vendor
Services, Vendor Services shall indemnify Lease Finance, the LLC, the Trustee
and the Noteholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.
SECTION 5.2 Reassignment of Purchased Leases and Equipment.
Upon deposit in the Collection Account of the Purchase Amount of any Lease and
the related Equipment (if applicable) repurchased by Vendor Services under
Section 5.1, or upon delivery of a Substitute Lease, Lease Finance and the LLC
shall take such steps as may be reasonably requested by Vendor Services in order
to assign to Vendor Services all of Lease Finance's and the LLC's right, title
and interest in and to such Lease and the related Equipment (if applicable) and
all security and documents conveyed to Lease Finance and the LLC directly
relating thereto, without
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recourse, representation or warranty, except as to the absence of liens, charges
or encumbrances created by or arising as a result of actions of Lease Finance or
the LLC. Such assignment shall be a sale and assignment outright, and not for
security. If, following the reassignment of a Purchased Lease and the related
Equipment (if applicable), in any enforcement suit or legal proceeding, it is
held that Vendor Services may not enforce any such Lease on the ground that it
shall not be a real party in interest or a holder entitled to enforce the Lease,
Lease Finance and the LLC shall, at the expense of Vendor Services, take such
steps as Vendor Services deems reasonably necessary to enforce the Lease,
including bringing suit in Lease Finance's or the LLC's name or the name of the
Trustee on behalf of the Noteholders.
SECTION 5.3 Waivers. No failure or delay on the part of Lease
Finance or the LLC in exercising any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude any other or future exercise thereof or
the exercise of any other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Reserved.
SECTION 6.2 Merger or Consolidation of Vendor Services or
Lease Finance. Any corporation or other entity (i) into which Vendor Services or
Lease Finance may be merged or consolidated, (ii) resulting from any merger or
consolidation to which Vendor Services or Lease Finance is a party or (iii)
succeeding to the business of Vendor Services or Lease Finance, shall be the
successor to Vendor Services or Lease Finance, as the case may be (without
relieving Vendor Services or Lease Finance of its responsibilities hereunder, if
it survives such merger or consolidation) without the execution or filing of any
document or any further act by any of the parties to this Agreement. Vendor
Services or Lease Finance shall promptly inform the other parties, the LLC and
the Trustee of such merger, consolidation or purchase and assumption.
Notwithstanding the foregoing, as a condition to the consummation of the
transactions referred to in clauses (i), (ii) and (iii) above, (x) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Sections 3.1 (other than subsections (b) and (i)) and 3.2 (other
than subsections (a) and (h)) of this Agreement shall have been breached (for
purposes hereof, such representations and warranties shall speak as of the date
of the consummation of such transaction), (y) Vendor Services or Lease Finance,
as applicable, shall have delivered written notice of such consolidation, merger
or purchase and assumption to the Rating Agencies prior to the consummation of
such transaction and shall have delivered to the LLC and the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 6.2 and that all conditions precedent, if any, provided for in this
Agreement, relating to such transaction have been complied with, and (z) Vendor
Services or Lease Finance, as applicable, shall have
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delivered to the LLC and the Trustee an Opinion of Counsel, stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to preserve and protect the interest of the LLC in the Trust Assets
and reciting the details of the filings or (B) no such action shall be necessary
to preserve and protect such interest.
SECTION 6.3 Limitation on Liability of Vendor Services and
Others.
(a) Except with respect to the Representations and Warranties
herein and in the Schedule of Representations, and the indemnification
obligations set forth in Section 4.4 herein, Vendor Services may rely in good
faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement. Vendor Services shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
obligations under this Agreement or its Related Documents and that in its
reasonable judgment may involve it in any expense or liability.
(b) Any officer, director, employee or agent of Vendor
Services may rely in good faith on the advice of counsel or on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement. Vendor Services shall be under no
obligation to appear in, prosecute or defend any legal action that is not
incidental to its obligations under this Agreement or its Related Documents and
that in its reasonable judgment may involve it in any expense or liability.
SECTION 6.4 Vendor Services May Own Notes. Subject to the
provisions of the Contribution and Servicing Agreement, Vendor Services, and any
Affiliate of Vendor Services, may in its individual or any other capacity become
the owner or pledgee of Notes with the same rights as it would have if it were
not Vendor Services or an Affiliate thereof (except as provided in Section 1.5).
SECTION 6.5 Amendment.
(a) This Agreement may be amended by Vendor Services and Lease
Finance without the consent of the LLC, the Trustee or the Noteholders (i) to
cure any ambiguity; (ii) to correct or supplement any provisions in this
Agreement that may be inconsistent with any other provisions herein; or (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement that are not inconsistent with the provisions hereof, provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the LLC and the Trustee, adversely affect in any material respect
the interests of the Noteholders.
(b) This Agreement may also be amended from time to time by
Vendor Services and Lease Finance, with the prior written consent of a Note
Majority (which consent of any Holder of a Note given pursuant to this Section
or pursuant to any other provision of this
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Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Note and of any Note issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of such consent is
made upon the Note), for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Noteholders; provided, however, that
no such amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Leases,
distributions that shall be required to be made on any Note or the applicable
rate of interest payable thereon, (ii) amend any provisions of Section 5.06 or
8.03 of the Indenture in such a manner as to affect the priority of payment of
interest or principal to Noteholders, or (iii) reduce the aforesaid percentage
required to consent to any such amendment or any waiver hereunder, without the
consent of the Holders of all Notes then Outstanding and affected thereby; and
provided, further, that no such amendment shall be effective unless and until
the Rating Agency Condition has been satisfied.
(c) Promptly after the execution of any such amendment or
consent, the LLC or the Trustee, as applicable, shall furnish written
notification of the substance of such amendment or consent to each Noteholder.
(d) It shall not be necessary for the consent of Noteholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Noteholders provided for in this Agreement) and of evidencing the
authorization of the execution thereof by Noteholders shall be subject to such
reasonable requirements as the LLC or the Trustee, as applicable, may prescribe,
including the establishment of record dates. The consent of any Holder of a Note
given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Note and of any Note issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of such consent is
made upon the Note.
SECTION 6.6 Notices. All demands, notices and communications
to Vendor Services or Lease Finance hereunder shall be in writing, personally
delivered, or sent by telecopier (subsequently confirmed in writing), reputable
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been given upon receipt:
(a) in the case of Vendor Services, to 1100 Landmark Towers,
000 Xx. Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention: General Counsel, or
such other address as shall be designated by Vendor Services in a written notice
delivered to the other parties and to the LLC and the Trustee; and
(b) in the case of Lease Finance, to 1100 Landmark Towers, 000
Xx. Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention: General Counsel, or such
other address as Lease
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Finance shall be designated by a written notice delivered to the other parties
and to the LLC and the Trustee.
SECTION 6.7 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement and the Related Documents set forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this Agreement and
the Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.8 Severability of Provisions. If any one or more of
the covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 6.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 6.10 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
SECTION 6.11 Conveyance of the Leases to the Trust. Vendor
Services acknowledges that Lease Finance intends, pursuant to the Contribution
and Servicing Agreement, to convey the Leases, the Residual Realizations and the
other items described in Section 2.1(a), together with its rights under this
Agreement, to the LLC on the Closing Date. Vendor Services acknowledges and
consents to such conveyance and waive any further notice thereof and covenants
and agrees that the representations and warranties of Vendor Services contained
in this Agreement and the rights of Lease Finance hereunder are intended to
benefit the LLC, the Trustee and the Noteholders. In furtherance of the
foregoing, Vendor Services covenants and agrees to perform its duties and
obligations hereunder, in accordance with the terms hereof, for the benefit of
the LLC, the Trustee and the Noteholders and that, notwithstanding anything to
the contrary in this Agreement, Vendor Services shall be directly liable to the
LLC and the Trustee (notwithstanding any failure by the Servicer or Lease
Finance to perform its duties and obligations hereunder or under the
Contribution and Servicing Agreement) and that the LLC and the Trustee may
enforce the duties and obligations of Vendor Services under this Agreement
against Vendor Services for the benefit of the Noteholders.
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SECTION 6.12 Nonpetition Covenant. Neither Vendor Services nor
Lease Finance shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the LLC (or, in the case of Vendor Services, against Lease Finance) under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the LLC (or Lease Finance, as applicable) or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the LLC
(or, in the case of Vendor Services, of Lease Finance).
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IN WITNESS WHEREOF, the parties have caused this Transfer
Agreement to be duly executed by their respective officers as of the day and
year first above written.
GREEN TREE LEASE FINANCE II, INC.,
as Purchaser
By ___________________________
Name:
Title:
GREEN TREE VENDOR SERVICES
CORPORATION,
In its individual capacity and as Servicer
By ___________________________
Name:
Title:
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SCHEDULE A
SCHEDULE OF LEASES AND EQUIPMENT
A-1
SCHEDULE B
SCHEDULE OF REPRESENTATIONS AND WARRANTIES
OF VENDOR SERVICES
With respect to each Lease as of the Initial Cut-Off Date, and
regarding each Substitute Lease as of the applicable Cut-Off Date, Vendor
Services represents and warrants as follows :
A. Characteristics of Leases. Each Lease (i) constitutes a
valid, binding and enforceable payment obligation of the Obligor in accordance
with its terms (except as may be limited by applicable bankruptcy, insolvency or
other similar laws affecting the enforceability of creditors' rights generally
and the availability of equitable remedies), (ii) has been duly and properly
sold, assigned and conveyed by Vendor Services to Lease Finance, (iii) was
originated by Vendor Services in the ordinary course of its business, or (in the
case of any Lease purchased by Vendor Services) was acquired by Vendor Services
for proper consideration and was validly assigned to Vendor Services by the
originator of such Lease, and (iv) contains customary and enforceable provisions
adequate to enable realization against the Obligor and/or the related Equipment
(although no representation or warranty is made with respect to the perfection
or priority of any security interest in such related Equipment).
B. No Waivers. No provisions of any Lease have been waived,
altered or modified in any material respect, except as indicated in the Lease
File.
C. No Consumer Leases. No Lease is a "consumer lease" as
defined in Article 2A of the Uniform Commercial Code, except for a de minimis
number of Leases.
D. Acceptance of Equipment. To the best of Vendor Services's
knowledge, each Obligor has accepted the related Equipment and has had
reasonable opportunity to inspect and test such Equipment.
E. Compliance with Law. All requirements of applicable
Federal, state and local laws, and regulations thereunder, in respect of all of
the Leases, have been complied with in all material respects.
F. No Default. There is no known default, breach, violation or
event permitting cancellation or termination of the Lease by the lessor under
the terms of any Lease (other than Scheduled Payment delinquencies (in excess of
10% of the Scheduled Payment due) of not more than 59 days), and (except for
payment extensions and waivers of Administrative Fees in accordance with Vendor
Services's servicing and collection policies and procedures) there has been no
waiver of any of the foregoing; and as of the Cut-Off Date, no related Equipment
had been repossessed.
B-1
G. The Obligors. Each Obligor (i) is located in the United
States, and (ii) is not (a) the United States of America or any State or local
government or any agency, department, subdivision or instrumentality thereof
(except for Leases representing no more than 3% of the Initial Pool Principal
Balance) or (b) Vendor Services or any Affiliate thereof .
H. Obligor Bankruptcy. Each Lease was entered into by an
Obligor who, at the Cut-Off Date, had not been identified on the records of
Vendor Services as being the subject of a current bankruptcy proceeding.
I. Delinquencies. No Lease has a Scheduled Payment delinquency
(in excess of 10% of the Scheduled Payment due) of more than 59 days past due as
of the Cut-Off Date.
J. Assignment to the LLC. Each Lease may be sold, assigned and
transferred by Vendor Services to Lease Finance, and may be assigned and
transferred by Lease Finance to the LLC, without the consent of, or prior
approval from, or any notification to, the applicable Obligor, other than (i)
certain Leases (which, in proportion to the aggregate of all of the Leases, are
not material) that require notification of the assignment to the Obligor, which
notification will be given by the Servicer not later than 10 days following the
Closing Date, and (ii) Leases (which, in proportion to the aggregate of all of
the Leases, are not material) that require the consent of the Obligor, which
consent will be obtained not more than 10 days following the Closing Date.
K. Lease Not Assumable. Each Lease prohibits the sale,
assignment or transfer of the Obligor's interest therein, the assumption of the
Lease by another person in a manner that would release the Obligor thereof from
the Obligor's obligation, or any sale, assignment or transfer of the related
Equipment, without the prior consent of the lessor, other than Leases which may
(i) permit assignment to a subsidiary, corporate parent or other affiliate, (ii)
permit the assignment to a third party, provided the Obligor remains liable
under the Lease, or (iii) permit assignment to a third party with a credit
standing (determined by Vendor Services in accordance with its underwriting
policy and practice at the time for an equivalent contract type, term and
amount) equal to or better than the original Obligor.
L. Payments in United States Dollars. The Obligor under each
Lease is required to make payments thereunder (i) in United States dollars, and
(ii) in fixed amounts and on fixed and predetermined dates.
M. Maintenance and Repair. Each Lease requires the Obligor to
assume responsibility for payment of all expenses in connection with the
maintenance and repair of the related Equipment, the payment of all premiums for
insurance of such Equipment and the payment of all taxes (including sales and
property taxes) relating to such Equipment.
N. Scheduled Payments. Each Lease requires the Obligor
thereunder to make all Scheduled Payments thereon under all circumstances and
regardless of the condition or
B-2
suitability of the related Equipment and notwithstanding any defense, set-off or
counterclaim that the Obligor may have against the manufacturer, lessor or
lender (as the case may be).
O. Repair or Replacement of Damaged Equipment. Under each
Lease, if the Equipment is damaged or destroyed, the Obligor is required either
(i) to repair such Equipment, (ii) to make a termination payment to the lessor
in an amount not less than the Required Payoff Amount, or (iii) in some cases,
to replace such damaged or destroyed Equipment with other equipment of
comparable use and value.
P. No Termination by Lessee. None of the Leases permit the
Obligor to terminate the Lease prior to the latest Stated Maturity Date or to
otherwise prepay the amounts due and payable thereunder, except for a de minimis
number of Leases which allow for an early termination or prepayment upon payment
of an amount which is not less than the Required Payoff Amount.
Q. No Transfer of Title Required. It is not a precondition to
the valid transfer or assignment of Vendor Services interest in any of the
Equipment related to any Lease that title to such Equipment be transferred on
the records of any governmental or quasi-governmental agency, body or authority.
R. Good Title. Immediately prior to the sale, assignment and
conveyance of each Lease by Vendor Services to Lease Finance, Vendor Services
had good title to such Lease and Vendor Services's interest in the related
Equipment (subject to the terms of such Lease) and was the sole owner thereof,
free of any Lien.
S. No Impairment. No person has a participation in or other
right to receive Scheduled Payments under any Lease, and neither Lease Finance
nor Vendor Services has taken any action to convey any right to any Person that
would result in such Person having a right to Scheduled Payments received with
respect to any Lease.
T. Lawful Assignment. The sale, transfer and assignment of
such Lease and Vendor Services interest in the related Equipment to Lease
Finance under this Agreement, and the transfer and conveyance of such Lease
from, and the grant of rights to the related Residual Realizations by, Lease
Finance to the LLC under the Contribution and Servicing Agreement, are not
unlawful, void or voidable under the laws of the jurisdiction applicable to such
Lease.
U. All Filings Made. All filings and other actions required to
be made, taken or performed by any Person in any jurisdiction to give the LLC a
first priority perfected lien or ownership interest in the Leases and a first
priority perfected security interest in Vendor Services's interest in the
Equipment have been made, taken or performed.
V. Lease Files Complete. There exists a Lease File pertaining
to each Lease, and such Lease File contains the Lease or a facsimile copy
thereof.
B-3
W. One Original. There is only one original executed copy of
each Lease, and such original executed copy is in the possession of Vendor
Services.
X. Chattel Paper. The Leases constitute chattel paper within
the meaning of the UCC as in effect in the States of Minnesota and Delaware
(other than those Leases in which the lessor is financing exclusively the
Obligor's software license or maintenance contract for Equipment, which Leases,
in proportion to the Initial Pool Principal Balance, are not material).
Y. Marking Records. By the Closing Date, the portions of the
electronic master record of Vendor Services relating to the Leases will have
been clearly and unambiguously marked to show that the Leases constitute part of
the Trust Assets and are owned by the LLC in accordance with the terms of the
Contribution and Servicing Agreement.
Z. Computer Tape. The Computer Tape containing information
with respect to the Leases that was made available by Vendor Services to the
Trustee on the Closing Date and was used to select the Leases was complete and
accurate in all material respects as of the Cut-Off Date and includes a
description of the same Leases that are described in the Schedule of Leases to
the Contribution and Servicing Agreement.
AA. Schedule of Leases. The information with respect to the
Leases listed on the Schedule of Leases attached to the Contribution and
Servicing Agreement is true, correct and complete in all material respects.
BB. No Fraud or Misrepresentation. Each Lease was originated
by Vendor Services or acquired by Vendor Services and was sold and assigned by
Vendor Services to Lease Finance without any fraud or misrepresentation on the
part of Vendor Services.
CC. Adverse Selection. No selection procedures adverse to the
Noteholders were utilized in selecting the Lease from those leases owned by
Vendor Services on the Cut-Off Date.
DD. One Payment. The Obligor has made at least one payment
under the Lease.
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