Exhibit 4.2
RECEIVABLES SALE AGREEMENT
by and among
AMERICAN BUSINESS LEASING, INC.,
as Originator,
ABFS FINANCE LLC 1999-A,
as Transferor
and
ABFS RESIDUAL LLC 1999-A,
as Transferor
Dated as of June 1, 1999
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................ 1
SECTION 1.01 Definitions................................................. 1
SECTION 1.02 Other Definitional Provisions............................... 1
ARTICLE II TRANSFER OF CONVEYED ASSETS....................................... 2
SECTION 2.01 Direction; Acquisition; Capital Contribution................ 2
SECTION 2.02 Custody of Contract Files................................... 4
SECTION 2.03 Intention of the Parties; Grant of Security Interest........ 4
ARTICLE III REPRESENTATIONS AND WARRANTIES................................... 4
SECTION 3.01 Representations and Warranties of the Originator............ 4
SECTION 3.02 Representations and Warranties of the Transferors........... 7
SECTION 3.03 Representations and Warranties of the Originator with
respect to the Conveyed Assets........................... 9
SECTION 3.04 Substitution of Contracts and Equipment by the Originator... 10
ARTICLE IV COVENANTS......................................................... 11
SECTION 4.01 Originator Covenants........................................ 11
SECTION 4.02 Transferor Covenants........................................ 13
SECTION 4.03 Transfer of Conveyed Assets................................. 15
ARTICLE V CONDITIONS PRECEDENT............................................... 15
SECTION 5.01 Conditions to Transferors Obligations....................... 15
SECTION 5.02 Conditions to the Originator's Obligations.................. 16
ARTICLE VI TERMINATION; LIABILITIES.......................................... 16
SECTION 6.01 Termination................................................. 16
SECTION 6.02 Effect of Termination....................................... 17
SECTION 6.03 Liabilities................................................. 17
ARTICLE VII MISCELLANEOUS PROVISIONS......................................... 17
SECTION 7.01 Amendment................................................... 17
SECTION 7.02 GOVERNING LAW............................................... 17
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SECTION 7.03 Notices..................................................... 17
SECTION 7.04 Severability of Provisions.................................. 18
SECTION 7.05 Assignment....................... ........................ 18
SECTION 7.06 Further Assurances.......................................... 18
SECTION 7.07 No Waiver; Cumulative Remedies.............................. 18
SECTION 7.08 Counterparts................................................ 19
SECTION 7.09 Binding Effect: Third-Party Beneficiaries.................. 19
SECTION 7.10 Merger and Integration...................................... 19
SECTION 7.11 Headings.................................................... 19
SECTION 7.12 Schedules and Exhibits...................................... 19
SECTION 7.13 No Bankruptcy Petition Against the Transferors, the
Manager or the Trust...................................... 19
Schedule I -- List of Initial Contracts
Exhibit A -- Form of Subsequent Receivables Sale Agreement
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This RECEIVABLES SALE AGREEMENT, dated as of June 1, 1999 (this
"Agreement"), by and among AMERICAN BUSINESS LEASING, INC., a Pennsylvania
corporation (the "Originator"), ABFS FINANCE LLC 1999-A, a Delaware limited
liability company ("Transferor I"), and ABFS RESIDUAL LLC 1999-A, a Delaware
limited liability company ("Transferor II" and, together with Transferor I, the
"Transferors").
WITNESSETH:
WHEREAS, the Originator, in the ordinary course of its business,
acquires and originates equipment contracts in the United States; and
WHEREAS, the Originator desires to convey, transfer, contribute and
assign all of its right title and interest in and to (x) Contracts, other than
any Contracts which are "true" or "operating" leases, to Transferor I, and (y)
any Contracts which are "true" or "operating" leases, the ownership interest or
security interest of the Originator in each item of Equipment and any Residual
Receipts to Transferor II, each upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Originator and the Transferors agree that all
representations, warranties, covenants and agreements made by it herein shall be
for the benefit of the Depositor, the Collateral Agent, the Noteholders, the
Residual Holders, the Note Insurer, the Owner Trustee and the Indenture Trustee.
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 herein but not defined herein shall have the meanings set forth in
Annex A to the Indenture, dated as of June 1, 1999 (the "Indenture"), by and
among ABFS Equipment Contract Trust 1999-A, as issuer (the "Issuer"), the
Originator, as servicer (in such capacity, the "Servicer"), and The Chase
Manhattan Bank, as indenture trustee (the "Indenture Trustee") and as back-up
servicer (the "Back-up Servicer").
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 GAAP, 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 GAAP, 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 Article,
Section, Schedule and Exhibit references contained in this Agreement are
references to Articles, Sections, Schedules and Exhibits in or to this
Agreement, unless otherwise specified.
(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; Capital Contribution. (a) Subject
to the terms and condition of this Agreement, the Originator hereby agrees to
sell, convey and contribute, on the Closing Date, all of its right, title and
interest in and to the Initial Conveyed Assets to the Transferors, as set forth
in subsection (c) below, which sale, contribution and conveyance shall be
evidenced by the execution of this Agreement. Upon receipt of the consideration
specified in subsection (d) below, the Originator hereby releases all of its
right, title and interest in, to and under the related Initial Conveyed Assets,
such receipt being hereby acknowledged by the execution of this Agreement by the
Originator.
(b) Each sale, conveyance and contribution of Subsequent Conveyed
Assets shall be evidenced by the execution and delivery by the Originator and
Transferors of a Subsequent Receivables Sale Agreement in the form of Exhibit A
hereto. Each such sale, conveyance and contribution shall be effective as of the
related Subsequent Funding Date.
(c) The transfers occurring on each Conveyance Date shall be
consummated such that those Conveyed Assets which are considered "financial
assets" within the meaning of the Statement of Financial Accountings Standards
No. 125 ("FAS 125") (such Conveyed Assets include, without limitation, the
Contracts, other than any Contract which is an "operating" or "true" lease) are
acquired by Transferor I, and such that those Conveyed Assets which are not
considered "financial assets" within the meaning of FAS 125 (such Conveyed
Assets include,
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without limitation, any Contract which is an "operating" or "true" lease, the
ownership interest or security interest of the Originator in each item of
Equipment and any Residual Receipts) are acquired by Transferor II.
(d) In consideration of (x) the receipt by the Originator of a 99%
membership interest in each of the Transferors, (y) the receipt by the
Originator of $58,806,460.72 and the Class B Notes from the Transferors and (z)
other good and valuable consideration, the Originator hereby conveys to the
applicable Transferor all of its right, title and interest in, to and under the
Initial Conveyed Assets, whether now existing or hereinafter arising, without
recourse, except as may be set forth herein. The purchase price for any
Subsequent Conveyed Assets will be paid by the applicable Transferor to the
Originator in immediately available funds on the related Subsequent Funding Date
in accordance with the terms of the related Subsequent Receivables Sale
Agreement. In connection with the transfers on each Conveyance Date, the
Originator hereby makes a capital contribution to the related Transferor in the
amount by which the fair market value of the related Conveyed Assets exceeds the
cash consideration received by the Originator in connection therewith.
(e) In connection with each sale, contribution and conveyance of
Conveyed Assets, the Originator agrees to record and file, at its own expense,
financing statements (and thereafter will file continuation statements with
respect to such financing statements) with respect to such Conveyed Assets,
meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect and to maintain the perfection of, (x)
the transfer, conveyance and contribution of such Conveyed Assets (subject to
the Filing Requirements with respect to the Equipment) from the Originator to
the related Transferors, (y) the pledge of such Conveyed Assets (subject to the
Filing Requirements with respect to the Equipment) from the Transferors to the
Trust as security for the Pledged Notes, and (z) the pledge of the related
Pledged Property from the Trust to the Indenture Trustee, on behalf of the
Noteholders and the Note Insurer, and to deliver a file-stamped copy of such
financing statements or other evidence of such filings to the related Transferor
(and copies to the Indenture Trustee and the Note Insurer) on or prior to each
Conveyance Date; provided, however, that the Contract Files (including each
original executed Contract) will not be physically delivered to either of the
Transferors, but instead will be held by the Collateral Agent, on behalf of the
Indenture Trustee, as bailee for the Noteholders and the Note Insurer. In
addition, the Originator will assign to the Transferors any UCC-1 financing
statement filed by the Originator against the Source with respect to any
Contract originated by a Source.
(f) In connection with each sale, contribution and conveyance of
Conveyed Assets, the Originator 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 such Conveyed
Assets have been assigned and transferred to the Transferors in accordance with
this Agreement or a Subsequent Receivables Transfer Agreement, as applicable,
subsequently pledged by the Transferors to the Trust in accordance with the
Receivables Pledge Agreement or a Subsequent Receivables Pledge Agreement, as
applicable, and such security interest was assigned by the Trust to the
Indenture Trustee, on behalf of the Noteholders and the Note Insurer, pursuant
to the Indenture or an Assignment, as applicable, and (ii) cause the Servicer to
prepare
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and hold on behalf of the Transferors and the Indenture Trustee, (x) the
List of Contracts on or prior to the Closing Date and (y) the List of Contracts
as supplemented by the List of Subsequent Contracts on or prior to each
Subsequent Funding Date. Pursuant to Section 3.04, the Originator from time to
time may make capital contributions of (A) Substitute Contracts to Transferor I
and (B) the ownership interest or security interest of the Originator in each
item of Substitute Equipment and any Residual Receipts to Transferor II, at any
time pursuant to Section 3.04. Upon delivery of any such List of Subsequent
Contracts or List of Substitute Contracts, the List of Contracts shall be deemed
amended to incorporate therein the information contained in such List of
Subsequent Contracts or List of Substitute Contracts, as applicable.
(g) Except for the obligations of the Originator pursuant to Section
3.03 and Article IV of the Indenture with respect to any breach of a
representation, warranty or covenant made herein, the sale, contribution and
conveyance of the Contracts will be without recourse to the Originator.
SECTION 2.02 Custody of Contract Files. In connection with the sale,
contribution, assignment, transfer and conveyance of the Conveyed Assets to the
Transferors pursuant to this Agreement, the pledge of the Conveyed Assets to the
Trust, and the pledge of the Pledged Assets to the Indenture Trustee, for the
benefit of the Noteholders and the Note Issuer, the Collateral Agent, on behalf
of the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, will retain the Contract Files, any related evidence of insurance and
payments and original executed counterparts of each Contract in accordance with
the terms of the Indenture.
SECTION 2.03 Intention of the Parties; Grant of Security Interest. It
is the intention of the parties hereto that each transfer of Conveyed Assets to
be made pursuant to the terms hereof shall constitute a sale or capital
contribution of (x) the Contracts by the Originator to Transferor I, and (y) the
ownership interest or security interest of the Originator in each item of
Equipment and any Residual Receipts by the Originator to Transferor II, and, in
either case, 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 or capital contribution, it is the intention of the parties hereto that
this Agreement is deemed to be a security agreement and that the Originator
shall be deemed to have granted to the related Transferor as of the date hereof
a first priority perfected security interest in all of the Originator's right,
title and interest in, to and under the related Conveyed Asset, and all income
and proceeds thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the Originator. The
Originator hereby makes the following representations and warranties for the
benefit of the Indenture Trustee, the Depositor, the Trust, the Owner Trustee,
the Collateral Agent, the Noteholders, the Note Insurer and the Transferors.
Such representations and warranties are made as of the Closing Date (with
respect to Initial Conveyed Assets), any Subsequent Funding Date (with respect
to Subsequent Conveyed Assets transferred to the Transferors on such date) or
any
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Transfer Date (with respect to Substitute Conveyed Assets transferred to the
Transferors on such date) and shall survive each sale, contribution, assignment,
transfer and conveyance by the Originator of the Conveyed Assets to the
Transferors and their respective successors and assigns.
(a) Organization and Good Standing. The Originator
is a corporation duly organized, validly existing and in good standing,
under the laws of the state of its incorporation, 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;
(b) Due Qualification. The Originator is
qualified as a foreign corporation in any state where it is
required to be so qualified to conduct its business and enforce the
Source Agreements to which it is a party, and has obtained all
necessary licenses, consents, approvals, authorizations,
registrations or declarations as required by any Person or any
Governmental Authority under federal and state law, in each case,
where the failure to be so qualified, licensed, consented to,
authorized, registered, declared or approved could reasonably be
expected to materially and adversely affect the ability of the
Originator to execute and deliver, or comply with the terms of, this
Agreement or any other Transaction Document to which it is a party;
(c) Power and Authority. The Originator has the
corporate power and authority to execute and deliver this Agreement,
the Source Agreements to which it is a party, the Contracts and any
other Transaction Document to which it is a party, and to carry out
their respective terms; the Originator has duly authorized the sale,
contribution, assignment, transfer and conveyance to the Transferors of
the Conveyed Assets by all necessary corporate action; 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 the Originator by all
necessary corporate action;
(d) Due Execution and Delivery. Each of this
Agreement, the Source Agreements, the Contracts and any other
Transaction Document to which it is a party has been duly executed
and delivered on behalf of the Originator;
(e) Valid Assignment; Binding Obligations.
This Agreement constitutes a valid sale, contribution,
assignment, transfer and conveyance to the Transferors of all
right, title, and interest of the Originator in, to and under the
Conveyed Assets and the Conveyed Assets will be held by the
Transferors free and clear of any Lien of any Person claiming,
through or under the Originator, except for Liens permitted under,
or to be created by the Indenture; and this Agreement, and the
other Transaction Documents to which it is a party, when duly
executed and delivered, will constitute legal, valid, and binding
obligations of the Originator enforceable against the Originator
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);
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(f) No Violation. The consummation of the
transactions contemplated by, and the fulfillment of the terms of,
this Agreement, the Source Agreements, the Contracts and the other
Transaction Documents 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 the Originator, or any
material term of any indenture, agreement, mortgage,deed of trust,
or other instrument to which the Originator 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 the Originator of
any court or of any federal or state regulatory body,
administrative agency, or other Governmental Authority having
jurisdiction over the Originator or any of its properties which would
have a material adverse effect on the Conveyed Assets;
(g) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of the Originator,
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 the Originator) materially and adversely affect the
performance by the Originator of its obligations under, or the validity
or enforceability of, this Agreement;
(h) Tax Returns. The Originator has filed on a
timely basis all tax returns (federal, state and local) required to be
filed and has paid or made adequate provisions for the payment of all
taxes, assessments and other governmental charges due from the
Originator;
(i) Pensions. Each pension plan or profit sharing
plan to which the Originator is a party has been fully funded in
accordance with the obligations of the Originator set forth in such
plan;
(j) Valid Business Reasons. The Originator has
valid business reasons for selling its interests in the Conveyed Assets
rather than obtaining a loan with the Conveyed Assets as collateral;
(k) Insolvency. The Originator is not insolvent nor
will it be rendered insolvent by the transactions contemplated by this
Agreement and the Originator has an adequate amount of capital to
conduct its business in the ordinary course and to carry out its
obligations hereunder and under each Transaction Document to which it
is a party;
(l) Principal Place of Business. The principal
place of business and chief executive office of the Originator is
located at the respective addresses set forth herein and, there are now
no, and during the past four months there have not been, any other
locations where the Originator 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
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Agreement, as shall have been specifically disclosed to the Servicer,
the Depositor, the Collateral Agent, the Note Insurer and the
Indenture Trustee in writing;
(m) Accounting and Tax Treatment. The Originator
will treat the assignment of the related Conveyed Assets to the
Transferors pursuant to Article II as a sale and contribution of the
Conveyed Assets to the capital of the related Transferor for Federal
income tax purposes, and as a contribution for financial reporting and
accounting purposes; the Originator will respond to any inquiries from
third parties by indicating that the Conveyed Assets are owned by the
Transferors;
(n) Legal Name. The legal name of the Originator is
as set forth in the signature line of this Agreement and the Originator
has not changed its name since its incorporation and since its
incorporation, the Originator has not used, nor does the Originator now
use, any trade names, fictitious names, assumed names or "doing
business as" names;
(o) Material Adverse Change. Since March 31, 1999,
no event has occurred and is continuing which materially and adversely
affects the Originator's operations, including, without limitation, the
ability of the Originator to perform the transactions contemplated
hereunder; and
(p) Fair Consideration. The consideration received
by the Originator as set forth herein is fair consideration having
value reasonably equivalent to or in excess of the value of the related
Conveyed Assets conveyed by it and the performance of the Originator's
obligations hereunder.
SECTION 3.02 Representations and Warranties of the Transferors. Each
of the Transferors hereby makes the following representations and warranties for
the benefit of the Originator, the Note Insurer, the Depositor, the Collateral
Agent, the Trust, the Owner Trustee, the Indenture Trustee and the Noteholders.
Such representations and warranties speak as of the Closing Date, each
Subsequent Funding Date and each Transfer Date.
(a) Organization and Good Standing. Each of the
Transferors is a limited liability company duly organized and validly
existing in good standing under the laws of the State of Delaware, with
full power and authority to own its properties and to conduct its
business as presently conducted and has the power, authority and legal
right to acquire and own the related Conveyed Assets;
(b) Due Qualification. Each of the Transferors is
duly qualified to do business as a foreign limited liability company in
good standing, and has obtained all necessary licenses and approvals in
all jurisdictions in which the ownership or lease of property or the
conduct of its business requires such qualification, except to the
extent that the failure to be so qualified, licensed or approved would
not, in the aggregate, materially and adversely affect the ability of
such Transferor to comply with the terms of this Agreement and the
other Transaction Documents to which it is a party;
(c) Power and Authority. Each of the Transferors
has the power and authority to execute and deliver this Agreement and
the other Transaction Documents to which it is
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a party and to carry out their respective terms; and the execution,
delivery, and performance of this Agreement and other Transaction
Documents to which it is a party have been duly authorized by such
Transferor by all necessary action;
(d) Due Execution and Delivery. This Agreement and
the other Transaction Documents to which it is a party have been duly
executed and delivered on behalf of each Transferor;
(e) Binding Obligations. This Agreement and the
other Transaction Documents to which it is a party constitute legal,
valid, and binding obligations of each Transferor and are enforceable
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);
(f) No Violation. The consummation of the
transactions contemplated by and the fulfillment of the terms of this
Agreement and other Transaction Documents 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 of lapse of
time) a default under, the Certificate of Formation or Limited
Liability Company Agreement of either Transferor, or any material
term to any indenture to which either Transferor is a party or
violate any law or any order, injunction, writ, rule or regulation
applicable to either Transferor of any court or of any federal or
state regulatory body, administrative agency or other Governmental
Authority having jurisdiction over either Transferor or any of its
properties which would have a material adverse effect on the Conveyed
Assets;
(g) Membership Interests. The Originator is the
registered owner of 99% of the membership interests of each of the
Transferors, each of which are owned of record, free and clear of all
mortgages, assignments and pledges, and security interests;
(h) No Proceedings. There are no proceedings or
investigations pending or, to the knowledge of each of the Transferors,
threatened, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (A) asserting the
invalidity of or any of the Transaction Documents, (B) seeking to
prevent the consummation of any of the transactions contemplated by any
of the Transaction Documents or (C) seeking any determination or ruling
that would materially and adversely affect the performance by either
Transferor of its obligations under, or the validity or enforceability
of, any of the Transaction Documents;
(i) Approvals and Compliance. All approvals,
authorizations, consents, orders or other actions of any person,
corporation or other organization, or of any court, governmental
agency or body or official, required in connection with the execution
and delivery of the Transaction Documents, have been or will be
taken or obtained on or prior to the Closing Date and each
Transferor is in compliance with all applicable laws, rules,
regulations and orders with respect to such Transferor, its
business and properties and all Conveyed Assets, except to the
extent that non-compliance, or failure to be so approved,
authorized or consented to, would not, in the aggregate, materially
and adversely affect
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the ability of such Transferor to comply with the terms of this
Agreement and the other Transaction Documents to which it is a party;
(j) Solvency. Each Transferor is solvent and will
not be rendered insolvent by the transactions contemplated by this
Agreement and the other Transaction Documents and each Transferor has
an adequate amount of capital to conduct its business in the ordinary
course and to carry out its obligations under this Agreement and the
other Transaction Documents;
(k) Subsidiaries. Neither of the Transferors has
any subsidiaries other than the Trust;
(l) Tax Returns. Each Transferor has filed on a
timely basis all tax returns (federal, state and local) required to be
filed and has paid or made adequate provisions for the payment of all
taxes, assessments and other governmental charges due from such
Transferor;
(m) Principal Place of Business. The principal
place of business and chief executive office of each Transferor are
located at the address of such Transferor set forth herein and, there
are now no, and during the past four months there have not been, any
other locations where such Transferor 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, the Note Insurer and the
Indenture Trustee in writing;
(n) Accounting and Tax Treatment. Each Transferor
will treat the assignment of the related Conveyed Assets from the
Originator to the Transferors pursuant to this Agreement as a
contribution of such Conveyed Assets for Federal income tax purposes,
and as a sale and contribution for financial reporting and accounting
purposes; each Transferor will respond to any inquiries by third
parties by indicating that the Conveyed Assets are owned by the
Transferors; and
(o) Legal Name. The legal name of each Transferor
is as set forth in the related signature line of this Agreement and
neither Transferor has changed its name since its incorporation and
since its incorporation, such Transferor did not use, nor does such
Transferor now use, any trade names, fictitious names, assumed names or
"doing business as" names.
SECTION 3.03 Representations and Warranties of the Originator with
respect to the Conveyed Assets. (a) With respect to each Contract, the
Originator hereby remakes to the Transferors the representations, warranties and
covenants set forth in Section 2.02 of the Servicing Agreement. Such
representations, warranties and covenants are made or deemed to be made, (x)
with respect to the Initial Conveyed Assets, as of the Cut-Off Date, (y) with
respect to the Subsequent Conveyed Assets, as of the Subsequent Cut-Off Date,
and (z) with respect to the Substitute Conveyed Assets, as of the related
Transfer Date.
(b) Upon the discovery by the Originator, either
Transferor, the Collateral Agent, the Depositor, the Indenture Trustee or the
Note Insurer of a breach of any of the
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representations or warranties set forth in Section 2.02 of the Servicing
Agreement that materially and adversely affects any Contract, the related
Equipment or the related Contract File, as the case may be, or if the Servicer
fails to cause delivery of evidence of filing or copies of any UCC financing
statement in accordance with the Servicing Agreement (any such event, a
"Warranty Event"), the party discovering such breach shall give prompt written
notice to the other parties hereto, the Indenture Trustee, the Trust and the
Note Insurer, and the Originator shall be required to reacquire or replace
such Contract in accordance with Article IV of the Indenture.
SECTION 3.04 Substitution of Contracts and Equipment by the
Originator. (a) With respect to a substitution of Contracts in accordance with
the provisions of this Section 3.04, each proposed Substitute Contract must (i)
be an Eligible Contract, (ii) satisfy all of the representations and warranties
set forth in Section 2.02 of the Servicing Agreement, (iii) have a Discounted
Contract Principal Balance of not less than the Discounted Contract Principal
Balance of the Contract being replaced, (iv) have a Booked Residual Value of not
less than the Booked Residual Value of the Contract being replaced, and (v)
satisfy the requirements of Section 4.02(d) of the Indenture. For purposes of
determining compliance with clauses (iii) and (iv) of the preceding sentence, if
more than one Substitute Contract is being provided on any date, the Discounted
Contract Principal Balances and Booked Residual Values of the Substitute
Contracts and the Contracts being replaced shall be determined on an aggregate
basis.
(b) Any substitution of a Contract pursuant to this
Agreement will be effected by (i) delivery to the Collateral Agent, on behalf of
the Indenture Trustee, of the Contract File for each such Substitute Contracts,
(ii) filing of any UCC financing statements necessary to comply with the Filing
Requirements and to perfect the interest of the Indenture Trustee in the
Substitute Contracts, (iii) delivery to the Indenture Trustee and the Collateral
Agent of a supplement to the List of Contracts reflecting such substitution and
(iv) delivery to the Collateral Agent, on behalf of the Indenture Trustee, of a
release request for the replaced Contract and the originally executed trust
receipt relating thereto.
(c) The parties hereto agree that in addition to the
obligation of the Originator to reacquire 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, the Originator will enforce
its remedies, if any, against any Source under any Source Agreement. In
consideration of the reacquisition of the Equipment and the Contract, the
Originator shall remit the Reacquisition Amount to the Servicer for allocation
of such Reacquisition 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 the Originator with respect to a breach as provided in this
Section 3.04 and Section 4.01 of the Indenture constitute the sole remedy
against the Originator for such breach available to the Transferor, the Note
Insurer, the Depositor, the Collateral Agent, the Indenture Trustee and
Noteholders, except to the extent that such breach is proven by final judgment
of a court of law having due jurisdiction to be the result of any fraud or
wilfull misconduct on the part of such Obligor. The representations and
warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the
assignment of the Conveyed Assets to the Transferors, the pledge of the Conveyed
Assets to the Trust and the pledge of the Pledged Property to the Indenture
Trustee.
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ARTICLE IV
COVENANTS
SECTION 4.01 Originator Covenants. The Originator hereby covenants
and agrees with the Transferor, the Trust, the Owner Trustee, the Note Insurer,
the Depositor, the Collateral Agent, the Noteholders and the Indenture Trustee
with respect to itself as follows:
(a) Preservation of Security Interest. The
Originator shall execute and file such financing statements and cause
to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve,
maintain, and protect the respective right, title and interest of the
Transferors, the Trust and the Indenture Trustee in the Conveyed
Assets. The Originator shall deliver (or cause to be delivered) to the
Transferors file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such
filing.
(b) Preservation of Name, etc. The Originator will
not change its name, identity or corporate structure in any manner that
would, could, or might make any financing statement or continuation
statement filed by the Originator in accordance with paragraph (a)
above or under any Transaction Document seriously misleading within the
meaning of Section 9-402(7) of the UCC, unless it shall have given the
Transferors, the Note Insurer, the Depositor, the Collateral Agent and
the Indenture Trustee at least 60 days' prior written notice thereof.
(c) Preservation of Office. The Originator will
give the Transferors, the Depositor, the Collateral Agent, the Note
Insurer and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, 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.
(d) Obligations with Respect to Conveyed Assets.
The Originator 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 Transferors,
the Trust, the Note Insurer or the Indenture Trustee in any of the
Conveyed Assets.
(e) Compliance with Law. The Originator 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 the Originator may contest any act, regulation,
order, decree or direction in any reasonable manner which shall not
materially and adversely affect the rights of the Transferors, the
Indenture Trustee, the Note Insurer or the Trust in any of the Conveyed
Assets.
(f) Conveyance of Conveyed Assets; Security
Interests. Except for the transfers and conveyances hereunder, or
under any Transaction Document, the Originator will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur,
assume
11
or suffer to exist any Lien, on any Conveyed Asset, or any
interest therein and the Originator shall defend the right, title,
and interest of the Transferors, the Trust, the Indenture Trustee,
the Note Insurer and their respective successors and assigns in, to,
and under the Conveyed Assets, against all claims of third
parties claiming, through or under the Originator; provided,
however, that nothing in this Section 4.01(f) shall prevent or
be deemed to prohibit the Originator 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 the
Originator 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.
(g) Notification of Breach. The Originator will
advise the Transferors, the Indenture Trustee, the Collateral Agent,
the Depositor, the Trust and the Note Insurer promptly, in reasonable
detail, upon discovery of the occurrence of any breach by the
Originator of any of its representations, warranties and covenants
contained herein.
(h) Further Assurances. The Originator will
make, execute or endorse, acknowledge and file or deliver to the
Transferors, the Trust, the Collateral Agent, the Depositor, the
Note Insurer 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 Transferors, the Trust, the Indenture Trustee, the Collateral
Agent, the Depositor and the Note Insurer 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.
(i) Indemnification. The Originator agrees to
indemnify, defend and hold the Transferors, the Trust, the Owner
Trustee, the Indenture Trustee, the Collateral Agent, the Depositor
and the Note Insurer 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 the Originator of its
representations and warranties contained in Article III, its
covenants contained in Section 4.01, or in any certificate or in any
schedule delivered by the Originator hereunder, being untrue in
any material respect at any time; provided, that the obligations
of the Originator with respect to the representations and
warranties set forth in Section 3.03(a) shall be limited as set forth
in Section 3.04(c). The obligations of the Originator under this
Section 4.01(i) shall be considered to have been relied upon by the
Transferors, the Indenture Trustee, the Trust, the Owner Trustee,
the Collateral Agent, the Depositor and the Note Insurer and shall
survive the execution, delivery, and performance of this Agreement
regardless of any investigation made by the Transferors, the
Indenture Trustee, the Trust, the Owner Trustee, the Collateral
Agent, the Depositor and the Note Insurer or on their respective
behalf. THE INDEMNIFICATION OBLIGATIONS OF THE ORIGINATOR PURSUANT
TO THE PRECEDING PROVISIONS OF THIS PARAGRAPH SHALL APPLY REGARDLESS
OF ANY NEGLIGENCE OR OTHER FAULT ON THE PART OF THE TRANSFERORS, THE
INDENTURE TRUSTEE, THE DEPOSITOR, THE
12
TRUST, THE OWNER TRUSTEE, THE COLLATERAL AGENT, THE NOTE INSURER
OR ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES OR AGENTS.
(j) Notice of Liens. The Originator shall notify
the Transferors, the Depositor, the Collateral Agent, the Indenture
Trustee and the Note Insurer promptly after becoming aware of any Lien
(other than any Permitted Liens) on any Conveyed Asset.
(k) Taxes. The Originator shall promptly pay all
applicable taxes required to be paid in connection with the assignment
of the Conveyed Assets and acknowledges that the Transferors shall have
no responsibility with respect thereto. The Originator shall promptly
pay and discharge, or cause the payment and discharge of, all federal
income taxes (and all other material taxes) when due and payable by
the Originator, 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. The Originator shall promptly
notify the Transferors, the Depositor, the Collateral Agent, the
Indenture Trustee, the Noteholders and the Note Insurer of any
material challenge, contest or proceeding pending by or against the
Originator before any taxing authority.
(l) Taxes and Other Liabilities. The Originator
shall promptly pay and discharge all material taxes, assessments, fees,
claims and other governmental charges when due and payable by the
Originator, 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. The Originator shall promptly
notify the Transferors, the Depositor, the Collateral Agent, the Note
Insurer, the Rating Agencies and the Indenture Trustee of any material
challenge, contest or proceeding pending by or against the Originator
before any taxing authority.
(m) Non-Consolidation. The Originator shall take
all action necessary to ensure that neither of the Transferors nor the
Manager would be substantially consolidated with the Originator, such
that the separate corporate existence of the Originator and either
Transferor or the Manager would be ignored in the event of a bankruptcy
of the Originator.
SECTION 4.02 Transferor Covenants. Each of the Transferors hereby
covenants and agrees with the Originator, the Depositor, the Trust, the Owner
Trustee, the Collateral Agent, the Note Insurer and the Indenture Trustee as
follows:
(a) Transferor Certificate. Prior to each date as
of which Contracts and the Equipment subject to such Contracts are to
be reacquired by the Originator pursuant to the Indenture, the
Transferors shall submit to the Originator a certificate signed by the
president, executive vice president, any vice president or the
treasurer of the Manager of each of the Transferors (a "Transferors
Certificate") and completed as to its date and the date of this
Agreement. Each Transferors Certificate shall operate as an assignment,
13
without recourse, representation, or warranty, to the Originator of all
of the Transferors' respective right, title and interests in and to
such Contracts and Equipment, and all security and documents relating
thereto, such assignment being an assignment outright and not for
security; and upon payment of the Reacquisition Amount, the Originator
will thereupon own such Contract, such interest in the related
Equipment and all such security and documents, free of any further
obligation to the Transferors with respect thereto. If in any
enforcement suit or legal proceeding it is held that the Servicer may
not enforce a Contract on the ground that it is not a real
party-in-interest or holder entitled to enforce the Contract, the
Transferors shall, at the Servicer's expense, take such steps as the
Servicer deems necessary to enforce the Contract, including bringing
suit in a Transferor's name.
(b) Obligor's Quiet Enjoyment. Transferor II 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. Transferor II covenants and
agrees that, so long as an Obligor shall not be in default of any of
the provisions of the applicable Contract, neither Transferor II nor
any assignee of Transferor II will disturb the Obligor's quiet and
peaceful possession of such Equipment and the Obligor's use thereof for
its intended purpose.
(c) Operation of Transferor. Each of the
Transferors shall be operated in such a manner that it should not be
substantively consolidated in the trust estate of another Person (that
is, such that the separate legal existence of such Transferor and such
Person should be disregarded) and in that regard, each Transferor
shall:
(i) not engage in any action that would
cause the separate legal identity of such Transferor not to be
respected, including, without limitation, (x) holding itself out
as being liable for the debts of any other party or (y) acting
other than through its duly authorized agents;
(ii) not incur, assume or guarantee any
indebtedness except for such indebtedness as may be incurred by
such Transferor in connection with the issuance of the Pledged
Notes or as otherwise permitted by the Note Insurer;
(iii) not commingle its funds with those of
any other entity;
(iv) act solely in its name in the conduct
of its business and shall conduct its business so as not to
mislead others as to the identity of the entity with which they
are concerned;
(v) 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;
(vi) not engage in any business or activity
other than in connection with or relating to the activities
allowed by its Certificate of Formation and/or Limited Liability
Company Agreement;
14
(vii) not form, or cause to be formed, any
subsidiaries;
(viii) comply with all restrictions and
covenants in, and shall not fail to comply with the corporate
formalities established in, the Certificate of Formation and/or
Limited Liability Company Agreement;
(ix) maintain separate bank accounts, if
any;
(x) not act as an agent of the Originator;
and
(xi) have as its managing member a limited
purpose corporation who maintains at all times one independent
director as required by the Certificate of Incorporation and/or
Bylaws.
SECTION 4.03 Transfer of Conveyed Assets. The Originator understands
that the Transferors intend to pledge the Conveyed Assets and their respective
rights under this Agreement to the Indenture Trustee, on behalf of the Trust, as
collateral security for its obligations on the Pledged Notes, and that the Trust
intends to pledge the Pledged Property to the Indenture Trustee, on behalf of
the Note Insurer and the Noteholders, pursuant to the Indenture. The Originator
agrees that any such assignee of the Transferors may exercise the rights of the
Transferors hereunder, without any consent or action by either Transferor, and
shall be entitled to all of the benefits of the Transferors hereunder to the
extent provided for in such assignment.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 Conditions to Transferors Obligations. The obligations of
the Transferors 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 the Originator 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;
(b) All information concerning the Initial Conveyed Assets provided to
the Transferors shall be true and correct as of the Cut-Off Date in all
material respects;
(c) The Originator shall have delivered to the Transferors a List of
Contracts with respect to its respective Contracts as of the Cut-Off Date
and shall have substantially performed all other obligations required to be
performed by the provisions of this Agreement;
(d) The Originator shall have recorded and filed, at its expense, any
financing statement with respect to the Initial Conveyed Assets to be
transferred from time to time to the related Transferor from the Originator
pursuant to this Agreement meeting the requirements of applicable state law
in such manner in such jurisdictions as are necessary
15
to perfect the transfer of the Initial Conveyed Assets from the Originator
to the related Transferor, and shall deliver a file-stamped copy of such
financing statements or other evidence of such filings to the related
Transferor;
(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 Transferors, and the Transferors
shall have received from the Originator copies of all documents (including,
without limitation, records of corporate proceedings) relevant to the
transactions herein contemplated as the Transferors may reasonably have
requested; and
(f) All respective conditions necessary to vest in the Originator 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 Contracts
and interests in Equipment shall have been satisfied.
SECTION 5.02 Conditions to the Originator's Obligations. The
obligations of the Originator to convey and contribute the Initial Conveyed
Assets to the Transferors on the Closing Date shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of the Transferors contained in
this Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date; and
(b) 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 Originator, and the Originator
shall have received from the Transferors copies of all documents (including,
without limitation, records of corporate proceedings) relevant to the
transactions herein contemplated as the Originator may reasonably have
requested.
ARTICLE VI
TERMINATION; LIABILITIES
SECTION 6.01 Termination. The respective obligations and
responsibilities of the Originator and the Transferors 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; (ii) the
distribution to the Transferors of all amounts required to be paid thereto
pursuant to this Agreement; (iii) the termination of the Indenture in accordance
with the terms thereof and (iv) the payment in full of all amounts owed to the
Note Insurer under the Transaction Documents; provided, however, that (A) the
indemnifications contained in Section 4.01(i) herein and (B) the covenant
contained in Section 7.13 hereof, shall survive the termination of this
Agreement.
16
SECTION 6.02 Effect of Termination. No termination or rejection or
failure to assume the executory obligations of this Agreement in the bankruptcy
of the Originator or the Transferors shall be deemed to impair or affect the
obligations pertaining to any executed contribution or executed obligations,
including, without limitation, pre-termination breaches of representations and
warranties by the Originator or the Transferors. Without limiting the foregoing,
prior to termination, neither the failure of the Transferors to deliver a
Transferors Certificate pursuant to Section 4.02, nor the failure of the
Originator to pay a Reacquisition Amount shall render such transfer or
obligation executory, nor shall the continued duties of the parties pursuant to
Article IV or Section 7.06 of this Agreement render an executed contribution
executory.
SECTION 6.03 Liabilities. By entering into this Agreement, the
Transferors agree to be liable, directly to each of the Issuer, the Indenture
Trustee, the Owner Trustee, the Note Insurer, the Collateral Agent, the
Depositor and each Noteholder, for the entire amount of any losses, claims,
damages or liabilities (other than those incurred by a Noteholder in the
capacity of an investor in the Notes or those which arise from any action or
omission by any Noteholder) of the Trust (to the extent Trust Assets remaining
after the Noteholders have been paid in full are insufficient to pay such
losses, claims, damages or liabilities).
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, the Indenture Trustee and the Note Insurer (or, in the event of a Note
Insurer Default, the Majority Holders), (y) satisfaction of the Rating Agency
Condition and (z) prior written notice to 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 the Originator, at the
following address: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇ Cynwyd, Pennsylvania 19004, Attention: General Counsel, telecopy (610)
668-1468, (b) in the case of the Indenture Trustee, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Global Trust Services,
17
telecopy (▇▇▇) ▇▇▇-▇▇▇▇; (c) in the case of Transferor I, c/o American Business
Leasing, Inc., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ Cynwyd, Pennsylvania 19004, Attention: General Counsel, telecopy (610)
668-1468, (d) in the case of Transferor II, c/o American Business Leasing, Inc.,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ Cynwyd,
Pennsylvania 19004, Attention: General Counsel, telecopy (▇▇▇) ▇▇▇-▇▇▇▇, (e) in
the case of the Collateral Agent, at the address set forth in the Servicing
Agreement, (f) in the case of the Depositor, as the address set forth in the
Receivables Pledge Agreement, and (g) in the case of the Note Insurer, the
Rating Agencies or the Owner Trustee at their respective addresses set forth in
Section 11.06 of the Indenture. Either party may alter the address to which
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 the
Originator, without the prior written consent of the Transferors, the Note
Insurer (or, in the event of a Note Insurer Default, the Majority Holders) and
the Indenture Trustee (acting upon the written direction of the Controlling
Party) and, except as provided in Section 4.03, this Agreement may not be
assigned by the Transferors without the prior written consent of the Originator,
the Note Insurer (or, in the event of a Note Insurer Default, the Majority
Holders) and the Indenture Trustee. Whether or not expressly stated, all
representations, warranties, covenants and agreements of the Originator and the
Transferors 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 Indenture Trustee for the benefit of the Noteholders and the
Note Insurer.
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 or the Note Insurer to carry into effect the
purposes of this Agreement or to better assure and confirm unto the Indenture
Trustee or the Note Insurer 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 either Transferor or the Originator,
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.
18
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, the Trust, the Note Insurer, the
Collateral Agent, the Depositor and the Noteholders are intended third party
beneficiaries of this Agreement.
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 the Transferors, the
Manager 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 (a) the of the latest
maturing Notes issued by the Trust and (b) all amounts owed to the Note Insurer
under the Transaction Documents, it will not institute against any of the
Transferors, the Manager or the Trust, or join any other Person in instituting
against any of the Transferors, the Manager 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.
[Remainder of Page Intentionally Left Blank]
19
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
AMERICAN BUSINESS LEASING, INC.,
as Originator
By:
------------------------------
Name:
Title:
ABFS FINANCE LLC 1999-A, as Transferor I
By: ABFS Special Purpose Management, Inc.,
as Managing Member
By:
------------------------------
Name:
Title:
ABFS RESIDUAL LLC 1999-A, as Transferor II
By: ABFS Special Purpose Management, Inc.,
as Managing Member
By:
------------------------------
Name:
Title:
[Signature Page for Receivables Sale Agreement]
SCHEDULE I
LIST OF INITIAL CONTRACTS
EXHIBIT A
FORM OF SUBSEQUENT
RECEIVABLES SALE AGREEMENT
This SUBSEQUENT RECEIVABLES SALE AGREEMENT, dated as of ____________
(the "Subsequent Funding Date"), by and among AMERICAN BUSINESS LEASING, INC., a
Pennsylvania corporation (the "Originator"), ABFS FINANCE LLC 1999-A, a Delaware
limited liability company ("Transferor I"), and ABFS RESIDUAL LLC 1999-A, a
Delaware limited liability company ("Transferor II", and, together with
Transferor I, the "Transferors").
WITNESSETH:
Reference is hereby made to that certain Receivables Sale Agreement,
dated as of June 1, 1999 (the "Receivables Sale Agreement"), by and among the
Originator and the Transferors. Pursuant to the Receivables Sale Agreement, the
Originator agreed to sell, convey and contribute, and the Transferors agreed to
accept, from time to time, Subsequent Conveyed Assets. The Receivables Sale
Agreement provides that each such sale, conveyance and contribution of
Subsequent Conveyed Assets be evidenced by the execution and delivery of a
Subsequent Receivables Sale Agreement such as this Subsequent Receivables Sale
Agreement (this "Agreement").
The "Subsequent Contracts" are those listed on the List of Subsequent
Contracts attached hereto.
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:
Section 1. Definitions. For the purposes of this Agreement,
capitalized terms used herein but not otherwise defined shall have the
respective meanings assigned to such terms in the Receivables Sale Agreement or
in Annex A to the Indenture.
Section 2. Direction; Acquisition; Capital Contribution. (a) Subject
to the terms and conditions of this Agreement, the Originator hereby agrees to
sell, convey and contribute, on the Subsequent Funding Date, all of the
Subsequent Conveyed Assets to the Transferors, as set forth in subsection (b)
below. Upon receipt of the consideration specified in subsection (c) below, the
Originator hereby releases all of its right, title and interest in, to and under
the Subsequent Conveyed Assets, such receipt being hereby acknowledged by the
execution of this Agreement by the Originator.
(b) The transfers occurring on the Subsequent Funding Date shall be
consummated such that those Conveyed Assets which are considered "financial
assets" within the meaning of the Statement of Financial Accounting Standards
No. 125 ("FAS 125") (such
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Conveyed Assets include, without limitation, the Contracts, other than any
Contract which is a "true" or "operating" lease) are acquired by Transferor I,
and such that those Conveyed Assets which are not considered "financial assets"
within the meaning of FAS 125 (such Conveyed Assets include, without limitation,
any Contract which is a "true" or "operating" lease, the ownership or security
interest of the Originator in each item of Equipment and any Residual Receipts)
are acquired by Transferor II.
(c) In consideration for (x) the receipt by the Originator of
$__________ from the Transferors and (y) other good and valuable consideration,
the Originator hereby conveys to the applicable Transferor all of its right,
title and interest in, to and under the Subsequent Conveyed Assets, whether now
existing or hereinafter arising, without recourse, except as may be set forth
herein. In connection with the transfers on Subsequent Funding Date, the
Originator hereby makes a capital contribution to the related Transferor in the
amount by which the fair market value of the Subsequent Conveyed Assets exceeds
the cash consideration received by the Originator in connection therewith.
(d) In connection with the sale, contribution and conveyance of the
Subsequent Conveyed Assets, the Originator shall, at its own expense, on or
prior to the Subsequent Funding Date (i) cause the Contract Management System to
be marked with a specified code (the "Contract Management Code") to show that
such Subsequent Conveyed Assets have been transferred and contributed to the
Transferors in accordance with this Agreement, subsequently pledged to the
Trust, as collateral security for the Pledged Notes in accordance with the
related Subsequent Receivables Pledge Agreement, and such security interest was
assigned to the Indenture Trustee, on behalf of the Noteholders and the Note
Insurer, pursuant to the related Assignment, and (ii) cause the Servicer to
prepare and hold on behalf of the Transferors and the Indenture Trustee the List
of Contracts as supplemented by the List of Subsequent Contracts on or prior to
the Subsequent Funding Date.
(e) Except for the obligations of the Originator pursuant to Section
3 hereof, Section 3.03 of the Receivables Sale Agreement and Article IV of the
Indenture with respect to any breach of a representation, warranty or covenant
made herein, the sale and contribution of the Subsequent Contracts will be
without recourse to the Originator.
Section 3. Representations and Warranties of the Originator. (a) With
respect to each Subsequent Contract, the Originator hereby remakes to the
Transferors the representations, warranties and covenants set forth in Section
2.02 of the Servicing Agreement.
(f) Upon the discovery by the Originator, either Transferor, the
Depositor, the Collateral Agent, the Indenture Trustee or the Note Insurer of a
breach of any of the representations or warranties set forth in Section 2.02 of
the Servicing Agreement that materially and adversely affects any Contract, the
related Equipment or the related Contract File, as the case may be, or if the
Servicer fails to cause delivery of evidence of filing or copies of any UCC
financing statement in accordance with the Servicing Agreement (any such event,
a "Warranty Event"), the party discovering such breach shall give prompt written
notice to the other parties hereto, the Indenture Trustee, the Trust and the
Note Insurer, the Depositor, the Collateral Agent and the Originator shall be
required to reacquire or replace such Contract in accordance with Article IV of
the Indenture.
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(g) The Originator understands that the Transferors intend to pledge
the Subsequent Conveyed Assets and their respective rights under this Agreement
to the Trust, as collateral security for its obligations on the Pledged Notes,
and that the Trust intends to pledge the Pledged Property to the Indenture
Trustee, on behalf of the Note Insurer and the Noteholders, pursuant to the
Indenture. The Originator agrees that any such assignee of the Transferors may
exercise the rights of the Transferors hereunder, without any consent or action
by either Transferor, and shall be entitled to all of the benefits of the
Transferors hereunder to the extent provided for in such assignment.
Section 4. Amendment. This Agreement may be amended from time to
time by the parties hereto only with (x) the prior written consent of the
Servicer, the Indenture Trustee and the Note Insurer (or, in the event of a Note
Insurer Default, the Majority Holders) and (y) satisfaction of the Rating Agency
Condition.
Section 5. GOVERNING LAW. THIS AGREEMENT AND ANY AMENDMENT HEREOF
PURSUANT TO SECTION 4 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 6. 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. 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, the Trust, the Depositor, the Collateral
Agent, the Note Insurer and the Noteholders are intended third party
beneficiaries of this Agreement.
Section 8. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 9. 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 10. Intent of Parties; Security Agreement. It is the
intention of the parties hereto that the transfer of the Subsequent Conveyed
Assets to be made pursuant to the terms hereof shall constitute a sale or
capital contribution of (x) the Contracts by the Originator to Transferor I, and
(y) the ownership interest or security interest of the Originator in each item
of Equipment and any Residual Receipts by the Originator to Transferor II, and,
in either case, 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 or capital contribution, it is the intention of the parties hereto that
this Agreement is deemed to be a security agreement and that the Originator
shall be deemed to have granted to the related Transferor as of the date hereof
a first priority perfected
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security interest in all of the Originator's right, title and interest in, to
and under the related Subsequent Conveyed Asset, and all income and proceeds
thereof.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
AMERICAN BUSINESS LEASING, INC.,
as Originator
By:
---------------------------------
Name:
Title:
ABFS FINANCE LLC 1999-A, as Transferor I
By: ABFS Special Purpose Management, Inc.,
as Managing Member
By:
---------------------------------
Name:
Title:
ABFS RESIDUAL LLC 1999-A, as Transferor II
By: ABFS Special Purpose Management, Inc.,
as Managing Member
By:
---------------------------------
Name:
Title:
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