Exhibit 4.1
TRANSFER AGREEMENT
AMONG
GREEN TREE LEASE FINANCE II, INC.
PURCHASER
AND
GREEN TREE VENDOR SERVICES CORPORATION
SELLER AND SERVICER
_______________
DATED AS OF DECEMBER 1, 1998
_______________
TABLE OF CONTENTS
Page
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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 Substitution 5
SECTION 2.3 Intention of the Parties 7
ARTICLE III REPRESENTATIONS AND WARRANTIES 7
SECTION 3.1 Representations and Warranties of Vendor Services 7
SECTION 3.2 Representations and Warranties of Lease Finance 9
ARTICLE IV COVENANTS OF VENDOR SERVICES 11
SECTION 4.1 Protection of Title of Lease Finance and the LLC 11
SECTION 4.2 Other Liens or Interests 13
SECTION 4.3 Costs and Expenses 13
SECTION 4.4 Indemnification 13
SECTION 4.5 Further Assurances 15
SECTION 4.6 Negative Covenant 15
ARTICLE V REPURCHASES 16
SECTION 5.1 Repurchase of Leases Upon Breach of Representation or Warranty 16
SECTION 5.2 Reassignment of Purchased Leases and Equipment 17
SECTION 5.3 Waivers 17
ARTICLE VI MISCELLANEOUS 17
SECTION 6.1 Reserved 17
SECTION 6.2 Merger or Consolidation of Vendor Services or Lease Finance 17
SECTION 6.3 Limitation on Liability of Vendor Services and Others 18
SECTION 6.4 Vendor Services May Own Notes 18
SECTION 6.5 Amendment 18
SECTION 6.6 Notices 19
SECTION 6.7 Merger and Integration 20
SECTION 6.8 Severability of Provisions 20
SECTION 6.9 GOVERNING LAW 20
SECTION 6.10 Counterparts 20
SECTION 6.11 Conveyance of the Leases to the Trust 20
SECTION 6.12 Nonpetition Covenant ▇▇
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▇▇▇▇▇▇▇▇ 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 23, 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.
"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.
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"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, WITH RESPECT TO THE EQUIPMENT, INCLUDING
WITHOUT LIMITATION ITS MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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SECTION 2.2 Substitution.
(a) Lease Finance may at any time request that Vendor Services
transfer to it one or more Substitute Leases and the Equipment subject thereto
to replace any Lease (for purposes of this Section 2,2, such Lease referred to
as a "Predecessor Lease") and the Equipment subject thereto if:
(i) the Predecessor Lease became (A) a Liquidated Lease, (B) a Prepaid
Lease, (C) a Warranty Lease or (D) an Adjusted Lease during the immediately
preceding Collection Period; and
(ii) the aggregate Principal Balance of the Liquidated Leases,
Adjusted Leases and Warranty Leases that are Predecessor Leases shall not
in the aggregate exceed 10% of the Initial Pool Principal Balance.
(b) Each transfer of Substitute Leases pursuant to this Section 2.2(a)
will be subject to the satisfaction of the following conditions precedent:
(i) Vendor Services has agreed to deliver such Substitute Leases and
the related Equipment to Lease Finance.
(ii) after giving effect to such substitutions and any adjustments
pursuant to Section 3.2, the aggregate Book Value of such Leases must be
not less than 90% of the Book Value of the Leases substituted or adjusted
since the Closing Date.
(iii) either the final payment on such Substitute Lease must be on or
prior to September 30, 2005 or, to the extent the final payment on such
Lease is due subsequent to September 30, 2005 only scheduled payments due
on or prior to such date may be included in the Principal Balance of such
Lease for the purpose of making any calculation under the Indenture.
(iv) the Lease Pool Principal Balance, after giving effect to such
adjustments and substitutions, must not be less than the Lease Pool
Principal Balance prior to such adjustment or substitution (without giving
effect to the proviso to the definition of "Principal Balance").
(v) the weighted average life of the Notes, after giving effect to
such adjustments and substitutions, must not differ materially from the
weighted average life of the Notes prior to such adjustments and
substitutions.
(vi) after giving effect to such adjustments and substitutions, the
aggregate Principal Balance of the Leases that were originated by Vendor
Services must not be less than the aggregate Principal Balance of the
Leases that were originated by Vendor Services prior to such adjustment or
substitution.
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(c) If Vendor Services has agreed to transfer Substitute Leases to
Lease Finance during any Collection Period, then by 11:00 a.m. on the following
Deposit Date, Vendor Services shall deliver to Lease Finance, the Servicer and
the Trustee:
(i) a supplement to Exhibit A hereto setting forth the information
shown thereon for each such Substitute Lease,
(ii) an Officer's Certificate (A) certifying that each such Substitute
Lease is an Eligible Lease, (B) specifying each Predecessor Lease for which
a substitution has been made and the Principal Balance and the Book Value
under each such Predecessor Lease and the Principal Balance and the Book
Value under each Substitute Lease being transferred thereby and (C) that
all conditions precedent to such addition or substitution have been
satisfied, and
(iii) such additional information concerning such Substitute Leases
or Predecessor Leases as may be needed for the Servicer to prepare its
Servicer's Certificates pursuant to Section 3.9 and to otherwise carry out
its duties as servicer hereunder.
(d) Subject to the provisions of Section 9.3 of the Contribution and
Servicing Agreement, the delivery of any Officer's Certificate and supplement to
Exhibit A pursuant to Section 2.2(c) shall be conclusive evidence, without
further act or deed, that during the immediately preceding Collection Period and
as of the related Cut-Off Date:
(i) Vendor Services assigned to Lease Finance all of Vendor Services'
right, title and interest in and to the Substitute Leases identified in
such supplement and the related rights described in Section 2.1,
(ii) Vendor Services transferred to Lease Finance all of Vendor
Services' right, title and interest in and to the Equipment subject to such
Substitute Leases and the related rights described in Section 2.1, and
(iii) Lease Finance assigned and transferred to Vendor Services,
without representation or warranty, all of the Contributor's right, title
and interest in and to the Predecessor Leases identified in such Officer's
Certificate and the Equipment subject thereto.
Vendor Services shall promptly deliver to the Servicer the original executed
copy of each Substitute Lease assigned to Lease Finance pursuant to Section
2.2(a) and the related Lease File and Lease Finance shall promptly request the
Servicer to deliver to Vendor Services the original executed copy of each
Predecessor Lease for which substitution has been made pursuant to Section
2.2(a) hereof and the related Lease File.
(e) Upon any substitution of Leases in accordance with the provisions
of this Section 2.2, Vendor Services' obligations hereunder with respect to the
Predecessor Lease shall
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cease but Vendor Services shall thereafter have the same obligations with
respect to the Substitute Lease substituted as it has with respect to all other
Leases subject to the terms hereof.
SECTION 2.3 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 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.
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(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 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.
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(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, ▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇
▇▇▇▇▇, and the offices where Vendor Services keeps its records concerning the
Leases and related documents are at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
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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 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.
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(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.
(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.
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(h) Chief Executive Offices. The chief executive office of Lease
Finance is located at 1100 Landmark Towers, ▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the offices where Lease Finance keeps its records
concerning the Leases and related documents are at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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 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 (S) 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
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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 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.
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(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.
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;
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(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 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
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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 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
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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.
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.
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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 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
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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 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
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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), 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, ▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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, ▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, or such
other address as Lease Finance shall be designated by a written notice delivered
to the other parties and to the LLC and the Trustee.
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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.
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
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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 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President & Secretary
GREEN TREE VENDOR SERVICES
CORPORATION,
In its individual capacity and as Servicer
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President & Secretary
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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.
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,
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subdivision or instrumentality thereof (except for Leases representing no more
than 1% 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 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,
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(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.
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).
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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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