EXHIBIT 10.66
PURCHASE AGREEMENT
BETWEEN
ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2002 LLC
as Buyer
AND
ALLIANCE LAUNDRY SYSTEMS LLC,
as Seller
DATED AS OF NOVEMBER 26, 2002
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................1
SECTION 1.1. Definitions.............................................................1
ARTICLE II PURCHASE AND SALE OF CONVEYED ASSETS........................................2
SECTION 2.1. Initial Transfer of Conveyed Assets.....................................2
SECTION 2.2. Subsequent Transfers of Conveyed Assets.................................2
SECTION 2.3. Timing of Conveyances...................................................3
SECTION 2.4. Consideration for, and Characterization of, Purchases...................3
SECTION 2.5. No Recourse.............................................................4
SECTION 2.6. No Assumption of Obligations Relating to Conveyed Assets,
Related Assets or Contracts.............................................4
SECTION 2.7. True Sales and True Contributions.......................................4
SECTION 2.8. Addition of Sellers.....................................................5
SECTION 2.9. [Reserved]..............................................................5
SECTION 2.10. Calculation of Purchase Price...........................................5
SECTION 2.11. Definitions and Calculations Related to Purchase Price
Percentage..............................................................6
SECTION 2.12. Purchase Mechanics......................................................8
SECTION 2.13. [Reserved]..............................................................9
SECTION 2.14. Application of Collections and Other Funds..............................9
SECTION 2.15. Servicing of Conveyed Assets and Related Assets........................10
SECTION 2.16. Payments and Computations, Etc.........................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES.............................................10
SECTION 3.1. Representations and Warranties of the Sellers..........................10
SECTION 3.2. Representations and Warranties of Buyer................................16
ARTICLE IV CONDITIONS.................................................................18
SECTION 4.1. Conditions to Obligation of Buyer......................................18
SECTION 4.2. Conditions To Obligation of Seller.....................................19
SECTION 4.3. Effect of Transfer.....................................................20
ARTICLE V ADDITIONAL AGREEMENTS......................................................20
SECTION 5.1. Affirmative Covenants..................................................20
SECTION 5.2. Reporting and Noticing Requirements....................................24
SECTION 5.3. Negative Covenants.....................................................25
ARTICLE VI ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE SPECIFIED ASSETS.......27
SECTION 6.1. Rights of Buyer........................................................27
SECTION 6.2. Responsibilities of the Sellers........................................28
SECTION 6.3. Further Action Evidencing Purchases....................................28
SECTION 6.4. Collection of Conveyed Assets; Rights of Buyer and Its Assignees.......29
-i-
ARTICLE VII TERMINATION................................................................30
SECTION 7.1. Termination by the Sellers.............................................30
SECTION 7.2. Automatic Termination..................................................30
ARTICLE VIII INDEMNIFICATION............................................................30
SECTION 8.1. Indemnities by the Sellers.............................................30
ARTICLE IX MISCELLANEOUS PROVISIONS...................................................32
SECTION 9.1. Amendments; Waivers, Etc...............................................32
SECTION 9.2. Notices................................................................33
SECTION 9.3. Cumulative Remedies....................................................33
SECTION 9.4. Binding Effect; Assignability; Survival of Provisions..................33
SECTION 9.5. Governing Law..........................................................33
SECTION 9.6. Costs, Expenses and Taxes..............................................33
SECTION 9.7. Submission to Jurisdiction.............................................34
SECTION 9.8. WAIVER OF JURY TRIAL...................................................34
SECTION 9.9. Integration............................................................34
SECTION 9.10. Counterparts...........................................................35
SECTION 9.11. Acknowledgment and Consent.............................................35
SECTION 9.12. No Partnership or Joint Venture........................................35
SECTION 9.13. No Proceedings.........................................................35
SECTION 9.14. Severability of Provisions.............................................35
SECTION 9.15. Further Assurances.....................................................36
SECTION 9.16. Survival...............................................................36
EXHIBITS
Exhibit A-1 - Form of Initial PA Assignment
Exhibit A-2 - Form of Subsequent PA Assignment
Exhibit B - Form of PA Assignment
SCHEDULES
Schedule Number Description
--------------- -----------
3.1(k) Perfection Certificate - Seller
3.1(p) Listing of Lockbox and Bank Accounts
APPENDICES
Appendix A Definitions
-ii-
Appendix B Notice Addresses and Procedures
-iii-
PURCHASE AGREEMENT, dated as of November 26, 2002, between ALLIANCE
LAUNDRY EQUIPMENT RECEIVABLES 2002 LLC, a Delaware limited liability company
(together with its permitted successors and assigns, the "Buyer"), and ALLIANCE
LAUNDRY SYSTEMS LLC, a Delaware limited liability company individually, and as
Servicer (in its individual capacity, "ALS", or "Seller" and collectively with
all Subsidiaries of ALS that become a Seller, the "Sellers").
WHEREAS, Buyer desires to purchase from Seller, from time to time,
Equipment Loans, Receivables and all Related Security;
WHEREAS, Seller is willing to sell to Buyer from time to time such
Equipment Loans, Receivables and Related Security;
WHEREAS, Buyer will sell or otherwise transfer such Equipment Loans,
Receivables and Related Security, to Alliance Laundry Equipment Receivables
Trust 2002-A (together with its permitted successors and assigns, the "Issuer");
WHEREAS, the Issuer will issue notes and certificates of beneficial
interest (any such issued interests or securities collectively the "Securities")
to fund its acquisition of such Equipment Loans, Receivables and Related
Security; and
WHEREAS, the Issuer will pledge its rights in such Receivables,
Equipment Loans and Related Security, including its rights under this Agreement,
to the Indenture Trustee under the Indenture for the benefit of the
Securityholders and the Insurer.
NOW, THEREFORE, in consideration of the foregoing, the other good and
valuable consideration and the mutual terms and covenants herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used but not otherwise defined
in this Agreement shall have the respective meanings assigned them in Part A of
Appendix A hereto, as it may be amended, supplemented or modified from time to
time. All references herein to "the Agreement" or "this Agreement" are to this
Purchase Agreement as it may be amended, supplemented or modified from time to
time, the exhibits hereto and the capitalized terms used herein which are
defined in such Appendix A, and all references herein to Articles, Sections and
subsections are to Articles, Sections or subsections of this Agreement unless
otherwise specified. The rules of construction set forth in Part B of such
Appendix A shall be applicable to this Agreement.
ARTICLE II
PURCHASE AND SALE OF CONVEYED ASSETS
SECTION 2.1. Initial Transfer of Conveyed Assets. On the terms and subject
to the conditions set forth in this Agreement (including the conditions
precedent set forth in Article IV), each Seller hereby transfers to the Buyer,
effective as of the Closing Date, all of Seller's right, title and interest in,
to and under:
(a) all Receivables of the Seller, as listed on the Funding Date Data
Pool Report delivered on the Closing Date, which report shall contain data as of
the Initial Cutoff Date;
(b) each Equipment Loan that is listed as one of the Initial
Transferred Assets on the Funding Date Data Pool Report delivered on the Closing
Date, which report shall contain data as of the Initial Cutoff Date;
(c) all Related Security with respect to all Conveyed Assets described
in Sections 2.1(a) and (b) above;
(d) the Lockboxes, the Bank Accounts, all documents, instruments and
agreements relating to the Lockboxes and the Bank Accounts, and all amounts from
time to time on deposit in the Lockboxes or the Bank Accounts;
(e) all Records relating to any of the foregoing; and
(f) all Proceeds of the foregoing, including Collections.
Such transfer shall be characterized as set forth in Section 2.4 hereof. All of
the items listed in clauses (a), (b), (c), (d), (e) and (f) of this Section 2.1
are collectively referred to as the "Initial Transferred Assets".
SECTION 2.2. Subsequent Transfers of Conveyed Assets. On the terms and
subject to the conditions set forth in this Agreement (including the conditions
precedent set forth in Article IV), each Seller agrees to transfer to Buyer
(which transfer shall be characterized as set forth in Section 2.4 hereof), and
Buyer agrees to accept from such Seller, at the times set forth in Section 2.3,
all of such Seller's right, title and interest in, to and under:
(a) all unpaid Receivables existing as of the related Receivables
Cutoff Date and originated since the immediately preceding Receivables Cutoff
Date which Receivables shall be listed on a Funding Date Data Pool Report
delivered two Business Days prior to the related Funding Date, which report
shall contain data as of the related Receivables Cutoff Date;
(b) each Equipment Loan that is listed on a Funding Date Data Pool
Report delivered two Business Days prior to the related Funding Date, which
report shall contain data as of the Loan Cutoff Date;
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(c) all Related Security with respect to all Conveyed Assets described
in Sections 2.2(a) and (b) above;
(d) all Records relating to any of the foregoing; and
(e) all Proceeds of the foregoing, including Collections.
As used herein, (i) "Purchased Receivables" means the items listed above in
Sections 2.1(a) and 2.2(a), (ii) "Purchased Equipment Loans" means the items
listed above in Sections 2.1(b) and 2.2(b), (iii) "Conveyed Assets" means the
Purchased Receivables and Purchased Equipment Loans collectively, (iv) "Related
Assets" means the items listed above in Sections 2.1(c), (d), (e) and (f) and
2.2(c), (d) and (e) collectively, and (v) "Specified Assets" means the Conveyed
Assets and the Related Assets collectively.
SECTION 2.3. Timing of Conveyances. Subject to the satisfaction of the
terms and conditions of Section 4.1:
(a) Initial Closing Date Conveyances. The Specified Assets described
in Section 2.1 shall be conveyed by the Seller to the Buyer on the Closing Date
pursuant to a written assignment substantially in the form of Exhibit A-1 (the
"Initial PA Assignment").
(b) Regular Purchases. From the Closing Date until the earlier to
occur of (x) the date on which a Rapid Amortization Event or Event of Default
initially occurs and (y) the closing of Seller's business on the Purchase
Termination Date, any Conveyed Assets and Related Assets shall be transferred by
the Seller to the Buyer, pursuant to a written assignment substantially in the
form of Exhibit A-2 (each a, "Subsequent PA Assignment" and, together with the
Initial PA Assignment the "PA Assignments"), on the Purchase Date set forth in a
Funding Date Data Pool Report delivered by a Seller to the Buyer that lists such
Conveyed Assets; provided, however, that such purchases and sales of Receivables
and of Equipment Loans shall occur not more frequently than once per each
calendar week for each type of asset (it being understood that separate
purchases of Receivables and Equipment Loans may occur on different days).
SECTION 2.4. Consideration for, and Characterization of, Purchases. (a) On
the terms and subject to the conditions set forth in this Agreement, Buyer
agrees to make Purchase Price payments to, and accept capital contributions
from, the Sellers in accordance with the provisions of Section 2.12 hereof.
(b) The transfers contemplated in Section 2.1 and Section 2.2 of
Eligible Receivables and Eligible Equipment Loans shall be treated as (x) sales
to the extent of cash received by Seller from Buyer on the related Purchase Date
and (y) if such Seller is ALS, to the extent the Total Consideration is in
excess of the amount set forth in clause (x), a contribution to the capital of
the Buyer in the amount of such excess. The transfers of Conveyed Assets
contemplated in Sections 2.1 and 2.2 that are not Eligible Receivables or
Eligible Equipment Loans shall be treated as a capital contribution to the
Buyer.
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SECTION 2.5. No Recourse. Except as specifically provided in this
Agreement, the sale and purchase of Purchased Assets under this Agreement shall
be without recourse to the Sellers; it being understood that each Seller shall
be liable to Buyer for all representations, warranties, covenants and
indemnities made by such Seller pursuant to the terms of this Agreement, all of
which obligations are limited so as not to constitute recourse to such Seller
for the credit risk of the Obligors under any Conveyed Assets.
SECTION 2.6. No Assumption of Obligations Relating to Conveyed Assets,
Related Assets or Contracts. None of the Buyer, the Servicer, the Issuer, the
Indenture Trustee or any Third Party Financier shall have any obligation or
liability to any Obligor or other customer or client of Seller, including any
obligation to perform any of the obligations of any Seller under any Purchased
Asset. No such obligation or liability is intended to be assumed by the Buyer,
the Servicer, the Issuer, the Indenture Trustee or any Third Party Financier,
and any assumption is hereby expressly disclaimed.
SECTION 2.7. True Sales and True Contributions. The Sellers and Buyer
intend the transfers of Specified Assets hereunder to be absolute conveyances by
the Sellers to Buyer that are absolute and irrevocable and that provide Buyer
with the full benefits of ownership of the Specified Assets, and (other than for
tax purposes and the limited accounting purposes described in the following
sentence) none of the Sellers nor Buyer intend the transactions contemplated
hereunder to be, or for any purpose to be characterized as, loans from Buyer to
any Seller. Without limiting or otherwise affecting the preceding sentence, and
solely for accounting purposes, the Seller will treat the sale or contribution
of Receivables owing by certain foreign obligors as loans until the Seller
recognizes the revenue associated with those Receivables in accordance with GAAP
consistently applied; and for tax purposes, the transactions contemplated by the
Basic Documents will be treated as a financing by the Seller. However, in the
event that, notwithstanding the intent of the parties, any Specified Assets are
determined to be property of any Seller's estate, then (i) this Agreement also
shall be deemed to be a security agreement within the meaning of the UCC, and
(ii) the conveyance by such Seller provided for in this Agreement shall be
deemed to be a grant by such Seller to Buyer of, all of such Seller's right,
title and interest in, to and under the Specified Assets, whether now or
hereafter existing or created, to secure (1) the rights of Buyer hereunder, (2)
a loan by Buyer to such Seller in the amount of the Total Consideration and (3)
without limiting the foregoing, the payment and performance of such Seller's
obligations (whether monetary or otherwise) hereunder. Each Seller and Buyer
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Specified Assets, such security interest would be deemed to be a
perfected security interest of first priority (subject to Permitted Adverse
Claims) in favor of Buyer under applicable law and shall be maintained as such
throughout the term of this Agreement. The parties agree that the foregoing
sales of Specified Assets constitute sales of "accounts", "promissory notes" and
"tangible chattel paper" as described in the UCC, and that this Agreement shall
create a security interest in favor of the Buyer as the purchaser of the
Specified Assets. Notwithstanding such intent, if the arrangements with respect
to the Specified Assets hereunder are deemed for any purpose to constitute a
loan and not a purchase and sale or contribution of such Specified Assets, it is
the intention of the parties hereto that this Agreement shall still constitute a
security agreement under applicable law, and each Seller hereby grants to the
Buyer a first priority
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perfected security interest in all of such Seller's right, title and interest,
whether now owned or hereafter acquired, in, to and under the Specified Assets,
and all money, accounts, general intangibles, payment intangibles, chattel
paper, instruments, documents, goods, supporting obligations, investment
property, deposit accounts, securities accounts, certificates of deposit,
letters of credit, letter-of-credit rights, and advices of credit consisting of,
arising from or related to the Specified Assets, and all proceeds thereof, to
secure its obligations hereunder, including its obligation to remit to the
Seller, or its successors and assigns, all Collections of the Specified Assets
and other proceeds of the Specified Assets.
SECTION 2.8. Addition of Sellers. Upon (i) the satisfaction of the Rating
Agency Condition, (ii) the delivery to Issuer (as assignee of Buyer) of a
performance guaranty by ALS, in form and substance acceptable to the Control
Party, guaranteeing the performance obligations of such Subsidiary of the Seller
and (iii) with the prior written consent of the Control Party and the
Noteholders representing 66 2/3% of the aggregate Outstanding Amount of the
Notes in each instance, any Subsidiary of Seller may become a Seller hereunder
and thereafter may sell to Buyer its Receivables, Equipment Loans, Related
Security, Lockboxes, Bank Accounts and Proceeds. Each Subsidiary of a Seller
that is proposed to be added as a Seller shall give to each of the Buyer and all
Third Party Financiers not less than ten (10) Business Days' prior written
notice of the effective date of the addition of the Subsidiary as a Seller. Once
the notice has been given, any addition of a Subsidiary of Seller as a Seller
pursuant to this section shall become effective on the first Business Day
following the expiration of such ten (10) Business Day period (or such later
date as may be specified in the notice) on which the Subsidiary and the parties
hereto shall have executed and delivered the agreements, instruments and other
documents and the amendments or other modifications to the Transaction Documents
(including financing statements, lien searches and opinions), in form and
substance reasonably satisfactory to each of the Buyer and each Third Party
Financiers, that any of the foregoing reasonably determines are necessary or
appropriate to effect the addition.
SECTION 2.9. [Reserved]
SECTION 2.10. Calculation of Purchase Price. On each day when Specified
Assets are transferred to Buyer from a Seller pursuant to Section 2.2, the
"Purchase Price" to be paid by the Buyer to such Seller on such day for the
applicable Specified Assets that are Eligible Receivables and/or Eligible
Equipment Loans and that are to be sold by such Seller on such day shall be
determined in accordance with the following formula:
PP = AUB x PPP
where:
PP = the aggregate Purchase Price for
the applicable Specified Assets to be
purchased from such Seller on such day;
AUB = the "Aggregate Unpaid Balance" of the
applicable Conveyed Assets that are to be
transferred from such Seller on the Purchase
Date set forth in the related Funding Date
Data Report. For purposes of this
calculation, "Aggregate Unpaid Balance"
shall
5
mean (i)for purposes of calculating the
Purchase Price to be paid to such Seller on
the Closing Date, the sum of the Unpaid
Balance of each applicable Conveyed Asset
generated by such Seller, calculated as of
the close of business on the third Business
Day prior to the Closing Date, and (ii) for
purposes of calculating the Purchase Price
on each subsequent Purchase Date, the sum of
the Unpaid Balance of each applicable
Conveyed Asset to be purchased from such
Seller on such day, calculated as of the
close of business on the third Business Day
prior to such Purchase Date; and
PPP = the Purchase Price Percentage applicable
to the applicable Conveyed Assets to be
purchased from such Seller on such day, as
determined pursuant to Section 2.11 (which
Purchase Price Percentage will differ
according to the type of Conveyed Assets
sold).
SECTION 2.11. Definitions and Calculations Related to Purchase Price
Percentage.
(a) (i) "Purchase Price Percentage" for any Receivables that are
Eligible Receivables and are to be sold by a Seller on any day during a
Settlement Period shall mean the percentage determined in accordance with the
following formula:
PPP = 100% - (LD + PDRR)
where:
PPP = the Purchase Price Percentage in effect
during such Settlement Period,
LD = the Loss Discount (expressed as a
percentage) in effect during such Settlement
Period, as determined pursuant to subsection
(b) below, and
PDRR = the Purchase Discount Reserve Ratio
(expressed as a percentage) in effect during
such Settlement Period, as determined on
such day pursuant to subsection (c) below,
and
(ii) "Purchase Price Percentage" for any Equipment Loans that are
Eligible Loans and are to be sold by a Seller on any day during a
Settlement Period shall mean one-hundred percent (100%).
The Purchase Price Percentage, the Loss Discount and the Purchase
Discount Reserve Ratio shall be recomputed by the Servicer on or prior to each
Settlement Date as of the then most recent Cutoff Date, and shall become
effective immediately after it becomes available and remain in effect until the
next succeeding Settlement Date; provided, however, that if such
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data is not delivered on or prior to a Settlement Date, the Purchase Price
Percentage, the Loss Discount and Purchase Discount Reserve Ratio which are then
applicable shall remain effective until such revised information is delivered.
(b) (i) "Loss Discount" in effect during such Settlement Period means
a percentage equal to the Default Ratio (expressed as a percentage) for the
Calculation Period ending immediately prior to the commencement of such
Settlement Period.
(ii) "Default Ratio" shall have the meaning set forth in Part I of
Appendix A to the Pooling and Servicing Agreement.
(c) "Purchase Discount Reserve Ratio" for the Receivables to be sold
on any day during a Settlement Period shall mean a percentage determined in
accordance with the following formula:
PDRR = DSOR/360 x DR
where:
PDRR = the Purchase Discount Reserve Ratio in
effect during such Settlement Period,
DSOR = the Days Sales Outstanding-Receivables
during the Calculation Period ending
immediately prior to the commencement of
such Settlement Period, and
DR = the Discount Rate (expressed as a
percentage) in effect during such Settlement
Period as determined pursuant to subsection
(d) below.
(d) "Discount Rate" for the Conveyed Assets to be sold or contributed
on any day during a Settlement Period shall mean a percentage calculated to
provide Buyer with a reasonable return on its investment in the Conveyed Assets
after taking account of (i) the time value of money based upon the anticipated
dates of collection of the Conveyed Assets and the cost to Buyer of financing
its investment in the Conveyed Assets during such period and (ii) the costs of
sub-servicing performed by the applicable Seller. A Seller and Buyer may agree
from time to time to change the Discount Rate based on changes in the items
affecting the calculation thereof; provided that any change to the Discount Rate
shall take effect as of the commencement of a Settlement Period, shall apply
only prospectively and shall not affect the Purchase Price payment in respect of
Purchases which occurred during any Settlement Period ending prior to the
Settlement Period during which such Seller and Buyer agree to make such change;
and provided, further, that any adjusted Purchase Price calculation resulting
from such adjustment shall be determined by the Seller and the Buyer to result
in a Purchase Price that represents the then fair market value of such Conveyed
Assets.
(e) The Discount Rate shall initially be 5%.
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SECTION 2.12. Purchase Mechanics. (a) (i) To the extent Buyer has
sufficient funds or Purchase Price Credits pursuant to clauses (A) and (B)
below, then the Buyer shall purchase from the Seller on the first Funding Date
and on each Purchase Date the Conveyed Assets that are Eligible Receivables and
Eligible Equipment Loans, pursuant to Section 2.2 on the terms and subject to
the conditions of this Agreement, and Buyer shall pay to such Seller as the
Purchase Price for the applicable Conveyed Assets purchased on such day as
follows:
(A) make a cash payment to such Seller of such Purchase Price, to
the extent that Buyer has cash available to make such payment pursuant
to Section 2.14;
(B) if the Buyer does not have cash available to pay the full
Purchase Price, automatically decrease the aggregate amount of then
outstanding Purchase Price Credits with respect to such Seller, but
not below zero;
(ii) To the extent the Buyer has insufficient funds or Purchase Price
Credits pursuant to the foregoing clauses (A) and (B) above, then the
Seller shall be deemed to have made a capital contribution to the Buyer in
the amount of such deficiency (that is, in an amount equal to the
difference between (x) an amount equal to the aggregate Purchase Price that
would be payable for all Eligible Receivables or Eligible Equipment Loans,
as applicable, transferred on the applicable Purchase Date, had they all
been sold for cash and Purchase Price Credits (such amount, the "Total
Consideration") less (y) the Purchase Price actually paid (whether in
the form of cash or Purchase Price Credits) for all Eligible Receivables or
Eligible Equipment Loans, as applicable, sold on the applicable Purchase
Date) on the first Funding Date or on any such Purchase Date with respect
to the remainder of the Conveyed Assets that are Eligible Receivables and
Eligible Equipment Loans, pursuant to Section 2.2 on the terms and subject
to the conditions of this Agreement.
(b) The Seller shall be deemed to have made a capital contribution to
the Buyer on the First Funding Date and on each Purchase Date of the Conveyed
Assets that are not Eligible Receivables or Eligible Equipment Loans.
(c) If on any Business Day, either of the following conditions shall
apply:
(A) the Unpaid Balance of a Purchased Receivable is (i) reduced
as a result of any defective goods or services or a cash discount,
(ii) reduced or canceled as a result of a setoff in respect of any
claim by any Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction and whether such claim
relates to a Seller or any Affiliate thereof), or (iii) otherwise
reduced as a result of any Dilution; or
(B) any of the Buyer, or the Control Party reasonably determines
that any Purchased Receivable that was identified on the related
Funding Date Data Pool Report as an Eligible Receivable or the
associated Related Asset failed to comply with the representations set
forth in Section 3.1 on the Purchase Date on
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which such Purchased Receivable was transferred by the Seller to the
Buyer (if a Purchased Receivable is remedied under this clause (B),
then the remedy under clause (A) shall not apply),
then, in either such instance, the Buyer shall be entitled to a reduction in the
then unpaid Purchase Price otherwise payable to the applicable Seller (such
reduction in the unpaid Purchase Price, a "Purchase Price Credit") in an amount
equal to (i) in the case of clause (A) above, the full amount of such reduction,
setoff or cancellation in the Unpaid Balance of such Purchased Receivable, and
(ii) in the case of clause (B) above, the Unpaid Balance of such non-conforming
Purchased Receivable on the date such Purchase Price Credit is determined (the
applicable amount set forth in clause (i) or (ii), the "Receivable Repurchase
Amount"). The applicable Seller may, at its option, at any time prior to the
Conversion Date elect to remedy the events described in clause (A) or (B) above
by remitting to the Issuer (as assignee of the Buyer) cash in an amount equal to
the unpaid Receivable Purchase Amount.
Notwithstanding the foregoing, the applicable Seller shall remit to
the Issuer (as assignee of the Buyer): (x) on the Conversion Date, cash in an
amount equal to the sum of all then unpaid Receivable Repurchase Amounts
calculated as of the Conversion Date and (y) on each Business Day after the
Conversion Date, cash in an amount equal to all Unpaid Receivable Repurchase
Amounts that result from events or conditions that occur or exist (or are
discovered) subsequent to the Conversion Date.
(d) If on any Business Day, any of the Buyer, the Issuer or the
Control Party reasonably determines that any Purchased Equipment Loan that was
identified as an Eligible Equipment Loan on the related Funding Date Data Pool
Report or the associated Related Assets failed to comply with the
representations set forth in Section 3.1 on the Purchase Date on which such
Purchased Equipment Loan was transferred by such Seller to Buyer, then, the
Seller shall, at its election, either repurchase the affected Purchased
Equipment Loans for the Purchase Price equal to the Warranty Payment for such
Loan or provide the Buyer (or the Issuer as its assignee) with a Substitute
Loan, at the times and in accordance with the procedures set forth in Section
2.12 or 2.13 as applicable of the Pooling and Servicing Agreement.
SECTION 2.13. [Reserved]
SECTION 2.14. Application of Collections and Other Funds. If, on any day,
Buyer receives payments from the Trust as permitted by the Indenture, Buyer
shall apply the funds as follows:
(a) first, to pay its existing expenses and to set aside funds for the
payment of expenses that are then accrued (in each case to the extent such
expenses are permitted to exist under the applicable Third Party Documents);
(b) second, to pay the unpaid Purchase Price pursuant to Section 2.12
for the applicable Conveyed Assets and Related Assets which were purchased by
Buyer from the Sellers on such day (or if such day is not a Business Day, on the
next Business Day); and
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(c) third, if Buyer shall elect, to declare and pay distributions to
ALS, in its capacity as the sole member of Buyer, to the extent permitted by
law.
SECTION 2.15. Servicing of Conveyed Assets and Related Assets. Consistent
with Buyer's ownership of the Specified Assets, as between the parties to this
Agreement, Buyer shall have the sole right to service, administer and collect
the Specified Assets and to assign and delegate such right to others.
SECTION 2.16. Payments and Computations, Etc. (a) All amounts to be paid by
a Seller to Buyer hereunder shall be paid in accordance with the terms hereof no
later than 11:30 a.m., New York City time, on the day when due in Dollars in
immediately available funds to an account that Buyer shall from time to time
specify in writing. Payments received by Buyer after such time shall be deemed
to have been received on the next Business Day. In the event that any payment
becomes due on a day that is not a Business Day, then the payment shall be made
on the next Business Day. Each Seller shall, to the extent permitted by law, pay
to Buyer, on demand, interest on all amounts not paid when due hereunder at 2%
per annum above the Base Rate plus the Applicable Margin (as each such term is
defined in the Pooling and Servicing Agreement) on the date the payment was due;
provided, however, that the interest rate shall not at any time exceed the
maximum rate permitted by applicable law. All computations of interest payable
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first but excluding the last day) elapsed.
(b) All amounts to be paid by Buyer to a Seller hereunder shall be
paid no later than 3:00 p.m., New York City time, on the day when due in Dollars
in immediately available funds to an account that Seller shall from time to time
specify in writing. Payments received by such Seller after such time shall be
deemed to have been received on the next Business Day. In the event that any
payment becomes due on a day that is not a Business Day, then such payment shall
be made on the next Business Day.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Sellers. Each Seller
severally makes the following representations and warranties for the benefit of
the Buyer, the Issuer and the Third Party Financiers as to each Seller and as to
the Specified Assets on which Buyer relies in accepting such Specified Assets.
Unless otherwise provided below, such representations and warranties speak as of
the Closing Date and each Purchase Date and Funding Date for each Seller for the
Specified Assets to be acquired on such date, and shall survive the sale,
transfer and assignment of such Specified Assets to Buyer and the subsequent
assignment and transfer thereof to the Issuer:
(a) Organization and Good Standing. Seller has been duly organized and
is validly existing as a limited liability company 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
10
properties are presently owned and such business is presently conducted, and had
at all relevant times, and now has, power, authority and legal right to acquire
and own the Specified Assets;
(b) Due Qualification. Seller is duly qualified to do business as a
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 or shall require such
qualification;
(c) Power and Authority. Seller has the power and authority to execute
and deliver this Agreement and to carry out its terms; Seller has full power and
authority to sell and assign the Specified Assets to Buyer, has duly authorized
such sale and assignment to Buyer by all necessary limited liability company
action; and the execution, delivery and performance of this Agreement have been
duly authorized by Seller by all necessary limited liability company action;
(d) Valid Sale; Binding Obligation. This Agreement, together with the
delivery of a Funding Date Data Pool Report, when duly executed and delivered,
shall constitute a valid sale, transfer and assignment of the Specified Assets
specified therein, enforceable against creditors of Seller; and this Agreement,
together with the applicable Funding Date Data Pool Report, when duly executed
and delivered, shall constitute a legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law;
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and any Funding Date Data Pool Report, and the fulfillment of the
terms of this Agreement and any Funding Date Data Pool Report, 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 limited liability company agreement of Seller, or any indenture, agreement,
mortgage, deed of trust or other instrument to which Seller 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 any
other Transaction Document), or violate any law (including without limitation
any bulk sales, tax or similar laws) or, to Seller's knowledge, any order, rule
or regulation applicable to Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over Seller or any of its properties;
(f) No Proceedings. There are no proceedings or, to Seller's
knowledge, investigations pending or, to Seller's knowledge, threatened, before
any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over Seller or its properties
(i) asserting the invalidity of this Agreement or any other Transaction
Document, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any other Transaction Document, or (iii)
seeking any determination or ruling
11
that might materially and adversely affect the performance by Seller of its
obligations under, or the validity or enforceability of, this Agreement or any
other Transaction Document;
(g) No Consent. No permit, consent, approval or authorization of, or
declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance by Seller of this
Agreement or any other Transaction Document or the consummation by Seller of the
transactions contemplated hereby or thereby except as expressly contemplated
herein or therein;
(h) Due Execution and Delivery. This Agreement and each of the other
Transaction Documents to which it is a party have been duly executed and
delivered on behalf of Seller;
(i) Ability to Perform. No event has occurred which materially and
adversely affects Seller's operations or its ability to perform its obligations
under this Agreement or any other Transaction Document to which it is a party;
(j) Insolvency. Seller (i) is not insolvent and will not be rendered
insolvent by the transactions contemplated by this Agreement or any other
Transaction Document and has an adequate amount of capital to conduct its
business in the ordinary course and to carry out its obligations hereunder, (ii)
shall not intend to incur or believe that it shall incur debts that would be
beyond its ability to pay as such debts mature, (iii) shall not make such
transfer with actual intent to hinder, delay or defraud any Person, and (iv)
shall not have assets that constitute unreasonably small capital to carry out
its business as then conducted. Seller does not contemplate the commencement of
insolvency, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official with respect to
it or any of its assets. Seller is not selling or transferring the Specified
Assets with any intent to hinder, delay or defraud its creditors;
(k) UCC Information. As of the Initial Funding Date, the information
set forth on Schedule 3.1(k) is true, correct and complete in all material
respects;
(l) [Reserved]
(m) Release of Lien. Each transfer of Conveyed Assets and Related
Assets satisfies the requirements for release of all liens thereon set forth in
the Amended and Restated Credit Agreement, dated as of August 2, 2002 (the
"Credit Agreement"), among Alliance Laundry Holdings LLC, a Delaware limited
liability company, Alliance Laundry Systems LLC, a Delaware limited liability
company, the several banks and other financial institutions or entities from
time to time parties thereto, ▇▇▇▇▇▇ Brothers Inc., as sole advisor, sole lead
arranger and sole bookrunner, ▇▇▇▇▇▇ Commercial Paper Inc., as syndication
agent, Fleet National Bank and LaSalle Bank National Association, as
documentation agents and General Electric Capital Corporation, as administrative
agent, as such agreement may be amended, restated, supplemented, or otherwise
modified from time to time. All transfers shall satisfy the requirements for
release set forth in any successor facility to the Credit Agreement;
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(n) Eligible Equipment Loans and Eligible Receivables. On the Closing
Date or subsequent Purchase Date of Conveyed Assetshereunder from such Seller,
each such Conveyed Asset identified as an Eligible Equipment Loan or Eligible
Receivable in the related Funding Date Data Pool Report, is an Eligible
Equipment Loan or Eligible Receivable, as the case may be;
(o) Accuracy of Information. All written information furnished by, or
on behalf of, such Seller to Buyer or any Third Party Financier pursuant to or
in connection with any Transaction Document, or any transaction contemplated
herein or therein, does not and shall not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made not misleading, in each case on the date the statement was made and in
light of the circumstances under which the statements were made or the
information was furnished; (p) Lockbox Banks and Payment Instructions. The names
and addresses of all the banks, together with the account numbers of the
accounts at such banks (and all related lockboxes and post office boxes), into
which Collections are paid as of the Closing Date are set forth in Schedule
3.1(p) hereto; such banks, accounts, lockboxes and post office boxes constitute
all of the Lockbox Banks and Lockboxes as of the Closing Date, and all of such
Lockboxes are subject to Lockbox Agreements;
(q) [Reserved]
(r) [Reserved]
(s) Taxes. Such Seller has filed all Federal income tax returns and
all other material tax returns (including, without limitation, any bulk sales or
similar tax returns) that are required to be filed by it whether in connection
with this transaction or otherwise and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by it, except for any such taxes
or assessments, if any, that are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves in conformity with GAAP have been provided. No Tax Lien has been filed,
and, to the knowledge of such Seller, no claim is being asserted, with respect
to any such tax or assessment;
(t) Margin Regulations. No use of any funds obtained by Seller under
this Agreement will conflict with or contravene any of Regulations T, U and X
promulgated by the Federal Reserve Board from time to time;
(u) Investment Company Act; Other Regulations. Such Seller is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. Such
Seller is not subject to regulation under any Federal or state statute or
regulation which limits its ability to incur indebtedness;
(v) No Adverse Selection. No Purchased Equipment Loan is selected on
any basis intended to adversely affect the value of any Third Party Financier's
right and interest under the applicable Third Party Documents;
13
(w) ERISA. As of the date hereof and as of each Purchase Date: (i)
each of ALS and its ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code and regulations and
published interpretations thereunder, and (ii) no ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events, could reasonably be expected to result in a Material Adverse Effect;
(x) [Reserved]
(y) [Reserved]
(z) Conformity with Seller Policies. All Specified Assets (other than
those not identified as Eligible Receivables or Eligible Loans) were originated
in the ordinary course of business and in conformity with the Credit and
Collection Policies of such Seller as in effect at such time; and
(aa) Security Interest Representations.
(i) In the event that the transfer of the Specified Assets pursuant to
the terms of this Agreement is held not to constitute a "true sale" or
"true contribution", this Agreement creates a valid and continuing security
interest (as defined in the UCC) in the Specified Assets in favor of the
Buyer, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from the Seller;
(ii) The Purchased Receivables constitute "accounts" within the
meaning of the applicable UCC. The Purchased Equipment Loans constitute
"tangible chattel paper" within the meaning of the applicable UCC. The
Equipment constitutes "equipment" and not "fixtures" under the UCC. The
Equipment Notes constitute "instruments" within the meaning of the
applicable UCC;
(iii) Immediately prior to the conveyance of the Specified Assets set
forth in this Agreement, the Seller was the sole owner of such Specified
Assets and owned and had good and marketable title to the Specified Assets,
free and clear of any Lien, claim or encumbrance of any Person (whether
senior, junior or pari passu) except for any Permitted Adverse Claim;
provided, however, that the Seller makes no representation regarding the
availability of a willing buyer for the Specified Assets.
(iv) The Seller has caused the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions
under applicable law in order to perfect the security interest in the
Specified Assets granted to the Buyer and assigned to the Issuer (and the
Indenture Trustee as assignee of the Issuer). All financing statements
filed against the Seller in favor of the Buyer in connection herewith
describing the Specified Assets contain a statement to the following
effect: "A purchase of or security interest in any collateral described in
this financing statement will violate the rights of the Buyer, the Issuer
and the Indenture Trustee (as assignee of the Issuer)";
14
(v) The Seller has not pledged, assigned, sold, granted a security
interest in or otherwise conveyed any of the Specified Assets except for
Permitted Adverse Claims. The Seller has not authorized the filing of, and
is not aware of, any financing statements or documents of similar import
against the Seller that include a description of collateral covering the
Specified Assets other than any financing statement or document of similar
import (i) relating to the security interest granted to the Buyer and
assigned to the Issuer (and the Indenture Trustee as assignee of the
Issuer) or (ii) that has been terminated. The Seller is not aware of any
judgment or tax lien filings against the Seller;
(vi) The Seller or the Indenture Trustee has received a written
acknowledgement from the Custodian that the Custodian is holding the only
originally executed counterpart of each Equipment Note and the related
security agreement on behalf of, and for the benefit of, the Indenture
Trustee and is subject to the Custodian's customary security and
safekeeping procedures;
(vii) None of the Equipment Notes or Equipment Loans have any marks or
notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Buyer's and the Issuer's assignee,
the Indenture Trustee; and other than any holder of an Adverse Claim to be
released simultaneously with the Purchase by the Buyer hereunder; and
(viii) The Seller has received all necessary consents and approvals
required by the terms of the Specified Assets to pledge to the Buyer of its
interest and rights in such Specified Assets hereunder, under the Pooling
and Servicing Agreement or the Indenture.
(bb) Representations With Respect to the Equipment Loans. Each
Equipment Loan contains customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for realization against
the collateral of the benefits of the security;
(cc) Compliance With Law. All requirements of applicable federal,
state and local laws, and regulations thereunder, including the Equal Credit
Opportunity Act, the Federal Reserve Board's Regulation "B", the Soldiers' and
Sailors' Civil Relief Act of 1940, and any applicable bulk sales or bulk
transfer law and other equal credit opportunity and disclosure laws, in respect
of any of the Equipment Loans, have been complied with in all material respects,
and each such Equipment Loan and the sale of each item of Equipment evidenced
thereby complied at the time it was originated or made and now complies in all
material respects with all legal requirements of the jurisdiction in which it
was originated or made;
(dd) Binding Obligation. Each Equipment Loan is non-cancelable, in
full force and effect and is the genuine, legal, valid and binding payment
obligation in writing of the Obligor thereon, enforceable against the Obligor in
accordance with its terms and the obligations of the related Obligor under such
Equipment Loan are irrevocable and unconditionally payable, except as may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights in general and by equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law;
15
(ee) Equipment Loans In Force. The obligations of an Obligor under any
Equipment Loan have not been satisfied, subordinated or rescinded, and the
Equipment securing any Equipment Loan has not been released from the Lien of the
related Loan in whole or in part;
(ff) No Liens. There are, to ALS's knowledge, no Liens or claims that
have been filed for work, labor or materials affecting any Equipment securing
any Equipment Loan that are or may be prior to, or equal or pari passu with, the
security interest in the Equipment granted by the Equipment Loan;
(gg) Default. There has been no default, breach, violation or event
permitting acceleration under the terms of any Equipment Loan, and no event has
occurred and is continuing that with notice or the lapse of time (or both) would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Equipment Loan, and ALS has not waived any of the foregoing, in
each case except for payments on any Equipment Loans which are not more than 60
days past due (measured from the date of any Scheduled Payment) as of the
applicable Purchase Date;
(hh) Lawful Assignment. No Equipment Loan was originated in, or is
subject to the laws of, any jurisdiction the laws of which would make unlawful
the sale, transfer and assignment of such Equipment Loan under this Agreement or
the Pooling and Servicing Agreement; and
(ii) Fair Consideration. The consideration received by each Seller
hereunder with respect to the assets sold hereunder to Buyer is fair
consideration having value reasonably equivalent to the value of the Specified
Assets sold by it and the performance of its obligations hereunder.
The representations and warranties set forth in this Section 3.1 shall survive
until the Indenture is terminated in accordance with its terms. Any breaches of
the representations and warranties set forth in this Section 3.1 may be waived
only upon satisfaction of the Rating Agency Condition.
SECTION 3.2. Representations and Warranties of Buyer. Buyer hereby makes
the following representations and warranties for the benefit of the Sellers, the
Issuer and each Third Party Financier as of the Closing Date and each Purchase
Date:
(a) Organization and Good Standing. Buyer has been duly organized and
is validly existing as a limited liability company 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 presently owned and such
business is presently conducted, and had at all relevant times, and now has,
power, authority and legal right to acquire and own the Specified Assets;
(b) Due Qualification. Buyer 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;
16
(c) Power and Authority. Buyer has the power and authority to execute
and deliver this Agreement and to carry out its terms and the execution,
delivery and performance of this Agreement have been duly authorized by Buyer by
all necessary limited liability company action;
(d) No Violation. The consummation by Buyer of the transactions
contemplated by this Agreement and the other Transaction Documents to which it
is a party, and the fulfillment of the terms of this Agreement and the other
Transaction Documents to which it is a party, 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) a default under, the limited liability company
agreement of Buyer, or any indenture, agreement, mortgage, deed of trust or
other instrument to which Buyer 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 or other instrument (other than this
Agreement, or any other Transaction Document to which it is a party), or violate
any law or, to Buyer's knowledge, any order, rule or regulation applicable to
Buyer of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over Buyer or
any of its properties;
(e) No Proceedings. There are no proceedings or, to Buyer's knowledge,
investigations pending or, to Buyer's knowledge, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over Buyer or its properties (i) asserting
the invalidity of this Agreement or any other Transaction Document to which it
is a party, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any other Transaction Document to which it is
a party, or (iii) seeking any determination or ruling that might materially and
adversely affect the performance by Buyer of its obligations under, or the
validity or enforceability of, this Agreement or any other Transaction Document
to which it is a party;
(f) Binding Obligation. This Agreement shall constitute a legal, valid
and binding obligation of Buyer enforceable against Buyer in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law;
(g) No Consent. No permit, consent, approval or authorization of, or
declaration to or filing with, any governmental authority is required
in connection with the execution, delivery and performance by Buyer of this
Agreement, or the consummation by Buyer of the transactions contemplated hereby
except as expressly contemplated herein;
(h) Insolvency. Buyer (i) is not insolvent and will not be rendered
insolvent by the transactions contemplated by this Agreement or any other
Transaction Document and has an adequate amount of capital to conduct its
business in the ordinary course and to carry out its obligations hereunder, (ii)
shall not intend to incur or believe that it shall incur debts that would be
beyond its ability to pay as such debts mature, (iii) shall not make such
transfer with actual intent to hinder, delay or defraud any Person, and (iv)
shall not have assets that constitute
17
unreasonably small capital to carry out its business as then conducted. Buyer
does not contemplate the commencement of insolvency, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official with respect to it or any of its
assets.
ARTICLE IV
CONDITIONS
SECTION 4.1. Conditions to Obligation of Buyer. The obligation of Buyer to
purchase or acquire Specified Assets hereunder on the Closing Date or any
Purchase Date, as the case may be, is subject to the satisfaction of the
following conditions:
(a) Representations and Warranties True. The representations and
warranties of Seller in Section 3.1 hereof shall be true and correct as of the
Closing Date or Purchase Date, as the case may be, with the same effect as if
then made, and Seller shall have performed all obligations to be performed by it
hereunder on or prior to the Closing Date or such Purchase Date, as the case may
be.
(b) No Events. No Rapid Amortization Event, Servicer Default, Default
or Event of Default shall have occurred on or prior to such Purchase Date.
(c) Computer Files Marked. In accordance with the Pooling and
Servicing Agreement, the Servicer shall, on or prior to the related Purchase
Date (i) cause the Contract Management System to be marked with a specified code
(the "Contract Management Code") to show that the Conveyed Assets have been
assigned and transferred in accordance with this Agreement and the related PA
Assignment, and (ii) prepare and hold in its capacity as Servicer on behalf of
the Issuer and the Indenture Trustee the Schedule of Loans and Schedule of
Receivables.
(d) Documents to be Delivered By Seller.
(i) PA Assignments. On or prior to the Closing Date, the Seller shall
have executed and delivered to the Buyer, an Initial PA Assignment and on
or prior to each Purchase Date thereafter, Seller shall have executed and
delivered to Buyer a Subsequent PA Assignment;
(ii) Documents to Custodian. With respect to each Purchased Equipment
Loan the Seller shall have delivered to the Custodian the Collateral
Documents for each such Equipment Loan within the time period required
pursuant to Section 2.09 of the Pooling and Servicing Agreement; and the
Custodian shall havce delivered a Certification with no exceptions with
respect to such Purchased Equipment Loan;
(iii) UCC Financing Statement. On or prior to the Closing Date (and
any subsequent Purchase Date, as necessary to perfect, or continue the
perfection of, Buyers ownership and security interest), the Seller has
filed UCC financing statements sufficient to perfect the security interest
set forth in Section 2.7 hereof;
18
(iv) Schedule of Loans and Schedule of Receivables. On or prior to the
Closing Date the Seller shall have delivered to Buyer, Indenture Trustee,
Insurer and each Co-Administrative Agent the Schedule of Loans and the
Schedule of Receivables, as the case may be. On each Purchase Date after
the Closing Date, the Seller shall have delivered an update to the Schedule
of Loans and the Schedule of Receivables, as the case may be;
(v) PA Assignments; Schedules. On such Purchase Date, Seller shall
have delivered to Buyer, Indenture Trustee, Insurer and each
Co-Administrative Agent copies of the PA Assignments, Initial PSA
Assignment or subsequent PSA Assignment (as such terms are defined in the
Pooling and Servicing Agreement); and
(vi) Other Documents. On such Purchase Date, Seller shall provide such
other documents as Buyer may reasonably request.
(e) Other Transactions. All conditions precedent under the Indenture
and the other Transaction Documents to the advance of the funds necessary for
the Buyer to finance such purchase shall have been satisfied or waived.
(f) Performance of Obligations. Seller shall have performed all
obligations to be performed by it hereunder on or prior to such Purchase Date.
(g) Taxes. Such transfer shall not impose tax liability on the Trust
and shall not affect the tax status of the Notes as debt held by the Holders.
(h) No Enforcement Notice. On or prior to such Purchase Date, either
(i) the Indenture Trustee shall not have received a second Enforcement Notice
(as defined in the Intercreditor Agreement, dated as of November 26, 2002,
between General Electric Capital Corporation (the "Opco Agent") and the
Indenture Trustee), from the Opco Agent or (ii) the Indenture Trustee shall have
received a certificate from the Seller or the Issuer indicating that the
requirements of Section 2.1 of the Intercreditor Agreement have been satisfied
such that sales and contributions are permitted.
SECTION 4.2. Conditions To Obligation of Seller. The obligation of Seller
to sell the Conveyed Assets to Buyer hereunder on any Purchase Date is subject
to the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of Buyer hereunder shall be true and correct as of such Purchase
Date, with the same effect as if then made, and Buyer shall have performed all
obligations to be performed by it hereunder on or prior to such Purchase Date.
(b) Purchase Price. On each Purchase Date, Buyer shall pay to Seller
the Purchase Price payable on such date as provided in Section 2.12 of this
Agreement.
19
SECTION 4.3. Effect of Transfer. Upon making an Advance pursuant to the
Indenture and the Note Purchase Agreement, title to the Specified Assets shall
vest in the Buyer, whether or not the conditions precedent to such transfer as
set forth above were in fact satisfied.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Affirmative Covenants. From the date hereof until the first
day following the Purchase Termination Date on which the Outstanding Obligations
are paid in full, unless Buyer and each Third Party Financier shall otherwise
give its prior written consent, each Seller hereby severally agrees that it will
perform the covenants and agreements set forth in this section.
(a) Compliance with Laws, Etc. The Seller will comply, in all material
respects, with all acts, rules, regulations, orders, decrees and directions of
any Governmental Authority applicable to the Equipment Loans, the Equipment, the
Receivables or any part thereof; provided, however, that the Seller may contest
any act, regulation, order, decree or direction in any reasonable manner that
shall not materially and adversely affect the rights of the Noteholders or the
Insurer in the Specified Assets; and provided, further, that such contests shall
be in good faith by appropriate proceedings and shall not subject the Insurer or
the Indenture Trustee to any civil or criminal liability or risk of loss of any
Collateral.
(b) Preservation of Organizational Existence. Such Seller will
preserve and maintain its organizational existence, rights, franchises and
privileges in the jurisdiction of its formation and existence, and qualify and
remain qualified in good standing as a foreign entity in each jurisdiction where
the failure to preserve and maintain such existence, rights, franchises,
privileges and qualifications could reasonably be expected to result in a
Material Adverse Effect.
(c) Conveyed Assets Reviews. Such Seller shall, during normal business
hours upon not less than three (3) Business Days' prior notice, permit Buyer and
each Third Party Financier and its agents or representatives, at the expense of
the Seller, (i) to examine and make copies of and abstracts from, and to conduct
accounting reviews of, all Records in the possession or under the control of
such Seller relating to the Conveyed Assets or Related Assets generated by such
Seller, and (ii) to visit the offices and properties of such Seller for the
purpose of examining the materials described in clause (i) above, and to discuss
matters relating to any Conveyed Assets or any Related Assets of such Seller or
such Seller's performance hereunder with any of the Authorized Officers of such
Seller or, with the prior consent of an Authorized Officer of such Seller, with
employees of such Seller having knowledge of such matters (the examinations set
forth in the foregoing clauses (i) and (ii) being herein called a "Seller
Conveyed Assets Review"). Buyer and each Third Party Financier shall be entitled
to conduct such Seller Conveyed Assets Reviews whenever such Person, in its
reasonable judgment, deems it appropriate.
(d) Keeping of Records and Books of Account. Seller shall maintain and
implement administrative and operating procedures (including an ability to
recreate records
20
evidencing its Conveyed Assets and Related Assets in the event of the
destruction of the originals thereof), and shall keep and maintain all
documents, books, records and other information that, in the reasonable
determination of Buyer and the Third Party Financiers, are necessary or
advisable in accordance with prudent industry practice and custom for
transactions of this type for the collection of all Conveyed Assets and the
Related Assets. Such Seller shall maintain at all times accurate and complete
books, Records and accounts relating to the Conveyed Assets, Related Assets and
related Contracts and all Collections thereon in which timely entries shall be
made. Such books and Records shall be marked as set forth in Section 4.1(c) and
shall include (i) all payments received and all credits and extensions granted
with respect to the Conveyed Assets and (ii) the return, rejection,
repossession, or stoppage in transit of any merchandise, the sale of which has
given rise to a Conveyed Assets that has been purchased by Buyer.
(e) Performance and Compliance with Conveyed Assets and Related
Contracts. Such Seller will, at its expense, timely and fully perform and comply
with all provisions, covenants and other promises required to be observed by it
under the Contracts of such Seller related to the Conveyed Assets and Related
Assets, the breach of which provisions, covenants or promises could reasonably
be expected to result in a Material Adverse Effect.
(f) Location of Records and Offices. Such Seller will keep all Records
related to the Conveyed Assets and the Related Assets (and all original
documents relating thereto), at the addresses referred to in Schedule 3.1(k) or,
upon not less than 30 days' prior notice given by such Seller to Buyer and each
Third Party Financier, at such other locations set forth in such notice.
(g) Separate Organizational Existence of Buyer. Such Seller hereby
acknowledges that each Third Party Financier is entering into, or will enter
into, the transactions contemplated by the applicable Third Party Documents in
reliance upon Buyer's identity as a legal entity separate from such Seller.
Therefore, from and after the date hereof until the first day following the
Purchase Termination Date on which all Obligations of the Sellers shall have
been fully paid and performed, such Seller will take all necessary steps to
continue their respective identities as separate legal entities and to make it
apparent to third Persons that each is an entity with assets and liabilities
distinct from those of Buyer and that Buyer is not a division of such Seller or
ALS.
(h) Turnover of Collections. In the case any Collections are received
by such Seller, such Seller shall remit such Collections, less any cash
collections or other cash proceeds received with respect to indebtedness not
constituting Conveyed Assets or Related Assets, to a Lockbox Account as soon as
practicable, but in no event later than two Business Days of receipt of such
Collections, and, at all times prior to such remittance, Seller shall itself
hold such Collections in trust, for the exclusive benefit of the Buyer and its
assigns and such Collections shall be maintained and segregated separate and
apart from all other funds and money of such Seller until delivery of such
Collections to Buyer.
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(i) Payment Instructions to Obligors. Each Seller shall instruct all
Obligors to submit all payments either (i) to one of the lockboxes maintained at
the Lockbox Banks for deposit in a Lockbox Account or (ii) directly to one of
the Lockbox Accounts.
(j) Accuracy of Information. All written information furnished on and
after the Closing Date by such Seller to Buyer, the Servicer or any Third Party
Financier pursuant to, or in connection with, any Third Party Document or any
transaction contemplated herein or therein shall not contain any untrue
statement of a material fact or omit to state material facts necessary to make
the statements made not misleading, in each case on the date the statement was
made and in light of the circumstances under which the statements were made or
the information was furnished.
(k) Cross Collateralization. (1) With respect to an Obligor under a
Purchased Equipment Loan, Seller may be, or may become, a lender to such Obligor
under another stand alone commercial laundry equipment loan (the "Non-Trust
Loan"). Each Purchased Equipment Loan and Non-Trust Loan is secured by the
equipment purchased with the proceeds of that loan. In certain circumstances, a
Purchased Equipment Loan may also purport to be secured by the equipment
purchased with the proceeds of a Non-Trust Loan (such equipment and the Proceeds
thereof being the "Common Non-Trust Collateral"), and/or a Non-Trust Loan may
also purport to be secured by the equipment purchased with the proceeds of a
Purchased Equipment Loan (such equipment and the Proceeds thereof being the
"Common Trust Collateral"). In addition, in certain circumstances, a Purchased
Equipment Loan and a Non-Trust Loan may have competing security interests in or
also purport to be secured by collateral other than Common Trust Collateral or
Common Non-Trust Collateral (such other collateral, the "Common Other
Collateral"). The Common Non-Trust Collateral, the Common Trust Collateral and
the Common Other Collateral are referred to herein together as the "Common
Collateral."
(2) Seller agrees that with respect to each loan of each such Obligor
(i) the security interest in such Common Trust Collateral granted to Seller
pursuant to any other Non-Trust Loan is, and shall be, junior and subordinate to
the security interest created to secure the Purchased Equipment Loan; (ii)
Seller shall have no legal right to realize upon such Common Trust Collateral or
exercise its rights under the Non-Trust Loan with respect to such Common Trust
Collateral in any manner until all required payments in respect of any Purchased
Equipment Loan that shares such Common Trust Collateral have been paid in full;
and (iii) in realizing upon such Common Trust Collateral, neither Buyer, Issuer,
nor any Third Party Financier shall have any obligation to protect or preserve
the rights of Seller in such Common Trust Collateral. Buyer agrees that with
respect to each loan of each such Obligor (i) the security interest in such
Common Non-Trust Collateral granted to secure the Purchased Equipment Loan and
hereby assigned to Buyer is and shall be junior and subordinate to the security
interest therein created by the Non-Trust Loan; (ii) Buyer, as assignee of the
lien of Seller, shall have no legal right to realize upon such Common Non-Trust
Collateral or exercise its rights under the Purchased Equipment Loan with
respect to such Common Non-Trust Collateral in any manner until all required
payments in respect of the Non-Trust Loan have been made in full; and (iii) in
realizing upon such Common Non-Trust Collateral, Seller or its assignees shall
have no obligation to protect or preserve the rights of Buyer, the Issuer or the
Third Party Financier in such Common Non-Trust Collateral. The proceeds of the
Common Other Collateral shall be
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shared by the holders of the Purchased Equipment Loan and the Non-Trust Loan on
a pro rata basis (based on relative outstanding principal amounts of the Trust
Loan and Non-Trust Loan).
(3) Seller agrees to use its best efforts to cause that any successors
or assigns (including any pledgee) of, or with respect to, any Non-Trust Loans
pursuant to an agreement entered into after the Closing Date shall enter into a
written agreement (of which the Indenture Trustee shall be a third party
beneficiary) acknowledging that is acquiring such Non-Trust Loan subject to the
provisions of this Section 5.10 and shall be bound by the provisions hereof. Any
successor or assign (including any pledgee) of Seller who agrees in writing (and
the Indenture Trustee shall be a third party beneficiary of such agreement) to
be bound by the provisions of this Section 5.10 shall itself be entitled to the
benefits of this Section 5.10 as a third party beneficiary. In addition, Seller
agrees to use its best efforts to cause, by February 28, 2003, each of its
current successors and assigns (other than Alliance Laundry Equipment
Receivables Trust 2000-A) (including any pledgee) with respect to any Non-Trust
Loan to enter into an agreement, in form and substance satisfactory to the
Control Party, acknowledging and agreeing to be bound by the provisions of this
Section 5.10. Buyer's rights in the Related Security are subject to the
provisions of Section 5.10 of the Purchase Agreement dated November 28, 2000
between Alliance Laundry Equipment Receivables LLC and Alliance Laundry Systems
LLC. The provisions of this Section 5.10 are not intended to be binding on any
successor, assign or pledgee that has not expressly acknowledged the provisions
of this Section 5.10.
(l) Notification of Breach. Seller will advise Buyer, its assignees,
the Issuer, the Indenture Trustee and each Third Party Financier promptly, in
reasonable detail, upon discovery of the occurrence of a breach, in any material
respect, by Seller of any of its representations, warranties and covenants
contained herein.
(m) Notice of Adverse Claim. Seller shall notify Buyer, the Issuer,
and each Third Party Financier, promptly after becoming aware of any Adverse
Claim on any Specified Asset.
(n) Taxes. Seller shall promptly pay all applicable taxes required to
be paid in connection with the transfer of the Specified Assets by Seller to
Buyer, and acknowledges that Buyer and the Issuer shall have no responsibility
with respect thereto. Seller 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 Seller, except (i) such as may be paid thereafter
without penalty or (ii) such as may be contested in good faith by appropriate
proceeding and for which an adequate reserve has been established and is
maintained in accordance with GAAP. Seller shall promptly notify the Issuer, the
Indenture Trustee, the Insurer and the Noteholders of any material challenge,
contest or proceeding pending by or against Seller before any taxing authority.
(o) Requirement to Sell All Receivables. On each Purchase Date related
to the Receivables, Seller shall transfer to Buyer all of its unpaid
Receivables. Prior to the Purchase Termination Date, Seller shall not sell any
of its Receivables to any Person other than the Buyer.
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SECTION 5.2. Reporting and Noticing Requirements.
(a) Reporting. The Seller will maintain, for itself and each of its
Subsidiaries, a system of accounting established and administered in accordance
with GAAP, and furnish to the Indenture Trustee, each Co-Administrative Agent
and the Control Party:
(i) as soon publicly as available and in any event by the Reporting
Date after the end of each of the first three quarterly fiscal periods of
each fiscal year of ALH, the consolidated balance sheet of ALH and its
unaudited consolidated Subsidiaries as at the end of such period and the
related unaudited consolidated statement of income and cash flows for ALH
and its consolidated Subsidiaries for such period and the portion of the
fiscal year through the end of such period, accompanied by a certificate of
an Authorized Officer of ALH, which certificate shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations ALH and its Subsidiaries in accordance
with GAAP, consistently applied, as at the end of, and for, such period
(subject to normal fiscal year-end audit adjustments and the omission of
footnotes);
(ii) as soon as publicly available and in any event by the Reporting
Date after the end of each fiscal year of ALH, the consolidated balance
sheet of ALH and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated statement of income and cash flows for
ALH and its consolidated Subsidiaries for such year, accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing which opinion shall not be qualified as to scope of audit
or going concern and shall state that said consolidated and consolidating
financial statements fairly present the consolidated financial condition
and results of operations of ALH and its consolidated Subsidiaries as at
the end of, and for, such fiscal year in accordance with GAAP; and
(iii) promptly upon transmission or receipt thereof, copies of any
filings and registrations with, and reports to or from, the Securities and
Exchange Commission (or the Ontario Securities Commission, as applicable)
or any national securities exchange, or any successor agency, and copies of
all proxy statements, and material notices, if any, as ALH or any of its
Subsidiaries shall send to its equity holders generally or to a holder of
any indenture, note or otherwise indebtedness owed by ALH or any of its
Subsidiaries;
(b) Compliance Certificate. The Seller will furnish to Buyer, at the
time it furnishes each set of financial statements pursuant to paragraphs (a)(i)
and (ii) above, a certificate of an Authorized Officer of ALS to the effect
that, to the best of such Authorized Officer's knowledge, ALS during such fiscal
period or year has observed, performed or satisfied in all material respects all
of its covenants, agreements and conditions, contained in this Agreement
compliance with which has not been waived by the Control Party.
(c) Change in Credit and Collection Policy. At least 5 days prior to
the effectiveness of any material change in, or amendment to, a Credit and
Collection Policy, Seller
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will furnish to the Buyer, the Issuer and each Third Party Financier, a copy of
such Credit and Collection Policy then in effect and a notice indicating such
change or amendment, unless such notice has already been provided by Servicer
under the Pooling and Servicing Agreement.
(d) Other Information. Seller will furnish to the Buyer, the Issuer
and each Third Party Financier such other information (including nonfinancial
information and information regarding the financial condition, operations or
business of ALH) as such Persons (or any of their respective assignees) may from
time to time reasonably request.
(e) Other Notices. Each Seller will notify in writing the Buyer, the
Issuer and each Third Party Financier of any of the following within seven (7)
Business Days after learning of the occurrence thereof, describing the same and,
if applicable, the steps being taken with respect thereto:
(i) Insolvency Events. The occurrence of each Insolvency Event with
respect to such Seller, by a statement of the treasurer, controller or
senior financial officer of such Seller; and
(ii) Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding against such Seller or any of its
Subsidiaries, or to which such Seller or any of its Subsidiaries becomes
party, in either case (i) with respect to any Third Party Document or (ii)
which could reasonably be expected to have a Material Adverse Effect.
SECTION 5.3. Negative Covenants. From the date hereof until the first day
following the Purchase Termination Date on which the Outstanding Obligations are
paid in full, unless Buyer and each Third Party Financier shall otherwise give
its prior written consent, each Seller hereby agrees that it will perform the
covenants and agreements set forth in this section.
(a) Sales, Liens, Etc. Except as otherwise provided herein or in any
other Transaction Document and except for Permitted Adverse Claims, such Seller
will not (i)(A) sell, assign (by operation of law or otherwise) or otherwise
transfer to any Person, (B) pledge any interest in, (C) grant, create, incur,
assume or permit to exist any Adverse Claim (other than Permitted Adverse
Claims) to or in favor of any Person upon or with respect to, or (D) cause to be
filed any financing statement or equivalent document relating to perfection with
respect to any Transferred Asset or any Contract related to any Conveyed Assets,
or upon or with respect to any lockbox or account to which any Collections of
any such Conveyed Assets or any Related Assets are sent or any interest therein
under the applicable Third Party Document(s), or (ii) assign to any Person any
right to receive income from or in respect of any of the foregoing.
In the event that such Seller fails to keep any Specified Assets free and clear
of any Adverse Claim (other than Permitted Adverse Claims), Buyer may (without
limiting its other rights with respect to such Seller's breach of its
obligations hereunder) make expenditures necessary to release the Adverse Claim.
Buyer shall be entitled to indemnification for any such expenditures pursuant to
the indemnification provisions of Article VIII. Alternatively, Buyer may deduct
such
25
expenditures as an offset to the Purchase Price owed to such Seller hereunder.
(b) Extension or Amendment of Conveyed Assets, Change in Credit and
Collection Policy or Contracts. Except as the Servicer may be expressly
permitted under the Pooling and Servicing Agreement, the Seller shall not, (i)
extend, amend or otherwise modify the terms of any Conveyed Assets or related
Contract or (ii) change the terms and provisions of Credit and Collection Policy
in any material respect.
(c) Change in Payment Instructions to Obligors. Except as otherwise
provided in the applicable Third Party Documents, such Seller will not (i) add
or terminate any bank as an Lockbox Bank from those listed in Schedule 3.1(p)
unless, prior to any such addition or termination, Buyer and the Third Party
Financiers shall have received not less than five Business Days' prior written
notice of the addition or termination and, not less than five Business Days
prior to the effective date of any such proposed addition or termination, Buyer
and the Third Party Financiers shall have received (A) counterparts of the
applicable type of Account Agreement with each new Lockbox Bank, duly executed
by such new Lockbox Bank and all other parties thereto and (B) copies of all
other agreements and documents signed by the Lockbox Bank and such other parties
with respect to any new Lockbox Account, all of which agreements and documents
shall be reasonably satisfactory in form and substance to Buyer and the Third
Party Financiers, or (ii) make any change in its instructions to Obligors,
regarding payments to be made to any Lockbox Bank, other than changes in the
instructions that direct Obligors to make payments to another Lockbox Account at
such Lockbox Bank or another Lockbox Account.
(d) Change in Name. Seller shall 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 Seller in accordance with Section
6.3(a) seriously misleading within the meaning of Section 9-506 of the UCC,
unless it shall have given Buyer, the Indenture Trustee and the Control Party at
least 60 days prior written notice thereof and shall file such financing
statements or amendments as may be necessary to continue the perfection of
Buyer's interest under this Agreement in the Specified Assets.
(e) Location. Seller shall give Buyer, Indenture Trustee and the
Control Party at least 60 days prior written notice of any relocation of its
"location" within the meaning of Section 9-307 of the UCC) 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. Seller shall at all times maintain its
"location" in United States of America.
(f) Accounting for Purchases. Each Seller shall prepare its financial
statements in accordance with GAAP, and any financial statements that are made
publicly available and which are consolidated to include Buyer will contain
footnotes stating that such Seller has sold or contributed to Buyer the
Specified Assets. Each Seller shall not prepare any financial statements that
account for the transactions contemplated in this Agreement in any manner other
than as a sale of the Specified Assets by such Seller to Buyer (except in each
to the extent provided in Section 2.7).
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(g) Other Liens or Interests. Except for the conveyances hereunder and
as contemplated by the this Agreement, the Indenture and the Pooling and
Servicing Agreement, ALS shall not sell, pledge, assign or transfer the
Specified Assets to any other Person, or grant, create, incur, assume or suffer
to exist any Lien on any interest therein, and ALS shall defend the right, title
and interest of Buyer and its assignees in, to and under the Specified Assets
against all claims of third parties claiming through or under ALS.
(h) Pledge of Interest in Buyer. ALS shall not sell, pledge, assign or
transfer its membership interest in Buyer, or grant, create, incur, assume or
suffer to exist any Lien on its membership interest in Buyer; provided, however,
that ALS may pledge or grant a security interest in such membership interest if
such Person (and any of such Person's successors and assigns) shall have agreed
that it will not: (i) file a petition in bankruptcy against the Buyer or the
Issuer until one year and one day after the Outstanding Obligations shall have
been paid in full, (ii) seek to substantively consolidate the Buyer or the
Issuer in connection with a bankruptcy of ALS or any of its Affiliates, (iii)
seek to realize on the assets of the Buyer or the Issuer, (iv) vote such
membership interest with respect to any matters, without the consent of the
Control Party and (v) challenge or contest any actions by the Indenture Trustee
or the Control Party (including, without limitation, any claims by either of the
agent, the Buyer, the Issuer or any of their respective assets), or assert any
claim against such parties in connection with the exercise by either the
Indenture Trustee or the Control Party of any right or remedy available to it
pursuant to the terms of the Basic Documents, or the exercise of any remedies,
or receipt of any proceeds from any assets of Buyer following the occurrence of
a Rapid Amortization Event or an Event of Default; provided, further, that ALS
may amend the Buyer's limited liability company agreement pursuant to an
amendment in form and substance reasonably satisfactory to the Control Party to
create a separate, non-voting membership interest in Buyer (the "Non-voting
Interest") (with no right to participate in the management of Buyer) which
interest would give its holder the right to receive only allocations and
distributions from the Buyer of amounts which are received by Buyer from the
Issuer at the times and in the amounts set forth in the Basic Documents and
pledge or grant to a pledgee a security interest solely in the Non-voting
Interest (and not any other membership interest that ALS may have in the Buyer).
ARTICLE VI
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE SPECIFIED ASSETS
SECTION 6.1. Rights of Buyer. (a) Each Seller hereby authorizes Buyer, the
Servicer and/or their respective designees to take any and all steps in such
Seller's name and on behalf of such Seller that Buyer, the Servicer and/or their
respective designees determine are reasonably necessary or appropriate to
collect all amounts due under any and all Specified Assets, including endorsing
the name of such Seller on Equipment Notes, checks and other instruments
representing Collections and enforcing such Seller's rights under such Specified
Assets.
(b) Except as expressly set forth in Section 2.12(a), Buyer shall have
no obligation to account for any Specified Asset to any Seller. Buyer shall have
no obligation to
27
account for, or to return Collections, or any interest or other finance charge
collected pursuant thereto, to any Seller, irrespective of whether such
Collections and charges are in excess of the Purchase Price for the Specified
Assets.
(c) Buyer shall have the unrestricted right to further assign,
transfer, deliver, hypothecate, subdivide or otherwise deal with the Specified
Assets, and all of Buyer's right, title and interest in, to and under this
Agreement.
(d) Buyer shall have the sole right to retain any gains or profits
created by buying, selling or holding the Specified Assets and shall have the
sole risk of and responsibility for losses or damages created by such buying,
selling or holding.
SECTION 6.2. Responsibilities of the Sellers. Anything herein to the
contrary notwithstanding, each Seller hereby agrees:
(a) to perform all of its obligations hereunder and under the
Contracts related to the Conveyed Assets and Related Assets to the same extent
as if the Conveyed Assets had not been sold or contributed hereunder, and the
exercise by Buyer or its designee or assignee of Buyer's rights hereunder or in
connection herewith shall not relieve such Seller from any of its obligations
under the Related Contracts or Related Assets related to the Conveyed Assets;
(b) to the extent that such Seller does not own the computer software
that Seller uses to account for Conveyed Assets, such Seller shall use
reasonable efforts to provide Buyer with such proprietary licenses, sublicenses
and/or assignments of contracts as Buyer shall require with regard to all
services and computer hardware or software used by such Seller that relate to
the servicing of any Transferred Asset.
SECTION 6.3. Further Action Evidencing Purchases. Such Seller agrees that
from time to time, at its expense, it will promptly, upon reasonable request,
make, execute, endorse, acknowledge, execute, file and deliver all further
instruments, documents, schedules, confirmatory assignments, conveyances,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take all further action, in order to perfect,
protect or more fully evidence the purchase by Buyer or contribution to Buyer of
the Conveyed Assets and the Related Assets under this Agreement, or to enable
Buyer to exercise or enforce any of its rights under any Transaction Document.
Each Seller further agrees that from time to time, at its expense, it will
promptly, upon request, take all action that Buyer may reasonably request in
order to perfect, protect or more fully evidence the purchase or contribution of
the Conveyed Assets and the Related Assets or to enable Buyer to exercise or
enforce any of its rights hereunder or under any other Transaction Document.
Without limiting the generality of the foregoing, each Seller will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as Buyer or the then Third Party Financiers may reasonably determine to
be necessary or appropriate,
(b) place the legend set forth below on the originally executed
counterpart of each Purchased Equipment Loan.
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"This is the original of this instrument, and a security interest has been
granted in this instrument to The Bank of New York, as Indenture Trustee
for the benefit of the persons set forth in that certain Indenture, dated
as of November 26, 2002, between the Bank of New York, as Indenture Trustee
and Alliance Laundry Equipment Receivables Trust 2002-A."
Each Seller hereby authorizes Buyer or its designee to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Conveyed Assets and Related
Assets of such Seller, in each case whether now existing or hereafter generated
by such Seller. If (i) such Seller fails to perform any of its agreements or
obligations under this Agreement and does not remedy the failure within the
applicable cure period, if any, and (ii) Buyer in good faith reasonably believes
that the performance of such agreements and obligations is necessary or
appropriate to protect its interests under this Agreement, then Buyer or its
designee may (but shall not be required to) perform, or cause performance of,
such agreement or obligation and the reasonable expenses of Buyer or its
designee or assignee incurred in connection with such performance shall be
payable by such Seller as provided in Section 8.1.
SECTION 6.4. Collection of Conveyed Assets; Rights of Buyer and Its
Assignees. (a) Each Seller hereby transfers to Buyer the ownership of, and the
exclusive dominion and control over, each of the Lockbox Accounts and all
related lock-boxes owned by such Seller, and such Seller hereby agrees to take
any further action that Buyer may reasonably request in order to effect or
complete the transfer. Each Seller further agrees to use reasonable efforts to
prevent funds other than proceeds of the Specified Assets from being deposited
in any Lockbox Account except as otherwise contemplated in the Lockbox
Agreements.
(b) Buyer may, at any time after a Servicer Default has occurred and
is existing, direct the Obligors of Conveyed Assets originated by any Seller to
pay all amounts payable under any Specified Asset originated by such Seller
directly to Buyer or its designees. Furthermore, such Seller shall, at the
request of Buyer and at such Seller's expense, promptly give notice of Buyer's
interest in such Conveyed Assets to each Obligor and direct that payments be
made directly to Buyer or its designee, which notice shall be acceptable in form
and substance to Buyer. In addition, such Seller hereby (x) grants to Buyer an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of such Seller all steps necessary or advisable to
endorse, negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by such Seller or transmitted or received by Buyer
(whether or not from such Seller) in connection with any Specified Assets; and
(y) authorizes Buyer or the Indenture Trustee (at the direction of the Control
Party) or the Control Party to take any and all steps in such Seller's name and
on its behalf that are necessary or desirable, in the reasonable determination
of Buyer, to collect all amounts due under any and all Specified Assets
originated by such Seller, including endorsing such Seller's name on checks and
other instruments representing Collections and enforcing such Specified Assets
and the Contracts related to the Conveyed Assets originated by such Seller.
(c) At any time when (i) a Servicer Default shall have occurred with
respect to a Seller and remain continuing or (ii) a Servicer other than the
related Seller has been
29
designated, such Seller shall, at Buyer's request, assemble all of the Records
that evidence the Conveyed Assets originated by such Seller and the Related
Assets thereto and the Contracts related to such Conveyed Assets, or that are
otherwise necessary or desirable to collect such Conveyed Assets or Related
Assets, and make the same available to Buyer or its designee at a place selected
by Buyer or its designee.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination by the Sellers. The Sellers may terminate all of
their agreements to sell Conveyed Assets hereunder to Buyer by giving Buyer and
each Third Party Financier not less than five (5) days' prior written notice of
their election not to continue to sell Conveyed Assets to Buyer (the
"Termination of Sale Notice"); provided that the Termination of Sale Notice must
(x) be given as to all Sellers and (y) specify the effective date of
termination; provided, further, that the Sellers will not, without the prior
written consent of the Insurer, deliver a Termination of Sale Notice prior to
the date that is three (3) years from the Closing Date.
SECTION 7.2. Automatic Termination. The agreement of each Seller to sell
Conveyed Assets hereunder, and the agreement of Buyer to purchase Conveyed
Assets from such Seller hereunder, shall terminate automatically upon the
occurrence of any of the following events:
(a) at any time prior to such date, an event specified in the
definition of Insolvency Event occurs (without regard to the 60 day grace period
specified in paragraph (ii) of that definition) as a result of a case or
proceeding being filed against a Seller;
(b) if the Internal Revenue Service or the PBGC files one or more Tax
or ERISA Liens against the assets of Buyer or any Seller (including Conveyed
Assets), then (and for so long as such Tax or ERISA Liens remain in place) Buyer
shall not purchase any Conveyed Assets or Related Assets from such Seller; or
(c) the occurrence of the Conversion Date.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Indemnities by the Sellers.
Each Seller agrees to severally indemnify and hold harmless the
Insurer, the Buyer, the Issuer and each Third Party Financier and their
respective Affiliates and the respective officers, directors and employees and
agents of the same (each of the foregoing parties being an "RPA Indemnified
Party"), from and against any and all claims, liabilities, losses, costs,
expenses (including reasonable counsel fees and expenses) and damages, which may
be incurred by or asserted against any RPA Indemnified Party relating to,
arising out of or resulting from:
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(i) a breach of any representation, warranty or covenant made in
writing by such Seller, the Transferor or the Issuer;
(ii) the use, ownership, repossession (other than losses related to a
decline in value of the Equipment repossessed) or operation by the Seller
or any Affiliate thereof of any item of Equipment or other collateral
therefor;
(iii) any taxes that may at any time be asserted against any RPA
Indemnified Party with respect to the transactions contemplated in this
Agreement, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but not including
any taxes asserted with respect to, and as of the date of, the sale of the
Loans and the Receivables to the Buyer or the issuance and original sale of
the Securities, or asserted with respect to ownership of the Loans or
Receivables, or federal or other income taxes arising out of distributions
on the Securities, or any fees or other compensation payable to any such
RPA Indemnified Party) and costs and expenses in defending against the
same; and
(iv) the negligence, willful misfeasance or bad faith of the Seller or
by reason of negligent disregard of the Seller's obligations and duties
under this Agreement.
other than (i) claims, liabilities, losses, costs, expenses and damages to the
extent they result from the gross negligence or willful misconduct of an RPA
Indemnified Party, (ii) to the extent the same includes losses in respect of
Conveyed Assets and reimbursement therefor that would constitute credit recourse
to such Seller for the amount of any Conveyed Assets or Related Asset not paid
by the related Obligor, (iii) to the extent the same constitutes recourse as a
result of nonpayment by Obligors for credit reasons on the Accounts or the
related Equipment Loans, (iv) to the extent the same constitutes recourse as a
result of nonpayment by Obligors for credit reasons on the Accounts or the
related Receivables, (v) to the extent the same constitutes recourse to a Seller
for any obligation of the Issuer to increase or replenish the Available Drawing
Amount after the Closing Date, (vi) to the extent the same are or result from
taxes on or measured by the net income of the RPA Indemnified Party and (vii) to
the extent the same constitute consequential, special or punitive damages.
If any action or proceeding (including any governmental investigation)
shall be brought or asserted against any RPA Indemnified Party in respect of
which the indemnity provided above may be sought from Seller (the "Indemnifying
Party") each such RPA Indemnified Party shall promptly notify the Indemnifying
Party in writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all expenses and reasonable legal fees; provided that
failure to notify the Indemnifying Party shall not relieve it from any liability
it may have to such RPA Indemnified Party except to the extent that it shall be
actually prejudiced thereby. The RPA Indemnified Party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof at the expense of the RPA Indemnified Party; provided, however that the
fees and expenses of separate counsel to the RPA Indemnified Party in any such
proceeding shall be at the expense of the Indemnifying Party if (i) the
Indemnifying Party has agreed to pay such fees and expenses, (ii) the
Indemnifying Party shall have failed to
31
assume the defense of such action or proceeding or employ counsel reasonably
satisfactory to the RPA Indemnified Party in any such action or proceeding
within a reasonable time after the commencement of such action or (iii) the
named parties to any such action or proceeding (including any impleaded parties)
include both the RPA Indemnified Party and the Indemnifying Party, and the RPA
Indemnified Party shall have been advised in writing by counsel that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party which gives rise to a
conflict of interest (in which case, if the RPA Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such action or proceeding on behalf of such RPA
Indemnified Party, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for the Indemnified Parties, which firm shall be designated in writing by
the RPA Indemnified Party and shall be reasonably acceptable to the RPA
Indemnified Party). The Indemnifying Party shall not be liable for any
settlement of any such action or proceeding effected without its written consent
to the extent that any such settlement shall be prejudicial to the Indemnifying
Party (to which the Indemnified Party did not consent), but, if settled with its
written consent, or if there is a final non-appealable judgment for the
plaintiff in any such action or proceeding with respect to which the
Indemnifying Party shall have received notice in accordance with this paragraph,
the Indemnifying Party agrees to indemnify and hold the RPA Indemnified Parties
harmless from and against any loss or liability by reason of such settlement or
judgment.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Amendments; Waivers, Etc. (a) The provisions of this Agreement
may from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and signed by Buyer, each Seller and the
Control Party, and then the waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. This Agreement
shall not be amended unless (x) the Rating Agency Condition is satisfied, (y)
Buyer shall have delivered the proposed amendment to each of the Third Party
Financiers at least ten Business Days (or such shorter period as shall be
acceptable to each of them) prior to the execution and delivery thereof and (z)
such amendment would not result in any Material Adverse Effect.
(b) No failure or delay on the part of Buyer, any RPA Indemnified
Party, or any Third Party Financier in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on any Seller in
any case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by Buyer or any Third Party Financier under
this Agreement shall, except as may otherwise be stated in the waiver or
approval, be applicable to subsequent transactions.
32
No waiver or approval under this Agreement shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 9.2. Notices. All demands, notices and communications upon or to
the Seller, the Servicer, the Rating Agencies or any Third Party Financier under
this Agreement shall be delivered as specified in Appendix B hereto.
SECTION 9.3. Cumulative Remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Without limiting
the foregoing, each Seller hereby authorizes Buyer, at any time and from time to
time, to the fullest extent permitted by law, to set-off, against any
Obligations of any Seller to Buyer that are then due and payable or that are not
then due and payable from a Seller to Buyer but have then accrued, any and all
indebtedness or other obligations at any time owing to any Seller by Buyer to or
for the credit or the account of any Seller or that are not then due and payable
from Buyer to a Seller but have then accrued.
SECTION 9.4. Binding Effect; Assignability; Survival of Provisions. This
Agreement shall be binding upon and inure to the benefit of Buyer and the
Sellers and their respective successors and permitted assigns. No Seller may
assign any of its rights hereunder or any interest herein unless (i) it has
obtained the prior written consent of the Buyer and the Control Party and (ii)
such amendment would not result in any Material Adverse Effect. This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
first date following the Purchase Termination Date, but not later than the date
on which the Obligations payable to all Third Party Financiers shall have been
fully paid or such other time as the parties hereto shall agree and as to which
the Indenture Trustee and Control Party shall have given their prior written
consent, which consent shall not be unreasonably withheld or delayed. The rights
and remedies with respect to any breach of any representation and warranty made
by a Seller pursuant to Article III (including those remedies set forth in
Section 2.12(c))and the indemnification and payment provisions of Article VIII
and Section 9.6 shall be continuing and shall survive any termination of this
Agreement.
SECTION 9.5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF BUYER
IN THE RECEIVABLES AND THE RELATED ASSETS ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS AGREEMENT HAS BEEN DELIVERED
IN THE STATE OF NEW YORK.
SECTION 9.6. Costs, Expenses and Taxes. In addition to the obligations of
the Sellers under Article X, the Sellers agree to pay, on a joint and several
basis, on demand:
(a) all reasonable out-of-pocket and other costs and expenses in
connection with the enforcement of this Agreement, the PA Assignments or the
other Transaction Documents by Buyer, the Issuer or any Third Party Financier,
and
33
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution and delivery, and the filing and
recording, of this Agreement or the other Transaction Documents, and agrees to
indemnify each RPA Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay the taxes and fees;
provided, however, that in no event shall any Seller be liable for or pay any
taxes (or interest, penalties, or additions to tax with respect thereto) imposed
upon or measured by the income of any RPA Indemnified Party or any taxes imposed
in lieu of income taxes.
SECTION 9.7. Submission to Jurisdiction. Each party hereto hereby
irrevocably submits to the non-exclusive jurisdiction of any New York State or
Federal Court sitting in the Borough of Manhattan in the City of New York, New
York over any action or proceeding arising out of or relating to the Transaction
Documents, and hereby (A) irrevocably agrees that all claims in respect of the
action or proceeding may be heard and determined in such State or Federal Court,
(B) irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of the action or proceeding,
and (C) irrevocably appoints CT Corporation System (the "Process Agent"), with
an office on the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as
its agent to receive on behalf of it and its property service of copies of the
summons and complaint and any other process that may be served in any action or
proceeding. The service may be made by mailing or delivering a copy of the
process to Buyer or the applicable Seller in care of the Process Agent at the
Process Agent's above address, and Buyer and each Seller hereby irrevocably
authorizes and directs the Process Agent to accept the service on its behalf.
As an alternative method of service, each of Buyer and the Sellers also
irrevocably consents to the service of any and all process in any action or
proceeding by the mailing of copies of the process to Buyer or a Seller (as
applicable) at its address specified herein. Nothing in this section shall
affect the right of any party hereto to serve legal process in any other manner
permitted by law or affect the right of any party hereto to bring any action or
proceeding against the other party or any of its properties in the courts of any
other jurisdiction.
SECTION 9.8. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
OR RELATING TO THE TRANSACTION DOCUMENTS OR ANY AMENDMENT, INSTRUMENT, DOCUMENT
OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION
THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE PARTIES HERETO OR ANY
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THE TRANSACTION DOCUMENTS, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
SECTION 9.9. Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement
34
between the parties hereto with respect to the subject matter hereof and
thereof, superseding all prior oral or written understandings.
SECTION 9.10. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
SECTION 9.11. Acknowledgment and Consent. (a) The Sellers acknowledge that,
contemporaneously herewith, Buyer is transferring and otherwise conveying to the
Third Party Financiers all of Buyer's right, title and interest in, to and under
the Specified Assets and this Agreement pursuant to the applicable Third Party
Documents. The Sellers hereby consent to the sale, transfer, assignment, set
over and otherwise conveyance to the Third Party Financiers by Buyer of all
right, title and interest of Buyer in, to and under the Specified Assets and all
of Buyer's rights to receive payments and pursue remedies under the applicable
Third Party Documents (whether arising pursuant to the terms of this Agreement
or otherwise available at law or in equity). Each Seller further consents and
agrees that the Control Party shall be a third party beneficiary of those
obligations of such Seller under this Agreement and shall be entitled to enforce
such obligations as if the Control Party were a party to this Agreement.
(b) The Sellers hereby agree to execute all agreements, instruments
and documents, and to take all other action, that Buyer reasonably determines is
necessary or appropriate to evidence its consent described in subsection (a)
above.
SECTION 9.12. No Partnership or Joint Venture. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.
SECTION 9.13. No Proceedings. Each Seller hereby agrees that it will not
institute against Buyer or Issuer, or join any other Person in instituting
against Buyer or Issuer, any insolvency proceeding (namely, any proceeding of
the type referred to in the definition of Insolvency Event) so long as any
Obligation payable to any Third Party Financier shall be due and unpaid or there
shall not have elapsed one year plus one day since the last day on which any
such Obligations shall have been due and unpaid. The agreement of each Seller
set forth in this Section 9.13 shall survive the termination of this Agreement.
The foregoing shall not limit the right of a Seller to file any claim in or
otherwise take any action with respect to any insolvency proceeding that was
instituted against Buyer or Issuer by any Person other than a Seller or any
other ALS Person (provided that no such action may be taken by a Seller until
such proceeding has continued undismissed, unstayed and in effect for a period
of 10 days).
SECTION 9.14. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then the
unenforceable covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement or the other Transaction Documents (as applicable) and
35
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or any of the other Transaction Documents.
SECTION 9.15. Further Assurances. (a) Each of the parties hereto hereby
agrees that it will cooperate in good faith and use commercially reasonable
efforts to assist any requesting Co-Administrative Agent in any sale or
securitization of the Specified Assets to take place after the Conversion Date;
provided, however, that each of the parties hereto agrees that it shall not be
obligated to take any action (including making any changes or amendments to any
of the Basic Documents), or provide any consent if such party would thereby
incur any material obligations or liabilities as a result thereof; provided,
further, that such requesting Co-Administrative Agent shall, at the written
request of the assisting party, offer such party indemnification reasonably
satisfactory to such party against any costs, liabilities and expenses incurred
in providing any requested assistance.
(b) In the event of any Regulatory Change (as defined in the Note
Purchase Agreement; provided, that for purposes of this Section, the term
Regulatory Change shall include the Insurer) which results in either (i) a
determination that the Issuer or any CP Conduit (as defined in the Note Purchase
Agreement) is not a Qualified Special Purpose Entity that is not required, under
generally accepted accounting principles, to consolidate its financial
statements with any other entity, or (ii) a cost arising under Section 2.3 of
the Note Purchase Agreement, the parties hereto agree to negotiate in good faith
to amend the Basic Documents in order to eliminate the consolidation
requirement; provided, however, that no party shall be obligated to take any
action (or make any amendments) if in the reasonable opinion of such party any
such amendment to the Basic Documents will be unlawful or otherwise
disadvantageous or inconsistent with its policies or regulatory restrictions or
result in any liability, unreimbursed cost or expense to such party.
SECTION 9.16. Survival. The representations and warranties set forth in
this Agreement shall survive the transfer of the Specified Assets to the Buyer,
the contribution of the Specified Assets by the Buyer to the Issuer and the
further pledge by the Issuer to the Indenture Trustee.
SECTION 9.17. Conditional Call. Following the satisfaction of the
Receivables Call Condition, but no earlier than the second anniversary of the
Closing Date, the Sellers shall repurchase all (but not part) of the Receivables
for an amount equal to the fair market value of such Receivables. The Sellers
shall purchase the Receivables pursuant to this call promptly following
satisfaction of the Receivables Call Condition, but in any event, no later than
the day of the sale to the Third Party Purchaser which shall take place no later
than 30 days after the satisfaction of the Receivables Call Condition.
36
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to
be executed by their respective officers hereunto duly authorized as of the date
and year first above written.
ALLIANCE LAUNDRY SYSTEMS LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VP, Law and Human Resources
& Secretary
ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES
2002 LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
PURCHASE AGREEMENT
EXHIBIT A-1
FORM OF INITIAL PA ASSIGNMENT
November 26, 2002
[Date]
Reference is made to the Purchase Agreement, dated as of November 26,
2002 (as the same maybe amended, supplemented, amended and restated or otherwise
modified from time to time, the "Agreement") among Alliance Laundry Systems LLC
and certain of its subsidiaries, as Sellers, and Alliance Laundry Equipment
Receivable 2002 LLC ("Buyer"). Unless otherwise defined herein, capitalized
terms used herein have the meanings provided in Appendix A to the Pooling and
Servicing Agreement referred to in the Agreement, and this Initial PA Assignment
shall be interpreted in accordance with the conventions set forth in Part B of
such Appendix A.
The undersigned (the "Seller") hereby sells, transfers, assigns, sets
over and conveys unto Buyer all right, title and interest of the Seller in, to
and under Initial Transferred Assets.
As set forth in Section 2.7 of the Purchase Agreement, the parties
hereto intend that the transactions set forth herein constitute an absolute
conveyance by the Sellers to the Buyer of Specified Assets or true sales by the
Sellers to the Buyer with the full benefits of ownership. In the event the
transactions set forth herein do not constitute an absolute assignment, it shall
constitute the granting of a security interest by the Sellers in favor of the
Buyer in the Specified Assets as provided in Section 2.7 of the Purchase
Agreement.
This Initial PA Assignment is made without recourse but on the terms
and subject to the conditions set forth in the Transaction Documents to which
the Seller is a party. The Seller acknowledges and agrees that Buyer is
accepting this Initial PA Assignment in reliance on the representations,
warranties and covenants of the Seller contained in the Transaction Documents to
which the Seller is a party.
THIS INITIAL PA ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
AGREEMENT AND THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
page 1
IN WITNESS WHEREOF, the undersigned has caused this Initial PA Assignment
to be duly executed and delivered by its duly Authorized Officer as of the date
first above written.
ALLIANCE LAUNDRY SYSTEMS LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President, CFO &
Treasurer
------------------------------
page 2
EXHIBIT A-2
FORM OF SUBSEQUENT PA ASSIGNMENT
November 26, 2002
[Date]
Reference is made to the Purchase Agreement, dated as of November 26,
2002 (as the same maybe amended, supplemented, amended and restated or otherwise
modified from time to time, the "Agreement") among Alliance Laundry Systems LLC
and certain of its subsidiaries, as Sellers, and Alliance Laundry Equipment
Receivable 2002 LLC ("Buyer"). Unless otherwise defined herein, capitalized
terms used herein have the meanings provided in Appendix A to the Pooling and
Servicing Agreement referred to in the Agreement, and this Subsequent PA
Assignment shall be interpreted in accordance with the conventions set forth in
Part B of such Appendix A.
The undersigned (the "Seller") hereby sells, transfers, assigns, sets
over and conveys unto Buyer all right, title and interest of the Seller in, to
and under Purchased Property and Related Assets which the Seller has agreed to
transfer on such Purchase Date pursuant to Section 2.2 of the Agreement.
As set forth in Section 2.7 of the Purchase Agreement, the parties
hereto intend that the transactions set forth herein constitute an absolute
conveyance by the Sellers to the Buyer of Specified Assets or true sales by the
Sellers to the Buyer with the full benefits of ownership. In the event the
transactions set forth herein do not constitute an absolute assignment, it shall
constitute the granting of a security interest by the Sellers in favor of the
Buyer in the Specified Assets as provided in Section 2.7 of the Purchase
Agreement.
This Subsequent PA Assignment is made without recourse but on the
terms and subject to the conditions set forth in the Transaction Documents to
which the Seller is a party. The Seller acknowledges and agrees that Buyer is
accepting this Subsequent PA Assignment in reliance on the representations,
warranties and covenants of the Seller contained in the Transaction Documents to
which the Seller is a party.
THIS SUBSEQUENT PA ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE AGREEMENT AND THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
page 1
IN WITNESS WHEREOF, the undersigned has caused this Subsequent PA
Assignment to be duly executed and delivered by its duly Authorized Officer as
of the date first above written.
ALLIANCE LAUNDRY SYSTEMS LLC
By:
-----------------------------
Title:
-----------------------------
page 2
SCHEDULE 3.1(k)
PERFECTION CERTIFICATE - SELLER
The undersigned, the Secretary, of Alliance Laundry Systems LLC (the
"Company"), hereby certifies, with reference to the certain Purchase Agreement,
dated as of November 26, 2002 (terms defined in such Purchase Agreement having
the same meanings herein as specified therein), among the Company, certain
Affiliates of the Company and Alliance Laundry Equipment Receivables 2002 LLC
(the "Lender"), to the Lender as follows:
1. Name. The exact legal name of the Company as that name appears on its
Certificate of Formation is as follows:
Alliance Laundry Systems LLC
2. Other Identifying Factors.
(a) The following is the mailing address of the Company:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) If different from its mailing address, the Company's place of business
or, if more than one, its chief executive office is located at the following
address:
(c) The following is the type of organization of the Company:
Limited Liability Company
(d) The following is the jurisdiction of the Company's organization:
Delaware
(e) The following is the Company's state issued organizational
identification number [state "None" if the state does not issue such a number];
Delaware Identification Number: 2889472
3. Other Names, Etc.
(a) The following is a list of all other names (including trade names or
similar appellations) used by the Company, or any other business or organization
to which the Company became the successor by merger, consolidation, acquisition,
change in form, nature or jurisdiction of organization or otherwise, now or at
any time during the past five years.
I-1
Speed Queen ▇▇▇▇▇▇▇
UniMac Ajax
(b) Attached hereto is the information required in Section 2 for any other
business or organization to which the Company became the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise, now or at any time during the past five years.
Not Applicable
4. Other Current Locations.
(a) The following are all other locations in the United States of America
in which the Company maintains any books or records relating to any of the
Specified Assets consisting of accounts, instruments, chattel paper, general
intangibles or mobile goods:
None
(b) The following are all other locations in the United States of America
where any of the Specified Assets consisting of inventory or equipment is
located:
Not Applicable
(c) The following are the names and addresses of all persons or entities
other than the Company, such as, consignees, warehousemen or
purchasers of chattel paper, which have possession or are intended to
have possession of any of the Specified Assets consisting of
instruments, chattel paper, inventory or equipment:
LaSalle Bank National Association
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
5. Prior Locations.
(a) Set forth below is the information required by Section 4(a) with
respect to each location or place of business previously maintained by
the Company at any time during the past five years in a state in which
the Company has previously maintained a location or place of business
at any time during the past four months:
Not Applicable
I-2
IN WITNESS WHEREOF, we have hereunto signed this Certificate on November
26, 2002.
ALLIANCE LAUNDRY SYSTEMS LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VP, Law and Human Resource
& Secretary
I-3
SECTION 3.1(p)
ACCOUNT BANKS AND PAYMENT INSTRUCTIONS
I-1
APPENDIX A
DEFINITIONS
A. All capitalized terms used in this Agreement but not otherwise defined
shall have the respective meanings assigned to them in Part I of Appendix A
to the Pooling and Servicing Agreement. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, another Person or any Subsidiary of such other Person. A
Person shall be deemed to control another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise.
"Aggregate Unpaid Balance" is defined in Section 2.1 of this
Agreement.
"ALH" means Alliance Laundry Holdings LLC, a limited liability company
organized under the laws of the State of Delaware.
"Allocated Transfer Consideration" is defined in Part I of Appendix A
to the Pooling and Servicing Agreement.
"ALS" is defined in Part I of Appendix A to the Pooling and Servicing
Agreement.
"Authorized Officer" means, with respect to Buyer or any Seller, the
Chief Executive Officer, the President, the Vice President, the Secretary, the
Assistant Secretary, the Chief Financial Officer, the Treasurer, the Assistant
Treasurer and any other Officer duly appointed by its board of managers.
"Bank Account" means any "deposit account" as defined in Section
9-102(a)(29) of the UCC, whether now owned or hereafter acquired by the Issuer.
"Business Day" means a day (other than a Saturday or Sunday) (i) on
which commercial banks in New York, New York are not authorized or required to
be closed for business, and (ii) if such day relates to the funding or pricing
of any interest in the Eurodollar markets, on which commercial banks in London
are not authorized or required to be closed for business.
"Buyer" is defined in the preamble to this Agreement.
I-1
"Calculation Period" means (i) with respect to any Receivable, a
period beginning on the first day and ending on the last day of each fiscal
month of a Seller; provided, however, that the initial Calculation Period for
Receivables shall commence on October 1, 2002 and end on November 3, 2002 and
(ii) with respect to any Equipment Loan, a period beginning on the first day and
ending on the last day of each calendar month; provided, however, that the
initial Calculation Period for the Equipment Loans shall commence on October 1,
2002 and end on November 3, 2002.
"Closing Date" means November 26, 2002.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral Documents" is defined in Part I of Appendix A to the
Pooling and Servicing Agreement.
"Collections" means, with respect to any Conveyed Asset, all cash
collections and other proceeds, whether in the form of cash, checks, drafts or
other instruments, in respect of such Conveyed Asset, Related Assets with
respect to such Conveyed Asset, whether the same represent principal, Finance
Charges, insurance proceeds of Related Security (that the applicable Seller or
the Servicer applies in the ordinary course of its business to amounts owed in
respect of any such Conveyed Asset and net proceeds of any sale or other
disposition of repossessed goods that were the subject of any such Conveyed
Asset), or otherwise, including all such amounts received on or after the Cutoff
Date..
"Common Non-Trust Collateral" is defined in Section 5.1(u) of this
Agreement.
"Common Trust Collateral" is defined in Section 5.1(k) of this
Agreement.
"Contract" means an agreement between a Seller and any Person pursuant
to which such Person is obligated to make payments in respect of any Conveyed
Assets or Related Asset.
"Control Party" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"Conversion Date" is defined in Part I of Appendix A to the Pooling
and Servicing Agreement.
"Conveyed Asset" means either or both, as the context may require, of
an Equipment Loan or a Receivable.
"Conveyed Assets" is defined in Section 2.2 of this Agreement.
"Credit Agreement" is defined in Section 3.1(m) of this Agreement.
"Credit and Collection Policy" means either or both, as the context
may require, of the Equipment Loan Credit and Collection Policy and the
Receivables Credit and Collection
I-2
Policy.
"Custodian" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"Cutoff Date" means the last day of any Calculation Period.
"Days Sales Outstanding - Receivables" is defined in Part I of
Appendix A to the Pooling and Servicing Agreement.
"Default Ratio" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"Defaulted Asset" means either or both, as the context may require, of
a Defaulted Equipment Loan or Defaulted Receivable.
"Defaulted Equipment Loan" is defined in Part I of Appendix A to the
Pooling and Servicing Agreement.
"Defaulted Receivable" is defined in Part I of Appendix A to the
Pooling and Servicing Agreement.
"Determination Date" is defined in Part I of Appendix A to the Pooling
and Servicing Agreement.
"Diluted Receivable" is defined in Part I of Appendix A to the Pooling
and Servicing Agreement.
"Discount Rate" is defined in Section 2.11(d) of this Agreement.
"Dollars" means dollars in lawful money of the United States of
America.
"Domestic Person" means any Person that is organized under the laws of
the United States or any State thereof, or has a place of business located in
the United States or otherwise is subject to the jurisdiction of one or more
civil courts of the United States (other than by reason of contractual
submission to such jurisdiction).
"Eligible Equipment Loan" is defined in Part I of Appendix A to the
Pooling and Servicing Agreement.
"Eligible Receivable" is defined in Part I of Appendix A to the
Pooling and Servicing Agreement.
"Equipment" means equipment that conforms with the Equipment Loan
Credit and Collection Policy (including renewals and replacements thereof and
additions thereto).
"Equipment Loan" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
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"Equipment Loan Documents" shall mean, with respect to an Equipment
Loan, the following documents:
(i) an originally executed counterpart of the related loan agreement,
executed by a duly authorized representative of the Obligor and the
applicable Seller;
(ii) the originally executed Equipment Note, executed by a duly
authorized representative of the Obligor;
(iii) if received, the acknowledgment copy of each UCC-1 Financing
Statement filed or recorded in connection with such Equipment Loan, with
evidence of filing or recording thereon, or if not yet received, a copy of
each such UCC-1 Financing Statement, if any;
(iv) if received, the acknowledgment copy of each filed or recorded
intervening UCC-3 assignment, showing a chain to the Borrower, of each UCC-
1 Financing Statement, or if not yet received, a copy of each such UCC-3
assignment, if any;
(v) a copy of an insurance certificate or other evidence satisfactory
to Buyer that all insurance policies required to be maintained by the
related Obligor with respect to the related Equipment are in full force and
effect; and
(vi) all documents (if any) evidencing or relating to Supporting
Obligations for such Equipment Loan, including recourse or support
obligations, guarantees, indemnities or security, and all letters of credit
relating thereto (if any).
"Equipment Loan Credit and Collection Policy" means Seller's credit
and collection policies and practices relating to Contracts and Equipment Loans
existing on the date hereof, as modified from time to time in accordance with
this Agreement, or such other Seller's credit and collection policies and
practices which are the same in all material respects as the Servicer's credit
and collection policies and practices.
"Equipment Note" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer with Seller under Section 414
of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of
I-4
ERISA), whether or not waived; (d) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (e) the incurrence of any liability
under Title IV of ERISA upon the termination of any Plan or the withdrawal or
partial withdrawal of Seller or any ERISA Affiliates from any Plan or
Multiemployer Plan; (f) the receipt by Seller or any ERISA Affiliate from the
Pension Benefit Guaranty Corporation of any notice relating to the intention to
terminate any Plan or to appoint a trustee to administer any Plan; (g) the
receipt by Seller or any ERISA Affiliate of any notice concerning the imposition
of withdrawal liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA; and (h) the occurrence of a "prohibited transaction" with respect to
which the Borrower is a "disqualified person" (within the meaning of Section
4975 of the Code) or with respect to which the Borrower could otherwise be
liable.
"Event of Default" is defined in Part I of Appendix A to the Pooling
and Servicing Agreement.
"Exempt Collateral" is defined in Part I of Appendix A to the Pooling
and Servicing Agreement.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Finance Charges" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.
"Funding Date" means the Purchase Date on which a Seller transfers
property to the Buyer, and the date on which Buyer further transfers to the
Issuer, Conveyed Assets or an interest therein and same are financed by a Third
Party Financier.
"Funding Date Data Pool Report" means, with respect to any Funding
Date, a computer diskette or direct modem electronic transmission, containing
(i) a complete data profile report in Excel format substantially in the form to
be agreed by the first Funding Date (including updated data of the Specified
Assets held by the Buyer as of the end of such Funding Date after giving effect
to the contemplated transfer of Conveyed Assets and Related Assets on such
Funding Date), (ii) the invoice numbers and associated Unpaid Balances of all
Receivables and Equipment Loans to be acquired by Buyer on such Funding Date,
(iii) the Schedule of Loans on the Schedule of Receivables as of the relevant
Cutoff Date, as applicable (which shall identify which Equipment Loans are
Eligible Equipment Loans or which Receivables are Eligible Receivables, as
applicable) and (iv) any other information reasonably requested by Buyer, the
Control Party, the Indenture Trustee or any Co-Administrative Agent.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board and the rules and regulations of the
Securities and Exchange Commission. If applicable, the term GAAP shall
I-5
refer to generally accepted accounting principles in Canada.
"Governmental Authority" means the United States of America, any state
or other political subdivision thereof and any entity in the United States of
America that exercises executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Holder" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"Indenture" is the Indenture, dated as of November 26, 2002 between
the Issuer and the Indenture Trustee, as amended and supplemented from time to
time in accordance with its terms.
"Indenture Trustee" is defined in Part I of Appendix A to the Pooling
and Servicing Agreement.
"Ineligible Conveyed Asset" means, on the date of determination, a
Conveyed Asset acquired by Buyer which does not constitute either an Eligible
Receivable or an Eligible Equipment Loan.
"Initial Cutoff Date" is defined in Part I of Appendix A to the
Pooling and Servicing Agreement.
"Initial PA Assignment" means an assignment by a Seller, substantially
in the form of Exhibit A-1 to this Agreement, evidencing Buyer's acquisition of
the Conveyed Assets and Related Assets generated by such Seller, as it may be
amended, supplemented or otherwise modified from time to time.
"Initial Transferred Assets" is defined in Section 2.1 of this
Agreement.
"Insolvency Event" means, for any Person, any of the following events:
(i) such Person shall generally not pay its debts as such debts become
due; or
(ii) such Person shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against such Person seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official
for it or any substantial part of its property and, solely in the case of
such a proceeding instituted against such Person, such proceeding continues
undismissed or unstayed for a period of 60 consecutive days, or (iii) such
Person shall take any corporate action to authorize any of the actions set
forth in clause (ii) above.
I-6
"Insurer" means Ambac Assurance Corporation, a stock insurance company
organized and existing under the laws of the State of Wisconsin, and any
successor thereto.
"Lien" is defined in Part I of Appendix A to the Pooling and Servicing
Agreement.
"Loan Balance" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"Lockbox Account" means the lockboxes, related demand deposit accounts
and other bank accounts maintained at the financial institutions listed on
Schedule 3.1(p) to this Agreement, into which Collections from the Conveyed
Assets are deposited, and any bank account that is hereafter established at any
financial institution for such purpose.
"Lockbox Agreements" means any letter agreement among a Lockbox Bank,
the Issuer and the Servicer, as any such letter agreement may be amended,
supplemented or modified from time to time in accordance with its terms.
"Lockbox Bank" means any of the banks at which one or more Lockbox
Accounts are maintained from time to time.
"Loss Discount" is defined in Section 2.11(b) of this Agreement.
"Material Adverse Effect" means, with respect to any event or
circumstances, a material adverse effect on (a) the business, financial
condition, operations or assets of the Issuer or of the Issuer, Buyer, Seller or
Servicer (taken as a whole), (b) the ability of any Issuer, Buyer, Seller or
Servicer to perform its obligations under any Transaction Document, (c) the
validity, enforceability of, or collectibility of, amounts payable by any
Issuer, Buyer, Seller or Servicer under any Transaction Document to which it is
a party, (d) the status, existence, perfection or priority of the interest of
any of the Third Party Financier in the Conveyed Assets and Related Assets, (e)
the validity, enforceability or collectibility of all or any portion of the
Conveyed Assets and Related Assets (amounts in excess of $1,000,000 shall be
deemed to result in a Material Adverse Effect) or (f) the ability of any of the
Third Party Financier to exercise its control or consent rights or monitor the
performance of the Conveyed Assets and Related Assets and compliance of the
Issuer, Buyer, Seller or Servicer to the Transaction Documents.
"Monthly Period" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"Monthly Report" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"Monthly Report Date" means the tenth Business Day following the end
of any calendar month.
"Non-Trust Loan" is defined in Section 5.1(k) of this Agreement.
I-7
"Notes" is defined in Part I of Appendix A to the Pooling and
Servicing Agreement.
"Obligations" means (a) all obligations of Buyer to the Third Party
Financiers arising under or in connection with the applicable Third Party
Documents, and (b) all obligations of a Seller to Buyer and any other RPA
Indemnified Party arising under or in connection with this Agreement or any
other Transaction Documents, in each case howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due.
"Obligor" means a Person obligated to make payments pursuant to a
Conveyed Asset and/or Contract.
"Operative Documents" means, with respect to a Person, (i) if such
Person is a limited liability company, its certificate of formation and limited
liability company agreement or otherwise titled operative agreement and (ii) if
such Person is a corporation, its articles of incorporation and by-laws.
"PBGC" or "Pension Benefit Guaranty Corporation" means the Pension
Benefit Guaranty Corporation created under Section 4002(a) of ERISA or any
successor thereto.
"Permitted Adverse Claim" means (a) ownership, security interests or
other rights and interests arising under the Transaction Documents and the Third
Party Documents, (b) any Adverse Claim to be released simultaneously with the
Purchase by Buyer hereunder, (c) Adverse Claims arising solely as a result of
any action taken by any Third Party Financier under this Agreement or the
applicable Transaction Documents, and (d) with respect to Receivable Lockbox
Accounts, liens in favor of the Lockbox Banks in respect of their fee, and right
of reimbursement for uncollected funds.
"Person" means an individual, partnership, corporation, association,
trust, or any other entity, or organization, including a government or political
subdivision or agency or instrumentality thereof.
"Plan" means any defined benefit plan maintained or contributed to by
Seller or any Subsidiary of Seller or by any trade or business (whether or not
incorporated) under common control with Seller or any Subsidiary of Seller as
defined in Section 4001 (b) of ERISA and insured by the PBGC under Title IV of
ERISA.
"Pooling and Servicing Agreement" is the Pooling and Servicing
Agreement, dated as of November 26, 2002, among ALS, the Seller and the Issuer,
as amended, supplemented or modified from time to time.
"Prime Rate" shall mean the prime rate as published in The Wall Street
Journal, determined as of each last Business Day of the fiscal month of Seller.
"Proceeds" shall have the meaning set forth in the UCC.
I-8
"Process Agent" is defined in Section 9.7 of this Agreement.
"Purchase" means each purchase of Conveyed Assets and Related Assets
by Buyer from a Seller under this Agreement.
"Purchase Date" means, with respect to any Conveyed Assets, the
Funding Date specified in Section 2.2 of this Agreement as the date on which
such Conveyed Assets are transferred by the applicable Seller to the Buyer.
"Purchase Discount Reserve Ratio" is defined in Section 2.11 of this
Agreement.
"Purchase Price" is defined in Section 2.10 of this Agreement.
"Purchase Price Credit" is defined in Section 2.12 of this Agreement.
"Purchase Price Percentage" is defined in Section 2.11 of this
Agreement.
"Purchase Termination Date" means the earlier to occur of (a) the date
specified by Seller pursuant to Section 7.1 of this Agreement and (b) the date
on which any event referred to in Section 7.2 of this Agreement initially
occurs.
"Purchased Equipment Loans" is defined in Section 2.2 of this
Agreement.
"Purchased Receivables" is defined in Section 2.2 of this Agreement.
"Rapid Amortization Event" is defined in Part I of Appendix A to the
Pooling and Servicing Agreement.
"Rating Agencies" means Standard & Poor's Rating Services and ▇▇▇▇▇'▇
Investors Services.
"Rating Agency Condition" means, with respect to any action to be
taken or proposed action to be taken, shall mean that (x) each Rating Agency
shall have notified the Issuer, the Servicer, Control Party and the Indenture
Trustee in writing that such action will not result in a reduction or withdrawal
of any rating at issuance of outstanding Notes with respect to which it is a
Rating Agency, including any underlying rating issued to the Insurer of such
Notes as if such Notes were issued without the benefit of any credit enhancement
provided by such Insurer and (y) the Control Party shall have consented in
writing thereto.
"Receivable" means any indebtedness and other obligations (excluding
obligations under any Equipment Loans) owed (before giving effect to any
transfer or conveyance contemplated under this Agreement) to a Seller, whether
constituting an account, chattel paper or general intangible, arising in
connection with the sale of goods or merchandise or the rendering of services by
such Seller or any of Subsidiaries that have been approved in writing by the
Control Party and includes the obligation to pay any Finance Charges with
respect thereto.
I-9
"Receivable Lockbox Accounts" means each of those lockboxes and
related demand deposit accounts, which are listed on Schedule 3.1(p), and each
additional or substitute lockbox and demand deposit account.
"Receivable Repurchase Amount" is defined in Section 2.12 hereof.
"Receivables Credit and Collection Policy" means Seller's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof, as modified from time to time in accordance with this
Agreement, or such other Seller's credit and collection policies and practices
which are the same in all material respects as the Servicer's credit and
collection policies and practices.
"Records" means, with respect to any Conveyed Asset, all Contracts and
other documents, books, records and other information (including, without
limitation, computer tapes, disks, punch cards, data processing software and
related property and rights) relating to such Conveyed Asset, any Related
Security therefor and the related Obligor.
"Related Assets" is defined in Section 2.2 of this Agreement.
"Related Security" means, with respect to any Conveyed Asset:
(i) with respect to a Purchased Equipment Loan, the Equipment Loan
Documents related thereto;
(ii) with respect to Purchased Equipment Loan, all of Seller's rights
to the related Equipment, including, without limitation, all security
interests therein granted by Obligors pursuant to the Equipment Loan
Documents related to the Purchased Equipment Loans and any other Collateral
securing such Purchased Equipment Loans.
(iii) all rights, remedies, powers and privileges of the applicable
Seller under the applicable Equipment Loan Documents (including all rights
of such Seller in and to the Equipment and other interests that are the
subject of the applicable Equipment Loans) and the Purchased Receivables;
(iv) all Servicing Records and other books and Records relating to any
of the foregoing;
(v) all recourse or support obligations, surety bonds, guarantees,
indemnities and security relating to any of the foregoing and all letters
of credit relative thereto and all Proceeds thereof;
(vi) all insurance policies covering the related Equipment and any
proceeds with respect thereto and all FCIA Insurance covering Receivables
the Obligors with respect to which are not resident in the United States;
I-10
(vii) to the extent not included in the foregoing, all "accounts,"
"chattel paper," "instruments," "goods" and "general intangibles" (as
defined in the UCC) relating to or constituting any and all of the
foregoing in whole or in part; and
(viii) all replacements, substitutions, distributions on, or Proceeds
of, any of the foregoing.
"Reporting Date" means:
(a) if ALH is required to report its financial statements to only the
Securities and Exchange Commission, such date following the end of ALH's annual
or quarterly period as the Securities and Exchange Commission shall require for
delivery of financial statements to it by ALH;
(b) if ALH is required to report its financial statements to only the
Ontario Securities Commission, such date following the end of ALH's annual or
quarterly period as the Ontario Securities Commission shall require for delivery
of financial statements to it by ALH;
(c) if ALH is required to report its financial statements to both the
Securities and Exchange Commission and the Ontario Securities Commission, the
earlier of such dates as such commission shall require for delivery of financial
statements to it by ALH; or
(d) if ALH is not required to report its financial statements to
either the Securities and Exchange Commission or the Ontario Securities
Commission, forty-five (45) days after the end of each fiscal quarter of ALH and
ninety (90) days after the end of each fiscal year of ALH.
"RPA Indemnified Losses" is defined in Section 8.1 of this Agreement.
"RPA Indemnified Party" is defined in Section 8.1 of this Agreement.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means ALS and each of its Subsidiaries from time to time
being party to this Agreement as a "Seller" pursuant to Section 2.8 hereof.
"Seller Person" means Seller and each of its Affiliates (other than
Buyer).
"Seller Conveyed Assets Review" is defined in Section 5.1(c) of this
Agreement.
"Servicer Default" is defined in Part I of Appendix A to the Pooling
and Servicing Agreement.
"Servicing Records" shall mean all servicing records, including any
and all
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servicing agreements, files, documents, records, data bases, computer tapes,
copies of computer tapes, proof of insurance coverage, insurance policies, other
closing documentation, payment history records, and any other records relating
to or evidencing the servicing of the Conveyed Assets.
"Settlement Date" means (i) with respect to the Receivables, the
eighth Business Day of each fiscal month of Seller and (ii) with respect to the
Equipment Loans, the eighth Business Day of each calendar month of Seller.
"Settlement Period" means each period from one Settlement Date to the
day prior to the next Settlement Date.
"Specified Assets" is defined in Section 2.2 of this Agreement.
"Subsequent PA Assignment" means an assignment by a Seller,
substantially in the form of Exhibit A-2 to this Agreement, evidencing Buyer's
acquisition of the Conveyed Assets and Related Assets generated by such Seller,
as it may be amended, supplemented or otherwise modified from time to time.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of Seller.
"Supporting Obligations" shall have the meaning set forth in the UCC.
"Tax or ERISA Lien" means a lien arising under Section 6321 of the
Internal Revenue Code or Section 302(f) or 4068 of ERISA.
"Termination of Sale Notice" is defined in Section 7.1 of this
Agreement.
"Third Party Documents" means the Pooling and Servicing Agreement, and
with respect to a Third Party Financier, all other documents executed in
connection with the financing or guaranty or credit enhancement provided by such
Third Party Financier (other than the Transaction Documents).
"Third Party Financier" means (i) the Noteholders under the Indenture
and any agent thereof, (ii) the Insurer and (iii) a Person other than Buyer,
Seller or its Affiliate which is to acquire from Buyer the title, ownership,
beneficial interest or security interest in any Specified Assets pursuant to the
applicable Third Party Documents.
"Total Consideration" is defined in Section 2.12(a) of this Agreement.
"Transaction Documents" means, collectively, this Agreement, the
Pooling and
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Servicing Agreement, each Contract, the Lockbox Agreements, any Seller's
Operative Document and all other instruments, documents and agreements executed
and delivered by any Seller in connection therewith.
"Transferred Asset" means any Specified Asset, the ownership or the
beneficial interest in which is sold, assigned, pledged or otherwise transferred
to a Third Party Financier pursuant to the applicable Third Party Documents.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"Unpaid Balance" means, with respect to any Purchased Receivable at
any time, the unpaid principal amount thereof (after giving effect to all
prepayments) as shown in the books of Seller or Servicer at such time including
any amount payable in respect of Finance Charges or shipping, packaging,
handling or similar costs; and with respect to any Purchased Equipment Loan, as
of any Cutoff Date, the unpaid principal balance of such Purchased Equipment
Loan, as shown on the books of such Seller as of such date and as of any
Accounting Date, the Loan Balance thereof.
"Write-Off" means any Conveyed Asset that, consistent with the
applicable Credit and Collection Policy, has been written off as uncollectible.
B. Other Interpretative Matters. For purposes of any Transaction Document,
unless otherwise specified therein: (1) accounting terms used and not
specifically defined therein shall be construed in accordance with GAAP; (2)
terms used in Article 9 of the New York UCC, and not specifically defined in
that Transaction Document, are used therein as defined in such Article 9; (3)
the term "including" means "including without limitation," and other forms of
the verb "to include" have correlative meanings; (4) references to any Person
include such Person's permitted successors; (5) in the computation of a period
of time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means "to but
excluding"; (6) the words "hereof, "herein" and "hereunder" and words of similar
import refer to such Transaction Document as a whole and not to any particular
provision of such Transaction Document; (7) references to "Section," "Schedule"
and "Exhibit" in such Transaction Document are references to Sections, Schedules
and Exhibits in or to such Transaction Document; (8) the various captions
(including any table of contents) are provided solely for convenience of
reference and shall not affect the meaning or interpretation of such Transaction
Document; and (9) references to any statute or regulation refer to that Statute
or regulation as amended from time to time, and include any successor statute or
regulation of similar import.
▇-▇▇
▇▇▇▇▇▇▇▇ ▇
Notice Addresses and Procedures
All requests, demands, directions, consents, waivers, notices,
authorizations and communications provided or permitted under this Agreement to
be made upon, given or furnished to or filed with Seller, the Servicer, the
Transferor, the Rating Agencies or any Third Party Financier shall be in
writing, personally delivered, sent by facsimile with a copy to follow via first
class mail or mailed by certified mail return receipt requested, and shall be
deemed to have been duly given upon receipt:
(a) in the case of the Buyer, at the following address:
Alliance Laundry Equipment Receivables 2002 LLC
c/o The Corporation Trust Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
Alliance Laundry Equipment Receivables 2002 LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
(b) in the case of the Seller and the Servicer, at the following
address:
Alliance Laundry Systems LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Alliance Laundry Systems LLC
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Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Ropes & ▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
(c) in the case of the Indenture Trustee, at its Corporate Trust
Office
(d) in the case of the Issuer or the Owner Trustee, to the Owner
Trustee at its Corporate Trust Office, with copies to:
Alliance Laundry Equipment Receivables 2002 LLC
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Attention: Treasurer
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Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
and:
Alliance Laundry Equipment Receivables 2002 LLC
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Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Ropes & ▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
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The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee and the Indenture Trustee shall
likewise promptly transmit any notice received by it from the
Noteholders to the Issuer.
(e) in the case of ▇▇▇▇▇'▇ Investors Service, to:
▇▇▇▇▇'▇ Investors Service
ABS Monitoring Department
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Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation:212-553-0300
(f) in the case of Standard & Poor's Ratings Services, to:
Standard & Poor's Ratings Services
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Attention: Asset Backed Surveillance Department
Telecopy: 212-438-2648
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
(g) in the case of Ambac Assurance Corporation, to:
Ambac Assurance Corporation
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Attention: Structured Finance Department - ABS
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: 212-668-0340
(h) in each case in which notice or other communication to the
Insurer refers to Servicer Default, an Event of Default, a Rapid
Amortization Event, a claim on the Ambac Insurance Policy or any event
with respect to which failure on the part of the Insurer to respond
shall be deemed to constitute consent or acceptance, then a copy of
such notice or other communication shall also be sent to the attention
of the general counsel of each of the Insurer and the Indenture
Trustee and shall be marked to indicate "URGENT MATERIAL ENCLOSED."
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(i) in the case of counsel to Insurer:
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: 212-878-8000
(j) and in the case of counsel to Indenture Trustee:
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: 212-238-3100
Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
(k) in the case of the Noteholders, to:
Bear, ▇▇▇▇▇▇▇ & Co., Inc.
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Attention:
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Telecopy No.:
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Confirmation: ▇▇▇-▇▇▇-▇▇▇▇
CIBC World Markets Corp., as Agent
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Attention: Asset Securitization Group: Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: 212-856-4000
or at such other address as shall be designated by such party in a written
notice to the other parties to this Agreement.
Where any Basic Document provides for notice to the Noteholders of any
condition or event, such notice shall be sufficiently given (unless otherwise
expressly provided in a Basic Document) if it is in writing and mailed,
first-class, postage prepaid to each Noteholder affected by such condition or
event, at such Person's address as it appears on the Note Register or
Certificate Register, as applicable, not later than the latest date, and not
earlier than the earliest date, prescribed in such Basic Document for the giving
of such notice. If notice to Noteholders is given by mail, neither the failure
to mail such notice nor any defect in any notice so mailed to
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any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
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