$250,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 2, 2000
among
MCII FUNDING II, INC.
as the Seller
and
CANADIAN IMPERIAL BANK OF COMMERCE
as the Purchaser
and
CANADIAN IMPERIAL BANK OF COMMERCE
as the Administrative Agent
and
BUSLEASE, INC.
as the Servicer
and
BNY ASSET SOLUTIONS LLC
as the Backup Servicer
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.........................................................................1
Section 1.01 Certain Defined Terms...............................................1
Section 1.02 Other Terms........................................................30
ARTICLE II. AMOUNTS AND TERMS OF THE PURCHASES................................................30
Section 2.01 Purchase Facility..................................................30
Section 2.02 Making Purchases...................................................30
Section 2.03 Settlement Procedures..............................................31
Section 2.04 Fees...............................................................36
Section 2.05 Payments and Computations, Etc.....................................36
Section 2.06 Cash Collateral Account............................................36
Section 2.07 Blocked Accounts...................................................37
ARTICLE III. CONDITIONS OF PURCHASES..........................................................38
Section 3.01 Conditions Precedent to Initial Purchase...........................38
Section 3.02 Conditions Precedent to All Purchases..............................40
ARTICLE IV. REPRESENTATIONS AND WARRANTIES....................................................43
Section 4.01 Representations and Warranties of the Seller.......................43
Section 4.02 Representations and Warranties of the Servicer.....................48
Section 4.03 Representations and Warranties of the Backup Servicer..............50
ARTICLE V. COVENANTS..........................................................................51
Section 5.01 Covenants of the Seller............................................51
Section 5.02 Covenants of the Servicer..........................................56
Section 5.03 Negative Covenants of the Seller...................................59
Section 5.04 Negative Covenants of the Servicer.................................61
Section 5.05 Reporting Covenants of the Seller and the Servicer.................62
ARTICLE VI. ADMINISTRATION AND COLLECTION.....................................................64
Section 6.01 Retention and Termination of Servicer..............................64
Section 6.02 Duties of the Servicer.............................................66
Section 6.03 Rights of the Administrative Agent.................................68
Section 6.04 Responsibilities of the Servicer...................................69
Section 6.05 Further Actions Evidencing Purchases...............................69
Section 6.06 Servicer Fee.......................................................70
Section 6.07 Claims Under Policy................................................70
Section 6.08 Preference Claims..................................................71
Section 6.09 Surrender of Policy................................................71
ARTICLE VII. SERVICER TERMINATION EVENTS......................................................71
Section 7.01 Servicer Termination Events........................................71
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ARTICLE VIII. INDEMNIFICATION.................................................................75
Section 8.01 Indemnities by the Seller..........................................75
Section 8.02 Indemnities by the Servicer........................................77
Section 8.03 Indemnification Due to Failure to Consummate Purchase..............78
Section 8.04 Purchase Discount Protection.......................................78
Section 8.05 Notices............................................................80
ARTICLE IX. THE ADMINISTRATIVE AGENT..........................................................80
Section 9.01 Appointment of Administrative Agent................................80
Section 9.02 Replacement of Administrative Agent................................80
ARTICLE X. MISCELLANEOUS......................................................................80
Section 10.01 Amendments, Etc....................................................80
Section 10.02 Notices, Etc.......................................................80
Section 10.03 Costs, Expenses....................................................80
Section 10.04 Payments Net of Taxes..............................................81
Section 10.05 No Waiver; Remedies................................................81
Section 10.06 Assignment, Successors and Assigns.................................81
Section 10.07 Construction of the Agreement......................................82
Section 10.08 No Proceedings.....................................................82
Section 10.09 Confidentiality....................................................82
Section 10.10 No Recourse........................................................83
Section 10.11 Governing Law; Execution in Counterparts...........................83
Section 10.12 Submission to Jurisdiction; Appointment of Agent to Accept
Service of Process.............................................83
Section 10.13 Third Party Beneficiary Rights.....................................83
Section 10.14 No Claims..........................................................83
Section 10.15 Waiver of Set-off..................................................84
Section 10.16 LIBO Funding Illegal...............................................84
Section 10.17 LIBO Deposits Unavailable..........................................84
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EXHIBITS
EXHIBIT A - Form of Monthly Report
EXHIBIT B - Form of Officer's Certificate
EXHIBIT C - Form of Termination Notice
EXHIBIT D - Form of Consent
EXHIBIT E - Form of Performance Indemnity - Servicer
EXHIBIT F - Form of Performance Indemnity - Transferors
EXHIBIT G - Form of Vehicle Loan
EXHIBIT H - Form of Vehicle Lease
EXHIBIT I - Form of Lockbox Agreement
EXHIBIT J - Form of Conditions Precedent Certificate
SCHEDULES
Schedule 1.01(a) - Preclosing Consolidated EBITDA
Schedule 1.01(b) - Cash Management Systems
Schedule 1.01(c) - Credit and Collection Policy
Schedule 1.01(e) - Stated Term of Eligible Receivables
Schedule 1.01(s) - Special Concentration Limits
Schedule 1.01(t) - Transferors
Schedule 4.01(v) - Lockbox Accounts
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RECEIVABLES PURCHASE AGREEMENT dated as of May 2, 2000 (as
amended, restated, supplemented or otherwise modified from time to time and in
effect, this "AGREEMENT") among MCII FUNDING II, INC., a Delaware corporation,
as seller (together with its permitted successors and assigns in such capacity,
the "SELLER"), CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC") (together with its
permitted successors and assigns in such capacity, the "PURCHASER"), CIBC, as
agent for the Purchaser (the "ADMINISTRATIVE AGENT"), BUSLEASE, INC.
("BUSLEASE"), as servicer (together with its permitted successors and assigns in
such capacity, the "SERVICER"), and BNY ASSET SOLUTIONS LLC (the "BACKUP
SERVICER"). Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Article I hereof.
ARTICLE I.
DEFINITIONS
Section 1.01 CERTAIN DEFINED TERMS. 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):
"ADMINISTRATIVE AGENT" has the meaning set forth in the
recital to this Agreement.
"ADVERSE CLAIM" means, in respect of the property of any
Person, any ownership interest of any other Person, any mortgage, deed of trust,
hypothecation, pledge, lien, security interest, grant of a power to confess
judgment, preference, right to priority payment, charge or other encumbrance or
security arrangement of any nature whatsoever, including, without limitation,
any conditional sale or title retention arrangement, and any assignment, deposit
arrangement, consignment or lease intended as, or having the effect of,
security.
"AFFECTED PARTY" means the Purchaser, the Administrative
Agent, the Transaction L/C Issuer, the Custodian, FSA and each Affiliate of the
foregoing Persons.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"AGREEMENT" has the meaning set forth in the recital hereto.
"ALTERNATE BASE RATE" means a fluctuating rate of interest per
annum equal to the higher of:
(a) the rate of interest most recently announced by the
Administrative Agent as its base rate; and
(b) the Overnight Funds Rate, plus [**]% per annum.
The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by the Administrative Agent in connection
with extensions of credit. Changes in the Purchaser Discount, to the extent
computed by reference to the Alternate Base Rate, shall take effect
simultaneously with each change in the Alternate Base Rate. The
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Administrative Agent shall give notice promptly to the Seller of changes in
the Alternate Base Rate.
"AVAILABLE L/C AMOUNT" means, with respect to any Transaction
Letter of Credit, the meaning ascribed to such term in such Transaction Letter
of Credit MINUS the portion of the Available L/C Amount, if any, allocated to
the "Required Credit Enhancement" (as defined in the Primary Purchase Agreement)
under the Primary Purchase Agreement.
"BACKUP SERVICER" means BNY Asset Solutions LLC, and its
permitted successors and permitted assigns.
"BACKUP SERVICER FEE" has the meaning set forth in the Backup
Servicing Agreement.
"BACKUP SERVICING AGREEMENT" means that certain Backup
Servicing Agreement dated as of May 2, 2000 among the Seller, the Administrative
Agent, the Servicer and the Backup Servicer, as the same shall be amended,
modified or supplemented and in effect from time to time.
"BALLOON PAYMENT" means, with respect to any Receivable, a
final Scheduled Contract Payment which, pursuant to the related Contract, equals
an amount which is greater than other Scheduled Contract Payments (including,
without limitation, payments in respect of purchase options under any Finance
Leases) with respect thereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
U.S.C. Section 101 et seq.), as amended from time to time, or any successor
statute.
"BASE RATE" means, for any day, the rate of interest
publicly announced from time to time by the [***] as its base rate, each
change in such rate to take effect at the opening of business on the date
specified in the public announcement of such change.
"BLOCKED ACCOUNTS" means the accounts described in Section
2.07.
"BLOCKED ACCOUNT BANK" means any Eligible Institution at which
a Blocked Account is kept.
"BUSINESS DAY" means (i) any day on which banks are not
authorized or required to close in New York, New York and (ii) in connection
with any determination to be made with respect to LIBOR, a London Banking Day.
"BUSLEASE" has the meaning set forth in the recital to this
Agreement.
"CAPITAL EXPENDITURES" means, for any period, with respect to
any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of
fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) that should be
capitalized under GAAP on a consolidated balance sheet of such Person and its
Subsidiaries.
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"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"CASH COLLATERAL ACCOUNT" means the account designated as
such, established and maintained pursuant to SECTION 2.06.
"CASH COLLATERAL ACCOUNT REQUIREMENT" means, as of any time of
determination, (a) prior to the date of termination of this Agreement in
accordance with Section 2.01(b), the occurrence of a Servicer Termination Event
or an Insurance Agreement Event of Default (unless such Servicer Termination
Event or Insurance Agreement Event of Default has been waived by the Controlling
Party), the greater of (i) the greater of (a) [**]% of the Investment at such
time of determination and (b) $[***] and (ii) an amount equal to the Required
Credit Enhancement at such time of determination MINUS the Available L/C Amount
at such time of determination of all Transaction Letters of Credit, and (b) on
or after the date of termination of this Agreement in accordance with Section
2.01(b), the occurrence of a Servicer Termination Event or an Insurance
Agreement Event of Default (unless such Servicer Termination Event or Insurance
Agreement Event of Default has been waived by the Controlling Party), the
greater of (i) an amount equal to the Required Credit Enhancement on the day
immediately preceding such date of termination or occurrence of such Servicer
Termination Event or Insurance Agreement Event of Default, MINUS the aggregate
Available L/C Amount on such day of determination of all Transaction Letters of
Credit, and (ii) the greater of (A) the lesser of (1) [**]% of the Investment at
such time of determination and (2) of the Investment at such time of
determination and (B) $[***].
"CASH MANAGEMENT SYSTEMS" means the cash management systems
relating to Receivables in effect on the date hereof, set forth on SCHEDULE
1.01(b) hereto
"CERTIFICATE OF TITLE" means, with respect to each Vehicle,
the certificate of title applicable to such Vehicle duly issued in accordance
with the certificate of title act or statute of the jurisdiction applicable to
such Vehicle.
"CHARGES" means (i) all federal, state, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the PBGC at the time due and payable); (ii) all levies, assessments, charges, or
claims of any governmental entity or any claims of statutory lienholders, the
nonpayment of which could give rise by operation of law to a Lien on the
Receivables, the related Contracts or the related Vehicles or any other property
of the Seller or any Transferor and (iii) any such taxes, levies, assessment,
charges or claims which constitute a lien or encumbrance on any property of the
Seller or any Transferor.
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"CIBC" has the meaning set forth in the recital to this
Agreement.
"CLOSING DATE" means the date on which all of the conditions
set forth in SECTION 3.01 are satisfied or waived by the Purchaser.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COLLECTIONS" mean, with respect to any Purchased Receivable,
all cash collections and other proceeds of such Receivable (including fees and
interest arising thereon, and all Recoveries with respect thereto).
"COMMITMENT FEE" has the meaning set forth in the SPARC Fee
Letter.
"CONSENT" means the consent and acknowledgment, substantially
in the form of EXHIBIT D hereto, by each Transferor in favor of the Purchaser,
the Primary Purchaser, the Administrative Agent and FSA.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net
Income for such period PLUS, without duplication and to the extent reflected as
a charge in the statement of such Consolidated Net Income for such period, the
sum of (a) income tax expense, (b) interest expense, amortization or write-off
of debt discount and debt issuance costs and commissions, discounts and other
fees and charges associated with Indebtedness, (c) depreciation and amortization
expense, (d) amortization of intangibles (including, but not limited to,
goodwill) and organization costs, (e) any extraordinary losses, non-recurring
cumulative effects of accounting changes (to the extent reflected as a charge in
the statement of such Consolidated Net Income) and, without duplication,
non-recurring or unusual losses and all restructuring charges (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, non-cash losses on sales of assets
outside of the ordinary course of business), (f) any other non-cash charges
(other than any non-cash item requiring an accrual or reserve for cash
disbursements in any future period) and (g) any non-cash charges attributable to
applying the purchase method of accounting in accordance with GAAP, and MINUS,
to the extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary gains,
non-recurring cumulative effects of accounting changes (to the extent included
as an addition to such Consolidated Net Income for such period) and, without
duplication, non-recurring or unusual gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, gains on the sales of assets outside of the ordinary course of
business), (c) any other non-cash income (other than any non-cash item which
represents a reversal of an accrual or reserve initially recorded in
anticipation of a cash disbursement to be made in a future period), all as
determined on a consolidated basis and (d) the corporate overhead expenses of
MCII Holdings, Inc. paid by any Subsidiary thereof to MCII Holdings, Inc. in the
form of a dividend.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, for any
period, the ratio of (a) Consolidated EBITDA for such period less the aggregate
amount actually paid by Motor Coach and its Subsidiaries in cash during such
period on account of Capital Expenditures to (b) Consolidated Fixed Charges for
such period; PROVIDED, that the Seller shall have the option at
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one time during the term of this Agreement to elect that during the
Measurement Period Consolidated EBITDA for purposes calculating the
Consolidated Fixed Charge Coverage Ratio be computed in accordance with the
Covenant Smoothing Method.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum
(without duplication) of (a) Consolidated Interest Expense for such period and
(b) scheduled payments made during such period on account of principal of
Indebtedness of Motor Coach or any of its Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
cash interest expense (including that attributable to Capital Lease Obligations)
of Motor Coach and its Subsidiaries for such period with respect to all
outstanding Indebtedness of Motor Coach and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Protection Agreements to the extent such net costs are
allocable to such period in accordance with GAAP), MINUS net payments received
during such period under Interest Rate Protection Agreements and minus interest
income.
"CONSOLIDATED NET INCOME" means, for any period, the
consolidated net income (or loss) of Motor Coach and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP; PROVIDED, that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of Motor Coach or is merged into or consolidated
with Motor Coach or any of its Subsidiaries, (b) the income (or deficit) of any
Person (other than a Subsidiary of Motor Coach) in which Motor Coach or any of
its Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by Motor Coach or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of Motor Coach to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any
Related Document) or Requirement of Law applicable to such Subsidiary.
"CONSOLIDATED SENIOR LEVERAGE RATIO" means, as at the last day
of any period, the ratio of (a) the difference between (i) (x) Consolidated
Total Debt on such day (other than the aggregate principal amount of Revolving
Extensions of Credit (as such term is defined in the Credit Agreement)
outstanding on such day) plus (y) the average daily principal amount of the
Revolving Extensions of Credit outstanding during the period of four fiscal
quarters ending on such day and (ii) the aggregate then outstanding principal
amount of Subordinated Indebtedness (as such term is defined in the Credit
Agreement) to (b) Consolidated EBITDA for such period; PROVIDED, that the Seller
shall have the option at one time during the term of this Agreement to elect
that during the Measurement Period Consolidated EBITDA for purposes of
calculating the Consolidated Senior Leverage Ratio be computed in accordance
with the Covenant Smoothing Method.
"CONSOLIDATED TOTAL DEBT" means, at any date, the aggregate
principal amount of all Indebtedness of Motor Coach and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP (other than
Indebtedness in respect of letters of credit backing obligations which do not
constitute Indebtedness).
5
"CONTRACT" means either a Vehicle Lease or a Vehicle Loan.
"CONTRACT FILE" means, with respect to each Contract, the
following documents:
(a) The executed original of each Contract
(which Contract shall contain, among other things, the name of
the related Obligor, the contract number, the amount of the
related loan and the identification number of the related
Vehicle);
(b) Evidence of insurance and any other
documents evidencing or related to any insurance policy
maintained by the related Obligor pursuant to the Contract
that covers physical damage to the related Vehicle, together
with an endorsement showing the Seller as loss payee, which
interest as loss payee has been assigned to the Administrative
Agent, for the benefit of the Purchaser, the Primary Purchaser
and FSA, PROVIDED, HOWEVER that with respect to the initial
Purchase hereunder, such endorsement shall be delivered to the
Custodian within forty five (45) days of the date of such
initial Purchase;
(c) either:
(i) the original related
Certificate of Title, indicating sole
ownership thereof by the Seller (if a Leased
Vehicle) or the applicable Obligor (if a
Financed Vehicle) and the Administrative
Agent, for the benefit of the Purchaser, the
Primary Purchaser and FSA, as sole lien
holder; or
(ii) if (1) the Certificate
of Title with respect to the related Vehicle
does not indicate sole ownership thereof by
the Seller (if a Leased Vehicle) or the
applicable Obligor (if a Financed Vehicle)
and/or the Administrative Agent, for the
benefit of the Purchaser, the Primary
Purchaser and FSA, as sole lien holder, (2)
such Certificate of Title is not issued by
the appropriate office in the jurisdiction
in which such Vehicle is or is to be titled,
or (3) such Certificate of Title must be
amended for any other reason, (i) a copy of
the related Certificate of Title, the
original of which has been sent by the
Servicer, together with an application for a
new, a duplicate or an amended Certificate
of Title indicating sole ownership of the
related Vehicle by the applicable Obligor
and the Administrative Agent, for the
benefit of the Purchaser, the Primary
Purchaser and FSA, as sole lien holder, to
the appropriate office in the jurisdiction
in which such Vehicle is or is to be titled,
and (ii) a copy of such application for a
new, a duplicate or an amended Certificate
of Title;
(iii) if a Certificate of
Title has not previously been issued with
respect to the related Vehicle, (1) a copy
of the manufacturer's statement of origin
with respect to such Vehicle,
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the original of which has been sent by
the Servicer, together with an
application for a new Certificate of
Title indicating sole ownership thereof
by the applicable Obligor and the
Administrative Agent, for the benefit of
the Purchaser, the Primary Purchaser and
FSA, as sole lien holder, to the
appropriate office in the jurisdiction in
which such Vehicle is to be titled, and
(2) a copy of such application for a new
Certificate of Title;
(d) A copy of the invoice or ▇▇▇▇ of sale
concerning the related Vehicle;
(e) Copies of any UCC financing statements
filed by the Seller or the Servicer against the Obligor with
respect to the related Vehicle; and
(f) copies of any amendments, UCC filings
or other documents executed in connection with a Permitted
Restructuring.
"CONTRACT PAYMENT" means each periodic installment payable by
an Obligor under a Contract for rent, principal and/or interest, excluding all
supplemental or additional payments required by the terms of such Contract with
respect to sales or other taxes, insurance, maintenance, ancillary products and
services, late fees, penalties, default interest and other specific charges.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound.
"CONTROLLING PARTY" means FSA, so long as no FSA Default shall
have occurred and be continuing, and in the event an FSA Default shall have
occurred and be continuing, the Administrative Agent, PROVIDED, HOWEVER, that
the Administrative Agent shall be the Controlling Party after all amounts due to
FSA have been paid and the Policy has expired in accordance with its terms.
"COVENANT SMOOTHING DATE" means the date selected by the
Seller as the date on which Consolidated EBITDA shall begin, for purposes of
calculating the Consolidated Fixed Charge Coverage Ratio and the Consolidated
Senior Leverage Ratio, to be computed in accordance with the Covenant Smoothing
Method.
"COVENANT SMOOTHING METHOD" means, at any date of measurement
of the Consolidated Senior Leverage Ratio or the Consolidated Fixed Charge
Coverage Ratio, the average of Consolidated EBITDA for each of the consecutive
non-overlapping four-fiscal quarter periods ended during the Reference Period,
with Consolidated EBITDA for any fiscal quarters ending prior to the Closing
Date being the amounts set forth on SCHEDULE 1.01(a).
"CREDIT AGREEMENT" means that certain Credit Agreement, dated
as of June 16, 1999, as amended, among MCII Holdings, Inc., Motor Coach, the
several lenders party thereto, The Bank of Nova Scotia, General Electric Capital
Corporation and CIBC, as the same shall be further amended, modified or
supplemented and in effect from time to time.
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[***]
"CUSTODIAL AGREEMENT" means the Custodial Agreement, dated as
of the date hereof, among the Seller, the Administrative Agent and the
Custodian, and any similar agreement among the Seller, the Administrative Agent,
and any successor Custodian, as the same shall be amended, modified or
supplemented and in effect from time to time.
"CUSTODIAN" means, initially, The Bank of New York, and
includes any successor thereto.
"DEFAULTED AMOUNT" means (a) with respect to a Defaulted
Receivable described in clause (i), (ii) or (iii) of the definition thereof, an
amount equal to the Outstanding Balance of such Defaulted Receivable, or (b)
with respect to a Defaulted Receivable described in clause (iv) of the
definition thereof, an amount equal to the amount which has been or should be
written off.
"DEFAULTED RECEIVABLE" means a Receivable:
(a) as to which the related Vehicle has been
repossessed;
(b) as to which any Scheduled Contract
Payment or part thereof is unpaid more than 200 days from its
original due date and the related Vehicle has not been
repossessed;
(c) as to which the Obligor thereof has
taken any action as to itself, or suffered any event to occur
as to itself, of the type described in SECTION 7.01(f) or (g)
of this Agreement; or
(d) any Receivable not described in clauses
(i) or (ii) above, which, consistent with the Credit and
Collection Policy, has been or should be written off the
Seller's books as uncollectible.
"DELINQUENCY RATIO" means, as of any date of determination, a
fraction, expressed as a percentage, the numerator of which is the average
Outstanding Balance of all Purchased Receivables which were Delinquent
Receivables at the end of the calendar month preceding the month in which such
date of determination occurs and the three most recently completed calendar
months preceding such date, and the denominator of which is the average
aggregate Outstanding Balance of all Purchased Receivables as of the end of such
calendar months.
"DELINQUENT RECEIVABLE" means a Receivable that is not a
Defaulted Receivable and as to which any Scheduled Contract Payment or part
thereof, is unpaid more than 60 days from its original due date.
"ELIGIBLE CONTRACT" means a Contract satisfying the following
criteria:
8
(a) which Contract constitutes either (i) a Vehicle Loan
substantially in the form of EXHIBIT G or (ii) a Vehicle Lease substantially in
the form of EXHIBIT H; provided, however, that a Vehicle Lease shall only be an
Eligible Contract with respect to the initial Purchase hereunder;
(b) which Contract requires the Obligor to maintain insurance
against loss or damage to the Vehicles related thereto in the amounts required
under the Credit and Collection Policy and to maintain liability insurance in an
amount not less than that required under applicable regulations of the I.C.C. or
any other Governmental Authority under insurance policies which name the Seller
as loss payee (either directly or by transfer of a Transferor's interest as loss
payee under the applicable Transfer Agreement) which interest as loss payee has
been assigned to the Administrative Agent, for the benefit of the Purchaser, the
Primary Purchaser and FSA;
(c) which Contract requires the related Obligor to assume all
risk of loss or malfunction of the Vehicles subject thereto and to continue
making payments thereunder notwithstanding any defective or malfunctioning
Vehicles or any casualty loss with respect thereto;
(d) which Contract requires the Obligor to be liable for the
payment of all sales, use, property and other similar taxes imposed on or with
respect to the related Vehicles;
(e) which Contract contains a "hell or high water" clause in
favor of the related Transferor under which the Obligor cannot ▇▇▇▇▇ any
Contract Payments owed to such Transferor on account of any setoff, counterclaim
or other defense as against the Manufacturer or for any other reason (except, in
the case of a Vehicle Lease, disturbance of such Obligor's quiet enjoyment by
such Transferor or any permitted assignee);
(f) which does not constitute a "consumer lease" under the UCC
of any applicable jurisdiction;
(g) which, in the case of a Vehicle Lease, does not permit the
related Obligor to cancel such Vehicle Lease;
(h) which, in the case of a Vehicle Lease with a fixed rate of
interest, has Scheduled Contract Payments which do not vary, except for any
Balloon Payments;
(i) which, in the case of a Vehicle Lease, the related
Contract does not permit the related Obligor to sublease the Vehicle subject
thereto to any Person without the written consent of the Servicer and requires
such Obligor to maintain such Vehicle in reasonably good condition and working
order;
(j) which, in the case of a Vehicle Lease, does not permit
early termination by the related Obligor except upon (i) continued payments of
Scheduled Contract Payments pending the remarketing, re-leasing or resale of the
related Vehicles and (ii) payment of a make-whole premium sufficient to pay in
full the Outstanding Balance of the Receivables arising thereunder less the
amounts realized by the related Transferor or the Servicer upon the remarketing,
release or resale of the related Vehicle or Vehicles;
9
(k) which, in the case of a Contract with a Balloon Payment
purchased after the initial Purchase, such Balloon Payment is not greater than
[**]% of the initial Outstanding Balance of such Contract;
(l) which, in the case of a Contract with a Balloon Payment,
has a maturity date not exceeding eighty-five (85) months from the date of such
Contract; and
(m) which, in the case of a Contract with a floating or
variable interest rate, has the same current base rate as set forth in such
Contract, based on the Prime Rate, and the same interest rate reset date as each
of the other Contracts with a floating or variable interest rate.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any United States branch of a foreign bank), having corporate
trust powers and acting as trustee or depository for funds deposited in such
account, so long as any of the securities of such depository institution shall
have a credit rating from each of S&P and ▇▇▇▇▇'▇ in one of its generic rating
categories which signifies investment grade (and if neither S&P nor Moody's
rates securities of such depository institution, then so long as such depository
institution is otherwise acceptable to the Controlling Party).
"ELIGIBLE INSTITUTION" means a commercial bank, depositary
institution or trust company or Affiliate of any of the foregoing which has a
short-term indebtedness rating from S&P and Moody's of not lower than A-1 and
P-1, respectively.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the laws of
the United States of America or any state thereof or the District of Columbia
(or any domestic branch of a foreign bank) and subject to supervision and
examination by federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or trust company
as custodian with respect to any obligation referred to in clause (a) above or
portion of such obligation for the benefit of the holders of such depository
receipts); PROVIDED, HOWEVER, that at the time of the investment or contractual
commitment to invest therein (which shall be deemed to be made again each time
funds are reinvested following each Settlement Date), the commercial paper or
other short-term senior unsecured debt obligations (other than such obligations
the rating of which is based on the credit of a Person other than such
depository institution or trust company) of such depository institution or trust
company shall have a credit rating from Standard & Poor's of A-1 and from
Moody's of P-1;
(c) commercial paper and demand notes investing solely in
commercial paper having, at the time of the investment or contractual commitment
to invest therein, a rating from Standard & Poor's of A-1 and from Moody's of
P-1;
10
(d) investments in money market funds (including funds for
which the Administrative Agent in its individual capacities or any of its
respective Affiliates is investment manager, controlling party or advisor)
having a rating from Standard & Poor's of AAA-m or AAAm-G and from Moody's of
Aaa and having been approved by the Controlling Party.
(e) banker's acceptances issued by any depository institution
or trust company referred to in clause (b) above; and
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) referred to in clause (b) above; and any other investment which has
been approved by the Controlling Party.
"ELIGIBLE RECEIVABLE" means, as of the date of Purchase
thereof, a Receivable:
(a) which is not a liability of an Excluded Obligor or an
Obligor which has had any Defaulted Receivables in the twelve month period
immediately preceding such date of Purchase;
(b) which is not a liability of an Obligor (i) organized under
the laws of any jurisdiction outside of the United States of America or (ii)
having its principal place of business outside of the United States of America;
(c) which is only denominated and payable in Dollars in the
United States of America;
(d) which, immediately prior to any Purchase, is both legally
and beneficially owned by the Seller free and clear of all rights, claims, Liens
or other interests of any other Person and is not subject to dispute, any right
of rescission, set-off, recoupment, counterclaim or defense, whether arising out
of transactions concerning the Contract therefor or otherwise;
(e) which arose under an Eligible Contract which was
originated by a Transferor in the ordinary course of its business and sold to
the Seller under a Transfer Agreement and which represents a bona fide
indebtedness of the Obligor incurred in connection with the purchase and/or
leasing of a Vehicle by such Obligor;
(f) (i) as to which no Scheduled Contract Payment or part
thereof is unpaid for more than 120 days, with respect to the initial Purchase,
and 30 days with respect to all subsequent Purchases, past its original due date
or (ii) which is not a Defaulted Receivable, and (iii) which, if it was
previously so delinquent or a Defaulted Receivable, has been current in payment
for at least six months since the date such Receivable was no longer delinquent
or defaulted;
(g) which does not arise from a transaction for which any
additional performance by the related Transferor or the Seller, or acceptance by
or other act of the Obligor thereunder, remains to be performed as a condition
to any payments on such Receivable;
11
(h) as to which representations and warranties set forth in
Article IV of the related Transfer Agreement are true and correct in all
respects as of the date of the sale of such Receivable under such Transfer
Agreement;
(i) as to which the Contract related thereto is not the
subject of any right of offset or counterclaim;
(j) the Vehicle relating to which is an Eligible Vehicle which
has been delivered to and accepted by the applicable Obligor;
(k) which was originated in accordance with, and satisfies in
all material respects all applicable requirements of, the Credit and Collection
Policy;
(l) which represents the genuine, legal, valid and binding
obligation of the Obligor thereunder enforceable by the holder thereof in
accordance with its terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the enforceability of creditors' rights generally and
general equitable principles, whether applied in a proceeding at law or in
equity;
(m) which is entitled to be paid pursuant to the terms of the
Contract therefor and has not been paid in full or been compromised, adjusted,
extended, satisfied, subordinated, rescinded, modified or otherwise
restructured, and is otherwise not subject to compromise, adjustment, extension,
satisfaction, subordination, rescission, or modification except for a Permitted
Restructuring;
(n) which has a stated term which satisfies the terms set
forth in SCHEDULE 1.01(e) hereto;
(o) which does not contravene in any material respect any
laws, rules or regulations applicable thereto (including laws, rules and
regulations relating to usury, consumer protection, truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party to the
Contract therefor is in violation of any such law, rule or regulation that could
reasonably be expected to have a material adverse effect on the collectibility,
value or payment terms of such Receivable;
(p) with respect to which no proceedings or investigations are
pending or threatened before any Governmental Authority (i) asserting the
invalidity of such Receivable or the Contract therefor, (ii) seeking payment of
such Receivable or payment and performance of such Contract or (iii) seeking any
determination or ruling that might materially and adversely affect the validity
or enforceability of such Receivable or such Contract;
(q) with respect to which the Obligor thereunder is not: (i)
bankrupt, (ii) to the knowledge of the Seller, the Servicer or any Transferor,
after due inquiry, unable to make payment of its obligations when due, (iii) a
debtor in a voluntary or involuntary bankruptcy proceeding, or (iv) the subject
of a comparable receivership or insolvency proceeding;
(r) the related Contract for which constitutes "chattel paper"
within the meaning of the UCC (i) as enacted in the jurisdiction in which the
Seller is located and where the
12
Custodian takes possession thereof and (ii) in the case of a Receivable
acquired under a Transfer Agreement, also as enacted in the jurisdiction in
which the applicable Transferor is located and, in each such case, there is
only one original copy of the Contract (including any note or instrument)
evidencing such Receivable in existence, which original has been stamped with
the notation "original copy" and delivered to the Custodian as contemplated
under the Custodial Agreement;
(s) with respect to which the Obligor thereunder has been
instructed to make payment of its obligations thereunder solely and directly to
a Lockbox Account.
(t) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations with, any Governmental
Authority required to be obtained, effected or given in connection with the
creation of such Receivable or the Contract therefor have been duly obtained,
effected or given and are in full force and effect;
(u) which, together with the related Contract, is not subject
to any provision prohibiting or otherwise restricting the assignment or transfer
thereof, or the granting of a security interest therein;
(v) which, in the case of a Lease Receivable, arises under a
Vehicle Lease no portion of which has been rejected or terminated prior to the
original term of such Contract, and is not subject to rejection, early
termination except as permitted in clause (j) of the definition of Eligible
Contract or non-assumption;
(w) which arises under a Contract that requires Scheduled
Contract Payments to be made on a regular monthly basis, PROVIDED that
Receivables arising under Contracts which by their express terms allow no more
than three monthly payments to be missed in any twelve-month period shall be
Eligible Receivables;
(x) with respect to which, except with respect to a Receivable
purchased as part of the initial Purchase if the related Contract File is in the
possession of General Electric Capital Corporation or any agent thereof, such
Contract File has been delivered to the Custodian as contemplated under the
Custodial Agreement, and with respect to a Receivable purchased as part of the
initial Purchase if the related Contract File is in the possession of General
Electric Capital Corporation or any agent thereof, such Contract File will be
delivered to the Custodian one Business Day after such Purchase;
(y) which is covered by (i) a commercial crime policy
protecting the Servicer against losses, including, without limitation, forgery,
theft, embezzlement and fraud, by all officers, employees, or other Persons
acting in any capacity with regard to the Contracts, the Receivables and the
handling of any funds, money, documents and papers relating thereto and (ii)
errors and omissions coverage from responsible companies (with a rating of A or
better from Best's Rating Service) on all directors and officers acting in any
capacity with regard to the Contracts, the Receivables and the handling of any
funds, money, documents and papers relating thereto;
13
(z) in respect of which Receivable, the Administrative Agent,
for the benefit of the Purchaser and FSA, has a valid and perfected first
priority security interest, free and clear of all Liens in favor of any other
Person;
(aa) which is subject to a UCC filing against the applicable
Obligor at its principal place of business and any other applicable
jurisdictions;
(bb) which, together with the related Contract, does not
provide for recourse to any member of the MCII Group for the payment or
performance of any obligation of the applicable Obligor.
"ELIGIBLE VEHICLE" means, as of any date of determination, a
Vehicle:
(a) which, in the case of a Leased Vehicle, is owned by the
Seller free and clear of all Liens and rights of any other Person except the
Liens in favor of the Administrative Agent and the rights of the applicable
Obligor;
(b) either:
(i) the original related Certificate of
Title, indicating sole ownership thereof by the Seller (if a
Leased Vehicle) or the applicable Obligor (if a Financed
Vehicle) and the Administrative Agent, for the benefit of the
Purchaser, the Primary Purchaser and FSA, as sole lien holder
has been delivered to the Custodian, and the Administrative
Agent, for the benefit of the Purchaser, the Primary Purchaser
and FSA, has acquired a perfected, first priority and valid
Lien in such Vehicle;
(ii) if (1) the Certificate of Title with
respect to the related Vehicle does not indicate sole
ownership thereof by the Seller (if a Leased Vehicle) or the
applicable Obligor (if a Financed Vehicle) and/or the
Administrative Agent, for the benefit of the Purchaser, the
Primary Purchaser and FSA, as sole lien holder, (2) such
Certificate of Title is not issued by the appropriate office
in the jurisdiction in which such Vehicle is or is to be
titled or (3) such Certificate of Title is to be amended for
any other reason, as to which the related original Certificate
of Title has been sent by the Servicer, together with an
application for a new, a duplicate or an amended Certificate
of Title indicating sole ownership of the related Vehicle by
the applicable Obligor and the Administrative Agent, for the
benefit of the Purchaser, the Primary Purchaser and FSA, as
sole lien holder, to such appropriate office; or
(iii) if a Certificate of Title has not
previously been issued with respect to such Vehicle, as to
which the original manufacturer's statement of origin with
respect to such Vehicle has been sent by the Servicer,
together with an application for a new Certificate of Title
indicating sole ownership thereof by the applicable Obligor
and the Administrative Agent, for the benefit of the
Purchaser, the Primary Purchaser and FSA, as sole lien holder,
to the appropriate office in the jurisdiction in which such
Vehicle is to be titled;
14
(c) as to which all of the representations or warranties
pertaining to Vehicles set forth in this Agreement or any other Related Document
(including any Transfer Agreement to the extent applicable) are true and
accurate;
(d) which is covered by insurance as required under this
Agreement;
(e) which is a model that has been certified by the
manufacturer thereof and any applicable Governmental Authority and any
applicable state agencies as roadworthy and which model otherwise complies with
all legal requirements for the use of such Vehicle for which it is intended in
the transportation industry;
(f) which is subject to an existing Eligible Contract the
Receivables arising under which are Eligible Receivables;
(g) which has not been attached, seized, levied upon or
subjected to a writ or distress warrant, nor come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors of the
Seller, BusLease, any Transferor, Motor Coach or any Subsidiary or Affiliate of
any of the foregoing; and
(h) which is located in and titled under the laws of the
United States.
"ENVIRONMENTAL LAWS" means all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. Sections 9601 ET SEQ.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. Sections 5101 ET SEQ.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 ET
SEQ.; the Solid Waste Disposal Act (42 U.S.C. Sections 6901 ET SEQ.); the Toxic
Substance Control Act (15 U.S.C. Sections 2601 ET SEQ.); the Clean Air Act (42
U.S.C. Sections 7401 ET SEQ.); the Federal Water Pollution Control Act (33
U.S.C. Sections 1251 ET SEQ.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 ET SEQ.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) ET SEQ.), each as from time to time amended, and any and all regulations
promulgated thereunder, and all analogous state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA AFFILIATE" means, with respect to the Seller or Motor
Coach, any trade or business (whether or not incorporated), which, together with
the Seller or Motor Coach, is treated as a single employer within the meaning of
SECTIONS 414(b), (c), (m) or (o) of the IRC.
15
"ESOP" means a Plan that is intended to satisfy the
requirements of SECTION 4975(e)(7) of the IRC.
"EXCESS COLLECTIONS" has the meaning specified in Section
2.03(c)(ii).
"EXCLUDED OBLIGOR" means any Obligor (a) that is an Affiliate
of the Seller, (b) that is a Governmental Authority or (c) which has been
otherwise reasonably designated, upon (30) days' prior written notice by the
Administrative Agent and FSA to the Seller, as an Obligor which shall be an
Excluded Obligor.
"FACILITY TERMINATION DATE" has the meaning specified in
Section 2.01(b).
"FINAL MATURITY DATE" means (i) with respect to each Purchased
Receivable which is not a Defaulted Receivable, 60 days after the date of the
final Scheduled Contract Payment of the last maturing Purchased Receivable, and
(ii) with respect to all Defaulted Receivables the later of (a) 60 days after
the date of the final Scheduled Contract Payment of the last maturing Purchased
Receivable and (b) 300 days after the date of the last Scheduled Contract
Payment (or portion thereof) made with respect to all Defaulted Receivables.
"FINANCE CHARGE COLLECTIONS" means that portion of Collections
which are attributable to Finance Charge Receivables.
"FINANCE CHARGE RECEIVABLE" means a Receivable created in
respect of Finance Charges.
"FINANCE CHARGES" means, with respect to any Purchased
Receivable, the portion of any Scheduled Contract Payment due under the Contract
giving rise to such Receivable which represents finance charges, together with
any late fees, delinquency fees and extension fees paid by the related Obligor
as specified in the related Contract.
"FINANCE LEASE" means a Vehicle Lease which, (i) in accordance
with GAAP, must be accounted for as Indebtedness of the lessee; (ii) would be
treated as a secured loan or a lease intended for a security and not as a "true
lease" for the purposes of Section 365(d)(2) of the Bankruptcy Code in the event
an Obligor or lessor becomes the subject of a proceeding under the Bankruptcy
Code; does not constitute a "true lease" as meeting the criteria of a "qualified
motor vehicle operating agreement" within the meaning of Section 7701(h) of the
Code and (iv) creates a valid and enforceable "security interest" in favor of
the lessor within the meaning of UCC Section 1 201(37).
"FINANCED VEHICLE" means a motor coach sold or financed by a
Transferor pursuant to a Contract, including all goods installed in or otherwise
affixed thereto.
"FISCAL QUARTER" means any of the quarterly accounting periods
of the Seller, ending on March 31, June 30, September 30 and December 31 of each
year.
"FISCAL YEAR" means any of the annual accounting periods of
the Seller ending on December 31 of each year.
16
[***]
[***]
"FSA" means Financial Security Assurance Inc., a New York
monoline insurance company, incorporated under the laws of the State of New
York, or successors thereto.
"FSA DEFAULT" has the meaning assigned to such term in the
Insurance Agreement.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, consistently applied;
PROVIDED, that when used with respect to the Servicer Termination Events set
forth in clauses (iv) and (v) of SECTION 7.01(p), GAAP shall mean generally
accepted accounting principles in the United States of America as in effect on
the Closing Date and consistently applied.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEE OBLIGATION" means, as to any Person (the
"GUARANTEEING PERSON"), any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "PRIMARY OBLIGATIONS") of any other third Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i)to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
PROVIDED, HOWEVER, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of(a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such
17
Guarantee Obligation, unless such primary obligation and the maximum amount
for which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing Person's maximum reasonably anticipated liability in
respect thereof as determined by Motor Coach in good faith.
"GUARANTEED YIELD" has the meaning specified in the Policy.
"HEDGE AGREEMENT" means any interest rate protection
agreement, interest rate futures contract, interest rate option, interest rate
cap or other interest rate hedge arrangement entered into in connection with the
Investment between the Purchaser or Administrative Agent and a Hedge
Counterparty, as the same shall be amended, modified or supplemented and in
effect from time to time.
"HEDGE COUNTERPARTY" means a financial institution which is a
counterparty to a Hedge Agreement (which shall not be the Seller, Motor Coach or
the Servicer) and which has capital and surplus in excess of $100,000,000 and a
long-term unsecured and unsubordinated debt credit rating of at least Aa3 by
Moody's and at least AA- by S&P.
"I.C.C." means the Interstate Commerce Commission.
"INDEBTEDNESS" means, with respect to any Person at any date,
without duplication, (a) all indebtedness of such Person for borrowed money, (b)
all obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above; and (i) all obligations of the
kind referred to in clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien (other than a Lien consisting solely of the filing or an
agreement to give a financing statement under the UCC or comparable law) on
property (including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable for the
payment of such obligation.
"INDEMNIFIED AMOUNTS" has the meaning specified in SECTION
8.01.
"INDEMNIFIED PARTY" has the meaning specified in SECTION 8.01.
"INSURANCE AGREEMENT" means the Insurance and Indemnity
Agreement dated as of May 2, 2000 among FSA, the Seller, MCII Holdings (USA),
Inc., MCII Coaches, Inc., Bus Lease, MCII Financial Services II Inc., MCII
Funding Inc., Motor Coach, the Purchaser, the
18
Primary Purchaser and the Administrative Agent, as the same shall be amended,
modified or supplemented and in effect from time to time.
"INITIAL CLOSING DATE" means May 10, 2000.
"INITIAL CASH COLLATERAL AMOUNT" means $__________.
"INSURANCE AGREEMENT EVENT OF DEFAULT" has the meaning
specified in the Insurance Agreement.
"INSURER OPTIONAL DEPOSIT" means, with respect to any
Settlement Date, an amount delivered by FSA, at its sole option, in respect of a
Policy Claim Amount to the Backup Servicer for application in accordance with
Section 2.03(c) for any of the following purposes: (i) to provide funds in
respect of the payment of fees or expenses of any provider of services with
respect to such Settlement Date or (ii) in lieu of the Administrative Agent
making a draw on the Policy.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate
protection agreement, interest rate future contract, interest rate option,
interest rate cap or other interest rate hedge arrangement, to or under which
Motor Coach or any of its Subsidiaries is a party or a beneficiary on the date
hereof or becomes a party or a beneficiary after the date hereof.
"INVESTMENT" means the aggregate Purchase Price paid in
respect of all Purchased Receivables, reduced from time to time by Principal
Collections, Excess Collections (to the extent applicable) and amounts withdrawn
from the Cash Collateral Account or drawn under any Transaction Letter of
Credit, in each case paid to the Purchaser as a reduction of such Purchase
Price; PROVIDED, that if the Investment shall have been reduced by any
distribution and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, the Investment shall be increased
by the amount of such rescinded or returned distribution, as though it had not
been made.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended.
"IRC" means the Internal Revenue Code of 1986, as amended, and
any successor thereto.
"IRS" means the Internal Revenue Service, or any successor
thereto.
"L/C FUNDING ACCOUNT" shall, with respect to the Transaction
Letter of Credit, have the meaning ascribed to that term in the Credit
Agreement.
"LEASE RECEIVABLE" means a Receivable arising under a Vehicle
Lease.
"LEASED VEHICLE" means a Vehicle subject to a Vehicle Lease.
"LIBO RATE" means, for any month, the rate of interest for
deposits in U.S. dollars for a period equal to the number of days in such month
which appears on the Telerate Page 3750
19
as of 11:00 a.m., London time, on the day that is two London Banking Days
prior to the first day of such month.
"LIBO RATE (RESERVE ADJUSTED)" means, for any month, a rate
per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to
the quotient of the LIBO Rate divided by the positive result of 100% less the
LIBOR Reserve Percentage. The Administrative shall determine the LIBO Rate
(Reserve Adjusted) for each month and promptly notify the Seller thereof (which
determination shall, in the absence of manifest error, be conclusive and binding
on the Seller).
"LIBOR RESERVE PERCENTAGE" means, for any month, a percentage
(expressed as a decimal) equal to the percentage in effect on the first day of
such month, as prescribed by the Board of Governors of the Federal Reserve
System (or any successor thereof) for determining the maximum reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to Regulation D
or any other applicable regulation which prescribes reserve requirements
applicable to such "Eurocurrency Liabilities."
"LIEN" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or other title retention agreement, any financing lease, in
each case having substantially the same economic effect as any of the foregoing,
and the filing of, or agreement to give, any financing statement perfecting a
security interest under the UCC or comparable law of any jurisdiction).
"LOCKBOX ACCOUNT" means the lockbox account to which the
Obligors are directed to remit Collections in accordance with this Agreement.
"LOCKBOX AGREEMENT" means an agreement, in substantially the
form of EXHIBIT I, among a Lockbox Bank, the Servicer and the Administrative
Agent.
"LOCKBOX BANK" means any Eligible Institution at which the
Lockbox Account is kept.
"LONDON BANKING DAY" means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.
"MANUFACTURER" means, with respect to any Financed Vehicle,
the Person who manufactured such Financed Vehicle.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, assets, operations or financial or other condition of the
Seller, the Servicer, or any Transferor, (b) the Seller's ability to pay any of
the Obligations in accordance with the terms of the Agreement; (c) the Seller's
or the Servicer's ability to perform its obligations in accordance with the
terms of this Agreement and the other Related Documents; (d) the Purchased
Receivables, the related Vehicles or the Collections with respect thereto or the
Liens created under this Agreement and the other Related Documents or the
priority of any such Liens or (e) Administrative Agent's, the
20
Purchaser's or the Transaction L/C Issuer's rights and remedies under the
Agreement and the other Related Documents.
"MAXIMUM PERMITTED LEVERAGE RATIO" means, for any twelve month
fiscal period, the amount set forth below opposite such period:
Fiscal Period Ending on: Maximum Permitted Leverage Ratio
------------------------ --------------------------------
March 31, 2001 [**] to 1
March 31, 2002 [**] to 1
March 31, 2003 [**] to 1
March 31, 2004 [**] to 1
March 31, 2005 and the last [**] to 1
business day of March of each year
thereafter
"MCII GROUP" has the meaning set forth in the Insurance
Agreement.
"MEASUREMENT PERIOD" means the period commencing on the
Covenant Smoothing Date and ending on (and including) the date which is 18
months thereafter or any earlier date specified by the Seller.
"MINIMUM PERMITTED FIXED CHARGE COVERAGE RATIO" means, for any
twelve month fiscal period, the amount set forth below opposite such period:
Fiscal Period Ending on: Minimum Permitted Fixed Charge Coverage Ratio
------------------------ ---------------------------------------------
March 31, 2001 [**] to 1
March 31, 2002 [**] to 1
March 31, 2003 [**] to 1
March 31, 2004 and the last [**] to 1
business day of March of each
year thereafter
"MONTHLY REPORT" means a report, in substantially the form of
EXHIBIT A hereto (appropriately completed), furnished by the Servicer to the
Purchaser pursuant to SECTION 5.05(i) hereof.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor thereto.
21
"MOTOR COACH" means Motor Coach Industries International,
Inc., a Delaware corporation.
"MOTOR COACH ENTITIES" has the meaning set forth in Section
5.01(l).
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined
in SECTION 4001(a)(3) of ERISA, and to which the Seller or ERISA Affiliate is
making, is obligated to make, has made or been obligated to make, contributions
on behalf of participants who are or were employed by any of them.
[***]
[***]
"OBLIGATIONS" means all debts, liabilities and obligations for
the payment of monetary amounts (whether or not such performance is then
required or contingent) owing by the Seller to the Administrative Agent, the
Custodian, the Purchaser or the Transaction L/C Issuer, of any kind or nature,
present or future, whether or not evidenced by any note, agreement or other
instrument, arising under the Agreement or any of the Related Documents. This
term includes, without limitation, all Investment, Yield (including all interest
which accrues after the commencement of any case or proceeding in bankruptcy
after the insolvency of, or for the reorganization of the Seller, whether or not
allowed in such proceeding), expenses, attorneys' fees and any other sum
chargeable to the Seller under the Agreement or any of the other Related
Documents.
"OBLIGOR" means each Person obligated to make payments under a
Contract.
"OPERATING LEASE" means a Vehicle Lease which is not a Finance
Lease.
"OUTSTANDING BALANCE" means, with respect to a Receivable at
any time of determination, all amounts in respect of which the related Obligor
is obligated as of such time of determination, including all Principal
Receivables and Finance Charge Receivables not paid by such Obligor as of such
time of determination.
22
"OVERNIGHT FUNDS RATE" means, for any day, a fluctuating
interest rate per annum equal to the rate of interest offered in the interbank
market to the Administrative Agent as the overnight Federal funds rate at or
about 10:00 a.m., New York City time, on such day (or if such day is not a
Business Day, for the next preceding Business Day).
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERFORMANCE INDEMNITY - SERVICER" means a performance
indemnity, substantially in the form of EXHIBIT E attached hereto, from Motor
Coach for the benefit of the Purchaser, the Primary Purchaser, FSA and the
Administrative Agent, pursuant to which Motor Coach unconditionally guarantees
to the Purchaser, the Primary Purchaser, FSA and the Administrative Agent the
due and punctual performance of the obligations of the Servicer under this
Agreement.
"PERFORMANCE INDEMNITY - TRANSFERORS" means a performance
indemnity, substantially in the form of EXHIBIT F attached hereto, from Motor
Coach for the benefit of the Purchaser, the Primary Purchaser, FSA, the
Administrative Agent and the Seller, pursuant to which Motor Coach
unconditionally guarantees to the Purchaser, the Primary Purchaser, the
Administrative Agent, FSA and the Seller the due and punctual performance of the
obligations of the Transferors under the Transfer Agreements.
"PERMITTED RESTRUCTURING" means a restructuring of a
Receivable in accordance with the Credit and Collection Policy which (i) does
not lower the Outstanding Balance owed thereunder; (ii) does not lower the
interest rate charged thereunder and (iii) does not extend the final maturity
thereof by more than three months, PROVIDED, that (x) no more than one
restructuring of a Receivable shall constitute a Permitted Restructuring; and
(y) no restructuring shall constitute a Permitted Restructuring if, as a result
thereof, the aggregate Outstanding Balances of all Receivables which have been
subject to a Permitted Restructuring would exceed [**]% aggregate Outstanding
Balances of all Purchased Receivables at such time.
"PERSON" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"PLAN" means, at any time, an employee benefit plan, as
defined in SECTION 3(3) of ERISA, which the Seller maintains, contributes to or
has an obligation to contribute to on behalf of participants who are or were
employed by the Seller.
"POLICY" means the financial guaranty insurance policy number
50930-N dated May 10, 2000, including any endorsement thereto, issued by FSA
pursuant to the Insurance Agreement.
"POLICY CLAIM AMOUNT" has the meaning set forth in the Policy.
"PREMIUM" has the meaning set forth in the Premium Letter.
23
"PREMIUM LETTER" means that certain letter dated as of May 2,
2000 between the Purchaser, the Primary Purchaser, MCI International, Inc., the
Seller, the Administrative Agent and FSA with respect to certain fees to be paid
from time to time to FSA, as such letter may be amended, restated or otherwise
defined from time to time.
"PRIMARY PURCHASER" means Special Purpose Accounts Receivable
Cooperative Corporation, and its permitted successors and permitted assigns.
"PRIMARY PURCHASE AGREEMENT" means the Receivables Purchase
Agreement dated as of the date hereof among the Seller, the Primary Purchaser,
the Servicer, to the Backup Servicer and the Administrative Agent, as the same
shall be amended, modified or supplemented and in effect from time to time.
"PRIME RATE" means the prime interest rate per annum announced
from time to time by Citibank, N.A. for loans to its most credit worthy
commercial borrowers as in effect on the first day of any calendar quarter.
"PRINCIPAL COLLECTIONS" means that portion of Collections
attributable to Principal Receivables.
"PRINCIPAL RECEIVABLE" means, with respect to any Purchased
Receivable, the portion of any Scheduled Contract Payment due under the Contract
giving rise to such Receivable which does not represent Finance Charges.
"PURCHASE" has the meaning specified in SECTION 2.01(a).
"PURCHASE DISCOUNT" means, for each day in a Settlement
Period, a percentage equal to the LIBO Rate (Reserve Adjusted) in effect on such
day; PROVIDED, HOWEVER, that if the Purchaser reasonably determines that it is
unlawful for the Purchaser to fund or maintain the Investment using the LIBO
Rate (Reserve Adjusted) or that adequate means does not exist for ascertaining
the applicable LIBO Rate, in accordance with Section 10.16 and 10.17, the
Purchase Discount shall equal the Alternate Base Rate, and PROVIDED, FURTHER,
that if a Hedge Agreement was entered into with respect to any portion of the
Investment, the Purchase Discount with respect to such Investment shall be equal
to the weighted average of the rates of interest set forth in the applicable
confirmations with respect to any applicable Hedge Agreement which is payable by
the Purchaser whether or not such Hedge Agreement is in effect on such day.
"PURCHASE LIMIT" means, at the time any determination thereof
is to be made, $250,000,000 less the "Investment" of the Primary Purchaser under
the Primary Purchase Agreement.
"PURCHASE PRICE" means, with respect to any Receivable to be
purchased on any Business Day pursuant to SECTION 2.01, the cash consideration
to be paid for such Receivable in an amount equal outstanding principal amount
thereof as of such Business Day or, if the related Vehicle is a new Vehicle, the
manufacturer's list price thereof if such list price is lower than such
outstanding principal amount.
24
"PURCHASED RECEIVABLE" means each outstanding Receivable
purchased by the Purchaser pursuant to SECTION 2.01 in respect of which the
Investment of such Purchased Receivable has not been reduced to zero.
"PURCHASER" has the meaning set forth in the recital to this
Agreement.
"PURCHASER'S ACCOUNT" means the account maintained at the Bank
of New York for the account of the Purchaser (account number 8900331046, ABA
number 021-010-018) or such other account of the Purchaser maintained at a
depository institution in the United States of America and designated in writing
as its account for the purposes of the Agreement.
"QUALIFIED PLAN" means a Plan which is intended to be
tax-qualified under SECTION 401(a) of the IRC.
"RATING AGENCIES" means, S&P and Moody's.
"RECEIVABLE" means, with respect to any Obligor:
(a) indebtedness of such Obligor arising
under a Contract (whether constituting an account, chattel
paper, a document, an instrument or a general intangible),
including the right to payment of any Scheduled Contract
Payments, interest or finance charges and other obligations of
such Obligor with respect thereto;
(b) all Liens and property subject thereto
from time to time securing or purporting to secure any such
indebtedness of such Obligor (including any security deposits
made or required to be made by such Obligor to secure such
indebtedness);
(c) all guaranties, indemnities and
warranties, insurance policies, financing statements and other
agreements or arrangements of whatever character from time to
time supporting or securing payment of any such indebtedness;
(d) all Collections with respect to any of
the foregoing; and
(e) all Records with respect to any of the
foregoing.
"RECORDS" means all Contracts and other documents, books,
records and other information (including computer programs, tapes, disks, data
processing software and related property and rights) prepared and maintained by
or on behalf of the Seller with respect to Receivables and the Obligors
thereunder and/or the related Vehicles, including, without limitation, all
documents, books, records and other information prepared and maintained by the
Seller, the Transferors or the Servicer with respect to such Receivables,
Obligors or Vehicles.
"RECOVERIES" means, with respect to a Defaulted Receivable,
the sum of all amounts, whether in the form of cash, checks, drafts, insurance
proceeds or other instruments, received by the Seller, the Related Transferor or
the Servicer, net of all expenses incurred in
25
connection with the repossession and disposition of such Vehicles (including
refurbishment costs), in payment of, or applied to, any amount owed by an
Obligor on account of such Defaulted Receivable.
"RECOVERY RATE" means, on any date of determination, a ratio,
expressed as a percentage, the numerator of which is the aggregate amount of
Recoveries during the four most recently completed calendar months preceding
such date of determination with respect to which there were Recoveries and the
denominator of which is the sum of the aggregate Outstanding Balance at the time
of the repossession of the related Vehicles of all such Purchased Receivables
related to such Recoveries.
"REFERENCE PERIOD" means, with respect to any date, the period
of three Fiscal Years of Motor Coach ending on such date.
"RELATED DOCUMENTS" means the Transferor Agreements, the
Lockbox Agreements, the Backup Servicing Agreement, the Performance Indemnity -
Servicer, the Performance Indemnity - Transferors, the Custodial Agreement, the
Credit Agreement, the Consents, the Insurance Agreement, the Policy, the Premium
Letter, the SPARC Fee Letter and each agreement and document entered into in
connection herewith or therewith.
"REPORT DELIVERY DATE" means, the fourteenth (14th) day (or if
such day is not a Business Day, the next succeeding Business Day) of each
calendar month.
"REQUIRED CREDIT ENHANCEMENT" means, at any time of
determination, either (1) prior to the date of termination of this Agreement in
accordance with SECTION 2.01(b) or the occurrence of a Service Termination Event
or an Insurance Agreement Event of Default (unless such Servicer Termination
Event or Insurance Agreement Event of Default has been waived by the Controlling
Party), the greater of (i) [**]% of the Investment at such time of determination
and (ii) the sum of (a) [**]% of the Investment at such time of determination,
(b) [**]% of the Outstanding Balance at such time of Receivables purchased as
part of the initial Purchase with respect to which any Scheduled Contract
Payment or part thereof was unpaid as of the date of such initial Purchase
between 60 days and 120 days, inclusive, from its original due date, and (c)
[**]% of the aggregate outstanding amount of Balloon Payments as such time of
determination, (2) from and after the date of termination of this Agreement in
accordance with SECTION 2.01(b), the greatest of (i) an amount determined in
clause (1) at such time of determination, (ii) the lesser of (a) the Investment
at such time of determination and (b) [**]% of the amount of the Required Credit
Enhancement on the day immediately preceding the date of termination of this
Agreement in accordance with SECTION 2.01(b), and (iii) $[***] or (3) from and
after the date of the occurrence of a Servicer Termination Event or an Insurance
Agreement Event of Default (unless such Servicer Termination Event or Insurance
Agreement Event of Default has been waived by the Controlling Party), the
greater of (x) the lesser of (i) the amount determined in accordance with clause
(1) on the day immediately preceding the date of such occurrence, (ii) the
Investment at such time of determination and (y) $[***].
"REQUIREMENT OF LAW" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
26
each case applicable to or binding on such Person or any of its property or
to which such Person or any of its property is subject.
"RESPONSIBLE OFFICER" means with respect to the Seller and
BusLease, any officer (including, for the purpose of this Agreement, any
assistant secretary and any assistant treasurer) of such entity or any person
designated in writing by any such officer.
"RETIREE WELFARE PLAN" means, at any time, a Plan that is a
"welfare plan" as defined in SECTION 3(2) of ERISA, that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant
after such participant's termination of employment, other than continuation
coverage provided pursuant to SECTION 4980B of the IRC and at the sole expense
of the participant or the beneficiary of the participant.
"S&P" means Standard & Poor's Ratings Service, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc.
"SCHEDULED CONTRACT PAYMENTS" means the regularly scheduled
Contract Payments due under each Contract.
"SCHEDULED PAYMENTS" has the meaning set forth in the Policy.
"SELLER" has the meaning set forth in the recital to this
Agreement.
"SERVICER" means at any time the Person (which may include the
Administrative Agent) then authorized pursuant to Article VI to service,
administer and collect Purchased Receivables. Initially, the Servicer shall be
BusLease.
"SERVICER FEE" has the meaning specified in SECTION 6.06.
"SERVICER TERMINATION EVENT" has the meaning specified in
Article VII.
"SETTLEMENT DATE" means, prior to the occurrence of a Servicer
Termination Event, four (4) Business Days after the Report Delivery Date, and on
and after the occurrence of a Servicer Termination Event, the first Business Day
following the receipt by the Servicer of any Collections.
"SETTLEMENT PERIOD" means the period from (and including) a
Settlement Date (or, in the case of the initial Settlement Period under this
Agreement, from the date of the Initial Purchase) to (but excluding) the
immediately succeeding Settlement Date.
"SHORTFALL" has the meaning specified in SECTION 2.03(d).
"SPARC FEE LETTER" means that certain letter dated as of May
2, 2000 between the Administrative Agent and the Seller with respect to certain
fees to be paid from time to time by the Seller to the Administrative Agent, for
the benefit of the Administrative Agent, the Purchaser and the Primary
Purchaser, as such letter may be amended, restated or otherwise defined from
time to time with the prior written consent of FSA.
27
"SPECIAL CONCENTRATION LIMIT" means, at any time of
determination with respect to any Obligor listed on SCHEDULE 1.01(s) attached
hereto (together with its Affiliates and Subsidiaries), the amount calculated
pursuant to SCHEDULE 1.01(s) with respect to such Obligor; PROVIDED, that the
Controlling Party may, at any time in its discretion, reduce or increase the
Special Concentration Limit for any such Obligor, or add the name of any other
Obligor to SCHEDULE 1.01(s), through the delivery by the Controlling Party to
the parties hereto and the Rating Agencies of an amended SCHEDULE 1.01(s), which
such reduction, increase or addition shall be applicable only with respect to
Purchases made after the delivery of such amended SCHEDULE 1.01(s); PROVIDED,
HOWEVER, that the Special Concentration Limit for any Obligor shall not be less
than the Standard Concentration Limit.
"STANDARD CONCENTRATION LIMIT" means, at any time of
determination with respect to any Obligor (other than an Obligor listed on
SCHEDULE 1.01(s) attached hereto) together with its Affiliates and
Subsidiaries), an amount equal to (i) for the five Obligors with the largest
Outstanding Balances at such time, [**]% of the Investment at such time, (ii)
for the next six Obligors with the largest Outstanding Balances at such time,
[**]% of the Investment at such time and (iii) for all other Obligors, [**]% of
the Investment at such time.
"STATED AMOUNT" means, with respect to any Transaction Letter
of Credit, the L/C Amount as defined in such Transaction Letter of Credit, which
amount shall not be without the consent of FSA, which consent shall not be
unreasonably withheld.
"SUBSIDIARY" means, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Capital Stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether, at the
time, Capital Stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned legally or beneficially by such Person
and/or one or more Subsidiaries of such Person, or with respect to which any
such Person has the right to vote or designate the vote of fifty percent (50%)
or more of such Capital Stock whether by proxy, agreement, operation of law or
otherwise, and (b) any partnership, limited liability company, business trust,
joint venture or other entity in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.
"TITLE IV PLAN" means an employee pension benefit plan, as
defined in SECTION 3(2) of ERISA (other than a Multiemployer Plan), which is
covered by Title IV of ERISA, and which the Seller or an ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"TRANSACTION L/C DRAW" means any payments made to the Backup
Servicer under the Transaction Letter of Credit.
"TRANSACTION L/C ISSUER" means the financial institution,
satisfactory to Administrative Agent, which from time to time is the issuer of a
Transaction Letter of Credit. Initially, the "TRANSACTION L/C ISSUER" shall be
The Bank of Nova Scotia.
28
"TRANSACTION LETTER OF CREDIT" means an irrevocable standby
letter of credit issued by a Transaction L/C Issuer in favor of the
Administrative Agent, for the benefit of the Purchaser and the Primary
Purchaser, as beneficiary, in form and substance satisfactory to FSA and the
Administrative Agent, as the same may be amended, restated or otherwise modified
or replaced from time to time, including any L/C Funding Account.
"TRANSFER AGREEMENTS" means those certain Receivables and
Vehicle Transfer Agreements between each Transferor, as seller, and the Seller,
as buyer, as each such agreement may be amended, restated or otherwise modified
from time to time in accordance with its terms.
"TRANSFEROR" means a direct or indirect Subsidiary or
Affiliate of Motor Coach to the extent party to a Transfer Agreement and
approved by the Administrative Agent and FSA, each in their sole discretion (as
of the date hereof being those Subsidiaries and Affiliates specified in SCHEDULE
1.01(t)).
"UCC" means the Uniform Commercial Code as the same may, from
time to time be enacted and in effect in the State of New York; PROVIDED,
HOWEVER, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Administrative Agent's security
interest in any Purchased Receivables, the related Financed Vehicles or
Collections with respect thereto is governed by the Uniform Commercial Code as
enacted and in effect in a jurisdiction other than the State of New York, the
term "UCC" shall mean the Uniform Commercial Code as enacted and in effect in
such other jurisdiction solely for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions related
to such provisions.
"UNFUNDED PENSION LIABILITY" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five (5) years following a
transaction which could reasonably be expected to be covered by SECTION 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by the
Seller or any ERISA Affiliate as a result of such transaction.
"UNUTILIZED PURCHASE LIMIT" means, at any time of
determination, the Purchase Limit minus the Investment.
"USAGE FEE" has the meaning set forth in the SPARC Fee Letter.
"VEHICLE" means a Financed Vehicle and/or a Leased Vehicle.
"VEHICLE LEASE" means an agreement between an Obligor and a
Transferor providing for the leasing of a Vehicle to the Obligor, PROVIDED that
such agreement would be classified for purposes of GAAP as a Finance Lease and
not an Operating Lease.
"VEHICLE LOAN" means an agreement between an Obligor and a
Transferor providing for the extension of credit to such Obligor by such
Transferor, in connection with such Obligor's purchase of a Vehicle from a
Manufacturer.
29
"WITHDRAWAL AMOUNT" has the meaning specified in SECTION
2.03(d).
"YIELD" means, for any Settlement Period, the sum, for each
day in such Settlement Period, of the product of (i) the outstanding Investment
on such day and (ii) the Purchase Discount for such day; PROVIDED, that no
provision of this Agreement shall require the payment or permit the collection
of Yield in excess of the maximum permitted by applicable law; and PROVIDED,
FURTHER, that Yield shall not be considered paid by any distribution to the
extent that at any time all or a portion of such distribution is rescinded or
must otherwise be returned for any reason.
OTHER TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
ARTICLE II.
AMOUNTS AND TERMS OF THE PURCHASES
Section 2.01 PURCHASE FACILITY.
(a) On the terms and subject to the conditions herein set
forth, the Seller may, in its sole discretion, from time to time prior to the
delivery of a notice pursuant to paragraph (b) below, sell to the Purchaser,
and, if the Seller elects so to sell, the Purchaser shall, purchase (each, a
"PURCHASE") from the Seller, all of the Seller's right, title and interest in
Eligible Receivables and the Contracts with respect thereto, PROVIDED, that with
respect to the right, title and interest of the Seller in the related Vehicles,
such Purchase shall be deemed to transfer only a security interest therein.
Under no circumstances shall the Purchaser make any Purchase if, after giving
effect to such Purchase the Investment would exceed the Purchase Limit.
(b) The "Facility Termination Date" shall be the earliest of
(i) that date which is 364 days from the date hereof; provided, that the
Facility Termination Date may be extended for an additional 364-day period at
the end of each 364-day period from the date hereof if the Seller gives the
Administrative Agent, the Rating Agencies and FSA written notice not later than
120 days prior to each such annual anniversary (beginning with the first such
period) and the Administrative Agent, the Rating Agencies and FSA provide the
Seller with their respective written consents to such extension not later than
30 days after receipt of the Seller's notice, (ii) the date of the occurrence of
any event described in Section 7.01 (f) or (g), and (iii) the date the Facility
Termination is declared pursuant to Section 7.01. Notwithstanding the foregoing,
either the Purchaser or the Seller may elect to terminate this Agreement by
notifying the other party and FSA to such effect. Such notice shall be given by
no later than 1:00 p.m., New York time, on the third Business Day preceding the
date such party contemplates terminating this Agreement. The notice will be in
the form of EXHIBIT C, and will specify the date on which this Agreement will be
terminated.
Section 2.02 MAKING PURCHASES.
(a) The Seller shall notify the Purchaser in writing, with a
copy to the Administrative Agent, of its desire to sell Eligible Receivables to
the Purchaser pursuant to the terms of this Agreement, which notice shall
specify (i) the Purchase Price of such Eligible
30
Receivables (which, in the aggregate, shall not be less than $500,000) and
(ii) the proposed date of such Purchase (which shall be not less than three
(3) Business Days after the date of such notice of Purchase hereunder and
shall be a Business Day, PROVIDED, that the Seller may only make one request
for a Purchase in any calendar week and shall have attached thereto a
schedule indicating the Contract number of each Contract relating to such
Receivables). The Seller shall indemnify the Purchaser against any loss or
expense incurred by the Purchaser as a result of any failure by the Seller to
accept the Purchase Price by reason of the liquidation or reemployment of
funds acquired or requested by the Purchaser to fund such requested amount.
(b) On the date of each Purchase, the Purchaser shall, upon
satisfaction of the applicable conditions set forth in SECTION 3.01 and SECTION
3.02, make available to the Seller in same day funds, at the Seller's account
with _______________, ABA Number _____________, account number _______________,
an amount equal to the Purchase Price of such Purchased Receivables.
(c) The Seller shall deliver to the Custodian no later than
11:00 a.m., New York City time, three (3) Business Days prior to the requested
date of Purchase, the Contract File pertaining to each Receivable to be sold to
the Purchaser, in accordance with the terms and conditions of the Custodial
Agreement.
(d) Pursuant to the Custodial Agreement, the Custodian shall
deliver to the Seller and the Administrative Agent, no later than 5:00 p.m., New
York City time, one Business Day prior to the proposed date of such Purchase, a
trust receipt, in the form attached as Annex 2 to the Custodial Agreement in
respect of all Receivables purchased by the Purchaser on such Funding Date.
Section 2.03 SETTLEMENT PROCEDURES.
(a) Collections with respect to the Purchased Receivables
shall be administered by the Servicer, in accordance with the terms of this
Agreement. The Seller shall provide to the Servicer and the Backup Servicer on a
timely basis all information needed for such administration.
(b) The Servicer shall, for each day on which Collections are
received by it or in any Lockbox Account, determine the allocation of such
Collections between Finance Charge Collections and Principal Collections with
respect to Purchased Receivables. The Servicer shall not commingle with its
other funds Collections received by it prior to their payment to the Purchaser
and shall deposit or cause to be deposited into a Blocked Account, in accordance
with SECTION 6.02(b) all Collections and other proceeds of Purchased
Receivables.
(c) On or prior to the third Business Day immediately
preceding a Settlement Date, the amount on deposit in any Blocked Account
(including all investment income with respect to amounts on deposit in any
Blocked Account) as of the last Business Day of the most recently completed
calendar month, shall be allocated as follows:
(i) The amount of Principal Collections with
respect to Purchased Receivables shall, upon payment of such
amount to the Purchaser in accordance with the terms of this
SECTION 2.03, be applied to reduce the
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Investment in the amount of such Principal Collections so
allocated and paid. The Purchaser may reinvest such
Principal Collections in new Receivables PROVIDED that the
conditions set forth in SECTIONS 2.02 and 3.02 have been
satisfied. On each Settlement Date on and after the Final
Maturity Date with respect to each Purchased Receivable,
the Administrative Agent shall draw first, upon all amounts
available in the Cash Collateral Account and second, upon
all amounts available under the Transaction Letter of
Credit and apply the proceeds of such draws and any Excess
Collections to the reduction of the Investment. Once such
amounts are reduced to zero, the Administrative Agent may
draw on the Policy on account of Investment.
(ii) Finance Charge Collections with respect
to Purchased Receivables, all investment income with respect
to amounts on deposit in the Cash Collateral Account, all
Recoveries, any Withdrawal Amount, any Transaction L/C Draw
and any Insurer Optional Deposit shall be allocated in the
following order of priority:
(A) first, to the Servicer
(if not BusLease or an Affiliate of
BusLease), an amount equal to the unpaid
Servicer Fee accrued through such day and
not previously allocated and held (whether
or not accrued during the current Settlement
Period),
(B) second, to the
Custodian, an amount equal to the unpaid
fees payable to the Custodian under the
Custodial Agreement accrued through such day
and not previously allocated and held
(whether or not accrued during the current
Settlement Period),
(C) third, to the Backup
Servicer, an amount equal to the unpaid
Backup Servicer Fee accrued through such day
and not previously allocated and held
(whether or not accrued during the current
Settlement Period), plus any Conversion Fee
or transition expenses as defined and
provided for in the Backup Servicing
Agreement to the extent not paid by the
Servicer as provided therein, provided, that
such transition expenses shall not exceed
$25,000,
(D) fourth, to the
Purchaser, the lesser of (i) the Yield and
(ii) the Guaranteed Yield, if any, payable
to the Purchaser accrued through such day
and not previously allocated and held
(whether or not accrued during the current
Settlement Period),
(E) fifth, to the
Purchaser, the Usage Fee and the Commitment
Fee, if any, payable to the Purchaser in
accordance with the SPARC Fee Letter accrued
through such day and not
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previously allocated and held (whether or
not accrued during the current Settlement
Period),
(F) sixth, to the Purchaser
to be applied as a reduction of the
Investment, an amount equal to the Net
Defaulted Amount as of the last day of the
most recently completed calendar month and
not previously allocated and held (whether
or not such Net Defaulted Amount arose from
Purchased Receivables which became Defaulted
Receivables during such calendar month),
(G) seventh, to FSA, an
amount equal to the unreimbursed payments
made under the Policy and the fees, if any,
payable to FSA in accordance with the
Premium Letter, in each case, accrued
through such day and not previously
allocated and held (whether or not accrued
during the current Settlement Period),
(H) eighth, to the extent
the amount on deposit in the Cash Collateral
Account is less than the Cash Collateral
Account Requirement, to the Cash Collateral
Account, an amount equal to such shortfall,
(I) ninth, to the
Purchaser, the remaining Yield, if any,
payable to the Purchaser through such day
and not previously allocated and held
(whether or not accrued during the current
Settlement Period), and not previously
allocated pursuant to clause (D) above,
(J) tenth, to the
Administrative Agent, for the benefit of
itself and the Purchaser, the amount of any
costs, expenses or indemnities required to
be paid to either of them under any Related
Document which was not previously allocated
and held (whether or not arising during the
current Settlement Period),
(K) eleventh, to FSA, the
amount of any costs, expenses or indemnities
required to be paid to FSA either of them
under any Related Document which was not
previously allocated and held (whether or
not arising during the current Settlement
Period), and
(L) twelfth, if BusLease or
an Affiliate of BusLease is the Servicer, to
the payment of the Servicer Fee accrued
through such day and not previously so
allocated and held (whether or not accrued
during the current Settlement Period).
Subject to paragraph (e) below, the excess of the Finance
Charge Collections with respect to Purchased Receivables, Recoveries, income
with respect to amounts on deposit in the Cash Collateral Account and the
Blocked Accounts and any Insurer Optional Deposit over the aggregate amount
required to be allocated to the payments described in clauses (A) through (L)
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above (such excess being referred to herein as "EXCESS COLLECTIONS") shall be
allocated and held by the Backup Servicer for the benefit of the Seller.
(d) On each Settlement Date, based upon the Settlement
Worksheet contained in the Monthly Report provided by the Servicer not later
than 10:00 a.m. New York time on the Report Delivery Date in a form reasonably
acceptable to the Backup Servicer (and subject to the Backup Servicer's
obligations pursuant to the Backup Servicing Agreement to verify certain
balances in the Summary and Settlement Report Worksheets contained in the
Monthly Report), the Backup Servicer shall pay to the Custodian, the
Administration Agent, the Purchaser, FSA, the Servicer, if applicable, the
Backup Servicer and the Seller, the amounts held for the account of, the
Custodian, the Administration Agent, the Purchaser, FSA, the Servicer, if
applicable, the Backup Servicer and the Seller, respectively, pursuant to
SECTION 2.03(c) above, in each case to the extent that such payment has not
previously been made by wire transfer pursuant to the payment instructions
provided to the Backup Servicer prior to such Settlement Date. Two Business Days
prior to each Settlement Date, the Backup Servicer shall determine the amount
(the "SHORTFALL"), if any, by which (1) the sum of the amounts required to be
paid pursuant to clauses (A) through (L) of paragraph (ii) of SECTION 2.03(c) on
such Settlement Date exceeds (2) the amount on deposit in the Blocked Account as
of the last Business Day of the most recently completed calendar month. In the
event of any Shortfall, the Backup Servicer shall make a withdrawal from the
Cash Collateral Account in the amount of such Shortfall (up to the amount on
deposit in the Cash Collateral Account on such date) (such amount the
"WITHDRAWAL AMOUNT"). In the event that the result of the Shortfall less the
Withdrawal Amount is greater than zero, the Backup Servicer shall, one Business
Day prior to such Settlement Date, make a Transaction L/C Draw in the amount of
such excess (up to the Available L/C Amount on such date). The Backup Servicer
shall pay to itself, the Administrative Agent, the Servicer, the Custodian, FSA
and the Purchaser from the Withdrawal Amount and any Transaction L/C Draw the
unpaid amounts described in clauses (A) through (L) of paragraph (ii) of SECTION
2.03(c) in the order of priority set forth therein on the Business Day of
receipt of funds from such Transaction L/C draw or, if such funds are received
after 2:00 p.m., New York City time, on any Business Day, on the Business Day
following the receipt of such funds, irrespective of whether such Business Day
is after the Settlement Date.. In the event that the result of the Shortfall
less the Withdrawal Amount less the amount of the Transaction L/C Draw is
greater than zero and all amounts due under 2.03(c)(ii)(D) have not been paid
(such unpaid amount the "DEFICIENCY AMOUNT"), the Administrative Agent shall on
such Settlement Date, make a draw under the Policy in the amount of the
Deficiency Amount, which on each Settlement Date shall not exceed the Guaranteed
Yield, and the Administrative Agent shall allocate the proceeds of such draw in
accordance with SECTION 6.07 of this Agreement.
(e) Following the occurrence and continuance of a Servicer
Termination Event or the termination of this Agreement in accordance with
Section 2.01(b) as a result of FSA not consenting to an extension of the
Facility Termination Date, all amounts in respect of Excess Collections shall be
allocated and applied to reduce the Investment.
(f) At such time as the Investment is reduced to zero and all
amounts of the Purchaser's Yield and other amounts owing to the Purchaser and
FSA have been paid in full, the ownership interest of the Purchaser in respect
of the Purchased Receivables shall be reconveyed to the Seller, and the
Purchaser shall deliver to the Seller all instruments and documents relating
34
thereto, all Records, and all residual interests thereto; PROVIDED, HOWEVER,
that if any Collections received by the Purchaser must be returned or rescinded
for any reason, such amount shall be deemed to have never been received by the
Purchaser and the Purchaser's interest in the Purchased Receivables shall
continue. In addition, upon the payment or other satisfaction in full of any
Purchased Receivable by or on behalf of an Obligor, the Purchaser shall take
such actions as the Seller shall reasonably request to evidence the termination
of the Purchaser's ownership rights in such Purchased Receivable.
(g) For the purposes of this SECTION 2.03:
(i) if on any day the outstanding
principal amount of any Receivable, the amount of any
Scheduled Contract Payment, or any accrued and unpaid
Finance Charges with respect to, any Purchased Receivable
is reduced or adjusted by the Seller or the Servicer as a
result of any defective or rejected Vehicles or otherwise,
or any setoff by any Obligor against the Seller or BusLease
shall occur with respect thereto, the Servicer shall be
deemed to have received on such day a Collection of such
Purchased Receivable in the amount of such reduction,
adjustment or setoff and shall on such day deposit, or
cause to be deposited, in a Blocked Account an amount equal
to such reduction, adjustment or setoff;
(ii) if on any day either (w) any of the
representations or warranties contained in (A) SECTION 4.01(q)
are no longer true or (B) SECTION 4.01(x), (y) or (ff) were
not true when made, with respect to any Purchased Receivable,
(x) the Seller or the Servicer shall fail to perform or
observe any term, covenant or agreement contained in SECTION
5.02(l) or SECTION 5.03(a) or (y) the Seller or the Servicer
shall extend, amend or otherwise modify the terms of any
Purchased Receivable (except in connection with a Permitted
Restructuring), or amend, modify or waive the terms or
conditions of the Contract under which such Purchased
Receivable arises (except in connection with a Permitted
Restructuring), the Servicer shall be deemed to have received
on such day a Collection in an amount equal to the Outstanding
Balance of such Purchased Receivable in full and shall on such
day deposit, or cause to be deposited, in a Blocked Account an
amount equal to such Outstanding Balance;
(iii) if on any day any of the
representations or warranties contained in SECTION 4.01(n),
(o), (r), (s), (v) or (cc) are no longer true with respect to
any Purchased Receivable, the Seller may, in its discretion,
repurchase such Purchased Receivable on such day for a
purchase price in an amount equal to the Outstanding Balance
of such Purchased Receivable, which purchase price shall be
deposited on such day in a Blocked Account by the Seller; and
(iv) if and to the extent the Purchaser
shall be required for any reason (other than as a result of a
bankruptcy of an Obligor) to pay over to an Obligor any amount
received on its behalf hereunder, such amount shall be deemed
not to have been so received but rather to have been retained
by the Seller and, accordingly, the Purchaser shall have a
claim against the Seller for such
35
amount, payable when and to the extent that any distribution
from or on behalf of such Obligor is made in respect thereof.
(h) Notwithstanding any provision of this Agreement to the
contrary, the Seller shall be absolutely and unconditionally obligated to pay to
the Purchaser the amount of the Investment, the Yield and all fees payable to
the Purchaser under this Agreement.
Section 2.04 FEES. The Seller shall pay to the Purchaser the
fees specified in the SPARC Fee Letter, at the times specified for payment
therein.
Section 2.05 PAYMENTS AND COMPUTATIONS, ETC.
(a) All amounts to be paid or deposited by the Seller, the
Backup Servicer or the Servicer hereunder shall be paid or deposited no later
than 1:00 P.M. (New York City time) on the day when due in same day funds to the
Purchaser's Account or to an account specified by the Administrative Agent or
FSA, as applicable.
(b) The Seller or the Servicer shall, to the extent permitted
by law, pay on demand from time to time interest on any amount not paid or
deposited by the Seller or the Servicer, as the case may be, when due and
payable hereunder at an interest rate per annum equal to [**]% per annum above
the Base Rate in effect from time to time; PROVIDED, HOWEVER, that such interest
rate shall not at any time exceed the maximum rate permitted by applicable law.
(c) All computations of interest under subsection (b) above
and all computations of Yield, fees, and other amounts hereunder shall be made
on the basis of a year of 360 days and the actual number of days elapsed.
Whenever any payment or deposit to be made hereunder shall be due on a day other
than a Business Day, such payment or deposit shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of such payment or deposit.
Section 2.06 CASH COLLATERAL ACCOUNT.
(a) On or prior to the Closing Date, the Cash Collateral
Account will be established by the Seller in the name of the Administrative
Agent for the benefit of the Purchaser and FSA. The Cash Collateral Account will
be funded on the date of the initial Purchase in the amount of the Initial Cash
Collateral Amount from an initial deposit by the Seller. During the term of the
Backup Servicing Agreement (including the term of this Agreement for any period
in which the Backup Servicer is the successor Servicer), the Cash Collateral
Accounts shall be maintained with The Bank of New York unless The Bank of New
York ceases to be an Eligible Institution.
(b) Funds on deposit in the Cash Collateral Account shall be
invested in Eligible Investments selected in writing by the Servicer; PROVIDED,
that following the occurrence of a Servicer Termination Event, the Servicer
shall continue to select such Eligible Investments unless the Controlling Party
notifies the Servicer that the Controlling Party shall select such Eligible
Investments; PROVIDED, FURTHER, that it is understood and agreed that the
Controlling Party shall not be liable for any loss arising from such investments
in Eligible Investments. All such Eligible Investments shall be held for the
benefit of the Purchaser, FSA and the Seller.
36
Funds on deposit in the Cash Collateral Account shall be invested in Eligible
Investments that will mature so that such funds will be available at the
close of business on the Business Day preceding each Settlement Date.
(c) The Backup Servicer, for the benefit of the Purchaser and
the Seller, shall possess all right, title and interest in all funds on deposit
from time to time in the Cash Collateral Account and in all proceeds thereof.
Except as otherwise provided for herein, the Cash Collateral Account shall be
under the sole dominion and control of the Backup Servicer for the benefit of
the Purchaser and the Seller. If at any time, the Cash Collateral Account ceases
to be an Eligible Deposit Account, then the Seller (or the Backup Servicer on
its behalf) shall within five (5) Business Days (or such longer period as to
which the Purchaser may consent) establish a new Cash Collateral Account as an
Eligible Deposit Account and shall transfer any cash and/or any investments to
such new Cash Collateral Account. In connection with the foregoing, the Backup
Servicer agrees that it shall notify the Administrative Agent in writing
promptly upon the Cash Collateral Account ceasing to be an Eligible Deposit
Account.
(d) The Backup Servicer shall have the power, revocable by the
Controlling Party, to instruct the Eligible Institution to make withdrawals and
payments from the Cash Collateral Account for the purpose of permitting the
Backup Servicer to carry out its duties hereunder PROVIDED, that if such power
is revoked, the Backup Servicer shall be relieved of its duties to make
allocations of amounts on deposit in the Cash Collateral Account.
(e) If the amount on deposit in the Cash Collateral Account on
any Settlement Date (after giving effect to any deposits therein and withdrawals
therefrom pursuant to SECTIONS 2.03(c)(ii)) and 2.03(d) is greater than the Cash
Collateral Account Requirement for such Settlement Date, such excess shall be
paid to the Seller.
Section 2.07 BLOCKED ACCOUNTS.
(a) The Backup Servicer shall establish and maintain with one
or more Blocked Account Banks, one or more Blocked Accounts, in the name of "BNY
Asset Solutions LLC, as Backup Servicer on behalf of Canadian Imperial Bank of
Commerce as Administrative Agent, for the benefit of Canadian Imperial Bank of
Commerce and Financial Security Assurance, Inc." The terms and conditions of
each Blocked Account shall be in all respects reasonably satisfactory to the
Backup Servicer, the Administrative Agent and FSA. During the term of the Backup
Servicing Agreement (including the term of this Agreement for any period in
which the Backup Servicer is the successor Servicer), the Blocked Account Bank
for all Blocked Accounts shall be The Bank of New York unless The Bank of New
York ceases to be an Eligible Institution.
(b) Funds on deposit in a Blocked Account shall be invested
overnight in Eligible Investments selected in writing by the Servicer; PROVIDED,
that following the occurrence of a Servicer Termination Event, the Servicer
shall continue to select such Eligible Investments unless the Controlling Party
notifies the Servicer and the Backup Servicer that the Controlling Party shall
select such Eligible Investments; PROVIDED, FURTHER, that it is understood and
agreed that the Controlling Party shall not be liable for any loss arising from
such investments in
37
Eligible Investments. All such Eligible Investments shall be held for the
benefit of the Administrative Agent, for the benefit of the Purchaser and FSA.
(c) Each Blocked Account Bank will maintain for the benefit of
the Administrative Agent, for the benefit of the Purchaser and FSA, possession
of any negotiable instruments or securities evidencing the investment of funds
on deposit in the related Blocked Account. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Blocked Accounts
shall be allocated in accordance with Section 2.03(c). The Backup Servicer
shall, at the request of the Seller and the consent of the Controlling Party
(which consent shall not be unreasonably withheld), remit to the Seller all
amounts on deposit in any Blocked Account that do not represent Collections.
ARTICLE III.
CONDITIONS OF PURCHASES
Section 3.01 CONDITIONS PRECEDENT TO INITIAL PURCHASE. The
Purchaser shall not be obligated to make any Purchase under this Agreement,
nor shall the Purchaser or Administrative Agent be obligated to take,
fulfill, or perform any other action hereunder, unless and until the
following conditions have been satisfied or provided for in a manner
satisfactory to FSA, Administrative Agent and the Purchaser and/or waived in
writing by FSA, Administrative Agent and the Purchaser:
(a) the Purchaser shall have received in form and substance
satisfactory to FSA, the Purchaser and the Administrative Agent certificates of
the Secretary or Assistant Secretary of the Seller, the Servicer, Motor Coach
and the Transferors certifying the names and true signatures of their respective
officers authorized to sign this Agreement, the Related Documents, and the other
documents to be delivered by them hereunder or thereunder or in connection
herewith or therewith, evidence of corporate authorization of the transactions
contemplated hereby or thereby, the articles of incorporation (attached and
appropriately certified by the Secretary of State of their respective
jurisdiction of incorporation) and the by-laws, and all amendments thereto, of
each of them;
(b) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
executed financing statements, to be filed on or before the date of such initial
Purchase under the UCC of all jurisdictions that the Purchaser, the
Administrative Agent and FSA may deem necessary or desirable in order (i) to
perfect to the extent contemplated by SECTION 4.01(q), the Purchaser's interests
contemplated by this Agreement and (ii) to perfect the ownership interests of
the Seller in the Receivables purchased by the Seller from the Transferors
pursuant to the Transfer Agreements, except to the extent any filings or other
actions are necessary to convey the interest in the related Vehicles under the
applicable titling laws;
(c) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, Administrative Agent and FSA completed
requests for information listing all effective financing statements filed in the
jurisdictions referred to in SECTION 3.01(b) above that name the Seller or a
Transferor as debtor, together with copies of such financing
38
statements (none of which shall cover any Purchased Receivables, the related
Contracts or the related Vehicles) or any interest therein;
(d) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
executed UCC termination statements, if any, necessary to release all security
interests and other rights of any Person in the Receivables, the related
Contracts or the Vehicles previously granted by the Seller, any Transferor or
Motor Coach;
(e) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
favorable opinions of counsel for the Seller, the Servicer, Motor Coach and the
Transferors, in form and substance satisfactory to the Purchaser, the
Administrative Agent and FSA, as to such matters as the Administrative Agent may
reasonably request;
(f) no Servicer Termination Event or Insurance Agreement Event
of Default shall have occurred and be continuing or would result after giving
effect to any of the transactions contemplated on the Initial Closing Date;
(g) the Seller shall have paid to the Purchaser and the
Administrative Agent fees payable (if any) in accordance with the SPARC Fee
Letter;
(h) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA good
standing certificates with respect to the Seller, the Servicer, Motor Coach and
the Transferors from the Secretary of the State of the respective States of
incorporation of the Seller, the Servicer, Motor Coach and the Transferors;
(i) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA the
Related Documents executed by each of the Persons party thereto;
(j) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
evidence that the Cash Collateral Account has been established with an Eligible
Institution and that such Cash Collateral Account is in the name of
Administrative Agent, for the benefit of the Purchaser and FSA;
(k) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA such
other documents as the Purchaser, FSA or the Administrative Agent shall have
reasonably requested;
(l) the Purchaser and FSA shall have received evidence from
each rating agency that this Agreement and the transactions contemplated hereby
have at least an investment grade "shadow" rating;
(m) FSA shall have received notice from S&P of FSA's capital
charge for the current transaction without giving effect to the Policy;
39
(n) the Administrative Agent shall have received the original
Transaction Letter of Credit executed by the Transaction L/C Issuer;
(o) the Purchaser, Administrative Agent and FSA shall have
received satisfactory evidence that the Seller, Motor Coach, the Transferors and
the other parties to the Related Documents have obtained all required licenses,
consents and approvals of all Persons including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Related Documents;
(p) the Administrative Agent and FSA shall have received an
executed Lockbox Agreement with respect to each Lockbox Account;
(q) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser and FSA, the executed pay-off letters
reasonably requested by the Purchaser, the Administrative Agent or FSA; and
(r) FSA shall have reviewed each of the Contract Files in the
possession of General Electric Capital Corporation or any agent thereof and FSA
shall be satisfied with the results of such review.
Section 3.02 CONDITIONS PRECEDENT TO ALL PURCHASES. Each
Purchase (including the initial Purchase) shall be subject to the further
conditions precedent that:
(a) in the case of each Purchase, the Servicer shall have
delivered to the Purchaser and the Administrative Agent on or prior to the date
of such Purchase, in form and substance satisfactory to the Purchaser, all
reports as and when due under SECTION 6.02(g), and, on or prior to the date of
the initial Purchase, a report, reasonably acceptable to the Purchaser,
containing information reasonably requested by the Purchaser with respect to the
Purchased Receivables and the Receivables to be purchased,
(b) on the date of each Purchase, the following statements
shall be true (and acceptance of the proceeds of such Purchase shall be deemed a
representation and warranty by the Seller that such statements are then true):
(i) the representations and warranties
contained in Article IV are correct on and as of the date of
such Purchase as though made on and as of such date,
(ii) no event has occurred and is
continuing, or would result from such Purchase, that
constitutes a Servicer Termination Event or an Insurance
Agreement Event of Default,
(iii) the amount on deposit in the Cash
Collateral Account is at least equal to the Required Cash
Collateral Amount, and the sum of the amount of deposit in the
Cash Collateral Account PLUS to the Available L/C Amount of
all Transaction Letters of Credit is at least equal to the
Required Credit Enhancement,
40
(iv) no event or circumstance that is
reasonably likely to have a Material Adverse Effect shall have
occurred since the date hereof,
(v) after giving effect to any Purchase, the
Investment shall not exceed the Purchase Limit,
(vi) the Custodian shall have received and
reviewed the Contract Files with respect to Receivables being
funded or acquired in connection with such Purchase and shall
have issued a trust receipt with respect thereto, in
accordance with the Custodial Agreement,
(vii) at least three business days prior to
the date of any Purchase, FSA shall have received from the
Servicer a credit write up with respect to each Receivable
being funded or acquired in connection with such Purchase,
(viii) after giving effect to any Purchase,
the aggregate Outstanding Balance of all Purchased Receivables
due from any Obligor does not exceed the Standard
Concentration Limit or the Special Concentration Limit with
respect to such Obligor,
(ix) after giving effect to any Purchase,
the aggregate Outstanding Balance of Purchased Receivables
with respect to which the related Vehicles were not
manufactured by Motor Coach Entities does not exceed [**]% of
the aggregate Outstanding Balance of all Purchased
Receivables,
(x) after giving effect to any Purchase, the
aggregate Outstanding Balance of Purchased Receivables arising
under Contracts with respect to which the related Obligors are
located (1) in the two States in the United States of America
with the largest aggregate Outstanding Balance of all
Purchased Receivables does not exceed, in either State, [**]%
of the aggregate Outstanding Balance of all Purchased
Receivables and (2) in the same State in the United States of
America (other than a State referred to in clause (1) above)
is less than [**]% of the aggregate Outstanding Balance of all
Purchased Receivables,
(xi) after giving effect to any Purchase,
the result of (i) the weighted average imputed rate of
interest for all Purchased Receivables less (ii) the sum of
(1) the weighted average of the rates at which the Guaranteed
Yield is computed for the immediately preceding Settlement
Period, or, with respect to the initial Purchase only, the
average of the fixed periodic rates of interest set forth in
the Hedge Agreements entered into in connection with such
Purchase, plus (2) sum of the percentages used to calculate
the Premium, the Commitment Fee, the Usage Fee, the Servicer
Fee and the Backup Servicer Fee for such Settlement Period
shall be equal to or greater than [**]%,
(xii) after giving effect to any Purchase,
the aggregate Outstanding Balance of Purchased Receivables
arising under Contracts which by their express terms allow no
more than three monthly payments to be missed in
41
any twelve-month period does not exceed [**]% of the
aggregate Outstanding Balance of all Purchased Receivables,
(xiii) after giving effect to any Purchase,
the aggregate Outstanding Balance of Purchased Receivables
arising under Contracts with respect to Vehicles which were
repossessed and subsequently financed does not exceed [**]% of
the aggregate Outstanding Balance of all Purchased
Receivables,
(xiv) after giving effect to any Purchase,
the aggregate Outstanding Balance of Purchased Receivables
arising under Contracts with respect to Vehicles which are of
a model year (1) between 10 and 15 years old as of the date of
such Purchase does not exceed [**]% of the aggregate
Outstanding Balance of all Purchased Receivables and (2) more
than 15 years old as of the date of such Purchase does not
exceed [**]% of the aggregate Outstanding Balance of all
Purchased Receivables,
(xv) all Receivables being funded or
acquired in connection with such Purchase are Eligible
Receivables,
(xvi) after giving effect to any Purchase,
the aggregate Outstanding Balance of Purchased Receivables
arising under Contracts which are Vehicle Loans that provide
for Balloon Payments does not exceed [**]% of the aggregate
Outstanding Balance of all Purchased Receivables,
(xvii) after giving effect to any Purchase,
none of the Purchased Receivables is an Operating Lease, and
(xviii) the Primary Purchaser shall have
failed to make a "Purchase" under the Primary Purchase
Agreement of the same Receivables which the Seller is
requesting the Purchaser to Purchase; and
(xiv) the Facility Termination Date shall
not have occurred;
(c) there shall be in place Hedge Agreements reasonably
satisfactory to the Controlling Party, the Seller and the Rating Agencies;
provided, that any Hedge Agreement entered into in connection with any Purchase
after the initial Purchase which is substantially similar in all material
respects to the Hedge Agreement entered into in connection with the initial
Purchase shall be deemed to be satisfactory to FSA, the Administrative Agent,
the Seller and the Rating Agencies; and
(d) the Purchaser and FSA shall have received such other
approvals, opinions or documents as it may reasonably request, including,
without limitation, information with respect to the performance of the Purchased
Receivables.
One Business Day prior to the date of each Purchase, FSA shall have received, in
the form attached as Exhibit J hereto, a certificate of an officer of the Seller
certifying that all conditions to purchase set forth in this Section shall have
been satisfied, and setting forth the calculation showing that the condition
specified in Section 3.02(b)(xi) has been satisfied.
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The request and acceptance by the Seller of the proceeds of any Purchase shall
be deemed to constitute, as of the date of such request or acceptance, a
representation and warranty by the Seller that the conditions in this Article
III have been satisfied.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER.
To induce the Purchaser to make the Purchases and the Administrative Agent to
take any action hereunder, the Seller hereby makes the following
representations and warranties to the Purchaser, the Administrative Agent and
FSA, as of the Closing Date and as of the date of each Purchase, each and all
of which shall survive the execution and delivery of this Agreement:
(a) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business, and is in good standing, in
each jurisdiction in which the nature of its business and the performance of its
obligations hereunder and under the other Related Documents to which it is a
party requires it to be so qualified.
(b) The Seller has the power and authority to own, pledge,
mortgage, operate and convey all of its properties, to conduct its business as
now or proposed to be conducted and to execute and deliver this Agreement and
the Related Documents to which it is a party and to perform the transactions
contemplated hereby and thereby.
(c) The Seller is and has been at all times since its
incorporation a wholly-owned Subsidiary of MCII Coaches, Inc.
(d) The execution, delivery and performance by the Seller of
this Agreement, the Related Documents and the transactions contemplated hereby
and thereby (i) have been duly authorized by all necessary corporate or other
action on the part of the Seller, (ii) do not contravene or cause the Seller to
be in default under (A) the Seller's certificate or articles of incorporation or
by-laws, (B) any contractual restriction contained in any indenture, loan or
credit agreement, lease, mortgage, security agreement, bond, note, or other
agreement or instrument binding on or affecting the Seller or its property
(including any property acquired under any Transfer Agreement), or (C) any law,
rule, regulation, order, license requirement, writ, judgment, award, injunction,
or decree applicable to, binding on or affecting the Seller or its property, and
(iii) do not result in or require the creation of any Lien upon or with respect
to any of the property of the Seller (other than Liens created in favor of the
Seller under the Transfer Agreements and the Liens created in favor of the
Administrative Agent as contemplated hereunder).
(e) This Agreement and each Related Document to which the
Seller is a party have each been duly executed and delivered by the Seller.
(f) No approval, consent of, notice to, filing with or
permits, licenses, qualifications or other action by any Governmental Authority
or any other party is required or necessary (i) for the conduct of the Seller's
business as currently conducted, for the ownership, use, operation or
maintenance of its properties and for the due execution, delivery and
43
performance by the Seller of this Agreement or any of the Related Documents,
(ii) for the perfection of or the exercise by each of FSA, the Purchaser, the
Custodian, or the Administrative Agent of any of its rights or remedies
hereunder or thereunder, or (iii) to ensure the legality, validity, or
enforceability of this Agreement in any jurisdiction in which the Seller or the
Servicer does business, in each case other than consents, notices, filings and
other actions which have been obtained or made and complete copies of which have
been provided to FSA, the Purchaser, the Custodian and the Administrative Agent
and continuation statements in respect of any such filings.
(g) No transaction contemplated by this Agreement requires
compliance with any bulk sales act or similar law.
(h) This Agreement and each Related Document to which the
Seller is a party constitutes the legal, valid and binding obligation of the
Seller enforceable against the Seller in accordance with its respective terms
subject to any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
enforceability of creditors' rights generally and general equitable principles,
whether applied in a proceeding at law or in equity.
(i) There is no pending or, to the best of the Seller's
knowledge, threatened, action, suit or proceeding against or affecting the
Seller, its officers or directors, or the property of the Seller, in any court
or tribunal, before any arbitrator of any kind or before or by any Governmental
Authority.
(j) No injunction, writ, restraining order or other order of
any nature adverse to the Seller or the conduct of its business or which is
inconsistent with the due consummation of the transactions contemplated by this
Agreement or the Related Documents has been issued by a Governmental Authority.
(k) The principal place of business and chief executive office
of the Seller, and the offices where the Seller keeps its Records and the
original copies of the Related Documents are located at the address of the
Seller for notices under SECTION 10.02 and there are currently no, and during
the past four months (or such shorter time as the Seller has been in existence)
there have not been, any other locations where the Seller is located (as that
term is used in the UCC of the jurisdiction where such principal place of
business is located) or keeps Records.
(l) The Seller does not have any Subsidiaries and does not
have any investments in, or loans or advances of money to, any Person except for
Receivables and Eligible Investments.
(m) The Seller is adequately capitalized and will not become
insolvent after giving effect to the transactions contemplated by this Agreement
and the Related Documents. The Seller has no Indebtedness other than pursuant to
this Agreement and the Related Documents. The Seller is adequately capitalized
for its business as proposed to be conducted in the foreseeable future and does
not expect the commencement of any insolvency, bankruptcy or similar proceedings
or the appointment of a receiver, liquidator or similar official in respect of
its
44
assets. The Seller executed and delivered each of the Related Documents to
which it is a party for fair consideration and without the intent to hinder,
delay or defraud any of its creditors or any other Person.
(n) Immediately prior to a Purchase hereunder, for accounting
purposes, the Seller will treat all of the Receivables and Vehicles as its own
property, and will account for the purchase, assignment or transfer of any such
Receivable or Vehicle pursuant to a Transfer Agreement as a purchase or absolute
assignment of the applicable Transferor's right, title and ownership interest in
such Receivable or Vehicle and the Seller has not in any other manner accounted
for or treated the transactions under the Transfer Agreements, except that such
transactions shall be treated as debt for tax purposes.
(o) The Seller has complied and will comply in all respects
with all applicable laws, rules, regulations, judgments, agreements, decrees and
orders with respect to its business and properties and all the Receivables and
related Contracts, except where the failure or failures to so comply could not
reasonably be expected, in the aggregate, to have a Material Adverse Effect.
(p) The Seller has filed on a timely basis all tax returns
(federal, state and local) required to be filed, is not liable for taxes payable
by any other Person (except for the payment of such amounts as a result of the
filing of a consolidated tax return) and has paid or made adequate provisions
for the payment of all taxes, fees, assessments and other governmental charges
due from the Seller, except where the Seller is contesting such tax, fee,
assessment or other governmental charge in good faith through appropriate
proceedings as to which adequate reserves are being maintained in accordance
with GAAP and with respect to which no Lien for payment has been filed or is
otherwise enforceable. No tax lien or similar Lien has been filed, and no claim
has been filed or is being asserted, with respect to any such tax, assessment or
other governmental charge, except for any contested proceedings as described in
the immediately preceding sentence. Any taxes, fees and other governmental
charges payable by the Seller in connection with the execution and delivery of
this Agreement and the Related Documents and the transactions contemplated
hereby or thereby have been paid or shall have been paid if and when due at or
prior to the Closing Date.
(q) Immediately prior to a Purchase hereunder, the Seller
shall be the legal and beneficial owner of the Receivables, free and clear of
any Adverse Claim. This Agreement is effective to, and shall, upon each Purchase
and the filing of the financing statements referred to in SECTION 3.01(b),
transfer and assign to the Purchaser (and the Purchaser shall acquire from the
Seller) a valid and perfected first priority security interest (as defined in
the UCC) in and to the Purchased Receivables, all free and clear of any Adverse
Claim. No effective financing statement or other instrument similar in effect
covering any Purchased Receivables or Collections or Contract with respect
thereto is on file in any recording office, except (a) those filed in favor of
the Administrative Agent pursuant to this Agreement and the Primary Purchase
Agreement and, (b) those filed in favor of the Seller pursuant to a Transfer
Agreement.
(r) The Contract File relating to each Purchased Receivable
other than a Purchased Receivable purchased as part of the initial Purchase if
the related Contract File is in the possession of General Electric Capital
Corporation or any agent thereof, has been delivered
45
to and reviewed by the Custodian in accordance with the terms hereof and of
the Custodial Agreement and the Custodian has delivered a trust receipt with
respect thereto in accordance with the Custodial Agreement. The Contract File
relating to each Purchased Receivable purchased as part of the initial
Purchase with respect to which the related Contract File was in the
possession of General Electric Capital Corporation or any agent thereof, has
been reviewed by FSA, shall be delivered to the Custodian one Business Day
after such Purchase and the Custodian shall deliver a trust receipt with
respect thereto in accordance with the Custodial Agreement.
(s) All information heretofore or hereafter furnished by or on
behalf of the Seller to the Administrative Agent, the Custodian, FSA or the
Purchaser in connection with this Agreement or the Related Documents, or any
transaction contemplated hereby or thereby, is and will be true and complete in
all material respects and does not and will not omit to state a material fact
necessary to make the statements contained therein not misleading.
(t) The Seller is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC (or any
successor thereto) under ERISA.
(u) The Seller is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act.
The making of the Purchases by the Purchaser, the application of the proceeds
thereof by the Seller and the consummation of the transactions contemplated by
this Agreement and the other Related Documents to which the Seller is a party
will not violate any provision of the Investment Company Act or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder.
(v) The Lockbox Accounts specified in SCHEDULE 4.01(v) hereto
are the only accounts into which Collections of any Receivables are deposited.
All of the Obligors have been instructed to make deposits of Collections
directly to the Lockbox Account, all in accordance with the Cash Management
Systems.
(w) The Seller has no knowledge of any fact which leads it or
should have led a reasonable person to expect that any payments on any Purchased
Receivable at the time of Purchase will not be paid in full when due or to
expect any other material adverse effect on (A) the performance by the Seller of
its obligations under this Agreement or any of the Related Documents, (B) the
validity or enforceability of this Agreement or any of the Related Documents, or
(C) the Receivables or the Contracts or the interests of the Seller therein.
(x) With respect to each Receivable, the Seller purchased such
Receivable from a Transferor in exchange for payment, made in accordance with
the provisions of the applicable Transfer Agreement, in an amount which
constitutes fair consideration and reasonably equivalent value. Each such sale
referred to in the preceding sentence shall not have been made for or on account
of an antecedent debt owed by the applicable Transferor to the Seller and,
accordingly, no such sale is or may be voidable or subject to avoidance under
the Bankruptcy Code, and the rules and regulations thereunder.
46
(y) With respect to each Leased Vehicle, the Seller purchased
the related Vehicle from a Transferor in exchange for payment, made in
accordance with the provisions of the applicable Transfer Agreement, in an
amount which constitutes fair consideration and reasonably equivalent value.
Each such sale referred to in the preceding sentence shall not have been made
for or on account of an antecedent debt owed by the applicable Transferor or the
applicable Manufacturer to the Seller and, accordingly, no such sale is or may
be voidable or subject to avoidance under the Bankruptcy Code, and the rules and
regulations thereunder.
(z) Each of the representations and warranties of the Seller
contained in the Related Documents (other than this Agreement) is true and
correct in all respects and the Seller hereby makes each such representation and
warranty to, and for the benefit of, the Administrative Agent, the Custodian,
FSA and the Purchaser as if the same were set forth in full herein.
(aa) No Servicer Termination Event or Insurance Agreement
Event of Default has occurred and is continuing.
(bb) Attached as SCHEDULE 1.01(c) is a true and correct copy
of the Credit and Collection Policy as in effect on the date hereof. All of the
Receivables and Contracts acquired from a Transferor have been originated in
accordance with the credit policy described in the applicable Transfer
Agreement, and are being serviced in accordance with the Credit and Collection
Policy.
(cc) Each Contract included in the related Contract File is
"chattel paper" (as such term is defined in the UCC) and is the sole original of
such Contract in existence and has been stamped with the notation "original
copy", and no Receivable is evidenced by any other Contract.
(dd) No broker or finder acting on behalf of the Seller was
employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and the Seller has
no obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
(ee) The benefit of the representations and warranties of each
Transferor set forth in the Transfer Agreement executed by such Transferor have
been assigned to the Administrative Agent and the Purchaser. Each such Transfer
Agreement remains in full force and effect in accordance with its terms and the
representations, warranties, covenants and obligations contained in such
Transfer Agreement have, to the extent provided therein, survived the
consummation of the transactions contemplated by such Transfer Agreement.
(ff) Each Purchased Receivable shall at the time of Purchase
be an Eligible Receivable. At the time of Purchase no event has occurred which
could materially and adversely affect the collectibility of such Purchased
Receivable.
(gg) The Seller is treating the conveyance of the Receivables
and the Collections under this Agreement as a sale for purposes of GAAP.
47
Section 4.02 REPRESENTATIONS AND WARRANTIES OF THE
SERVICER. To induce the Purchaser to make the Purchases and the
Administrative Agent to take any action hereunder, the Servicer hereby makes
the following representations and warranties to Administrative Agent, the
Purchaser and FSA as of the Closing Date, each and all of which shall survive
the execution and delivery of this Agreement:
(a) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business, and is in good standing, in
every jurisdiction in which the nature of its business and the performance of
its obligations hereunder and under the other Related Documents to which it is a
party requires it to be so qualified, except where the failure to be so
qualified is not reasonably likely to have a Material Adverse Effect.
(b) The Servicer has the power and authority to own and
operate all of its properties, to conduct its business as now or proposed to be
conducted and to execute and deliver this Agreement and the Related Documents to
which it is a party and to perform the transactions contemplated hereby and
thereby.
(c) The execution, delivery and performance by the Servicer of
this Agreement, each other Related Document to which it is a party and all other
agreements, instruments and documents which may be delivered by it pursuant
hereto and thereto and the transactions contemplated hereby and thereby (i) have
been duly authorized by all necessary corporate or other action on the part of
the Servicer, (ii) do not contravene or cause the Servicer to be in default in
any material respect under (A) its certificate or articles of incorporation or
by-laws, (B) any contractual restriction with respect to any Indebtedness of the
Servicer or contained in any indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note or other agreement or instrument
binding on or affecting it or its property, or (C) any law, rule, regulation,
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and (iii) do not result in or require the creation of any Lien
upon or with respect to any of its properties.
(d) This Agreement and each other Related Document to which it
is a party has been duly executed and delivered by the Servicer.
(e) No approval or consent of, notice to, filing with or
permits, licenses, qualifications or other action by any Governmental Authority
or any other party is required for the conduct of the Servicer's business as
currently conducted, for the ownership, use, operation or maintenance of its
properties and for the due execution, delivery and performance by the Servicer
of this Agreement, any Related Document to which it is a party or any other
agreement, document or instrument to be delivered hereunder other than (i) any
consents, notices, permits, filings, qualifications, or other actions which have
been obtained or made and complete copies of which have been provided to the
Administrative Agent and (ii) where the failure to obtain any such approval or
consent or make any filing is not reasonably likely to result in a Material
Adverse Effect.
(f) This Agreement and each other Related Document to which it
is a party is the legal, valid and binding obligation of the Servicer
enforceable against the Servicer in
48
accordance with its terms subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the enforceability of creditors' rights generally
and general equitable principles, whether applied in a proceeding at law or
in equity.
(g) There is no pending or, to the best of the Servicer's
knowledge, threatened, action, suit, investigation or proceeding of a material
nature against or affecting the Servicer or its Subsidiaries or their respective
officers or directors, or the property of the Servicer or its Subsidiaries, in
any court or tribunal, before any arbitrator of any kind or before or by any
Governmental Authority (i) asserting the invalidity of this Agreement, any other
Related Document or any document to be delivered by the Servicer hereunder or
thereunder, or (ii) seeking any determination or ruling that would be reasonably
likely to materially and adversely affect (A) the performance by the Servicer of
its obligations under this Agreement or any other Related Document, or (B) the
validity or enforceability of this Agreement, any other Related Document or any
document to be delivered by the Servicer hereunder or thereunder.
(h) The Servicer has complied and will comply in all material
respects with all applicable laws, rules, regulations, judgments, agreements,
decrees and orders, and has obtained all necessary approvals, consents, permits,
licenses and qualifications from all Governmental Authorities, with respect to
its business and properties and the Receivables and Contracts serviced by it, in
each case except where failure to so comply or obtain could not reasonably be
expected, in the aggregate, to have a Material Adverse Effect.
(i) No injunction, writ, restraining order or other order of
any material nature adverse to the Servicer or the conduct of its business or
which is inconsistent with the due consummation of the transactions contemplated
by this Agreement and the Related Documents has, to the knowledge of the
Servicer, been issued by a Governmental Authority.
(j) The Servicer has timely filed all tax returns (federal,
state and local) required to be filed by it and has paid or has made adequate
provision for the payment of all taxes, fees, assessments and other governmental
charges due from the Servicer, except where the Servicer is contesting such tax,
assessment or other governmental charge in good faith through appropriate
proceedings as to which adequate reserves are being maintained in accordance
with GAAP and with respect to which no Lien for payment has been filed or is
otherwise enforceable. No tax lien or similar Lien has been filed, and no claim
has been filed or is being asserted, with respect to any such tax, fee,
assessment or other governmental charge, except for any contested proceedings as
described in the immediately preceding sentence. Any taxes, fees and other
governmental charges payable by the Servicer in connection with the transactions
contemplated by this Agreement and the Related Documents and the execution and
delivery of this Agreement and the Related Documents have been paid or shall
have been paid at or prior to the Closing Date.
(k) The Servicer is not an "investment company" or an
"affiliated person" or "promoter" or "principal underwriter" for an "investment
company", as such terms are defined in the Investment Company Act.
49
(l) The Servicer has no knowledge of any fact which leads it
or should have led a reasonable person to expect that any payments on any
Purchase Receivable will not be paid in full when due or to expect any other
material adverse effect on (A) the performance by the Servicer of its
obligations under this Agreement or any of the Related Documents, (B) the
validity or enforceability of this Agreement or any of the Related Documents, or
(C) the Receivables or the Contracts or the interests of the Purchaser therein.
(m) Each of the representations and warranties of the Servicer
contained in this Agreement and the Related Documents is true and correct in all
material respects and the Servicer hereby makes each such representation and
warranty contained in the Related Documents to, and for the benefit of the
Administrative Agent and the Purchaser.
(n) All information heretofore or hereafter furnished by or on
behalf of the Servicer to Administrative Agent, Custodian or the Purchaser in
connection with this Agreement or the Related Documents, or any transaction
contemplated hereby or thereby, is and will be true and complete in all material
respects and does not and will not omit to state a material fact necessary to
make the statements contained therein not misleading.
(o) Attached as SCHEDULE 1.01(c) is a true and correct copy of
the Credit and Collection Policy as in effect on the date hereof. All of the
Receivables and Contracts serviced by the Servicer are being serviced in
accordance with the Credit and Collection Policy. BusLease maintains such
insurance as is customary and desirable for companies engaged in its business
and as required by applicable law.
Section 4.03 REPRESENTATIONS AND WARRANTIES OF THE BACKUP
SERVICER. The Backup Servicer hereby represents and warrants to and covenants
with the Administrative Agent, the Purchaser and FSA, as of the date hereof
and during the term hereof, that:
(a) The Backup Servicer is, and throughout the term hereof
shall remain, a limited liability company duly formed, validly existing and in
good standing under the laws of the State of Delaware and the Servicer is, and
shall remain, licensed and in compliance with the laws of any state necessary to
perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement by the Backup
Servicer, and the performance and compliance with the terms of this Agreement by
the Backup Servicer, will not violate the Backup Servicer's articles of
organization or constitute a default (or an event which, with notice or passage
of time, or both, would constitute a default) under, or result in the breach of,
any material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(c) The Backup Servicer has full power and authority to enter
into and consummate all actions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and has
duly executed and delivered this Agreement.
(d) This Agreement, assuming due authorization, execution and
delivery by each of the parties hereto, constitutes a valid, legal and binding
obligation of the Backup Servicer, enforceable against the Backup Servicer in
accordance with the terms hereof, subject to
50
(A) applicable bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(e) The Backup Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and compliance with
the terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand of
any federal, state or local governmental or regulatory authority, which
violation, in the Backup Servicer's good faith reasonable judgment, is likely to
affect materially and adversely either the ability of the Servicer to perform
its obligations under this Agreement or the financial condition of the Servicer.
(f) No litigation is pending or, to the best of the Backup
Servicer's knowledge, threatened against the Backup Servicer which would
prohibit the Backup Servicer from entering into this Agreement or, in the Backup
Servicer's good faith reasonable judgment, is likely to affect materially and
adversely either the ability of the Backup Servicer to perform its obligations
under this Agreement or the financial condition of the Backup Servicer.
ARTICLE V.
COVENANTS
Section 5.01 COVENANTS OF THE SELLER. Until the date on
which the Investment shall be reduced to zero, the Yield shall have been
paid, no other amount shall be owing to the Purchaser, the Administrative
Agent or FSA under this Agreement and no further Purchases are to be made
under this Agreement:
(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The Seller
shall perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it and its business and properties, including the Contracts, the
Receivables and the related Vehicles and all Proceeds thereof, including those
relating to truth in lending, retail installment sales, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices,
privacy, licensing, taxation, ERISA and labor matters and Environmental Laws,
except to the extent that the failure to so comply, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. The Seller further
agrees that (i) without the prior consent of the Controlling Party, the Seller
shall not give any consent, direction, approval, demand, extension or waiver
under or with respect to any Related Document (other than as permitted in such
documents in the case of a Permitted Restructuring), (ii) upon the request of
the Controlling Party, the Seller shall be obligated to give or withhold any and
all such consents, requests, notices, directions, approvals, demands, extensions
or waivers as the Controlling Party may request, and (iii) upon any failure by
the Seller to comply with any such request, the Controlling Party shall be
entitled to give or withhold any and all such consents, directions, approvals,
demands, extensions or waivers, and to enforce directly all of the Seller's
rights and remedies under the Related Document.
(b) MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. The
Seller shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; (ii) continue to conduct its business
51
substantially as now conducted or as otherwise permitted hereunder and in
accordance with the terms of its certificate of incorporation and bylaws and
SECTIONS 5.01(l); (iii) at all times maintain, preserve and protect all of
its licenses, permits, charters and registrations which are reasonably
necessary for the conduct of its business; and (iv) transact business only
under its exact corporate name.
(c) CASH MANAGEMENT SYSTEMS; DEPOSIT OF COLLECTIONS. The
Seller shall direct, or cause to be directed, all Obligors to make payments on
the Receivables directly to a Lockbox Account. The Seller shall also direct each
of the other parties to the Related Documents, to the extent that any amounts
may be payable thereunder to the Seller, to make all deposits of such amounts
directly into the Lockbox Account. If notwithstanding the foregoing the Seller
at any time receives any Collections with respect to any Receivable or any other
proceeds of any Receivables, the Seller shall direct or cause to be directed,
the related Obligor to make such payments to the Lockbox Account and shall
promptly, and in any event no later than the first Business Day after receipt
thereof, deposit or cause to be deposited all such amounts into a Blocked
Account.
(d) USE OF PROCEEDS. The Seller shall utilize the proceeds of
the Purchases made hereunder solely for (i) the purchase of Receivables and
Vehicles from the Transferors pursuant to a Transfer Agreement from time to time
after the Closing Date, (ii) the payment of routine administrative or operating
expenses, in each case only as expressly permitted by and in accordance with the
terms of this Agreement and the other Related Documents, and (iii) the payment
of expenses hereunder.
(e) BOOKS AND RECORDS. The Seller shall keep proper books of
record and account in which full and correct entries shall be made of all
financial transactions and the assets and business of the Seller in accordance
with GAAP; maintain and implement administrative and operating procedures
(including, without limitation, the ability to recreate records evidencing the
Receivables and the Outstanding Balances thereof in the event of the destruction
of the originals thereof); and keep and maintain all documents, books, records
and other information necessary or reasonably advisable for the collection of
all Receivables and the disposition of all Vehicles.
(f) ACCESS; INSPECTION. The Seller shall permit the
Administrative Agent, the Purchaser and FSA, at the Seller's expense, to make or
cause to be made inspections and audits of any books, records and papers of the
Seller and to make extracts therefrom and copies thereof, or to make inspections
and examinations of any properties and facilities of the Seller, including
ongoing inspections of the Vehicles which are in the Seller's possession or
under its control, from time to time as required in order to assure that the
Seller is and will be in compliance with its obligations under this Agreement
and the Related Documents; PROVIDED, that unless a Servicer Termination Event
has occurred and is continuing, or the Administrative Agent, the Purchaser or
FSA has reason to believe that a Servicer Termination Event is imminent, (x)
such audits shall be upon reasonable notice and shall be conducted during normal
business hours and (y) no more than four (4) full audits per calendar year shall
be made at the Seller's expense, which audits shall be conducted by FSA who
shall provide the Administrative Agent and the Purchaser with written notice at
least 5 Business Days prior to conducting any such audit and the opportunity to
accompany FSA on such audit. Notwithstanding the preceding sentence, the Seller
shall only be liable to the Administrative Agent, the Purchaser and FSA for the
actual reasonable out-of-
52
pocket expenses incurred by the Administrative Agent, the Purchaser or FSA in
connection with such inspections and audits. The Seller shall, upon
reasonable notice and during normal business hours, make available its
officers, directors, employees, representatives, agents and accountants to
discuss with the Administrative Agent, the Purchaser and FSA all financial
statements and other information relating to the Seller or the Purchased
Receivables and shall deliver any document or instrument necessary for the
Administrative Agent, the Purchaser and FSA, as they may from time to time
request, to obtain records from any service bureau or other Person which
maintains records for the Seller. Representatives of other Affected Parties
may, at their own expense, accompany Administrative Agent's or the
Purchaser's representatives on regularly scheduled audits at no charge to the
Seller.
(g) PAYMENT, PERFORMANCE AND DISCHARGE OF OBLIGATIONS. The
Seller shall pay, perform and discharge or cause to be paid, performed and
discharged promptly all Charges payable by it, including (A) Charges imposed
upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees and (B) lawful claims for labor,
materials, supplies and services or otherwise before any thereof shall become
past due.
(h) ERISA. The Seller shall give the Administrative Agent and
FSA prompt written notice of any event that could result in the imposition of a
Lien under SECTION 412 of the IRC or SECTION 302 OR 4068 of ERISA.
(i) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION
POLICY. The Seller shall, at its expense, timely and fully perform and comply
with all provisions, covenants and other promises required to be observed by it
under any Contracts and shall comply with the Credit and Collection Policy with
respect to all such Contracts and the Receivables and Financed Vehicles relating
thereto.
(j) RELATED DOCUMENTS. The Seller shall comply with all of its
obligations set forth in the Related Documents, and enforce all of its rights,
remedies and privileges under such Related Documents in accordance with the
terms thereof to the same extent it would enforce such rights, remedies and
privileges against an unrelated third-party; PROVIDED, HOWEVER, that the Seller
shall not, without the prior written consent of the Administrative Agent and,
provided that an FSA Default has not occurred, FSA, terminate or amend any
Transfer Agreement.
(k) CERTIFICATES OF TITLE. The Seller shall deliver, or cause
to be delivered, to the Custodian, promptly but in any event within 120 days of
the date of Purchase of any Receivable with respect to which a Certificate of
Title applicable to the related Vehicle was not available on or prior to such
date of Purchase, such Certificate of Title which shall show the lien of the
Administrative Agent, for the benefit of the Purchaser and the Primary
Purchaser, noted thereon.
(l) SEPARATENESS. The Seller shall be operated in such a
manner that the separate corporate existence of the Seller and Motor Coach or
its Affiliates (the "MOTOR COACH ENTITIES") would not be disregarded in the
event of a bankruptcy or insolvency of any Motor Coach Entity, and, without
limiting the foregoing:
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(i) the Seller shall at all times be a
limited purpose corporation whose activities are restricted as
set forth in its certificate or articles of incorporation;
(ii) no Motor Coach Entity shall be involved
in the day-to-day management of the Seller (except to the
extent expressly contemplated by this Agreement or any other
Related Document);
(iii) other than the purchase of Receivables
and Vehicles from the Transferors pursuant to the Transfer
Agreements, the payment of the Servicer Fees to the Servicer
and other transactions permitted under this Agreement, the
Seller shall not engage in any intercorporate transactions
with any Motor Coach Entity;
(iv) the Seller shall maintain separate
corporate records and books of account from each Motor Coach
Entity, hold regular corporate meetings and otherwise observe
corporate formalities and have separate office space from each
Motor Coach Entity, if any;
(v) the financial statements and books and
records of Motor Coach and of any other entity whose financial
statements are consolidated with the Seller prepared after the
Initial Closing Date shall reflect the separate corporate
existence of the Seller;
(vi) the Seller shall not act as agent for
any Motor Coach Entity and shall hold itself out to the public
as a corporation separate from each such Motor Coach Entity;
(vii) the Seller shall maintain at least two
independent directors each of whom, at all times after the
Initial Closing Date, shall be an individual who (i) is in
fact independent of the Seller, (ii) does not have, and never
has had, any direct financial interest or any material
indirect financial interest in the Seller or in any Affiliate
of the Seller and (iii) is not, and never has been, connected
as an officer, employee, promoter, underwriter, trustee,
partner, director, creditor, supplier, family member, manager
or contractor or person performing similar functions within
the Seller or any Affiliate of the Seller or as a Person who,
directly, indirectly or otherwise, controls any such
individual, entity or its affiliates;
(viii) the Seller shall maintain its assets
separately from the assets of any Motor Coach Entity
(including through the maintenance of separate bank accounts
and except for any Records to the extent necessary for the
servicing of the Receivables); the Seller's funds and assets,
and records relating thereto, shall not be commingled with
those of any Motor Coach Entity; and the separate creditors of
the Seller will be entitled to be satisfied out of the
Seller's assets prior to any value in the Seller becoming
available to the Seller's equity holders;
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(ix) except as expressly contemplated under
this Agreement and the Related Documents and those associated
with the creation and organization of the Seller and the
preparation of this Agreement and the Related Documents, no
Motor Coach Entity shall (A) pay the Seller's expenses; (B)
guarantee the Seller's obligations, or (C) advance funds to
the Seller for the payment of expenses or otherwise; and
(x) all business correspondence of the
Seller and other communications shall be conducted in the
Seller's own name, on its own stationery and through a
separately-listed telephone number; and
(m) The Seller shall not engage in any activity other than the
activities expressly contemplated by this Agreement and the Related Documents,
nor shall the Seller enter into any agreement other than this Agreement and the
Related Documents, and any agreement necessary to undertake any activity
expressly contemplated by this Agreement or the Related Documents.
(n) LETTER OF CREDIT. If (1) the short-term senior unsecured
and unsubordinated debt rating of the Transaction L/C Issuer shall be withdrawn
or reduced below A-1, in the case of S&P, or P-1, in the case of ▇▇▇▇▇'▇, or (2)
the Transaction Letter of Credit shall expire or be terminated prior to the date
on which the Investment shall be reduced to zero, the Yield shall have been
paid, no other amount shall be owing to the Purchaser, the Administrative Agent
or FSA and no further Purchases are to be made under this Agreement, the Seller
shall, not later than (x) thirty (30) days after such withdrawal or reduction in
debt rating or (y) thirty (30) days prior to such expiration or termination, as
the case may be, deliver or cause to be delivered, to the Administrative Agent a
replacement letter of credit, or other comparable form of credit enhancement
acceptable to the Administrative Agent and FSA, in their sole discretion, which
shall replace the initial Transaction Letter of Credit for all purposes of this
Agreement, and upon such delivery, the Administrative Agent shall return the
initial Transaction Letter of Credit to the initial Transaction L/C Issuer for
cancellation and all references to such Transaction Letter of Credit and such
Transaction L/C Issuer shall thereafter be deemed to refer to such replacement
letter of credit or other form of credit enhancement and the issuer thereof,
respectively, PROVIDED that the following conditions are satisfied:
(i) The replacement letter of credit or
other form of credit enhancement shall be irrevocable, issued
by a Transaction L/C Issuer satisfactory to the Administrative
Agent and FSA and shall be on substantially the same terms and
in substantially the same form as the Transaction Letter of
Credit, PROVIDED that the Stated Amount of the replacement
letter of credit or other form of credit enhancement, together
with the amount on deposit in the Cash Collateral Account and
the Stated Amount of any other Transaction Letter of Credit or
other form of credit enhancement which will be in effect
following such replacement, shall be at least equal to the
Required Credit Enhancement. The replacement letter of credit
and the letter of credit reimbursement agreement relating
thereto or such other form of credit enhancement and the
reimbursement agreement relating thereto shall be consented to
by the Purchaser, the Administrative Agent and FSA, which
consents shall not be unreasonably withheld.
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(ii) The Seller shall have delivered the
proposed form of the replacement letter of credit and the
applicable letter of credit reimbursement agreement or such
other form of credit enhancement and the reimbursement
agreement relating thereto to the Purchaser, Administrative
Agent and FSA at least 10 days prior to the proposed date on
which the Transaction Letter of Credit is to be replaced.
(iii) The Seller shall have caused to be
delivered to the Purchaser, the Administrative Agent and FSA a
certificate of a Responsible Officer and incumbency
certificate, duly executed by an officer of the issuer of the
replacement letter of credit or other form of credit
enhancement, together with an opinion of counsel to the issuer
of the replacement letter of credit or other form of credit
enhancement, all in substantially the same form as the
certificates and opinions delivered to the Purchaser and
Administrative Agent in connection with the issuance of the
Transaction Letter of Credit, or in such other form as may
have been approved by the Purchaser, the Administrative Agent
and, provided that an FSA Default has not occurred, FSA.
If the Seller does not deliver a replacement letter of credit
or other form of credit enhancement as described above when required, the
Administrative Agent shall on the day such replacement letter of credit or other
form of credit enhancement was required to be delivered make, or cause the
Backup Servicer to make, a drawing on the Transaction Letter of Credit in an
amount equal to the Available L/C Amount, which amount shall be deposited in the
L/C Funding Account. All references in this Agreement to the Transaction Letter
of Credit and the Transaction L/C Draw shall, from and after the deposit in the
L/C Funding Account as set forth in the immediately preceding sentence, be
deemed to refer to the L/C Funding Account and withdrawals therefrom,
respectively. Upon delivery of a replacement Letter of Credit, or other form of
credit enhancement as described above, any amounts on deposit in the L/C Funding
Account at the time of such delivery (after giving effect to any withdrawals to
be made in accordance with Section 2.03(d) on the date of such delivery) shall
be paid to the Seller.
Section 5.02 COVENANTS OF THE SERVICER. Until the date on
which the Investment shall be reduced to zero, the Yield shall have been
paid, no amount shall be owing to the Purchaser, the Administrative Agent and
FSA under this Agreement and no further Purchases are to be made under this
Agreement:
(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The
Servicer shall perform each of its obligations under this Agreement and the
other Related Documents and comply with all federal, state and local laws and
regulations applicable to it and its business and properties, including the
Contracts, the Receivables and the related Vehicles and all Proceeds thereof,
including those relating to truth in lending, retail installment sales, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices, privacy, licensing, taxation, ERISA and labor matters and
Environmental Laws, except to the extent that the failure or failures to so
comply, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
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(b) MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. The
Servicer shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder; and (iii) at all times maintain, preserve
and protect all of its licenses, permits, charters and registrations which are
reasonably necessary for the conduct of its business.
(c) DEPOSIT OF COLLECTIONS; CASH MANAGEMENT SYSTEMS. The
Servicer shall direct all Obligors to make payments on the Receivables directly
to the Lockbox Account and shall deposit or cause to be deposited promptly into
a Blocked Account, in accordance with SECTION 6.02(b), all Collections it may
receive with respect to any Receivable or any other proceeds of any Receivable.
The Servicer shall, direct, or cause to be directed, such Obligor to make such
payments to the Lockbox Account and shall, to the extent it is responsible for
the administration of the Seller's funds, establish and maintain the Cash
Management Systems described on SCHEDULE 1.01(b).
(d) BOOKS AND RECORDS. The Servicer shall keep proper books of
record and account in which full and correct entries shall be made of all
financial transactions and the assets and business of the Servicer in accordance
with GAAP; maintain and implement administrative and operating procedures
(including, without limitation, the ability to recreate records evidencing the
Receivables and the Outstanding Balances thereof in the event of the destruction
of the originals thereof); and keep and maintain all documents, books, records
and other information necessary or reasonably advisable for the collection of
all Receivables and the disposition of all Financed Vehicles.
(e) ACCESS; INSPECTION. The Servicer shall permit the
Administrative Agent, the Purchaser and FSA, at the Servicer's expense, to make
or cause to be made inspections and audits of any books, records and papers of
the Servicer and to make extracts therefrom and copies thereof, or to make
inspections and examinations of any properties and facilities of the Servicer,
including ongoing inspections of the Vehicles which are in the Servicer's
possession or under its control, from time to time as required in order to
assure that the Servicer is and will be in compliance with its obligations under
this Agreement and the Related Documents; PROVIDED, that unless a Servicer
Termination Event has occurred and is continuing, or the Administrative Agent,
the Purchaser or FSA has reason to believe that a Servicer Termination Event is
imminent (x) such audits shall be upon reasonable notice and shall be conducted
during normal business hours and (y) no more than four (4) full audits per
calendar year shall be made at the Servicer's expense, which audits shall be
conducted by FSA who shall provide the Administrative Agent and the Purchaser
with written notice at least 5 Business Days prior to conducting any such audit
and the opportunity to accompany FSA on such audit. Notwithstanding the
preceding sentence, the Servicer shall only be liable to the Administrative
Agent, the Purchaser and FSA for the actual reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Purchaser or FSA in connection with
such inspections and audits. The Servicer shall, upon reasonable notice and
during normal business hours, make available its officers, directors, employees,
representatives, agents and accountants to discuss with the Administrative
Agent, the Purchaser and FSA all financial statements and other information
relating to the Servicer or the Purchased Receivables and shall deliver any
document or instrument necessary for the Administrative Agent, the Purchaser and
FSA as they may from time to time request, to obtain records from any
57
service bureau or other Person which maintains records for the Servicer.
Representatives of other Affected Parties may accompany the Administrative
Agent's or the Purchaser's representatives on regularly scheduled audits at
no charge to the Servicer or the Seller.
(f) PAYMENT, PERFORMANCE AND DISCHARGE OF OBLIGATIONS. The
Servicer shall pay, perform and discharge or cause to be paid, performed and
discharged promptly all Charges payable by it, including (A) Charges imposed
upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for labor,
materials, supplies and services or otherwise before any thereof shall become
past due.
(g) ERISA. The Servicer shall give Administrative Agent and
FSA prompt written notice of any event that could result in the imposition of a
Lien under SECTION 412 of the IRC or SECTION 302 OR 4068 of ERISA.
(h) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION
POLICY. The Servicer shall, at its expense, timely and fully perform and comply
with all provisions, covenants and other promises required to be observed by it
under any Contracts related to a Purchased Receivable (except, in the case of a
successor Servicer, such material provisions, covenants and other provisions
shall only include those provisions relating to the collection and servicing of
the Purchased Receivables to the extent such obligations are set forth in a
document included in the related Contract File) and shall comply with the Credit
and Collection Policy with respect to all such Contracts and the Receivables and
Financed Vehicles relating thereto, except where the failure to so comply is not
reasonably likely to result is an Material Adverse Effect.
(i) COLLECTIONS. The Servicer shall instruct all Obligors to
cause all Collections to be deposited directly to a Lockbox Account and, within
one (1) Business Day after receipt into a Lockbox Account, all such Collections
shall be remitted to a Blocked Account.
(j) FACILITY DOCUMENTS. The Servicer shall comply in all
material respects with the terms of and employ the procedures outlined in this
Agreement, and all of the other Related Documents to which it is a party and
take all such action to such end as may be from time to time reasonably
requested by the Controlling Party.
(k) INSURANCE. The Servicer shall require, in accordance with
its customary servicing policies and procedures, that each Financed Vehicle, at
the time of origination of the related Receivable, be insured by the related
Obligor under an insurance policy and that such insurance policy names the
Administrative Agent, for the benefit of the Purchaser, the Primary Purchaser
and FSA, as an additional insured. Each Receivable shall permit the holder
thereof to obtain physical loss and damage insurance at the expense of the
Obligor if the Obligor fails to maintain such insurance. The Servicer may ▇▇▇ to
enforce or collect upon the insurance policies in its own name or as agent of
the Administrative Agent, the Purchaser, the Primary Purchaser or FSA. If the
Servicer elects to commence a legal proceeding to enforce an insurance policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Administrative Agent under such insurance policy to the Servicer
for purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce an insurance policy on
the grounds that it is not a real party in interest or a holder
58
entitled to enforce the insurance policy, the Administrative Agent, at the
Servicer's expense, shall take such steps as the Administrative Agent deems
necessary to enforce such insurance policy, including bringing suit in its
name or the name of the Administrative Agent for the benefit of the
Purchaser, the Primary Purchaser and FSA.
(l) ORIGINAL CERTIFICATE OF TITLE. The Servicer shall, with
respect to each Vehicle related to a Purchased Receivable for which a
Certificate of Title described in paragraph (iii)(A) of the definition of
"Contract File" was not included in the related Contract File on the related
date of Purchase, deliver or cause to be delivered to the Custodian the original
Certificate of Title naming the Administrative Agent, for the benefit of the
Purchaser, the Primary Purchaser and FSA, as sole lien holder with respect to
such Vehicle promptly after the issuance thereof by the appropriate office in
the jurisdiction in which such Vehicle is titled but in any event not later than
120 days after such date of Purchase.
Section 5.03 NEGATIVE COVENANTS OF THE SELLER. The Seller
covenants and agrees that, from and after the Closing Date until the
Termination Date:
(a) SALE OF ASSETS. The Seller shall not sell, transfer,
convey, assign or otherwise dispose of, or assign any right to receive income in
respect of, any of its properties or other assets, including any Vehicle,
Receivable or Contract or any Related Document or any of its rights with respect
to Lockbox Account or any other deposit account in which any Collections of any
Receivable or other proceeds of any Receivable are deposited, except as
expressly permitted by this Agreement or any of the other Related Documents.
(b) LIENS. The Seller shall not create, incur, assume or
permit to exist any Lien on or with respect to the Receivables, Vehicles,
Contracts, the Lockbox Account, the Cash Collateral Account, the Blocked
Accounts, any other deposit accounts into which Collections of any Receivables
or other proceeds of any Receivables are deposited, or any other properties or
assets (whether now owned or hereafter acquired).
(c) MODIFICATIONS OF RECEIVABLES OR CONTRACTS. The Seller
shall not extend, amend, forgive, discharge, compromise, waive, cancel or
otherwise modify the terms of any Receivable or amend, modify or waive any term
or condition of any Contract related thereto, except for Permitted
Restructurings and such other modifications of past due Receivables as the
Seller deems reasonably necessary to maximize the collection thereof to the
extent expressly permitted by the terms of the Credit and Collection Policy.
(d) CHANGES IN INSTRUCTIONS WITH RESPECT TO PAYMENTS ON
PURCHASED RECEIVABLES. The Seller shall not make any change in its instructions
to Obligors regarding the deposit of Collections with respect to the
Receivables, including its instructions with respect to payments to the Lockbox
Account, or in its instructions to any Person obligated to make payments in
respect of any other Receivables.
(e) CAPITAL STRUCTURE AND BUSINESS . The Seller shall not (i)
make any changes in any of its business objectives, purposes or operations, (ii)
without the prior written consent of the Administrative Agent, the Purchaser
and, provided that an FSA Default has not occurred, FSA, amend its certificate
or articles of incorporation or bylaws or (iii) engage in any business
59
other than the businesses currently engaged in by it or contemplated to be
engaged in by it under this Agreement and the other Related Documents.
(f) MERGERS, SUBSIDIARIES, ETC. The Seller shall not directly
or indirectly, by operation of law or otherwise, (i) form or acquire any
Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially
all of the assets or Capital Stock of, or otherwise combine with or acquire, any
Person.
(g) SALE CHARACTERIZATION; TRANSFER AGREEMENTS . The Seller
shall not make statements or disclosures, prepare any financial statements or in
any other respect account for or treat the transactions contemplated by the
Transfer Agreements (including for accounting, tax and reporting purposes) in
any manner other than as a true sale or absolute assignment of the title to and
sole record and beneficial ownership interest of the Receivables, Contracts and
Vehicles sold or purported to be sold thereunder.
(h) RESTRICTED PAYMENTS. Other than as contemplated by the
Related Documents, the Seller shall not enter into any lending relationship with
any of its Affiliates. The Seller shall not at any time declare any dividends,
repurchase any Capital Stock, return any capital, or make any other payment or
distribution of cash or other property or assets in respect of the Seller's
Capital Stock if, at the time of or after giving effect to any such dividend,
repurchase, return or other payment or distribution, a Service Termination Event
shall have occurred and be continuing.
(i) INDEBTEDNESS. The Seller shall not create, incur, assume
or permit to exist any Indebtedness except for (i) Indebtedness expressly
contemplated under this Agreement or the Related Documents (ii) deferred taxes,
and (iii) endorser liability in connection with the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
(j) PROHIBITED TRANSACTIONS AND AMENDMENTS. The Seller shall
not enter into, or be a party to, any transaction with any Person except as
expressly contemplated hereunder or under any other Related Document. The Seller
shall not amend, waive or otherwise modify the Credit and Collection Policy or
any provision of any Related Document to which it is a party.
(k) INVESTMENTS. Except as otherwise expressly permitted
hereunder or under the other Related Documents, the Seller shall not make any
investment in, or make or accrue loans or advances of money to, any Person,
including any stockholder, director, officer or employee of the Seller or any of
its Affiliates, through the direct or indirect lending of money, holding of
securities or otherwise, except with respect to the purchases of Receivables and
Financed Vehicles contemplated hereunder and Eligible Investments.
(l) COMMINGLING. The Seller shall not deposit or permit the
deposit of any funds that do not constitute Collections of Receivables or other
proceeds of Receivables into any Lockbox Account.
(m) ERISA. The Seller shall not, and shall not cause or permit
any of its ERISA Affiliates to, cause or permit to occur an event that could
result in the imposition of a Lien under SECTION 412 of the IRC or Section 302
or 4068 of ERISA.
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Section 5.04 NEGATIVE COVENANTS OF THE SERVICER. The
Servicer covenants and agrees that, from and after the Closing Date until the
Termination Date:
(a) LIENS. The Servicer shall not create, incur, assume or
permit to exist any Lien on or with respect to any of its rights under any of
the Related Documents, whether with respect to Receivables, Vehicles, Contracts,
the Lockbox Account, the Cash Collateral Account, the Blocked Accounts or any
other deposit account in which Collections of any Receivable of the Seller or
other proceeds of any Receivables are deposited or otherwise.
(b) MODIFICATIONS OF RECEIVABLES OR CONTRACTS. The Servicer
shall not extend, amend, forgive, discharge, compromise, waive, cancel or
otherwise modify the terms of any Receivable or amend, modify or waive any term
or condition of any Contract related thereto, except for Permitted
Restructurings and such other modifications of past due Receivables as the
Servicer deems reasonably necessary to maximize the collection thereof to the
extent expressly permitted by the Credit and Collection Policy.
(c) CHANGES IN INSTRUCTIONS WITH RESPECT TO PAYMENTS ON
PURCHASED RECEIVABLES. The Servicer shall not make any change in its
instructions to Obligors regarding the deposit of Collections with respect to
the Receivables, including its instructions with respect to payments to the
Lockbox Account, or in its instructions to any Person obligated to make payments
in respect of any other Receivables.
(d) CAPITAL STRUCTURE AND BUSINESS. The Servicer shall not (i)
change the Seller's capital structure so that it ceases to be a wholly owned
Subsidiary of MCII Coaches Inc., or (ii) make any changes in any of its business
objectives, purposes or operations that would be reasonably expected to have a
Material Adverse Effect.
(e) MERGERS. The Servicer shall not directly or indirectly, by
operation of law or otherwise, merge with, consolidate with, acquire all or
substantially all of the assets or Capital Stock of, or otherwise combine with
or acquire, any Person, except that the Servicer shall be allowed to merge with
any Affiliate so long as the Servicer (i) remains the surviving corporation of
such merger and (ii) shall have given prior written notice of such merger to the
Administrative Agent.
(f) COMMINGLING. The Servicer shall not deposit or permit the
deposit of any funds that do not constitute Collections of Receivables or other
proceeds of any Receivables into the Lockbox Account.
(g) ERISA. The Servicer shall not, and shall not cause or
permit any of its ERISA Affiliates to, cause or permit to occur an event that
could result in the imposition of a Lien under SECTION 412 of the IRC or SECTION
302 or 4068 of ERISA.
(h) SERVICING OBLIGATIONS. The Servicer will not (i) amend,
waive or otherwise modify the Credit and Collection Policy in any material
respect without the prior written consent of the Administrative Agent and FSA,
(ii) agree to any amendment, waiver or other modification of the Related
Document to which it is a party or (iii) interpose any claims, offsets or
defenses it may have as against the Seller as a defense to its performance of
its obligations in favor of any Affected Party hereunder or under any other
Related Documents.
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Section 5.05 REPORTING COVENANTS OF THE SELLER AND THE
SERVICER. From and after the Closing Date and until the Termination Date, the
Seller and the Servicer shall furnish, or cause to be furnished, to the
Administrative Agent and FSA:
(a) monthly, as soon as available, but in no
event later than the Report Delivery Date, a Monthly Report in
the form of EXHIBIT A, together with a certificate of an
officer of the Seller with appropriate knowledge certifying
that the Seller is in compliance with respect to the
maintenance of all insurance and the payment of taxes required
hereunder;
(b) quarterly, with each Monthly Report
delivered pursuant to SECTION 5.05(i) in January, April, July
and October of each year, a computer tape in an MS-DOS, PC
readable ASCII format or format reasonably acceptable to the
Administrative Agent, which shall contain the following
information with respect to each Purchased Receivable: the
name, address and telephone number of the related Obligor and
the account number for each Contract, the collection status,
the contract status, the Outstanding Balance for each
Contract, the repossession agent for repossessed Vehicles and
the broker for sold or leased Vehicles;
(c) (i) as soon as available and in any
event within 120 days after the end of each Fiscal Year, a
copy of the unaudited consolidated financial statements for
such year for the Servicer and its consolidated Subsidiaries,
including the prior comparable period (if any) from the
preceding fiscal year, together with consolidating financial
statements for the Servicer certified by an officer of the
Servicer with appropriate knowledge stating that the
information set forth therein fairly presents the financial
condition of the Servicer and its consolidated Subsidiaries as
of and for such Fiscal Year, with all such financial
statements being prepared in accordance with GAAP applied
consistently throughout the period involved (except for
changes in the application of GAAP approved by the Servicer's
accountants in accordance with GAAP and disclosed therein),
and (ii) as soon as received by the Servicer with respect to
any fiscal year, a copy of the audited consolidated financial
statements for such year for Motor Coach and its consolidated
Subsidiaries, including the prior comparable period (if any)
from the preceding fiscal year and certified by a nationally
recognized firm of independent accountants (the report of
which shall be unqualified), together with consolidating
financial statements for Motor Coach certified by an officer
of Motor Coach with appropriate knowledge stating that the
information set forth therein fairly presents the financial
condition of Motor Coach and its consolidated Subsidiaries as
of and for such fiscal year, with all such financial
statements being prepared in accordance with GAAP applied
consistently throughout the period involved (except for
changes in the application of GAAP approved by such
accountants in accordance with GAAP and disclosed therein);
(d) as soon as available and in any event
within 45 days after the end of each Fiscal Quarter of each
Fiscal Year (other than the last Fiscal Quarter of each Fiscal
Year), an unaudited consolidated and consolidating balance
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sheet of the Servicer and its consolidated Subsidiaries as of
the end of such Fiscal Quarter and including the prior
comparable period (if any), and the unaudited consolidated and
consolidating statements of income and retained earnings, and
of cash flow, of the Servicer and its consolidated
Subsidiaries for such Fiscal Quarter and for the period
commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, certified by an officer
of the Servicer with appropriate knowledge identifying such
documents as being the documents described in this PARAGRAPH
(iv) and stating that the information set forth therein fairly
presents the financial condition of the Servicer and its
consolidated Subsidiaries as of and for the periods then
ended, subject to year-end adjustments and confirming that the
Servicer is in compliance with all financial covenants in this
Agreement;
(e) as soon as possible and in any event
within five days after the occurrence of a Servicer
Termination Event, the statement of an officer of the Seller
setting forth complete details of such Servicer Termination
Event and the action which the Seller has taken, is taking and
proposes to take with respect thereto;
(f) as soon as available and in any event
within 120 days after the end of each fiscal year, a report
from a nationally recognized firm of independent accountants
(upon which report, the Administrative Agent, Custodian and
the Purchaser may rely) to the Administrative Agent and the
Purchaser to the effect that such accountants have applied the
agreed upon procedures agreed to by the Servicer, the
Administrative Agent and, provided that an FSA Default has not
occurred, FSA with respect to (a) the Servicer's compliance
with any accounting and financial covenants in this Agreement
and (b) the substantial compliance with this Agreement in the
preparation of the Monthly Reports delivered during the
previous fiscal year, and that, on the basis of such
procedures, such accountants have uncovered no exceptions,
except as set forth in such statement;
(g) promptly, from time to time, such
other information, documents, records or reports respecting
the Receivables or the Contracts or the Vehicles or the
condition or operations, financial or otherwise, of the
Servicer or the Seller, as the Administrative Agent, FSA or
the Purchaser may reasonably request from time to time;
(h) upon any request from the
Administrative Agent or FSA and in any event, on or before 120
days after the end of each fiscal year, (i) an officer's
certificate of the Seller, dated the date of such delivery,
bringing down to such date the matters set forth in the
officer's certificate in the form of EXHIBIT H and (ii) an
officer's certificate of the Servicer, dated the date of such
delivery, bringing down to such date the matters set forth in
the officer's certificate in the form of EXHIBIT H;
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(i) promptly, notification in writing of
any litigation, legal proceeding or dispute, whether or not in
the ordinary course of business, which may in any respect
materially and adversely affect the Seller or the Servicer;
(j) prompt written notice of any ERISA
Event;
(k) within 10 days after receipt of any
Revenue Agent Reports (Internal Revenue Service Form 886), or
other written proposals of the Internal Revenue Service, which
propose, determine or otherwise set forth positive adjustments
to the Federal income tax liability of the affiliated group
(within the meaning of SECTION 1504(a)(1) of the Code) of
which the Seller is a member which equal or exceed $1,000,000
in the aggregate, telephonic, telex or telecopied notice
(confirmed in writing within 5 Business Days) specifying the
nature of the items giving rise to such adjustments and the
amounts thereof;
(l) promptly upon discovery thereof,
written notice of any other event, circumstance or condition
that has resulted in or is reasonably likely to result in a
Material Adverse Effect with respect to the Seller;
(m) promptly upon receipt thereof, copies
of any notices received from or delivered to the Transaction
L/C Issuer, the Seller, the Servicer or any Affiliate of any
of the foregoing with respect to the termination or extension
of the Transaction Letter of Credit; PROVIDED, that the Seller
shall deliver, or cause to be delivered, not later than 60
days prior to the then current termination date of the
Transaction Letter of Credit, a request to the Transaction L/C
Issuer for the extension of the Transaction Letter of Credit
for at least one additional year; and
(n) within 15 days after any Purchase
(other than the initial Purchase) in excess of $15,000,000, or
if no such Purchase has occurred during any Fiscal Quarter, on
the last Business Day of such Fiscal Quarter, an updated tax
certificate, a tax lien search and the information described
in SECTION 3.01(c).
ARTICLE VI.
ADMINISTRATION AND COLLECTION
Section 6.01 RETENTION AND TERMINATION OF SERVICER The
servicing, administering and collection of the Receivables shall be conducted
by the Person (the "SERVICER") so designated from time to time in accordance
with this Section 6.01. Subject to early termination due to the occurrence of
a Servicer Termination Event or as otherwise provided below in this SECTION
6.01, BusLease shall serve as Servicer for an initial term commencing on the
date hereof and expiring on June 30, 2000, which term, unless terminated,
shall be extendible by the Controlling Party for successive terms thereafter
of one calendar quarter each (in each case on the next succeeding day that is
March 31, June 30, September 30 or December 31 of such year) as specified in
a writing (each a "SERVICER EXTENSION NOTICE") delivered by the Controlling
Party not later than the twentieth (20th) day prior to the expiration of each
current term to the Servicer and the Administrative Agent, until the
termination of this Agreement. The Servicer hereby agrees that,
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upon its receipt of any such Servicer Extension Notice, the Servicer shall
become bound, for the duration of the term covered by such notice, to
continue as Servicer subject to and in accordance with the provisions of this
Agreement. The Administrative Agent agrees that if, as of the fifteenth
(15th) day prior to the last day of any term of the Servicer, the
Administrative Agent shall not have received any Servicer Extension Notice
from the Controlling Party, the Administrative Agent, shall, within five (5)
days thereafter, give written notice of such non-receipt to the Controlling
Party (if not the Administrative Agent) and the Servicer. Any designation of
a successor Servicer under this Agreement shall become effective upon such
successor Servicer's agreement to perform the duties and obligations of the
Servicer pursuant to the terms hereof. and BusLease shall continue to perform
the obligations of the Servicer hereunder and be paid the Servicing Fee until
such successor Servicer shall have assumed the responsibilities and
obligations of the Servicer. The Servicer may, with the prior consent of
Controlling Party, subcontract with any other Person for the servicing,
administering or collecting the Purchased Receivables; PROVIDED that the
Servicer shall remain liable for the performance of the duties and
obligations of the Servicer pursuant to the terms hereof.
(b) Upon the termination or resignation of the Servicer,
whether by reason of the expiration of the Servicer's term, a Servicer
Termination Event, or any other reason, the Backup Servicer shall, upon the
receipt of notice of such resignation or termination, within 30 days commence
servicing activities in place of BusLease, in accordance with the Backup
Servicing Agreement and shall, for the purposes of this Agreement, become
Servicer. Until such time as the Controlling Party notifies BusLease that the
Backup Servicer has commenced servicing activities in the place of BusLease,
BusLease shall continue to perform the obligations of the Servicer hereunder and
be paid the Servicing Fee. Upon the Backup Servicer's assumption of the
obligations of Servicer pursuant to this Agreement and the Backup Servicing
Agreement, the Servicer shall deliver to the Backup Servicer all documents and
instruments and monies held by it under this Agreement, and the Servicer and the
Administrative Agent shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Backup Servicer all such rights, powers, duties, and
obligations.
Notwithstanding anything contained herein to the contrary, the
resignation or termination of the Servicer shall not become effective until the
Backup Servicer or an entity acceptable to the Controlling Party shall have
assumed the responsibilities and obligations of the Servicer.
(c) Neither the Servicer nor the Backup Servicer shall resign
from the obligations and duties imposed on it by this Agreement as Servicer or
Backup Servicer, as the case may be, except upon a determination that by reason
of a change in legal requirements, the performance of its duties hereunder would
cause it to be in violation of such legal requirements in a manner which would
have a material adverse effect on the Servicer, or Backup Servicer, as the case
may be, and the Controlling Party does not elect to waive the obligations of the
Servicer to perform the duties which render it legally unable to act or to
delegate those duties to another Person. Any such determination permitting the
resignation of the Servicer or Backup Servicer, as the case may be, pursuant to
this Section 6.01(c) shall be evidenced by an opinion of counsel to such effect
delivered and acceptable to the Controlling Party. No resignation of the
Servicer
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shall become effective until the Backup Servicer or an entity acceptable to
the Controlling Party shall have assumed the responsibilities and obligations
of the Servicer.
(d) Any Person (i) into which the Servicer or Backup Servicer
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which the Servicer shall be a party, (iii) which acquires by conveyance,
transfer or lease substantially all of the assets of the Servicer or Backup
Servicer, or (iv) succeeding to the business of the Servicer, in any of the
foregoing cases, shall execute an agreement of assumption to perform every
obligation of the Servicer under this Agreement and, whether or not such
assumption agreement is executed, shall be the successor to the Servicer under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement, anything in this Agreement
to the contrary notwithstanding; PROVIDED, HOWEVER, that nothing contained
herein shall be deemed to release the Servicer from any obligation.
(e) In the event the Backup Servicer assumes the obligations
of the Servicer pursuant to this Section 6.1, the Backup Servicer shall also
thereupon so assume all of the rights and obligations of the outgoing Servicer
under the Lockbox Agreement. In such event, the Backup Servicer shall be deemed
to have assumed all of the Servicer's interest therein and to have replaced the
Servicer as a party to the Lockbox Agreement to the same extent as if such
Lockbox Agreement had been assigned to the Backup Servicer, except that the
Servicer shall not thereby be relieved of any liability or obligations to the
Lockbox Bank under such Lockbox Agreement. The Servicer shall, upon request of
the Administrative Agent, but at the expense of the Servicer, deliver to the
Backup Servicer all documents and records relating to the Lockbox Agreement and
an accounting of amounts collected and held by the Lockbox Bank and otherwise
use its best efforts to effect the orderly and efficient transfer of any Lockbox
Agreement to the Backup Servicer.
(f) If the Backup Servicer assumes the role of successor
Servicer, (A) the Backup Servicer may appoint a subservicer to perform its
duties and obligations as successor Servicer or outsource any of its duties and
obligations as successor Servicer (PROVIDED that no such delegation or
outsourcing shall relieve the Backup Servicer of its obligations as the
successor Servicer) and (B) the Backup Servicer shall, by the fifth (5th)
Business Day following the day of such assumption of duties, determine which
licenses, approvals and consents were necessary or required to be obtained by
BusLease (and BusLease shall promptly provide the Backup Servicer a list of all
licenses BusLease then has) in connection with the performance of its
obligations as Servicer and as soon as reasonably practicable thereafter obtain
all licenses, approvals and consents necessary or required to be obtained in
connection with the performance by the Backup Servicer of its obligations as
successor Servicer hereunder, except where the failure to so obtain such
licenses, approvals or consents is not reasonably likely to have a material
adverse effect on the Backup Servicer's ability to perform its obligations as
successor Servicer hereunder.
Section 6.02 DUTIES OF THE SERVICER.
(a) The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect the Purchased Receivables
from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in
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accordance with the Credit and Collection Policy. Each of the Seller, the
Purchaser and the Administrative Agent hereby appoints the Servicer, from
time to time designated pursuant to SECTION 6.01 hereof, as agent for itself
and in its name to enforce and administer their respective rights and
interests in the Purchased Receivables, the Vehicles and the related
Contracts.
(b) The Servicer shall administer the Collections in respect
of the Purchased Receivables in accordance with the procedures described herein
and in SECTION 2.03. The Servicer shall transfer, or cause to be transferred,
all Collections on deposit in any Lockbox Account to a Blocked Account by the
close of business on the first Business Day following the date such Collections
are received in such Lockbox Account. The Servicer shall promptly (but in no
event later than one Business Day after the receipt thereof) deposit all
Collections received directly by it into a Blocked Account. The Servicer shall
make such deposits or payments by electronic funds transfer through the
Automated Clearing House system, or by wire transfer, in immediately available
funds.
(c) If no Servicer Termination Event shall have occurred,
BusLease, while it is the Servicer, may, subject to SECTION 5.04(b), extend the
Term (as defined in the related Contract) of any Contract or adjust the
Outstanding Balance of any Purchased Receivable as BusLease deems appropriate to
maximize Collections in respect thereof.
(d) The Servicer shall hold in trust for the Purchaser and the
Seller in accordance with their respective interests, all Records that evidence
or relate to the Purchased Receivables not previously delivered to the Custodian
and shall, as soon as practicable upon demand of the Administrative Agent, make
available, or, upon the occurrence and during the continuation of a Servicer
Termination Event, deliver to the Administrative Agent all Records in its
possession which evidence or relate to Purchased Receivables.
(e) The Servicer shall, as soon as practicable following
receipt thereof, turn over to the Seller, any cash collections or other cash
proceeds received with respect to each Receivable which does not constitute a
Purchased Receivable.
(f) The Servicer shall, from time to time at the reasonable
request of the Purchaser, furnish to the Purchaser (promptly after any such
request) a calculation of the amounts set aside for the Purchaser pursuant to
SECTION 2.03 hereof.
(g) The Servicer shall prepare and forward to the Seller, the
Purchaser, the Administrative Agent and FSA Monthly Reports provided for in
SECTION 5.05(i) together with such additional information as may be reasonably
requested by the Seller, the Purchaser, the Administrative Agent or, provided
that an FSA Default has not occurred, FSA.
(h) The Servicer will, to the extent permitted by applicable
law and with respect to any amount received and not paid by the Servicer when
required to be paid hereunder, pay on demand interest to the Purchaser and/or
any other party entitled thereto at a rate per annum equal to [**]% above the
Base Rate, PROVIDED, HOWEVER, that such interest rate will not at any time
exceed the maximum rate permitted by applicable law.
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(i) The Servicer's authorization under this Agreement will
terminate upon payment in full of all amounts payable to the Seller, the
Purchaser and the Servicer under this Agreement, provided that no further
Purchases are to be made under this Agreement.
(j) Upon the occurrence of an Insurance Agreement Event of
Default, the Servicer, at the written direction of the Controlling Party, shall
take or cause to be taken such action as may be necessary or desirable to
perfect or re-perfect the security interests in the Vehicles securing the
Contracts in the name of the Administrative Agent, on behalf of the Purchaser,
the Primary Purchaser and FSA, by amending the title documents of such Financed
Vehicles or by such other reasonable means as may, in the opinion of counsel to
the Controlling Party, be necessary or prudent and shall deliver to the
Administrative Agent any Contract File or portion thereof that is currently in
the possession of the Servicer, including the original certificates of title.
Section 6.03 RIGHTS OF THE ADMINISTRATIVE ▇▇▇▇▇.▇▇ any
time, upon at least five (5) Business Days' notice to the Servicer and the
Seller unless either the Administrative Agent or FSA, as the case may be,
determines in its sole discretion that it would be reasonably impractical or
inadvisable to give such notice five (5) Business Days in advance (in which
case notice shall be given on the date any action described in clauses (i)
through (iii) below is taken, provided that the failure to give such notice
on such date shall not prohibit the Administrative Agent or FSA, as
applicable, from taking any such action) following the occurrence of a
Servicer Termination Event:
(a) The Servicer shall, at the
Administrative Agent's or, provided that an FSA Default has
not occurred, FSA's request and at the expense of the
Servicer, notify each Obligor of a Purchased Receivable of the
interest of the Purchaser under this Agreement and direct the
Obligors to make Scheduled Contract Payments with respect to
the Purchased Receivables directly to the Administrative Agent
or its designee.
(b) The Servicer shall, at the
Administrative Agent's or, provided that an FSA Default has
not occurred, FSA's request and at the expense of the
Servicer, assemble all of the Records in the Servicer's
possession that evidence or relate to the Purchased
Receivables, and the related Contracts and Related Security,
or that are otherwise necessary or desirable to collect the
Purchased Receivables, and shall make the same available to
the Administrative Agent or its designee, at a place
reasonably selected by the Administrative Agent.
(c) The Seller and the Servicer hereby
irrevocably appoint the Administrative Agent their
attorney-in-fact, with full power and authority in place and
stead of the Seller or BusLease in the name of the Seller or
the Servicer, as the case may be, or otherwise to take any and
all steps in the Seller's or the Servicer's name and on behalf
of the Seller or the Servicer that are necessary or desirable,
in the reasonable determination of the Administrative Agent,
to collect amounts due under the Purchased Receivables,
including, without limitation, endorsing the Seller's or the
Servicer's name on checks and other instruments representing
Collections of Purchased Receivables, enforcing the Purchased
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Receivables and the Related Security and related Contracts
and causing the title to each Vehicle related to a Purchased
Receivable to be retitled in the name of the Administrative
Agent.
Section 6.04 RESPONSIBILITIES OF THE SERVICER. Anything
herein to the contrary notwithstanding:
(a) The Servicer shall perform its obligations under the
Contracts related to the Purchased Receivables to the same extent as if
Purchased Receivables had not been sold and the exercise by the Administrative
Agent and by the Purchaser of their rights hereunder shall not release the
Servicer or the Seller from any of their duties or obligations with respect to
any Purchased Receivables or under the related Contracts; and
(b) Neither the Administrative Agent, FSA nor the Purchaser
shall have any obligation or liability with respect to any Purchased Receivables
or related Contracts, nor shall any of them be obligated to perform the
obligations of the Seller or the Servicer thereunder.
Section 6.05 FURTHER ACTIONS EVIDENCING PURCHASES.
(a) The Seller shall, from time to time, at its expense,
promptly execute and deliver all further instruments and documents, and take all
further actions, that may be necessary or desirable, or that the Administrative
Agent, the Purchaser or, provided that an FSA Default has not occurred, FSA may
reasonably request, to protect or more fully evidence the interest of the
Purchaser in the Purchased Receivables, or to enable the Purchaser or the
Administrative Agent to exercise and enforce their respective rights and
remedies hereunder or under the other Related Documents. Without limiting the
foregoing, the Seller will upon the request of the Purchaser, the Administrative
Agent or, provided that an FSA Default has not occurred, FSA (i) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments and documents, that may be necessary or desirable, or that the
Purchaser or the Administrative Agent may reasonably request, to perfect,
protect or evidence such Purchased Receivables; and (ii) ▇▇▇▇ its master data
processing records evidencing Purchased Receivables and the related Contracts
with a legend, acceptable to the Purchaser, evidencing that interests therein
have been sold.
(b) The Seller authorizes the Administrative Agent to file
financing or continuation statements, and amendments thereto, relating to the
Purchased Receivables (other than Financed Vehicles securing a Purchased
Receivable), the related Contracts and the Collections with respect thereto
without the signature of the Seller where permitted by law, PROVIDED, that
nothing contained herein shall be deemed to give any Person authority to sign on
behalf of the Seller. A photocopy or other reproduction of this Agreement shall
be sufficient as a financing statement where permitted by law.
(c) If the Servicer fails to perform any of its obligations
hereunder, the Purchaser or the Administrative Agent may (but shall not be
required to) perform, or cause performance of, such obligation; and the
Purchaser's or the Administrative Agent's costs and expenses incurred in
connection therewith shall be payable by the Seller (if the Servicer that fails
to so perform is BusLease or an Affiliate thereof) as provided in SECTION 8.01.
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Section 6.06 SERVICER FEE. The Servicer (if BusLease, an
Affiliate of BusLease or the Backup Servicer) shall be paid a collection fee
(the "SERVICER FEE") at the rate of [**]% per annum on the Outstanding
Balance as of the last Business Day of each calendar month of the Purchased
Receivables, payable in arrears on the Settlement Date immediately following
such calendar month in accordance with, and subject to the priority of
payment set forth in, Section 2.03(c). If the Servicer is not BusLease, an
Affiliate of BusLease or the Backup Servicer, the Servicer Fee shall be
calculated based on the average of the market rates quoted by three Persons
in the business of servicing assets comparable to the Purchased Receivables,
which Persons shall be selected by the Controlling Party. The Servicer Fee
shall not be amended by the parties hereto without the written consent of the
Backup Servicer and FSA.
Section 6.07 CLAIMS UNDER POLICY.
(a) In accordance with the provisions of the Policy, FSA is
required to pay to the Administrative Agent the Policy Claim Amount properly
claimed thereunder by 12:00 noon, New York City time, on the later of (i) the
third (3rd) Business Day (as defined in the Policy) following Receipt (as
defined in the Policy) on a Business Day (as defined in the Policy) of the
Notice of Claim, and (ii) the applicable Settlement Date. Any payment made by
FSA under the Policy shall be applied solely to the payment of Yield and the
Investment, and for no other purpose.
(b) The Administrative Agent shall (i) receive as
attorney-in-fact of the Purchaser any Policy Claim Amount from FSA and (ii)
deposit the same in the Purchaser's Account for distribution to the Purchaser.
Any and all Policy Claim Amounts paid to the Administrative Agent under the
Policy shall not be considered payment with respect to Yield or the Investment,
and shall not discharge the obligations of the Seller with respect thereto. FSA
shall, to the extent it makes any payment with respect to Yield or the
Investment, become subrogated to the rights of the Purchaser to the extent of
such payments. Subject to and conditioned upon any payment with respect to Yield
or the Investment by or on behalf of FSA, the Administrative Agent, on behalf of
the Purchaser, shall assign to FSA all rights of the Purchaser to the payment of
Yield or the Net Investment, as the case may be, which are then due for payment
to the extent of such payment. The foregoing subrogation shall in all cases be
subject to the rights of the Purchaser to receive all Scheduled Payments in
respect of Yield and the Investment.
(c) The Administrative Agent shall keep a complete and
accurate record of all payments by FSA under the Policy and the allocations
thereof to the payment of Yield and the Investment. FSA shall have the right to
inspect such records at reasonable times upon one Business Day's prior written
notice to the Administrative Agent.
(d) The Administrative Agent shall be entitled to enforce on
behalf of the Purchaser the obligations of FSA under the Policy. Notwithstanding
any other provision of this Agreement or any Related Document, the Purchaser is
not entitled to institute proceedings directly against FSA unless the
Administrative Agent has failed to do so within 30 days after the Purchaser has
requested the Administrative Agent to institute proceedings against FSA.
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Section 6.08 PREFERENCE CLAIMS.
(a) In the event that the Administrative Agent has received a
certified copy of an order of the appropriate court that any payment on a
Purchased Receivable has been avoided in whole or in part as a preference
payment under applicable bankruptcy law, the Administrative Agent shall so
notify FSA, shall comply with the provisions of the Policy to obtain payment by
FSA of such avoided payment, and shall, at the time it provides notice to FSA,
notify the Purchaser by mail that, in the event that such payment is so
recoverable, the Purchaser will be entitled to payment pursuant to the terms of
the Policy. The Administrative Agent shall furnish to FSA its records evidencing
the payments on Purchased Receivables, if any, which are subject to such
recovery from the Purchaser, and the dates on which such payments were made.
Pursuant to the terms of the Policy, FSA will make such payment on behalf of the
Purchaser to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order (as defined in the Policy) and not to the
Administrative Agent or the Purchaser directly (unless the Purchaser has
previously paid such payment to the receiver, conservator, debtor-in-possession
or trustee in bankruptcy, in which case FSA will make such payment to the
Administrative Agent for distribution to the Purchaser upon proof of such
payment by the Purchaser reasonably satisfactory to FSA).
(b) The Administrative Agent shall promptly notify FSA of any
proceeding or the institution of any action (of which the Administrative Agent
has actual knowledge) seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law
(a "Preference Claim") of any payment made with respect to the Purchased
Receivables. The Purchaser and the Administrative Agent hereby agree that so
long as an FSA Default shall not have occurred and be continuing, FSA may at any
time during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedeas or performance
bond pending any such appeal at the expense of FSA, but subject to reimbursement
as provided in the Insurance Agreement.
Section 6.09 SURRENDER OF POLICY. The Administrative Agent
shall surrender the Policy to FSA for cancellation upon the expiration or
termination of the Policy in accordance with the terms thereof.
ARTICLE VII.
SERVICER TERMINATION EVENTS
Section 7.01 SERVICER TERMINATION EVENTS. If any of the
following events ("SERVICER TERMINATION EVENTS") shall occur and be continuing:
(a) the Seller or the Servicer (if BusLease or an Affiliate
thereof) shall fail to make any payment or deposit required hereunder on the
first Business Day after the due date thereof; or
(b) any representation or warranty made or deemed made by the
Seller, the Servicer (if BusLease or an Affiliate thereof), any Transferor or
Motor Coach (or any of their
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respective Responsible Officers) in this Agreement or any Related Document or
in any written report delivered by any of them pursuant hereto shall prove to
have been incorrect or untrue in any respect when made or deemed made or
delivered, the effect of which is to materially adversely affect the
Purchaser's interest in, or the collectibility of, the Purchased Receivables;
PROVIDED, HOWEVER, that the breach of any of the representations or warranties
contained in SECTION 4.01(n), (o), (q), (r), (s) (but only to the extent that
such representation or warranty relates to a Purchased Receivable), (v), (x),
(y), (cc) or (ff) shall not be a Servicer Termination Event hereunder if the
Seller or the Servicer, as the case may be, shall have complied with SECTION
2.03(g) with respect thereto; or
(c) the Seller, the Servicer (if BusLease or an Affiliate
thereof) any Transferor or Motor Coach shall fail to perform or observe any
term, covenant or agreement contained in this Agreement or any Related Document
on its part to be performed or observed and any such failure shall materially
adversely affect the Purchaser's interest in, or the collectibility of, the
Purchased Receivables; PROVIDED, HOWEVER, that the failure to perform or observe
any term, covenant or agreement contained in SECTION 5.03(a) shall not be a
Servicer Termination Event hereunder if the Seller or the Servicer shall have
complied with SECTION 2.03(g) with respect thereto; or
(d) the Seller, the Servicer (if BusLease or an Affiliate
thereof), any Transferor or Motor Coach shall (i) default in making any payment
of principal of any Indebtedness on the scheduled or original due date beyond
the period of grace, if any, with respect thereto; or (ii) default in making any
payment of any interest on such Indebtedness beyond the grace period, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary ) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or to become payable; PROVIDED, that, in each case,
other than with respect to the Seller, such Indebtedness is in excess of
$5,000,000; or
(e) any assets of the Seller, the Servicer (if BusLease or an
Affiliate thereof), any Transferor or Motor Coach shall be attached, seized,
levied upon or subjected to a writ or distress warrant, or come within the
possession of any receiver, trustee, custodian or assignee for the benefit of
creditors of any such Person and such condition continues for thirty (30) days
or more; PROVIDED, that, in each case, other than with respect to the Seller,
the aggregate book value of such assets is in excess of $1,000,000; or
(f) a case or proceeding shall have been commenced against any
of the Seller, the Servicer (if BusLease or an Affiliate thereof), any
Transferor or Motor Coach seeking a decree or order in respect of any such
Person (i) under Title 11 of the United States Code, as now constituted or
hereafter amended or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any such Person or
of any substantial part of any such Person's assets, or (iii) ordering the
winding-up or liquidation of the affairs of any such Person,
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PROVIDED that if such case or proceeding is not commenced against the Seller,
then a Servicer Termination Event shall not occur under this SECTION 7.01(f) or
(g) unless such case or proceeding shall remain undismissed or unstayed for
sixty (60) days or more or such court shall enter a decree or order granting
the relief sought in such case or proceeding; or
(g) any of the Seller, the Servicer (if BusLease or an
Affiliate thereof), any Transferor or Motor Coach (i) shall file a petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) shall fail to contest in a timely and appropriate
manner or shall consent to the institution of proceedings thereunder or to the
filing of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of any such Person or of any substantial part of any such Person's
assets, (iii) shall make an assignment for the benefit of creditors, or (iv)
shall take any corporate action in furtherance of any of the foregoing, or (v)
shall admit in writing its inability to, or shall be generally unable to, pay
its debts as such debts become due; or
(h) a final judgment or judgments for the payment of money not
fully covered by insurance in excess of $5,000,000 (net of insurance coverage)
in the aggregate at any time outstanding shall be rendered against the Servicer
(if BusLease or an Affiliate thereof), any Transferor or Motor Coach and the
same shall not, within thirty (30) days after the entry thereof, have been
discharged or execution thereof stayed or bonded pending appeal, or shall not
have been discharged prior to the expiration of any such stay; or
(i) any final judgment or order for the payment of money shall
be rendered against the Seller, and the same shall not have been discharged
thereof by full payment prior to the expiration of any period for filing appeal;
or
(j) any Related Document or any material provision of any
thereof shall for any reason terminate or otherwise cease to be valid, binding
and enforceable in accordance with its terms (or the Seller, any Affiliate
thereof or any other party to any Related Document (other than the
Administrative Agent or the Purchaser) shall challenge the enforceability of any
Related Document or shall assert in writing, or engage in any action or inaction
based on any such assertion, that any Related Document or any provision of any
thereof has terminated or ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any security or ownership interest
created under any Related Documents shall cease to be a valid and perfected
first priority security or ownership interest or Lien (except as otherwise
permitted herein or therein) in any Purchased Receivables or property purported
to be covered thereby; or
(k) the Seller shall not be a 100% direct or indirect
wholly-owned Subsidiary of MCII Coaches, Inc. or the Servicer (if BusLease or an
Affiliate thereof) shall not be a 100% direct or indirect wholly-owned
Subsidiary of Motor Coach; or
(l) any change in ownership of any of the MCII Group or any
change in their respective roles under this Agreement or any other Related
Document that conflicts with the "Assumptions of Fact" section in the opinion of
Skadden, Arps, Slate Meager & ▇▇▇▇, dated the date hereof, relating to certain
nonconsolidation matters.
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(m) any Governmental Authority (including the IRS or the PBGC)
shall file notice of a Lien with regard to any of the assets of the Seller, the
Servicer (if BusLease or an Affiliate thereof), any Transferor or Motor Coach;
or
(n) S&P's long-term issuer rating or ▇▇▇▇▇'▇ issuer rating of
Motor Coach, or similar indication of the long-term, unsecured and
unsubordinated indebtedness of Motor Coach shall have been withdrawn or
downgraded below "B" or "B2" by S&P or ▇▇▇▇▇'▇, as the case may be; or
(o) (i) any Transfer Agreement shall for any reason fail to
constitute the transfer to the Seller of the legal and equitable title to, and
ownership of, the Receivables, Contracts and Financed Vehicles purported to be
transferred thereunder, or (ii) a default or breach shall occur under any other
provision of any Transfer Agreement or under any other provision of any other
Related Document and the same shall remain unremedied subject only to cure
periods therein after written notice thereof shall have been given by
Administrative Agent to the Seller; or
(p) (i) the Four-Month Default Ratio shall at any time be
greater than [**]%, (ii) the Four-Month Net Default Ratio shall at any time be
greater than [**]%, (iii) the Recovery Rate shall at any time be less than
[**]%, (iv) the Consolidated Senior Leverage Ratio shall at any time be greater
than the Maximum Permitted Leverage Ratio for the fiscal period ending on March
31 most recently completed, (v) the Consolidated Fixed Charge Coverage Ratio
shall at any time be less than the Minimum Permitted Fixed Charge Coverage Ratio
for the fiscal period ending on March 31 most recently completed, or (vi) the
Delinquency Ratio shall at any time be greater than [**]%; or
(q) the sum of the Stated Amounts of the Transaction Letters
of Credit PLUS the amount on deposit in the Cash Collateral Account shall be
less than the Required Credit Enhancement and such deficiency shall not be cured
within 30 days; or
(r) FSA shall be required to make a payment under the Policy;
or
(s) any Insurance Agreement Event of Default shall have
occurred and be continuing;
then, the Controlling Party shall, upon at least five (5) Business Days' notice
to the Servicer and the Seller (unless the Controlling Party determines in its
sole discretion that it would be reasonably impractical or inadvisable to give
such notice), remove the Servicer, appoint the Backup Servicer (who shall assume
the obligations of the Servicer within thirty (30) days in accordance with
SECTION 6.01(e)) or, if the Backup Servicer is in default under the Backup
Servicing Agreement, any other Person as the new Servicer, take control of the
Lockbox Accounts (by delivering to the Lockbox Banks a notice in substantially
the form of Attachment A to EXHIBIT I), take control of the Blocked Accounts (as
described in Section 2.06(d)), notify the Obligors of its interest in the
Purchased Receivables and exercise all other incidences of ownership in the
Purchased Receivables.
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In addition to the rights and remedies described above, upon the
occurrence of a Servicer Termination Date, the Purchaser or the Administrative
Agent may, in its sole discretion, by notice to the Seller, declare the Facility
Termination Date to have occurred (in which case the Facility Termination Date
shall be deemed to have occurred); PROVIDED, that automatically upon the
occurrence of any event (without any requirement for the passage of time or the
giving of notice) described in Section 7.01(f) or (g), the Facility Termination
Date shall occur. Upon any such declaration or designation or upon any such
automatic termination, the Servicer shall prepare and forward to the Purchaser
the Administrative Agent and the Backup Servicer, within one Business Day after
the Facility Termination Date, a Monthly Report relating to the Purchased
Receivables immediately preceding the Facility Termination Date, and (ii) the
Purchaser and the Administrative Agent shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies
provided after default under the UCC and under other applicable law, which
rights and remedies shall be cumulative.
Following the occurrence of a Servicer Termination Event and
the appointment of a successor Servicer, the Purchaser shall have the right,
with the consent of FSA, to remove and, if requested by FSA, shall remove any
successor Servicer and to take the other actions described above at any time in
its sole discretion; PROVIDED, HOWEVER, that the consent of FSA shall not be
required and the instructions of FSA need not be followed if an FSA Default has
occurred.
ARTICLE VIII.
INDEMNIFICATION
Section 8.01 INDEMNITIES BY THE SELLER. Without limiting
any other rights that the Administrative Agent, FSA or the Purchaser or any
Affiliate thereof and their respective officers, directors, employees and
agents (each, an "INDEMNIFIED PARTY") may have hereunder or under applicable
law, the Seller hereby agrees to indemnify each Indemnified Party from and
against any and all claims, losses and liabilities (including reasonable
attorneys fees and expenses but excluding administrative overhead) (all of
the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS")
arising out of or resulting from this Agreement or the use of proceeds of
Purchases or the ownership of Purchased Receivables or in respect of any
Receivable or any Contract, excluding, however, Indemnified Amounts (a) to
the extent resulting from gross negligence or willful misconduct on the part
of such Indemnified Party or (b) the effect of which would constitute
recourse for nonpayment or delayed payment of Receivables due to the
creditworthiness or financial ability to pay of the Obligors. Without
limitation of the generality of the foregoing, the Seller shall pay on demand
to each Indemnified Party any and all amounts necessary to indemnify such
Indemnified Party from and against any and all Indemnified Amounts relating
to or resulting from any of the following:
(a) the Seller's or the Servicer's failure
to pay when due any taxes (including sales, excise or personal
property taxes) payable in connection with the Receivables;
(b) any Purchased Receivable not being at
the date of the Purchase an Eligible Receivable;
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(c) reliance on any written representation
or warranty made or deemed made by the Seller, the Servicer
(if BusLease or any Affiliate thereof), any Transferor or
Motor Coach (or any of their respective Responsible Officers)
under or in connection with this Agreement or any other
Related Documents which shall have been incorrect when made or
deemed made;
(d) the failure by the Seller, the Servicer
(if BusLease or an Affiliate thereof), any Transferor or Motor
Coach to comply with any covenant set forth in this Agreement
or any other Related Document or any applicable law, rule or
regulation with respect to any Purchased Receivable, or the
non-conformity of any Purchased Receivable with any such
applicable law, rule or regulation;
(e) the failure to vest in the Purchaser a
security interest (as defined in the UCC) in a Purchased
Receivable and the Related Security and Collections in respect
thereof, free and clear of any Adverse Claim;
(f) the failure to vest in the Seller all
right, title and interest in the Receivables purchased by the
Seller from any Transferor pursuant to a Transfer Agreement,
free and clear of any Adverse Claim;
(g) the failure to have filed, or any
delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any
Purchased Receivable and Collections in respect thereof,
whether at the time of any Purchase or at any subsequent time,
to the extent contemplated by this Agreement and the Transfer
Agreement;
(h) any dispute, claim, offset or defense
(other than discharge in bankruptcy of the Obligor or other
similar statutory relief applicable to an Obligor) of the
Obligor to the payment of any Purchased Receivable (including,
without limitation, a defense based on such Purchased
Receivable or the related Contract not being a legal, valid
and binding obligation of such Obligor enforceable against it
in accordance with its terms), or any other claim related to
such Purchased Receivable;
(i) any failure of BusLease, as the
Servicer or otherwise, to perform its duties or obligations in
accordance with the provisions of this Agreement;
(j) the commingling of Collections of
Purchased Receivables at any time with other funds of the
Seller or the Servicer;
(k) any action or omission by the Seller or
the Servicer reducing or impairing the rights of the Purchaser
with respect to any Purchased Receivables or the value of any
Purchased Receivables, except in accordance with the Credit
and Collection Policy and as permitted by this Agreement;
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(l) any failure of the Seller to give
reasonably equivalent value to a Transferor in consideration
of the sale by such Transferor to the Seller of any
Receivables, or any attempt by any Person to void any such
sale under statutory provisions or common law or equitable
action, including, without limitation, any provision of the
Bankruptcy Code;
(m) any products liability claim,
personal injury or property damage suit, any claim, loss,
liability (including without limitation, attorneys' fees) or
damages related to the ownership, leasing, operation or
maintenance of the Financed Vehicles, the Purchased
Receivables or any part thereof, whether arising under strict
liability in tort or otherwise, or other similar or related
claim or action of whatever sort arising out of or in
connection with any Receivable;
(n) any investigation, litigation or
proceeding related to or arising from this Agreement, the
transactions contemplated hereby, the use of the proceeds of
the Purchases, the ownership of any Purchased Receivable, or
Contract or any other investigation, litigation or proceeding
relating thereto in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated
hereby; or
(o) any Servicer Termination Event
described in clause (f) or (g) of SECTION 7.01; or
(p) the assignment or termination
(including the payment of breakage fees) of any Hedge
Agreement.
If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Seller hereby agrees to make the maximum
contribution to the payment of the amounts indemnified against in this Section
which is permissible under applicable law.
Section 8.02 INDEMNITIES BY THE SERVICER. Without limiting
any other rights that an Indemnified Party may have hereunder or under
applicable law, the Servicer hereby agrees to indemnify each Indemnified Party
from and against Indemnified Amounts arising out of or resulting from this
Agreement, excluding, however, Indemnified Amounts (a) to the extent resulting
from gross negligence or willful misconduct on the part of such Indemnified
Party or (b) the effect of which would constitute recourse for nonpayment or
delayed payment of Receivables due to the creditworthiness or financial ability
to pay of the Obligors. Without limitation of the generality of the foregoing,
the Servicer shall pay on demand to each Indemnified Party any and all amounts
necessary to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from any of the following:
(a) the Servicer's failure to pay when due
any taxes (including sales, excise or personal property taxes)
payable in connection with the Receivables;
(b) reliance on any written representation
or warranty made or deemed made by the Servicer under or in
connection with this Agreement or any
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other Related Documents which shall have been incorrect when
made or deemed made;
(c) the failure by the Servicer to comply
with any covenant set forth in this Agreement or any other
Related Document or any applicable law, rule or regulation
with respect to any Purchased Receivable, or the
non-conformity of any Purchased Receivable with any such
applicable law, rule or regulation;
(d) the failure to have filed, or any delay
in filing, financing statements or other similar instruments
or documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any Purchased Receivable
and Collections in respect thereof, whether at the time of any
Purchase or at any subsequent time, to the extent contemplated
by this Agreement and the Transfer Agreement;
(e) any failure of the Servicer to perform
its duties or obligations in accordance with the provisions of
this Agreement;
(f) any action or omission by the Servicer
reducing or impairing the rights of the Purchaser with respect
to any Purchased Receivables or the value of any Purchased
Receivables, except in accordance with the Credit and
Collection Policy and as permitted by this Agreement; or
(g) any Servicer Termination Event
described in clause (f) or (g) of SECTION 7.01;
If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Servicer hereby agrees to make the maximum
contribution to the payment of the amounts indemnified against in this Section
which is permissible under applicable law.
Section 8.03 INDEMNIFICATION DUE TO FAILURE TO CONSUMMATE
PURCHASE. The Seller will indemnify the Purchaser and FSA on demand and hold it
harmless against all costs (including, without limitation, breakage costs) and
expenses resulting from any failure by the Seller to consummate a Purchase
after the Purchaser has accepted an offer from the Seller to make such Purchase.
Section 8.04 PURCHASE DISCOUNT PROTECTION.
(a) If, after the date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, including Regulation D of the
Board of Governors of the Federal Reserve System, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Affected Party with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency,
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(i) shall subject an Affected Party to any
tax (except for taxes on the overall net income of such
Affected Party), duty or other charge with respect to the
Investment or any right to make purchases, or shall change the
basis of taxation of payments to an Affected Party of its
Investment or Purchase Discount (other than changes in the
basis of taxation on the overall net income of such Affected
Party) or any other amounts due under this Agreement in
respect of its Investment or its rights, if any, to make
purchases; or
(ii) shall impose, modify or deem applicable
any reserve requirement (including, without limitation, any
reserve requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve requirement,
if any, included in the determination of Purchase Discount),
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by,
any Affected Party; or
(iii) shall impose any other condition
affecting the Investment or the Purchaser's rights, if any, to
make purchases;
and the result of any of the foregoing is (i) to increase the cost to, or, in
the case of Regulation D referred to above, to impose a cost on an Affected
Party funding or maintaining the Investment, or (ii) to reduce the amount of any
sum received or receivable by an Affected Party under this Agreement, then
within ten days after demand by such Affected Party (which demand shall be
accompanied by a statement setting forth the basis for such demand), the Seller
shall pay directly to such Affected Party such additional amount or amounts as
will compensate such Affected Party for such additional or increased cost
incurred or such reduction suffered.
(b) If an Affected Party shall reasonably determine that the
adoption of any applicable law, rule, regulation, directive or guideline
regarding capital adequacy, or any change in or phase-in of any applicable law,
rule, regulation, directive or guideline or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by an Affected Party with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of any Affected Party as a consequence of its obligations
hereunder or arising in connection herewith to a level below that which any such
Affected Party could have achieved but for such adoption, change or compliance
(taking into consideration the policies of such Affected Party with respect to
capital adequacy) by an amount deemed by such Affected Party to be material,
then from time to time, within ten days after demand by such Affected Party, the
Seller shall pay to such Affected Party such additional amount or amounts as
will compensate such Affected Party for such reduction.
In determining any amount provided for in this Section 8.04,
the Affected Party may use any reasonable averaging and attribution methods
consistently applied to all of its customers. Any Affected Party making a claim
under this Section 8.04 shall submit to the Seller a certificate as to such
additional or increased cost or reduction, which certificate shall be conclusive
absent demonstrable error; PROVIDED, that the failure to deliver any such
certificate shall not affect the Affected Party's right to payment hereunder.
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Section 8.05 NOTICES. The Purchaser agrees to notify the Seller upon its
knowledge of a claim for which it intends to seek indemnification under SECTION
8.01 or reimbursement under SECTION 8.03 from the Seller. The Seller agrees to
assist the parties indemnified under SECTION 8.01, to the extent requested by
them, in any action, suit or proceeding brought by or against them in connection
with the indemnification granted herein.
ARTICLE IX.
THE ADMINISTRATIVE AGENT
Section 9.01 APPOINTMENT OF ADMINISTRATIVE AGENT. The Purchaser has
appointed Canadian Imperial Bank of Commerce as its Administrative Agent. The
Administrative Agent is responsible for administering and enforcing this
Agreement and fulfilling all other duties expressly assigned to it in this
Agreement. The Purchaser has granted the Administrative Agent the authority to
take all actions necessary to assure the Seller's compliance with the terms of
this Agreement and to take all actions required or permitted to be performed by
the Purchaser under this Agreement.
Section 9.02 REPLACEMENT OF ADMINISTRATIVE AGENT. The Purchaser may, at
any time in its discretion, remove a Administrative Agent and appoint a new
Administrative Agent, which shall have the duties described in SECTION 9.01.
ARTICLE X.
MISCELLANEOUS
Section 10.01 AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or consent to any departure therefrom shall be effective
unless (i) in a writing signed by the parties hereto and FSA (provided that an
FSA Default has not occurred), and (ii) confirmation is received by the
Administrative Agent from each rating agency then rating the Notes that the then
current rating of the Notes by such rating agency shall not be withdrawn or
downgraded after giving effect to any such amendment, waiver or consent, and
(iii) evidence is received by the Administrative Agent from each Rating Agency
that this Agreement and the transactions contemplated hereby have at least an
investment grade "shadow" rating; PROVIDED that the confirmation referred to in
clause (ii) above and the evidence referred to in clause (iii) above shall be
required only for material amendments, waivers or consents, as determined by the
Administrative Agent.
Section 10.02 NOTICES, ETC. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be delivered or sent, as to each party
hereto, at its address set forth under its name on the signature pages hereof or
at such other address as shall be designated by such party in a written notice
to the other parties hereto. Notices and communications by facsimile shall be
effective when sent, and notices and communications sent by other means shall be
effective when received.
Section 10.03 COSTS, EXPENSES. In addition to the rights of
indemnification granted under SECTION 8.01 hereof, the Seller agrees to pay
on demand all reasonable costs and
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expenses in connection with the preparation, execution, delivery of this
Agreement, the Related Documents and the other documents and agreements to be
delivered hereunder and thereunder, including, without limitation, (i) the
reasonable fees and expenses of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the
Administrative Agent and the Purchaser, (ii) all reasonable costs and
expenses (including reasonable counsel fees and expenses) in connection with
the amendment of this Agreement, the Related Documents and the other
documents and agreements to be delivered hereunder, (iii) all costs and
expenses (including counsel fees and expenses) in connection with the
enforcement of this Agreement, the Related Documents and the other documents
and agreements to be delivered hereunder and (iv) the reasonable preclosing
fees and expenses of PricewaterhouseCoopers LLP.
Section 10.04 PAYMENTS NET OF TAXES. All payments by the Seller and the
Servicer payable under this Agreement shall be made free and clear of, and
without deduction for, any present or future income, stamp or other taxes, fees,
duties, withholdings or other charges imposed by any taxing authority. If any
withholding or deduction from any payment by the Seller or the Servicer is
required to be made, then the Seller or the Servicer, as the case may be, will:
(a) pay to the relevant authority the full amount required to be withheld
or deducted;
(b) promptly forward to the Purchaser an official receipt or other
satisfactory documentation evidencing such payment to such authority; and
(c) pay to the Purchaser any additional amounts necessary to ensure that
the net amount actually received by the Purchaser will equal the full amount it
would have received had no such withholding or deduction been required.
Section 10.05 NO WAIVER; REMEDIES. No failure on the part of the
Purchaser to exercise, and no delay in exercising, any right hereunder or
under any other agreement or document in connection herewith shall operate as
a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 10.06 ASSIGNMENT, SUCCESSORS AND ASSIGNS. Notwithstanding
anything to the contrary contained in this Agreement, except as provided in
the provisions of the Agreement concerning the resignation of the Servicer
and the Backup Servicer and the appointment of a successor Servicer, this
Agreement may not be assigned by the Purchaser, the Seller or the Servicer
without the prior written consent of the Controlling Party; PROVIDED,
HOWEVER, that (i) the Purchaser may assign the Purchased Receivables and its
rights and obligations hereunder without the consent of the Controlling Party
to CIBC, an Affiliate of CIBC, any securitization vehicle managed by the
Administrative Agent, or the Primary Purchaser and (ii) the Backup Servicer
shall not assign any interest herein without the prior written consent of the
Administrative Agent and FSA, which consent shall not be unreasonably
withheld. Prior written notice of any such assignment shall be provided to
each Rating Agency by the assignor. This Agreement shall be binding upon the
parties hereof and their respective
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successors and assigns permitted hereunder. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Purchaser, the Administrative Agent and FSA and their respective permitted
successors and assigns, if any.
Section 10.07 CONSTRUCTION OF THE AGREEMENT. It is the intention of the
parties hereto that each Purchase of Receivables made hereunder shall constitute
a "sale of chattel paper," as such term is used in Article 9 of the UCC, which
sales are absolute, irrevocable and without recourse except as specifically
provided herein, and shall provide the Administrative Agent, on behalf of the
Purchaser and FSA, with the full benefits of ownership of the Purchased
Receivables. None of the parties hereto intend for the transactions contemplated
hereunder to be, or for any purpose to be characterized as, loans from the
Purchaser to the Seller secured by the Receivables. In this regard, the Seller
hereby pledges and grants a security interest in and assigns to the
Administrative Agent, for the benefit of the Purchaser and FSA, as security for
such loans and for the payment and performance of all obligations of the Seller
hereunder, all of the Seller's right title and interest in, to and under (i) the
Receivables and Collections related thereto, (ii) the Blocked Accounts, the
Lockbox Accounts and all funds and investments on deposit therein and credited
thereto, (iii) the Transfer Agreements and (iv) proceeds of the foregoing.
Section 10.08 NO PROCEEDINGS. Each of the Servicer, the Purchaser and
the Administrative Agent hereby agrees that it will not institute against, or
join any other Person in instituting against, the Seller any proceeding of
the type referred to in SECTION 7.01(f) or (g).
Section 10.09 CONFIDENTIALITY.
(a) Unless otherwise required by applicable law, rule or regulation or
by court order or process, the Seller and the Servicer agree to maintain the
confidentiality of this Agreement (and all drafts thereof) in communications
with third parties and otherwise; PROVIDED, that this Agreement may be
disclosed to the Seller's and the Servicer's legal counsel, auditors,
accountants and other advisers if they agree to hold it confidential.
(b) The Purchaser and the Administrative Agent agree to maintain the
confidentiality of any information regarding the Seller or the Servicer
obtained in accordance with the terms of this Agreement which is not publicly
available, but the Purchaser or the Administrative Agent may reveal such
information (a) to liquidity providers, credit providers and any rating
agency providing a rating for the obligations of the Purchaser or the Primary
Purchaser, (b) as necessary or appropriate in connection with the
administration or enforcement of this Agreement or the Purchaser's funding of
Purchases under this Agreement, (c) as required by law, government
regulation, court proceeding or subpoena or (d) to bank regulatory agencies
and examiners (including, without limitation, those exercising jurisdiction
over the Primary Purchaser). In the event that the Purchaser or the
Administrative Agent is requested or required to disclose any confidential
information or any information developed from confidential information, the
Purchaser or the Administrative Agent, as the case may be, will provide the
Seller or the Servicer with prompt written notice of any such request or
requirement so that either the Seller or the Servicer may seek an appropriate
protective order or waive the Purchaser's or the Administrative Agent's
compliance, as the case may be, with the provisions hereof.
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Section 10.10 NO RECOURSE. The obligations of the Purchaser under this
Agreement or any other agreement, instrument, document or certificate executed
and delivered by or issued by the Purchaser or any officer thereof in connection
herewith are solely the corporate obligations of the Purchaser. Except as
expressly provided in this Agreement, no recourse shall be had for payment of
any fee or other obligation or claim arising out of or relating to this
Agreement or any other agreement, instrument, document or certificate executed
and delivered or issued by the Purchaser or any officer in connection herewith,
against any stockholder, member, employee, officer, director or incorporator of
the Purchaser. The provisions of this SECTION 10.10 shall survive the
termination of this Agreement.
Section 10.11 GOVERNING LAW; EXECUTION IN COUNTERPARTS.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THE LAWS OF
ANOTHER JURISDICTION GOVERN THE PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF SECURITY INTERESTS.
(b) This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
Section 10.12 SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT TO ACCEPT
SERVICE OF PROCESS. The parties hereto hereby submit to the exclusive
jurisdiction of the Courts of the State of New York and of any Federal Court
located in the State of New York in any action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. The parties
hereto irrevocably waive any objection which they may have to the laying of
venue of any such proceeding and any claim that any such proceeding has been
brought in an inconvenient forum.
Section 10.13 THIRD PARTY BENEFICIARY RIGHTS.
(a) Subject to any limitations contained in this Agreement, the Seller
hereby assigns to the Purchaser, to the extent of the Purchased Receivables,
all rights of the Seller against any Transferor under the Transfer
Agreements. Each of the Servicer and the Seller agrees that the Purchaser
shall be a third party beneficiary of the Seller's rights under the Transfer
Agreements and shall be entitled to enforce such rights against the
Transferor as if the Purchaser had been a party to the Transfer Agreements.
(b) This Agreement shall inure to the benefit of FSA, and all
covenants and agreements in this Agreement shall be for the benefit of and
run directly to FSA, and FSA shall be entitled to rely on and, subject to the
limitations set forth herein, enforce such covenants to the same extent as if
it were a party to this Agreement.
Section 10.14 NO CLAIMS. Notwithstanding anything to the contrary
contained in this Agreement, on any day, no payments by the Seller to the
Purchaser, FSA, the Servicer, the Custodian or the Administrative Agent under
any provision in this Agreement providing for indemnification by the Seller
shall be made, and neither the Purchaser, FSA, the Servicer, the
83
Custodian nor the Administrative Agent shall have any claim (as defined in
Section 101(5) of the Bankruptcy Code) against the Seller for any such
payment, to the extent the amount of any such payment exceeds the cash
available to the Seller after the payment by the Seller of the Investment and
all other amounts payable (other than amounts paid by the Seller pursuant to
provisions under this Agreement providing for indemnification by the Seller)
under this Agreement.
Section 10.15 WAIVER OF SET-OFF. Each of the parties hereto waives any
right of set-off it may have to which it may be entitled under this Agreement
from time to time against the Purchaser or its assets.
Section 10.16 LIBO FUNDING ILLEGAL. If, due to a change in law or
regulation (or the adoption of a new law or regulation), the Purchaser shall
reasonably determine (which determination shall be conclusive and binding on
the Seller) that it is unlawful for the Purchaser to fund or maintain the
Investment using the LIBO Rate (Reserve Adjusted) then the Purchaser shall
promptly notify the Seller to such effect and the obligation of the Purchaser
to fund or maintain the ownership interest using the LIBO Rate (Reserve
Adjusted) shall be suspended until such time as the Purchaser may again fund
and maintain the Investment using the LIBO Rate (Reserve Adjusted), and the
Purchaser shall fund and maintain the Investment using the Alternate Base
Rate.
Section 10.17 LIBO DEPOSITS UNAVAILABLE. If the Purchaser shall have
determined (for any reason whatsoever), that by reason of circumstances
affecting the interbank eurodollar market, adequate means do not exist for
ascertaining the applicable LIBO Rate, then the Purchaser shall promptly
notify the Seller thereof and the obligation of the Purchaser to maintain and
fund the Investment using the LIBO Rate (Reserve Adjusted) shall be suspended
until such time as the Purchaser may again fund and maintain the Investment
using the LIBO Rate (Reserve Adjusted), and the Purchaser shall fund and
maintain the Investment using the Alternate Base Rate.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MCII FUNDING II, INC.
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
[9787 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇]
Attention: ____________________
Facsimile No.: ________________
CANADIAN IMPERIAL BANK OF
COMMERCE, as Purchaser
By: ____________________________
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Securitization Group
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By: ____________________________
Authorized Signatory
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Securitization Group
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
85
BUSLEASE, INC.
By: ____________________________
Name:
Title:
[9787 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇]
Attention: ____________________
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
BNY ASSET SOLUTIONS LLC, as Backup
Servicer
By: ____________________________
Name:
Title:
[address]
Attention: ____________________
Facsimile No.:
86
EXHIBIT A
Form of Monthly Report
EXHIBIT B
Form of Officer's Certificate
EXHIBIT C
Form of Termination Notice
EXHIBIT D
Form of Consent
EXHIBIT E
Form of Performance Indemnity - Servicer
EXHIBIT F
Form of Performance Indemnity - Transferors
EXHIBIT G
Form of Vehicle Loan
EXHIBIT H
Form of Vehicle Lease
EXHIBIT I
Form of Lockbox Agreement
EXHIBIT J
Form of Conditions Precedent Certificate
______ __, 20__
Financial Security Assurance Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Receivables Purchase Agreement ("Receivables Purchase
Agreement") among Canadian Imperial Bank of Commerce, as
purchaser and administrative agent, MCII Funding II, Inc. (the
"Seller"), BusLease, Inc. and BNY Asset Solutions LLC
Ladies and Gentlemen:
In accordance with the provisions of Section 3.02(c) of the
Receivables Purchase Agreement, the undersigned hereby certifies that:
(i) all of the conditions precedent set forth in Section
3.02 of the Receivables Purchase Agreement with respect to the Purchase to be
made by the Purchaser on _________, 20__ have been satisfied;
(ii) attached hereto as Schedule I is the calculation showing
that the condition specified in Section 3.02(b)(xi) has been satisfied; and
(iii) attached hereto as Schedule II is the confirmation to
the Hedge Agreement, if any, entered into in connection with such Purchase.
Capitalized words and phrases used herein and not otherwise
defined herein shall have the respective meanings assigned to them in the
Receivables Purchase Agreement. This Certificate is subject in all respects to
the terms of said Receivables Purchase Agreement.
MCII FUNDING II, INC.
By: _________________________
Name:
Title:
cc: Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Securitization Group
Schedule I
1. Weighted average imputed rate of interest for all Purchased Receivables ___%
----------------------------------------------------------------------------------------------------------------
2. Weighted average of the rates at which the Guaranteed Yield is computed for ___%
the immediately preceding Settlement Period (or with respect to the initial
Purchase only, the average of the fixed periodic rates of interest set
forth in the Hedge Agreements entered into in connection with such
Purchase)
----------------------------------------------------------------------------------------------------------------
PERCENTAGES USED TO CALCULATE:
----------------------------------------------------------------------------------------------------------------
3. Premium [**]%
----------------------------------------------------------------------------------------------------------------
4. Commitment Fee [**]%
----------------------------------------------------------------------------------------------------------------
5. Usage Fee [**]%
----------------------------------------------------------------------------------------------------------------
6. Servicer Fee [**]%
----------------------------------------------------------------------------------------------------------------
7. Backup Servicer Fee [**]%
----------------------------------------------------------------------------------------------------------------
8. Sum of lines 2 through 7 ___%
----------------------------------------------------------------------------------------------------------------
9. Line 1 less line 8 ___%
----------------------------------------------------------------------------------------------------------------
LINE 9 IS EQUAL TO OR GREATER THAN .50%(CHECK APPROPRIATE BOX) / / Yes / / No
----------------------------------------------------------------------------------------------------------------
Schedule II
Hedge Agreement Confirmations
(attached)
Schedule 1.01(a)
Preclosing Consolidated EBITDA
Schedule 1.01(b)
Cash Management System
Schedule 1.01(c)
Credit and Collection Policy
Schedule 1.01(e)
Stated Term of Eligible Receivables
Schedule 1.01(s)
Special Concentration Limits
The Special Concentration Limit with respect to all
Receivables owing from each of the following Obligors, together with Receivables
owing from its Affiliates and Subsidiaries, shall be an amount equal to [**]% of
the Investment:
[***]
[***]
Schedule 1.01(t)
Transferors
Schedule 4.01(v)
Lockbox Accounts