EXHIBIT 10.3
GANIS/DEPOSITOR TRANSFER AGREEMENT
between
GANIS CREDIT CORPORATION,
as Transferor,
and
DEUTSCHE RECREATIONAL ASSET FUNDING CORPORATION,
as Depositor
Dated as of May 1, 1999
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Definitions........................................ 1
SECTION 1.02. Other Definitional Provisions...................... 1
ARTICLE II
Contribution of Receivables
SECTION 2.01. Contribution....................................... 2
SECTION 2.02. Intent of the Parties.............................. 3
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties as to Receivables... 4
ARTICLE IV
The Transferor
SECTION 4.01. Representations of Transferor...................... 11
SECTION 4.02. Corporate Existence................................ 12
SECTION 4.03. Liability of the Transferor........................ 12
SECTION 4.04. Indemnification.................................... 12
SECTION 4.05. Merger or Consolidation of, or Assumption of the
Obligations of, Transferor......................... 13
SECTION 4.06. Limitation on Liability of Transferor and Others... 13
SECTION 4.07. Notice of Events................................... 14
ARTICLE V
Miscellaneous
SECTION 5.01. Amendment.......................................... 14
SECTION 5.02. Protection of Title; Change of Name, Identity,
Corporate Structure or Location, Etc............... 14
SECTION 5.03. Notices............................................ 15
SECTION 5.04. Assignment......................................... 16
SECTION 5.05. Limitations on Rights of Others.................... 16
SECTION 5.06. Severability....................................... 16
SECTION 5.07. Separate Counterparts.............................. 16
SECTION 5.08. Headings........................................... 16
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SECTION 5.09. Governing Law...................................... 16
SECTION 5.10. Nonpetition Covenants.............................. 16
SECTION 5.11. Waiver............................................. 17
SECTION 5.12. Separate Corporate Existence....................... 17
SECTION 5.13 Submission to Jurisdiction......................... 17
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GANIS/DEPOSITOR TRANSFER AGREEMENT dated as of May 1, 1999 (this
"Agreement") between DEUTSCHE RECREATIONAL ASSET FUNDING CORPORATION, a Nevada
corporation (the "Depositor") and GANIS CREDIT CORPORATION, a Delaware
corporation ("Ganis" or the "Transferor").
WHEREAS, the Depositor desires to acquire Receivables from the Transferor;
WHEREAS, the Transferor is willing to contribute such Receivables to the
Depositor; and
WHEREAS, the Transferor acquired certain of such Receivables from DFS
pursuant to the DFS/Ganis Transfer Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Definitions. Except as otherwise specified herein or as the
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context may otherwise require, capitalized terms used herein (including in the
recitals hereto) have the respective meanings assigned thereto in Appendix A to
the Transfer and Servicing Agreement for all purposes of this Agreement.
"Transfer and Servicing Agreement" means the Transfer and Servicing Agreement,
dated the same date as this Agreement, among Distribution Financial Services
Marine Trust 1999-2, the Depositor, and Deutsche Financial Services Corporation,
as Servicer, as the same may be amended, amended and restated or otherwise
modified from time to time.
SECTION 1.02. Other Definitional Provisions.
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(a) All terms defined in Appendix A to the Transfer and Servicing
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms in this Agreement or in any such certificate or other document
are inconsistent with the meanings of such terms under generally accepted
accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
(c) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article and Section
references contained in this Agreement are references to Articles and Sections
in this Agreement unless otherwise specified; and the term "including" shall
mean "including without limitation".
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
amended and restated or otherwise modified and includes (in the case of
agreements or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
(f) Each reference to the "close of business" on a particular day
shall mean 5:00 p.m. Pacific Time on such day.
ARTICLE II
Contribution of Receivables
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SECTION 2.01. Contribution. The Transferor does hereby transfer, assign,
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set over and otherwise convey to the Depositor, as a capital contribution,
without recourse (subject to the obligations of the Transferor set forth
herein), all right, title and interest of the Transferor in, to and under (but
none of the obligations of the Transferor under):
(a) all of the Receivables originated by the Transferor or acquired
by the Transferor from Dealers (all of such Receivables being referred to
collectively as the "Transferor Receivables" and individually as a "Transferor
Receivable") and all moneys received thereon on and after the Cutoff Date;
(b) (i) the security interests in the Financed Boats (other than the
Federally Documented Boats) created pursuant to the Transferor Receivables and
any other interest of the Transferor in the Financed Boats, and (ii) the Boat
Mortgage Trust Agreement (but only to the extent relating to the Federally
Documented Boats);
(c) any proceeds with respect to the Transferor Receivables under any
Insurance Policies and all claims under such Insurance Policies;
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(d) any proceeds from recourse to Dealers with respect to Transferor
Receivables;
(e) any Financed Boat, relating to a Transferor Receivable, acquired
in repossession;
(f) the contents of the Receivable Files with respect to Transferor
Receivables and all rights, benefits and proceeds arising therefrom or in
connection therewith;
(g) all funds on deposit from time to time in the Trust Accounts, and
all investments and proceeds thereof (including all income thereon);
(h) the DFS/Ganis Transfer Agreement;
(i) the DFS Conveyed Property; and
(j) the proceeds of any and all of the foregoing.
The Receivables and other items covered by clauses (a)-(j) of this Section
2.01 shall be referred to collectively as the "Transferor Conveyed Property".
SECTION 2.02. Intent of the Parties. (a) The Transferor and the Depositor
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intend that the conveyance by the Transferor to the Depositor of the right,
title and interest of the Transferor in, to and under the Receivables and the
other Transferor Conveyed Property pursuant to this Agreement shall constitute a
capital contribution and not a loan, that such conveyance is absolute and
unconditional, and that the Transferor retain no interest in, to or under the
Receivables and the other Transferor Conveyed Property. However, in the event
that, notwithstanding the intent of the parties, such conveyance is deemed to be
a transfer for security and not a capital contribution, then (i) the Transferor
shall be deemed to have granted, and in such event does hereby grant, to the
Depositor a first priority security interest in all of its right, title and
interest in, to and under the Transferor Conveyed Property, and (ii) this
Agreement shall constitute a security agreement under applicable law with
respect to such conveyance.
(b) No party hereto shall take any action that is inconsistent with the
ownership of the Transferor Conveyed Property by the Depositor, it being
understood that this sentence shall not prevent the transfer of the Transferor
Conveyed Property by the Depositor to the Issuer in accordance with the Transfer
and Servicing Agreement. Each party hereto shall inform any Person inquiring
about the Receivables that the Transferor Conveyed Property has been transferred
by the Transferor to the Depositor and by the Depositor to the Issuer (and such
transfers shall be reflected in the accounting records and computer systems of
the parties hereto). Without limiting the generality of the foregoing, for
accounting, tax and other purposes each party hereto shall treat the transfer of
the Transferor Conveyed Property by the Transferor to the Depositor as a capital
contribution by the Transferor to the Depositor. Notwithstanding any
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other provision of this Agreement, no Person shall have any recourse to DFS, the
Transferor, the Depositor or the Servicer on account of the financial inability
of any Obligor to make payments in respect of a Receivable.
ARTICLE III
The Receivables
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SECTION 3.01. Representations and Warranties as to Receivables. DFS has
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made representations and warranties set forth in Section 3.01 of the DFS/Ganis
Transfer Agreement, and has consented to the assignment by the Transferor to the
Depositor and by the Depositor to the Issuer of the Transferor's rights with
respect thereto. Pursuant to Section 2.01 of this Agreement, the Transferor has
transferred to the Depositor all of the Transferor's right, title and interest
in, to and under the DFS/Ganis Transfer Agreement, which shall be understood to
include the representations and warranties of DFS therein, upon which the
Depositor relies in accepting the Receivables, together with all rights of the
Transferor with respect to any breach thereof, including the right to require
DFS to purchase Receivables in accordance with the DFS/Ganis Transfer Agreement.
The Transferor makes the following representations and warranties as to the
Receivables, on which representations and warranties each of the Depositor and
the Issuer is deemed to have relied in acquiring the Receivables. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date and shall survive the transfer and
assignment of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(i) Characteristics of Receivables. All of the Receivables (other
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than the DFS Receivables) were originated by the Transferor or acquired by the
Transferor from Dealers. Each Transferor Receivable (A) was fully and properly
executed by the parties thereto, (B) contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for realization against the collateral security, (C) is fully
amortizing and provides for fixed level periodic payments which, if made when
due, shall fully amortize the Amount Financed over the original term (except
that if such Transferor Receivable is a Step Rate Receivable, such periodic
payments will vary from time to time during the term of such Receivable) and (D)
provides for, in the event that such Transferor Receivable is prepaid in full,
payment of an amount that fully pays the Principal Balance and includes accrued
but unpaid interest at least through the date of prepayment calculated at a rate
at least equal to its Annual Percentage Rate. Each Transferor Receivable
provides that payments thereon are to be applied in accordance with the Simple
Interest Method. If a Transferor Receivable was originated by a Dealer, such
Receivable, to the knowledge of the Transferor, (A) was originated by the Dealer
for the retail sale of a Financed Boat in the ordinary course of such Dealer's
business, (B) was purchased by the Transferor from such Dealer for new value
under a Dealer Agreement and (C) was validly assigned by the Dealer to the
Transferor. To the knowledge of the Transferor, such Dealer had all necessary
licenses and permits to originate Transferor Receivables in the state
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where such Dealer was located. If a Transferor Receivable was originated by the
Transferor, such Transferor Receivable was originated for value by the
Transferor in the ordinary course of its business to finance the purchase of, or
refinance, the related Financed Boat by the related Obligor. The Transferor had
all necessary licenses and permits to originate or purchase each Transferor
Receivable at the time of its origination or purchase of such Transferor
Receivable. At the time each Transferor Receivable was originated or purchased
by the Transferor, the related Financed Boat was, to the knowledge of the
Transferor, to be used primarily for personal, family, or household purposes
rather than for business or commercial purposes. The Transferor Receivables were
selected at random by the Transferor from its portfolio of boat receivables
originated by the Transferor or acquired by the Transferor from Dealers.
(ii) No Fraud or Misrepresentation. To the knowledge of the
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Transferor, each Transferor Receivable originated by a Dealer was originated by
the Dealer and sold by the Dealer to the Transferor without any fraud or
misrepresentation on the part of such Dealer.
(iii) Compliance with Law. To the knowledge of the Transferor, all
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requirements of applicable federal, state and local laws, and regulations
thereunder (including, without limitation, usury laws, the Federal Truth-in-
Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal
Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve
Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief Act of
1940, state motor vehicle retail installment sales acts and lending acts and
state adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code and other consumer credit laws and equal credit opportunity and
disclosure laws) in respect of all of the Transferor Receivables and each and
every sale of Financed Boats relating thereto, have been complied with in all
material respects, and each Transferor Receivable and the sale of the Financed
Boat evidenced by each Transferor Receivable complied at the time it was
originated or made and now complies in all material respects with all applicable
legal requirements, including the laws and regulations contemplated by this
clause (iii).
(iv) Origination. Each Transferor Receivable was originated in the
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United States of America.
(v) Binding Obligation. Each Transferor Receivable represents the
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genuine, legal, valid and binding payment obligation of the Obligor thereon,
enforceable by the holder thereof in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law;
and all parties to each Transferor Receivable had full legal capacity to execute
and deliver such Transferor Receivable and all other documents related thereto
and to grant the security interest purported to be granted thereby.
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(vi) No Government Obligor. No Obligor of a Transferor Receivable
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is the United States of America or any State or any agency, department,
subdivision or instrumentality thereof.
(vii) Obligor Bankruptcy. At the Cutoff Date, no Obligor had been
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identified on the records of the Transferor as being the subject of a current
bankruptcy proceeding.
(viii) Schedule of Receivables. The information with respect to
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Transferor Receivables set forth in the Schedule of Receivables is true and
correct in all material respects as of the close of business on the Cutoff Date.
(ix) Marking Records. By the Closing Date, the Transferor shall
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have caused the portions of its electronic ledger relating to the Receivables to
be clearly and unambiguously marked to show that the Receivables have been
transferred absolutely from DFS to the Transferor (in the case of the DFS
Receivables), from the Transferor to the Depositor and from the Depositor to the
Trust.
(x) Computer Tape. The Computer Tape was complete and accurate as
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of the Cutoff Date and includes a description of the same Transferor Receivables
that are described in the Schedule of Receivables.
(xi) Chattel Paper. The Transferor Receivables constitute chattel
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paper within the meaning of the UCC as in effect in the states in which the
Obligors reside.
(xii) One Original. There is only one original executed copy of
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each Transferor Receivable.
(xiii) Receivable Files Complete. There exists a Receivable File
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pertaining to each Transferor Receivable and, to the knowledge of the
Transferor, such Receivable File contains (a) a fully executed original of the
Transferor Receivable, with a fully executed assignment thereof in blank or from
the related Dealer to the Transferor, as the case may be, if such Transferor
Receivable was acquired by the Transferor from a Dealer, (b) a certificate of
physical damage insurance, application form for such insurance signed by the
Obligor or a signed representation letter from the Obligor named in the
Transferor Receivable pursuant to which the Obligor has agreed to obtain
physical damage insurance for the Financed Boat, or copies thereof, (c) the
Title Document or a copy of the application therefor or, except with respect to
Financed Boats that are Federally Documented Boats, a certification from the
Servicer that it has received confirmation from an authorized official of the
appropriate governmental office of the existence of the first lien of the
Transferor with respect to the related Financed Boat, and (d) a credit
application signed by the Obligor, or a copy thereof. Each of such documents
which is required to be signed by the Obligor has been signed by the Obligor in
the appropriate spaces. Each of the foregoing documents has been correctly
prepared. The complete file for each Transferor Receivable currently is in the
possession of the Servicer.
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(xiv) Receivables in Force. No Transferor Receivable has been
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satisfied, subordinated or rescinded, and the Financed Boat securing each such
Transferor Receivable has not been released from the lien of the related
Transferor Receivable in whole or in part. No provisions of any Transferor
Receivable have been waived, altered or modified (except that DFS as servicer
may have, for administrative purposes, modified the due date of a Transferor
Receivable to a different date in the month, which modification is reflected in
its servicing records) in any respect since its origination, except by
instruments or documents identified in the Receivable File. No Transferor
Receivable has been modified as a result of application of the Soldiers' and
Sailors' Civil Relief Act of 1940, as amended.
(xv) Lawful Assignment. No Transferor Receivable was originated in,
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or is subject to the laws of, any jurisdiction the laws of which (a) would make
unlawful, void or voidable the transfer and assignment of such Transferor
Receivable under this Agreement or the pledge of such Transferor Receivable
under the Indenture or (b) would impair the validity or enforceability of any
Transferor Receivable because of any such transfer, assignment or pledge.
(xvi) Good Title. No Transferor Receivable has been sold,
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transferred, assigned or pledged by the Transferor except pursuant to this
Agreement; immediately prior to the conveyance of the Receivables by the
Transferor to the Depositor pursuant to this Agreement, the Transferor had good
and indefeasible title to the Receivables, free and clear of any Lien. No Dealer
has a participation in, or other right to receive, payments or proceeds in
respect of any Transferor Receivable. The Transferor has not taken any action to
convey any right to any Person that would result in such Person having a right
to payments received under the related Insurance Policies or the related Dealer
Agreements or to payments due under such Transferor Receivables. This Agreement
is effective to transfer to the Depositor all of the right, title and interest
of the Transferor in, to and under the Receivables.
(xvii) Security Interest in Financed Boat. Each Transferor Receivable
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(together with the related mortgage, if applicable) has created a valid, binding
and enforceable first priority security interest in favor of the Transferor in
the related Financed Boat, which is in full force and effect and which has been
perfected. Each Title Document contained in the Receivables Files shows the
Transferor named as the original secured party under each Transferor Receivable
and as the holder of a first priority security interest in such Financed Boat.
With respect to each Transferor Receivable for which the Title Document is not
contained in the related Receivable File, the Servicer has either received
written evidence that such Title Document showing the Transferor as first
lienholder in the related Financed Boat has been applied for or, except with
respect to Financed Boats that are Federally Documented Boats, has certified in
writing in the related Receivable File that it has received confirmation from
the appropriate governmental office of the existence of the first lien of the
Transferor with respect to the related Financed Boat. Each Transferor Receivable
is secured by an enforceable and perfected first priority security interest in
the Financed Boat in the name of the Transferor as secured party, which security
interest is prior to all other Liens upon and security interests in such
Financed Boat. The security interest of the Transferor in each such Financed
Boat (other
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than a Federally Documented Boat) has been validly assigned by the Transferor to
the Depositor pursuant to this Agreement. The security interest of the
Transferor in each Federally Documented Boat securing a Transferor Receivable
has been validly assigned by the Transferor to the Boat Mortgage Trustee
pursuant to the Boat Mortgage Trust Agreement. With respect to each Financed
Boat that secures a Transferor Receivable and that is eligible for documentation
under the Ship Mortgage Statutes, a fully effective Preferred Mortgage has been
signed by the related Obligor in favor of the Transferor as security for such
Receivable and such Preferred Mortgage has been properly filed with the Coast
Guard.
(xviii) All Filings Made; Valid Security Interest. All filings
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(including, without limitation, UCC filings) required to be made by any Person
and actions required to be taken or performed by any Person in any jurisdiction
to give the Depositor a first priority perfected ownership interest in the
Receivables and the proceeds thereof have been made, taken or performed, subject
to the transfer thereof by the Depositor to the Issuer. At the Closing Date the
Depositor shall have a valid, subsisting and enforceable first priority
ownership interest in each Receivable and the proceeds thereof, subject to the
transfer thereof by the Depositor to the Issuer.
(xix) No Impairment. The Transferor has not done and shall not do
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anything to convey any right to any Person that would result in such Person
having a right to payments due under a Receivable or otherwise to impair the
rights of the Trust in any Receivable or the proceeds thereof.
(xx) No Release. No Transferor Receivable is assumable by another
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Person in a manner which would release the Obligor thereof from such Obligor's
obligations to the Transferor with respect to such Transferor Receivable.
(xxi) No Defenses. No Transferor Receivable is subject to any
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right of rescission, setoff, counterclaim or defense and, to the knowledge of
the Transferor, no such right has been asserted or threatened with respect to
any Transferor Receivable. The operation of the terms of any Transferor
Receivable or the exercise of any right thereunder shall not render the
Transferor Receivable unenforceable in whole or in part or subject to any right
of rescission, setoff, counterclaim or defense, and to the knowledge of the
Transferor, no such right of rescission, setoff, counterclaim or defense has
been asserted or threatened with respect thereto.
(xxii) No Default. To the knowledge of the Transferor, there has
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been no default, breach, violation or event permitting acceleration under the
terms of any Transferor Receivable (other than payment delinquencies as of the
Cutoff Date of not more than 59 days), and no condition exists or event has
occurred and is continuing that with notice, the lapse of time or both would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Transferor Receivable, and there has been no waiver of any of
the foregoing. As of the Cutoff Date, no Financed Boat relating to any
Transferor Receivable had been repossessed.
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(xxiii) Insurance. Each Transferor Receivable requires the Obligor
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to maintain physical loss and damage insurance, naming the Transferor and its
successors and assigns as additional insured parties or loss payees, and each
Transferor Receivable permits the holder thereof to obtain physical loss and
damage insurance at the expense of the Obligor if the Obligor fails to do so. No
Financed Boat relating to any Transferor Receivable was insured under a policy
of force-placed insurance on the Cutoff Date.
(xxiv) Past Due. At the Cutoff Date, no Transferor Receivable was
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more than 59 days past due.
(xxv) No Liens. There are no Liens or claims which have been
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filed, and, to the knowledge of the Transferor, none pending or threatened to be
filed, for work, labor, materials or unpaid state or federal taxes affecting the
Financed Boat securing any Transferor Receivable which are or may become liens
prior or equal to the lien of the Transferor Receivable.
(xxvi) Remaining Principal Balance. At the Cutoff Date, the
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Principal Balance of each Transferor Receivable set forth in the Schedule of
Receivables is true and accurate in all material respects.
(xxvii) Final Scheduled Maturity Date. No Receivable has a final
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maturity which is sooner than the first Monthly Payment Date following the
Closing Date or later than 240 months after the Cutoff Date.
(xxviii) Certain Characteristics. (A) Each Receivable had a remaining
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maturity, as of the Cutoff Date, of at least 11 months but not more than 240
months; (B) each Receivable had an original maturity of at least 24 months but
not more than 240 months; (C) each Receivable had an original principal balance
of at least $2,701.25 and not more than $1,100,545; (D) each Receivable had a
Principal Balance as of the Cutoff Date of at least $175.99 and not more than
$1,097,328.01; (E) as of the Cutoff Date, each Receivable has an Annual
Percentage Rate of at least 2.75% and not more than 15.25%; (F) approximately
52.23% of the aggregate Principal Balance of the Receivables (measured as of the
Cutoff Date) were secured by used Financed Boats at the time such Receivables
were originated; (G) no funds have been advanced by the Transferor, any Dealer,
or any Person acting on behalf of any of them in order to cause any Transferor
Receivable to qualify under paragraph (xxv) above; (H) as of the Cutoff Date,
other than California (21.99%), New York (14.25%), Texas (12.37%), Florida
(9.28%) and Washington (5.12%), no State represented more than 5% of the Initial
Pool Balance with respect to the billing addresses of the Obligors (as
determined by reference to the records of DFS); and (I) the Principal Balance of
each Transferor Receivable set forth in Schedule of Receivables is true and
accurate in all material respects as of the Cutoff Date. As of the Cutoff Date,
the sum of the Principal Balances of the Receivables which are Step Rate
Receivables does not exceed approximately 1.03%of the Initial Pool Balance.
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For purposes of determining whether the Transferor is obligated to purchase
a Receivable on account of a breach of a representation and warranty pursuant to
this Section 3.01 or indemnify in respect of such breach pursuant to the last
paragraph of this Section 3.01, the determination as to whether a representation
or warranty that is made to the knowledge of the Transferor has been breached
shall be made without regard to such knowledge of the Transferor as if such
representation and warranty were not qualified by the knowledge of the
Transferor.
Upon discovery by any party hereto of a breach of any of the
representations and warranties of the Transferor set forth in this Section or of
DFS set forth in Section 3.01 of the DFS/Ganis Transfer Agreement, in each case
which materially and adversely affects the value of the Receivables or the
interest therein of the Issuer or the Indenture Trustee (or which materially and
adversely affects the interest of the Issuer or the Indenture Trustee in the
related Receivable in the case of a representation and warranty relating to a
particular Receivable), the party discovering such breach shall give prompt
written notice to the other parties hereto. On the last day of the Collection
Period following the Collection Period during which the Transferor discovers or
receives notice of any such breach of any such representation or warranty, if
such breach shall not have been cured in all material respects by such last day,
the Transferor shall purchase (and, if applicable, the Transferor shall enforce
the obligation of DFS, under the DFS/Ganis Transfer Agreement, to purchase) such
Receivable from the Issuer (or from the Depositor, if the Depositor is required
to purchase such Receivable pursuant to Section 3.01 of the Transfer and
Servicing Agreement) as of such last day at a price equal to the Purchase Amount
of such Receivable, which price the Transferor shall remit in the manner
specified in Section 5.05 of the Transfer and Servicing Agreement; provided,
that, with respect to the representation set forth in paragraph (xiii) above,
such purchase shall be required with respect to a Receivable only if any
resulting breach is not cured (it being understood that if the related Lien
Certificate has been duly applied for from the applicable governmental offices
as evidenced by a copy of the application therefor, the receipt of such Lien
Certificate shall not be required to cure a breach of the applicable
representation and warranty) within 90 days after completion of the review and
examination of the Receivable File for such Receivable pursuant to Section 3.02
of the Transfer and Servicing Agreement. Subject to the indemnification
provisions contained in the last paragraph of this Section, the sole remedy of
the Depositor, the Issuer, the Owner Trustee, the Indenture Trustee, the
Residual Interestholder and the Noteholders with respect to a breach of
representations and warranties of the Transferor set forth in this Section shall
be to require the Transferor to purchase Receivables pursuant to this Section,
subject to the conditions contained herein; it being understood that this
sentence shall not limit the right of the parties to the Transfer and Servicing
Agreement to enforce (or to cause the Transferor to enforce) the obligation of
DFS to purchase Receivables pursuant to the DFS/Ganis Transfer Agreement.
The Transferor shall indemnify the Depositor, the Issuer, the Owner Trustee
and the Indenture Trustee and hold each harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of the representations
and warranties of the Transferor contained in this Agreement; provided that the
Transferor shall not be liable for any indirect damages or for any loss, damage,
penalty, fine,
10
forfeiture, legal fees and related costs, judgments and other costs and expenses
caused by the wilful misconduct of the Depositor, the Issuer, the Owner Trustee
or the Indenture Trustee.
ARTICLE IV
The Transferor
--------------
SECTION 4.01. Representations of Transferor. The Transferor makes the
-----------------------------
following representations on which each of the Depositor and the Issuer is
deemed to have relied in acquiring the Receivables. The representations speak as
of the execution and delivery of this Agreement and as of the Closing Date, in
the case of the Receivables, and shall survive the transfer of the Receivables
to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. The Transferor is duly organized
------------------------------
and validly existing as a corporation in good standing under the laws of the
State of Delaware, with the corporate power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and has, the
corporate power, authority and legal right to acquire and own the Receivables.
(b) Due Qualification. The Transferor is duly qualified to do
-----------------
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Transferor has the corporate power and
-------------------
authority to execute and deliver this Agreement and to carry out its respective
terms; the Transferor has full power and authority to transfer and assign the
property to be transferred and assigned to the Depositor, and the Transferor has
duly authorized such transfer and assignment by all necessary corporate action;
and the execution, delivery and performance of this Agreement by the Transferor
has been duly authorized by the Transferor by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid
------------------
and binding obligation of the Transferor enforceable in accordance with its
terms.
(e) No Violation. The consummation of the transactions contemplated
------------
by this Agreement by the Transferor and the fulfillment of the terms hereof by
the Transferor do not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws of the Transferor, or any
indenture, agreement or other instrument to which the Transferor is a party or
by which it is bound; or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant
11
to the Basic Documents); or violate any law or, to the best of the Transferor's
knowledge, any order, rule or regulation applicable to the Transferor of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Transferor or its
properties.
(f) No Proceedings. To the Transferor's best knowledge, there are no
--------------
proceedings or investigations pending or threatened before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Transferor or its properties: (i) asserting the invalidity
of this Agreement, the Indenture or any of the other Basic Documents, the Notes
or the Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by this
Agreement, the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Transferor of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) which might adversely affect
the federal or state income tax attributes of the Notes or the Certificates.
(g) Chief Executive Office. The chief executive office of the
----------------------
Transferor is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
SECTION 4.02. Corporate Existence. During the term of this Agreement, the
-------------------
Transferor shall keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and shall obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby.
SECTION 4.03. Liability of the Transferor. The Transferor shall be liable
---------------------------
in accordance herewith only to the extent of the obligations specifically
undertaken by the Transferor under this Agreement.
SECTION 4.04. Indemnification. (a) The Transferor shall indemnify, defend
---------------
and hold harmless the Depositor against any taxes that may at any time be
asserted against the Depositor with respect to any sales, tangible personal
property, privilege or license taxes relating to this Agreement (but not
including any taxes asserted with respect to, and as of the date of, the
transfer of the Receivables to the Depositor or the issuance and original sale
of the Notes or the Residual Interest, or asserted with respect to ownership of
the Receivables, or federal or other income taxes) and costs and expenses in
defending against the same.
(b) The Transferor shall indemnify, defend and hold harmless the Depositor
and any of the officers, directors, employees and agents of the Depositor from
and against any loss, liability or expense incurred by reason of the
Transferor's willful misfeasance, bad faith or
12
negligence in the performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under this Agreement.
Indemnification under this Section shall survive termination of this
Agreement and the other Basic Documents and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Transferor shall have
made any indemnity payments pursuant to this Section and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to the
Transferor, without interest.
SECTION 4.05. Merger or Consolidation of, or Assumption of the Obligations
------------------------------------------------------------
of, Transferor. Any Person (a) into which the Transferor may be merged or
--------------
consolidated, (b) which may result from any merger or consolidation to which the
Transferor shall be a party or (c) which may succeed to the properties and
assets of the Transferor substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Transferor under this Agreement, shall be the successor to the Transferor
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however, that (i) immediately
after giving effect to such transaction, no representation or warranty made by
the Transferor in Section 3.01 shall have been breached (unless the applicable
breach shall have been cured in all material respects, or the applicable
Receivable shall have been purchased in accordance herewith), (ii) the
Transferor shall have delivered to the Depositor, the Owner Trustee and the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Transferor shall have delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and Indenture Trustee,
respectively, in the Receivables and reciting the details of such filings, or
(B) stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interests. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of assumption
and compliance with clauses (i), (ii), and (iii) above shall be conditions to
the consummation of the transactions referred to in clauses (a), (b) or (c)
above.
SECTION 4.06. Limitation on Liability of Transferor and Others. The
------------------------------------------------
Transferor and any director, officer, employee or agent of the Transferor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Transferor shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
13
SECTION 4.07. Notice of Events. Transferor shall give each of the Rating
----------------
Agencies prior written notice of (i) any mergers involving the Transferor, (ii)
any amendments to this Agreement and (iii) any assignment under this Agreement
as permitted by Sections 4.05 and 5.04 of this Agreement.
ARTICLE V
Miscellaneous
-------------
SECTION 5.01. Amendment. This Agreement may be amended by the parties
---------
hereto, with the consent of the Indenture Trustee, but without the consent of
any other Person; provided, however, that no such amendment shall be effective
unless either (a) the Owner Trustee and the Indenture Trustee shall have been
delivered an Opinion of Counsel to the effect that such amendment shall not
adversely affect in any material respect the interests of any Noteholder or the
Residual Interestholder, or (b) the Holders of 100% of the Outstanding Amount of
the Notes shall have consented to such amendment.
Promptly after the execution of any such amendment or consent, the
Depositor shall furnish written notification of the substance of such amendment
or consent to the Indenture Trustee and each of the Rating Agencies.
Prior to the execution of or the consent to any amendment to this
Agreement, the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of or the consent to such
amendment is authorized or permitted by this Agreement. The Indenture Trustee
may, but shall not be obligated to, consent to any such amendment which affects
the Indenture Trustee's own rights, duties or immunities under this Agreement or
otherwise.
SECTION 5.02. Protection of Title; Change of Name, Identity, Corporate
--------------------------------------------------------
Structure or Location, Etc.
--------------------------
(a) The Transferor shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Depositor, the Issuer and of the Indenture
Trustee in the Receivables and in the proceeds thereof. The Transferor shall
deliver (or cause to be delivered) to the Owner Trustee and the Indenture
Trustee file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing.
(b) The Transferor shall not change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, unless it shall
have given the Depositor, the Owner Trustee and the
14
Indenture Trustee at least five days' prior written notice thereof and shall
have promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) The Transferor shall give the Depositor, the Owner Trustee and
the Indenture Trustee at least 60 days' prior written notice of any relocation
of its chief executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall promptly file any such amendment or new financing statement.
(d) If at any time the Transferor shall propose to sell, grant a
security interest in, or otherwise transfer any interest in boat receivables to
any prospective purchaser, lender or other transferee, the Transferor shall give
(or shall cause the Servicer to give) to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been transferred by
the Transferor to the Depositor and by the Depositor to the Issuer and is owned
by the Issuer and has been pledged to the Indenture Trustee.
(e) The Transferor shall cooperate fully and in good faith with the
Servicer, the Indenture Trustee and the Boat Mortgage Trustee in order to
maintain and promote the perfection and priority of security interests in the
Financed Boats and in order to facilitate enforcement and collection of the
Receivables.
SECTION 5.03. Notices. All demands, notices, directions, communications
-------
and instructions upon, to, or by the Servicer, the Transferor, the Depositor,
the Issuer, the Owner Trustee, the Indenture Trustee or the Rating Agencies
under this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, and shall be deemed to have been duly
given upon receipt (a) in the case of the Servicer (so long as DFS is the
Servicer), to Deutsche Financial Services Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Senior Vice President/Treasurer or
Chief Legal Officer, (b) in the case of the Transferor, to Ganis Credit
Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Senior Vice President, (c) in the case of the Depositor, to Deutsche
Recreational Asset Funding Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, (d) in the case of the Issuer or the Owner
Trustee, at the Corporate Trust Office (as defined in the Trust Agreement), (e)
in the case of the Indenture Trustee, at the Corporate Trust Office, (f) in the
case of Fitch, to Fitch IBCA, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Asset-Backed Securities Surveillance Group, (g) in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Asset Backed Surveillance Department, and (h) in the case of Moody's,
to ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Moody's ABS Monitoring Group; or, as to each of the foregoing, at
such other address as shall be designated by written notice to the other Persons
listed in this Section.
15
SECTION 5.04. Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 4.05 of this Agreement, this
Agreement may not be assigned by the Transferor. The Transferor hereby
acknowledges and consents to (i) the transfer by the Depositor to the Issuer
pursuant to the Transfer and Servicing Agreement of all right, title and
interest of the Depositor in, to and under (but none of the obligations of the
Depositor under) the Transferor Conveyed Property and this Agreement, including
the representations and warranties of DFS in the DFS/Ganis Transfer Agreement
and of the Transferor in this Agreement, together with all rights of the
Depositor with respect to any breach thereof, including the right to require DFS
to purchase Receivables in accordance with the DFS/Ganis Transfer Agreement and
to require the Transferor to purchase Receivables in accordance with this
Agreement, and (ii) the other terms of and transactions contemplated by the
Transfer and Servicing Agreement and the other Basic Documents.
SECTION 5.05. Limitations on Rights of Others. The provisions of this
-------------------------------
Agreement are solely for the benefit of DFS, the Transferor, the Depositor, the
Servicer, the Issuer, the Owner Trustee, the Indenture Trustee and the
Noteholders, and, except as expressly provided in this Agreement, nothing in
this Agreement shall be construed to give to any other Person any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 5.06. Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 5.07. Separate Counterparts. This Agreement may be executed by
---------------------
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 5.08. Headings. The headings of the various Articles and Sections
--------
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 5.09. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE PERFECTION (AND THE EFFECT OF
PERFECTION OR NON-PERFECTION) OF THE INTERESTS OF ANY PERSON IN CONVEYED
PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
SECTION 5.10. Nonpetition Covenants. Notwithstanding any prior
---------------------
termination of this Agreement, the Transferor shall not acquiesce, petition or
otherwise invoke or cause the Issuer to
16
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer or the Boat Mortgage Trust
under any federal or state bankruptcy, insolvency or similar law, or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or the Boat Mortgage Trust or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Issuer or the Boat Mortgage Trust. Notwithstanding any prior termination
of this Agreement, the Transferor shall not acquiesce, petition or otherwise
invoke or cause the Depositor to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Depositor under any federal or state bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Depositor or any substantial part of its property,
or ordering the winding up or liquidation of the affairs of the Depositor.
SECTION 5.11. Waiver. Each party hereto hereby (a) acknowledges that
------
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ represents (i) DFS, the Transferor, and the Depositor in
connection with the transactions contemplated by the Basic Documents, (ii)
Affiliates of the Transferor, DFS and the Depositor in other matters, (iii)
underwriters of the Notes (and Affiliates of such underwriters) in other
matters, (iv) the institutions which are the Indenture Trustee, the Boat
Mortgage Trustee and the Owner Trustee (and Affiliates of such institutions) in
other matters, and (v) the Specified Accountants in other matters, and (b)
waives any conflict of interest relating thereto. Notwithstanding any other
provision of this Agreement, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ is entitled to rely on this
Section.
SECTION 5.12. Separate Corporate Existence. Each party hereto hereby
----------------------------
acknowledges that the Trust is entering into the transactions contemplated by
the Basic Documents in reliance upon the Depositor's identity as a legal entity
separate from DFS and the Transferor. Therefore, each of the Transferor and the
Depositor shall take all reasonable steps to make it apparent to third Persons
that the Depositor is an entity with assets and liabilities distinct from those
of DFS and the Transferor and that the Depositor is not a division of DFS, the
Transferor or any other Person. Without limiting the foregoing, each party
hereto shall operate and conduct its respective businesses and otherwise act in
a manner which is consistent with Section 10.13 of the Transfer and Servicing
Agreement.
SECTION 5.13. Submission to Jurisdiction. Each of the parties hereto
--------------------------
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Basic Document or for
recognition and enforcement of any judgment in respect thereof, to the non-
exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of such action or
17
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Person at its
address set forth in Section 5.03 or at such other address notified to the other
party to this Agreement pursuant thereto; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction.
[SIGNATURES FOLLOW]
18
IN WITNESS WHEREOF, the parties hereto have caused this Ganis/Depositor
Transfer Agreement to be duly executed by their respective officers as of the
day and year first above written.
GANIS CREDIT CORPORATION, as Transferor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
DEUTSCHE RECREATIONAL ASSET FUNDING CORPORATION,
as Depositor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
S-1