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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): April 15, 1998
ASTA FUNDING, INC.
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(Exact name of registrant as a specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-26906 22-3388607
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(Commission File Number) (IRS Employer Identification No.)
210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632
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(Address of Principal Executive Offices) Zip Code
Registrant's telephone number, including area code: 201-567-5648
Not Applicable
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(Former name of former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On April 15, 1998, E.R. Receivables Corp., L.L.C. ("ER"), a Delaware
limited liability company owned by Asta Funding, Inc. (the "Registrant"),
purchased a $6.2 million loan portfolio of consumer receivables (the
"Receivables") at a discount from Greenwich Capital Financial Products, Inc. and
Hibernia National Bank. The consumer receivables are performing and
non-performing in nature. Pursuant to the agreement, ER will service and collect
amounts owned under the Receivables.
This acquisition was financed by both a note payable to Greenwich
Financial Products, Inc. and a note payable to Asta Group, Incorporated, an
affiliate of ER.
On April 30, 1998, ER sold $2.5 million worth of the Receivables to
Sterling Financial Services Company for $2.0 million, or a premium to the
original purchase price.
The Registrant may purchase additional consumer receivables in the
future.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibits
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1. Accounts Purchase and Sale Agreement, dated as of April
15,1998, by and between ER and Greenwich Financial Products, Inc. and Hibernia
National Bank.
2. Participation Agreement, date as of April 30, 1998, by
and between ER and Sterling Financial Services Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASTA FUNDING, INC.
/s/ Gary Stern
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Gary Stern, President
Dated: May 12, 1998
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EXHIBIT 1.
ACCOUNT PURCHASE AND SALE AGREEMENT
(Performing Accounts)
This Account Purchase and Sale Agreement (hereinafter referred to as
this "Agreement") is made and entered into as of the 15th day of April, 1998, by
and between E.R. RECEIVABLES CORP, L.L.C., a Delaware limited liability company
(hereinafter referred to as "Buyer"), and GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC., a Delaware corporation ("GCFP") and HIBERMA NATIONAL BANK as successor to
ARGENTBANK, a national association ("Hibernia", which together with GCFP is
hereinafter referred to as "Seller", and every reference in this Agreement to
"Seller shall mean each of GCFP and Hibernia).
W I T N E S S E T H:
WHEREAS, pursuant to a certain Receivables Purchase Agreement dated as
of September 7, 1995 between GCFP, as Buyer, and Argentbank (now known as
Hibernia National Bank), as Seller (the "Hibernia Agreement"), GCFP purchased
from Argentbank certain receivables and related rights respecting open-end
revolving loan accounts currently owned by Hibernia;
WHEREAS, the sale of such receivables by Hibernia to GCFP
notwithstanding, under the Hibernia Agreement, Hibernia retained certain
ownership rights and obligations relative to such accounts;
WHEREAS, the portion of such receivables, specifically 2,943 accounts
having an aggregate principal balance of $6,203,430.46 as of the Cutoff Date
(defined below) which are the subject of this Agreement, are performing pursuant
to the terms of their applicable account agreements as set forth on Schedule I
attached hereto (the "Accounts");
WHEREAS, each of GCFP and Hibernia desires to sell to Buyer and Buyer
desires to purchase from Seller, all of GCFP's and Hibernia's respective
interests in and to the Accounts upon the terms and conditions set forth herein
(the transaction contemplated herein being referred to as the "Sale");
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed by and among the parties hereto as follows:
ARTICLE 1. PURCHASE AND SALE OF ACCOUNTS
1.1 PURCHASE AND SALE OF ACCOUNTS. Seller hereby agrees to sell,
transfer, and assign to Buyer without recourse or warranty except as expressly
provided herein, and Buyer hereby agrees to purchase from Seller, subject to the
terms, conditions, and provisions set forth herein, the Accounts and the Account
Materials (as hereafter defined), such Sale to be effective as of the
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close of business on the Cutoff Date (as hereafter defined). In addition, Seller
hereby agrees to sell, transfer and assign to Buyer without recourse or warranty
an additional thirty (30) accounts which have been classified by Seller as
"bankrupt" accounts and have an aggregate principal balance of $73,976.19 as of
the Cutoff Date (defined below) as set forth on ATTACHMENT 1.1 hereto.
Notwithstanding anything to the contrary contained in this Agreement, such
bankrupt accounts shall be conveyed to Buyer: (a) "As Is", without
representations or warranties of any kind, (b) for One Dollar ($1.00) and (c)
without the benefit of any repurchase or indemnity provisions set forth in this
Agreement.
1.2 PURCHASE PRICE. The purchase price for the Accounts (the "Purchase
Price") shall be $3,316,510.01 calculated as set forth on ATTACHMENT 1,2.
1.3 CUTOFF DATE. For purposes of this Agreement, the Cutoff Date shall
be the close of business on December 31, 1997 (the "Cutoff Date").
1.4 REMITTANCES TO BUYER. Any payment on the Accounts received by
Seller (or its agents or servicers) subsequent to the Cutoff Date shall be held
by Seller and, immediately following the Closing of the Sale, such amounts shall
be delivered by Seller to Buyer pursuant to Section 2.3(iv). Seller represents
that, as of April 15, 1998, such payments include: (a) $224,106.97 for the month
of January 1998, (b) $244,257.66 for the month of February 1998, and (c)
approximately $240,000 for the month of March 1998. The parties acknowledge that
the servicer of the Accounts has not provided a final report for payments
received in March, 1998. Accordingly, the parties agree to reconcile such
payment among the Seller and Buyer as soon as the report becomes available and
makes such payment to the other party no later than April 20, 1998. In addition,
if, following the Closing Date (as hereafter defined), Seller (or its agents or
servicers) shall theretofore have received after the Cutoff Date or shall
thereafter receive any payment of any kind in respect of the Accounts, Seller
(and its agents and servicers) shall as soon as practicable (that is, no later
than five (5) business days following receipt) pay over the same to Buyer in the
same form received, with such duly executed endorsement or other transfer power
of Seller as is necessary or appropriate. Until payment is made pursuant to the
preceding sentence, Seller shall hold any such payment due to Buyer hereunder as
agent for Buyer and shall have no legal, equitable or beneficial interest in
such payment.
1.5 ASSUMPTION OF LIABILITIES. Except as provided in this Agreement,
Buyer hereby assumes all obligations and liabilities which arise under all
applicable Account Materials (as defined below) or otherwise required by
applicable law relating to the administration of the Accounts, and which require
performance in the ordinary course after the Closing Date with respect to the
Accounts (the "Assumed Liabilities"); provided that, Seller shall REMAIN, and
Buyer shall not be liable for all obligations and liabilities which have arisen
under all applicable Account Materials (as defined below); (a) on or prior to
the Closing Date with respect to the Accounts or (b) which are described in
Article 11 below. GCFP and Hibernia agree to cooperate with each other in the
manner they have in the past with respect to any Seller obligations and
liabilities.
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ARTICLE 2. CLOSING
2.1 CLOSING. Subject to the satisfaction of the conditions set forth in
Sections 7 and 11 hereof, the closing of the sale and purchase of the accounts
(hereinafter, the "Closing") shall be held at the offices of GCFP at 600
Steamboat Road, Greenwich, CT 06830, on April 16, 1998, at 10:00 a.m., New York
time (the "Closing Date"), or at such time and place as Seller and Buyer shall
mutually agree. At the Closing, Buyer and Seller agree to execute at least 6
multiple originals of this Agreement and the Bill of Sale, substantially in the
form of Exhibit A hereto, by which Seller shall assign to Buyer the Accounts and
the Account Materials. Notwithstanding the foregoing, the Closing MAY occur by
facsimile transmission of signature pages of the various transactional documents
in lieu of Sellers' attendance at the Closing, provided that originally-
executed signature pages follow by reputable overnight courier service the next
following business day.
2.2 EFFECT OF FAILURE TO CLOSE THE SALE. If, at the scheduled Closing
Date, Seller fails to tender the Accounts for purchase in accordance with this
Agreement, for any reason other than the non-fulfillment of a condition set
forth in Section 7.2, or any of the conditions specified in Section 7.1 shall
not have been fulfilled to Buyer's reasonable satisfaction or waived by such
Buyer, Buyer shall, at its election, be relieved of all further obligations
under this Agreement to purchase the Accounts. If at the scheduled Closing Date
Buyer shall fail to tender payment of the Purchase Price in accordance with
Section 2.4, for any reason other than the non-fulfillment of a condition set
forth in Section 7.1, or ANY of the conditions specified in Section 7.2 shall
not have been fulfilled to Seller's reasonable satisfaction or waived by Seller,
Seller shall, at its election, be relieved of all further obligations under this
Agreement to sell the Accounts to Buyer.
The remedies described above in this Section 2.2 shall not be the
exclusive remedies available to Seller or Buyer for failure to perform the
closing conditions described herein. Neither Seller nor Buyer waive their
rights, if any, to seek DAMAGES or pursue any remedy at law or equity for such
failure.
2.3 SELLER'S OBLIGATIONS.
(i) At Closing, Seller shall deliver to Buyer a certificate executed by
the secretary of Seller certifying as to the incumbency of the officer of Seller
executing this Agreement and other documents executed in connection herewith.
(ii) Prior to or at Closing, Seller will notify its agents and
servicers, including: (a) Electronic Data System Corporation, a Delaware
corporation, with a place of business at 190 South Warner Rd., Wayne,
Pennsylvania 19087 ("EDS") and (b) the Special Assets Division of Financial
Collection Agencies, Inc., a Delaware corporation, with a place of business at
Suite 1205 The Woods, 998 Eagle School Road, Wayne, Pennsylvania 19087 ("FCA"),
that the Accounts have been transferred to Buyer, and direct its agents and
servicers to henceforth release
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all information and documents in connection with the Accounts to Buyer in
accordance with the terms of this Agreement.
(iii) At the Closing, GCFP shall deliver, or cause to be delivered, at
its sole and expense, to Buyer at such address as shall be provided to Seller in
advance ("Buyer's Office") the following documentation with respect to each
Account:
(a) A detailed schedule containing the Account number, borrower
name and last known address of each debtor (each a "Debtor",
and collectively, the "Debtors") the cut-rent balance (as of
the Cutoff Date), the original principal balance, FICO score
at time of origination, credit grade, 24 month delinquency
history and last payment date as set forth on Schedule 1
attached hereto;
(b) all Account Materials and related back-up information relating
to or evidencing the obligations of each Debtor to Seller
(including the payment history for each Account since
inception);
(c) all credit applications, original purchase orders and closing
files for each Account except for those documents identified
on the Schedule attached hereto as ATTACHMENT 2.3;
(d) all FCA collection notes for each Account since June, 1997;
(e) back-up documentation providing evidence of all charges made
by each Debtor which substantiates the actual amount owed (as
shown on Schedule 1 to this Agreement), including without
limitation, the original purchase price for the satellite dish
plus the cost of all additional equipment, warranties, service
contracts and programming agreements;
If any of such documentation is missing, Buyer shall, promptly following
discovery, notify GCFP of such deficiency(ies), whereupon: (I) GCFP shall
provide such missing documentation to Buyer on or before April 30, 1998 (the
"Transfer Date") or (II) Buyer shall have the right to cause Seller to
repurchase such Account(s) in accordance with the provisions of Section 6.1,
PROVIDED, HOWEVER, there shall be added to the repurchase price the allocable
portion of the interest paid by Buyer to Seller for such Account(s) on the
Closing Date less principal and interest received by Buyer since the Cutoff Date
(as described in subparagraph 1.2(b) above) and, PROVIDED, FURTHER, that the
"Basket" exclusion (described in such Section 6.1) shall not be applicable to
repurchases due to documentation deficiencies.
That notwithstanding, in lieu of original purchase orders (provided a copy
thereof is available), to the extent admissible as bona fide evidence of legal
indebtedness in a Court of law having jurisdiction over the subject Debtor, GCFP
may deliver to Buyer an "Affidavit of Lost Document"
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(in form and substance reasonably satisfactory to Buyer and its counsel) which
includes a customary indemnification provision indemnifying and holding harmless
Buyer, any Debtor and their respective successors and assigns, from claims of
third parties relative to any such lost purchase order (including reasonable
attorneys' fees incurred in connection therewith).
(f) Documents prepared by Buyer reasonably required in order to
assign the Accounts and Account Documents for the Account to
Buyer in form and substance reasonably satisfactory to Buyer,
including without limitation the Bill of Sale, substantially
in the form of EXHIBIT A hereto, any other transfer
instruments that may be required by the jurisdiction(s)
applicable to such Account.
(g) Other Account and credit documentation for the Account over
which Seller (or Seller's agents) have possession, custody, or
control;
(h) All other documents, instruments and work papers relating to
the Account not otherwise itemized above over which GCFP (or
GCFP's agents) have possession, custody, or control to the
extent such information is maintained on an account by account
basis (items (a) through (g) of this Section 2.3(iii) with
respect to the Accounts are referred to as the "Account
Materials"). GCFP shall, upon request by Buyer, deliver
additional copies of the Account Materials at Buyer's sole
cost and expense.
(iv) At the Closing, GCFP shall have, at its expense, arranged for the
transfer, by each of EDS and FCA to Buyer all individual Account servicing
information in a format which can be readily input into Buyer's computer
servicing system, on or before 3:00 p.m. on the Transfer Date; and
(v) Seller has not processed, and agrees not to process, any
collections due and owing after the Cut-Off Date, but will immediately forward
any payments thereafter received on the Accounts to Buyer in accordance with
Section 1.4.
(vi) In accordance with the Uniform Commercial Code ("UCC") as in
effect in the State of Louisiana, GCFP agrees to record and file, at its own
expense, a financing statement on Form UCC-1 (and continuation statements if
necessary) naming the Seller as "seller" and the Buyer as "purchaser" thereon
with respect to the Accounts for the sale of the accounts or chattel paper (as
defined in Section 9-105 of the UCC) as in effect in the State of Louisiana
meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale and assignment of the
Accounts to the Buyer, and to deliver a file-stamped copy of such financing
statements or other evidence of such filing to the Buyer on or prior to the
Transfer Date, and if any additional filing is so necessary, promptly after such
filing. The Buyer shall be under no obligation whatsoever to file such financing
statement, or to make any other
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filing under the UCC in connection with this sale. All such filings shall be the
responsibility of and at the expense of GCFP.
2.4 BUYER'S OBLIGATIONS
(i) At Closing, Buyer shall deliver to GCFP the Purchase Price in
immediately available funds sent by wire transfer to GCFP in accordance with
Seller's instructions provided in Attachment 2.4 hereto; and,
(ii) At Closing, Buyer shall deliver to Seller a certificate executed
by the secretary of the Buyer certifying as to (a) the incumbency of the officer
of the Buyer executing this Agreement and other documents executed in connection
herewith, and (b) the corporate resolutions adopted by the Buyer authorizing the
execution of this Agreement and such other documents contemplated hereby and
authorizing the consummation of the transactions contemplated hereby.
(iii) Buyer covenants to Seller that all servicing, collection and
administration of the Accounts on and after the Closing Date shall be performed
in compliance with all applicable federal and state laws and regulations.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER
3.1 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents
and warrants as of the date hereof and as of the Closing Date as follows;
(i) Buyer is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of Delaware with the
power and authority to own property and assets and duly qualified to do business
and in good standing in every jurisdiction where the failure to so qualify is
likely to have a material adverse effect on Buyer.
(ii) Buyer has full power and authority to enter into this Agreement
and to carry out its obligations hereunder, including, but not limited to, the
authority to purchase the Accounts in accordance with this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Buyer, which authorization remains in full force and effect and
has not been modified or amended by any subsequent action of such Board of
Directors, and no other actions or proceedings on the part of Buyer are
NECESSARY to authorize this Agreement or the transactions contemplated hereby.
This Agreement constitutes the valid and binding obligations of Buyer
enforceable in accordance with its terms.
(iii) The execution, delivery and performance by Buyer of this
Agreement and the consummation by it of the transactions contemplated hereby do
not require the consent, waiver, approval, license or authorization of or filing
of any notice or report with any person, entity or public authority and will not
violate, result in a breach of or the acceleration of any
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obligation under, or constitute a default under, any provision of Buyer's
organizational documents or any material indenture, mortgage, lien, lease,
agreement, contract, instrument, order, judgment, decree, law, ordinance or
regulation to which any property of Buyer is subject or by which Buyer is bound
or result in the creation or imposition of any lien, claim, charge, restriction,
equity or encumbrance of any kind whatsoever upon, or give to any other person
any interest or right in or with respect to, any of the properties, assets,
business, agreements or contracts of Buyer.
(iv) There is no litigation, proceeding, claim, demand or governmental
investigation pending or, to the knowledge of Buyer, threatened, nor is there
any order, injunction or decree outstanding against or relating to Buyer, which
would materially impair the ability of Buyer to perform its obligations
hereunder, nor does Buyer know of any reasonable basis for any such litigation,
proceeding, claim, demand or governmental investigation.
(v) Buyer has knowledge and experience in financial and business
matters that enable it to evaluate the merits and risks of the transactions
contemplated by this Agreement. Buyer has performed its own due diligence
investigation and evaluation with respect to the Accounts and the Account
Materials and has received access to all information necessary to make Buyer's
determination to enter into and to effectuate the transactions contemplated by
this Agreement. Buyer understands that Seller is not making and has not at any
time made any warranties or representations of any kind of character, express or
implied, with respect to the Accounts or the Account Materials, except as
expressly provided in this Agreement.
The representations and warranties of this Article 3 shall survive the
Closing and not merge therein.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF GCFP
4.1 REPRESENTATIONS AND WARRANTIES OF GCFP. GCFP hereby represents and
warrants as follows:
(i) As of the date hereof and as of the Closing Date, GCFP is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Delaware and in every jurisdiction where the failure to so
qualify is likely to have a material adverse effect on GCFP or the Accounts. As
of the date hereof and as of the Closing Date, GCFP, or its designee, has in
full force and effect all licenses, registrations and qualifications in all
appropriate jurisdictions necessary to conduct all activities performed with
respect to the Accounts.
(ii) As of the date hereof and as of the Closing Date, GCFP has full
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder, including, but not limited to, the authority to sell,
assign and transfer its interest in the Accounts in accordance with this
Agreement. As of the date hereof and as of the Closing Date, the execution and
delivery of this Agreement and the consummation of the transactions contemplated
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hereby have been duly authorized by all actions required of GCFP, which
authorization remains in full force and effect and has not been modified or
amended by any subsequent action of GCFP's Board of Directors, and no other
corporate actions or proceedings on the part of GCFP are necessary to authorize
this Agreement or the transactions contemplated hereby. As of the date hereof
and as of the Closing Date, this Agreement constitutes the valid and binding
obligations of GCFP enforceable in accordance with its terms.
(iii) As of the date hereof and as of the Closing Date, the execution,
delivery and performance by GCFP of this Agreement and the consummation by it of
the transactions contemplated hereby do not require the consent, waiver,
approval, license or authorization of or filing of any notice or report with any
person, entity or public authority which has not been made or obtained prior to
the Closing Date and will not violate, result in a breach of or the acceleration
of any obligation under, or constitute a default under, any provision of GCFP's
Certificate of Incorporation or By-laws or any material indenture, mortgage,
lien, lease, agreement, contract, instrument, order, judgment, decree, law,
ordinance or regulation to which any property of GCFP is subject or by which
GCFP is bound or result in the creation or imposition of any lien, claim,
charge, restriction, equity or encumbrance of any kind whatsoever upon, or give
to any other person any interest or right in or with respect to, any of the
properties, assets, business, agreements or contracts of GCFP.
(iv) As of the date hereof and as of the Closing Date, there is no
litigation, proceeding, claim, demand or governmental investigation pending or,
to the knowledge of GCFP, threatened, nor is there any order, injunction or
decree outstanding against or relating to GCFP, which could have a material
adverse effect upon any of the Accounts, result in any liability to Buyer or
materially impair the ability of GCFP to perform its obligations hereunder, nor
does GCFP know of any reasonable basis for any such litigation, proceeding,
claim, demand or governmental investigation. As of the date hereof and as of the
Closing Date, GCFP is not is default in any material respect with respect to any
order of any court, governmental authority or arbitration board or tribunal to
which GCFP is a party or is subject, and GCFP is not in violation of any laws,
ordinances, governmental rules or regulations to which it is subject, which such
default or violation is reasonably likely to materially and adversely affect any
of the Accounts or result in material cost or liability to Buyer.
(v) As of the date thereof and as of the Closing Date, the
representations, warranties and written statements made by GCFP in this
Agreement are true and correct in all material respects.
(vi) The Schedule of Accounts as set forth on the attached SCHEDULE I
and outstanding principal balances for the Accounts as of the Cutoff Date
delivered by GCFP to Buyer are true and correct in all material respects as of
such date.
(vii) As of the Closing Date, except as otherwise provided in this
Agreement, GCFP is the sole owner and holder of, and will transfer to Buyer, its
interest in the Accounts free
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and clear of all liens and encumbrances whatsoever, including all claims of
third party servicers whether contractual or arising by law, and GCFP has not
and will not make any other assignments, transfers or encumbrances in conflict
with the rights of Buyer hereunder.
(viii) As of the Cutoff Date, (A) no Account is subject to any right of
rescission, set-off, counterclaim or defense based upon a written
representation, warranty, undertaking or similar obligation relative to the
Accounts made by Seller, the distributor or the dealer to such obligor,
including the defense of usury; or (B) the operation of any of the terms of the
Account Materials or the exercise of any right thereunder in accordance with
applicable law will not render the Account Materials unenforceable, in whole or
in part, or subject them to any right of rescission, set-off, counterclaim or
defense, including the defense of usury.
(ix) As of the Cutoff Date, no Account has been settled or compromised,
no Debtor under any Account has filed for bankruptcy or other creditors' rights
proceeding nor has any Account been discharged in bankruptcy or other creditors'
rights proceeding prior to the Cutoff Date nor have the obligations of either
the Debtor or ANY guarantor with respect to any Account been held to be
unenforceable by a court or other administrative or governmental authority, nor
has the applicable statute of limitations for any Account lapsed. As of the
Cutoff Date, no Debtor under any Account is deceased.
(x) As of the Cutoff Date, the full original principal amount of every
Account will have been fully disbursed to the Debtor thereof, and there will be
no requirement for Seller or Buyer to make future advances thereunder. As of the
Cutoff Date, no Debtor under any Account is entitled to any refund of ANY
amounts paid or due pursuant to any Account or any of the Account Materials. As
of the Cutoff Date, GCFP shall have closed, or shall have caused Hibernia to
have closed, all open lines of credit under the Accounts and shall have
delivered notices to such effect to all Debtors under such Accounts.
(xi) As of the Closing Date, other than the Assumed Liabilities, there
are no claims, liabilities or obligations, of any nature or kind, whether
accrued, absolute, contingent or otherwise and whether asserted or unasserted,
known or unknown and whether due or to become due with respect to the Accounts
or servicing of the Accounts with respect to facts or circumstances prior to the
Closing Date for which Buyer will become responsible as a result of the
consummation of the transactions contemplated by this Agreement.
(xii) In addition to such other matters contemplated by this agreement,
as of the Closing Date, as heretofore disclosed by GCFP to Buyer in writing,
pursuant to certain "MMIC Agreements" with GCFP, the Accounts have been the
subject of collection activity instituted by collection and servicing agencies,
namely, EDS and FCA. Buyer shall, following the Closing Date, be subject to
claims, liabilities or obligations to such agencies for services performed with
respect to any Account, following the Cut-Off Date through April 30, 1998;
provided that such obligations shall be on the same terms and conditions as have
been afforded to Seller by EDS and FCA; provided, further, that for the period
from the Cutoff Date through April 30, 1998, Buyer's
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obligations relative to the Accounts shall not exceed an amount equal to: (A)
$140,467.08 with respect to January, February and March and such obligation
shall be paid to the Seller on the Closing Date. The foregoing notwithstanding,
Buyer shall not be subject to any claims, liabilities or obligations to such
collection and servicing agencies for services performed with respect to any
Account prior to the Cut-Off Date.
(xiii) Except for income and transfer taxes, there have been, and on
the Closing Date there will be, no local, state and federal taxes of any type or
nature due with respect to the Accounts and all interest and income relating
thereto.
(xiv) This Agreement and all matters contemplated hereby constitute a
valid sale, transfer and assignment to Buyer or all right, title and interest of
Seller in the Accounts. Seller has taken and will continue to take any and all
such actions as are necessary to grant to Buyer a first priority perfected
ownership interest in the Accounts and the proceeds thereof. Neither Seller not
any person claiming through or under Seller has any claim to or interest in the
Accounts. The sale of the Accounts is not and will not be voidable as a
fraudulent transfer. This Agreement and each transaction contemplated hereby and
thereby are and will be entered into for good and valuable consideration and not
to hinder or defraud creditors of Seller.
The representations and warranties of this Article 4 shall survive the
Closing and not merge therein for a period of two and one-half (21h) years
following the Closing Date (the "Indemnification Period").
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF HIBERNIA
5.1 REPRESENTATIONS AND WARRANTIES OF HIBERNIA. Hibernia hereby
represents and warrants as follows:
(i) As of the date hereof and as of the Closing Date, Hibernia is a
national association, duly organized, validly existing and in good standing
under the laws of the United States and in every jurisdiction where the failure
to so qualify is likely to have a material adverse effect on Hibernia or the
Accounts. As of the date hereof and as of the Closing Date, Hibernia, or its
designee, has in full force and effect all licenses, registrations and
qualifications in all appropriate jurisdictions necessary to conduct all
activities performed with respect to the Accounts.
(ii) As of the date hereof and as of the Closing Date, Hibernia has
full corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder, including, but not limited to, the authority to sell,
assign and transfer its interest in the Accounts in accordance with this
Agreement. As of the date hereof and as of the Closing Date, the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all actions required of Hibernia, which
authorization remains in full force and effect and has not been modified or
amended by any subsequent action of Hibernia's Board of Directors, and no other
corporate actions or proceedings on the part of
<PAGE>
Hibernia are necessary to authorize this Agreement or the transactions
contemplated hereby. As of the date hereof and as of the Closing Date, this
Agreement constitutes the valid and binding obligations of Hibernia enforceable
in accordance with its terms.
(iii) As of the date hereof and as of the Closing Date, the execution,
delivery and performance by Hibernia of this Agreement and the consummation by
it of the transactions contemplated hereby do not require the consent, waiver,
approval, license or authorization of or filing or any notice or report with any
person, entity or public authority which has not been made or obtained prior to
the Closing Date and will not violate, result in a breach of or the acceleration
of any obligations under, or constitute a default under, any provision of
Hibernia's Banking Charter or By-laws or any material indenture, mortgage, lien,
lease, agreement, contract, instrument, order, judgment, decree, law, ordinance
or regulation to which any property of Hibernia is subject or by which Hibernia
is bound or result in the creation or imposition of ANY lien, claim, charge,
restriction, equity or encumbrance of any kind whatsoever upon, or give to any
other person any interest or right in or with respect to, any of the properties,
assets, business, agreements or contracts of Hibernia.
(iv) As of the date hereof and as of the Closing Date, there is no
litigation, proceeding, claim, demand or governmental investigation pending, nor
has Hibernia been notified of any threatened litigation, proceeding, claim,
demand or governmental investigation, nor is there any order, injunction or
decree outstanding against or relating to Hibernia, which could have a material
adverse effect upon any of the Accounts, result in any liability to Buyer or
materially impair the ability of Hibernia to perform its obligations hereunder.
As of the date hereof and as of the Closing Date, Hibernia is not in default in
any material respect with respect to any order of any court, governmental
authority or arbitration board or tribunal to which Hibernia is a party or is
subject, and Hibernia is not in violation of any laws, ordinances, governmental
rules or regulations to which it is subject, which such default or violation is
reasonably likely to materially and adversely affect any of the Accounts or
result in material costs or liability to buyer.
(v) As of the date hereof and as of the Closing Date, the
representations, warranties and written statements made by Hibernia in this
Agreement, are true and correct in all material respects.
(vi) As of the Closing Date, except as otherwise provided in this
Agreement, Hibernia is the sole owner and holder of, and will transfer to Buyer,
its interest in the Accounts free and clear of all liens and encumbrances
whatsoever, including all claims of third party servicers whether contractual or
arising by law, and Hibernia has not and will not make any other assignments,
transfers or encumbrances in conflict with the rights of Buyer hereunder.
(vii) As of the Cutoff Date, the full original principal amount of
every Account will have been fully disbursed to the Debtor thereof, and there
will be no requirement for Seller or Buyer to make future advances thereunder.
As of the Cutoff Date, no Debtor is entitled to any refund of any amounts paid
or due pursuant to any Account or any of the Account Materials. As
<PAGE>
of the Cutoff Date, Hibernia shall have closed, or shall have caused GCFP to
have closed, all open lines of credit under the Accounts and shall have
delivered notices to such effect to all Debtors under such Accounts.
The representations and warranties of this Article 5 shall survive the
Closing and not merge therein for the Indemnification Period.
ARTICLE 6. REMEDIES
6.1 REPURCHASE OF ACCOUNTS. It is understood and agreed that the
representations and warranties set for in Articles 4, 5 and 11 shall survive the
sale of the Accounts to Buyer hereunder for the Indemnification Period and the
delivery of the Account Documents to Buyer and shall inure to the benefit of
Buyer. Following the Closing Date, upon discovery by Buyer of a breach by GCFP
or any representations or warranties which materially and adversely affects the
value of any Account, then, in such event, Buyer may elect to have GCFP
repurchase such Account by providing, during the Indemnification Period, written
notice of, and reasonable documentation establishing, such facts to GCFP (which,
with respect to the representations made by GCFP in subparagraph 4.l(viii)
hereof shall include a copy of the written dealer/distributor representation,
undertaking, warranty or similar obligation forming the basis for the alleged
breach of representation), whereupon GCFP, subject to GCFP's right to disagree
as provided below, shall repurchase promptly (and, in any event, within 15 days
of receiving such notice and documentation) such Account at a price equal to
fifty-two percent (52%) of the principal amount as of the Cutoff Date of such
Account or Accounts to be repurchased less any principal payments received
thereon by Buyer during such time Buyer owned the Account or Accounts so
repurchased; provided that, except for repurchases arising from document
deficiencies described in Section 2.3(iii), Seller shall have no such obligation
except to the extent the aggregate value of Accounts required to be repurchased
and valid indemnity claims pursuant to Section 6.2 exceed $10,000 (the "Basket")
and then only to the extent of such excess. In the event GCFP disagrees with any
provision in Buyer's notice or documentation delivered pursuant to this Section
6.1, GCFP shall, within 15 days of receipt of such notice, give Buyer written
notice of those items in the notice with which GCFP disagrees; provided,
however, that GCFP shall be obligated to remit in accordance with this Section
6. 1 to Buyer by such 15th day all payments due Buyer with respect to Accounts
for which a repurchase demand has been made and which GCFP does not dispute.
Buyer and GCFP each agree that they shall confer in good faith to resolve any
such dispute. If, within 30 days of Buyer's receipt of GCFP's disagreement
notice, the parties are unable to resolve any such dispute through good faith
efforts, either party may submit such dispute to arbitration pursuant to the
terms of Section 10.20 hereof.
At the time of repurchase, Buyer and GCFP shall arrange for the
reassignment of the Accounts to be repurchased by GCFP and the delivery to GCFP
of any and all Account Materials held by Buyer, its custodian or its services
relating to such Accounts. Upon completion of any such repurchase by GCFP, Buyer
shall, as soon as practicable, (i) forward to GCFP all servicing
<PAGE>
records and Account Materials relating to such repurchased Accounts and (ii)
such duly executed endorsement or other transfer power of Buyer as reasonably
necessary or appropriate.
6.2 INDEMNITY BY GCEP. In addition to the repurchase obligation
provided in Section 6.1, GCFP shall indemnify and hold Buyer harmless from and
against any and all claims, demands, causes of action, loss, damage,
liabilities, costs and expenses (including reasonable attorneys' fees and court
costs) of any and every kind or character, known or unknown, tired or
contingent, asserted against or incurred by Buyer at any time and from time to
time based on or grounded upon, or resulting from (i) a breach of any
representation, warranty or covenant of GCFP contained in this Agreement or (ii)
an act of misconduct by GCFP or any of their respective officers, directors,
employees, agents, servants, shareholders, successors or assigns (other than the
Buyer) on account of or arising out of this Agreement and the Accounts; provided
that Seller shall have no liability for claims except these which exceed $10,000
in the aggregate and then only to the extent of such excess. The terms and
conditions of this Section 6.2 shall expressly survive the Closing and not merge
therein.
INDEMNITY BY HIBERNIA. Hibernia shall indemnify and hold Buyer harmless
from and against any and all claims, demands, clauses of action, loss, damage,
liabilities, costs and expenses (including reasonable attorneys' fees and court
costs) of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by Buyer at any time and from time to
time based on or grounded upon, or resulting from (i) a breach of any
representation, warranty or covenant of Hibernia contained in this Agreement or
(ii) an act of misconduct by Hibernia or any of their respective officers,
directors, employees, agents, servants, shareholders, successors or assigns
(other than the Buyer) on account of or arising out of this Agreement and the
Accounts; provided that Seller shall have no liability for claims except those
which exceed $10,000 in the aggregate and then only to the extent of such
excess. The terms and conditions of this Section 6.2 shall expressly survive the
Closing and not merge therein.
6.3 INDEMNITY BY BUYER. Buyer shall indemnify and hold Seller harmless
from and against any and all claims, demands, causes of action, loss, damage,
liabilities, COSTS and expenses (including reasonable attorneys' fees and court
costs) of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by Seller at any time and from time to
time based on or grounded upon, or resulting from (i) a breach of any
representation, warranty or covenant of Buyer contained in this Agreement or
(ii) an act of misconduct by Buyer of any of its officers, directors, employees,
agents, servants, shareholders, successors or assigns on account of an arising
out of this Agreement or the Accounts. The terms and conditions of this Section
6.3 shall expressly survive the Closing and not merge therein.
<PAGE>
ARTICLE 7. CLOSING CONDITIONS
7.1 BUYER'S CONDITIONS TO CLOSING. Buyer's obligation to purchase the
Accounts at the Closing are subject to the fulfillment as of the Closing Date of
the following conditions, the waiver of which shall not be effective without
Buyer's consent in writing thereto:
(i) The representations and warranties made by Seller in Articles 4, 5
and 11 hereof shall be true and correct in all material respects when made, and
shall be true and correct in all material respects on such Closing Date;
(ii) All covenants, obligations, agreements and conditions contained in
this Agreement to be performed by Seller on or prior to such Closing Date shall
have been performed or complied with in all material respects; and
(iii) GCFP shall have paid, or arranged for the payment of, all fees
and expenses payable by them in accordance with Section 10.3 in connection with
the transactions contemplated by this Agreement.
7.2 SELLER'S CONDITIONS TO CLOSING. Seller's obligations to sell the
Accounts at the Closing are subject to the fulfillment as of the Closing Date of
the following conditions, the waiver of which shall not be effective without
Seller's consent in writing thereto;
(i) The representations and warranties made by Buyer in Section 3.1
hereof shall be true and correct in all material respects when made, and shall
be true and correct in all material respects on such Closing Date;
(ii) All covenants, obligations, agreements and conditions contained in
this Agreement to be performed by Buyer on or prior to such Closing Date shall
have been performed or complied with in all material respects; and
(iii) Buyer shall have paid, or arranged for the payment of, ail fees
and expenses payable by it in accordance with Sections 10.3 and 10.4 in
connection with the transactions contemplated by this Agreement.
ARTICLE 8. SERVICING
8.1 SERVICING RELEASED. (i) Servicing of the Accounts shall be
transferred by Seller to Buyer as of the Closing Date. As soon as practicable
following the Closing, GCFP shall use its best efforts to send, and GCFP shall
be responsible for the costs of, appropriate "goodbye letters" to all the
parties obligated on the Accounts advising them of the sale of their Account and
directing them as to the method for making future payments. Buyer shall send,
and be responsible for the costs of, similar "hello letters" within fourteen
(14) days thereafter. Such forms of letters shall be subject to the prior review
and approval of all parties.
<PAGE>
(ii) Specifically, as referenced in subparagraph 4.l(xii) above, with
respect to the servicing and collection agencies agreements: (a) GCFP will
cooperate with Buyer in giving any required notices to FCA and EDS to terminate
their agreements and to Debtors relative to the transfer of their Accounts and
(b) Buyer will maintain the EDS and FCA contracts until at least April 30, 1998
on the condition that Buyer is afforded the same terms and conditions as Seller.
(iii) Moreover, Buyer and GCFP will cooperate with Hibernia as
reasonably requested by Hibernia connection with the resolution of any matters
relating to Hibernia's interest in the Accounts, including, without LIMITATION,
promptly sending to Hibernia copies of any correspondence from any attorney or
governmental agency which may have an adverse effect on Hibernia.
ARTICLE 9. NOTICES
9.1 NOTICES. Any notice or communication required or permitted
hereunder shall be in writing, and may be given by overnight courier, registered
or certified mail and, if given by registered or certified mail, same shall be
deemed to have been given and received when a registered or certified letter
containing such notice properly addressed, and postage prepaid, is deposited in
the United States mail; and if given otherwise than by registered or certified
mail, it shall be deemed to have been given when delivered to and received by
the person to whom it is addressed. Any notice or communication shall be given
to the parties hereto at their following address:
If to Buyer:
E.R. Receivables Corp., L.L.C.
C/o Asta Funding, Inc.
210 Sylvan Avenue
Englewood Cliffs, NJ 07632
Attn: Gary Stern
Telephone: (201) 567-5648
Telecopy: (201) 569-6198
If to GCFP or to Seller:
Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Attn: Dawn Papaccio
Telephone: (203) 625-2928
Telecopy: (203) 629-4640
<PAGE>
With a copy to:
Greenwich Capital Markets
600 Steamboat Road
Greenwich, Connecticut 06830
Attn: Paul Stevelman, Esq.
Telephone: (203) 625-2756
Telecopy: (203) 629-4640
If to Hibernia:
Hibernia National Bank
P.O. Box 61540
New Orleans, Louisiana 70161
Attn: J. Patrick Gaffney, Esq.
Telephone: (504) 533-2165
Telecopy: (504) 533-5636
Any party hereto may at any time designate any other address in
substitution of the foregoing address to which such notice or communication
shall be given.
ARTICLE 10. MISCELLANEOUS
10.1 FURTHER ASSURANCES: TAX REPORTING.. The parties agree that from
time to time hereafter, and upon reasonable request, each of them will execute,
acknowledge and deliver such other instruments and documents and take such
further action as may be reasonably necessary to CARRY out the intent of this
Agreement including, without limitation, assignments reasonably requested and
obtained for the purpose of effectively transferring the Accounts to Buyer and
endorsements of contracts, affidavits or account histories reasonably required
to demonstrate Buyer's ownership of the Accounts or the Account Materials or to
assist in the collection of the Accounts. Buyer shall be responsible for
preparing and delivering all federal and state tax reports due after the Closing
Date with respect to the Accounts, PROVIDED that Seller will furnish such
information and assistance, as reasonably requested by Buyer, with respect to
any obligations with respect to federal and/or state tax reporting arising from
the Accounts.
10.2 ACCESS TO DOCUMENTS: ATTORNEY-IN-FACT, Buyer and Seller agree to
permit the other to have full and unrestricted access to all files and documents
delivered with respect to the Accounts and to copy and make excerpts therefrom
during normal business hours. Upon Closing, each of GCFP and Hibernia,
respectively, hereby irrevocably appoints Buyer and each of its officers as
their attorney-in-fact to endorse, without recourse, it's name upon any and all
notes, checks, drafts or other instruments for the payment of money received by
Buyer which are payable to GCFP or Hibernia, as the case may be, in respect to
the Accounts.
<PAGE>
10.3 EXPENSES. Each party to this Agreement shall bear its own costs
and expenses in connection with the negotiation and preparation of this
Agreement and all documents ancillary thereto, including, but not limited to,
legal, accounting and all other consulting and professional fees and expenses,
and the consummation of the transactions contemplated hereby, except as provided
in Section 10.4 below. GCFP shall indemnify and reimburse Buyer, and be
responsible for, all collection, legal, accounting and all other consulting and
professional fees and expenses incurred in connection with the administration of
the Accounts on or prior to the Cutoff Date. Buyer shall indemnify and reimburse
Seller, and be responsible for, such fees and expenses incurred in connection
with the administration of the Accounts by Seller in the ordinary course of its
business of the period between the Cutoff Date and April 30, 1998 up to the
limits set forth in subparagraph 4.l (xii) above and Buyer shall indemnify and
reimburse Seller, and be responsible for, all collection, legal accounting and
all other consulting and professional fees and expenses incurred in connection
with the administration of the Accounts on or following April 30, 1998.
10.4 TRANSFER TAXES. GCFP shall be responsible for paying, and shall
indemnify Buyer from any liability with respect to, all federal and state
TRANSFER taxes, that may be assessed in connection with the transactions
consummated pursuant to this Agreement. GCFP is not aware of any such tax
resulting from this Agreement or the matters contemplated thereby.
10.5 NO BROKER. Seller and Buyer represents to the other that neither
it nor any party acting on its behalf has incurred any liability, either express
or implied, to any "broker" or "finder" or similar person in connection with
this Agreement or any transactions contemplated hereby.
10.6 RISK OF LOSS. GCFP will bear the risk of loss of the Account
Materials until possession thereof is physically delivered to Buyer's Office as
herein provided.
10.7 NOTICE TO DEBTORS. Each of Buyer and/or GCFP, at each's respective
expense, shall give notice, or cause notice to be given to the Debtors as may be
required under the Accounts or law of the transfer of the Accounts. Notice shall
be sent to all Debtors within forty-five (45) days of the date of Closing in
accordance with the terms of the Accounts or law (as the case may be), at those
parties' last known address.
10.8 MODIFICATION. No provision contained herein may be modified,
amended or waived except by written agreement signed by the party to be bound
thereby.
10.9 BINDING EFFECT AND BENEFIT. This Agreement shall inure to the
benefit, and shall be binding upon, the parties hereto, their heirs, executions,
administrators, personal representatives, successors and permitted assigns.
10.10 HEADINGS AND CAPTIONS. Subject headings and captions are included
for convenience purposes only and shall not affect the interpretation of this
Agreement.
<PAGE>
10.11 SEVERABILITY. If any portion of this Agreement is held invalid,
illegal or unenforceable, such unenforceability shall not impair the
enforceability of the remaining terms and provisions herein.
10.12 WAIVER. No waiver of a breach or violation of any provision of
this Agreement shall operate or be construed as a waiver of any subsequent
breach.
10.13 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties and supersedes any and all other prior agreements, oral or
written, with respect to the subject matter contained herein.
10.14 GOVERNING LAW: JURISDICTION. This Agreement shall be subject to
and governed by the laws of the State of New York, without giving effect to
principles governing conflict of laws.
10.15 ATTORNEY'S FEES. If any litigation is initiated by any party
against another party relating to this Agreement or the subject matter hereof,
the party prevailing in such litigation shall be entitled to recover, in
addition to all damages allowed by law and other relief, all court costs and
reasonable attorneys-' fees incurred in connection therewith.
10.16 INCORPORATION BY REFERENCE. All Schedules, Attachments and
Exhibits referred to in this Agreement shall be deemed incorporated herein by
any reference thereto as if fully set out.
10.17 COUNTERPARTS. This Agreement may be executed in counterparts each
of which shall be deemed an original when each of the parties has executed a
counterpart, but all of which together shall constitute one and the same
instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than one counterpart.
10.18 THIRD PARTY BENEFICIARIES. This Agreement shall not create any
rights for the benefit of any third party.
10.19 ASSIGNMENT. This Agreement shall not be assigned by any party
without the prior written consent of the other party(ies). Notwithstanding the
foregoing and any other provisions of this Agreement to the contrary, Buyer may
assign this Agreement, any rights thereunder (including Seller's obligations
under Articles 4, 5, 6 and 11), and/or one or more Account(s) to any third party
upon ten (10) days advance written notice to Seller.
ARTICLE 11. SPECIAL PROVISIONS
11.1 RETENTION OF ACCOUNTS. With respect to the accounts described on
Attachment 11.1 hereto, which shall be retained by the Seller hereunder, the
Buyer agrees to service such accounts as a contract servicer for the benefit of
the Seller in accordance with customary servicing procedures of prudent lenders.
The Buyer shall not be purchasing such accounts and will have no liability for
those accounts (other than in connection with negligently servicing such
accounts).
<PAGE>
The sole servicing compensation payable to the Buyer in connection with the
Buyer's agreement to service such accounts shall be 10% of all amounts collected
on such accounts.
11.2 TERMINATION OF EDS AND FCA. In addition to the transfer of the
Accounts as contemplated by Section 2.3(iv), Seller shall terminate the
relationship with EDS and FCA on or before April 30, 1998. Moreover, as a
further condition to the Closing, Seller shall obtain from each of EDS and FCA,
and deliver the same to Buyer, a release of Buyer, GCFP and Hibernia, from any
further liabilities or claims relative to the Accounts and all matters relating
thereto.
11.3 PORTFOLIO INFORMATION. The schedules, attachments, exhibits,
reports, written statements and/or certificates, and all information contained
therein, provided by GCFP to Buyer are true and correct in all material
respects. The foregoing consists of:
(a) the Aging Schedule for all Accounts for the period between
August 1997 through and including December 1997 attached
hereto as Schedule 2 (and, for purposes of this
representation, such representation shall include that: (i)
all such Accounts designated thereon as "0-29 days" are
contractually current (an Account designated as "0-29 days"
shall mean an Account with respect to which, as of the
Cut-off Date, the principal and interest payment thereunder
was not delinquent in excess of 29 DAYS) and (ii) there have
been no re-aging(s) of such Accounts since their inception
by any party other than to correct an error in posting),
(b) the original FICO scores and other credit grades of each
Debtor, and
(c) the payment histories for each of the Accounts.
11.4 SATELLITE DISH EQUIPMENT WARRANTIES AND MAINTENANCE. In the event
the debtor of any Account refuses to pay any portion of a monthly payment, or
otherwise compromises or sets-off its Account, as a result of (a) a defect or
malfunction of any equipment FINANCED under the Account and (b) such defect or
malfunction is covered by an extended warranty contract financed under the
Account and (c) the extended warranty provider is insolvent or has otherwise
ceased doing business, GCFP will, upon request of the Buyer, at GCFP's option
either (i) repurchase the Account at a price equal to 52% of the principal
amount as of the Cut-off Date of such Account, (ii) pay any costs associated
with repairing the equipment to the satisfaction of the debtor or (iii) promptly
notify Buyer of the identity and contract information of the successor warranty
providers (or insurance company providers), if any, will honor the extended
warranty contract in question. If GCFP opts to repurchase the Account, GCFP's
repurchase price will be reduced by the aggregate amount of principal payments
received by the Buyer in respect of the Account through and including the date
of repurchase. Buyer shall be entitled to retain any payments of interest
collected on the account through the date of repurchase. Any payments of
principal and/or interest received by Buyer on such Account following the date
of repurchase will be remitted to GCFP; provided that Seller shall have no
liability for such claims, or to repurchase such Accounts, except
<PAGE>
after the $10,000 threshold for the Basket under Section 6.1 has been satisfied
and an aggregate of $25,000 of claims under this Section 11.4 have been made,
and then only to the extent of such excess over such aggregate $35,000
threshold.
11.5 ACCOUNT WARRANTIES AND INSURANCE. GCFP represents and warrants
that attached hereto as Attachment 11.5 is a materially true and correct
schedule setting forth all the extended warranties and/or agreements made by
such dealer or distributor to any Debtor. Seller hereby assigns and transfers
(to the extent it exists) to Buyer all its rights, remedies, powers and
privileges of Seller under those certain warranties, and in that regard, GCFP
will take such acts as may be necessary to ensure that any such warranty
provider recognizes Buyer as successor to Seller in such regard.
11.6 ACCOUNT CONTRACTS. Seller represents and warrants that only one of
three form MMIC Account Agreements were entered into with a Debtor in respect of
each Account. Such forms are attached to this Agreement as Attachments 11.6(A),
(B) and (C), respectively. In that regard:
(i) Seller knows of no other form contract evidencing the terms of each
Debtor's indebtedness, and to the extent such additional agreements are
discovered by Buyer which have a material adverse effect on the enforceability
of any Account(s), such Account(s) shall be eligible for repurchase under the
terms of Section 6.1; and
(ii) As a condition to the Closing, Seller shall deliver to Buyer an
opinion from the McGlinchey Stafford firm, subject to customary legal opinion
exclusions, in form and substance reasonably satisfactory to Buyer and its
counsel, to the effect that under Louisiana law, the original MMIC Application
for Credit signed by a Debtor (or a copy thereof) presented to a court of law
having jurisdiction over such Debtor together with an unsigned, blank form
reverse side MMIC Account Agreement (annexed to this Agreement as Attachment
11.6(A), (B) or (C), as applicable) constitutes sufficient legal evidence of an
enforceable, contractual obligation of the Debtor; and
(iii) As a further condition to Closing, GCFP will deliver to Buyer at
least fifty (50) blank form copies of each of Attachments 11.6(A), (B) and (C)
to facilitate Buyer's enforcement of the Accounts through legal proceedings or
otherwise.
11.7 TRANSFER OF HIBERNIA CONTRACT. Effective as of the Cutoff Date,
GCFP hereby assigns and transfers to Buyer without recourse all rights,
remedies, powers and privileges of GCFP under the Hibernia Agreement, a copy of
which is annexed hereto as Attachment 11.8. Notwithstanding anything contained
to the contrary in the Hibernia Agreement, Hibernia hereby consents to the
transfer of such rights to Buyer and agrees to acknowledge and recognize Buyer
as successor to GCFP's rights thereunder. Buyer acknowledges and agrees that it
shall enforce any of its rights and remedies pursuant to the Hibernia Agreement
solely against Hibernia and not through GCFP.
<PAGE>
The representations and warranties of this Article 11 shall survive the Closing
and not merge therein for a period of two and one-half (21H) years following the
Closing Date and shall be subject to the repurchase and indemnification
provisions of paragraphs 6.1 and 6.2, respectively.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first above written.
SELLERS:
GREENWICH CAPITAL FINANCIAL HIBERNIA NATIONAL BANK as
PRODUCTS, INC. successor to ARGENTBANK
BY: Dawn M. Papaccio BY: Paul A. Cuevas
------------------------ ----------------------
Vice President Vice President
BUYER:
E.R. RECEIVABLES CORP., L.L.C.
By: ________________
Name:
Title:
<PAGE>
STATE OF CONNECTICUT )
) ss.
COUNTY OF FAIRFlELD )
This Account Purchase and Sale Agreement was acknowledged before me on
the day of April 1998, by Dawn Papaccio as a Vice President of Greenwich Capital
Financial Products, Inc., a Delaware corporation.
Notary Public
STATE OF LOUISIANA )
) ss.
PARISH OF EAST BATON ROUGE )
This Account Purchase and Sale Agreement was acknowledged before me on
the day of April, 1998, by Paul A. Cuevas as a Vice President of Hibernia
National Bank, a national association.
Notary Public
STATE OF NEW JERSEY )
) ss.
COUNTY OF )
This Account Purchase and Sale Agreement was acknowledged before me on
the day of April, 1998, by ______________ as a _________________ of E.R.
Receivables Corp., L.L.C., a Delaware limited liability company.
Notary Public
<PAGE>
SELLER'S WIRE INSTRUCTIONS
--------------------------
Greenwich Capital Financial Products, Inc.
Chase Manhattan Bank
ABA #021000021
Acct #140095961
ATTACHMENT 2
<PAGE>
BILL OF SALE AND ASSIGNMENT OF ACCOUNTS
---------------------------------------
Greenwich Capital financial Products, Inc., a Delaware corporation and Hibernia
National Bank, a national association (collectively "Assignor" or "Seller")'
hereby absolutely sell, transfer, assign, set over and convey to E.R.
Receivables Corp., L.L.C. a Delaware limited liability company ("Assignee")
without recourse and without representations or warranties, express or implied,
of any type, kind or nature except as expressly contained in the "Agreement"
(defined below):
(i) all of Assignor's right, title and interest in and to each of the
Accounts identified in the Accounts Schedule attached hereto as Exhibit "A" (the
"Accounts"), together with all promissory notes, any other evidence of
indebtedness and the Account Materials related thereto, if any; and
(ii) all principal, interest or other proceeds of any kind with respect
to the Accounts, but excluding any payments or other consideration received by
or on behalf of Assignor prior to December 31, 1997, with respect to the
Accounts.
This Bill of Sale is being executed and delivered pursuant to and in accordance
with the terms and provisions of that certain Account Purchase and Sale
Agreement made and entered into by and between the Assignor, as seller and the
Assignee, as purchaser, dated as of April 15, 1998 (the "Agreement"). The
Accounts are defined and described in the Agreement and are being conveyed
hereby subject to the terms, conditions and provisions set forth in the
Agreement.
This Bill of Sale shall be governed by the laws of the State of New York without
regard to the conflicts-of-laws rules thereof.
Dated :__________________
ASSIGNORS:
GREENWICH CAPITAL FINANCIAL HIBERIA NATIONAL BANK as
PRODUCTS, INC. successor to ARGENTBANK
By:
Name:
Title:
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STATE OF CONNECTICUT )
) ss:
COUNTY OF FAIRFIELD )
This Bill of Sale was acknowledged before me on the______day of April,
1998, by Dawn Papaccio as a Vice President of Greenwich Capital Financial
Products, Inc., a Delaware corporation.
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Notary Public
STATE OF LOUISIANA )
) ss:
PARISH OF EAST BATON ROUGE )
This Bill of Sale was acknowledged before me on the _______ day of
April, 1998, by Paul A. Cuevas as a Vice President of Hibernia National Bank, a
national association.
-------------------------
Notary Public
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EXHIBIT 2.
PARTICIPATION AGREEMENT
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AGREEMENT, made as of this 30th day of April, 1998, by and between
STERLING FINANCIAL SERVICES COMPANY, a division of Sterling Bancorp., a New York
corporation, having offices at 500 Seventh Avenue, New York, New York 10018
(hereinafter referred to as "Sterling") and E.R. RECEIVABLES CORP., LLC, a New
Jersey limited liability company, having its principal place of business at 210
Sylvan Avenue, Englewood Cliffs, New Jersey 07632, hereinafter referred to as
"Seller").
WHEREAS, Seller has purchased a certain consumer loan portfolio of
Argent Bank ("Argent") containing approximately 3,000 accounts having an
aggregate outstanding principal balance of approximately $5,800,000, as set
forth in the schedule annexed hereto as Exhibit A (the "Accounts"), from
Greenwich Capital Financial Products, Inc. ("GCFP") and Argent for the sum of
$ (the "Purchase Price"), pursuant to a certain Purchase and Sale
Agreement (the "Purchase Agreement"), a copy of which is annexed hereto as
Exhibit B; and
WHEREAS, Seller has agreed to sell to Sterling and Sterling has agreed
to purchase from Seller a forty-three and three quarters(43.752) percent
participation in the ACCOUNTS and the proceeds thereof, for the sum of Two
Million ($2,000,000~00) Dollars (the "Investment"); and
WHEREAS, Sterling and Seller desire that: the Accounts be serviced and
enforced in accordance with the terms and provisions set forth in this
Agreement.
NOW, THEREFORE, Sterling and Seller hereby agree as follows:
1. PARTICIPATION INTEREST. A. sterling and Seller agree to participate
in the Accounts, including the proceeds thereof, and any and all collateral
pledged to secure any individual account thereof.
B. Simultaneously with the execution of this Agreement, Sterling shall
deliver to Seller in immediately available funds the sum of $2,000,000.00
representing its Investment in the Accounts.
C. The Participation Interest of sterling shall constitute
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an undivided interest in the Accounts SET forth on Exhibit C, including without
limitation, all sales contracts, loan agreements, notes, collateral, mortgages,
SECURITY agreements, guaranties and all other documents and instruments executed
and delivered by or on behalf OF any of the account debtors obligated on such
Accounts to evidence and secure the indebtedness of such account debtors, in all
payments of interest and principal and any other charges paid in respect of such
Accounts, and in any RECOVERIES or distributions in respect of such Accounts.
The foregoing shall be held in the name of Seller for itself and as agent and
trustee Par Sterling.
D. Commencing on the date hereof, Sterling shall receive as
compensation, from the LIQUIDATION proceeds of the Accounts included on Exhibit
C, interest on its Investment at the Base Rate of Sterling National Bank in
effect from time to time plus five percent: (5%) per annum.
2. COLLATERAL SECURITY. Sterling's Investment and interest due thereon,
shall be secured solely by, and Seller hereby grants to Sterling a continuing
general lien and first priority security interest on the Accounts listed on
Exhibit C. seller agrees to deliver to Sterling such instruments and documents,
including VCC-1 financing statements, as Sterling shall reasonably request for
the purpose of perfecting such security interest.
3. ADMINISTRATION OF THE ACCOUNTS
A. Sterling shall manage the Account a and perform all billing
functions and payment processing for the Accounts. Seller shall cause the
proceeds of all Accounts to be paid directly to Sterling. Neither Sterling nor
its officers, directors, employees or attorneys shall be liable for any acts
taken or omitted to be taken with respect to the management, billing and payment
processing of and for the Accounts! or with respect to Seller's interest in the
proceeds of Accounts, excepting only gross negligence or willful misconduct.
B. Seller shall perform all required collection activity to liquidate
the Accounts and enforce its rights and remedies under the various loan document
a which comprise the Accounts. In conducting collection activity, Seller shall
exercise the same level of care that it would exercise if the Accounts had not
been subject to a participation agreement. Seller shall act as
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principal for itself and as trustee for Sterling solely for purposes of
collecting and DISTRIBUTING the sums received by it.
C. The parties agree that all proceeds and collections (`Collections")
received by Sterling or Seller in respect of the Accounts from all sources,
whether before or after the default of any account debtor included therein, or
the realization on any collateral security in respect of any Account, shall, be
distributed monthly in the following order of priority:
(i) to Sterling, to the extent such Collections apply to Accounts
included on Exhibit C;
(ii) to Seller, to the extent such Collections apply to Accounts not
included on Exhibit C.
4. CONSENT OF STERLING. Seller shall not take any of the following
actions without the prior written consent of Sterling: (a) consent to or permit
the substitution, withdrawal or release of any collateral or other security
securing the obligations of any account debtor included in the Accounts; (b)
amend or modify the terms of any loan agreement and/or any other documents or
instruments securing and evidencing the obligations of any account debtor
included in the Accounts; or (c) consent to the sale or the transfer of any of
the Accounts to a third party.
5. EXPENSES. All losses and expenses (other than normal administrative
and collection expenses and expenses incurred in connection with actions or
proceedings brought by or against individual account debtors) including but not
limited to, reasonable counsel fees, costs and disbursements, paid or incurred
by either party in taking any action to enforce or collect any or all of the
Accounts or to settle or satisfy any action, proceeding, judgment, claim or
demand of any kind brought or asserted against Seller or Sterling in respect of
the Accounts shall be borne by seller and sterling in PROPORTION to their
respective Participation interests.
6. REPRESENTATIONS AND ACKNOWLEDGEMENTS. Sterling and Seller each
represent and acknowledge to each other that:
A. It is acquiring its Participation interest for its own account and
not as a nominee or agent for any other person, and
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has no intention of distributing or reselling such participation interest or any
part thereof in any transaction that would be in violation of the securities
laws of the United States of America or any state thereof;
B. It has been furnished, during the course of this transaction, with
all information regarding the Accounts which it has requested ox desired to
know; that all documents which could be reasonably provided have been made
available for its inspection and review; that it has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers and/or other representatives of __________concerning the terms and
conditions of the Accounts and any additional information which it had
requested.
7. DEFAULT BY ACCOUNT DEBTORS. Upon a default by an account debtor,
Seller shall be authorized to take appropriate action on behalf of itself and
Sterling to enforce and protect the rights of Seller and Sterling. Seller shall
keep Sterling informed with respect to all such ACTION taken by it on a regular
basis and shall respond to all reasonable requests by Sterling for such
information
8. SELECTION OF COUNSEL. Seller shall have sole and absolute discretion
in the selection of legal counsel, independent certified accountants, appraisers
or experts and all other matters pertaining to the enforcement of the rights
under the Accounts.
9. TRANSFER OF PARTICIPATION INTERESTS No party shall assign, sell or
transfer all or any part of its Participation Interest to a non-party to this
Agreement (the "Purchaser"), unless it shall first: offer the same in writing
irrevocably for at least thirty (30) days, to the other party hereto at the same
price and terms as shall have been offered by the Purchaser. The non-selling
party shall have the right to purchase the selling party's Participation
Interest at such price and terms by giving written notice to the selling party
within such 30-day period. The closing of such purchase and sale shall take
place within three business days after receipt of such notice. If the
non-selling party does not offer to purchase the selling party's participation
Interest as provided for herein, or if, having accepted the offer, the
non-selling party does not close as
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provided for herein, the selling party shall have the right to complete the
transfer to the Purchaser. The foregoing notwithstanding, Sterling shall be
permitted to transfer its Participation Interest to an affiliate, subsidiary, or
sub-subsidiary of Sterling Bancorp without being required first to offer to
sell such interest to Seller.
10. APPLICABLE LAW. JURISDICTION. This Agreement has been executed and
delivered and shall be construed and enforced in accordance with the laws of the
State of New York, including, but not limited to, matters of construction,
validity and performance. Any dispute arising out of this Agreement, or the
breach thereof, shall be resolved by litigation commenced in the federal or
state courts located in the State of New York, County of New York. Each party
hereto irrevocably submits to the personal jurisdiction of any such court in
connection with such legal action, and waives, to the fullest extent it may do
so under law, any objections that it may now or hereafter have to the laying of
venue with such courts. Each party further waives its right to trial by jury.
11. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter hereof, and may not be
modified or amended, except by another agreement in writing duly executed by the
parties hereto.
12. PARTIES IN INTEREST. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
13. SEVERABILITY. In the event that any one or more of the provisions
of this Agreement shall be deemed to be illegal or unenforceable, such
illegality or unenforceability shall not affect the validity or enforceability
of the remaining legal and enforceable provisions hereof which shall be
construed as if such illegal or unenforceable provisions had not been inserted.
14. NOTICES. All notices, exercises of right, requests, demands and
other communications provided for in this Agreement shall be in writing, and
unless otherwise specifically provided for herein shall be deemed to have been
given at the time (i) when mailed at ANY general or branch United States post
office enclosed in a registered or certified post-paid envelope, return
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receipt requested, (ii) delivered in person, or (iii) delivered by a recognized
national overnight delivery service, and addressed to the parties at the
addresses set forth at the head of this Agreement or to such changed addresses
as such parties may have fixed by notice; provided, however, that any change of
address shall be effective only upon its receipt.
15. HEADINGS The headings of the paragraphs of this Agreement have been
inserted for convenience of reference only and shall, in no way, restrict or
otherwise affect the construction of the terms and provisions hereof.
16. EXECUTION. This Agreement may be executed in one or more
counterparts and each of such counterparts shall, for all purposes, be deemed to
be an original, but all of such counterparts shall together constitute but one
and the same instrument.
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IN WITNESS WHEREOFF, the parties hereto have executed this Agreement by
their duly authorized officers on the day and year first above written.
STERLING FINANCIAL SERVICES CO.
By:__________________________
John Murphy, President
E.R. RECEIVABLES CORP., LLC
By: _________________________
Gary Stern, President
