SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 28, 1999
(Date of earliest event reported)
DVI Receivables Corp., VIII
(Exact name of registrant as specified in its charter)
Delaware 333-74901 25-1824148
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(State or Other Juris- (Commission (I.R.S. Employer
diction of Incorporation) File Number) Identification No.)
500 Hyde Park, Doylestown, Pennsylvania 18901
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code:(215) 345-6600
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Item 5. Other Events.
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The registrant has entered into the material agreements
exhibited below.
Item 7. Financial Statements, PRO FORMA Financial Information and Exhibits
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(a) Financial Statements.
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Not applicable.
(b) PRO FORMA Financial Information.
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Not applicable.
(c) Exhibits
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1.1 Underwriting Agreement, dated as of October 21, 1999, by
and among Lehman Brothers Inc., Prudential Securities Incorporated, Banc One
Capital Markets, Inc., DVI Receivables Corp. VIII, DVI Receivables X, L.L.C.,
DVI Receivables Corp. X and DVI Financial Services Inc.
3.1 Amended and Restated Certificate of Incorporation of DVI
Receivables Corp. VIII.
4.1 Amended and Restated Indenture, dated as of June 1, 1999
between DVI Receivables X, L.L.C., as Issuer, and U.S. Bank Trust National
Association, as Indenture Trustee, and Appendix A thereto.
4.2 Amended and Restated Limited Liability Company Operating
Agreement, dated as of June 1, 1999, by and between DVI Receivables Corp. VIII
and DVI Receivables X, L.L.C.
4.3 Amended and Restated Contribution and Servicing Agreement,
dated as of June 1, 1999, between DVI Financial Services Inc., as Contributor,
and DVI Receivables Corp.
X,
as Transferor.
4.4 Amended and Restated Subsequent Contract Transfer
Agreement, dated as of June 1, 1999 between DVI Receivables Corp. X and DVI
Receivables X, L.L.C.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on behalf of the
Registrant by the undersigned thereunto duly
authorized.
DVI RECEIVABLES CORP.VIII
By: /s/ Lisa J. Cruikshank
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Name: Lisa J. Cruikshank
Title: Vice President
Dated: November 12, 1999
EXHIBIT 1.1
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$31,483,000 6.17% ASSET-BACKED NOTES, SERIES 1999-2, CLASS A-1
$42,182,000 6.54% ASSET-BACKED NOTES, SERIES 1999-2, CLASS A-2
$65,098,000 6.83% ASSET-BACKED NOTES, SERIES 1999-2, CLASS A-3
$99,051,000 7.22% ASSET-BACKED NOTES, SERIES 1999-2, CLASS A-4
$ 4,054,000 7.30% ASSET-BACKED NOTES, SERIES 1999-2, CLASS B
$ 8,107,000 7.48% ASSET-BACKED NOTES, SERIES 1999-2, CLASS C
$ 5,405,000 8.25% ASSET-BACKED NOTES, SERIES 1999-2, CLASS D
UNDERWRITING AGREEMENT
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October 21, 1999
LEHMAN BROTHERS INC.
Three World Financial Center
New York, New York 10285
PRUDENTIAL SECURITIES INCORPORATED
One New York Plaza
New York, New York 10292
BANC ONE CAPITAL MARKETS, INC.
One Bank One Plaza
Chicago, Illinois 60670
Ladies and Gentlemen:
DVI Receivables Corp. VIII (the "MANAGING MEMBER"), as sole owner of all of
the membership Units interest in DVI Receivables X, L.L.C. (the "ISSUER"), the
Issuer, DVI Receivables Corp. X (the "TRANSFEROR") and DVI Financial Services
Inc. (the "CONTRIBUTOR" or "SERVICER"), hereby agree with the Underwriters
(defined below) as follows:
Section 1. ISSUANCE AND SALE OF NOTES. The Issuer proposes to issue and
sell $31,483,000 (the "CLASS A-1 INITIAL PRINCIPAL AMOUNT") of 6.17% Class A-1
Asset-Backed Notes (the "CLASS A-1 NOTES"); $42,182,000 (the "CLASS A-2 INITIAL
PRINCIPAL AMOUNT") of 6.54% Class A-2 Asset-Backed Notes (the "CLASS A-2
NOTES"); $65,098,000 (the "CLASS A-3 INITIAL PRINCIPAL AMOUNT") of 6.83% Class
A-3 Asset-Backed Notes (the "CLASS A-3 NOTES"), $99,051,000 (the "CLASS A-4
INITIAL PRINCIPAL AMOUNT") of 7.22% Class A-4 Asset-Backed Notes (the "CLASS A-4
NOTES," together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "CLASS A NOTES"); $4,054,000 (the "CLASS B INITIAL PRINCIPAL AMOUNT")
of 7.30% Class B Asset-Backed Notes (the "CLASS B NOTES"); $8,107,000 (the
"CLASS C INITIAL PRINCIPAL AMOUNT") of 7.48% Class C Asset-Backed Notes (the
"CLASS C NOTES"); $5,405,000 (the "CLASS D INITIAL PRINCIPAL AMOUNT") of 8.25%
Class D Asset-
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Backed Notes (the "CLASS D NOTES"; together with the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the
Class C Notes, the "NOTES"). The Notes will be issued pursuant to an Amended and
Restated Indenture, dated as of June 1, 1999 (the "INDENTURE"), between the
Issuer and U.S. Bank Trust National Association, a national association (the
"TRUSTEE"). The Notes are more fully described in the Prospectus Supplement (as
defined below), a copy of which the Managing Member is furnishing to the
Underwriters. The Notes will evidence secured obligations of the Issuer. The
assets of the Issuer will include a pool of leases, loans and other contracts
and security interests in the related underlying Equipment.
The Notes will be sold by the Issuer to the Underwriters listed on Schedule
A hereto (the "UNDERWRITERS") in accordance with the terms of this agreement.
The terms which follow, when used in this Agreement, shall have the
meanings indicated:
"INITIAL PRINCIPAL AMOUNT" means the sum of the Class A-1 Initial Principal
Amount, the Class A-2 Initial Principal Amount, the Class A-3 Initial Principal
Amount, the Class A-4 Initial Principal Amount, the Class B Initial Principal
Amount, the Class C Initial Principal Amount and the Class D Initial Principal
Amount.
"UNDERWRITING INFORMATION" has the meaning given to such term in SECTION
8(B).
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in APPENDIX I to the Indenture.
Section 2. PURCHASE AND SALE OF NOTES.
(a) Subject to the terms and conditions and in reliance upon the covenants,
representations and warranties set forth herein, each of the Underwriters agrees
to purchase from the Issuer the Initial Principal Amount of the Notes pursuant
to the terms of this Agreement on the Closing Date at a purchase price equal to
the aggregate of the Initial Principal Amount of each class of Notes purchased
by such Underwriter times the applicable Underwriter's discount (the "Purchase
Price") set forth on Schedule A attached hereto.
(b) The obligations of each of the Underwriters hereunder to purchase the
respective Notes of each Class shall be several and not joint. Each
Underwriter's obligation shall be to purchase the aggregate principal amount of
Notes of the related class as is indicated with respect to each Underwriter on
Schedule A attached hereto. The rights of the Issuer and any Non-Defaulting
Underwriter shall be as set forth in Section 13 hereof.
(c) It is understood that the Underwriters propose to offer the Notes for
sale to the public in the manner set forth in the Prospectus Supplement (as
defined below).
Section 3. DELIVERY AND PAYMENT. Delivery of and payment for the Notes
purchased by the Underwriters shall be made at the offices of Thacher Proffitt &
Wood, at Two World Trade Center, 39th Floor, New York, New York, on the Closing
Date, or such other place and time as the parties hereto agree. Delivery of the
Notes shall be made against payment of the purchase price in
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immediately available funds drawn to the order of the Issuer or as it shall so
direct. The Notes to be so delivered will be initially represented by one or
more Notes registered in the name of Cede & Co., as nominee for The Depository
Trust Company. The interests of beneficial owners of the Notes will be
represented by book entries on the records of the Note Registrar and
participating members thereof. Definitive Notes will be available only under
limited circumstances described in the Indenture.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE MANAGING MEMBER AND THE
ISSUER.
(a) Each of the Managing Member or the Issuer, as the case may be, hereby
severally represents and warrants to, and agrees with, the Underwriters as
follows:
(i) The Managing Member has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement (No. 333-74901) on
Form S-3 for the registration under the Securities Act of 1933, as amended
(the "ACT"), of Asset Backed Securities (issuable in series), including the
Notes, which registration statement has become effective, and a copy of
which, as amended to the date hereof, has heretofore been delivered to you.
The Managing Member proposes to file with the Commission pursuant to Rule
424(b) under the rules and regulations of the Commission under the Act (the
"1933 ACT REGULATIONS") a supplement dated October 25, 1999 (the
"PROSPECTUS SUPPLEMENT"), to the Prospectus dated July 12, 1999 (the "BASIC
PROSPECTUS"), relating to the Notes and the method of distribution thereof.
Such registration statement (No. 333-74901) including exhibits thereto and
any information incorporated therein by reference, as amended at the date
hereof, is hereinafter called the "REGISTRATION STATEMENT"; and the Basic
Prospectus and the Prospectus Supplement and any information incorporated
therein by reference, together with any amendment thereof or supplement
thereto authorized by the Managing Member on or prior to the Closing Date
for use in connection with the offering of the Notes, are hereinafter
called the "PROSPECTUS."
(ii) The Registration Statement has become effective, and the
Registration Statement as of the effective date (the "EFFECTIVE DATE"), and
the Prospectus, as of the date of the Prospectus Supplement, complied in
all material respects with the applicable requirements of the Act and the
1933 Act Regulations; and the Registration Statement, as of the Effective
Date, did not contain any untrue statement of a material fact and did not
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading and the Prospectus, as of the
date of the Prospectus Supplement, did not, and as of the Closing Date will
not, contain an untrue statement of a material fact and did not and will
not omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that neither the Managing Member, the
Transferor, the Issuer, the Contributor nor the Servicer makes any
representations or warranties as to the Underwriting Information. The
conditions to the use by the Managing Member of a registration statement on
Form S-3 under the Act, as set forth in the General Instructions to Form
S-3, have been satisfied with respect to the Registration Statement, as
applicable, and the Prospectus, except that the Managing Member makes no
such representation regarding any Computational Materials (as defined
herein) incorporated by reference therein. There are no contracts or
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documents (not including Computational Materials) of the Managing Member
which are required to be filed as exhibits to the Registration Statement
pursuant to the Act or the 1933 Act Regulations which have not been so
filed.
(iii) This Agreement has been duly authorized, executed and delivered
by the Managing Member and the Issuer and constitutes a legal, valid and
binding agreement of the Managing Member and the Issuer enforceable in
accordance with its terms, except that the provisions hereof relating to
indemnification of the Underwriters may be subject to limitations of public
policy.
(iv) Each of the Transaction Documents to which the Managing Member
or the Issuer is a party have been duly authorized by the Managing Member
or the Issuer, as the case may be and each of the Managing Member and the
Issuer has the power, authority and legal right to execute, deliver and
perform its respective obligations under each of the Transaction Documents
to which it is a party and to consummate all transactions contemplated
thereunder, and, when executed and delivered by the Managing Member or the
Issuer, each of the Transaction Documents to which it is a party will
constitute the legal, valid and binding obligation of the Managing Member
or the Issuer, as the case may be, enforceable in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(v) The direction by the Issuer to Trustee to authenticate the Notes
has been duly authorized by the Issuer and, when duly and validly
authenticated by Trustee and delivered in accordance with the Indenture and
this Agreement, the Notes will be the legal, valid and binding obligations
of the Issuer, enforceable in accordance with their terms, and entitled to
the benefits of the Indenture, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought.
(vi) The sale of the Notes and the performance by the Managing Member
or the Issuer, as the case may be, of this Agreement and the Transaction
Documents to which the Managing Member or the Issuer is a party will (A)
not conflict with or result in a breach of, and will not constitute a
default under any of the provisions of, its respective certificate of
incorporation or limited liability company operating agreement any law,
governmental rule or regulation, or any judgment, decree or order binding
on the Managing Member or the Issuer or either of their respective
properties, or any of the provisions of any indenture, mortgage, deed of
trust, contract or other agreement or instrument to which the Managing
Member or the Issuer, as the case may be, is a party or by which it is
bound and (B) not result in the creation or imposition of any adverse claim
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the sale of the Notes or the consummation by the Managing
Member or the Issuer, as the case may be, of the transactions contemplated
by this Agreement, except such consents, approvals, authorizations,
registrations or qualifications as may be required under
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the Act and under state securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by the Underwriters.
(vii) Neither the Managing Member nor the Issuer is, or will be,
subject to registration as an "investment company" under the Investment
Company Act of 1940 (the "1940 ACT").
(viii) the Issuer is a Delaware limited liability company duly
organized, validly existing and in good standing under the laws of the
State of Delaware, with its chief executive office located at 500 Hyde
Park, Doylestown, Pennsylvania, and has the power and authority to own,
convey and otherwise deal with its assets and to engage in the activities
in which it is presently engaged and is duly qualified and in good standing
under the laws of each jurisdiction where its ownership of property or the
conduct of its activities requires such qualification, if the failure to so
qualify would have a material adverse effect on the financial condition of
the Issuer or on the enforceability of the Contracts or the Notes or the
ability of the Issuer to perform its obligations under the Transaction
Documents to which it is a party; one hundred percent of the Units of the
Issuer at all times will be owned by the Managing Member; and the Issuer
has no subsidiaries.
(ix) Each of the Managing Member and the Issuer hereby makes and
repeats each of the respective representations and warranties expressly
made by it in the Transaction Documents. Such representations and
warranties are incorporated by reference in this Section 4(a) and the
Underwriters may rely thereon as if such representations and warranties
were fully set forth herein.
(b) The Contributor hereby represents and warrants to and agrees with the
Underwriters as follows:
(i) This Agreement has been duly authorized, executed and delivered,
each of the Transaction Documents to which the Contributor is a party has
been duly authorized, and this Agreement constitutes, and when executed and
delivered, each of such Transaction Documents will constitute, the legal,
valid and binding obligations of the Contributor enforceable in accordance
with their respective terms, except that (A) the enforcement thereof may be
subject to (1) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (2) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought, and (B) the
provisions hereof relating to indemnification of the Underwriters may be
subject to limitations of public policy.
(ii) The performance by the Contributor of each of this Agreement and
the Transaction Documents to which the Contributor is a party, and the
consummation by the Contributor of the transactions herein and therein
contemplated, will (A) not conflict with or result in a breach of, and will
not constitute a default under any of the provisions of its certificate of
incorporation or by-laws or any law, governmental rule or regulation, or
any judgment, decree or order binding on the Contributor or its properties,
or any of the provisions of any indenture, mortgage, deed of trust,
contract or other agreement or
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instrument to which the Contributor is a party or by which it is bound and
(B) not result in the creation or imposition of any lien, pledge or
incumbrance upon any of the Contributor's, Transferor's or Issuer's
property and no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the consummation by the Contributor of the transactions
contemplated by this Agreement or the Transaction Documents, except such
consents, approvals, authorizations, registrations or qualifications as may
be required under the Securities Act and under state securities or Blue Sky
laws in connection with the purchase and distribution of the Notes by the
Underwriters.
(iii) The Contributor hereby makes and repeats the representations and
warranties set forth in Articles II and III of the Contribution Agreement.
Such representations and warranties are incorporated by reference in this
Section 4(b), and the Underwriters may rely thereon as if such
representations and warranties were fully set forth herein.
(iv) The Contributor represents and warrants it has delivered to the
Underwriters complete and correct copies of its balance sheet and
statements of income and retained earnings for the fiscal year ended June
30, 1999. Except as set forth in or contemplated in the Registration
Statement and the Prospectus, there has been no material adverse change in
the condition (financial or otherwise) of the Contributor or any other
consolidated subsidiary of the Contributor since June 30, 1999.
(v) Any taxes, fees and other governmental charges arising from the
execution and delivery of this Agreement and the Transaction Documents and
in connection with the execution, delivery and issuance of the Notes and
with the transfer of the Contracts and any interest in the Equipment, have
been paid or will be paid by the Contributor.
(c) The Transferor hereby represents and warrants to and agrees with the
Underwriters as follows:
(i) This Agreement has been duly authorized, executed and delivered by
the Transferor and constitutes a legal, valid and binding agreement of the
Transferor enforceable in accordance with its terms, except that the
provisions hereof relating to indemnification of the Underwriters may be
subject to limitations of public policy.
(ii) Each of the Transaction Documents to which the Transferor is a
party have been duly authorized by the Transferor and the Transferor has
the power, authority and legal right to execute, deliver and perform its
obligations under each of the Transaction Documents to which it is a party
and to consummate all transactions contemplated thereunder, and, when
executed and delivered by the Transferor, each of the Transaction Documents
to which it is a party will constitute the legal, valid and binding
obligation of the Transferor, enforceable in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
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(iii) The sale of the Notes and the performance by the Transferor, of
this Agreement and the Transaction Documents to which the Transferor is a
party will (A) not conflict with or result in a breach of, and will not
constitute a default under any of the provisions of, its respective
certificate of incorporation or limited liability company operating
agreement any law, governmental rule or regulation, or any judgment, decree
or order binding on the Transferor or its properties, or any of the
provisions of any indenture, mortgage, deed of trust, contract or other
agreement or instrument to which the Transferor is a party or by which it
is bound and (B) not result in the creation or imposition of any adverse
claim and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the sale of the Notes or the consummation by the Transferor of
the transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Act and under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the
Underwriters.
(iv) The Transferor is not, or will it be, subject to registration
as an "investment company" under the Investment Company Act of 1940 (the
"1940 Act").
(v) The Transferor hereby makes and repeats each of the respective
representations and warranties expressly made by it in the Transaction
Documents. Such representations and warranties are incorporated by
reference in this Section 4(a) and the Underwriters may rely thereon as if
such representations and warranties were fully set forth herein.
(d) Each of the Transferor, the Managing Member and the Contributor
severally represents and warrants to the Underwriters that:
(i) There is no pending or threatened action, suit or proceeding
against or affecting it in any court or tribunal or before any arbitrator
of any kind or before or by any governmental authority (A) asserting the
invalidity of this Agreement, any Transaction Document or the Notes, (B)
seeking to prevent the issuance of the Notes or the consummation of any of
the transactions contemplated by this Agreement or the Transaction
Documents or (C) seeking any determination or ruling that might materially
and adversely affect (x) its performance or its obligations under this
Agreement or the Transaction Documents (as applicable), (y) the validity or
enforceability of this Agreement, any Transaction Documents or the Notes or
(z) the federal income tax attributes of such Notes described in the
Prospectus.
(ii) Deloitte & Touche LLP is an independent public accountant with
respect to the Contributor and the Transferor within the meaning of the Act
and the rules and regulations promulgated thereunder.
Section 5. COVENANTS OF THE MANAGING MEMBER AND THE CONTRIBUTOR. The
Managing Member and the Contributor, jointly and severally, hereby covenant and
agree with the Underwriters as follows:
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(a) To use best efforts to cause the Registration Statement, and any
amendment thereto, if not effective as of the date hereof, to become effective.
If the Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b), the
Managing Member will file the Prospectus, properly completed, pursuant to Rule
424(b) within the time period prescribed and will provide evidence satisfactory
to the Underwriters of such timely filing. The Managing Member will promptly
advise the Underwriters (i) when the Registration Statement shall have become
effective, (ii) when any amendment thereof shall have become effective, (iii) of
any request by the Commission for any amendment or supplement of the
Registration Statement or the Prospectus or for any additional information or of
the receipt of any comments from the Commission with respect to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and (v) of the
receipt by the Managing Member of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. Before amending or
supplementing the Registration Statement or the Prospectus with respect to the
Notes, the Managing Member will furnish each of the Underwriters with a copy of
each such proposed amendment or supplement within a reasonable time in advance
of filing and the Managing Member will not file any amendment of the
Registration Statement or supplement to the Prospectus to which the Underwriters
reasonably object. The Managing Member and the Contributor will use best efforts
to prevent the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when the Prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or, if it shall be necessary to supplement such Prospectus to comply
with the Act or the rules thereunder, the Managing Member promptly will prepare
and file with the Commission, subject to paragraph (a) of this Section 5, a
supplement which will correct such statement or omission or an amendment which
will effect such compliance.
(c) As soon as practicable, the Managing Member will make generally
available to Noteholders and to the Underwriters an earnings statement or
statements of the Issuer which will satisfy the provisions of Section 11(a) of
the Act and Rule 158 under the Act.
(d) The Issuer will furnish to the Underwriters and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of the prospectus by
either of the Underwriters or any dealer may be required by the Act, as many
copies of each Prospectus relating to the Notes and any supplement thereto as
the Underwriters may reasonably request.
(e) The Contributor, the Managing Member and the Transferor will take all
reasonable actions requested by the Underwriters to arrange for the
qualification of the Notes for sale under the laws of such jurisdictions within
the United States and as the Underwriters may reasonably designate, will
maintain such qualifications in effect so long as required for the completion of
the distribution of the Notes; PROVIDED, in connection therewith the
Contributor, the Managing Member
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and the Transferor shall not be required to qualify as a foreign corporation
doing business in any jurisdiction or to file a general consent to service of
process in any jurisdiction.
(f) For so long as the Notes are outstanding, the Managing Member shall
deliver to the Underwriters by first-class mail and as soon as practicable a
copy of all reports and notices delivered by the Issuer to the Trustee or the
Noteholders under the Indenture.
(g) For so long as the Notes are outstanding, the Managing Member and the
Contributor will furnish to the Underwriters as soon as practicable after filing
any other information concerning the Transferor or the Contributor filed with
any government or regulatory authority which is otherwise publicly available.
(h) To the extent, if any, that any rating provided with respect to the
Notes set forth in Section 6(e) is conditional upon the furnishing of documents
reasonably available to the Managing Member or the Contributor, the Managing
Member or the Contributor, as necessary, shall furnish such documents.
(i) The Managing Member will file with the Commission within fifteen days
of the issuance of the Notes a current report on Form 8-K setting forth specific
information concerning the Notes and the Contracts to the extent that such
information is not set forth in the Prospectus. The Managing Member will also
file with the Commission a current report on Form 8-K setting forth all
Computational Materials, ABS Term Sheets and Collateral Term Sheets (as such
terms are defined herein) provided to the Managing Member by any Underwriter
within the applicable time periods allotted for such filing pursuant to the
No-Action Letters (as such term is defined herein).
(j) In connection with any Computational Materials, ABS Term Sheets or
Collateral Term Sheets provided by an Underwriter pursuant to Section 5A, the
Transferor must receive a letter from Deloitte & Touche LLP, certified public
accountants, satisfactory in form and substance to the Transferor, to the effect
that such accountants have performed certain specified procedures, all of which
have been agreed to by the Transferor, as a result of which they have determined
that the information included in the Computational Materials, ABS Term Sheets or
Collateral Term Sheets (if any), provided by the Underwriter(s) to the Managing
Member for filing on Form 8-K pursuant to Section 5A and subsection (i), is
accurate except as to such matters that are not deemed by the Managing Member to
be material. The foregoing letter shall be obtained at the expense of the
Managing Member.
(k) In the event that an Underwriter must prepare corrected Computational
Materials, ABS Term Sheets or Collateral Term Sheets pursuant to Section 5A(d),
the Managing Member shall file any corrected Computational Materials, ABS Term
Sheets or Collateral Term Sheets no later than two days following receipt
thereof (or, if such second day is not a Business Day, then the next immediately
succeeding Business Day).
Section 5A. INVESTOR INFORMATION. Each Underwriter may prepare and provide
to prospective investors certain Computational Materials, ABS Term Sheets or
Collateral Term Sheets in connection with its offering of the Notes, subject to
the following conditions:
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(a) Such Underwriter shall comply with the requirements of the No-Action
Letter of May 20, 1994 issued by the Commission to Kidder, Peabody Acceptance
Corporation I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset
Corporation, as made applicable to other issuers and underwriters by the
Commission in response to the request of the Public Securities Association dated
May 24, 1994 (collectively, the "KIDDER/PSA LETTER"), and the requirements of
the No-Action Letter of February 17, 1995 issued by the Commission to the Public
Securities Association (the "PSA LETTER" and, together with the Kidder/PSA
Letter, the "NO-ACTION LETTERS").
(b) For purposes hereof, "COMPUTATIONAL MATERIALS" shall have the meaning
given such term in the No-Action Letters, but shall include only those
Computational Materials that have been prepared or delivered to prospective
investors by any Underwriter. For purposes hereof, "ABS TERM SHEETS" and
"COLLATERAL TERM SHEETS" shall have the meanings given such terms in the PSA
Letter but shall include only those ABS Term Sheets or Collateral Term Sheets
that have been prepared or delivered to prospective investors by any
Underwriter.
(c) Each Underwriter shall provide to the Managing Member any Computational
Materials, ABS Term Sheets or Collateral Term Sheets which are provided to
investors by it no later than the day preceding the date such Computational
Materials, ABS Term Sheets or Collateral Term Sheets are required to be filed
pursuant to the applicable No-Action Letters. Each Underwriter may provide
copies of the foregoing in a consolidated or aggregated form including all
information required to be filed.
(d) In the event that the Managing Member or any Underwriter discovers an
error in the Computational Materials, ABS Term Sheets or Collateral Term Sheets,
the Underwriter that prepared such material shall prepare corrected
Computational Materials, ABS Term Sheets or Collateral Term Sheets, as
applicable, and deliver them to the Managing Member for filing pursuant to
Section 5(k).
Section 6. CONDITIONS OF THE UNDERWRITERS' OBLIGATION. The obligation of
the Underwriters to purchase and pay for the Notes as provided herein shall be
subject to the accuracy as of the date hereof and the Closing Date (as if made
at the Closing Date) of the representations and warranties of the Transferor,
the Managing Member, the Contributor and the Issuer contained herein (including
those representations and warranties set forth in the Transaction Documents and
incorporated herein), to the accuracy of the statements of the Transferor, the
Managing Member, the Contributor and the Issuer made in any certificate or other
document delivered pursuant to the provisions hereof, to the performance by the
Transferor, the Managing Member, the Contributor and the Issuer of its
respective obligations hereunder, and to the following additional conditions:
(a) (i) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been initiated or threatened by the Commission and the Prospectus Supplement
shall have been filed or transmitted for filing by means reasonably calculated
to result in filing with the Commission not later than the time required by Rule
424(b) under the Act and (ii) there shall not have come to any Underwriter's
attention any facts that would cause such Underwriter to believe that the
Prospectus at the time it was required to be delivered to a purchaser of the
Notes, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances
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existing at such time, not misleading. No challenge by the Commission shall have
been made to the accuracy or adequacy of the Registration Statement and any
request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus shall have been complied with and the
Transferor shall not have filed with the Commission any amendment or supplement
to the Registration Statement or the Prospectus without prior written notice to
the Underwriters.
(b) The Underwriters shall have received the Transaction Documents,
including the Notes, in form and substance reasonably satisfactory to the
Underwriters, duly executed by all signatories required pursuant to the
respective terms thereof.
(c) (i) The Underwriters shall have received the favorable opinions of
Thacher Proffitt & Wood with respect to the following items, each dated the
Closing Date:
(A) Each of the agreements to which the Contributor, the
Transferor and the Issuer is a party (the "AGREEMENTS"), assuming the
necessary authorization, execution and delivery thereof by the parties
thereto, is a valid and legally binding agreement under the laws of
the State of New York, enforceable thereunder in accordance with its
terms.
(B) The Notes, assuming the necessary execution, authentication
and delivery thereof and payment therefor in accordance with the
applicable Agreements, are valid and legally binding obligations under
the laws of the State of New York, enforceable thereunder against the
Issuer in accordance with their terms, and are entitled to the
benefits of the Indenture.
(C) With respect to each of the Contributor, the Transferor and
the Issuer, the performance of its obligations under the Agreements to
which it is a party and the consummation of the transactions
contemplated thereby do not require any consent, approval,
authorization or order of, filing with or notice to any court, agency
or other governmental body, except such as may be required under the
securities laws of any state or such as have been obtained, effected
or given.
(D) With respect to each of the Contributor, the Transferor and
the Issuer, the performance of its obligations under the Agreements to
which it is a party and the consummation of the transactions
contemplated thereby will not result in any breach or violation of any
statute or regulation thereunder or, to such counsel's knowledge, any
order of any court, agency or other governmental body.
(E) The Agreements create, for the benefit of the Trustee, acting
under the Indenture for the benefit of the Holders of the Notes, a
valid security interest under the New York UCC in all right, title and
interest of the Issuer in and to the Contracts and the proceeds
thereof, (i) which security interest in the Initial Contracts and the
proceeds thereof, and, with respect to the Substitute Contracts, upon
the delivery of such Substitute Contracts to the Trustee pursuant to
and in accordance with the Agreements, will be perfected and is prior
to all other security interests and (ii) which security interest, upon
the filing of the Financing Statements in the Filing Offices,
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will be perfected in any Contract constituting either an Instrument or
Chattel Paper, and the proceeds thereof, in which a security interest
can be perfected against the Issuer by filing.
(F) The statements made in the Prospectus Supplement under the
heading "DESCRIPTION OF THE NOTES AND PRINCIPAL TRANSACTION
DOCUMENTS," insofar as such statements purport to summarize certain
provisions of the Notes, the Contribution Agreement, the SCTA and the
Indenture, provide a fair summary of such provisions. The statements
made in the Prospectus Supplement under the headings "MATERIAL FEDERAL
INCOME TAX CONSEQUENCES" and "CONSIDERATIONS FOR BENEFIT PLAN
INVESTORS," to the extent that they constitute statements of the law
of the State of New York or federal law or legal conclusions with
respect thereto, while not purporting to discuss all possible
consequences of investment in the Notes, are correct in all material
respects with respect to those consequences or matters that are
discussed therein.
(G) The Indenture has been qualified under the Trust Indenture
Act of 1939, as amended. Neither the Transferor nor the Issuer is an
"investment company" nor "controlled by" an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(H) The Registration Statement has become effective under the
1933 Act. To such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and not
withdrawn, and no proceedings for that purpose have been instituted or
threatened under Section 8(d) of the 1933 Act.
(I) The Registration Statement as of its effective date, the date
of the Prospectus Supplement and the date hereof, and the Prospectus
as of the date thereof and hereof, other than with respect to any
financial and statistical information, Computational Materials and ABS
Term Sheets contained or incorporated by reference therein as to which
we express no opinion herein, complied as to form in all material
respects with the requirements of the 1933 Act and the applicable
rules and regulations thereunder.
(J) To such counsel's knowledge, there are no material contracts,
indentures or other documents of a character required to be described
or referred to in either the Registration Statement or the Prospectus
Supplement or to be filed as exhibits to the Registration Statement,
other than any Computational Materials and ABS Term Sheets, as to
which such counsel expresses no opinion, and those described or
referred to therein or filed or incorporated by reference as exhibits
thereto.
(ii) The Underwriters shall have received the favorable opinions of
Melvin Breaux, Esq. general counsel to the Issuer, the Transferor and the
Contributor with respect to the following items, each dated the Closing
Date:
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(A) Each of the Issuer, the Transferor and the Contributor has
been duly organized and is validly existing as a corporation or, in
the case of the Issuer, a limited liability company, in good standing
under the laws of the State of Delaware, and is qualified to do
business in each jurisdiction in which the character of the properties
owned or leased by it or the nature of the business conducted by it
makes such qualification necessary to conduct its business as
presently conducted (except where the failure to be so qualified or in
good standing could not individually or in the aggregate have a
material adverse effect upon (x) the business, assets, property,
condition (financial or otherwise) or prospects of the Issuer, the
Transferor or the Contributor, respectively, taken as a whole or (y)
the validity and enforceability of the Agreements to which it is a
party. Each of the Issuer, the Transferor and the Contributor has the
power and authority to make, deliver and perform each of the
Agreements to which it is a party.
(B) The Agreements have been duly authorized, executed and
delivered by the Issuer, the Transferor and the Contributor, as to
those Agreements as to which each respectively is a party, and each
constitutes the valid and binding obligation of the Issuer, the
Transferor or the Contributor, respectively, enforceable against the
Issuer, the Transferor and the Contributor, as applicable, in
accordance with their respective terms, except as enforcement thereof
may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(C) Neither the consummation of transactions contemplated by, nor
the execution, delivery and performance of the terms of the
Agreements, (x) will result in any violation of the limited liability
company operating agreement, certificate of incorporation or bylaws of
the Issuer, the Transferor or the Contributor, as applicable; or (y)
to the best of such counsel's knowledge, any order, judgment or decree
of any court or arbitrator to which any of the Issuer, the Transferor
or the Contributor is a party or is subject; and (z) to the best of
such counsel's knowledge, will not conflict with, result in a breach,
violation or acceleration of any of the terms of, constitute a default
under or result in the creation or imposition of any lien, pledge or
encumbrance upon either the Issuer's, the Transferor's or the
Contributor's property pursuant to the terms of any indenture, loan
agreement, any other agreement, instrument or other undertaking to
which either the Issuer, the Transferor or the Contributor or any of
their subsidiaries is a party or by which any of them is bound or to
which any of their property or assets of any of them is subject, or
upon the Notes, except as otherwise contemplated by the Indenture.
(D) Except for the filing of the related UCC financing statements
described in the Agreements and the registration under the Securities
Act of the Publicly Offered Notes, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution by the Underwriters, no consent,
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approval, authorization, order or withholding of objection on the part
of, or registration or qualification with, any court, governmental
agency or body or tribunal is required for the execution and delivery
by either the Issuer, the Transferor or the Contributor of, or the
consummation by each of them of the Agreements, except such consents,
approvals, authorizations, registrations or qualifications which have
been obtained and such as have been made and are in full force and
effect.
(E) Other than as may be set forth or contemplated in the related
Prospectus Supplement, there are no actions, proceedings or
investigations pending or, to the best of such counsel's knowledge,
threatened before any court, administrative agency or other tribunal
to which either the Issuer, the Transferor or the Contributor is a
party or threatened to be made a party (i) asserting the invalidity of
the Agreements, (ii) seeking to prevent the consummation of any of the
transactions contemplated by the Agreements or (iii) which could
reasonably be expected to have a material adverse effect upon (x) the
business, assets, property, condition (financial or otherwise) or
prospects of any of the Issuer, the Transferor or the Contributor or
any of their subsidiaries, taken as a whole or (y) the validity and
enforceability of the Indenture or the rights of the Trustee therein.
(F) The Notes, assuming due authentication by the Trustee, and
delivery and payment therefor pursuant to the Agreements, are validly
issued and outstanding and are entitled to the benefits of the
Indenture.
(iii) The Underwriters shall have received the favorable opinion(s),
dated the Closing Date, of Thacher Proffitt & Wood, with respect to such
other related matters as the Underwriters shall reasonably require.
In rendering their opinions, the counsel described in this Paragraph (c)
may rely, as to matters of fact, on certificates of responsible officers of the
Issuer, the Managing Member, the Transferor, the Contributor, the Trustee and
public officials. Such opinions may also assume the due authorization, execution
and delivery of the instruments and documents referred to therein by the parties
thereto; PROVIDED, HOWEVER, that counsel to the Transferor, the Managing Member,
the Contributor and the Issuer may not make such assumptions with respect to
such Transferor, Managing Member, Contributor and Issuer.
(d) The Underwriters shall have received a letter from a nationally
recognized independent accounting firm, dated on or before the Closing Date, in
form and substance satisfactory to the Underwriters and counsel for the
Underwriters, to the effect that they have performed certain specified
procedures requested by the Underwriters with respect to the information set
forth in the Prospectus and certain matters relating to the Managing Member.
(e) The Class A-1 Notes shall have been rated "D-1+", "F1" and "P-1" by
Duff & Phelps Credit Rating Co. ("DCR"), Fitch IBCA, Inc. ("FITCH") and Moody's
Investors Service, Inc. ("MOODY'S"; together with DCR and Fitch IBCA, the
"RATING AGENCIES"), respectively; the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, shall have been rated "AAA" or "Aaa", as applicable, by the
Rating Agencies; the Class B Notes shall have been rated at least "AA" or "Aa3",
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as applicable, by the Rating Agencies; the Class C Notes shall have been rated
at least "A" or "A2", as applicable, by the Rating Agencies; the Class D Notes
shall have been rated at least "BBB" or "Baa2", as applicable by the Rating
Agencies; and such ratings shall not have been rescinded. The Underwriters and
counsel for the Underwriters shall have received copies of any opinions of
counsel supplied to the rating organizations relating to any matters with
respect to the Class A Notes, the Class B Notes, the Class C Notes and the Class
D Notes. Any such opinions shall be dated the Closing Date and addressed to the
Underwriters or accompanied by reliance letters to the Underwriters or shall
state that the Underwriters may rely upon them.
(f) The Underwriters shall have received from the Managing Member a
certificate, signed by the president, a senior vice president or a vice
president of the Managing Member, dated the Closing Date, to the effect that the
signer of such certificate has carefully examined the Registration Statement,
the Prospectus, the Indenture and this Agreement and that, to his or her
knowledge:
(i) the representations and warranties of the Managing Member and the
Issuer, as applicable, in this Agreement and in the Contribution and
Servicing Agreement, as of the Closing Date, and in the Indenture, the
Subsequent Contract Transfer Agreement and in all related agreements, as of
the date specified in such agreements, are true and correct, and the
Managing Member and the Issuer, as applicable, has complied with all the
agreements, and satisfied all the conditions on its part to be performed or
satisfied, thereunder at or prior to the Closing Date;
(ii) there are no actions, suits or proceedings pending, or, to such
officer's knowledge, threatened, against or affecting the Managing Member
or the Issuer which, if adversely determined, individually or in the
aggregate, would be reasonably likely to materially and adversely affect
the ability of the Managing Member or the Issuer to perform the Managing
Member's or the Issuer's, respectively, obligations under the Transaction
Documents or the Notes; and no merger, liquidation, dissolution or
bankruptcy of the Managing Member or the Issuer is pending or contemplated;
(iii) the information contained in the Registration Statement and the
Prospectus relating to the Managing Member, the Issuer, the Contracts or
the servicing procedures of its affiliates is true and accurate in all
material respects, and nothing has come to his or her attention that would
lead such officer to believe that the Registration Statement or the
Prospectus includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein not
misleading;
(iv) the information set forth in the List of Contracts required to
be furnished pursuant to the Indenture is true and correct in all material
respects;
(v) there has been no amendment or other document filed affecting the
certificate of incorporation or bylaws of the Managing Member since the
amendment filed July 21, 1999, and no such amendment has been authorized.
Other than with regard to the amendments that the Issuer intends to enter
into on the Closing Date, there has been no amendment or other document
filed affecting the limited liability company operating
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agreement of the Issuer since December 1, 1998 and no such amendment has
been authorized. No event has occurred since December 21, 1998 which has
affected the good standing of the Managing Member or the Issuer under the
laws of the State of Delaware;
(vi) there has not occurred any material adverse change, or, to such
officer's knowledge, any development involving a prospective material
adverse change, in the condition, financial or otherwise, results of
operations, business or operations of the Issuer, the Managing Member and
its parent, taken as a whole, since June 30, 1999;
(vii) on or prior to the Closing Date, there has been no downgrading
nor has any notice been given of (A) any intended or potential downgrading
or (B) any review or possible change in rating, the direction of which has
not been indicted in, the rating, if any, accorded the Notes by any
"nationally recognized statistical rating organization," as such term is
defined for purposes of the Act;
(viii) each person who, as an officer or representative of the
Managing Member or the Issuer, signed or signs the Registration Statement,
the Transaction Documents or any other document delivered pursuant hereto,
on the date of such execution or on the Closing Date, as the case may be,
in connection with the transactions described in the Transaction Documents,
was, at the respective times of such signing and delivery, and is now, duly
elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents are their genuine signatures; and
(ix) the Notes have been duly executed by the Issuer.
The Managing Member shall attach to such certificate a true and correct
copy of its certificate of incorporation and bylaws, which are in full force and
effect on the date of such certificate, and a certified true copy of the
resolutions of its Board of Directors with respect to the transactions
contemplated herein and the Issuer shall attach a true and correct copy of its
limited liability company operating agreement, which will be in full force and
effect on the date of such certificate.
(g) The Underwriters shall have received a certificate, signed by the
president, a senior vice president or a vice president of each of the
Contributor and the Servicer, dated the Closing Date, to the effect that the
signer of such certificate has carefully examined the Registration Statement,
the Prospectus, the Indenture, and the Contribution and Servicing Agreement and
that, to his or her knowledge:
(i) the representations and warranties of each of the Contributor and
the Servicer in the Contributor Documents, as of the Closing Date, and in
all related agreements, as of the date specified in such agreements, are
true and correct, and each of the Contributor and the Servicer has complied
with all the respective agreements, and satisfied all the conditions on its
part to be performed or satisfied thereunder at or prior to the Closing
Date;
(ii) there are no actions, suits or proceedings pending, or, to such
officer's knowledge, threatened, against or affecting the Contributor or
the Servicer which, if adversely determined, individually or in the
aggregate, would be reasonably likely to
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materially and adversely affect the Contributor's or the Servicer's
respective obligations under the Contributor Documents; and no merger,
liquidation, dissolution or bankruptcy of the Contributor or the Servicer
is pending or contemplated;
(iii) the information contained in the Registration Statement and the
Prospectus relating to the Contributor and the Servicer, the Contracts, the
origination procedures of the Contributor and the servicing procedures of
the Servicer is true and accurate in all material respects, and nothing has
come to his or her attention that would lead such officer to believe that
the Registration Statement or the Prospectus, includes any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements therein not misleading;
(iv) the information set forth in the List of Contracts required to
be furnished pursuant to the Contribution and Servicing Agreement is true
and correct in all material respects;
(v) there has been no amendment or other document filed affecting the
certificate of incorporation or bylaws of the Contributor/Servicer since
April 17, 1996 and no such amendment has been authorized. No event has
occurred since June 30, 1999, which has affected the good standing of the
Contributor/Servicer under the laws of the State of Delaware;
(vi) there has not occurred any material adverse change, or, any
development involving a prospective material adverse change, in the
condition, financial or otherwise, results of operations, business or
operations of the Contributor or the Servicer and its respective
subsidiaries, taken as a whole, since June 30, 1999; and
(vii) each person who, as an officer or representative of the
Contributor or the Servicer, signed or signs the Contributor Documents or
any other document delivered pursuant hereto, on the date of such
execution, or on the Closing Date, as the case may be, in connection with
the transactions described in the Contributor Documents, was, at the
respective times of such signing and delivery, and is now, duly elected or
appointed, qualified and acting as such officer or representative, and the
signatures of such persons appearing on such documents are their genuine
signatures.
The Contributor/Servicer shall attach to such certificate a true and
correct copy of its certificate of incorporation and bylaws, which are in full
force and effect on the date of such certificate, and a certified true copy of
the resolutions of its Board of Directors with respect to the transactions
contemplated herein.
(h) The Underwriters shall have received a favorable opinion of counsel to
the Trustee, dated the Closing Date and in form and substance reasonably
satisfactory to the Underwriters, to the effect that:
(i) the Trustee is a banking corporation duly organized, validly
existing and in good standing under the laws of the United States of
America, and has the power and authority to enter into and to take all
actions required of it under the Indenture;
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(ii) the Indenture has been duly authorized, executed and delivered by
the Trustee, and the Indenture constitutes the legal, valid and binding
obligation of the Trustee, enforceable against the Trustee in accordance
with its terms, except as enforceability thereof may be limited by (A)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally, as such laws would apply in the
event of a bankruptcy, insolvency or reorganization or similar occurrence
affecting the Trustee, and (B) general principles of equity, regardless of
whether such enforcement is sought in a proceeding at law or in equity;
(iii) no consent, approval, authorization or other action by any state
or federal court or any governmental agency or body or other tribunal is
required on the part of the Trustee in connection with its execution and
delivery of the Indenture or the performance of its obligations thereunder;
(iv) the Notes have been duly authenticated and delivered by the
Trustee; and
(v) the execution and delivery of, and performance by the Trustee of
its obligations under, the Indenture do not conflict with or result in a
violation of any statute or regulation applicable to the Trustee, or the
charter or bylaws of the Trustee, or any order, judgment, writ, injunction
or decree of any governmental authority having jurisdiction over the
Trustee, or, to the best knowledge of such counsel, the terms of any
material indenture or other agreement or instrument to which the Trustee is
a party or by which it is bound.
In rendering such opinion, such counsel may rely, as to matters of fact, on
certificates of responsible officers of the Transferor, the Managing Member, the
Trustee and public officials. Such opinion may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Trustee.
(i) The Underwriters shall have received from the Trustee a certificate,
signed by the president, a senior vice president or a vice president of the
Trustee, dated the Closing Date, to the effect that each person who, as an
officer or representative of the Trustee, signed or signs the Notes, the
Indenture or any other document delivered pursuant hereto, on the date hereof or
on the Closing Date, in connection with the transactions described in the
Indenture, was, at the respective times of such signing and delivery, and is
now, duly elected or appointed, qualified and acting as such officer and
representation, and the signatures of such persons appearing on such documents
are their genuine signatures.
(j) On or prior to the Closing Date, there has been no downgrading, nor has
any notice been given of (A) any intended or potential downgrading or (B) any
review or possible changes in rating, the direction of which has not been
indicated in the rating, if any, in any rating accorded the Notes by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of the Act.
(k) Since June 30, 1999, there has not occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the business or operations, of (A) the Managing Member, (B) the
Transferor, (C) the Servicer or (D) the Contributor,
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that, in either Underwriter's judgment, is material and adverse and that makes
it, in either Underwriter's reasonable judgment, impracticable to market the
Notes on the terms and in the manner contemplated in the Prospectus.
(l) Reserved.
(m) The Underwriters and counsel for the Underwriters shall have received
copies of any opinions of counsel to the Contributor, the Managing Member, the
Transferor or the Issuer supplied to the Trustee relating to matters with
respect to the Notes. Any such opinions shall be dated the Closing Date and
addressed to the Underwriters or accompanied by reliance letters to the
Underwriters or shall state the Underwriters may rely thereon.
(n) The Underwriters shall have received such further information,
certificates and documents as the Underwriters may reasonably have requested not
fewer than three (3) full Business Days prior to the Closing Date.
(o) The Contributor shall have transferred to the Trustee, for deposit in
the Collection Account to be maintained by the Trustee in accordance with the
Indenture, all Contract Payments actually received by the Contributor which were
due subsequent to the Cut-Off Date and received on or prior to the Closing Date.
(p) The Financing Statements shall have been prepared and filed as set
forth in Article One of the Contribution and Servicing Agreement.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all respects when and as provided in this Agreement, if the
Managing Member, the Transferor, the Issuer or the Contributor is in breach of
any covenants or agreements contained herein or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Underwriters and counsel to the Underwriters, this Agreement and all obligations
of the Underwriters hereunder may be canceled on, or at any time prior to, the
Closing Date by the Underwriters. Notice of such cancellation shall be given to
the Managing Member in writing, or by telephone or telegraph confirmed in
writing.
Section 7. REIMBURSEMENT OF EXPENSES. If (x) no closing of the sale of the
Notes occurs by the Closing Date through no fault of the Managing Member, the
Transferor, the Issuer or the Contributor or because the conditions set forth in
Section 6 have not been met, or (y) the Underwriters terminate the engagement
pursuant to Section 10 or because any conditions precedent in Section 6 have not
been fulfilled, then the Managing Member's or the Contributor's liability to the
Underwriters shall be limited to the reimbursement of the Underwriters' expenses
incurred through the date of termination for their reasonable out-of-pocket and
incidental expenses. In addition, whether or not the Notes are issued or sold:
(a) The Transferor or the Contributor shall pay the reasonable fees and
expenses associated with the transactions contemplated hereby not paid by the
Underwriters in accordance with the provisions of Section 7(b) including,
without limitation, the following fees and expenses:
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(i) rating agency fees payable with respect to their ratings of the
Notes;
(ii) any fees charged by the firm of independent public accountants
referred to in Section 6(d);
(iii) filing fees in connection with the transactions contemplated
hereby including, but not limited to, the Commission;
(iv) reasonable fees and expenses of counsel to the Underwriters;
(v) the Trustee's fees and expenses and reasonable fees and expenses
of counsel to the Trustee;
(vi) the costs and expenses of printing the Prospectus;
(vii) the costs of printing or reproducing this Agreement, the Blue
Sky Survey, if applicable, and any other documents in connection with the
offer, sale and delivery of the Notes;
(viii) all expenses in connection with the qualification of the Notes
under state securities laws as provided in Section 4(a)(vi), including the
fees and disbursements of counsel in connection with the Blue Sky Survey,
if applicable;
(ix) the cost of preparing the Notes;
(x) the cost or expenses of any transfer agent or registrar; and
(xi) all other costs and expenses incident to the performance of
their obligations hereunder which are not otherwise specifically provided
for in this Section 7; PROVIDED, that neither the Contributor nor the
Managing Member waives any rights to reimbursement from the Underwriters in
the event of either Underwriter's failure to perform in accordance with
this Agreement.
(b) It is understood and agreed that, except as provided in Sections 8 and
9, the Underwriters will pay securities transfer taxes on resale of any of the
Notes by them, and any advertising expenses connected with any offers they may
make.
Section 8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Transferor and the Contributor, jointly and severally, will
indemnify and hold harmless each Underwriter as follows: (i) against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or acts in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
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or necessary to make the statements therein not misleading, and will promptly
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating, preparing to defend or
defending, or appearing as a third-party witness in connection with, any such
action or claim; PROVIDED, that the Transferor and the Contributor shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement or
the Prospectus or any such amendment or supplement, in reliance upon and in
conformity with the Underwriting Information (defined below); and (ii) against
any losses, claims, damages, liabilities, joint or several, and expenses
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Computational Materials, ABS Term
Sheets or Collateral Term Sheets distributed by any Underwriter; unless such
untrue statement or alleged untrue statement of a material fact was made in
reliance upon and in conformity with Derived Information provided by such
Underwriter expressly for use in the Computational Materials, the ABS Term
Sheets or the Collateral Term Sheets and the untrue statement or alleged untrue
statement did not derive from an inaccuracy in the Transferor- Provided
Information used in the preparation of such Computational Materials, ABS Term
Sheets or Collateral Term Sheets.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Transferor and the Contributor as follows: (i) against any
losses, claims, damages or liabilities to which the Transferor or the
Contributor may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or acts in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Underwriting Information or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Underwriting Information or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Transferor or the Contributor by or on behalf of
such Underwriter expressly for use therein; and will reimburse the Transferor or
the Contributor for any legal or other expenses reasonably incurred by the
Transferor or the Contributor in connection with the investigating, preparing to
defend or defending, or appearing as a third-party witness in connection with
any such action or claim; and (ii) against any losses, claims, damages and
expenses described in the indemnity contained in subsection (a) of this Section
8, as incurred, but only with respect to untrue statements or alleged untrue
statements made in the Computational Materials, Collateral Term Sheets or ABS
Term Sheets furnished by such Underwriter to the extent that such untrue
statement or alleged untrue statement of a material fact was made in reliance
upon and in conformity with Derived Information provided by it expressly for use
in the Computational Materials, the ABS Term Sheets or the Collateral Term
Sheets and the untrue statements or alleged untrue statements were not derived
from any inaccuracy in the Transferor-Provided Information used in the
preparation of such Computational Materials, ABS Term Sheets or Collateral Term
Sheets.
The Transferor and the Contributor acknowledge that the statements set
forth under the headings "THE UNDERWRITING OF THE SECURITIES" and "PLAN OF
DISTRIBUTION" in the Basic Prospectus and "PLAN OF DISTRIBUTION" in the
Prospectus Supplement constitute the only information furnished in writing by or
on behalf of the Underwriters for inclusion in the Registration Statement
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<PAGE>
or the Prospectus (the "UNDERWRITING INFORMATION"), and the Underwriters confirm
that such statements are correct; PROVIDED, HOWEVER, that if but only if, all
Transferor-Provided Information (as defined below) is accurate and complete in
all material respects, the references to "Underwriting Information" in this
Agreement shall be deemed to include any Derived Information contained in a Form
8-K relating to the Notes filed by the Transferor with the Commission. For
purposes of this Section, the term "Derived Information" means such portion, if
any, of the information contained in Computational Materials, Collateral Term
Sheets or ABS Term Sheets in any Form 8-K relating to the Notes filed by the
Transferor with the Commission as:
(1) is not also contained in the Prospectus or the
Prospectus Supplement without taking into account
information incorporated therein by reference; and
(2) does not constitute Transferor-Provided Information.
"TRANSFEROR-PROVIDED INFORMATION" means the information set forth under the
heading "The Contracts" in the Prospectus Supplement and any computer tape or
other information furnished to any Underwriter by or on behalf of the Transferor
concerning the assets of the Issuer.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party; PROVIDED, that if the defendants in any such action
include both the indemnified party and the indemnifying party, and the
indemnified party shall have been advised by counsel that representation of such
indemnified party and the indemnifying party may be inappropriate under
applicable standards of professional conduct due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. It is understood that the indemnifying party
shall, in connection with any such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys together with appropriate local counsel at
any time from all indemnified parties not having actual or potential differing
interest with any other indemnified party. Upon receipt of notice from the
indemnifying party to such indemnified party of such counsel, the indemnifying
party will not be liable for any settlement entered into without its consent and
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the second preceding
sentence, (ii) the indemnifying party shall have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment
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<PAGE>
of counsel for the indemnified party at the expense of the indemnifying party;
and except that, if clause (i) or (iii) is applicable, such liability shall be
only in respect of the counsel referred to in such clause (i) or (iii).
Notwithstanding the immediately preceding sentence and the first sentence of
this paragraph, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnifying party in accordance with such request prior to the
date of such settlement.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(B) in respect of any losses, claims, damages or liabilities (or actions or
proceeding in respect thereon) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Transferor and the Contributor on the one hand and the
Underwriters on the other from the offering of the Notes. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c), then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Transferor or the Contributor on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Transferor or the Contributor on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
that the total net proceeds from the offering (before deducting expenses)
received by the Transferor and the Contributor bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Transferor or the
Contributor on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Transferor, the Contributor and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to above in this subjection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing to defend or defending, or appearing as a third-party witness in
connection with, any such action or claim. Notwithstanding the provision for
this subsection (d), the Underwriters shall not be required to contribute any
amount in excess of the total underwriting discount as set forth on the cover
page of the Prospectus. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
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<PAGE>
obligations of the Underwriters to contribute pursuant to this subsection (d)
are several in proportion to their respective underwriting obligations with
respect to such Notes and not joint.
(e) The obligations of the Transferor and the Contributor under this
Section 8 shall be in addition to any liability which the Transferor or the
Contributor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls either of the Underwriters
within the meaning of the Act, and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Transferor and the Contributor and to each person,
if any, who controls the Transferor or the Contributor within the meaning of the
Act.
Section 9. SURVIVAL. The respective representations, warranties and
agreements of the Transferor, the Managing Member, the Issuer, the Contributor
and the Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, notwithstanding any investigation heretofore or
hereafter made by or on behalf of the Transferor, the Managing Member, the
Issuer, the Contributor or the Underwriters or any director, officer or
controlling person thereof, and such representations, warranties and agreements
made by the Transferor, the Managing Member, the Issuer and the Contributor
shall survive the delivery and payment for the Notes. The provisions of Sections
7 and 8 shall survive the termination or cancellation of this Agreement.
Section 10. TERMINATION.
(a) This Agreement may be terminated by the Underwriters at any time upon
the giving of notice at any time prior to the Closing Date: (i) if there has
been, since June 1, 1999, any material adverse change in the condition,
financial or otherwise, of the Contributor, the Managing Member, the Issuer or
the Transferor, or in the earnings, business affairs or business prospects of
the Contributor, the Issuer or the Transferor, whether or not arising in the
ordinary course of business, (ii) if there has occurred any outbreak or
escalation of hostilities or other calamity or crises the effect of which on the
financial markets of the United States is such as to make it, in the reasonable
judgment of the underwriters, impracticable to market the Notes or enforce
contracts for the sale of the Notes, (iii) if trading generally on either the
American Stock Exchange or the New York Stock Exchange has been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by
order of the Commission or any other governmental authority or (iv) if a banking
moratorium has been declared by either federal or New York authorities. In the
event of any such termination, no party will have any liability to any other
party hereto, except as otherwise provided in Sections 7 or 8.
(b) This agreement may not be terminated by the Transferor, the Managing
Member, the Issuer or the Contributor, except in accordance with law, without
the written consent of the Underwriters.
(c) Notwithstanding anything herein to the contrary, if the Transferor, the
Managing Member, the Issuer or the Contributor does not perform any obligation
under this agreement or any representation and warranty hereunder is incomplete
or inaccurate in any material respect, this Agreement and all of the
Underwriters' obligations hereunder may be immediately canceled by the
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<PAGE>
Underwriters by notice thereof to the Managing Member or the Contributor. Any
such cancellation shall be without liability of any party to any other party
except that the provisions of Sections 8 and 9 shall survive any such
cancellation.
Section 11. NOTICES. All communications provided for or permitted hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered to or mailed by certified or registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Underwriters, addressed to Lehman Brothers Inc., c/o Mr. Henry Domenici,
facsimile no.: (212) 526-8579, at the address set forth in the beginning of this
Agreement, to Prudential Securities Incorporated, addressed c/o Mr. Robert
Schwartz, facsimile no.: (212) 778- 7401, at the address set forth in the
beginning of this Agreement, and to Banc One Capital Markets, Inc., c/o Mr.
Vimal Shah, facsimile no.: (312) 732-4487, at the address set forth in the
beginning of this Agreement or to such other address as any of the Underwriters
may designate with respect to itself in writing to the Transferor or the
Contributor; if to the Contributor, addressed to the Chief Financial Officer at
500 Hyde Park, Doylestown, Pennsylvania 18901, facsimile no.: (215) 345- 4428;
if to the Transferor, addressed to the Transferor at 500 Hyde Park, Doylestown,
Pennsylvania 18901, facsimile no.: (215) 230-5328, or such other address as the
Transferor or the Contributor may have designated in writing to you; if to the
Managing Member, addressed to the Managing Member at 500 Hyde Park, Doylestown,
Pennsylvania 18901, facsimile no.: (215) 230-5328, or such other address as the
Managing Member may have designated in writing to you; or, if to the Issuer,
addressed to the Issuer at 500 Hyde Park, Doylestown, Pennsylvania 18901,
facsimile no.: (215) 230- 5328, or such other address as the Issuer may have
designated in writing to you.
Section 12. SUCCESSORS; ACTIONS BY THE UNDERWRITERS. This Agreement will
inure to the benefit of and be binding upon the Transferor, the Managing Member,
the Issuer and the Contributor and their respective successors and assigns and
the Underwriters and their respective successors and assigns. Any action by the
Underwriters hereunder may be taken by the Underwriters jointly or by Lehman
Brothers Inc. alone or on behalf of the Underwriters, and any such action taken
by Lehman Brothers Inc. alone shall be binding upon the Underwriters.
Section 13. DEFAULT BY EITHER UNDERWRITER. If either Underwriter shall fail
on the Closing Date to purchase the Notes which it is obligated to purchase
hereunder (the "Defaulted Notes"), the remaining Underwriter (the
"Non-Defaulting Underwriter") shall have the right, but not the obligation,
within one (1) Business Day thereafter, to make arrangements to purchase all,
but not less than all, of the Defaulted Notes upon the terms herein set forth;
if, however, the Non-Defaulting Underwriter shall not have completed such
arrangements within such one (1) Business Day period, then this Agreement shall
terminate without liability on the part of the Non-Defaulting Underwriter.
No action taken pursuant to this Section 13 shall relieve the defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, any of the Non-Defaulting Underwriter, the Transferor, the
Managing Member or the Contributor shall have the right to postpone the Closing
Date for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements.
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<PAGE>
Section 14. ENTIRE AGREEMENT. This Agreement and the documents referred to
herein and to be delivered pursuant hereto constitute the entire agreement
between the parties pertaining to the subject matter hereof and supersede all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties.
Section 15. GOVERNING LAW.
(a) THIS AGREEMENT IS TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF
NEW YORK.
(b) EACH UNDERWRITER, THE TRANSFEROR, THE MANAGING MEMBER, THE ISSUER AND
THE CONTRIBUTOR HEREBY SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE
BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 11 AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN
DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE TRANSFEROR, THE MANAGING
MEMBER, THE ISSUER AND THE CONTRIBUTOR HEREBY WAIVE ANY OBJECTION BASED ON FORUM
NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER.
NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE TRANSFEROR, THE MANAGING
MEMBER, THE ISSUER OR THE CONTRIBUTOR TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT EITHER'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN
THE COURTS OF ANY OTHER JURISDICTION.
(c) EACH UNDERWRITER, THE TRANSFEROR, THE MANAGING MEMBER, THE ISSUER AND
THE CONTRIBUTOR HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY
DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute one and the same instrument.
Section 17. MISCELLANEOUS. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
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<PAGE>
UNDERWRITING AGREEMENT
If you are in agreement with the foregoing, please sign a counterpart
hereof and return the same to the Transferor, the Managing Member, the Issuer
and the Contributor, whereupon this Agreement shall become a binding agreement
among the Underwriters, the Transferor, the Managing Member, the Issuer and the
Contributor.
Very truly yours,
DVI RECEIVABLES CORP. X
By: /s/ Lisa J. Cruikshank
---------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
DVI FINANCIAL SERVICES INC.
By: /s/ Lisa J. Cruikshank
---------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII, its Managing
Member
By: /s/ Lisa J. Cruikshank
---------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
DVI RECEIVABLES CORP. VIII
By: /s/ Lisa J. Cruikshank
---------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
LEHMAN BROTHERS INC.
By: /s/ Paul Sveen
---------------------------------
Name: Paul Sveen
Title: Managing Director
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Robert Schwartz
--------------------------------
Name: Robert Schwartz
Title: Director
BANC ONE CAPITAL MARKETS, INC.
By: /s/ Vimal Shah
--------------------------------
Name: Vimal Shah
Title: Director
<PAGE>
EXHIBIT A
PURCHASING PRICE
<TABLE>
<CAPTION>
Principal Amount Principal Amount
Principal Amount to be Purchased by to be Purchased
to be Purchased by Prudential by Banc One
Lehman Brothers Securities Capital Markets,
Class of Note Price Inc. Incorporated Inc.
- ------------------- ---------- ------------------ -------------------- ------------------
<S> <C> <C> <C> <C>
The Class A-1 Notes 99.82500% $ 10,494,334 $ 10,494,333 $ 10,494,333
The Class A-2 Notes 99.76810% $ 14,060,668 $ 14,060,666 $ 14,060,666
The Class A-3 Notes 99.58760% $ 21,699,334 $ 21,699,333 $ 21,699,333
The Class A-4 Notes 99.56713% $ 33,017,000 $ 33,017,000 $ 33,017,000
The Class B Notes 99.58170% $ 4,054,000 $ 0 $ 0
The Class C Notes 99.59334% $ 8,107,000 $ 0 $ 0
The Class D Notes 99.53457% $ 5,405,000 $ 0 $ 0
</TABLE>
A-1
EXHIBIT 3.1
<PAGE>
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
DVI RECEIVABLES CORP. VIII
(Pursuant to Section 245 of the General Corporation
Law of the State of Delaware)
The undersigned, being an authorized officer of DVI Receivables Corp.
VIII, a Delaware corporation (the "Corporation"), acting under Section 245 of
the General Corporation Law of the State of Delaware, does hereby certify that:
A. The original Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation") was filed with the Secretary of State of the
State of Delaware on December 21, 1998.
B. This Amended and Restated Certificate of Incorporation of DVI
Receivables Corp. VIII, which restates and integrates and also amends the
Corporation's Certificate of Incorporation as heretofore amended, was proposed
and declared advisable by the unanimous written consent of the Board of
Directors of the Corporation, dated as of July 22, 1999 in accordance with
Section 141, is hereby consented to in writing by the Corporation's stockholders
pursuant to written consent, in accordance with Section 228, and adopted in
accordance with Sections 242 and 245, of the General Corporation Law of the
State of Delaware.
C. The Corporation's Certificate of Incorporation is hereby restated in
its entirety as follows:
1. The name of the corporation is
DVI RECEIVABLES CORP. VIII
2. The address of DVI Receivables Corp. VIII (hereinafter the
"Corporation") registered office in the State of Delaware is Corporation Trust
Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The
name of the Corporation's registered agent at such address is The Corporation
Trust Company.
3. The nature of the business or purposes to be conducted or
promoted by the Corporation is, limited to the following activities and none
other:
<PAGE>
A. To acquire and hold a limited liability company
interest in and to make an initial or additional
capital contributions to DVI Receivables VIII,
L.L.C., a Delaware limited liability company ("DRVIII
LLC") and to become a member of DRVIII LLC as the
Board of Directors of the Corporation may from time
to time authorize and direct;
B. To acquire, own, purchase, hold, transfer, pledge and
otherwise deal with any of the units representing
limited liability company ownership interests
("Units") in DRVIII LLC or any other notes, debt or
other securities (collectively "Securities") issued
by DRVIII LLC or by any limited liability company,
partnership, corporation, trust, joint venture, or
other artificial person permitted by applicable law
(any of the foregoing, an "Artificial Person") for
which DRVIII LLC is a depositor or sponsor;
C. To act as the managing member of DRVIII LLC and to
perform all acts and assume all responsibilities
required thereby;
D. To enter into a limited liability company agreement
of DRVIII LLC, as the same may be amended or restated
from time to time (the "DRVIII LLC Agreement"), and
to exercise all rights, duties and obligations of a
member of DRVIII LLC under the DRVIII LLC Agreement
and applicable law;
E. To perform any and all of the activities set forth
above with respect to other limited liability
companies ("Other LLCs") in which the Corporation
holds Units;
F. Borrowing money pursuant to one or more interim
finance agreements between the Corporation and one or
more lenders and acquiring, owning,
<PAGE>
leasing, purchasing, investing, transferring, selling
and/or pledging certain property to be contributed to
the Corporation pursuant to a contribution agreement,
contribution and servicing agreement or subsequent
contract transfer agreement, pooling agreement,
transfer agreement or other similar agreement (each
of the foregoing agreements, a "Transfer Agreement")
in connection with such borrowing; provided, however,
that there may be only one interim finance agreement
outstanding at one time;
G. To acquire, own and hold one or more series of
securities ("Pass-Through Securities") issued
pursuant to one or more Transfer Agreements, and to
cause the issuance of one or more series of
Pass-Through Securities; such Pass-Through Securities
of each series (i) will represent ownership interests
in various equipment finance contracts, the cash
flow, income, payments and proceeds therefrom and any
related property and/or collections in respect
thereof and (ii) may be structured to contain one or
more classes of Pass-Through Securities, each class
having the characteristics specified in the related
Transfer Agreement; and to sell, transfer, assign,
finance, and refinance one or more Pass-Through
Securities or classes of Pass-Through Securities of
any series;
H. To issue, acquire, own and hold in addition to the
Units, one or more series of (i) debt obligations
("Notes"), with the prior written consent of Moody's
Investors Service, Inc., pursuant to one or more
indentures (each, an "Indenture"), which Notes are
collateralized by equipment finance contracts or
income, payments or proceeds therefrom ("Funding
Agreements"),
<PAGE>
Pass-Through Securities or supplemental collateral
(collectively, the "Collateral"); and to sell,
transfer, assign and finance such Notes;
I. To establish one or more Artificial Persons to engage
in any one or more of the activities described in any
of the clauses above or to issue, acquire, own, hold
and sell a particular series of Notes, Pass-Through
Securities, Certificates or other securities (each, a
"Permitted Security") between such Artificial Person
and an indenture trustee (the "Trustee"); to receive
upon the formation of any such Artificial Person one
or more certificates, units, partnership share
certificate of stock or other documentary indicia of
ownership (each, a "Certificate") representing with
respect to trusts the beneficial ownership interest
in such trust, and with respect to all other
Artificial Persons, as appropriate, the equitable
ownership of such Artificial Person; and to acquire,
own, hold, sell, transfer, assign, pledge, finance,
refinance and otherwise deal with any or all of the
Certificates in any such Artificial Person;
J. To invest and reinvest the funds received or
collected by the Corporation on Collateral in other
investments of such types or in other
interest-bearing or discount securities, loans or
other investments;
K. To convey or transfer all or any portion of the
Corporation's right, title and interest in and to the
Collateral for any series of Notes, subject and
subordinate to the rights of the related Noteholders;
<PAGE>
L. To transfer the Corporation's rights to any cash flow
in excess of amounts necessary to pay holders of the
Permitted Securities remitted, or to be remitted to,
the Corporation with respect to such Permitted
Securities;
M. To acquire, own, hold, sell, transfer, assign,
pledge, finance, refinance and otherwise deal with
(1) installment sales contracts, equipment leases,
equipment finance leases, rental and other payments
from leases and other contracts, equipment finance
loans and secured equipment notes (collectively,
"Contracts"), (2) the equipment which is the subject
of such Contracts, (3) policies of insurance relating
to such Contracts, Contract payments due thereunder,
equipment, or proceeds of any of the foregoing, (4)
any other assets which may be incidental to the
ownership of such Contracts, or (5) any participation
interest in or security based on or backed by assets
described in (1) through (5) (collectively, "Lease
Receivables");
N. To become a registrant of a registration statement or
issuer under another offering document, or an
affiliate or owner of such a registrant or issuer, in
accordance with applicable law (including the
applicable rules and regulations promulgated by the
Securities and Exchange Commission) and enter into or
otherwise execute related statements, documents,
instruments and filings, contracts as may be
necessary or appropriate in furtherance of such
registration or issue.
O. To engage in any other acts or activities and to
exercise any power permitted to the Corporation under
the General Corporation Law of the State of Delaware
so long as the same are incidental to, or connected
with, the
<PAGE>
foregoing or are necessary, suitable or convenient to
accomplish the foregoing; and
P. Provided, however, that none of the permitted
activities set forth in E through O above shall
result in a downgrade of any rating issued by the
nationally recognized rating agency related to the
Units or any other previously issued Permitted
Security.
4. The total number of shares of stock which the Corporation
shall have authority to issue is one hundred (100) of the par value of one cent
($.01) per share.
5. A. The Corporation shall at all times have at
least two directors, neither of whom shall
be, nor have been, a director of any
Affiliate of the Corporation except as
described below or an officer of, be
employed by, be a creditor, supplier or
contractor of, or hold any beneficial or
economic interest in the Corporation or any
Affiliate of the Corporation, or be a family
member of any of the foregoing. As used in
the preceding sentence, "Affiliate" shall
mean any entity other than the Corporation
(i) which owns beneficially, directly or
indirectly, 10% or more of the outstanding
shares of common stock of the Corporation;
or (ii) of which 10% or more of the
outstanding shares of its common stock is
owned beneficially, directly or indirectly,
by any entity described in clause (i) above,
or (iii) which is "controlled", as defined
in Section 230.405 of the Rules and
Regulations of the Securities and Exchange
Commission, 17 C.F.R. Section 230.405, by an
entity described in clause (i) above;
provided, however, that such
<PAGE>
independent directors may serve in similar
capacities for other "special purpose
corporations" formed by DVI, Inc. or its
affiliates.
B. With respect to a vote for the filing of a
bankruptcy petition or other such action as
described in Section 6(ii) hereof, the
independent directors shall, to the extent
permitted under applicable law, consider the
interests of creditors of the Corporation
and the wholly-owned subsidiaries of the
Corporation (if any).
C. No action voted upon by the Corporation's
board of directors shall be effective until
a successor independent director has been
elected to replace any independent director
that has resigned or been removed.
6. The affirmative unanimous vote of the holders of all of the
Corporation's outstanding common stock and the unanimous vote of the whole board
of directors, including the vote of the independent directors, at any meeting of
the board of directors shall be necessary (i) for the amendment of the Articles
3, 5, 6, 9 and 10 of this Amended and Restated Certificate of Incorporation of
the Corporation and for the amendment of the by-laws of the Corporation (and any
amendment pursuant to this clause (i) also shall not result in a downgrade of
the rating by the nationally recognized rating agency related to any previously
issued Permitted Security); or (ii) before the Corporation may take any action
to institute proceedings to have itself, DRVIII LLC or any other Artificial
Person that is affiliated with the Corporation adjudicated as bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against any of them, or seek or consent to the entry of any order for relief or
the appointment of a receiver, trustee, or other similar official for either of
them or for any substantial part of either of their property, or seek
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition
<PAGE>
of either of them or either of their debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or make any general
assignment for the benefit of creditors; or (iii) to take any corporate action
in furtherance of any of the actions set forth above in this Article 6.
7. A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is amended
after the filing of the Amended and Restated Certificate of Incorporation of
which this paragraph is a part to authorize corporate action eliminating or
further limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended. Any repeal or
modification of the foregoing portion of this paragraph by the stockholders of
the Corporation shall not adversely affect any right or protection of a director
of the Corporation existing at the time of such repeal or modification.
8. Elections of directors need not be by written ballot unless
the by-laws of the Corporation shall so provide.
9. Notwithstanding any other provision of this Amended and
Restated Certificate of Incorporation and any provision of law which otherwise
so empowers the Corporation, the Corporation shall not perform any act in
contravention of any of the following:
<PAGE>
A. the Corporation shall not (i) consolidate or merge
with or into any other entity or person or dissolve
or liquidate in whole or in part or transfer its
properties and assets substantially as an entirety to
any entity or (ii) engage in any other action that
bears on whether the separate legal identity of the
Corporation will be respected, including, without
limitation (a) holding itself out as being liable for
the debts of any other party; (b) forming, or causing
to be formed, any subsidiaries; or (c) acting other
than in its corporate name and through its duly
authorized officers or agents;
B. the Corporation shall not engage in any joint
activity or transaction of any kind with or for the
benefit of any Related Company (as defined in
paragraph E below), including loans to or from any
Related Company and any guarantee of the indebtedness
of any Related Company, except for (i) entering into
a Transfer Agreement and other agreements or
transactions referenced in Article 3, (ii) purchasing
management services and leasing office space or
equipment, in each case only to the extent necessary
for the conduct of the Corporation's business, (iii)
payment of lawful dividends and capital distributions
to its shareholder or shareholders, and (iv) any
guaranty by a Related Company, in whole or in part,
of any series of Permitted Securities or the
Corporation's obligations under any interim financing
or other agreements;
C. the Corporation shall not create, incur, assume,
guarantee or in any manner become liable in respect
of any indebtedness, except as stated in Article 3,
other than trade payables and expense accruals
incurred in the ordinary course
<PAGE>
of business and which are incident to the business
purpose of the Corporation as stated in Article 3
above;
D. the Corporation shall not commingle its funds and
assets with those of any Related Company; and
E. "Related Company" means the shareholder or
shareholders of the Corporation or any entity other
than the Corporation now or hereafter controlled
directly or indirectly by, or under direct or
indirect common control with, the shareholders of the
Corporation.
10. The Corporation (A) shall maintain its financial and
accounting books and records separate from those of any other entity or person,
(B) shall pay from its assets any obligations and indebtedness of any kind
incurred by it, and shall not pay from its assets any obligations or
indebtedness of any other entity or person, and (C) shall observe all corporate
formalities required by its Amended and Restated Certificate of Incorporation,
by-laws and the laws of the State of Delaware.
11. The name and mailing address of the sole incorporator is
as follows:
Susan A.T. Tice
Thacher Proffitt & Wood
Two World Trade Center
New York, New York 10048
12. The Corporation is to have perpetual existence.
13. Meetings of stockholders may be held within or without the
State of Delaware, as the by-laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the by-laws of the Corporation.
<PAGE>
14. Except as otherwise provided by statute, any action which
might have been taken by a vote of the stockholders at a meeting thereof
(including any action under Articles 13, 15, 16 and 17 hereof) may be taken with
the written consent of such of the holders of stock who would have been entitled
to vote upon the action if a meeting were held having not less than the minimum
percentage of the total vote required for the proposed action by statute, this
Amended and Restated Certificate of Incorporation or the by-laws of the
Corporation, as may be applicable (but in the case of the election of a director
or directors, not less than a majority of the stock of the Corporation entitled
to vote); provided that prompt notice shall be given to all stockholders of the
taking of such corporate action without a meeting if less than unanimous written
consent is obtained.
15. Any director may be removed from office either with or
without cause at any time by the affirmative vote of stockholders of record
holding a majority of the outstanding shares of the stock of the Corporation
entitled to vote, given at a meeting of the stockholders called for that purpose
(or as provided in Article 14 above).
16. Any action required or permitted to be taken at a meeting
of the Board of Directors, other than an action requiring shareholder approval,
may be taken by written action signed by the number of directors that would be
required to take the same action at a meeting of the Board of Directors at which
all directors were present.
17. In furtherance and not in limitation of the power
conferred upon the Board of Directors by law, the Board of Directors shall have
power to make, adopt, alter, amend and repeal by-laws of the Corporation,
subject to the right of the stockholders entitled to vote with respect thereto
to alter, amend and repeal by-laws made by the Board of Directors.
18. Subject to the limitations in Article 6 of this Amended
and Restated Certificate of Incorporation, the Corporation reserves the right to
amend, alter, change or repeal any
<PAGE>
provision contained in this Amended and Restated Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights and powers
conferred upon stockholders, directors and officers herein are granted subject
to this reservation.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
DATED AS OF JULY __, 1999
IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be signed by its authorized officer
this __ day of July, 1999.
By: /s/ Lisa J. Cruikshank
-------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
EXHIBIT 4.1
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DVI RECEIVABLES X, L.L.C.
ISSUER
AND
U.S. BANK TRUST NATIONAL ASSOCIATION,
TRUSTEE
------------------
AMENDED AND RESTATED INDENTURE
Dated as of June 1, 1999
------------------
$262,136,000 in aggregate principal amount of Asset-Backed Notes consisting of:
$31,483,000 6.17% ASSET BACKED NOTES, SERIES 1999-2, CLASS A-1
$42,182,000 6.54% ASSET BACKED NOTES, SERIES 1999-2, CLASS A-2
$65,098,000 6.83% ASSET BACKED NOTES, SERIES 1999-2, CLASS A-3
$99,051,000 7.22% ASSET BACKED NOTES, SERIES 1999-2, CLASS A-4
$4,054,000 7.30% ASSET BACKED NOTES, SERIES 1999-2, CLASS B
$8,107,000 7.48% ASSET BACKED NOTES, SERIES 1999-2, CLASS C
$5,405,000 8.25% ASSET BACKED NOTES, SERIES 1999-2, CLASS D
$6,756,000 10.85% ASSET BACKED NOTES, SERIES 1999-2, CLASS E
<PAGE>
TABLE OF CONTENTS
Page
RECITALS OF THE ISSUER.........................................................1
GRANTING CLAUSE................................................................2
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01 Definitions.....................................................3
SECTION 1.02 Compliance Certificates.........................................3
SECTION 1.03 Form of Documents Delivered to Trustee..........................3
SECTION 1.04 Acts of Noteholders, etc........................................4
SECTION 1.05 Notices.........................................................5
SECTION 1.06 Notice to Noteholders; Waiver...................................6
SECTION 1.07 Table of Contents, Headings, etc................................6
SECTION 1.08 Successors and Assigns..........................................6
SECTION 1.09 Severability Clause.............................................7
SECTION 1.10 Benefits of Amended and Restated Indenture......................7
SECTION 1.11 GOVERNING LAW...................................................7
SECTION 1.12 Legal Holidays..................................................7
SECTION 1.13 Execution in Counterparts.......................................7
SECTION 1.14 Inspection......................................................7
SECTION 1.15 Survival of Representations and Warranties......................8
SECTION 1.16 Incorporation by Reference to Trust Indenture Act...............8
SECTION 1.17 Communications by Noteholders with Other Noteholders............8
SECTION 1.18 Statements Required in Officer's Certificate....................8
SECTION 1.19 When Treasury Securities are Disregarded........................9
SECTION 1.20 Rules by Trustee................................................9
SECTION 1.21 No Adverse Interpretation of Other Agreements...................9
SECTION 1.22 No Recourse Against Others......................................9
SECTION 1.23 Independence of Covenants.......................................9
SECTION 1.24 Consent to Jurisdiction.........................................9
SECTION 1.25 No Bankruptcy Petition.........................................10
SECTION 1.26 Voting Rights of Class F Instruments...........................10
SECTION 1.27 Indebtedness Treatment.........................................10
ii
<PAGE>
Page
ARTICLE II
THE NOTES
SECTION 2.01 General Provisions.............................................11
SECTION 2.02 Global Notes...................................................12
SECTION 2.03 Execution, Authentication, Delivery and Dating.................15
SECTION 2.04 Registration, Transfer and Exchange............................16
SECTION 2.05 Mutilated, Destroyed, Lost and Stolen Notes....................18
SECTION 2.06 Delivery of Class F Instruments................................18
SECTION 2.07 Payment of Interest and Principal; Rights Preserved............20
SECTION 2.08 Persons Deemed Owners..........................................20
SECTION 2.09 Cancellation...................................................20
SECTION 2.10. Noteholder Lists; Communications to Noteholders................20
SECTION 2.11. ERISA Deemed Representations...................................21
ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01 Accounts; Investments by Trustee...............................22
SECTION 3.02 Reserved.......................................................24
SECTION 3.03 Collection of Moneys...........................................24
SECTION 3.04 Collection Account.............................................25
SECTION 3.05 Class A Distribution Sub-Account; Class B Distribution Sub-
Account; Class C Distribution Sub-Account; Class D Distribution
Sub-Account; Class E Distribution Sub-Account; Class F
Distribution Sub-Account
...............................................................29
SECTION 3.06 Reserved.......................................................31
SECTION 3.07 Reserved.......................................................31
SECTION 3.08 Reserve Account................................................31
SECTION 3.09 Reports; Notices of Certain Payments...........................32
SECTION 3.10. Trustee May Rely on Certain Information from Contributor and
Servicer.......................................................33
ARTICLE IV
CONTRACTS AND EQUIPMENT
SECTION 4.01 Representations and Warranties of the Issuer...................34
SECTION 4.02 Purchase upon Breach; Amended and Restated Contribution and
Servicing Agreement............................................34
iii
<PAGE>
Page
SECTION 4.03 Release of Contracts and Equipment Following Substitution or
Purchase.......................................................35
SECTION 4.04 Release of Contracts and Equipment Upon Final Contract Payment.35
SECTION 4.05 Execution of Documents.........................................36
ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.01 Servicer Events of Default.....................................37
SECTION 5.02 Substitute Servicer............................................37
SECTION 5.03 Notification to Noteholders and Rating Agencies................37
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01 Events of Default..............................................38
SECTION 6.02 Acceleration of Maturity; Rescission and Annulment.............39
SECTION 6.03 Other Remedies.................................................40
SECTION 6.04 Trustee May File Proofs of Claim...............................40
SECTION 6.05 Trustee May Enforce Claims Without Possession of Notes.........41
SECTION 6.06 Application of Money Collected.................................42
SECTION 6.07 Limitation on Suits............................................43
SECTION 6.08 Unconditional Right of Noteholders to Receive Payment..........44
SECTION 6.09 Restoration of Rights and Remedies.............................44
SECTION 6.10. Rights and Remedies Cumulative.................................45
SECTION 6.11 Delay or Omission Not Waiver...................................45
SECTION 6.12 Control by Noteholders.........................................45
SECTION 6.13 Waiver of Defaults and Events of Default.......................46
SECTION 6.14 Waiver of Stay or Extension Laws...............................46
SECTION 6.15 Sale of Trust Property.........................................46
SECTION 6.16 Undertaking for Costs..........................................47
ARTICLE VII
THE TRUSTEE
SECTION 7.01 Certain Duties and Responsibilities............................48
SECTION 7.02 Notice of Defaults or Events of Default........................49
SECTION 7.03 Certain Rights of Trustee......................................49
SECTION 7.04 Trustee's Disclaimer...........................................50
SECTION 7.05 Money Held in Trust............................................50
SECTION 7.06 Compensation, Reimbursement, etc...............................50
iv
<PAGE>
Page
SECTION 7.07 Eligibility; Disqualification..................................51
SECTION 7.08 Resignation and Removal; Appointment of Successor..............52
SECTION 7.09 Acceptance of Appointment by Successor.........................53
SECTION 7.10. Merger, Conversion, Consolidation or Succession to Business....53
SECTION 7.11 Co-trustees and Separate Trustees..............................53
SECTION 7.12 Trustee to Hold Contracts......................................54
SECTION 7.13 Financing Statements...........................................55
SECTION 7.14 Trustee to Act; Appointment of Successor.......................55
SECTION 7.15 Reports by Trustee to Holders..................................56
SECTION 7.16 Preferential Collection of Claims Against Issuer...............56
ARTICLE VIII
COVENANTS
SECTION 8.01 Payment of Principal and Interest..............................57
SECTION 8.02 Maintenance of Office or Agency; Chief Executive Office........57
SECTION 8.03 Money for Payments to Noteholders to Be Held in Trust..........57
SECTION 8.04 Issuer Existence; etc..........................................58
SECTION 8.05 Protection of Trust Property; Further Assurances...............59
SECTION 8.06 Compliance Certificates........................................60
SECTION 8.07 Performance of Obligations; Amended and Restated Contribution
and Servicing Agreement........................................60
SECTION 8.08 Negative Covenants.............................................61
SECTION 8.09 Information as to the Issuer...................................62
SECTION 8.10. Payment of Taxes and Other Claims..............................63
SECTION 8.11 Indemnification................................................63
SECTION 8.12 Contract Files to Trustee......................................64
SECTION 8.13 Payment Advices................................................64
ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL AMENDED AND RESTATED INDENTURES
SECTION 9.01 Amendments and Supplemental Indentures.........................65
SECTION 9.02 Execution of Amendments and Supplemental Indentures............65
SECTION 9.03 Effect of Amendments and Supplemental Indentures...............66
SECTION 9.04 Reference in Notes to Amendments and Supplemental Indentures...66
SECTION 9.05 Compliance with Trust Indenture Act............................66
SECTION 9.06 Revocation and Effect of Consents..............................66
ARTICLE X
REDEMPTION OF NOTES
v
<PAGE>
Page
SECTION 10.01 Optional Redemption; Election to Redeem........................67
SECTION 10.02 Notice to Trustee..............................................67
SECTION 10.03 Notice of Redemption or Partial Redemption by the Issuer.......67
SECTION 10.04 Deposit of the Redemption Price or Partial Redemption Price....68
SECTION 10.05 Notes Payable on Redemption Date...............................68
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01 Satisfaction and Discharge of Amended and Restated Indenture...70
SECTION 11.02 Application of Trust Money.....................................71
SECTION 11.03 Reinstatement..................................................71
vi
<PAGE>
SCHEDULES
Schedule 1 - Contract Schedule
EXHIBITS
Exhibit A-1 - Form of Class A-1 Note
Exhibit A-2 - Form of Class A-2 Note
Exhibit A-3 - Form of Class A-3 Note
Exhibit A-4 - Form of Class A-4 Note
Exhibit B - Form of Class B Note
Exhibit C - Form of Class C Note
Exhibit D - Form of Class D Note
Exhibit E - Form of Class E Note
Exhibit F - Form of Class F Instrument
Exhibit G - Investment Letter
Exhibit H - Reserved
Exhibit I - Tax Certificate
APPENDICES
Appendix I - Defined Terms
vii
<PAGE>
AMENDED AND RESTATED INDENTURE
This AMENDED AND RESTATED INDENTURE ("AMENDED AND RESTATED INDENTURE")
dated as of June 1, 1999, is between DVI RECEIVABLES X, L.L.C., a Delaware
limited liability company (herein called the "ISSUER"), and U.S. BANK TRUST
NATIONAL ASSOCIATION, a national banking association, as trustee (herein called
the "Trustee").
RECITALS OF THE ISSUER
The Issuer has duly authorized the issuance of $31,483,000 in
aggregate principal amount of its 6.17% Asset Backed Notes, Series 1999-2, Class
A-1 (the "CLASS A-1 NOTES"), $42,182,000 in aggregate principal amount of its
6.54% Asset Backed Notes, Series 1999-2, Class A-2 (the "CLASS A-2 NOTES"),
$65,098,000 in aggregate principal amount of its 6.83% Asset Backed Notes,
Series 1999-2, Class A-3 (the "CLASS A-3 NOTES"), $99,051,000 in aggregate
principal amount of its 7.22% Asset Backed Notes, Series 1999-2, Class A-4 (the
"CLASS A-4 NOTES"), together with the Class A-1 Notes, the Class A-2 Notes and
the Class A-3 Notes, the "CLASS A NOTES"), $4,054,000 in aggregate principal
amount of its 7.30% Asset Backed Notes, Series 1999-2, Class B (the "Class B
Notes") $8,107,000 in aggregate principal amount of its 7.48% Asset Backed
Notes, Series 1999-2, Class C (the "CLASS C NOTES"), $5,405,000 in aggregate
principal amount of its 8.25% Asset Backed Notes, Series 1999-2, Class D (the
"CLASS D NOTES") and $6,756,000 in aggregate principal amount of its 10.85%
Asset Backed Notes, Series 1999-2, Class E (the "CLASS E NOTES" and together
with the Class A Notes, the Class B Notes, the Class C Notes and the Class D
Notes, the "OFFERED NOTES"), of substantially the tenor hereinafter set forth,
and to provide therefor the Issuer has duly authorized the execution and
delivery of this Amended and Restated Indenture.
Subsequent to the execution and delivery of this Amended and Restated
Indenture, the Issuer may, subject to the restrictions described herein, enter
into a Supplement directing the issuance of a sixth class of securities (the
"CLASS F INSTRUMENTS", and together with the Offered Notes, the "NOTES") which
will be subordinate to the Class A Notes, the Class B Notes, the Class C Notes,
the Class D Notes and the Class E Notes.
All things necessary to make the Notes, when executed by the Issuer
and authenticated and delivered hereunder, the valid obligations of the Issuer,
and to make this Amended and Restated Indenture a valid agreement of the Issuer,
in accordance with its terms, have been done.
NOW, THEREFORE, THIS AMENDED AND RESTATED INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the holders thereof, it is mutually covenanted and agreed, for the benefit of
all Noteholders, as follows:
<PAGE>
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee, for the benefit and security
of the Noteholders and the Trustee as their interests appear herein, all of the
Issuer's right, title and interest in and to the Trust Property. The Issuer also
hereby assigns to the Trustee, for the benefit of the Noteholders and the
Trustee, its security interest in the Equipment (which shall be a first priority
perfected security interest in Equipment other than with respect to Equipment
relating to a Secured Equipment Note or Finance Lease and for which the Original
Equipment Cost is less than $20,000) subject to the underlying equipment lease
related to the Contracts and all of the Issuer's rights in all income, payments
and proceeds related thereto. The Grants of the Trust Property effected by this
Amended and Restated Indenture shall include all rights, powers, and options
(but none of the obligations) of the Issuer with respect thereto, including,
without limitation, the immediate and continuing right to claim for, collect,
receive, and give receipts for Contract Payments in respect of the Contracts and
all other moneys payable thereunder, to give and receive notices and other
communications, to recover on the Equipment pursuant thereto, to make waivers,
amendments or other agreements, to exercise all rights and options, to bring
judicial proceedings in the name of the Issuer or otherwise, to terminate a
Contract pursuant to the terms thereof, enforce all rights and remedies of the
Issuer with respect to the duties, covenants, obligations, indemnities,
representations and warranties of the Contributor and the Servicer under the
Amended and Restated Contribution and Servicing Agreement, and generally to do
and receive anything that the Issuer is or may be entitled to do or receive
thereunder or with respect thereto. Such Grants are made in trust to secure (i)
the payment of all amounts due on the Notes in accordance with their terms,
equally and ratably without prejudice, priority, or distinction between any Note
of the same class and any other Note of the same class by reason of differences
in time of issuance or otherwise, except as otherwise may be provided in this
Amended and Restated Indenture or any Supplement, (ii) the payment of all other
sums payable under this Amended and Restated Indenture and (iii) compliance with
the provisions of this Amended and Restated Indenture and any Supplement with
respect to the Notes.
The Trustee acknowledges such Grants, accepts the trusts hereunder in
accordance with the provisions hereof, and agrees to perform the duties herein
required to the best of its ability and to the end that the interests of the
Noteholders may be adequately and effectively protected as hereinafter provided.
2
<PAGE>
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01 DEFINITIONS.
For purposes of this Amended and Restated Indenture, capitalized terms
used herein but not otherwise defined shall have the respective meaning assigned
to such terms in Appendix I hereto.
SECTION 1.02 COMPLIANCE CERTIFICATES.
Upon any application or request by the Issuer to the Trustee to take
any action under any provision of this Amended and Restated Indenture or any
Supplement, other than any request that (i) the Trustee authenticate the Notes
specified in such request, (ii) the Trustee invest moneys in the Collection
Account or the Reserve Account pursuant to the written directions specified in
such request, or (iii) the Trustee pay moneys due and payable to the Issuer
hereunder to the Issuer's beneficial owner or other assignee specified in such
request, the Trustee may require the Issuer to furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Amended and Restated Indenture or any Supplement relating to the
proposed action have been complied with, except that in the case of any such
requested action as to which other evidence of satisfaction of the conditions
precedent thereto is specifically required by any provision of this Amended and
Restated Indenture or any Supplement, no additional certificate need be
furnished.
SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any Officer's Certificate delivered to the Trustee may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such Officer's Certificate or opinion and any Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Authorized Officer or Authorized Officers
of the Managing Member as to such factual matters unless such Authorized Officer
or counsel of the Managing Member knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion.
3
<PAGE>
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Amended and Restated Indenture or any Supplement, they
may, but need not, be consolidated and form one instrument.
Wherever in this Amended and Restated Indenture or any Supplement, in
connection with any application or certificate or report to the Trustee, it is
provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of compliance with any term hereof,
it is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 7.01(a)(ii).
SECTION 1.04 ACTS OF NOTEHOLDERS, ETC.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Amended and Restated Indenture or any
Supplement to be given or taken by Noteholders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Noteholders in person or by agents duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, with a copy (or if
expressly required an original) to the Issuer and the Servicer. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "ACT" of the Noteholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Amended and Restated Indenture or any Supplement and (subject to Section 7.01)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section 1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the holder of any Note shall bind every future holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.
(d) By accepting the Notes issued pursuant to this Amended and
Restated Indenture and any Supplement, each Noteholder irrevocably appoints the
Trustee hereunder as the special attorney-
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in-fact for such Noteholder vested with full power on behalf of such Noteholder
to effect and enforce the rights of such Noteholder pursuant hereto and the
provisions hereof for the benefit of such Noteholder.
(e) Each holder of a Note, by acceptance of such Note, agrees to treat
such Note as indebtedness for federal, state and local income or franchise tax
purposes.
SECTION 1.05 NOTICES.
Any request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document provided or permitted by this
Amended and Restated Indenture or any Supplement to be made upon, given or
furnished to, or filed with, the Trustee, the Issuer or the Servicer shall be
sufficient for every purpose hereunder if in writing and telexed, telecopied
(with the original of the telexed or telecopied material sent to the recipient
by overnight courier on the day of the telex or telecopy), mailed, first-class
postage prepaid, or hand delivered. Unless otherwise specifically provided
herein, no such request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders or other document shall be effective until received
and any provision hereof requiring the making, giving, furnishing, or filing of
the same on any date shall be interpreted as requiring the same to be sent or
delivered in such fashion that it will be received on such date. Any such
request, demand, authorization, direction, notice, consent, waiver, Act of
Noteholders, or other document shall be sent or delivered to the following
addresses:
(i) if to the Trustee, at the Corporate Trust Office, Attention:
Structured Finance, 180 Fifth Street, St. Paul, Minnesota, 55101 (Number
for telecopy: (651) 244-0089; Number for telephonic confirmation: (651)
244-0727;
(ii) if to the Issuer, Attention: Securitization Manager, at 500
Hyde Park, Doylestown, Pennsylvania 18901 (Number for telecopy: (215)
489-8015; Number for telephonic confirmation: (215) 230-6375) or at any
other address previously furnished in writing to the Trustee, the Servicer
or the Contributor by the Issuer;
(iii) if to the Contributor, Attention: Securitization Manager,
at 500 Hyde Park, Doylestown, Pennsylvania 18901 (Number for telecopy:
(215) 230-5328; Number for telephonic confirmation: (215) 489-8015) or at
any other address previously furnished in writing to the Trustee, the
Issuer and the Servicer by the Contributor;
(iv) if to the Servicer, Attention: Servicing Manager, at 500
Hyde Park, Doylestown, Pennsylvania 18901 (Number for telecopy: (215)
230-5328; Number for telephonic confirmation: (215) 489-8015) or at any
other address previously furnished in writing to the Trustee, the Issuer
and the Contributor by the Servicer;
(v) if to Duff & Phelps, at 55 East Monroe Street, Suite 3800,
Chicago, Illinois 60603, Attention: Structured Finance Group (Number for
telecopy: (312) 263-2650), or at any other address previously furnished in
writing to the Trustee, the Issuer and the Servicer;
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(vi) if to Moody's, at 99 Church Street, New York, New York
10007, Attention: ABS Monitoring Department (Number for telecopy: (212)
553-3856), or at any other address or telecopy number previously furnished
in writing to the Trustee, the Issuer and the Servicer by Moody's; or
(vii) if to Fitch IBCA, at One State Street Plaza, New York, New
York 10004, Attention: ABS Group (Number for telecopy: (212) 514-9879), or
at any other address or telecopy number previously furnished in writing to
the Trustee, the Issuer and the Servicer by Fitch IBCA.
SECTION 1.06 NOTICE TO NOTEHOLDERS; WAIVER.
(a) Where this Amended and Restated Indenture or any Supplement
provides for notice to Noteholders of any event, or the mailing of any report to
Noteholders, such notice or report shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first class postage
prepaid, or sent by private courier or confirmed telecopy (with a copy of the
telecopied material sent to the recipient by overnight courier on the day of the
telecopy) to each Noteholder affected by such event or to whom such report is
required to be mailed, at such Noteholder's address as it appears in the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In
any case where a notice or report to Noteholders is mailed, neither the failure
to mail such notice or report, nor any defect in any notice or report so mailed,
to any particular Noteholder shall affect the sufficiency of such notice or
report with respect to other Noteholders. Where this Amended and Restated
Indenture or any Supplement provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
(b) In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.06(a), of any event or any report to
Noteholders when such notice or report is required to be delivered pursuant to
any provision of this Amended and Restated Indenture or any Supplement, then
such notification or delivery as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 1.07 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents and the Article and Section headings are for
convenience only and shall in no way modify or restrict any of the terms or
provisions hereof.
SECTION 1.08 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Amended and Restated Indenture by
the Issuer or the Trustee shall bind its respective successors and permitted
assigns, whether so expressed or not.
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SECTION 1.09 SEVERABILITY CLAUSE.
In case any provision in this Amended and Restated Indenture, any
Supplement or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.10 BENEFITS OF AMENDED AND RESTATED INDENTURE.
Nothing in this Amended and Restated Indenture, any Supplement or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any separate trustee or co-trustee
appointed under Section 7.11 and the holders of Notes, any benefit or any legal
or equitable right, remedy or claim under this Amended and Restated Indenture.
SECTION 1.11 GOVERNING LAW.
THIS AMENDED AND RESTATED INDENTURE, ANY SUPPLEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. THIS
AMENDED AND RESTATED INDENTURE IS SUBJECT TO THE TRUST INDENTURE ACT OF 1939, AS
AMENDED FROM TIME TO TIME, AS IN EFFECT ON ANY RELEVANT DATE (THE "TIA") AND
SHALL BE GOVERNED THEREBY OR CONSTRUED IN ACCORDANCE THEREWITH.
SECTION 1.12 LEGAL HOLIDAYS.
In any case where any Payment Date or the Stated Maturity Date or any
other date on which principal of or interest on any Note is proposed to be paid
shall not be a Business Day, then (notwithstanding any other provision of this
Amended and Restated Indenture or of the Notes) such payment shall be made on
the next succeeding Business Day, and no interest shall accrue for the
intervening period.
SECTION 1.13 EXECUTION IN COUNTERPARTS.
This Amended and Restated Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
SECTION 1.14 INSPECTION.
The Issuer agrees that, on reasonable prior notice, it will permit the
representatives of the Trustee or any Noteholder, during the Issuer's normal
business hours, to examine all of the books of account, records, reports and
other papers of the Issuer, to make copies thereof and extracts therefrom, to
cause such books to be audited by independent accountants selected by the Issuer
and reasonably acceptable to the Trustee or such Noteholder, as the case may be,
and to discuss its affairs, finances and accounts with its officers, employees
and independent accountants with an Authorized Officer of the Transferor (as
sole beneficiary of the Issuer) present (and by this provision the Issuer hereby
authorizes its accountants to discuss with such representatives such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested for the purpose of reviewing
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or evaluating the financial condition or affairs of the Issuer or the
performance of and compliance with the covenants and undertakings of the Issuer
in this Amended and Restated Indenture, the Amended and Restated Contribution
and Servicing Agreement, the other Transaction Documents, or any of the other
documents referred to herein or therein. Any expense incident to the exercise by
the Trustee or any Noteholder during the continuance of any Default or Indenture
Event of Default of any right under this Section 1.14 shall be borne by the
Issuer, but any expense due to the exercise of a right by any such Person prior
to the occurrence of a Default or Indenture Event of Default shall be borne by
such Person.
SECTION 1.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations, warranties and certifications of the Issuer made
in this Amended and Restated Indenture or in any certificate or other writing
delivered by the Issuer pursuant hereto shall survive the authentication and
delivery of the Notes hereunder, but unless explicitly provided to the contrary,
they are made only as of the Closing Date.
SECTION 1.16 INCORPORATION BY REFERENCE TO TRUST INDENTURE ACT.
The provisions of TIA Sections 310 through 317 inclusive that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by the provisions of this Amended and Restated
Indenture) are a part of and govern this Amended and Restated Indenture, whether
or not physically contained herein.
If any provision of this Amended and Restated Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Amended and Restated Indenture by the TIA, the required provision of the
TIA shall control.
SECTION 1.17 COMMUNICATIONS BY NOTEHOLDERS WITH OTHER NOTEHOLDERS.
A Noteholder may communicate with other Noteholders pursuant to TIA
Section 312(b) with respect to their rights under this Amended and Restated
Indenture or the Notes. The Issuer, the Trustee and anyone else shall have the
protection of Section 312(c) of the TIA.
SECTION 1.18 STATEMENTS REQUIRED IN OFFICER'S CERTIFICATE.
Each Officer's Certificate with respect to compliance with a condition
or covenant provided for in this Amended and Restated Indenture shall include:
(i) a statement that the Person making such certification has
read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such
certificate are based;
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(iii) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
Person, such covenant or condition has been complied with.
SECTION 1.19 WHEN TREASURY SECURITIES ARE DISREGARDED.
In determining whether the Noteholders of the required principal
amount of Notes have concurred in any direction, waiver or consent hereunder,
Notes owned by the Issuer or any other obligor on the Notes or by any Affiliate
of the Issuer or such obligor related thereto shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which a Responsible
Officer of the Trustee actually knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith shall not be disregarded if
the pledgee establishes to the reasonable satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Issuer or any other obligor upon the Notes or any Affiliate of the Issuer or
such obligor.
SECTION 1.20 RULES BY TRUSTEE.
The Trustee may make reasonable rules for action by or at a meeting of
Noteholders.
SECTION 1.21 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Amended and Restated Indenture may not be used to interpret
another indenture, loan or debt agreement of the Issuer or an Affiliate of the
Issuer. Any such indenture, loan or debt agreement may not be used to interpret
this Amended and Restated Indenture.
SECTION 1.22 NO RECOURSE AGAINST OTHERS.
All liability described in the Notes of any director, officer,
employee or member, as such, of the Issuer is waived and released.
SECTION 1.23 INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Amended and Restated Indenture
shall be given independent effect so that if any particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Indenture Event of Default if
such action is taken or condition exists.
SECTION 1.24 CONSENT TO JURISDICTION.
Each of the Issuer and the Trustee irrevocably submits to the
jurisdiction of any New York State or Federal court sitting in the Borough of
Manhattan in the City of New York over any
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suit, action or proceeding arising out of or relating to this Amended and
Restated Indenture or any Note. Each of the Issuer and the Trustee irrevocably
waives, to the fullest extent permitted by laws, any objection which it may have
to the laying of the venue of any such suit, action or proceeding brought in
such a court and any claim that any such suit, action or proceeding brought in
such a court has been brought in any inconvenient forum. Each of the Issuer and
the Trustee agrees that final judgment in any such suit, action or proceeding
brought in such a court shall be conclusive and binding upon the Issuer or the
Trustee, as the case may be, and may be enforced in the courts of New York (or
any other courts to the jurisdiction of which the Issuer or the Trustee, as the
case may be, is subject) by a suit upon such judgment, provided that service of
process is effected upon the Issuer as permitted by law; PROVIDED, HOWEVER, that
each of the Issuer and the Trustee does not waive, and the foregoing provisions
of this sentence shall not constitute or be deemed to constitute a waiver of,
(i) any right to appeal any such judgment, to seek any stay or otherwise to seek
reconsideration or review of any such judgment or (ii) any stay of execution or
levy pending an appeal from, or a suit, action or proceeding for reconsideration
or review of, any such judgment.
SECTION 1.25 NO BANKRUPTCY PETITION.
Notwithstanding any provision contained herein, each of the
Noteholders and the Trustee covenants and agrees that prior to the date which is
one year and one day after the payment in full of all Notes issued by the
Issuer, it will not institute against, or join any other Person in instituting
against, the Issuer or its Managing Member any bankruptcy, reorganization,
receivership, arrangement, insolvency or liquidation proceedings, or other
similar proceedings under any federal or state bankruptcy or similar law. The
Issuer represents, warrants, and covenants that it and has obtained, and will in
the future obtain, a no-petition agreement from each and every Person that
enters into any agreement of any kind with the Issuer or its Managing Member.
This Section 1.25 shall survive the termination of this Amended and Restated
Indenture.
SECTION 1.26 VOTING RIGHTS OF CLASS F INSTRUMENTS.
Upon the irrevocable payment in full of all of the Class A Notes, the
Class B Notes the Class C Notes, the Class D Notes and the Class E Notes, all
voting and consent rights otherwise granted to the Class A Noteholders, the
Class B Noteholders, the Class C Noteholders, the Class D Noteholders and the
Class E Noteholders shall be exercised by the requisite percentage of holders of
the Class F Instruments, if any.
SECTION 1.27 INDEBTEDNESS TREATMENT.
This Amended and Restated Indenture and the Notes have been structured
with the intention that the Notes will qualify under applicable tax law as
indebtedness. Each Noteholder agrees to treat the Notes for purposes of federal,
state and local income or franchise taxes (and any other tax imposed on or
measured by income) as indebtedness and to cause any Person acquiring an
interest in a Note by, through or under it to acknowledge the characterization
of the Notes as indebtedness and to agree to treat the Notes as indebtedness for
such tax purposes.
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ARTICLE II
THE NOTES
SECTION 2.01 GENERAL PROVISIONS.
(a) The Notes issuable hereunder shall be issued as registered Notes
without coupons in no more than five classes as from time to time shall be
authorized by the Issuer. The Notes of all classes shall be known and entitled
generally as the "DVI Receivables X, L.L.C. Asset-Backed Notes, Series 1999-2"
The Notes of each class shall have further particular designation as the Issuer
may adopt for each class, and each Note issued hereunder shall bear upon the
face thereof the designation so adopted for the class to which it belongs. The
Trustee is hereby authorized and directed upon the written order of the Issuer
to authenticate and deliver Notes to be issued hereunder in five classes, and,
with respect to the Class A Notes only, in four tranches, entitled "6.17%
Asset-Backed Notes, Series 1999-2, Class A-1", "6.54% Asset-Backed Notes, Series
1999-2, Class A-2", "6.83% Asset- Backed Notes, Series 1999-2 Class A-3", "7.22%
Asset-Backed Notes, Series 1999-2 Class A-4", "7.30% Asset-Backed Notes, Series
1999-2, Class B", "7.48% Asset-Backed Notes, Series 1999-2, Class C", "8.25%
Asset-Backed Notes, Series 1999-2, Class D" and "10.85% Asset-Backed Notes,
Series 1999-2, Class E", respectively. The Issuer may issue in accordance with
Section 2.06 hereof, the Class F Instruments which will be subordinate to the
Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and the
Class E Notes by entering into a Supplement. The form of each class of Offered
Notes and of the Trustee's certificate of authentication shall be in
substantially the forms set forth in Exhibits A-1, A-2, A-3, A-4, B, C, D and E
hereto, with such appropriate insertions, omissions, substitutions, and other
variations as are required or permitted by this Amended and Restated Indenture.
The aggregate principal amount of Notes which may be authenticated and delivered
under this Amended and Restated Indenture is limited to $262,136,000 except for
Notes authenticated and delivered upon registration of, transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Section 2.04, 2.05, or
9.04. The Notes shall be issuable only in registered form and only in
denominations of at least $500,000 and integral multiples of $1,000 thereof;
PROVIDED that the foregoing shall not restrict or prevent the transfer or
issuance in accordance with Section 2.04 or 2.05 of any Note having a remaining
outstanding principal amount of less than $500,000; PROVIDED, FURTHER, that a
single Note of each Class may be issued in a different amount as may be
necessary so that the Notes of such Class evidence the full initial principal
balance thereof. The Class F Instruments, if any, shall be issued in the minimum
denominations indicated in the related Supplement.
(b) The aggregate amount of principal due and payable on each class of
Notes on each Payment Date shall be equal to the sum of (i) Monthly Principal
for such class and (ii) any other due and unpaid principal for such class.
Except (i) for optional redemption pursuant to Section 10.01, (ii) for
Prepayment Amounts or Partial Prepayment Amounts or (iii) as otherwise provided
in Section 6.02, no part of the principal of any Note shall be paid prior to the
Payment Date on which such principal is due in accordance with the preceding
provisions of this Section 2.01(b).
(c) Interest and principal on the Notes shall be payable on each
Payment Date commencing with the Initial Payment Date to Noteholders of record
on the Record Date. Interest on the Notes is required to be paid to Noteholders
in an amount equal to the Monthly Interest plus Overdue Interest. Interest on
the Notes shall be computed on the basis of a 360-day year consisting
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of twelve 30-day months PROVIDED that for Class A-1, interest shall be computed
using the actual number of days elapsed over a 360-day year.
(d) All payments made with respect to any Note shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts and shall be applied first
to the interest then due and payable on such Notes and then to the principal
thereof.
(e) All Notes of the same class issued under this Amended and Restated
Indenture or any Supplement shall be in all respects equally and ratably
entitled to the benefits hereof and thereof without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Amended and
Restated Indenture or any Supplement. Payments of principal and interest on
Notes of the same class shall be made pro rata among all outstanding Notes of
such class, without preference or priority of any kind.
(f) The Issuer, the Trustee and each Class A, Class B, Class C, Class
D and Class E Noteholder by acceptance of its Class A, Class B, Class C, Class D
or Class E Note, respectively, (and any Person that is a beneficial owner of any
interest in a Class A, Class B, Class C, Class D or Class E Note, respectively,
by virtue of such Person's acquisition of a beneficial interest therein) agrees
to treat such Note(s) for purposes of federal, state and local income or
franchise taxes (and any other tax imposed on or measured by income) as
indebtedness. Each Class A, Class B, Class C, Class D and Class E Noteholder
agrees that it will cause any Person acquiring an interest in a Class A, Class
B, Class C, Class D or Class E Note through it to acknowledge the Class A, Class
B, Class C, Class D or Class E Notes', respectively, characterization as
indebtedness and to agree to comply with this Amended and Restated Indenture as
to treatment of such Notes as indebtedness for such tax purposes.
SECTION 2.02 GLOBAL NOTES.
(a) Initially, the Class A Notes, the Class B Notes, the Class C Notes
and the Class D Notes shall be issued in the form of one or more Public Global
Notes and the Class E Notes shall be issued in the form of one or more Rule 144A
Global Note(s) which (i) shall represent, and shall be denominated in an
aggregate amount equal to, the aggregate principal amount of all Class A Notes,
the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes to
be issued hereunder, (ii) shall be delivered as one or more Notes held by the
Book Entry Custodian, or, if appointed to hold such Notes as provided below, the
Depositary shall be registered in the name of the Depositary or its nominee,
(iii) shall be substantially in the form of the Note specified pursuant to
Section 2.01, with such changes therein as may be necessary to reflect that each
such Note is a global security, and (iv) shall each bear a legend substantially
to the effect included in the form of the face of the Notes as set forth in
Exhibits A-1, A-2, A-3, A-4, B, C, D and E hereto. Notwithstanding anything in
any Transaction Document to the contrary, no Class E Note shall be purchased by
a Person who is not a U.S. Person, as defined herein and no Class E Note shall
be purchased by a Person who is not a "qualified institutional buyer" as defined
in Rule 144A of the Securities Act.
(b) Notwithstanding any other provisions of this Section 2.02 or of
Section 2.04, unless and until a Global Note is exchanged in whole for Notes in
definitive form, a Global Note may be transferred, in whole, but not in part,
and in the manner provided in this Section 2.02, only by the
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Depositary to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary selected or approved by the Issuer or
to a nominee of such successor Depositary or in the manner specified in Section
2.02(c). The Depositary shall order the Note Registrar to authenticate and
deliver the following Book-Entry Notes: with respect to the E Notes only, a Rule
144A Global Note having an aggregate initial Outstanding principal balance equal
to the Initial Class Note Balance of such Class, and, with respect to the Class
A Notes, the Class B Notes, the Class C Notes and the Class D Notes only, a
Public Global Note, having an initial Outstanding principal balance equal to
zero. Note Owners shall hold their respective Ownership Interests in and to such
Notes through the book-entry facilities of the Depositary. Without limiting the
foregoing, Class A, Class B, Class C and Class D Note Owners shall hold their
respective Ownership Interests, if any, in Public Global Notes only through
Depositary Participants, Euroclear or Cedel.
(c) If (i) the Depositary for the Notes represented by one or more
Global Notes at any time notifies the Issuer that it is unwilling or unable to
continue as Depositary of the Notes or if at any time the Depositary shall no
longer be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation, and a successor Depositary is not appointed or
approved by the Issuer within 90 days after the Issuer receives such notice or
becomes aware of such condition, as the case may be, (ii) the Trustee, at the
direction of Noteholders evidencing not less than 66 2/3% of the Voting Rights,
elects to terminate the book-entry system through the Depositary or (iii) after
an Indenture Event of Default or a Servicer Event of Default, Noteholders
representing more than 50% of the Voting Rights advise the Depositary, or
Book-Entry Custodian, as the case may be, in writing that the continuation of a
book-entry system through the Depositary, or the Book-Entry Custodian, as the
case may be, is no longer in such Noteholder's best interest upon the request of
such Noteholder, but only with respect to the interests of such Noteholder, the
Issuer will promptly execute, and the Trustee, upon receipt of an Officer's
Certificate evidencing such determination by the Issuer, will promptly
authenticate and make available for delivery, Notes in definitive form without
coupons, in authorized denominations and in an aggregate principal amount equal
to the principal amount of the Global Note or Notes then outstanding in exchange
for such Global Note or Notes and this Section 2.02 shall no longer be
applicable to the Notes. Upon the exchange of the Global Notes for such Notes in
definitive form without coupons, in authorized denominations, such Global Notes
shall be canceled by the Trustee. Such Notes in definitive form issued in
exchange of the Global Notes pursuant to this Section 2.02(c) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee may conclusively rely on any such
instructions furnished by the Depositary and shall not be liable for any delay
in delivery of such instructions. The Trustee shall make such Notes available
for delivery to the Persons in whose names such Notes are so registered.
(d) As long as the Notes outstanding are represented by one or more
Global Notes:
(i) the Note Registrar and the Trustee may deal with the
Depositary for all purposes (including the payment of principal of and
interest on the Notes) as the authorized representative of the Note Owners;
(ii) the rights of Note Owners shall be exercised only through
the Depositary and shall be limited to those established by law and
agreements between such Note Owners
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and the Depositary and/or the Depositary Participants. Unless and until
Definitive Notes are issued, the Depositary will make book-entry transfers
among the Depositary Participants and receive and transmit payments of
principal of and interest on the Notes to such Depositary Participants; and
(iii) whenever this Amended and Restated Indenture requires or
permits actions to be taken based upon instructions or directions of
Holders of Notes evidencing a specified percentage of the Voting Rights,
the Depositary shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Note Owners
and/or Depositary Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes (or Class of
Notes) and has delivered such instruction to the Trustee.
(e) If Notes are to be issued in global form other than as Global
Notes, the provisions governing such Notes shall be specified pursuant to an
Officer's Certificate with respect thereto and by an indenture supplemental
hereto.
(f) Whenever a notice or other communication to the Noteholders is
required under this Amended and Restated Indenture, unless and until Notes have
been issued in definitive form to Note Owners, the Trustee shall give all such
notices and communications to the Depositary.
(g) The Trustee is hereby initially appointed as the Book-Entry
Custodian and hereby agrees to act as such in accordance with the agreement that
it has with the Depositary authorizing it to act as such. The Book-Entry
Custodian may, and, if it is no longer qualified to act as such, the Book-Entry
Custodian shall, appoint, by written instrument delivered to the Issuer and the
Depositary, any other transfer agent (including the Depositary or any successor
Depositary) to act as Book-Entry Custodian under such conditions as the
predecessor Book-Entry Custodian and the Depositary or any successor Depositary
may prescribe, PROVIDED that the predecessor Book-Entry Custodian shall not be
relieved of any of its duties or responsibilities by reason of any such
appointment of other than the Depositary. If the Trustee resigns or is removed
in accordance with the terms hereof, the successor Trustee or, if it so elects,
the Depositary shall immediately succeed to its predecessor's duties as Book-
Entry Custodian. The Issuer shall have the right to inspect, and to obtain
copies of, any Notes held as Book-Entry Notes by the Book-Entry Custodian.
(h) The provisions of this Section 2.02(h) shall apply to all
transfers of Definitive Notes, if any, issued in respect of Ownership Interests
in the Rule 144A Global Notes.
(1) No transfer of any Class of Note or interest therein shall be made
unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. If a
transfer of any Definitive Note is to be made without registration under
the Securities Act (other than in connection with the initial issuance
thereof or a transfer thereof by the Depositary or one of its Affiliates),
then the Note Registrar shall refuse to register such transfer unless it
receives (and upon receipt, may conclusively rely upon) either: (i) a
certificate from such Noteholder substantially in the form attached as
Exhibit G hereto or such other certification reasonably acceptable to the
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Trustee and a certificate from such Noteholder's prospective transferee
substantially in the form attached as Exhibit G hereto or such other
certification reasonably acceptable to the Trustee; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be
made without registration under the Securities Act (which Opinion of
Counsel shall not be an expense of the Issuer or any Affiliate thereof that
is a trust or of the Depositary, the Servicer, the Trustee or the Note
Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Noteholder desiring to effect such transfer and/or such Noteholder's
prospective transferee on which such Opinion of Counsel is based. If such a
transfer of any interest in a Book-Entry Note is to be made without
registration under the Securities Act, the transferor will be deemed to
have made each of the representations and warranties set forth on Exhibit G
hereto in respect of such interest as if it was evidenced by a Definitive
Note and the transferee will be deemed to have made each of the
representations and warranties set forth in either Exhibit G hereto in
respect of such interest as if it was evidenced by a Definitive Note. None
of the Depositary, the Trustee or the Note Registrar is obligated to
register or qualify any Class of Notes under the Securities Act or any
other securities law or to take any action not otherwise required under
this Amended and Restated Indenture to permit the transfer of any Note or
interest therein without registration or qualification. Any Noteholder or
Note Owner desiring to effect such a transfer shall, and does hereby agree
to, indemnify the Depositary, the Trustee and the Note Registrar against
any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
SECTION 2.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) The Notes shall be executed manually or by facsimile signature on
behalf of the Issuer by an Authorized Officer of the Issuer.
(b) Any Note bearing the signature of an individual who was at the
time of execution thereof a proper authorized signatory of the Issuer shall bind
the Issuer, notwithstanding that such individual did not hold such office at the
date of such Note.
(c) No Note shall be entitled to any benefit under this Amended and
Restated Indenture or any Supplement or be valid or obligatory for any purpose
unless there appears on such Note a certificate of authentication substantially
in the form provided for herein, executed by the Trustee by manual signature,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
Each Note shall be dated the date of its authentication.
(d) The Notes may from time to time be executed by the Issuer and
delivered to the Trustee for authentication together with an Issuer Request to
the Trustee directing the authentication and delivery of such Notes and
thereupon the same shall be authenticated and delivered by the Trustee in
accordance with such Issuer Request.
All Notes and the interest thereon shall be nonrecourse obligations of
the Issuer and shall be payable from and secured by the Trust Property. The
Notes shall never constitute obligations of the Trustee, the Contributor, the
Servicer, the Transferor, the Managing Member or of any shareholder
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or any Affiliate of such parties (other than any Affiliate that guarantees any
Notes) or any officers, directors, employees or agents of any thereof, and no
recourse may be had under or upon any obligation, covenant or agreement of this
Amended and Restated Indenture, any Supplement or of any Notes, or for any claim
based thereon or otherwise in respect thereof, against any incorporator or
against any past, present, or future owner, partner of an owner or any officer,
employee or director thereof or of any successor entity, or any other Person,
either directly or through the Issuer, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed that this Amended and Restated Indenture
and the obligations issued hereunder are solely obligations of the Issuer, and
that no such personal liability whatever shall attach to, or is or shall be
incurred by, any other Person under or by reason of this Amended and Restated
Indenture, any Supplement or any Notes or implied therefrom, or for any claim
based thereon or in respect thereof, all such liability and any and all such
claims being hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Amended and Restated Indenture and the
issue of such Notes. Except as provided in any Supplement, no Person other than
the Issuer shall be liable for any obligation of the Issuer under this Amended
and Restated Indenture or any Note or any losses incurred by any Noteholder.
SECTION 2.04 REGISTRATION, TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept at the Corporate Trust Office a
register (the "NOTE REGISTER") in which, subject to such reasonable regulations
as the Trustee may prescribe, the Issuer shall provide for the registration of
Notes and of transfers of Notes. The Trustee is hereby appointed "NOTE
REGISTRAR" for the purpose of registering Notes and transfers of Notes as herein
provided.
(b) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office, the Issuer shall execute and the Trustee upon request
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of the same class, of any authorized
denominations and of a like aggregate original principal amount.
(c) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Amended and Restated Indenture and
any Supplement, as the Notes surrendered upon such registration of transfer or
exchange.
(d) Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed, by the holder thereof
or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of transfer
or exchange of Notes but the Issuer or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, but this
provision shall not apply to any exchange pursuant to Section 9.04 not involving
any transfer.
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(f) If Notes are issued or exchanged in definitive form under Section
2.02, such Notes will not be registered by the Trustee unless each prospective
initial Noteholder acquiring a Note, each prospective transferee acquiring a
Note and each prospective owner (or transferee thereof) of a beneficial interest
in Notes acquiring such beneficial interest provides the Servicer, the Issuer,
the Trustee and any successor Servicer with a representation that the statements
in either subsections (1) or (2) of Section 2.11 is an accurate representation
as to all sources of funds to be used to pay the purchase price of the Notes.
(g) No transfer of a Note shall be deemed effective unless the
registration and prospectus delivery requirements of Section 5 of the Securities
Act of 1933, as amended, and any applicable state securities laws are complied
with, or such transfer is exempt from the registration and prospectus delivery
requirements under said Securities Act and laws. In the event that a transfer is
to be made without registration or qualification, such Noteholder's prospective
transferee shall deliver to the Trustee an investment letter substantially in
the form of Exhibit G hereto (the "INVESTMENT LETTER"). The Trustee is not under
any obligation to register the Notes under said Act or any other securities law
or to bear any expense with respect to such registration by any other Person or
monitor compliance of any transfer with the securities laws of the United States
regulations promulgated in connection thereto or ERISA unless the Notes are
issued or exchanged in definitive form under Section 2.02.
(h) No Class E Noteholder shall transfer, sell, assign, pledge or
otherwise grant a security interest in ("TRANSFER"), a Class E Note to any
Person that is not a United States person within the meaning of section
7701(a)(30) of the Code. In the event of any Transfer with respect to a Class E
Note, the Trustee shall require, in addition to any other applicable
requirements set forth in this Amended and Restated Indenture, including without
limitation, the delivery of the Investment Letter, (A) the purchaser to execute
a Tax Certificate in substantially the form attached as Exhibit I hereto
certifying to the transferor and the Trustee as to the matters set forth therein
and (B) the transferee to certify, in form and substance reasonably acceptable
to the Trustee, that (1) the transferee is acquiring the Class E Note for its
own behalf and is not acting as agent or custodian for any other person or
entity in connection with such acquisition and (2) the transferee is a United
States person within the meaning of section 7701(a)(30) of the Code.
In addition, no Class E Noteholder shall Transfer a Class E Note to
any Person that is a grantor trust, partnership or S corporation (each a
"PASS-THROUGH ENTITY") if substantially all of the value of the assets of the
Pass-Through Entity is attributable to the Pass-Through Entity's ownership
interest in securities of the Issuer other than the Class A, Class B, Class C
and Class D Notes, nor may the Class E Notes be Transferred or sold to any
Person if, for the purposes of Section 7704 of the Code and the Treasury
regulations promulgated thereunder, after giving effect to such Transfer the
Issuer would be treated under the Code (by virtue of calculating the aggregate
number, Class E Noteholders and holders of the Class F Instrument (if issued))
as being owned by more than 100 persons. In the event of any Transfer with
respect to a Class E Note, the Trustee shall require, in addition to any other
applicable requirements set forth in this Agreement, including without
limitation, the delivery of the Investment Letter, (A) the purchaser to execute
a Tax Certificate substantially in the form attached as Exhibit I hereto in form
and substance reasonably acceptable to the Trustee certifying to the transferor
and the Trustee as to the matters set forth therein and (B) the transferee to
certify, in form and substance reasonably acceptable to the Trustee, that (1)
the transferee is acquiring the Class E Note for its own
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behalf and is not acting as agent or custodian for any other person or entity in
connection with such acquisition and (2) the transferee is (x) not a
Pass-through Entity or (y) is a Pass-through Entity but after giving effect to
such purchase of such Class E Note by such person, substantially all of the
value of the assets of the Pass-Through Entity is not attributable to the
Pass-Through Entity's ownership interest in the Class E Notes.
SECTION 2.05 MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
(a) If any mutilated Note is surrendered to the Trustee, the Issuer
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a replacement Note of the same class, of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Issuer and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of actual notice
to the Issuer or the Trustee that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
replacement Note of the same class, of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
(c) In case the final installment of principal on any such mutilated,
destroyed, lost or stolen Note has become or will at the next Payment Date
become due and payable, the Issuer in its discretion may, instead of issuing a
replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this Section, the
Issuer or the Trustee may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed as a result of the issuance
of such replacement Note.
(e) Every replacement Note issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Amended and Restated Indenture and any Supplement
equally and proportionately with any and all other Notes of the same class, duly
issued hereunder.
(f) The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06 DELIVERY OF CLASS F INSTRUMENTS.
(a) The Issuer may issue the Class F Instruments upon delivery to the
Trustee of the following: (i) a Supplement in form reasonably satisfactory to
the Trustee executed by the Issuer, the Trustee and any other applicable party
and specifying the items provided in Section 2.06(c) and any other terms (the
"PRINCIPAL TERMS"), (ii) any related credit enhancement agreements as
contemplated by such Supplement, (iii) written confirmation from each Rating
Agency that the issuance of such Class F Instruments will not result in a
Ratings Effect with respect to any class of Notes; PROVIDED,
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HOWEVER, that no such written confirmation shall be required if the Class F
Instruments are issued on the Closing Date, (iv) such other closing documents,
certificates and Opinions of Counsel as may be required by this Amended and
Restated Indenture or the applicable Supplement and (v) an Officer's Certificate
from the Issuer stating that each of the conditions to the issuance of the Class
F Instruments set forth in this Section 2.06 have been satisfied. In no event
shall the Issuer issue a Class F Instrument to the order of the Issuer or an
Affiliate.
(b) Any such Class F Instrument shall be substantially in the form of
Exhibit F hereto and shall bear, upon its face, the designation for such class
to which it belongs so selected by the Issuer and set forth in the related
Supplement. All Class F Instruments shall be identical in all respects except
for the denominations thereof and shall be equally and ratably entitled among
themselves to the benefits of this Amended and Restated Indenture and any
Supplement thereof without preference, priority or distinction on account of the
actual title or times of authentication and delivery, all in accordance with the
terms and provisions of this Amended and Restated Indenture and such Supplement.
Notwithstanding anything contained in any Supplement, such Class F Instruments,
if any, shall be subordinate to the Class A Notes, the Class B Notes, the Class
C Notes, the Class D Notes and the Class E Notes, and no Class F Instruments
shall adversely affect the method of allocating Available Funds to Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes or the Class E
Notes for any period or alter or affect the manner or timing of distributions to
the Class A, Class B, Class C, Class D or Class E Noteholders or the rights or
priority of such holders in and to the Trust Property.
(c) Any Supplement relating to Class F Instruments shall define or
provide for, but shall not be limited to, the following Principal Terms: (i) the
name or designation of the Class F Instruments, (ii) the initial balance of the
Class F Instrument (or method for calculating such amount), (iii) the rate of
interest applicable to such Class F Instrument (or formula for the determination
thereof, which may provide that such rate is a floating rate), (iv) the Class F
Percentage, (v) the Stated Maturity Date, (vi) the Redemption Price, if any,
(vii) the Payment Dates and the date or dates from which interest shall accrue
and (viii) if the Class F Instruments are entitled to receive less than the
entire amount distributable to the Issuer or its designee pursuant to Section
3.04(b)(xiii), the amount that the Class F Instruments are entitled to receive;
PROVIDED that no such Supplement shall conflict with the terms of this Amended
and Restated Indenture in any respect.
(d) The Issuer will not issue, sell, assign, pledge or otherwise grant
a security interest in, the Class F Instruments without an Opinion of Counsel
acceptable in form and substance to the Trustee and addressed to the Trustee
delivered by outside counsel to the Issuer to the effect that for federal income
tax purposes (i) such issuance, sale, assignment, pledge or grant of a security
interest in the Class F Instruments will not affect the tax characterization of
any of the Class A Notes, Class B Notes, Class C Notes or Class D Notes as
indebtedness or Class E Notes as indebtedness or partnership interests, (ii)
such issuance, sale, assignment, pledge or grant of a security interest in the
Class F Instruments will not constitute a deemed reissuance of the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes or the Class E
Notes under Treasury Regulations ss.1.1001-3 and (iii) such issuance, sale,
assignment, pledge or grant of a security interest in the Class F Instruments
will not prevent the income from the Trust Property from being properly included
in the consolidated federal income tax return of the DVI Group.
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SECTION 2.07 PAYMENT OF INTEREST AND PRINCIPAL; RIGHTS PRESERVED.
(a) Any installment of interest or principal payable on any Note that
is paid or duly provided for by the Issuer on the applicable Payment Date shall
be paid to the Person in whose name such Note was registered at the close of
business on the Record Date for such Payment Date by wire transfer of
immediately available funds to the account and number specified in the Note
Register on such Record Date for such Person or, if no such account or number is
so specified, then by check mailed to such Person's address as it appears in the
Note Register on such Record Date.
(b) All reductions in the principal amount of a Note effected by
payments of installments of principal made on any Payment Date shall be binding
upon all holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not such
payment is noted on such Note. All payments on the Notes shall be paid without
any requirement of presentment but each holder of any Note shall be deemed to
agree, by its acceptance of the same, to surrender such Note at the Corporate
Trust Office for the payment of the final installment of principal on such Note.
SECTION 2.08 PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration or transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Noteholder as the owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Trustee nor any
agent of the Issuer or the Trustee shall be affected by notice to the contrary.
SECTION 2.09 CANCELLATION.
All Notes surrendered for registration of transfer or exchange or
final payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Issuer may
at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Amended and Restated Indenture. All cancelled Notes held by the Trustee may be
disposed of in the normal course of its business or as directed by an Issuer
Order.
SECTION 2.10. NOTEHOLDER LISTS; COMMUNICATIONS TO NOTEHOLDERS.
(a) The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Note Registrar, the Issuer or other
obligor, if any, shall furnish to the Trustee at least three Business Days prior
to each Record Date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Noteholders.
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(b) If any Noteholder (herein referred to as an "APPLICANT") applies
in writing to the Trustee, and such application states that the applicant
desires to communicate with other Noteholders with respect to their rights under
this Amended and Restated Indenture or under the Notes, then the Trustee shall,
within three Business Days after the receipt of such application, afford such
applicant(s) access to the information preserved at the time by the Trustee in
accordance with Section 2.10(a).
(c) Every Noteholder, by receiving and holding the same, agrees with
the Issuer and the Trustee that neither the Issuer nor the Trustee nor any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Noteholders in accordance
with Section 2.10(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 2.10(b).
SECTION 2.11. ERISA DEEMED REPRESENTATIONS
Each prospective initial Noteholder acquiring Notes, each prospective
transferee acquiring the Notes, and each prospective owner (or transferee
thereof) of a beneficial interest in Notes (each a "PROSPECTIVE OWNER") will be
deemed to have represented by such purchase to the Issuer, the Trustee, the
Servicer and any successor Servicer that either (1) it is not a plan within the
meaning of Section 3(3) of ERISA or Section 4975 of the Code ("PLAN") and is not
directly or indirectly acquiring the Notes on behalf of, as investment manager
of, as named fiduciary of, as trustee of, or with the assets of a Plan; or (2)
the acquisition and holding of the Notes will not give rise to a prohibited
transaction under Section 406(a) of ERISA or Section 4975 of the Code for which
a statutory or administrative exemption is unavailable.
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ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01 ACCOUNTS; INVESTMENTS BY TRUSTEE.
(a) The Servicer, pursuant to a Lock-Box Agreement, shall establish a
Lock-Box Account, which account shall be an Eligible Deposit Account, in the
name of the Trustee for the benefit of the Noteholders. Each Lock-Box Account
shall be a segregated account initially established and maintained with First
Union National Bank, First National Bank of Chicago or such other Lock-Box Bank
as the Servicer may select; PROVIDED, HOWEVER, that the Servicer (i) shall give
the Trustee and the Rating Agencies written notice of any change in the location
of a Lock-Box Account and (ii) shall give at least 10 days' prior written notice
of the new location to each Obligor.
In addition, on or before the Closing Date, the Trustee shall
establish in the name of the Trustee for the benefit of the Noteholders and the
Issuer to the extent of their interests therein as provided in this Amended and
Restated Indenture and in the Amended and Restated Contribution and Servicing
Agreement, the following accounts, which accounts shall be trust accounts
maintained at the Corporate Trust Office:
(i) Collection Account;
(ii) Distribution Account; and
(iii) Reserve Account.
Each of such accounts shall be established and maintained as an Eligible Deposit
Account. In addition, the Trustee shall establish a sub-account to the
Distribution Account for each Class of Notes (such sub-accounts the "CLASS A
DISTRIBUTION SUB-ACCOUNT," the "CLASS B DISTRIBUTION SUB-ACCOUNT," the "CLASS C
DISTRIBUTION SUB-ACCOUNT" the "CLASS D DISTRIBUTION SUB-ACCOUNT," the "CLASS E
DISTRIBUTION SUB-ACCOUNT" and, if necessary, the "CLASS F DISTRIBUTION
SUB-ACCOUNT"). Subject to the further provisions of this Section 3.01(a), the
Trustee shall, upon receipt or upon transfer from another account, as the case
may be, deposit into such accounts all amounts received by it which are required
to be deposited therein in accordance with the written direction of the Servicer
and the provisions of this Amended and Restated Indenture. All such amounts and
all investments made with such amounts, including all income and other gain from
such investments, shall be held by the Trustee in such accounts as part of the
Trust Property as herein provided, subject to withdrawal by the Trustee in
accordance with, and for the purposes specified in the written direction of the
Servicer pursuant to the provisions of, this Amended and Restated Indenture.
The Collection Account shall be comprised of more than one such
Eligible Deposit Account, but shall, for the purposes of the Transaction
Documents, be deemed to be one account. Funds shall be withdrawn equally from
each such Eligible Account that constitutes the Collection Account to make all
payments from the Collection Account in accordance with the terms and conditions
of this Amended and Restated Indenture.
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(b) The Trustee shall hold in trust but shall not be required to
deposit in any account specified in Section 3.01(a) any payment received by it
until such time as the Trustee shall have identified to its reasonable
satisfaction the nature of such payment and, on the basis thereof, the proper
account or accounts into which such payment is to be deposited. In determining
into which of the accounts, if any, referred to above any amount received by the
Trustee is to be deposited, the Trustee may conclusively rely (in the absence of
bad faith on the part of the Trustee) on the written instructions of the
Servicer. Unless otherwise advised in writing by the Servicer, the Trustee shall
assume that any amount remitted to it is to be deposited into the Collection
Account pursuant to Section 3.03(b). The Trustee may establish from time to time
such deadline or deadlines as it shall determine are reasonable or necessary in
the administration of the Trust Property after which all amounts received or
collected by the Trustee on any day shall not be deemed to have been received or
collected until the next succeeding Business Day.
(c) The Trustee shall have no right of set-off with respect to any
Lock-Box Account, the Collection Account, the Reserve Account, the Distribution
Account, the Class A Distribution Sub- Account, the Class B Distribution
Sub-Account, the Class C Distribution Sub-Account, the Class D Distribution
Sub-Account, the Class E Distribution Sub-Account, the Class F Distribution Sub-
Account or any investment therein, or any Trust Property, including collections
or proceeds with respect thereto regardless of when or how held by the Trustee
and whether or not commingled.
(d) So long as no Default or Indenture Event of Default shall have
occurred and be continuing, the amounts in the Collection Account and the
Reserve Account shall be invested and reinvested by the Trustee pursuant to a
Servicer Order in one or more Eligible Investments. Subject to the restrictions
on the maturity of investments set forth in Section 3.01(f), each such Servicer
Order may authorize the Trustee to make the specific Eligible Investments set
forth therein, to make Eligible Investments from time to time consistent with
the general instructions set forth therein, or to make specific Eligible
Investments pursuant to instructions received in writing or by telegraph or
facsimile transmission from the employees or agents of the Servicer identified
therein, in each case in such amounts as such Servicer Order shall specify. The
Issuer, and any Class F Instrumentholder, agrees to report as income for
financial reporting and tax purposes (to the extent reportable) all investment
earnings on amounts in the Collection Account and the Reserve Account.
(e) In the event that either (i) the Servicer shall have failed to
give investment directions to the Trustee by 12:00 P.M. New York time on any
Business Day on which there may be uninvested cash or (ii) a Default or
Indenture Event of Default shall have occurred and be continuing, then the
Trustee shall invest and reinvest the funds then in the Collection Account, the
Reserve Account, as the case may be, to the fullest extent practicable in one or
more Eligible Investments as specified in paragraph (vii) of the definition of
Eligible Investments. All investments made by the Trustee shall mature no later
than the maturity date therefor permitted by Section 3.01(f).
(f) No investment of any amount held in the Collection Account or the
Reserve Account shall mature later than the second Business Day immediately
preceding the Payment Date which is scheduled to occur immediately following the
date of investment; all such investments shall be held to maturity. All income
or other gains from the investment of moneys deposited in the Collection Account
or the Reserve Account shall be deposited by the Trustee in such account
immediately upon receipt. Any net loss of principal (determined on a month by
month basis) resulting
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from such investment of amounts in the Collection Account or the Reserve Account
shall be charged to the Issuer, and the Issuer shall reimburse such account for
such loss within three Business Days.
(g) Any investment of any funds in the Collection Account or the
Reserve Account, and any sale of any investment held in such accounts, shall be
made under the following terms and conditions:
(i) each such investment shall be made in the name of the Trustee
(in its capacity as such) for the benefit of the Noteholders or in the name
of a nominee of the Trustee;
(ii) the investment earnings of any investment shall be credited
to the account for which such investment was made;
(iii) any certificate or other instrument evidencing such
investment shall be delivered directly to the Trustee or its agent and the
Trustee shall have sole possession of such instrument, and all income on
such investment; and
(iv) the proceeds of any sale of an investment shall be remitted
by the purchaser thereof directly to the Trustee for deposit in the account
in which such investment was held.
(h) The Trustee shall not in any way be held liable by reason of any
insufficiency in the Collection Account or the Reserve Account, resulting from
losses on investments made in accordance with the provisions of this Section
3.01 (but the institution serving as Trustee shall at all times remain liable
for its own debt obligations, if any, constituting part of such investments).
The Trustee shall not be liable for any investment losses or any liquidation
prior to its maturity or any investment made by it in accordance with this
Section 3.01 on the grounds that it could have made a more favorable investment.
SECTION 3.02 RESERVED.
SECTION 3.03 COLLECTION OF MONEYS.
(a) Except as otherwise expressly provided herein, the Trustee may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Trustee pursuant to
this Amended and Restated Indenture. The Trustee shall apply all such money
received by it as provided in this Amended and Restated Indenture. Except as
otherwise expressly provided in this Amended and Restated Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Property, the Trustee may take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings. Notwithstanding the
foregoing, the Trustee shall not be obligated to act as Servicer prior to its
being appointed Successor Servicer. Any such action shall be without prejudice
to any right to claim a Default or Event of Default under this Amended and
Restated Indenture and any right to proceed thereafter as provided in Article
VI. If at any time the Issuer shall receive any payment on or in respect of any
Contract or Equipment (including any Residual
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Payment), it shall hold such payment in trust for the benefit of the Trustee and
the Noteholders, shall segregate such payment from the other property of the
Issuer, and shall, within two Business Days of receipt, deliver such payment in
immediately available funds to the Trustee.
(b) If at any time the Trustee shall receive any payment on or in
respect of any Contract or Equipment (including any Residual Payment), it shall,
within two Business Days of receipt, deposit such payment by it into the
Collection Account in accordance with the written direction of the Servicer.
(c) If at any time the Trustee shall receive any Residual Payment in
respect of any Contract, it shall hold such Residual Payment in trust for the
benefit of the Contributor and deposit such Residual Payment as instructed in
writing by the Servicer, including, without limitation, as the Servicer may so
instruct as contemplated in Section 3.04(a)(v) hereof or to such other designee
or account as the Servicer instructs.
SECTION 3.04 COLLECTION ACCOUNT.
(a) The Trustee shall deposit the following into the Collection
Account in accordance with the written instructions delivered to the Trustee by
the Servicer:
(i) promptly upon receipt, each Contract Payment or Servicer
Advance received by the Trustee, including all Contract Payments deposited
with the Trustee by the Contributor on the Closing Date;
(ii) promptly upon receipt, the proceeds of any purchase of
Contracts and Equipment pursuant to Section 4.02 of this Amended and
Restated Indenture;
(iii) promptly upon receipt, each Prepayment Amount or Partial
Prepayment Amount received by the Trustee and any amounts remitted by the
Contributor in connection with any substitution of Contracts;
(iv) promptly upon receipt, any amount required to be deposited
in the Collection Account pursuant to this Amended and Restated Indenture;
(v) promptly upon receipt, each Residual Payment received by the
Trustee;
(vi) promptly upon receipt, any proceeds received by the Trustee
pursuant to any insurance policy covering Equipment or any other amounts
received by the Trustee relating to a Contract or Equipment; and
(vii) promptly upon receipt, any amounts the Trustee receives
pursuant to Section 3.03 of this Amended and Restated Indenture.
(b) Unless the Notes have been declared due and payable pursuant to
Section 6.02 hereof and moneys collected by the Trustee are being applied in
accordance with Section 6.06 hereof, the Trustee shall by 3:00 P.M., New York
City time, on each Payment Date disburse all Available
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Funds deposited in the Collection Account (including any investment income with
respect to monies on deposit in the Collection Account) in the amounts required,
and in the following order of priority in accordance with the Monthly Servicer
Report:
(i) to the Servicer, the Servicing Fee due to the Servicer on
such Payment Date and if the Servicer is no longer DVI, and the Servicer
has, in its good faith and reasonable business judgment, deemed the
Servicing Fee to be commercially unreasonable, then, to the Servicer, the
amount agreed upon between the then Servicer and the Trustee, each in their
good faith and commercially reasonable judgment, as necessary to make the
Servicing Fee commercially reasonable and to cover the reasonable costs in
transferring the servicing obligations;
(ii) to the Servicer, any unreimbursed Nonrecoverable Advances or
Servicer Advances previously made with respect to Delinquent Contracts in
accordance with Section 5.01 of the Amended and Restated Contribution and
Servicing Agreement;
(iii) first, to the Class A Distribution Sub-Account, in the
following order of priority, the sum of: (A) the Class A-1 Monthly
Interest; and (B) the Class A-1 Overdue Interest, if any; second, to the
Class A Distribution Sub-Account, in the following order of priority, the
sum of: (A) the Class A-2 Monthly Interest; and (B) the Class A-2 Overdue
Interest, if any; third, to the Class A Distribution Sub-Account, in the
following order of priority, the sum of: (A) the Class A-3 Monthly
Interest; and (B) the Class A-3 Overdue Interest, if any; and fourth, to
the Class A Distribution Sub-Account, in the following order of priority,
the sum of: (A) the Class A-4 Monthly Interest; and (B) the Class A-4
Overdue Interest, if any;
(iv) to the Class B Distribution Sub-Account, in the following
order of priority, in the sum of:
(A) the Class B Monthly Interest; and
(B) the Class B Overdue Interest, if any;
(v) to the Class C Distribution Sub-Account, in the following
order of priority, the sum of:
(A) the Class C Monthly Interest; and
(B) the Class C Overdue Interest, if any;
(vi) to the Class D Distribution Sub-Account, in the following
order of priority, in the sum of:
(A) the Class D Monthly Interest; and
(B) the Class D Overdue Interest, if any;
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(vii) to the Class E Distribution Sub-Account, in the following
order of priority, the sum of:
(A) the Class E Monthly Interest; and
(B) the Class E Overdue Interest, if any;
(viii) PROVIDED that no Amortization Event shall have occurred
and be continuing, to the Class A Distribution Sub-Account, in the
following order of priority, the sum of:
(A) the Class A-1 Overdue Principal, if any;
(B) the Class A-1 Monthly Principal;
(C) the Class A-2 Overdue Principal, if any;
(D) the Class A-2 Monthly Principal;
(E) the Class A-3 Overdue Principal, if any;
(F) the Class A-3 Monthly Principal;
(G) the Class A-4 Overdue Principal, if any; and
(H) the Class A-4 Monthly Principal;
(ix) PROVIDED that no Amortization Event shall have occurred and
be continuing, to the Class B Distribution Sub-Account, in the following
order of priority, the sum of:
(A) the Class B Overdue Principal, if any; and
(B) the Class B Monthly Principal;
(x) PROVIDED that no Amortization Event shall have occurred and
be continuing, to the Class C Distribution Sub-Account, in the following
order of priority, the sum of:
(A) the Class C Overdue Principal, if any; and
(B) the Class C Monthly Principal;
(xi) PROVIDED that no Amortization Event shall have occurred and
be continuing, to the Class D Distribution Sub-Account, in the following
order of priority, the sum of:
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(A) the Class D Overdue Principal, if any; and
(B) the Class D Monthly Principal;
(xii) PROVIDED that no Amortization Event shall have occurred and
be continuing, to the Class E Distribution Sub-Account, in the following
order of priority, the sum of:
(A) the Class E Overdue Principal, if any; and
(B) the Class E Monthly Principal;
(xiii) PROVIDED that no Amortization Event shall have occurred
and be continuing, to the Reserve Account, the Reserve Account Deposit
Amount;
(xiv) if an Amortization Event shall have occurred and is
continuing and is not subject to a continuing waiver from Noteholders
evidencing not less than 662/3% of the Voting Rights, in the following
order of priority:
FIRST, to the Class A Distribution Sub-Account the amount
necessary to reduce the Class A-1 Note Balance to zero; then, to
the Class A Distribution Sub- Account, the amount necessary to
reduce the Class A-2 Note Balance to zero; then, to the Class A
Distribution Sub-Account, the amount necessary to reduce the
Class A-3 Note Balance to zero; and then, to the Class A
Distribution Sub- Account, the amount necessary to reduce the
Class A-4 Note Balance to zero; PROVIDED, HOWEVER, that upon the
occurrence of a Subordination Deficiency Event, after the Class
A-1 Note Balance has been reduced to zero and the Class A-2 Note
Balance has been reduced to zero, then the Class A-3 Note Balance
and the Class A-4 Note Balance will be paid on a PRO RATA, PARI
PASSU basis; and
SECOND, to the Class B Distribution Sub-Account the amount
necessary to reduce the Class B Note Balance to zero; and
THIRD, to the Class C Distribution Sub-Account the amount
necessary to reduce the Class C Note Balance to zero;
FOURTH, to the Class D Distribution Sub-Account the amount
necessary to reduce the Class D Note Balance to zero; and
FIFTH, to the Class E Distribution Sub-Account the amount
necessary to reduce the Class E Note Balance to zero;
(xv) any remaining Available Funds on deposit in the Collection
Account shall be paid to DVI Receivables Corp. VIII, as sole member of the
Issuer, or, if the Class F Instrument has been issued, to the Class F
Distribution Sub-Account.
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Noteholders evidencing not less than 662/3% of the Voting Rights shall have the
ability to waive or defer any Amortization Event by written notice delivered to
the Trustee. If at any time any amount or portion thereof previously distributed
pursuant to this Section 3.04(b) shall have been recovered, or shall be subject
to recovery, in any proceeding with respect to the Issuer or otherwise, then for
purposes of determining future distributions pursuant to this Section 3.04(b)
such amount or portion thereof shall be deemed not to have been previously so
distributed. The Trustee shall make the disbursements in accordance with the
Monthly Servicer Report on each Payment Date to the extent of Available Funds
for such Payment Date.
(c) If on any Payment Date, the Available Funds on deposit in the
Collection Account (the "DEPOSITED AVAILABLE FUNDS") are less than the sum
necessary to make the payments required pursuant to Section 3.04(b), clauses
(iii) through (xii) inclusive and clause (xiv), each as applicable (the sum of
such payments, the "PRIORITY PAYMENTS"), then the Trustee shall withdraw from
the Reserve Account, to the extent that such funds are on deposit in the Reserve
Account and after taking into account payments to be made pursuant to clauses
(i) and (ii) of Section 3.04(b), and either (A) if an automatic stay under
Section 362(a) of the Bankruptcy Code has not been applied to the Trust
Property, deposit into the Distribution Account for payment on such Payment Date
funds equal to the amount of the Priority Payments less any Deposited Available
Funds for payment in accordance with Section 3.04(b)(iii) through and including
(xii) and (xiv) hereof, as applicable or (B) if an automatic stay under Section
362(a) of the Bankruptcy Code has been applied to the Trust Property, deposit
into the Distribution Account for payment on such Payment Date funds equal to
the amount of payments required pursuant to Section 3.04(b), clauses (iii)
through (vii) less any Deposited Available Funds for payment in accordance with
Section 3.04(b)(iii) through and including (vii) hereof, as applicable (the
amount calculated pursuant to Clause (A) or (B), as applicable, the "AVAILABLE
RESERVE ACCOUNT FUNDS").
SECTION 3.05 CLASS A DISTRIBUTION SUB-ACCOUNT; CLASS B DISTRIBUTION
SUB-ACCOUNT; CLASS C DISTRIBUTION SUB-ACCOUNT; CLASS D DISTRIBUTION SUB-ACCOUNT;
CLASS E DISTRIBUTION SUB-ACCOUNT; CLASS F DISTRIBUTION SUB-ACCOUNT.
(a) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class A Noteholders, from the amounts then
on deposit in the Class A Distribution Sub- Account and allocated pursuant to
Section 3.04 hereof, first to the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders and the Class A-4 Noteholders, PRO RATA
among the Noteholders of each such Class, in the following order of priority:
(i) the Class A-1 Monthly Interest;
(ii) the Class A-1 Overdue Interest, if any;
(iii) the Class A-2 Monthly Interest;
(iv) the Class A-2 Overdue Interest, if any;
(v) the Class A-3 Monthly Interest;
(vi) the Class A-3 Overdue Interest, if any;
(vii) the Class A-4 Monthly Interest; and
(viii) the Class A-4 Overdue Interest, if any;
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second, to the Class A-1 Noteholders, Class A-2 Noteholders, the Class
A-3 Noteholders and the Class A-4 Noteholders, PRO RATA among the Noteholders of
each such Class, in the following order of priority:
(i) the Class A-1 Overdue Principal, if any;
(ii) the Class A-1 Monthly Principal;
(iii) any additional Class A-1 principal payable pursuant to
the Amended and Restated Indenture;
(iv) the Class A-2 Overdue Principal, if any;
(v) the Class A-2 Monthly Principal;
(vi) any additional Class A-2 principal payable pursuant to
the Amended and Restated Indenture;
(vii) the Class A-3 Overdue Principal, if any;
(viii) the Class A-3 Monthly Principal;
(ix) any additional Class A-3 principal payable pursuant to
the Amended and Restated Indenture;
(x) the Class A-4 Overdue Principal, if any;
(xi) the Class A-4 Monthly Principal; and
(xii) any additional Class A-4 principal payable under the
Amended and Restated Indenture;
PROVIDED, HOWEVER, that in the event that a Subordination Deficiency Event has
occurred and is continuing, after the Class A-1 Note Balance has been reduced to
zero, and the Class A-2 Note Balance has been reduced to zero, the Class A-3
Note Balance and the Class A-4 Note Balance will be paid on a PRO RATA, PARI
PASSU basis.
(b) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class B Noteholders, PRO RATA among the
Noteholders of such Class, the amount then on deposit in the Class B
Distribution Sub-Account and allocated pursuant to Section 3.04 hereof. Such
payments to the Class B Noteholders shall be made in the following order of
priority:
(i) the Class B Monthly Interest;
(ii) the Class B Overdue Interest, if any;
(iii) the Class B Overdue Principal, if any;
(iv) the Class B Monthly Principal; and
(v) any additional principal payable to
the Class B Noteholders pursuant to the Amended and
Restated Indenture.
(c) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class C Noteholders, PRO RATA among the
Noteholders of such Class, the amount then on deposit in the Class C
Distribution Sub-Account and allocated pursuant to Section 3.04 hereof. Such
payments to the Class C Noteholders shall be made in the following order of
priority:
(i) the Class C Monthly Interest;
(ii) the Class C Overdue Interest, if any;
(iii) the Class C Overdue Principal, if any;
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(iv) the Class C Monthly Principal; and
(v) any additional principal payable to the Class C
Noteholders pursuant to the Amended and Restated
Indenture.
(d) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class D Noteholders, PRO RATA among the
Noteholders of such Class, the amount then on deposit in the Class D
Distribution Sub-Account and allocated pursuant to Section 3.04 hereof. Such
payments to the Class D Noteholders shall be made in the following order of
priority:
(i) the Class D Monthly Interest;
(ii) the Class D Overdue Interest, if any;
(iii) the Class D Overdue Principal, if any;
(iv) the Class D Monthly Principal; and
(v) any additional principal payable to the Class D
Noteholders pursuant to the Amended and Restated
Indenture.
(e) On each Payment Date in accordance with the Monthly Servicer
Report the Trustee shall pay to the Class E Noteholders, PRO RATA among the
Noteholders of such Class, the amount then on deposit in the Class E
Distribution Sub-Account and allocated pursuant to Section 3.04 hereof. Such
payments to the Class E Noteholders shall be made in the following order of
priority:
(i) the Class E Monthly Interest;
(ii) the Class E Overdue Interest, if any;
(iii) the Class E Overdue Principal, if any;
(iv) the Class E Monthly Principal; and
(v) any additional principal payable to the Class E
Noteholders pursuant to the Amended and Restated
Indenture.
(f) If the Class F Instruments have been issued, on each Payment Date
in accordance with the Monthly Servicer Report the Trustee shall distribute to
the Class F Instrumentholders, PRO RATA among all holders of Class F
Instruments, the amount then on deposit in the Class F Distribution Sub- Account
in the priority set forth in the Supplement.
SECTION 3.06 RESERVED.
SECTION 3.07 RESERVED.
SECTION 3.08 RESERVE ACCOUNT.
(a) On each Payment Date the Trustee shall promptly deposit into the
Reserve Account all amounts required to be deposited into the Reserve Account
and actually received by the Trustee pursuant to this Amended and Restated
Indenture. The obligation of the Trustee to deposit amounts into the Reserve
Account in accordance with the terms of this Amended and Restated Indenture
shall be limited to the deposit of amounts in the Collection Account pursuant to
Section 3.04(b) hereof. The Trustee shall not have any responsibility to
determine the amount or adequacy of funds on deposit in the Reserve Account, or
the amount of any deposits to or withdrawals from the Reserve Account. The
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Issuer, or Class F Instrumentholder, if any, by its acceptance of the Class F
Instrument, agrees to treat such assets (and all earnings thereon) (the "RESERVE
ACCOUNT PROPERTY") as its assets (and earnings) for federal, state and local tax
purposes and not to sell, transfer or otherwise dispose of its interest therein.
(b) On each Payment Date, the Trustee shall, on the basis of the
Monthly Servicer Report, deposit in the Reserve Account, pursuant to Section
3.04(b), an amount equal to the Reserve Account Deposit Amount. If on any
Payment Date, Deposited Available Funds are less than the Priority Payments, the
Trustee shall withdraw from the Reserve Account the excess of the Priority
Payments over the Available Funds in accordance with Section 3.04(c) hereof. On
each Payment Date, if, after giving effect to all deposits and withdrawals
therefrom on such Payment Date, the balance in the Reserve Account is greater
than the Reserve Account Requirement, the Trustee shall release and, at the
instruction of the Servicer, shall pay the amount (such amount, a "RESERVE
ACCOUNT WITHDRAWAL") of the excess to the Issuer or its designee, or Class F
Instrumentholder, if any. Amounts properly paid to the Issuer or its designee,
or Class F Instrumentholder, if any, pursuant to this Section 3.08, either
directly from the Distribution Account without deposit in the Reserve Account or
from the Reserve Account, shall be deemed released from the Trust Property, and
the Issuer or its designee, or Class F Instrumentholder, if any, shall not in
any event thereafter be required to refund any such paid amounts.
(c) With respect to the Reserve Account Property, the Issuer and the
Trustee agree that any Reserve Account Property that is held in deposit accounts
shall be held solely in the name of the Trustee, on behalf of the Noteholders.
Each such deposit account shall be subject to the exclusive custody and control
of the Trustee, and the Trustee shall have sole signature authority with respect
thereto.
(d) Upon termination of this Amended and Restated Indenture, any
amounts on deposit in the Reserve Account, after payment of amounts due to the
Class A Noteholders, the Class B Noteholders, the Class C Noteholders, the Class
D Noteholders, the Class E Noteholders upon the Managing Member's written
request to the Trustee, shall be paid to the Managing Member (as sole beneficial
owner of the Issuer), or Class F Instrumentholders, if any.
SECTION 3.09 REPORTS; NOTICES OF CERTAIN PAYMENTS.
(a) Following each payment to the Noteholders, the Trustee shall mail
to the Issuer, Cede & Co. and the Rating Agencies, and make available to each
Noteholder, the Monthly Servicer Report furnished to the Trustee by the Servicer
on the Determination Date prior to such Payment Date (or if such report has not
been received, a written statement to such effect).
(b) The Trustee shall deliver to the Servicer, and within two Business
Days after the request of the Issuer, deliver to the Issuer a written statement
setting forth the amounts on deposit in the Collection Account and the Reserve
Account, and identifying the investments included therein.
SECTION 3.10. TRUSTEE MAY RELY ON CERTAIN INFORMATION FROM CONTRIBUTOR
AND SERVICER.
Pursuant to the Amended and Restated Contribution and Servicing
Agreement, the Contributor and the Servicer are required to furnish to the
Trustee from time to time certain information and make various calculations
which are relevant to the performance of the Trustee's duties in this Article
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III and in Article IV of this Amended and Restated Indenture. The Trustee shall
be entitled to rely conclusively in good faith on any such information and
calculations in the performance of its duties hereunder, (i) unless and until a
Responsible Officer of the Trustee has actual knowledge that such information or
calculations is or are incorrect, or (ii) unless there is a manifest error in
any such information; PROVIDED that the Trustee shall verify the mathematical
accuracy of the Class A-1 Monthly Principal, the Class A-2 Monthly Principal,
the Class A-3 Monthly Principal, the Class A-4 Monthly Principal, the Class B
Monthly Principal, the Class C Monthly Principal, the Class D Monthly Principal,
the Class E Monthly Principal, the Class A-1 Monthly Interest, the Class A-2
Monthly Interest, the Class A-3 Monthly Interest, the Class A-4 Monthly
Interest, the Class B Monthly Interest, the Class C Monthly Interest, the Class
D Monthly Interest and the Class E Monthly Interest to be paid on each Payment
Date.
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ARTICLE IV
CONTRACTS AND EQUIPMENT
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE ISSUER.
The Issuer hereby restates and incorporates herein each of the
representations and warranties, IN MUTATIS MUTANDIS, set forth in Section 2.03
and Section 2.04 of the Amended and Restated Contribution and Servicing
Agreement. The Trustee shall rely on such representations and warranties in
accepting the Contracts and the other Trust Property in trust and authenticating
the Notes. Such representations and warranties shall speak as of the Closing
Date.
SECTION 4.02 PURCHASE UPON BREACH; AMENDED AND RESTATED CONTRIBUTION
AND SERVICING AGREEMENT.
The Issuer shall inform the Trustee promptly, in writing, upon the
discovery of a breach of any of the Contributor's representations and warranties
set forth in Section 2 of the Amended and Restated Contribution and Servicing
Agreement. With respect to any breach of the Contributor's representations and
warranties set forth in Section 2 of the Amended and Restated Contribution and
Servicing Agreement, which materially and adversely affects the interest of the
Noteholders in such Contract or Contracts, the Issuer shall cause the
Contributor to either (a) replace such Contract and the related Equipment with a
Substitute Contract in accordance with the provisions of Section 5.03 of the
Amended and Restated Contribution and Servicing Agreement (and for the
Transferor to receive from the Contributor and transfer to the Issuer such
Substitute Contract) or (b) purchase from the Transferor (which Transferor shall
purchase from the Issuer and resell to the Contributor) the Contract and the
security interest in the related Equipment that are affected by such breach,
unless, in each such instance such breach has been cured, or waived in all
respects by Noteholders evidencing more than 50% of the Voting Rights, within 90
days following the Issuer's discovery or receipt of notice of such breach. In
the event of a repurchase of a Contract, the Issuer and the Managing Member (as
sole beneficial owner of the Issuer) shall cause the Contributor to remit to the
Trustee (upon written notice to the Trustee thereof) the Repurchase Amount of
such Contract (or, if such Contract is then a Defaulted Contract, an amount
equal to the Repurchase Amount as of the date such Contract first became a
Defaulted Contract, together with interest thereon at the Discount Rate from the
date such Contract first became a Defaulted Contract to the end of the month in
which the repurchase is to be made). The Trustee shall, to the extent received,
deposit such Repurchase Amounts and any cash received in connection with a
substitution in the Collection Account on or prior to 11:00 a.m. New York City
time on the second Business Day after receipt thereof. The sole remedy of the
Trustee or the Noteholders against the Contributor with respect to a breach of a
representation or a warranty set forth in Section 2 of the Amended and Restated
Contribution and Servicing Agreement, and against the Issuer or the Transferor
with respect to a breach under this agreement or the Amended and Restated
Subsequent Contract Transfer Agreement (the "SCTA") by reason of such breach by
the Contributor, shall be to require the Contributor to purchase or substitute
Contracts pursuant to the Amended and Restated Contribution and Servicing
Agreement, PROVIDED that the limitation contained in this sentence shall not
otherwise limit the rights of any such Person under Section 5.02 of the Amended
and Restated Contribution and Servicing Agreement. In the event that the
Contributor fails to purchase or substitute for any Contract that it is required
to substitute or repurchase pursuant to the Amended and Restated Contribution
and Servicing Agreement, the Trustee,
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upon the written direction of the Noteholders, shall enforce the Issuer's and
the Transferor's rights against the Contributor under and in accordance with the
terms of the Amended and Restated Contribution and Servicing Agreement, and the
SCTA, as assigned to the Trustee, to require the purchase or replacement of the
Contract.
SECTION 4.03 RELEASE OF CONTRACTS AND EQUIPMENT FOLLOWING SUBSTITUTION
OR PURCHASE.
In the event that (i) the Contributor shall have substituted a
Substitute Contract and a security interest in the Equipment subject thereto for
a Predecessor Contract and a security interest in the Equipment subject thereto
in accordance with Section 7 of the Amended and Restated Contribution and
Servicing Agreement, or (ii) the Contributor shall have purchased a Contract and
a security interest in the related Equipment in accordance with Section 5.03 of
the Amended and Restated Contribution and Servicing Agreement, the Predecessor
Contract or the repurchased Contract, as applicable, and the security interest
in the Equipment subject thereto, shall be released from the lien of this
Amended and Restated Indenture when the Trustee shall have (i) in the case of
the purchase of a Contract, deposited in the Collection Account all amounts
received pursuant to Section 5.03 of the Amended and Restated Contribution and
Servicing Agreement, (ii) in the case of a Substitute Contract, received a fully
executed original of the Substitute Contract Transfer Form and the Contract File
with respect to such Substitute Contract plus any cash amount delivered as
provided in Section 7.01(d) of the Amended and Restated Contribution and
Servicing Agreement, (iii) received written certification from an Authorized
Officer of the Servicer that there are no unreimbursed Servicer Advances with
respect to such Contract and (iv) delivered to the Contributor acknowledgment of
its receipt of the related Contract Files. If there are such unreimbursed
amounts, any proceeds received with respect to such Predecessor Contract or
repurchased Contract, as applicable, and the security interest in the related
Equipment shall be applied hereunder only to the extent necessary to repay such
Servicer Advances (and clause (iii) of the foregoing sentence shall be deemed
satisfied) and to reimburse the Collection Account for any other amounts drawn
thereon and the balance of such proceeds, if any, shall be paid to, or as
directed by, the Contributor.
In connection with the substitution of a Contract, if the Discounted
Contract Balance of such Substitute Contract is less than the Discounted
Contract Balance of the Predecessor Contract, the Contributor shall, on the date
of substitution, deposit an amount equal to such difference into the Collection
Account.
SECTION 4.04 RELEASE OF CONTRACTS AND EQUIPMENT UPON FINAL CONTRACT
Payment.
(a) In the event that the Trustee shall have received written
certification from an Authorized Officer of the Servicer that the Trustee has
received from amounts paid by the Obligor or from the proceeds of the Equipment
subject to any Contract (i) the final Contract Payment due and payable under any
Contract (including, if applicable, any Purchase Option Payment paid by the
Obligor) or (ii) a Prepayment Amount in respect of any Contract and, following
such final Contract Payment or Prepayment Amount, no further payments on, or in
respect of, such Contract are or will be due and payable, such Contract and the
Equipment subject thereto shall be released from the lien of this Amended and
Restated Indenture except if a Restricting Event or an Amortization Event shall
have occurred and then be continuing.
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(b) If a Restricting Event or Amortization Event shall have occurred
and then be continuing, then each Contract and the security interest in all
Equipment (except for security interests relating to Equipment subject to a
conditional sales agreement or an equipment note) which would otherwise be
released from the lien of this Amended and Restated Indenture pursuant to this
Section 4.04 shall instead remain subject to such lien and all of the provisions
of this Amended and Restated Indenture, including, without limitation, Article
VI hereof.
SECTION 4.05 EXECUTION OF DOCUMENTS.
The Trustee shall promptly execute and deliver such documents (which
shall be furnished to the Trustee by the Issuer) and take such other actions as
the Issuer, by Issuer Request, may reasonably request to fully effectuate the
release from this Amended and Restated Indenture of any Contract and the
security interest relating to Equipment required to be so released pursuant to
Sections 4.03 and 4.04 hereof.
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ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.01 SERVICER EVENTS OF DEFAULT.
If a Servicer Event of Default shall have occurred and be continuing
under Section 10.01 of the Amended and Restated Contribution and Servicing
Agreement, the Trustee shall, upon the written request of Noteholders evidencing
not less than 66 2/3% of the Voting Rights give written notice to the Servicer
of the termination of all of the rights and obligations of the Servicer (but
none of the Contributor's obligations thereunder, which shall survive any such
termination) under the Amended and Restated Contribution and Servicing Agreement
and the Trustee shall act as successor Servicer in accordance with Section 10 of
the Amended and Restated Contribution and Servicing Agreement.
SECTION 5.02 SUBSTITUTE SERVICER.
Notwithstanding the provisions of Section 5.01, the Trustee may, if it
shall be unwilling or unable to act as the Successor Servicer in accordance with
Section 5.01, appoint a Successor Servicer in accordance with the provisions of
Section 10.03 of the Amended and Restated Contribution and Servicing Agreement.
SECTION 5.03 NOTIFICATION TO NOTEHOLDERS AND RATING AGENCIES.
Upon any termination of the Servicer or appointment of a Successor
Servicer, the Trustee shall give prompt notice of such termination, resignation,
discharge, removal or appointment, together with the conditions of default, if
applicable, to the Rating Agencies and each Noteholder in the manner provided
herein.
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ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
"INDENTURE EVENT OF DEFAULT," wherever used herein, means any one of
the following (whatever the reason for such Indenture Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) default in the payment of (A) any interest payment on any
outstanding Class A Note, Class B Note, Class C Note, Class D Note or Class
E Note when it becomes due and payable, or (B) the then outstanding
principal balance of the Class A-1 Notes on the Class A-1 Stated Maturity
Date, of the Class A-2 Note on the Class A-2 Stated Maturity Date, of the
Class A-3 Note on the Class A-3 Stated Maturity Date, of the Class A-4 Note
on the Class A-4 Stated Maturity Date, of the Class B Notes on the Class B
Stated Maturity Date, of the Class C Notes on the Class C Stated Maturity
Date, of the Class D Notes on the Class D Stated Maturity Date or of the
Class E Notes on the Class E Stated Maturity Date or (C) any payment of
principal of or interest on any outstanding Note when it becomes due and
payable to the extent that sufficient Available Funds were on deposit in
the Collection Account and to the extent that sufficient Available Reserve
Account Funds are on deposit in the Reserve Account with respect to such
Payment Date;
(ii) default in the performance, or breach, of any covenant set
forth in Section 8.04, 8.07(c) or 8.08;
(iii) default in the performance, or breach, of any covenant of
the Issuer in the Notes or this Amended and Restated Indenture (other than
a covenant described in (ii) above), or of any party to the Amended and
Restated Contribution and Servicing Agreement, or the other Transaction
Documents and continuance of such default or breach for a period of 30 days
after the earliest of (A) any officer of the Transferor or the Issuer first
acquiring knowledge thereof, (B) the Trustee's giving written notice
thereof to the Issuer or (C) the holder of any Note giving written notice
thereof to the Issuer;
(iv) if any representation or warranty of the Issuer, the
Transferor or the Contributor made in this Amended and Restated Indenture,
the SCTA or the Amended and Restated Contribution and Servicing Agreement,
respectively, or any other writing provided to the Noteholders in
connection with the foregoing documents shall prove to be incorrect in any
material respect as of the time when the same shall have been made;
PROVIDED, HOWEVER, that the breach of any representation or warranty made
by the Contributor in Section 2.03 or 2.04 of the Amended and Restated
Contribution and Servicing Agreement, with respect to any of the Contracts
or the security interest in the Equipment subject thereto shall not
constitute an Indenture Event of Default if the Contributor substitutes one
or more Substitute Contracts and the security interest in the Equipment
subject thereto for such Contract and a security interest in the related
Equipment in accordance with Section 7.01 of the Amended and Restated
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Contribution and Servicing Agreement, or repurchases a Contract and the
security interest in the related Equipment in accordance with Section 5.03
of the Amended and Restated Contribution and Servicing Agreement;
(v) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Issuer in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or (B) a decree or order
adjudging the Issuer a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment, or
composition of or in respect of the Issuer under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of the Issuer or of any
substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(vi) the commencement by the Issuer of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Issuer in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator, or
similar official of the Issuer or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
Issuer's failure to pay its debts generally as they become due, or the
taking of company action by the Issuer in furtherance of any such action.
SECTION 6.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
(a) If an Indenture Event of Default occurs and is continuing, of
which a Responsible Officer of the Issuer written notice (PROVIDED that such
written notice need not have been received by the Trustee in connection with a
payment default as described in Section 6.01(i)), then and in every such case
the Trustee with the consent of Noteholders evidencing not less than 662/3% of
the Voting Rights may declare the unpaid principal amount of all the Notes to be
due and payable immediately, by a notice in writing to the Issuer, and upon any
such declaration such principal amount shall become immediately due and payable
together with all accrued and unpaid interest thereon, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Issuer.
(b) At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, Noteholders evidencing
not less than 662/3% of the Voting Rights, by written notice to the Issuer and
the Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay:
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(A) all sums paid or advanced, together with interest
thereon, by the Trustee hereunder and the reasonable
compensation, expenses, disbursements, and advances, if any, of
the Trustee, its agents and counsel;
(B) all principal of any Notes which have become due
otherwise than by such declaration of acceleration, and interest
thereon from the date when the same first became due at the
applicable Note Rate; and
(C) all interest which has become due with respect to the
Notes;
(ii) all Indenture Events of Default, other than the non-payment
of the aggregate principal amount of the Notes which has become due solely
by such declaration of acceleration, have been cured or waived as provided
in Section 6.13; and
(iii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction.
No such rescission shall affect any subsequent Indenture Event of Default or
impair any right consequent thereon.
SECTION 6.03 OTHER REMEDIES.
(a) If an Indenture Event of Default occurs and is continuing of which
a Responsible Officer of the Trustee has received written notice (PROVIDED that
such written notice need not have been received by the Trustee in the case of a
payment default as described in Section 6.01(i)), the Trustee shall give notice
to each Noteholder as set forth in Section 7.02. The Trustee shall then take
such action, if any, as may be directed by Noteholders evidencing not less than
662/3% of the Voting Rights.
(b) Following any acceleration of the Notes, the Trustee shall have
all of the rights, powers and remedies with respect to the Trust Property as are
available to secured parties under the Uniform Commercial Code or other
applicable law or as are otherwise available to it under applicable law to
protect and enforce the rights and remedies of the Trustee and the Noteholders
hereunder and under the other Transaction Documents; PROVIDED that, so long as
the Offered Notes are outstanding, the Trustee, in acting during the pendency of
an Indenture Event of Default shall act solely on behalf of the holders of the
Offered Notes and shall not take into account any Class F Instruments that may
have been issued in so acting. Such rights, powers and remedies may be exercised
by the Trustee in its own name as trustee of an express trust.
SECTION 6.04 TRUSTEE MAY FILE PROOFS OF CLAIM.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Issuer, the Transferor, the
Contributor, the Servicer or any other obligor upon the Notes or the other
obligations secured hereby or relating to the property of the Issuer, the
Transferor, the Contributor, the Servicer or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of
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whether the Trustee shall have made any demand on the Issuer, the Transferor,
the Contributor or the Servicer for the payment of overdue principal or overdue
interest or any such other obligation) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Notes and any other
obligation secured hereby and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Noteholders allowed in such judicial proceeding,
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
(iii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders in any election of a trustee, a standby
trustee or Person performing similar functions in any such proceedings; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
or the Noteholders allowed in any proceedings relative to the Issuer, its
creditors and its property;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Noteholders
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.06.
(b) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any holder thereof or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding, except as
aforesaid to vote for the election of a trustee in bankruptcy or similar Person.
SECTION 6.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Amended and Restated
Indenture or the Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Notes in respect of which such
judgment has been recovered.
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SECTION 6.06 APPLICATION OF MONEY COLLECTED.
Any money, securities or property collected by the Trustee pursuant to
this Article, and any moneys, securities or property that may then be held or
thereafter received by the Trustee, shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of the
entire amount due on account of principal or interest, upon presentation of the
Notes and surrender thereof:
FIRST, to the payment of all costs and expenses of collection incurred
by the Trustee (including the reasonable fees and expenses of any
counsel to the Trustee) and all other amounts due the Trustee under
Section 7.06 (the parties hereto agree that when the Trustee renders
services following an Indenture Event of Default under Section 6.01
(v) or (vi), compensation for such services and expenses in connection
therewith are intended to constitute administrative expenses under
applicable bankruptcy law);
SECOND, to the payment of all unreimbursed Servicer Advances due to
the Servicer;
THIRD, only in the event that DVI is no longer the Servicer, and the
Servicer has, in its good faith and reasonable business judgment,
deemed the Servicing Fee to be commercially unreasonable, then, to the
Servicer, the amount agreed upon between the then Servicer and the
Trustee, each in their good faith and commercially reasonable
judgment, as necessary to make the Servicing Fee commercially
reasonable and to cover the reasonable costs in transferring the
servicing obligations;
FOURTH, to the payment of all accrued and unpaid interest on the
outstanding Class A Note Balance to the date of payment thereof,
ratably to each Class A Noteholder, without preference or priority of
any kind;
FIFTH, to the payment of all accrued and unpaid interest on the
outstanding Class B Note Balance to the date of payment thereof,
ratably to each Class B Noteholder, without preference or priority of
any kind;
SIXTH, to the payment of all accrued and unpaid interest on the
outstanding Class C Note Balance to the date of payment thereof,
ratably to each Class C Noteholder, without preference or priority of
any kind;
SEVENTH, to the payment of all accrued and unpaid interest on the
outstanding Class D Note Balance to the date of payment thereof,
ratably to each Class D Noteholder, without preference or priority of
any kind;
EIGHTH, to the payment of all accrued and unpaid interest on the
outstanding Class E Note Balance to the date of payment thereof,
ratably to each Class E Noteholder, without preference or priority of
any kind;
NINTH, to the payment of the outstanding Class A-1 Note Balance, and
any other amounts due to the Class A-1 Noteholders, ratably, without
preference or priority of any kind,
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until the Class A-1 Note Balance has been reduced to zero, then to the
payment of the outstanding Class A-2 Note Balance, and any other
amounts due to the Class A-2 Noteholders, ratably, without preference
or priority of any kind, until the Class A-2 Note Balance has been
reduced to zero, then to the payment of the outstanding Class A-3 Note
Balance, and any other amounts due to the Class A-3 Noteholders,
ratably, without preference or priority of any kind, until the Class
A-3 Note Balance has been reduced to zero, then to the payment of the
outstanding Class A-4 Note Balance, and any other amounts due to the
Class A-4 Noteholders, ratably, without preference or priority of any
kind, until the Class A-4 Note Balance has been reduced to zero
(PROVIDED that a Subordination Deficiency Event has not occurred and
is continuing, in which case the outstanding Class A-3 Note Balance
and the Class A-4 Note Balance shall be paid PRO RATA in accordance
with their respective outstanding Note Balances);
TENTH, to the payment of the outstanding Class B Note Balance, and any
other amounts due to the Class B Noteholders ratably, without
preference or priority of any kind;
ELEVENTH, to the payment of the outstanding Class C Note Balance, and
any other amounts due to the Class C Noteholders ratably, without
preference or priority of any kind;
TWELFTH, to the payment of the outstanding Class D Note Balance, and
any other amounts due to the Class D Noteholders ratably, without
preference or priority of any kind;
THIRTEENTH, to the payment of the outstanding Class E Note Balance,
and any other amounts due to the Class E Noteholders ratably, without
preference or priority of any kind;
FOURTEENTH, to the payment of all accrued and unpaid interest on
outstanding Class F Instruments, if any, to the date of payment
thereof, ratably to each Holder of the Class F Instruments without
preference or priority of any kind;
FIFTEENTH, to the payment of the outstanding principal balance of the
Class F Instruments, if any, and any other amounts due to the Holders
of any Class F Instruments ratably, without preference or priority of
any kind;
SIXTEENTH, in the event that DVI is the Servicer, to the payment of
all unreimbursed Servicing Fees due to the Servicer; and
SEVENTEENTH, to the payment of the remainder, if any, to, or at the
order of, the Issuer.
SECTION 6.07 LIMITATION ON SUITS.
The holder of any Note shall not have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) such Noteholder has previously given written notice to the
Trustee of a continuing Indenture Event of Default;
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(ii) the Noteholders evidencing not less than 25% of the Voting
Rights shall have made written request to the Trustee to institute
proceedings in respect of such Indenture Event of Default in its own name
as Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the Trustee
adequate indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(iv) the Trustee for 30 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(v) so long as any of the Notes remain outstanding, no direction
inconsistent with such written request has been given to the Trustee during
such 30-day period by Noteholders evidencing not less than 662/3% of the
Voting Rights;
it being understood and intended that no one or more Noteholder shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Amended and Restated Indenture to affect, disturb, or prejudice the rights
of any other Noteholder, or to obtain or to seek to obtain priority or
preference over any other Noteholder or to enforce any right under this Amended
and Restated Indenture, except in the manner herein provided. It is further
understood and intended that so long as any portion of the Notes remains
outstanding, the Servicer shall not have any right to institute any proceeding,
judicial or otherwise, with respect to this Amended and Restated Indenture
(other than for the enforcement of Sections 3.04(b) and 4.04) or for the
appointment of a receiver or trustee, or for any other remedy hereunder.
SECTION 6.08 UNCONDITIONAL RIGHT OF NOTEHOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision in this Amended and Restated
Indenture, other than the provisions hereof establishing priorities of payment
or limiting the right to recover amounts due on the Notes to recoveries from the
Trust Property, the holder of any Note shall have the absolute and unconditional
right to receive payment of the principal of and interest on such Note as such
principal and interest becomes due on the Payment Dates for such payments,
including the Stated Maturity Date for the applicable Class, and to institute
suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Noteholder.
SECTION 6.09 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Noteholder has instituted any proceeding to
enforce any right or remedy under this Amended and Restated Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Noteholder, then and in every
such case, subject to any determination in such proceeding, the Issuer, the
Trustee and the Noteholders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Noteholders shall continue as though no such proceeding had been
instituted.
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SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in the last paragraph of
Section 2.05, no right or remedy herein conferred upon or reserved to the
Trustee or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any holder of any Note to
exercise any right or remedy accruing upon any Indenture Event of Default shall
impair any such right or remedy or constitute a waiver of any such Indenture
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Noteholders, as the case may be.
SECTION 6.12 CONTROL BY NOTEHOLDERS.
Except as may otherwise be provided in this Amended and Restated
Indenture, until such time as the conditions specified in Section 11.01 have
been satisfied in full, Noteholders evidencing not less than 662/3% of the
Voting Rights shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. Notwithstanding the foregoing:
(i) no such direction shall be in conflict with any rule of law
or with this Amended and Restated Indenture;
(ii) the Trustee shall not be required to follow any such
direction which the Trustee believes may be unduly prejudicial to the
rights of another Noteholder not joining in such direction or which the
Trustee believes might result in any personal liability on the part of the
Trustee for which the Trustee is not indemnified to its reasonable
satisfaction; and
(iii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with any such direction; PROVIDED that
the Trustee shall give notice of any such action to each Noteholder.
SECTION 6.13 WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.
(a) Subject to the provisions of Sections 6.08 and 9.01, Noteholders
evidencing more than 50% of the Voting Rights, may, by one or more instruments
in writing, waive an existing Default or Indenture Event of Default hereunder
and its consequences, except a continuing Indenture Event of Default:
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(i) in respect of the payment of the principal of or interest on
any outstanding Note (which may only be waived by the holder of such Note),
or
(ii) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the holder
of each outstanding Note affected (which only may be waived by the holders
of all outstanding Notes affected).
(b) A copy of each waiver pursuant to Section 6.13(a) shall be
furnished by the Issuer to the Trustee. Upon any such waiver, such Indenture
Event of Default shall cease to exist and shall be deemed to have been cured,
for every purpose of this Amended and Restated Indenture; but no such waiver
shall extend to any subsequent or other Indenture Event of Default or impair any
right consequent thereon.
SECTION 6.14 WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Amended and Restated Indenture; and the Issuer (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 6.15 SALE OF TRUST PROPERTY.
(a) The power to effect any sale of any portion of the Trust Property
pursuant to Section 6.03 shall not be exhausted by any one or more sales as to
any portion of the Trust Property remaining unsold, but shall continue
unimpaired until the entire Trust Property shall have been sold or all amounts
payable on the Notes shall have been paid. The Trustee may from time to time,
upon directions in accordance with Section 6.12, postpone any public sale by
public announcement made at the time and place of such sale.
(b) To the extent permitted by applicable law, the Trustee shall not
in any private sale sell the Trust Property, or any portion thereof, unless
either (i) until such time as the conditions specified in Section 11.01(a) have
been satisfied in full, Noteholders evidencing not less than 662/3% of the
Voting Rights consent to or direct the Trustee to make such sale; or (ii) the
proceeds of such sale would be not less than the sum of all amounts due to the
Trustee hereunder and the entire unpaid principal amount of all Class A Notes,
Class B Notes, Class C Notes, Class D Notes and Class E Notes then outstanding
and interest due or to become due thereon in accordance with Section 6.06 on the
Payment Date next succeeding the date of such sale.
(c) In connection with a sale of all or any portion of the Trust
Property:
(i) any one or more Noteholders or the Trustee may bid for and
purchase the property offered for sale, and upon compliance with the terms
of sale may hold, retain, and possess and dispose of such property, without
further accountability, and any Noteholder may,
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in paying the purchase money therefor, deliver in lieu of cash any
outstanding Notes or claims for interest thereon for credit in the amount
that shall, upon distribution of the net proceeds of such sale, be payable
thereon, and such Notes, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned to the Noteholders
after being appropriately stamped to show such partial payment;
(ii) the Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the
Trust Property in connection with a sale thereof;
(iii) the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Property in connection with a sale thereof, and to
take all action necessary to effect such sale; and
(iv) no purchaser or transferee at such a sale shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(d) The method, manner, time, place and terms of any sale of all or
any portion of the Trust Property shall be commercially reasonable.
(e) The provisions of this Section 6.15 shall not be construed to
restrict the ability of the Trustee to exercise any rights and powers against
the Issuer or the Trust Property that are vested in the Trustee by this Amended
and Restated Indenture, including, without limitation, the power of the Trustee
to proceed against the collateral subject to the lien of this Amended and
Restated Indenture and to institute judicial proceedings for the collection of
any deficiency remaining thereafter.
SECTION 6.16 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Amended and Restated Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court may in its discretion require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.16 does not apply to a suit by the Trustee, a suit by a
Noteholder pursuant to Sections 6.07 and 6.08, or a suit by any Noteholder or
group of Noteholders of more than 10% in principal amount of all Class A Notes,
Class B Notes, Class C Notes, Class D Notes and Class E Notes then outstanding.
ARTICLE VII
THE TRUSTEE
SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Indenture Event of Default:
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(i) the Trustee undertakes to perform only those duties that are
specifically set forth in this Amended and Restated Indenture and no others
and no covenants or duties shall be implied herein in connection with the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates, statements, opinions,
reports or documents furnished to the Trustee and conforming to the
requirements of this Amended and Restated Indenture. The Trustee, however,
shall examine the same to determine whether or not they conform to the
requirements of this Amended and Restated Indenture.
(b) If an Indenture Event of Default has occurred and is continuing,
the Trustee shall exercise its rights and powers vested in it by this Amended
and Restated Indenture and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(c) No provision of this Amended and Restated Indenture shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, EXCEPT that:
(i) this subsection shall not be construed to limit the effect of
subsection (a) of this Section 7.01;
(ii) the Trustee shall not be liable for any error in judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
directions received by it pursuant to Section 6.12 or 6.13; and
(iv) no provision of this Amended and Restated Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
personal financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or
indemnity reasonably satisfactory to it against such risk or liability is
not assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Amended and Restated Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
SECTION 7.02 NOTICE OF DEFAULTS OR EVENTS OF DEFAULT.
Within five Business Days after a Responsible Officer receives written
notice or is otherwise notified of the occurrence of any Default or Indenture
Event of Default hereunder or Servicer Event of Default under the Amended and
Restated Contribution and Servicing Agreement, the Trustee
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shall transmit by certified mail return receipt requested, hand delivery or
overnight courier, to all Noteholders, as their names and addresses appear in
the Note Register, the Issuer, the Servicer, the Rating Agencies and the
Contributor notice of such Default, Indenture Event of Default or Servicer Event
of Default hereunder known to the Trustee, unless such Default, Indenture Event
of Default or Servicer Event of Default shall have been cured or waived.
SECTION 7.03 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 7.01:
(i) the Trustee may rely conclusively and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, note, debenture, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or Issuer Order and
any action of the Issuer may be sufficiently evidenced by an Issuer Order;
(iii) whenever in the administration of this Amended and Restated
Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(iv) the Trustee may consult with counsel as to legal matters and
the advice or opinion of any such counsel selected by the Trustee with due
care shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(v) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Amended and Restated Indenture at
the request or direction of any of the Noteholders pursuant to this Amended
and Restated Indenture, unless such Noteholders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(vi) prior to the occurrence of an Indenture Event of Default and
after the curing or waiving of all Indenture Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, note, debenture, other
evidence of indebtedness, or other paper or document, other than to examine
such documents to determine whether they conform as to form to the
requirements of this Amended and Restated Indenture, unless requested in
writing to do so by the Noteholders evidencing more than 50% of the Voting
Rights; PROVIDED that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of
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the Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Amended and Restated Indenture, the Trustee may
require indemnity reasonably satisfactory to it against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such examination shall be paid by the Issuer or, if paid by the Trustee or
any predecessor trustee, shall be promptly repaid by the Issuer upon
demand; and
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent,
custodian, nominee or attorney appointed with due care by it hereunder.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Amended and Restated Indenture (except as against itself), the SCTA, the
Amended and Restated Contribution and Servicing Agreement, or the Notes and it
shall not be responsible for any statement in the Notes other than its
certificate of authentication or in any document used in the sale of the Notes.
The Trustee shall have no responsibility for, or duty, or liability in
connection with performance by the Servicer, and shall have no obligation to
monitor the performance of the Servicer. The Trustee shall not be accountable
for the use or application by the Issuer of the Notes or the proceeds thereof.
SECTION 7.05 MONEY HELD IN TRUST.
Money and investments held by the Trustee or other paying agent shall
be held in trust in one or more Eligible Deposit Accounts as required hereunder.
The Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with Issuer.
SECTION 7.06 COMPENSATION, REIMBURSEMENT, ETC.
(a) Pursuant to the Amended and Restated Contribution and Servicing
Agreement, the Servicer has agreed:
(i) to pay to the Trustee from time to time such compensation for
all services rendered by it hereunder as the Servicer and the Trustee have
agreed in writing prior to the Closing Date (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust), such payment to be made independent of the
other payment obligations of the Servicer hereunder;
(ii) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements,
and advances incurred or made by the Trustee in accordance with any
provision of this Amended and Restated Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement, or advance as may be attributable to
its negligence or bad faith;
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(iii) to pay the Trustee its annual administrative fee on the
Closing Date;
(iv) to pay the reasonable fees and expenses of Trustee's counsel
on the Closing Date; and
(v) to pay the reasonable annual administrative fee of each
Lock-Box Bank.
(b) The Trustee hereby acknowledges and agrees that if the Servicer
fails to pay the amounts set forth in Section 7.06(a) of this Amended and
Restated Indenture, the Trustee will continue to perform its obligations under
this Amended and Restated Indenture, regardless of the Servicer's failure to pay
such amounts, until the appointment of a successor Trustee reasonably
satisfactory to the Noteholders in accordance with Section 7.08 of this Amended
and Restated Indenture; PROVIDED, HOWEVER, that in such event, the Trustee shall
withhold amounts otherwise payable to it pursuant to Section 7.06(a) hereof from
amounts payable to the Servicer pursuant to Section 3.04(b)(i).
SECTION 7.07 ELIGIBILITY; DISQUALIFICATION.
The Trustee hereunder (a) shall at all times be a national banking
association organized and doing business under the laws of the United States of
America or any state thereof authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $100,000,000 or
shall be a member of a bank holding system, the aggregate combined capital and
surplus of which is at least $100,000,000, PROVIDED that unless the Trustee is
U.S. Bank Trust National Association, the Trustee, or the bank holding company
system of which the Trustee is a member must have a long-term unsecured debt
rating of at least "A" from the Rating Agencies; PROVIDED, FURTHER, that if the
Trustee is U.S. Bank Trust National Association, the Trustee, or the bank
holding company system of which the Trustee is a member, shall have a long-term
unsecured debt rating of at least "Baa3" from Moody's, BBB- from Duff & Phelps
or "BBB" from Fitch IBCA or a short-term unsecured rating of "Prime-3" from
"Moody's" or "F1" from Fitch IBCA, and (b) shall be subject to supervision or
examination by Federal or state authority and, in the case of any successor
Trustee subject to regulations regarding fiduciary funds on deposit
substantially similar to 12 CFR ss. 9.10(b). If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section 7.07, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 7.07, the Trustee
shall resign immediately in the manner and with the effect specified in Section
7.08.
SECTION 7.08 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by a successor Trustee reasonably satisfactory to
Noteholders evidencing more than 50% of the Voting Rights under Section 7.09.
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(b) Subject to Section 7.08(a) the Trustee may resign at any time by
giving written notice thereof to the Issuer and by mailing notice of resignation
by first-class mail, postage prepaid, to the Rating Agencies and the Noteholders
at their addresses appearing on the Note Register.
(c) The Trustee may be removed at any time by written notice from
Noteholders evidencing more than 50% of the Voting Rights delivered to the
Trustee and the Issuer. The Issuer, with the consent of Noteholders evidencing
more than 50% of the Voting Rights, may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.07;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(d) If the Trustee shall resign, be removed, or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Issuer, with the consent of Noteholders evidencing more than 50% of the Voting
Rights by an act of the Issuer, shall promptly appoint a successor Trustee.
(e) If no successor Trustee shall have been so appointed by the Issuer
as hereinabove provided and accepted appointment in the manner hereinafter
provided within 30 days after any such resignation or removal, existence of
incapability, or occurrence of such vacancy, the Trustee or any Noteholder may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to all Noteholders,
as their names and addresses appear in the Note Register and to the Rating
Agencies. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
(g) A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
SECTION 7.09 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; PROVIDED that on request of
the Issuer or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer
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and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder. Upon request of any such successor Trustee, the
Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
(b) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article and no reduction in the then current ratings, if any, on the
Notes has occurred as a result of such appointment.
SECTION 7.10. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; PROVIDED such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Notes shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion,
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Notes.
SECTION 7.11 CO-TRUSTEES AND SEPARATE TRUSTEES.
(a) At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Trust Property may at the
time be located, the Issuer and the Trustee shall have power to appoint, and,
upon the written request of the Trustee or the Noteholders evidencing more than
50% of the Voting Rights, the Issuer shall for such purpose join with the
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint one or more Persons approved by the
Trustee either to act as co-trustee, jointly with the Trustee, of all or any
part of such Trust Property, or to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 7.11. If the Issuer does not join in such
appointment within fifteen days after the receipt by it of a request so to do,
or in case an Indenture Event of Default has occurred and is continuing, the
Trustee alone shall have power to make such appointment.
(b) Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Issuer.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms:
(i) The Notes shall be authenticated and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal
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property held by, or required to be deposited or pledged with, the Trustee
hereunder, shall be exercised solely by the Trustee.
(ii) The rights, powers, duties, and obligations hereby conferred
or imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
by the Trustee or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee
or separate trustee, except to the extent that, under any law of any
jurisdiction in which any particular act is to be performed, the Trustee
shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee.
(iii) The Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by an Issuer
Order, may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section 7.11, and, in case an Indenture Event
of Default has occurred and is continuing, the Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Issuer. Upon the written request of
the Trustee, the Issuer shall join with the Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be appointed in
the manner provided in this Section 7.11.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee or any
other such trustee hereunder and the Trustee shall not be personally liable
by reason of any act or omission of any co-trustee or other such separate
trustee hereunder selected and supervised by the Trustee with due care or
appointed in accordance with directions to the Trustee pursuant to Section
6.12.
(v) Any Act of Noteholders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 7.12 TRUSTEE TO HOLD CONTRACTS.
On or prior to the Closing Date, the Contributor, on behalf of the
Issuer, shall deliver to the Trustee (or its designee) the sole original,
manually executed counterpart of each Contract (or, if the original Contract is
in the form of a schedule or supplement to a master lease, all original
counterparts of such schedule or supplement previously in the possession of the
Contributor or the Issuer together with a true and correct copy of such master
lease) that constitutes "chattel paper" or an "instrument," as such terms are
defined in the UCC. The Trustee (or its designee) shall hold such documents
until such time as such Contract is released from the lien of this Amended and
Restated Indenture pursuant to the provisions hereof.
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SECTION 7.13 FINANCING STATEMENTS.
The Trustee shall execute such UCC financing statements and
continuation statements as shall have been prepared by the Servicer and as shall
be necessary and shall furnish the Servicer with such limited powers of attorney
or other documents necessary or appropriate to enable the Servicer to fulfill
its obligations under Section 4 of the Amended and Restated Contribution and
Servicing Agreement and to carry out its servicing and administration duties
under the Amended and Restated Contribution and Servicing Agreement.
SECTION 7.14 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 10.02 of the Amended and Restated Contribution
and Servicing Agreement, the Trustee (subject to subsection (b) hereof) shall be
the successor in all respects to the Servicer in its capacity as servicer under
the Amended and Restated Contribution and Servicing Agreement of the Contracts
and, to such extent, shall be subject to all the responsibilities, duties and
liabilities (other than the duty to advance funds and indemnify) relating
thereto placed on the Servicer by the terms and provisions thereof (but not the
obligations of the Contributor contained therein which shall survive any such
termination as provided in Section 10.02 thereof) and shall be entitled to
receive from the Issuer the Servicing Fee and other servicing compensation
provided for in Section 4.04 of the Amended and Restated Contribution and
Servicing Agreement; PROVIDED that the Trustee shall in no way be responsible or
liable for any action or actions of the Servicer before the time the Servicer
receives such a notice of termination.
(b) The Trustee may, if it is unwilling or unable to act as the
successor Servicer, give notice of such fact to each Noteholder and (i) appoint
a successor Servicer with a net worth of at least $15,000,000 and reasonably
acceptable to Noteholders evidencing more than 50% of the Voting Rights and
whose regular business includes the servicing of a similar type of contracts and
the financing of medical diagnostic imaging equipment, as the successor Servicer
under the Amended and Restated Contribution and Servicing Agreement, to assume
all of the rights and obligations of the Servicer thereunder, including, without
limitation, the Servicer's right thereunder to receive the Servicing Fee (but
not the obligations of the Contributor contained therein) or, (ii) if no such
institution is so appointed, petition a court of competent jurisdiction to
appoint an institution meeting such criteria as the Servicer thereunder. Pending
appointment of a successor Servicer under the Amended and Restated Contribution
and Servicing Agreement, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee shall
cause such successor Servicer to enter into a servicing agreement substantially
in the form of the Amended and Restated Contribution and Servicing Agreement,
except that such agreement shall not include any of the Contributor's
representations, warranties or obligations and the Trustee may make arrangements
for the compensation of such successor Servicer out of payments on Contracts and
the related Contracts as it and such successor Servicer shall agree; PROVIDED,
HOWEVER, that no such compensation shall be in excess of that provided in
Section 4.04 of the Amended and Restated Contribution and Servicing Agreement.
SECTION 7.15 REPORTS BY TRUSTEE TO HOLDERS.
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If required by the TIA, within 60 days after each Payment Date
beginning with August 13, 1999, the Trustee shall mail to each Noteholder a
brief report dated as of such Payment Date that complies with TIA Section
313(a).
SECTION 7.16 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Trustee is subject to and shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b).
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ARTICLE VIII
COVENANTS
SECTION 8.01 PAYMENT OF PRINCIPAL AND INTEREST.
The Issuer will duly and punctually pay the principal of and interest
on the Notes in accordance with the terms of the Notes and this Amended and
Restated Indenture. An installment of interest shall be considered paid on the
date it is due if the Trustee holds on that date money designated for and
sufficient to pay the installment.
SECTION 8.02 MAINTENANCE OF OFFICE OR AGENCY; CHIEF EXECUTIVE OFFICE.
(a) The Issuer will maintain in the Commonwealth of Pennsylvania an
office or agency where notices and demands to or upon the Issuer in respect of
the Notes and this Amended and Restated Indenture may be served.
(b) The chief executive office of the Issuer, and the office at which
the Issuer maintains its records with respect to the Contracts, the Equipment,
and the transactions contemplated hereby, is located in Doylestown,
Pennsylvania. The Issuer will not change the location of such office without
giving the Trustee and each Noteholder at least 60 days' prior written notice
thereof.
SECTION 8.03 MONEY FOR PAYMENTS TO NOTEHOLDERS TO BE HELD IN TRUST.
(a) All payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Collection Account pursuant
to Section 3.04(b) or Section 6.06 shall be made on behalf of the Issuer by the
Trustee, and no amounts so withdrawn from the Collection Account for payments of
Notes shall be paid over to the Issuer under any circumstances except as
provided in this Section 8.03.
(b) In making payments hereunder, the Trustee will:
(i) allocate all sums received for payment to the Noteholders on
each Payment Date in accordance with the terms of this Amended and Restated
Indenture;
(ii) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
and
(iii) comply with all requirements of the Internal Revenue Code
of 1986, as amended (or any successor statutes), and all regulations
thereunder, with respect to the withholding from any payments made by it on
any Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith,
in each case, consistent with the treatment of the Notes as indebtedness.
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(c) Except as required by applicable law, any money held by the
Trustee in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for two years after such amount has become due and payable
to the Noteholder shall be discharged from such trust and, subject to applicable
escheat laws, paid to the Issuer upon request; and such Noteholder shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof, and all liability of the Trustee with respect to such trust
money shall thereupon cease.
SECTION 8.04 ISSUER EXISTENCE; ETC.
(a) The Issuer will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence as a Delaware limited
liability company and the rights, licenses and franchises of the Issuer, and
will 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 the Amended and Restated Indenture, the Notes, or any of the
Contracts.
(b) The Issuer shall at all times observe and comply in all material
respects with (i) its limited liability company operating agreement as in effect
on the date hereof, (ii) all laws, regulations and court orders applicable to
it, (iii) all requirements of law in the declaration and payment of any
distributions on its Units, and (iv) all requisite and appropriate formalities
(including, without limitation, obtaining the consent of the Managing Member as
its sole beneficial owner to authorize Issuer action as required, and as
otherwise required by law) in the management of its business and affairs and the
conduct of the transactions contemplated hereby, by the SCTA and by the Amended
and Restated Contribution and Servicing Agreement. The SCTA limits the Issuer's
activities to the purchases of assets, issuance of securities, and activities
incidental thereto. No Affiliate of the Issuer pays the expenses of the Issuer
except as contemplated in the Transaction Documents, and no Affiliate of the
Issuer guarantees any obligation of the Issuer. Other than the purchase,
contribution, substitution or sale of assets, the Issuer has no intercorporate
transactions with DVI.
(c) The Issuer will, at all times: (i) maintain (A) financial books
and records separate from those of any other Person and (B) minutes of its
meetings and other proceedings of its member(s); (ii) continuously maintain the
resolutions, agreements and other instruments underlying the transactions
contemplated hereby, by the SCTA and by the Amended and Restated Contribution
and Servicing Agreement, as official records of the Issuer; (iii) act solely in
its name to maintain an arm's-length relationship with the Contributor and its
Affiliates; (iv) pay all of its operating expenses and liabilities from its own
funds; (v) maintain an office and telephone number separate from that of the
Contributor, the Managing Member and the Transferor, (vi) maintain its assets
separately from the assets of the Contributor and (vii) characterize the
Contributor, the Managing Member and the Transferor as separate entities in any
report, tax return, financial statement, other accounting or business
transaction.
(d) The Issuer shall conduct its business solely in its own name so as
to not mislead others as to the identity of the trust with which those others
are concerned, and particularly will avoid the appearance of conducting business
on behalf of the Contributor or any of its Affiliates or that the assets of the
Issuer are available to pay the creditors of the Contributor or any of its
Affiliates. Without limiting the generality of the foregoing, all oral and
written communications, including, without limitation, letters, invoices,
purchase orders, contracts, statements and loan applications, will be made
solely in the name of the Issuer.
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(e) The Issuer will be operated so as not to be substantively
consolidated for bankruptcy purposes with the Contributor.
(f) Reserved.
(g) The Issuer will not amend its limited liability company operating
agreement without the prior consent of Noteholders evidencing more than 50% of
the Voting Rights.
(h) The Issuer shall also comply with the other applicable provisions
of TIA Section 314.
SECTION 8.05 PROTECTION OF TRUST PROPERTY; FURTHER ASSURANCES.
The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such UCC financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
(i) Grant more effectively all or any portion of the Trust
Property;
(ii) maintain or preserve the lien of this Amended and Restated
Indenture or carry out more effectively the purposes hereof;
(iii) publish notice of, or protect the validity of, any Grant or
assignment made or to be made by this Amended and Restated Indenture and
perfect the security interest contemplated hereby in favor of the Trustee
in the Contracts and any security interest in the related Equipment;
(iv) enforce or cause the Servicer to enforce any of the
Contracts; or
(v) preserve and defend title to any Contract (including the
right to receive all payments due or to become due thereunder subsequent to
the applicable Cut-Off Date), the security interest of the Trustee in the
Equipment, or other property included in the Trust Property and preserve
and defend the rights of the Trustee and the Noteholders in such Contract
(including the right to receive all payments due or to become due
thereunder subsequent to the applicable Cut-Off Date), Equipment and other
property against the claims of all persons and parties.
The Issuer, upon the Issuer's failure to do so, hereby designates the Trustee
its agent and attorney-in-fact to execute any UCC financing statement,
continuation statement or other document or instrument required pursuant to this
Section 8.05; PROVIDED, HOWEVER, that such designation shall not be deemed to
create a duty in the Trustee to monitor the compliance of the Issuer with the
foregoing covenants, and PROVIDED FURTHER that the duty of the Trustee to
execute any instrument required pursuant to this Section 8.05 shall arise only
if a Responsible Officer of the Trustee has actual knowledge of any failure of
the Issuer to comply with the provisions of this Section 8.05.
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SECTION 8.06 COMPLIANCE CERTIFICATES.
The Issuer will deliver to the Trustee and the Rating Agencies, within
90 days after the end of each fiscal year, an Officer's Certificate of the
Managing Member, as sole owner of the beneficial interests of the Issuer,
stating, in addition to the statements required by Section 1.18, as to each
signer thereof, that
(i) a review of the activities of the Issuer during such year and
of performance under this Amended and Restated Indenture has been made
under such officers' supervision,
(ii) to the best of such officers' knowledge, based on such
review, (a) the Issuer has fulfilled all of its obligations under this
Amended and Restated Indenture throughout such year and (b) the Servicer
has fulfilled all of the Servicer's obligations under the Amended and
Restated Contribution and Servicing Agreement, and
(iii) whether the officer knows of any Defaults by the Issuer
under this Amended and Restated Indenture throughout such year or, if there
has been a Default in the fulfillment of any such obligation, specifying
each such Default known to him and the nature and status thereof and the
nature of the action taken with respect thereto.
SECTION 8.07 PERFORMANCE OF OBLIGATIONS; AMENDED AND RESTATED
CONTRIBUTION AND SERVICING AGREEMENT.
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Amended and Restated Indenture, any
Supplement, the Notes, its limited liability company operating agreement, the
Note Purchase Agreement, the Underwriting Agreements and any other applicable
Transaction Documents.
(b) The Issuer will clearly mark its books and records to reflect each
assignment and transfer of a Contract and the security interest in the Equipment
subject thereto from the Transferor.
(c) If the Managing Member, as sole member of the Issuer, shall have
actual knowledge of the occurrence of a default under either the Amended and
Restated Contribution and Servicing Agreement or the SCTA, the Issuer shall
promptly notify the Trustee and the Noteholders thereof, and shall specify in
such notice the action, if any, the Issuer is taking in respect of such default.
Unless consented to by Noteholders evidencing more than 50% of the Voting
Rights, the Issuer may not waive any default under or amend the Amended and
Restated Contribution and Servicing Agreement.
(d) The Issuer shall, and shall cause the Contributor to, update any
information required to be provided pursuant to Rule 144A(d) (4) of the
Securities Act to subsequent purchasers of the Class E Notes to prevent such
information from becoming materially false and materially misleading in a manner
adverse to any Noteholder.
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SECTION 8.08 NEGATIVE COVENANTS.
The Issuer will not:
(i) sell, transfer, exchange or otherwise dispose of any portion
of the Trust Property except as expressly permitted by this Amended and
Restated Indenture or any Supplement; PROVIDED THAT nothing contained
herein shall prohibit the transfer by the Issuer of amounts payable to the
Issuer pursuant to Section 3.04(b);
(ii) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Notes by reason of the payment of
any taxes levied or assessed upon any portion of the Trust Property;
(iii) seek dissolution or liquidation in whole or in part or
reorganization of its business or affairs;
(iv) (A) permit the validity or effectiveness of this Amended and
Restated Indenture or any Grant hereby to be impaired, or permit the lien
of this Amended and Restated Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations under this Amended and Restated
Indenture, except as may be expressly permitted hereby, (B) permit any
lien, charge, security interest, mortgage or other encumbrance to be
created on or to extend to or otherwise arise upon or burden the Trust
Property or any part thereof or any interest therein or the proceeds
thereof other than the lien of this Amended and Restated Indenture and the
rights of Obligors, or (C) permit the lien of this Amended and Restated
Indenture not to constitute a valid first priority perfected security
interest in the Contracts and a valid security interest in the Equipment;
(v) engage in any business or activity in violation of the
provisions contained in its limited liability company operating agreement;
(vi) at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or
other law that would prohibit or forgive the Issuer from paying all or any
portion of the principal of or interest on the Notes as contemplated herein
or in the Notes, wherever enacted, now or at any time hereafter in force,
or that may affect the covenants or the performance of this Amended and
Restated Indenture; and (to the extent that it may lawfully do so) the
Issuer hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted;
(vii) merge or consolidate with any other Person unless (i) the
entity surviving such merger or consolidation is a Person organized under
the laws of the United States or any jurisdiction thereof, (ii) the
surviving entity, if not the Issuer, shall execute and deliver to the
Servicer and the Trustee, in form and substance satisfactory to each of
them, (x) an instrument expressly assuming all of the obligations of the
Issuer hereunder, and (y) an opinion of counsel to the effect that such
Person is a Person of the type described in the preceding clause (i), has
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effectively assumed the obligations of the Issuer hereunder, that all
conditions precedent provided for in this Amended and Restated Indenture
relating to such transaction have been complied with, that in the opinion
of such counsel, all UCC 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 Trustee in the Trust
Property, and reciting the details of such filings, or stating that no such
action shall be necessary to preserve and protect such interest, (iii) the
Issuer shall deliver to the Trustee a letter from each Rating Agency to the
effect that such transaction will not, in and of itself, result in a
downgrading of the rating for the Notes and (iv) immediately after giving
effect to such transaction, no event of default under any Transaction
Document, and no event which, after notice or lapse of time, or both, would
become an event of default, shall have occurred and be continuing. The
Issuer and any surviving entity, if not the Issuer, will keep all of its
material assets within the United States at all times. The Issuer will not
make any material change in its business;
(viii) take any action or permit any action to be taken by others
which would release any Person from any of such Person's covenants or
obligations under any Contract or any other instrument included in the
Trust Property other than any such release occasioned by the early
termination of a Contract after receipt of the Prepayment Amount, or which
would result in the amendment, hypothecation, subordination, termination,
or discharge of, or impair the validity or effectiveness of, any Contract
or such other instrument, except as expressly provided in this Amended and
Restated Indenture or the Amended and Restated Contribution and Servicing
Agreement; or
(ix) issue any other securities (other than the Notes and the
Class F Instruments) unless it shall have received from the Rating Agencies
a written confirmation that the issuance of such securities will not result
in a Ratings Effect with respect to any class of Notes.
SECTION 8.09 INFORMATION AS TO THE ISSUER.
The Issuer shall file with the Trustee and the Rating Agencies:
(a) within 15 days after filing with the Commission, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) which the Managing Member (as settlor of the Issuer) is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act.
(b) immediately upon becoming aware of the existence of any condition
or event which constitutes a Default or an Indenture Event of Default, a written
notice describing its nature and period of existence and what action the Issuer
is taking or proposes to take with respect thereto;
(c) promptly upon the Issuer's becoming aware of:
(i) any proposed or pending investigation of it by any
governmental authority or agency, or
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(ii) any pending or proposed court or administrative proceeding
which involves or may involve the possibility, individually or in the aggregate,
of materially and adversely affecting the properties, business, profits or
condition (financial or otherwise) of the Issuer, a written notice specifying
the nature of such investigation or proceeding and what action the Issuer is
taking or proposes to take with respect thereto and evaluating its merits; and
(d) with reasonable promptness, any other data and information which
may be reasonably requested from time to time.
SECTION 8.10. PAYMENT OF TAXES AND OTHER CLAIMS.
The Issuer will pay or discharge or cause to be paid or discharged,
before any penalty accrues from the failure to so pay or discharge, (1) all
taxes, assessments and governmental charges levied or imposed upon the Issuer or
upon the income, profits or property (including any property that is part of the
Trust Property) of the Issuer and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Issuer; PROVIDED, HOWEVER, that the Issuer shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim the amount, applicability or validity of which is being contested in good
faith by appropriate proceedings and for which adequate provision has been made
or where the failure to effect such payment or discharge is not adverse in any
material respect to the Noteholders.
SECTION 8.11 INDEMNIFICATION.
The Issuer agrees to indemnify and hold harmless the Trustee (which
shall include its directors, officers, employees and agents) and each Noteholder
(each an "INDEMNIFIED PARTY") against any and all liabilities, losses, damages,
penalties, costs and expenses (including the fees and expenses of counsel and
the costs of defense and legal fees and expenses) which may be incurred or
suffered by such Indemnified Party without negligence, bad faith or willful
misconduct on its part as a result of claims, actions, suits or judgments
asserted or imposed against it and arising out of the transactions contemplated
hereby, by the SCTA or by the Amended and Restated Contribution and Servicing
Agreement, including, without limitation, any claims resulting from any use,
operation, maintenance, repair, storage or transportation of any item of
Equipment, whether or not in the Issuer's possession or under its control, and
any tort claims and any fines or penalties arising from any violation of the
laws or regulations of the United States or any state or local government or
governmental authority; PROVIDED that, except to the extent otherwise provided
in Section 6.06, all amounts payable pursuant to this Section 8.11 shall be
fully subordinated to amounts payable under the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes and the Class E Notes to the extent
that any amounts otherwise due and payable under the terms of this Amended and
Restated Indenture have not been fully paid. In every circumstance where the
Issuer has agreed to indemnify or hold harmless the Noteholders for legal fees,
counsel fees and related costs and expenses, it is understood and agreed, and
the Noteholders by their acceptance of their respective Notes agree, that such
indemnification and holding harmless is limited to the reasonable fees, related
costs and expenses of the Noteholders Counsel only. The provisions of this
Section 8.11 shall survive the termination of this Amended and Restated
Indenture.
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SECTION 8.12 CONTRACT FILES TO TRUSTEE.
On or prior to the Closing Date or each Substitute Date, as
applicable, the Contributor, on behalf of the Issuer, shall deliver to the
Trustee the original counterpart of each Contract that constitutes "chattel
paper" or an "instrument," as such terms are defined in the UCC.
SECTION 8.13 PAYMENT ADVICES.
Each payment by the Issuer or the Servicer to the Trustee pursuant to
any of the provisions of the Transaction Documents shall be accompanied by
written advice containing sufficient information to identify the Contract and/or
Equipment to which such payment relates, the Section of the Transaction
Documents pursuant to which such payment is made, and the proper application
pursuant to the provisions of the applicable Transaction Document of the amounts
being paid.
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ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL AMENDED AND RESTATED INDENTURES
SECTION 9.01 AMENDMENTS AND SUPPLEMENTAL INDENTURES.
This Amended and Restated Indenture or the Notes may be amended from
time to time by the parties hereto, without the consent of any of the
Noteholders, (i) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or to make any
other provisions with respect to matters or questions arising under this Amended
and Restated Indenture or the Notes which shall not be materially inconsistent
with the provisions of this Amended and Restated Indenture or the Notes,
PROVIDED THAT such action shall not adversely affect in any respect the
interests of any Noteholder or (ii) to make any change to comply with the TIA or
any amendment thereto, or to comply with any requirement of the Commission in
connection with the qualification of the Amended and Restated Indenture under
the TIA.
This Amended and Restated Indenture or the Notes may also be amended
from time to time by the parties hereto with the consent of the Holders of Notes
evidencing more than 662/3% of the Voting Rights (and with prior written notice
to the Rating Agency) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Amended and Restated
Indenture or the Notes or of modifying in any manner the rights of the Holders
of Notes; PROVIDED, HOWEVER, that no amendment to this Amended and Restated
Indenture or any supplemental indenture may (i) cause a reduction in the then
current ratings, if any, of the Notes, (ii) increase or reduce in any manner the
amount of, or accelerate or delay the timing of collections of payments on the
related Contracts or distributions that are required to be made for the benefit
of such Noteholders, (iii) reduce the aforesaid percentage of the Notes of such
series which is required to consent to any such amendment or waiver, or (iv)
release any of the Trust Property from the lien hereof (except as otherwise
permitted herein) or modify Section 2.06, 3.04, 6.06, 6.08, 6.13 or 9.01,
without the consent of each affected Noteholder. The Issuer shall furnish to the
Rating Agencies copies of all amendments to and supplements to this Amended and
Restated Indenture.
It shall not be necessary for the consent of the Noteholders under
this Section 9.01 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.
SECTION 9.02 EXECUTION OF AMENDMENTS AND SUPPLEMENTAL INDENTURES.
In executing any amendment to this Amended and Restated Indenture, the
Notes or any supplemental indenture pursuant to Section 9.01 of this Amended and
Restated Indenture, the Trustee shall be entitled to receive, and (subject to
Section 7.01) shall be fully protected in relying upon (i) an Officer's
Certificate stating that all conditions precedent for entering into such
amendment or supplemental indenture as set forth in the Amended and Restated
Indenture have been met and (ii) an Opinion of Counsel stating that the
execution of such amendment to this Amended and Restated Indenture, the Note, or
any supplemental indenture is authorized or permitted by this Amended and
Restated Indenture. The Trustee may, but shall not be obligated to, enter into
any supplemental indenture which affects
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the Trustee's own rights, duties, protections, or immunities under this Amended
and Restated Indenture or otherwise.
SECTION 9.03 EFFECT OF AMENDMENTS AND SUPPLEMENTAL INDENTURES.
Upon the execution of any amendment to this Amended and Restated
Indenture, the Notes or any supplemental indenture under this Article, this
Amended and Restated Indenture, the Notes or any supplemental indenture shall be
modified in accordance therewith, and such amendment or supplemental indenture
shall form a part of this Amended and Restated Indenture, the Notes or any
supplemental indenture for all purposes, and every Noteholder of Notes
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.04 REFERENCE IN NOTES TO AMENDMENTS AND SUPPLEMENTAL
INDENTURES.
Notes authenticated and delivered after the execution of any amendment
to this Amended and Restated Indenture or any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such amendment or
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Issuer, to any such
amendment or supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for outstanding
Notes.
SECTION 9.05 COMPLIANCE WITH TRUST INDENTURE ACT.
The Issuer hereby covenants and agrees that every amendment or
supplement to this Amended and Restated Indenture or the Notes shall comply with
the TIA as then in effect.
SECTION 9.06 REVOCATION AND EFFECT OF CONSENTS.
Subject to this Amended and Restated Indenture, each amendment, waiver
or instrument evidencing other action shall become effective in accordance with
its terms. Until an amendment, waiver or other action becomes effective, a
consent to it by a Noteholder is a continuing consent by the Noteholder even if
notation of the consent is not made on any Note.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then those Persons who were
Noteholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Noteholders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01 OPTIONAL REDEMPTION; ELECTION TO REDEEM.
(a) The Notes may be redeemed in part by the Issuer at the Partial
Redemption Price on any Payment Date on which the outstanding Pool B Aggregate
Discounted Contract Balance is less than 20% of the outstanding Pool B Aggregate
Discounted Contract Balance as of the Closing Date. The Notes may be redeemed by
the Issuer, in whole but not in part, at the Redemption Price on any Payment
Date on which the Pool A Aggregate Discounted Contract Balance is less than 10%
of the Pool A Aggregate Discounted Contract Balance as of the Closing Date and
the Pool B Aggregate Discounted Contract Balance is less than 20% of the Pool B
Aggregate Discounted Contract Balance as of the Closing Date. The Issuer, by an
Authorized Officer of the Managing Member, shall set the Redemption Date and the
Redemption Record Date and give notice thereof to the Trustee. Notice of
redemption or partial redemption having been given as provided in the Amended
and Restated Indenture, the Notes shall, on the applicable Redemption Date,
become due and payable at the Redemption Price or Partial Redemption Price, as
applicable. The respective Noteholders shall be paid the Redemption Price or
Partial Redemption Price, as applicable, by the Trustee to the extent of
Available Funds on deposit in the Collection Account, and upon presentation and
surrender of the Notes on behalf of the Issuer; PROVIDED, HOWEVER, that
installments of principal and interest which are due on or prior to the
Redemption Date shall be payable to the respective Noteholders registered as
such on the relevant Record Dates or Redemption Record Dates, as applicable,
according to their terms.
(b) The Issuer, by order of an Authorized Officer of the Managing
Member, shall set the Redemption Date and the Redemption Record Date and give
notice thereof to the Trustee pursuant to Section 10.02.
SECTION 10.02 NOTICE TO TRUSTEE.
In the case of any redemption or partial redemption pursuant to
Section 10.01, the Issuer shall, at least 20 days prior to the Redemption,
notify the Trustee and the Rating Agencies of such Redemption Date and the
principal amount of Notes to be redeemed in part. The notice shall be
accompanied by an Officer's Certificate stating that the redemption or partial
redemption complies with the provisions of this Amended and Restated Indenture.
SECTION 10.03 NOTICE OF REDEMPTION OR PARTIAL REDEMPTION BY THE
ISSUER.
Notice of redemption or partial redemption pursuant to Section 10.01
shall be given by first class mail, postage prepaid, mailed at least 15 days but
not more than 60 days prior to the applicable Redemption Date, to each holder of
a Note, at its address in the Note Register.
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All notices of redemption or partial redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price or Partial Redemption Price, as
applicable;
(3) that on the Redemption Date, the Redemption Price or Partial
Redemption Price, as applicable, will become due and payable
upon each such Note, and that interest on the redeemed
portion of such Note shall cease to accrue if payment is
made on such date;
(4) the private placement number or CUSIP number, if any, of the
Notes;
(5) Corporate Trust Office where Notes are to be surrendered for
payment of the Redemption Price; and
(6) the Redemption Record Date.
Notice of redemption or partial redemption, as applicable, of Notes
shall be given by the Issuer, by order of an Authorized Officer of the
Transferor, or, at the request of such Authorized Officer of the Managing
Member, by the Trustee in the name and at the expense of the Issuer. Failure to
give notice of redemption or partial redemption, as applicable, or any defect
therein, to any holder of a Note shall not impair or affect the validity of the
redemption or partial redemption, as applicable, of any other Note. If a private
placement number or CUSIP number is listed in such notice or printed on the
Note, the notice may state that no representation is made as to the correctness
or accuracy of such private placement number or CUSIP number.
SECTION 10.04 DEPOSIT OF THE REDEMPTION PRICE OR PARTIAL REDEMPTION
PRICE.
On or before the Business Day immediately preceding any Redemption
Date, the Issuer shall deposit with the Trustee an amount of monies sufficient
to pay the Redemption Price or Partial Redemption Price, as applicable, of all
Notes outstanding on such Redemption Date (less any portion of such payment to
be made from monies in the Collection Account).
SECTION 10.05 NOTES PAYABLE ON REDEMPTION DATE.
(a) Notice of redemption in full having been given as provided in
Section 10.03, the Notes shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and on such Redemption Date (unless the
Issuer shall default in the payment of the Redemption Price) such Notes shall
cease to bear interest. The Noteholders shall be paid the Redemption Price by
the Trustee on behalf of the Issuer; PROVIDED, HOWEVER, that installments of
principal and interest which are due on or prior to the Redemption Date shall be
payable to the Noteholders registered as such on the relevant Record Dates
according to their terms and the provisions of Section 2.07. If the Holders of
any Note called for redemption in full shall not be so paid upon surrender, the
principal and interest shall, until paid, bear interest from the Redemption Date
at the related Note Rate.
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(b) Notice of partial redemption having been given as provided in
Section 10.03, that portion of the Notes shall, on the applicable Redemption
Date, become due and payable at the Partial Redemption Price and on such
Redemption Date (unless the Issuer shall default in the payment of the
Redemption Price) such Notes shall continue to bear interest only on the
principal balances remaining outstanding. The Noteholders shall be paid the
Partial Redemption Price by the Trustee on behalf of the Issuer; PROVIDED,
HOWEVER, that installments of principal and interest which are due on or prior
to the Redemption Date shall be payable to the Noteholders registered as such on
the relevant Record Dates according to their terms and the provisions of Section
2.07. If the holders of any Note called for partial redemption shall not be so
paid, the principal and interest shall, until paid, bear interest from the
Redemption Date at the related Note Rate.
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ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01 SATISFACTION AND DISCHARGE OF AMENDED AND RESTATED
INDENTURE.
(a) This Amended and Restated Indenture shall cease to be of further
effect (except as to any surviving rights herein expressly provided for), and
the Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments and certifications acknowledging satisfaction and discharge of this
Amended and Restated Indenture, when:
(i) either:
(A) all Notes theretofore authenticated and delivered (other
than (x) Notes which have been destroyed, lost, or stolen and which
have been replaced or paid as provided in Section 2.05 and (y) Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section
8.03(c)) have been irrevocably paid and delivered to the Trustee for
cancellation; or
(B) the final installments of principal on all such Notes
not theretofore delivered to the Trustee for cancellation:
(1) have become due and payable, or
(2) will become due and payable at their Stated
Maturity Date within one year,
and the Issuer has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount sufficient
to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for principal
and interest to the date of such deposit (in the case of Notes which
have become due and payable) or to the Stated Maturity Date thereof;
(ii) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer for the benefit of the Noteholders; and
(iii) the Issuer has delivered to the Trustee an Officer's
Certificate of the Managing Member stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Amended and Restated Indenture have been complied with.
At such time, the Trustee shall deliver to the Issuer or, upon Issuer Order, its
assignee, all cash, securities and other property held by it as part of the
Trust Property other than funds deposited with the Trustee pursuant to Section
11.01(a)(i)(B) for the payment and discharge of the Notes and a certificate from
a Responsible Officer certifying the satisfaction and discharge of this Amended
and Restated Indenture.
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(b) Notwithstanding the satisfaction and discharge of this Amended and
Restated Indenture, the obligations of the Issuer under Sections 7.06 and 8.11,
and, if money shall have been deposited with the Trustee pursuant to Section
11.01(a)(i)(B), the obligations of the Trustee under Section 11.02 and Section
8.03(c) shall survive.
SECTION 11.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 8.03(c), all money deposited with
the Trustee pursuant to Sections 11.01 and 8.03 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this Amended
and Restated Indenture, to the payment to the Persons entitled thereto of the
principal and interest for whose payment such money has been deposited with the
Trustee.
SECTION 11.03 REINSTATEMENT.
If the Trustee is unable to apply any money in accordance with Section
11.01 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuer's obligations under this Amended and
Restated Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 11.01 until such time as the Trustee is
permitted to apply all such money in accordance with Section 11.01.
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AMENDED AND RESTATED INDENTURE
DATED AS OF JUNE 1, 1999
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Indenture to be duly executed, all as of the day and year first above
written.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By: /s/ Lisa J. Cruikshank
-----------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ Nancie J. Arvin
-----------------------------------
Name: Nancie J. Arvin
Title: Vice President
<PAGE>
SCHEDULE 1
CONTRACT SCHEDULE
<PAGE>
EXHIBIT A-1
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS A-1 NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS A-1 NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS A-1 NOTES WILL NOT GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
No. 1 Principal Amount $__________
Due: _____________ CUSIP No. ___________
_______% ASSET-BACKED NOTE, SERIES 1999-2, CLASS A-1
A-1-1
<PAGE>
DVI RECEIVABLES X, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of ___________ _______ and 00/100 Dollars
($__________) in monthly installments equal to the sum of (i) the Class A-1
Monthly Principal, (ii) the Class A-1 Overdue Principal and (iii) any other
principal that may be due hereon pursuant to the Amended and Restated Indenture
during an Amortization Event together with (i) the Class A-1 Monthly Interest
and (ii) the Class A-1 Overdue Interest due thereon on the thirteenth day of
each month (or if such date is not a Business Day, the next succeeding Business
Day, commencing _________, ____ (each, a "PAYMENT DATE"), and not later than
_____________, all remaining principal and interest (computed on the basis of a
360-day year of actual number of days elapsed) are due and payable in their
entirety as set forth in the Amended and Restated Indenture.
Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class A-1 Notes of the
Issuer designated as its _______% Asset-Backed Notes, Series 1999-2, Class A-1
with aggregate principal amount of $__________ and to be issued under an Amended
and Restated Indenture, dated as of June 1, 1999 (herein called the "AMENDED AND
RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
tranche and any other Note of the same tranche by reason of difference in time
of issuance or otherwise, and also secures the payment of certain other amounts
and certain other obligations as set forth in the Amended and Restated
Indenture. This Note is issued under and is subject to the terms, provisions and
conditions of the Amended and Restated Indenture, to which Amended and Restated
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
Each Class A-1 Noteholder by acceptance of its Class A-1 Note (and any
Person which is a beneficial owner of any interest in a Class A-1 Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A-1 Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class A-1 Noteholder agrees that it
will cause any Person acquiring an interest
A-1-2
<PAGE>
in a Class A-1 Note through it to acknowledge the Class A-1 Notes'
characterization as indebtedness and to treat the Class A-1 Notes as
indebtedness for such tax purposes.
Each prospective initial Noteholder acquiring Class A-1 Notes, each
prospective transferee acquiring a Class A-1 Note, and each prospective owner
(or transferee thereof) of a beneficial interest in a Class A-1 Note (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class A-1 Note on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class A-1
Note will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.
If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Class A-1 Note is
registrable in the Note Register, upon surrender of this Class A-1 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Amended and Restated Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-1 Notes, of authorized
denominations and for the same original aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Class A-1 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Class A-1 Note be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
A-1-3
<PAGE>
This Class A-1 Note and the Amended and Restated Indenture may be
amended or supplemented as set forth in the Amended and Restated Indenture.
By accepting this Class A-1 Note, the holder hereof irrevocably
appoints the Trustee under the Amended and Restated Indenture as the special
attorney-in-fact for the holder vested with full power on behalf of the holder
to effect and enforce the rights of such holder and the provisions of the
Amended and Restated Indenture for the benefit of the holder. The preceding
provision in no way shall limit the right of the holder hereof to demand payment
hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Class A-1 Note which are defined in
the Amended and Restated Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture, this Class A-1 Note
and the Amended and Restated Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to the
conflict of laws principles thereof.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Class A-1 Note shall not be entitled to
any benefit under the Amended and Restated Indenture or be valid or obligatory
for any purpose.
This Class A-1 Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.
A-1-4
<PAGE>
IN WITNESS WHEREOF, DVI RECEIVABLES X, L.L.C. has caused this
instrument to be duly executed.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By:_____________________________________
Name:
Title:
Dated:_____________________
This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:_____________________________________
Authorized Signatory
A-1-5
<PAGE>
EXHIBIT A-2
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS A-2 NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS A-2 NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS A-2 NOTES WILL NOT GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
No. 1 Principal Amount $__________
Due: _____________ CUSIP No. ___________
_____% ASSET-BACKED NOTE, SERIES 1999-2, CLASS A-2
A-2-1
<PAGE>
DVI RECEIVABLES X, L.L.C., a limited liability company (the "ISSUER"),
for value received, hereby promises to pay to CEDE & CO. or registered assigns,
the principal sum of _____________ and 00/100 Dollars ($__________) in monthly
installments equal to the sum of (i) the Class A-2 Monthly Principal, (ii) the
Class A-2 Overdue Principal and (iii) any other principal that may be due hereon
pursuant to the Amended and Restated Indenture during an Amortization Event
together with (i) the Class A-2 Monthly Interest and (ii) the Class A-2 Overdue
Interest due thereon on the thirteenth day of each month (or if such date is not
a Business Day, the next succeeding Business Day, commencing _____ ________
(each, a "PAYMENT DATE"), and not later than _____________, all remaining
principal and interest (computed on the basis of a 360-day year of twelve 30-day
months) are due and payable in their entirety as set forth in the Amended and
Restated Indenture.
Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class A-2 Notes of the
Issuer designated as its _____% Asset-Backed Notes, Series 1999-2, Class A-2
with aggregate principal amount of $__________ and to be issued under an Amended
and Restated Indenture, dated as of June 1, 1999 (herein called the "AMENDED AND
RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
tranche and any other Note of the same tranche by reason of difference in time
of issuance or otherwise, and also secures the payment of certain other amounts
and certain other obligations as set forth in the Amended and Restated
Indenture. This Note is issued under and is subject to the terms, provisions and
conditions of the Amended and Restated Indenture, to which Amended and Restated
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
Each Class A-2 Noteholder by acceptance of its Class A-2 Note (and any
Person which is a beneficial owner of any interest in a Class A-2 Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A-2 Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class A-2 Noteholder agrees that it
will cause any Person acquiring an interest
A-2-2
<PAGE>
in a Class A-2 Note through it to acknowledge the Class A-2 Notes'
characterization as indebtedness and to treat the Class A-2 Notes as
indebtedness for such tax purposes.
Each prospective initial Noteholder acquiring Class A-2 Notes, each
prospective transferee acquiring a Class A-2 Note, and each prospective owner
(or transferee thereof) of a beneficial interest in a Class A-2 Note (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class A-2 Notes on
behalf of, as investment manager of, as named fiduciary of or with the assets of
a Plan; or (2) the acquisition and holding of the Class A-2 Notes will not give
rise to a nonexempt prohibited transaction under Section 406(a) of ERISA or
Section 4975 of the Code for which a statutory or administrative exemption is
unavailable.
If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Class A-2 Note is
registrable in the Note Register, upon surrender of this Class A-2 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Amended and Restated Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-2 Notes, of authorized
denominations and for the same original aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Class A-2 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Class A-2 Note be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
A-2-3
<PAGE>
This Class A-2 Note and the Amended and Restated Indenture may be
amended or supplemented as set forth in the Amended and Restated Indenture.
By accepting this Class A-2 Note, the holder hereof irrevocably
appoints the Trustee under the Amended and Restated Indenture as the special
attorney-in-fact for the holder vested with full power on behalf of the holder
to effect and enforce the rights of such holder and the provisions of the
Amended and Restated Indenture for the benefit of the holder. The preceding
provision in no way shall limit the right of the holder hereof to demand payment
hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Class A-2 Note which are defined in
the Amended and Restated Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture, this Class A-2 Note
and the Amended and Restated Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to the
conflict of laws principles thereof.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Class A-2 Note shall not be entitled to
any benefit under the Amended and Restated Indenture or be valid or obligatory
for any purpose.
This Class A-2 Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.
A-2-4
<PAGE>
IN WITNESS WHEREOF, DVI RECEIVABLES X, L.L.C. has caused this
instrument to be duly executed.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By:_______________________________
Name:
Title:
Dated:__________________
This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:_____________________________________
Authorized Signatory
A-2-5
<PAGE>
EXHIBIT A-3
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS A-3 NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS A-3 NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS A-3 NOTES WILL NOT GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
No. 1 Principal Amount $__________
Due: ____________ CUSIP No. ___________
A-3-1
<PAGE>
_____% ASSET-BACKED NOTE, SERIES 1999-2, CLASS A-3
DVI RECEIVABLES X, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of ______________________________________
and 00/100 Dollars ($__________) in monthly installments equal to the sum of (i)
the Class A-3 Monthly Principal, (ii) the Class A-3 Overdue Principal and (iii)
any other principal that may be due hereon pursuant to the Amended and Restated
Indenture during an Amortization Event together with (i) the Class A-3 Monthly
Interest and (ii) the Class A-3 Overdue Interest due thereon on the thirteenth
day of each month or if such date is not a Business Day, the next succeeding
Business Day, commencing _________________ (each, a "PAYMENT DATE"), and not
later than ____________, all remaining principal and interest (computed on the
basis of a 360-day year of twelve 30-day months) are due and payable in their
entirety as set forth in the Amended and Restated Indenture.
Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class A-3 Notes of the
Issuer designated as its _____% Asset-Backed Notes, Series 1999-2, Class A-3
with aggregate principal amount of $__________ and to be issued under an Amended
and Restated Indenture, dated as of June 1, 1999 (herein called the "AMENDED AND
RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
tranche and any other Note of the same tranche by reason of difference in time
of issuance or otherwise, and also secures the payment of certain other amounts
and certain other obligations as set forth in the Amended and Restated
Indenture. This Note is issued under and is subject to the terms, provisions and
conditions of the Amended and Restated Indenture, to which Amended and Restated
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
Each Class A-3 Noteholder by acceptance of its Class A-3 Note (and any
Person which is a beneficial owner of any interest in a Class A-3 Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A-3 Notes (or beneficial interest therein) for purposes
A-3-2
<PAGE>
of federal, state and local income or franchise taxes and any other tax imposed
on or measured by income, as indebtedness. Each Class A-3 Noteholder agrees that
it will cause any Person acquiring an interest in a Class A-3 Note through it to
acknowledge the Class A-3 Notes' characterization as indebtedness and to treat
the Class A-3 Notes as indebtedness for such tax purposes.
Each prospective initial Noteholder acquiring Class A-3 Notes, each
prospective transferee acquiring a Class A-3 Note, and each prospective owner
(or transferee thereof) of a beneficial interest in a Class A-3 Note (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class A-3 Note on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class A-3
Note will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.
If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Class A-3 Note is
registrable in the Note Register, upon surrender of this Class A-3 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Amended and Restated Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-3 Notes, of authorized
denominations and for the same original aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Class A-3 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note
A-3-3
<PAGE>
is registered as the owner hereof for all purposes, whether or not this Class
A-3 Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Class A-3 Note and the Amended and Restated Indenture may be
amended or supplemented as set forth in the Amended and Restated Indenture.
By accepting this Class A-3 Note, the holder hereof irrevocably
appoints the Trustee under the Amended and Restated Indenture as the special
attorney-in-fact for the holder vested with full power on behalf of the holder
to effect and enforce the rights of such holder and the provisions of the
Amended and Restated Indenture for the benefit of the holder. The preceding
provision in no way shall limit the right of the holder hereof to demand payment
hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Class A-3 Note which are defined in
the Amended and Restated Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture, this Class A-3 Note
and the Amended and Restated Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to the
conflict of laws principles thereof.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Class A-3 Note shall not be entitled to
any benefit under the Amended and Restated Indenture or be valid or obligatory
for any purpose.
This Class A-3 Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.
A-3-4
<PAGE>
IN WITNESS WHEREOF, DVI RECEIVABLES X, L.L.C. has caused this
instrument to be duly executed.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By:______________________________
Name:
Title:
Dated:___________________
This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:_____________________________________
Authorized Signatory
A-3-5
<PAGE>
EXHIBIT A-4
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS A-4 NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS A-4 NOTES ON BEHALF OF, AS INVESTMENT MANAGER OR, AS NAMED
FIDUCIARY OF OR WITH THE ASSETS OF A PLAN; OR (2) THE ACQUISITION AND HOLDING OF
THE CLASS A-4 NOTES WILL NOT GIVE RISE TO A PROHIBITED TRANSACTION UNDER SECTION
406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH A STATUTORY OR
ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
No. 1 Principal Amount $__________
Due: ____________ CUSIP No. ___________
A-4-1
<PAGE>
_____% ASSET-BACKED NOTE, SERIES 1999-2, CLASS A-4
DVI RECEIVABLES X, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of _________ _______ and 00/100 Dollars
($__________) in monthly installments equal to the sum of (i) the Class A-4
Monthly Principal, (ii) the Class A-4 Overdue Principal and (iii) any other
principal that may be due hereon pursuant to the Amended and Restated Indenture
during an Amortization Event together with (i) the Class A-4 Monthly Interest
and (ii) the Class A-4 Overdue Interest due thereon on the thirteenth day of
each month or if such date is not a Business Day, the next succeeding Business
Day, commencing ______________ (each, a "PAYMENT DATE"), and not later than
____________, all remaining principal and interest (computed on the basis of a
360-day year of twelve 30-day months) are due and payable in their entirety as
set forth in the Amended and Restated Indenture.
Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class A-4 Notes of the
Issuer designated as its _____% Asset-Backed Notes, Series 1999-2, Class A-4
with aggregate principal amount of $__________ and to be issued under an Amended
and Restated Indenture, dated as of June 1, 1999 (herein called the "AMENDED AND
RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
tranche and any other Note of the same tranche by reason of difference in time
of issuance or otherwise, and also secures the payment of certain other amounts
and certain other obligations as set forth in the Amended and Restated
Indenture. This Note is issued under and is subject to the terms, provisions and
conditions of the Amended and Restated Indenture, to which Amended and Restated
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
Each Class A-4 Noteholder by acceptance of its Class A-4 Note (and any
Person which is a beneficial owner of any interest in a Class A-4 Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A-4 Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income,
A-4-2
<PAGE>
as indebtedness. Each Class A-4 Noteholder agrees that it will cause any Person
acquiring an interest in a Class A-4 Note through it to acknowledge the Class
A-4 Notes' characterization as indebtedness and to treat the Class A-4 Notes as
indebtedness for such tax purposes.
Each prospective initial Noteholder acquiring Class A-4 Notes, each
prospective transferee acquiring a Class A-4 Note, and each prospective owner
(or transferee thereof) of a beneficial interest in a Class A-4 Note (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class A-4 Notes on
behalf of, as investment manager of, as named fiduciary of or with the assets of
a Plan; or (2) the acquisition and holding of the Class A-4 Notes will not give
rise to a prohibited transaction under Section 406(a) of ERISA or Section 4975
of the Code for which a statutory or administrative exemption is unavailable.
If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Class A-4 Note is
registrable in the Note Register, upon surrender of this Class A-4 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Amended and Restated Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-4 Notes, of authorized
denominations and for the same original aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Class A-4 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note
A-4-3
<PAGE>
is registered as the owner hereof for all purposes, whether or not this Class
A-4 Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Class A-4 Note and the Amended and Restated Indenture may be
amended or supplemented as set forth in the Amended and Restated Indenture.
By accepting this Class A-4 Note, the holder hereof irrevocably
appoints the Trustee under the Amended and Restated Indenture as the special
attorney-in-fact for the holder vested with full power on behalf of the holder
to effect and enforce the rights of such holder and the provisions of the
Amended and Restated Indenture for the benefit of the holder. The preceding
provision in no way shall limit the right of the holder hereof to demand payment
hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Class A-4 Note which are defined in
the Amended and Restated Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture, this Class A-4 Note
and the Amended and Restated Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to the
conflict of laws principles thereof.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Class A-4 Note shall not be entitled to
any benefit under the Amended and Restated Indenture or be valid or obligatory
for any purpose.
This Class A-4 Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.
A-4-4
<PAGE>
IN WITNESS WHEREOF, DVI RECEIVABLES X, L.L.C. has caused this
instrument to be duly executed.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By:_______________________________
Name:
Title:
Dated:_________________________
This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:_____________________________________
Authorized Signatory
Name:
Title:
A-4-5
<PAGE>
EXHIBIT B
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS B NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS B NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS B NOTES WILL NOT GIVE RISE TO A PROHIBITED
TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
No. 1 Principal Amount $_________
Due: ____________ CUSIP No. ___________
B-1
<PAGE>
_____% ASSET-BACKED NOTE, SERIES 1999-2, CLASS B
DVI RECEIVABLES X, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of ______________________________________
and 00/100 Dollars ($_________) in monthly installments equal to the sum of (i)
the Class B Monthly Principal, (ii) the Class B Overdue Principal and (iii) any
other principal that may be due hereon pursuant to the Amended and Restated
Indenture during an Amortization Event together with (i) the Class B Monthly
Interest and (ii) the Class B Overdue Interest due thereon on the thirteenth day
of each month (or if such date is not a Business Day, the next succeeding
Business Day, commencing _______________ (each, a "PAYMENT DATE"), and not later
than ______, ____, all remaining principal and interest (computed on the basis
of a 360-day year of twelve 30-day months) are due and payable in their entirety
as set forth in the Amended and Restated Indenture.
Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class B Notes of the
Issuer designated as its _____% Asset-Backed Notes, Series 1999-2, Class B with
aggregate principal amount of $_________ and to be issued under an Amended and
Restated Indenture, dated as of June 1, 1999 (herein called the "AMENDED AND
RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "Trustee", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Amended and Restated Indenture.
This Note is issued under and is subject to the terms, provisions and conditions
of the Amended and Restated Indenture, to which Amended and Restated Indenture
the Holder of this Note by virtue of the acceptance hereof assents and by which
such Holder is bound.
Each Class B Noteholder by acceptance of its Class B Note (and any
Person which is a beneficial owner of any interest in a Class B Note, by virtue
of such Persons' acquisition of a beneficial interest therein) agrees to treat
the Class B Notes (or beneficial interest therein) for purposes of federal,
B-2
<PAGE>
state and local income or franchise taxes and any other tax imposed on or
measured by income, as indebtedness. Each Class B Noteholder agrees that it will
cause any Person acquiring an interest in a Class B Note through it to
acknowledge the Class B Notes' characterization as indebtedness and to agree to
comply with the Amended and Restated Indenture as to treatment of the Class B
Notes as indebtedness for such tax purpose.
Each prospective initial Noteholder acquiring Class B Notes, each
prospective transferee acquiring the Class B Notes, and each prospective owner
(or transferee thereof) of a beneficial interest in Class B Notes (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class B Notes on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class B
Notes will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.
If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Amended and Restated Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
original aggregate principal amount, will be issued to the designated transferee
or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered
B-3
<PAGE>
as the owner hereof for all purposes, whether or not this Note be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
This Note and the Amended and Restated Indenture may be amended or
supplemented as set forth in the Amended and Restated Indenture.
By accepting this Note, the holder hereof irrevocably appoints the
Trustee under the Amended and Restated Indenture as the special attorney-in-fact
for the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Amended and Restated
Indenture for the benefit of the holder. The preceding provision in no way shall
limit the right of the holder hereof to demand payment hereunder or bring an
action to enforce payment hereof.
All capitalized terms used in this Note which are defined in the
Amended and Restated Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture, this Note and the
Amended and Restated Indenture shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Amended and Restated Indenture or be valid or obligatory for any
purpose.
This Class B Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.
B-4
<PAGE>
IN WITNESS WHEREOF, DVI RECEIVABLES X, L.L.C. has caused this
instrument to be duly executed.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By:_______________________________
Name:
Title:
Dated:____________________
This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:_____________________________________
Authorized Signatory
B-5
<PAGE>
EXHIBIT C
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS C NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS C NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS C NOTES WILL NOT GIVE RISE TO A PROHIBITED
TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
No. 1 Principal Amount $_________
Due ____________ CUSIP No. ___________
C-1
<PAGE>
_____% ASSET-BACKED NOTE, SERIES 1999-2, CLASS C
DVI RECEIVABLES X, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of ____________________________________
and 00/100 Dollars ($_________) in monthly installments equal to the sum of (i)
the Class C Monthly Principal, (ii) the Class C Overdue Principal and (iii) any
other principal that may be due hereon pursuant to the Amended and Restated
Indenture during an Amortization Event together with (i) the Class C Monthly
Interest and (ii) the Class C Overdue Interest due thereon on the thirteenth day
of each month (or if such date is not a Business Day, the next succeeding
Business Day, commencing _______________ (each, a "PAYMENT DATE"), and not later
than ______, ____, all remaining principal and interest (computed on the basis
of a 360-day year of twelve 30-day months) are due and payable in their entirety
as set forth in the Amended and Restated Indenture.
Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class C Notes of the
Issuer designated as its _____% Asset-Backed Notes, Series 1999-2, Class C with
aggregate principal amount of $_________ and to be issued under an Amended and
Restated Indenture, dated as of June 1, 1999 (herein called the "AMENDED AND
RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Amended and Restated Indenture.
This Note is issued under and is subject to the terms, provisions and conditions
of the Amended and Restated Indenture, to which Amended and Restated Indenture
the Holder of this Note by virtue of the acceptance hereof assents and by which
such Holder is bound.
Each Class C Noteholder by acceptance of its Class C Note (and any
Person which is a beneficial owner of any interest in a Class C Note, by virtue
of such Persons' acquisition of a beneficial interest therein) agrees to treat
the Class C Notes (or beneficial interest therein) for purposes of federal,
C-2
<PAGE>
state and local income or franchise taxes and any other tax imposed on or
measured by income, as indebtedness. Each Class C Noteholder agrees that it will
cause any Person acquiring an interest in a Class C Note through it to
acknowledge the Class C Notes' characterization as indebtedness and to agree to
comply with the Amended and Restated Indenture as to treatment of the Class C
Notes as indebtedness for such tax purpose.
Each prospective initial Noteholder acquiring Class C Notes, each
prospective transferee acquiring the Class C Notes, and each prospective owner
(or transferee thereof) of a beneficial interest in Class C Notes (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class C Notes on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class C
Notes will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.
If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Amended and Restated Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
original aggregate principal amount, will be issued to the designated transferee
or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered
C-3
<PAGE>
as the owner hereof for all purposes, whether or not this Note be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
This Note and the Amended and Restated Indenture may be amended or
supplemented as set forth in the Amended and Restated Indenture.
By accepting this Note, the holder hereof irrevocably appoints the
Trustee under the Amended and Restated Indenture as the special attorney-in-fact
for the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Amended and Restated
Indenture for the benefit of the holder. The preceding provision in no way shall
limit the right of the holder hereof to demand payment hereunder or bring an
action to enforce payment hereof.
All capitalized terms used in this Note which are defined in the
Amended and Restated Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture, this Note and the
Amended and Restated Indenture shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Amended and Restated Indenture or be valid or obligatory for any
purpose.
This Class C Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.
C-4
<PAGE>
IN WITNESS WHEREOF, DVI RECEIVABLES X, L.L.C. has caused this
instrument to be duly executed.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By:_______________________________
Name:
Title:
Dated:_____________________
This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:_____________________________________
Authorized Signatory
C-5
<PAGE>
EXHIBIT D
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS D NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE AMENDED AND RESTATED INDENTURE REFERRED
TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS D NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS D NOTES WILL NOT GIVE RISE TO A PROHIBITED
TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
No. 1 Principal Amount $_________
Due: ____________ CUSIP No. ___________
D-1
<PAGE>
_____% ASSET-BACKED NOTE, SERIES 1999-2, CLASS D
DVI RECEIVABLES X, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of _________________________________ and
00/100 Dollars ($_________) in monthly installments equal to the sum of (i) the
Class D Monthly Principal, (ii) the Class D Overdue Principal and (iii) any
other principal that may be due hereon pursuant to the Amended and Restated
Indenture during an Amortization Event together with (i) the Class D Monthly
Interest and (ii) the Class D Overdue Interest due thereon on the thirteenth day
of each month (or if such date is not a Business Day, the next succeeding
Business Day, commencing _______________ (each, a "PAYMENT DATE"), and not later
than ____________, all remaining principal and interest (computed on the basis
of a 360-day year of twelve 30-day months) are due and payable in their entirety
as set forth in the Amended and Restated Indenture.
Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date, or Redemption Record Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class D Notes of the
Issuer designated as its _____% Asset-Backed Notes, Series 1999-2, Class D with
aggregate principal amount of $_________ and to be issued under an Amended and
Restated Indenture dated as of June 1, 1999 (herein called the "AMENDED AND
RESTATED INDENTURE"), between the Issuer and U.S. Bank Trust National
Association, as trustee (herein called the "Trustee", which term includes any
successor trustee under the Amended and Restated Indenture), to which Amended
and Restated Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Issuer, the Trustee, and the holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Amended and Restated Indenture.
This Note is issued under and is subject to the terms, provisions and conditions
of the Amended and Restated Indenture, to which Amended and Restated Indenture
the Holder of this Note by virtue of the acceptance hereof assents and by which
such Holder is bound.
Each Class D Noteholder by acceptance of its Class D Note (and any
Person which is a beneficial owner of any interest in a Class D Note, by virtue
of such Persons' acquisition of a beneficial interest therein) agrees to treat
the Class D Notes (or beneficial interest therein) for purposes of federal,
state and local income or franchise taxes and any other tax imposed on or
measured by income, as
D-2
<PAGE>
indebtedness. Each Class D Noteholder agrees that it will cause any Person
acquiring an interest in a Class D Note through it to acknowledge the Class D
Notes' characterization as indebtedness and to agree to comply with the Amended
and Restated Indenture as to treatment of the Class D Notes as indebtedness for
such tax purpose.
Each prospective initial Noteholder acquiring Class D Notes, each
prospective transferee acquiring the Notes, and each prospective owner (or
transferee thereof) of a beneficial interest in Class D Notes (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Notes on behalf
of, as investment manager of, as named fiduciary of, as trustee of, or with the
assets of a Plan; or (2) the acquisition and holding of the Class D Notes will
not give rise to a prohibited transaction under Section 406(a) of ERISA or
Section 4975 of the Code for which a statutory or administrative exemption is
unavailable.
If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Amended and Restated Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
original aggregate principal amount, will be issued to the designated transferee
or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered
D-3
<PAGE>
as the owner hereof for all purposes, whether or not this Note be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
This Note and the Amended and Restated Indenture may be amended or
supplemented as set forth in the Amended and Restated Indenture.
By accepting this Note, the holder hereof irrevocably appoints the
Trustee under the Amended and Restated Indenture as the special attorney-in-fact
for the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Amended and Restated
Indenture for the benefit of the holder. The preceding provision in no way shall
limit the right of the holder hereof to demand payment hereunder or bring an
action to enforce payment hereof.
All capitalized terms used in this Note which are defined in the
Amended and Restated Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture, this Note and the
Amended and Restated Indenture shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Amended and Restated Indenture or be valid or obligatory for any
purpose.
This Class D Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be provided to any Noteholder, at its expense, upon a written
request to the Trustee, U.S. Bank Trust National Association, 180 Fifth Street,
St. Paul, Minnesota 55101, Attention: Structured Finance.
D-4
<PAGE>
IN WITNESS WHEREOF, DVI RECEIVABLES X, L.L.C. has caused this
instrument to be duly executed.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By:_______________________________
Name:
Title:
Dated:____________________
This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:_____________________________________
Authorized Signatory
D-5
<PAGE>
EXHIBIT E
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS E NOTES]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES TO
TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAW OF ANY STATE. ANY RESALE,
TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH REGISTRATION OR
QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION
2.04 OF THE AMENDED AND RESTATED INDENTURE REFERRED TO HEREIN.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED TO
HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT A PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA OR SECTION 4975 OF THE CODE ("PLAN") AND IT IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THE CLASS E NOTES ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN; OR (2) THE
ACQUISITION AND HOLDING OF THE CLASS E NOTES WILL NOT GIVE RISE TO A PROHIBITED
TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE.
THIS CLASS E NOTE MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED
UNLESS (i) SUCH TRANSFEREE IS A "UNITED STATES PERSON" AS DEFINED IN SECTION
7701(a)(30) OF THE CODE; (ii) (A) SUCH TRANSFEREE IS NOT A GRANTOR TRUST,
PARTNERSHIP OR S CORPORATION FOR UNITED STATES FEDERAL INCOME TAX PURPOSES OR
(B) SUCH TRANSFEREE IS A GRANTOR TRUST, PARTNERSHIP OR S CORPORATION FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES, BUT AFTER GIVING EFFECT TO SUCH TRANSFER OF
CLASS E NOTES TO SUCH TRANSFEREE,
E-1
<PAGE>
SUBSTANTIALLY ALL OF THE VALUE OF THE INTEREST OF AN OWNER OF THE TRANSFEREE IN
THE TRANSFEREE WILL NOT BE ATTRIBUTABLE TO THE PASS-THROUGH ENTITY'S OWNERSHIP
INTEREST IN SECURITIES ISSUED BY THE ISSUER OTHER THAN THE CLASS A, CLASS B AND
CLASS C NOTES AND (ii) FOR THE PURPOSES OF SECTION 7704 OF THE CODE AND THE
TREASURY REGULATIONS PROMULGATED THEREUNDER, AFTER SUCH TRANSFER THE ISSUER
WOULD NOT BE TREATED AS HAVING MORE THAN 100 PARTNERS.
No. 1 Principal Amount $_________
Due: ____________ CUSIP No. ___________
_____% ASSET-BACKED NOTE, SERIES 1999-2, CLASS E
DVI RECEIVABLES X, L.L.C., a Delaware limited liability company (the
"ISSUER"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of _____________________________________
and 00/100 Dollars ($_________) in monthly installments equal to the sum of (i)
the Class E Monthly Principal, (ii) the Class E Overdue Principal and (iii) any
other principal that may be due hereon pursuant to the Amended and Restated
Indenture during an Amortization Event together with (i) the Class E Monthly
Interest and (ii) the Class E Overdue Interest due thereon on the thirteenth day
of each month (or if such date is not a Business Day, the next succeeding
Business Day, commencing _______________ (each, a "PAYMENT DATE"), and not later
than ____________, all remaining principal and interest (computed on the basis
of a 360-day year of twelve 30-day months) are due and payable in their entirety
as set forth in the Amended and Restated Indenture.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS CLASS E NOTE ARE
SUBORDINATE TO THE PRIOR PAYMENT IN FULL ON EACH PAYMENT DATE OF CERTAIN AMOUNTS
DUE AND PAYABLE ON THE CLASS A NOTES, THE CLASS B NOTES, THE CLASS C NOTES AND
THE CLASS D NOTES AS PROVIDED IN THE AMENDED AND RESTATED INDENTURE.
Payments of principal and interest on this Note shall be made on each
Payment Date in such coin or currency of the United States of America as at such
time is legal tender for payment of public and private debts to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on the Record Date or Redemption Date, as applicable, for such
Payment Date, which shall be the last Business Day of the month preceding the
month in which the Payment Date occurs (or in the case of the initial Payment
Date, the Closing Date), by wire transfer of immediately available funds to the
account and number specified in the Note Register on such Record Date for such
Person or, if no such account or number is so specified, then by check mailed to
such Person's address as it appears in the Note Register on such Record Date.
The holder hereof shall surrender this Note at the principal Corporate Trust
Office of the Trustee for the final installment of principal of this Note.
This Note is one of a duly authorized issue of Class E Notes of the
Issuer designated as its _____% Asset-Backed Notes, Series 1999-2, Class E with
aggregate principal amount of $_________ and to be issued under an Amended and
Restated Indenture dated as of June 1, 1999 (herein
E-2
<PAGE>
called the "AMENDED AND RESTATED INDENTURE"), between the Issuer and U.S. Bank
Trust National Association, as trustee (herein called the "TRUSTEE", which term
includes any successor trustee under the Amended and Restated Indenture), to
which Amended and Restated Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, and immunities thereunder of the Issuer, the Trustee, and the
holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Trust Property secures the Notes equally and
ratably without prejudice, priority, or distinction between any Note of the same
class and any other Note of the same class by reason of difference in time of
issuance or otherwise, and also secures the payment of certain other amounts and
certain other obligations as set forth in the Amended and Restated Indenture.
This Note is issued under and is subject to the terms, provisions and conditions
of the Amended and Restated Indenture, to which Amended and Restated Indenture
the Holder of this Note by virtue of the acceptance hereof assents and by which
such Holder is bound.
The Issuer, the Trustee and each Class E Noteholder by acceptance of
its Class E Note (and any Person that is a beneficial owner of any interest in a
Class E Note, by virtue of such Person's acquisition of a beneficial interest
therein) agrees to treat the Class E Notes for purposes of federal, state and
local income or franchise taxes (and any other tax imposed on or measured by
income) as indebtedness. Each Class E Noteholder agrees that it will cause any
Person acquiring an interest in a Class E Note through it to acknowledge the
Class E Notes' characterization as indebtedness and to agree to comply with this
Amended and Restated Indenture as to treatment of the Class E Notes as
indebtedness for such tax purposes.
Each prospective initial Noteholder acquiring Notes, each prospective
transferee acquiring the Class E Notes, and each prospective owner (or
transferee thereof) of a beneficial interest in Class E Notes (each a
"Prospective Owner") will be deemed to have represented by such purchase to the
Issuer, the Trustee, the Servicer and any successor Servicer that either (1) it
is not a plan within the meaning of Section 3(3) of ERISA or Section 4975 of the
Code ("Plan") and is not directly or indirectly acquiring the Class E Notes on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with the assets of a Plan; or (2) the acquisition and holding of the Class E
Notes will not give rise to a prohibited transaction under Section 406(a) of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption is unavailable.
If an Indenture Event of Default or Amortization Event shall occur and
be continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture and subject to the
limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Amended and Restated Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
original aggregate principal amount, will be issued to the designated transferee
or transferees.
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The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Amended and Restated Indenture on any Payment
Date on which the outstanding Pool B Aggregate Discounted Contract Balance is
less than 20% of the Pool B Aggregate Discounted Contract Balance on the Closing
Date in the manner provided in the Amended and Restated Indenture. The Notes may
be redeemed by the Issuer, in whole but not in part, at the redemption price set
forth in the Amended and Restated Indenture on any Payment Date on which the
Pool A Aggregate Discounted Contract Balance is less than 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date and the Pool B
Aggregate Discounted Contract Balance is less than 20% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date in the manner provided in the
Amended and Restated Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Amended and Restated Indenture and subject to
certain limitations therein set forth. No service charge shall be made for any
such registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note and the Amended and Restated Indenture may be amended or
supplemented as set forth in the Amended and Restated Indenture.
By accepting this Note, the holder hereof irrevocably appoints the
Trustee under the Amended and Restated Indenture as the special attorney-in-fact
for the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Amended and Restated
Indenture for the benefit of the holder. The preceding provision in no way shall
limit the right of the holder hereof to demand payment hereunder or bring an
action to enforce payment hereof.
All capitalized terms used in this Note which are defined in the
Amended and Restated Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Amended and Restated Indenture.
As provided in the Amended and Restated Indenture, this Note and the
Amended and Restated Indenture shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Amended and Restated Indenture or be valid or obligatory for any
purpose.
This Class E Note does not purport to summarize the Amended and
Restated Indenture and reference is made to the Amended and Restated Indenture
for information with respect to interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and immunities of
the Trustee. Copies of the Amended and Restated Indenture and all amendments
thereto will be
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provided to any Noteholder, at its expense, upon a written request to the
Trustee, U.S. Bank Trust National Association, 180 Fifth Street, St. Paul,
Minnesota 55101, Attention: Structured Finance.
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IN WITNESS WHEREOF, DVI RECEIVABLES X, L.L.C. has caused this
instrument to be duly executed.
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its Managing Member
By:_______________________________
Name:
Title:
Dated:____________________
This is one of the Notes
referred to in the within
mentioned Amended and Restated Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:_____________________________________
Authorized Signatory
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EXHIBIT F
TO AMENDED AND RESTATED INDENTURE
---------------------------------
[FORM OF CLASS F INSTRUMENT TO BE PROVIDED WITH ANY
SUPPLEMENT PURSUANT TO WHICH CLASS F INSTRUMENTS ARE ISSUED]
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EXHIBIT G
TO AMENDED AND RESTATED INDENTURE
---------------------------------
INVESTMENT LETTER
-----------------
_______________, 199__
DVI Receivables X, L.L.C.
500 Hyde Park
Doylestown, Pennsylvania 18901
U.S. Bank Trust National Association
180 Fifth Street
St. Paul, Minnesota 55101
Re: $ % Asset-Backed Notes, Series 1999-2, Class
CUSIP Number
---------------------------------------------------------
Ladies and Gentlemen:
______________________ (the "SELLER") intends to transfer $___________
in aggregate principal amount of the captioned Notes to _____________________
(the "PURCHASER").
1. In connection with such transfer, and in accordance with Section
2.04 of the Amended and Restated Indenture, dated as of June 1, 1999 (the
"AMENDED AND RESTATED INDENTURE"; all capitalized terms used herein without
definition shall have the meanings ascribed to such terms in the Amended and
Restated Indenture), between DVI Receivables X, L.L.C. (the "ISSUER") and U.S.
Bank Trust National Association, not in its individual capacity but solely as
Trustee (the "TRUSTEE"), pursuant to which the Notes were issued, the Seller
hereby certifies to you the following facts: Neither the Seller nor anyone
acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Notes, any interest in the Notes or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Notes, any interest in the Notes or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action
which would constitute a distribution of the Notes under the Securities Act of
1933, as amended (the "1933 ACT"), or under state securities laws, or which
would render the disposition of the Notes a violation of Section 5 of the 1933
Act or applicable state securities laws or require registration pursuant
thereto.
2. The Purchaser warrants and represents to, and covenants with, the
Trustee pursuant to Section 2.04 of the Amended and Restated Indenture that:
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(a) The Purchaser agrees to be bound, as Noteholder, by all of the
terms, covenants and conditions of the Amended and Restated Indenture and
the Notes, and from and after the date hereof, the Purchaser assumes for
the benefit of each of the Trustee and the Seller all of the Seller's
obligations as Noteholder thereunder;
(b) The Purchaser understands that the Notes have not been and may
never be registered under the 1933 Act or the securities laws of any state;
(c) The Purchaser is acquiring the Notes for investment for its own
account or the account of another qualified institutional buyer (within the
meaning of Rule 144A under the 1933 Act) only and not for any other person
or with a view to the distribution thereof in violation of applicable
securities laws;
(d) The Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Notes;
(e) The Purchaser has been furnished with all information regarding
the Notes that it has requested from the Seller or the Trustee and has been
afforded the opportunity to ask all questions it reasonably desires to ask
of the Seller (and all such questions have been answered to the Purchaser's
satisfaction);
(f) Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Notes, any interest
in the Notes or any other similar security to, or solicited any offer to
buy or accept a transfer, pledge or other disposition of the Notes, any
interest in the Notes or any other similar security from, or otherwise
approached or negotiated with respect to the Notes, any interest in the
Notes or any other similar security with, any person in any manner, or made
any general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution of
the Notes under the 1933 Act or applicable state securities laws or which
would render the disposition of the Notes a violation of Section 5 of the
1933 Act or applicable state securities laws or require registration
pursuant thereto, nor will it act, nor has it authorized or will it
authorize any person to act, in such manner with respect to the Notes; and
(g) The Purchaser will strictly comply with the Amended and Restated
Indenture as to treatment of the Class ___ Notes as indebtedness of the
Seller for purposes of federal, state and local income or franchise taxes
and any other tax imposed on or measured by income.
3. The Purchaser represents and warrants to the Issuer, the Trustee,
the Servicer and any successor Servicer that either (1) it is not a plan within
the meaning of Section 3(3) of ERISA or Section 4975 of the Code ("Plan") and is
not directly or indirectly acquiring this Note on behalf of, as investment
manager of, as named fiduciary of, as trustee of, or with the assets of a Plan;
or (2) the acquisition and holding of this Note will not give rise to a
prohibited transaction under Section 406(a) of ERISA or section 4975 of the Code
for which a statutory or administrative exemption is unavailable.
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<PAGE>
4. The Purchaser understands and agrees with the Seller that the
Seller is transferring the Notes pursuant to the exemption from registration
under the 1933 Act provided by Rule 144A thereunder ("RULE 144A") and the
Purchaser hereby represents and warrants to the Seller and the Trustee that the
Purchaser is a "qualified institutional buyer" as defined in Rule 144A.
The Purchaser acknowledges that it is familiar with Rule 144A and
understand that you are and will continue to rely on the statements made herein.
5. This Certification may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Investment Letter to
be executed by their duly authorized officers as of the date first above
written.
__________________________________ ___________________________________
Seller Purchaser
By:_______________________________ By:______________________________
Its:______________________________ Its:_____________________________
Taxpayer Identification Taxpayer Identification
No._______________________ No.______________________
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EXHIBIT H
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<PAGE>
EXHIBIT I
TAX CERTIFICATE
[With respect to Class E Notes]
The undersigned hereby certifies and represents as follows to the parties
listed in the Amended and Restated Indenture to which this certification relates
with respect to the Class E Notes described therein:
This Tax Certificate ("CERTIFICATE") is delivered in connection with
the acquisition of, transfer to or possession by the undersigned, whether as
beneficial owner (the "BENEFICIAL OWNER"), or nominee on behalf of the
beneficial owner of the above-described Class E Notes.
Each Holder must complete Part I, Part II (if the holder is a
nominee), Part III, Part IV and in all cases sign and otherwise complete this
certificate. Each Holder shall submit with this certificate an IRS Form W-9 (or
any such successor form) to such Holder.
Part I
1. _______________ (Name of beneficial owner) is not a foreign
corporation, foreign partnership, foreign trust or foreign estate
(as those terms are defined in the Code and Treasury
Regulations);
2. The beneficial owner's office address and place of incorporation
(if applicable) is _______________; and
3. The beneficial owner's U.S. employer identification number is
_______________.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:
____ an IRS Form W-9
____ a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trustee at least thirty (30) days prior to the date that
the form relied upon becomes obsolete, and (ii) in connection with a change in
beneficial owners, the undersigned agrees to submit a new Tax Certificate to the
Trustee promptly after such change.
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Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees
to notify the Trustee within sixty (60) days of the date that the Beneficial
Owner becomes a foreign person. The undersigned understands that this
certificate may be disclosed to the Internal Revenue Service by the Trustee and
any false statement contained therein could be punishable by fines, imprisonment
or both.
Part IV - Representation
The undersigned hereby represents, warrants and agrees that it:
(1) (a) is purchasing the Class E Note for its own account and is the
sole beneficial owner of such Note;
(b) either (i) is not, for federal income tax purposes, a
partnership, trust, estate or "S Corporation" (as defined in the Code) (each a
"PASS-THROUGH ENTITY") or (ii) is for federal income tax purposes, a
Pass-through Entity, but after giving effect to our purchase of such Note less
than 50 percent of the aggregate value of our assets would consist of Class E
Notes; and
(c) such Note has not been transferred through an "established
securities market" within the meaning of Section 7704(b) of the Code;
(2) if it is a Pass-through Entity, it covenants that the portion of
its assets consisting of Class E Notes will remain below 50 percent at all
times; and
(3) if it resells or transfers any of the Class E Notes, it will
obtain from each subsequent purchaser or transferee a letter containing the same
representations and agreements as set forth herein.
The undersigned understands and agrees that no initial or subsequent sale
or other transfer of a Class E Note may be made unless such sale or transfer (i)
is accompanied by delivery of a tax statement in the form of this letter, (ii)
is made to a "United States Person" as defined in Section 7701(a)(30) of the
code, as certified in such tax statement, and (iii) will not cause the Issuer to
be treated as a publicly traded partnership for United States federal income tax
purposes. Any attempted transfer, assignment, conveyance, participation or
subdivision in contravention of the preceding restrictions, as reasonably
determined by the Trustee, shall be void AB INITIO and the purported transferor,
seller or subdivider of such Class E Note shall continue to be treated as the
Holder of such Note for all purposes of the Amended and Restated Indenture.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized officer as of the date first above written.
_____________________________________
Purchaser
By:__________________________________
Its:_________________________________
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<PAGE>
APPENDIX I
The following definition of terms used in the Amended and
Restated Contribution and Servicing Agreement, the Amended and Restated
Indenture, the Amended and Restated Subsequent Contract Transfer Agreement, any
Note Purchase Agreement and the Underwriting Agreement (each such agreement as
defined herein), unless the context otherwise requires, shall have the following
meanings and such meanings shall be equally applicable to both the singular and
plural forms of such terms:
ACT: means, with respect to any Noteholder, as defined in
Section 1.04(a) of the Amended and Restated Indenture.
AFFILIATE: means, of any specified Person, any other Person
(i) which directly or indirectly controls, or whose directors or officers
directly or indirectly control, or is controlled by, or is under common control
with, such specified Person, (ii) which beneficially owns or holds, or whose
directors or officers beneficially own or hold, 5% or more of any class of the
voting stock (or, in the case of an entity that is not a corporation, 5% of the
equity interest) of such specified Person, or (iii) 5% or more of the voting
stock (or, in the case of an entity that is not a corporation, 5% of the equity
interest) of which is owned or held by such specified Person. The term "control"
as used in the preceding sentence means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise.
AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with respect to
any date of determination, the sum of the Discounted Contract Balances of all
Contracts.
AGGREGATE NOTE BALANCE: means the sum of (i) the Note Balance
for the Class A Notes, (ii) the Note Balance for the Class B Notes, (iii) the
Note Balance for the Class C Notes, (iv) the Note Balance for the Class D Notes,
(v) the Note Balance for the Class E Notes and (iv) the Note Balance for the
Class F Instrument, if any.
AMENDED AND RESTATED CONTRIBUTION AND SERVICING AGREEMENT:
means the Amended and Restated Contribution and Servicing Agreement dated as of
June 1, 1999 between the Transferor and the Contributor, as the same may be
amended or modified from time to time in accordance with the provisions hereof
and thereof.
AMENDED AND RESTATED INDENTURE: means the Amended and Restated
Indenture between the Issuer and the Trustee dated as of June 1, 1999 and as
from time to time supplemented or amended pursuant to the applicable provisions
thereof.
AMENDED AND RESTATED SUBSEQUENT CONTRACT TRANSFER AGREEMENT:
means the Subsequent Contract Agreement, dated as of June 1, 1999, by and
between the Issuer and the Transferor.
<PAGE>
AMORTIZATION EVENT: means the occurrence of any one of the
following events:
(i) The entry by a court having jurisdiction
in the premises of (A) a decree or order for relief in respect
of DVI, Inc. in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or (B) a decree or order
adjudging DVI, Inc. a bankrupt or insolvent, or approving as
properly filed a petition servicing reorganization,
arrangement, adjustment, or composition of or in respect of
DVI, Inc. under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of DVI, Inc.
or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance
of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90
consecutive days; or
(ii) The commencement by DVI, Inc. of a
voluntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization, or other similar
law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of DVI, Inc. in an
involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization, or other similar
law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief
under any applicable federal or state law, or the consent by
it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator, or similar official of DVI,
Inc. or of any substantial part of its property, or the making
by it of an assignment for the benefit of creditors, or DVI,
Inc.'s failure to pay its debts generally as they become due,
or the taking of corporate action by DVI, Inc. in furtherance
of any such action; or
(iii) On and as of any Determination Date,
(x) the quotient of (1) the sum of the Discounted Contract
Balances of all Contracts listed as more than 90 days
delinquent as of the last day of the three immediately
preceding calendar months, divided by (2) three exceeds (y)
the product of (1) 0.08 and (2) the quotient of (A) the sum of
the Aggregate Discounted Contract Balance as of the last day
of the three immediately preceding Collection Periods, divided
by (B) three; or
(iv) As of any Determination Date, the sum
of Discounted Contract Balances of all Contracts that have
been classified as Defaulted Contracts since the Closing Date
(such Discounted Contract Balances to be determined
immediately prior to the classification as a Defaulted
Contract) exceeds the product of (1) 0.06 and (2) the
Aggregate Discounted Contract Balance on the Closing Date.
AUTHORIZED OFFICER: means, with respect to any matter, any
officer of or other Person representing the Issuer, the Transferor, the
Contributor, the Servicer, the Trustee, any Noteholder or any Instrumentholder,
as the case may be, who is authorized to act for that party.
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AVAILABLE FUNDS: means, with respect to each Payment Date, the
excess of (i) all amounts on deposit in the Collection Account on the second
Business Day preceding such Payment Date over (ii) any portion thereof
representing Contract Payments due, or voluntary prepayments deposited therein,
subsequent to the end of the related Collection Period.
AVAILABLE RESERVE ACCOUNT FUNDS: has the meaning set forth in
Section 3.04(c) of the Amended and Restated Indenture.
BALLOON PAYMENT: means, with respect to any Contract, a final
Contract Payment that is at least equal to six times any other Contract Payment
related to such Contract.
BOOK-ENTRY CUSTODIAN: means, the Person appointed pursuant to
the terms of the Amended and Restated Indenture to act in accordance with a
certain Letter of Representations agreement such Person has with DTC, in which
DTC delegates its duties to maintain the Book-Entry Notes to such Person and
authorizes such Person to perform such duties.
BOOK-ENTRY NOTE(S): means each Note for so long as such Note
is registered in the name of its depository or its nominee in accordance with
the terms and conditions of the Amended and Restated Indenture.
BUSINESS DAY: means any day other than a Saturday, a Sunday or
a day on which banking institutions in New York City or in the city in which the
Corporate Trust Office is located are authorized or required by law or executive
order to close.
CAPITAL STOCK: means the Transferor's common stock, $1.00 par
value.
CLASS A DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.
CLASS A MONTHLY INTEREST: means, for any Payment Date, the sum
of the Class A-1 Monthly Interest, the Class A-2 Monthly Interest, the Class A-3
Monthly Interest and the Class A-4 Monthly Interest.
CLASS A MONTHLY PRINCIPAL: means for any Payment Date the sum
of the Class A-1 Monthly Principal, the Class A-2 Monthly Principal, the Class
A-3 Monthly Principal and the Class A-4 Monthly Principal due or payable on that
Payment Date.
CLASS A NOTE BALANCE: means, as of the Closing Date,
$237,814,000 and thereafter shall equal the Class A Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A Notes.
CLASS A NOTEHOLDER: means, at any time, any Person in whose
name a Class A Note is registered in the Note Register.
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CLASS A NOTES: means any Class A-1 Note, Class A-2 Note, Class
A-3 Note or Class A-4 Note described in Article II of, and authorized by, and
authenticated and delivered under, the Amended and Restated Indenture.
CLASS A OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class A Noteholders on all prior Payment Dates.
CLASS A OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A Monthly Principal due on
the Class A Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class A Noteholders on all prior Payment Dates.
CLASS A PERCENTAGE: means 88.0%.
CLASS A-1 MONTHLY INTEREST: means, for any Payment Date
(except the Initial Payment Date), the product of (i) the fraction of which the
numerator is the actual number of days elapsed during the related month and the
denominator of which is 360 days and (ii) the Class A-1 Note Rate and (iii) the
Class A-1 Note Balance on the immediately preceding Payment Date (or, with
respect to the Initial Payment Date, the Closing Date) after giving effect to
all principal payments on the Class A-1 Notes on such Payment Date. The Class
A-1 Monthly Interest, with respect to each Payment Date, shall accrue from and
including the prior Payment Date to but excluding such Payment Date, and with
respect to the Initial Payment Date, shall accrue from and including the Closing
Date to but excluding such Initial Payment Date.
CLASS A-1 MONTHLY PRINCIPAL: means (A) with respect to each
Payment Date other than the Class A-1 Stated Maturity Date, until the Class A-1
Note Balance has been reduced to zero, an amount equal to the product of (a) the
Class A Percentage and (b) Monthly Principal; PROVIDED, HOWEVER, that in no
event shall the Class A-1 Monthly Principal due on any Payment Date exceed the
Class A-1 Note Balance as of such Payment Date and (B) on the Class A-1 Stated
Maturity Date, the entire amount of the then-Outstanding Note Balance.
CLASS A-1 NOTE BALANCE: means, as of the Closing Date,
$31,483,000 and thereafter shall equal the Class A-1 Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A-1 Notes.
CLASS A-1 NOTE RATE: means six and 17/100 percent (6.17%) per
annum based upon the actual number of days elapsed.
CLASS A-1 NOTEHOLDER: means, at any time, any Person in whose
name a Class A-1 Note is registered in the Note Register.
CLASS A-1 NOTES: means any Class A-1 Notes described in
Article II of, and authorized by, and authenticated and delivered under, the
Amended and Restated Indenture.
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CLASS A-1 OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A-1 Monthly Interest
payable on all prior Payment Dates over (b) the aggregate amount of interest
actually paid to the Class A-1 Noteholders on all prior Payment Dates.
CLASS A-1 OVERDUE PRINCIPAL: means, as of any Payment Date,
the excess, if any, of (a) the aggregate amount of Class A-1 Monthly Principal
due on the Class A-1 Notes on all prior Payment Dates over (b) the aggregate
amount of principal actually paid to the Class A-1 Noteholders on all prior
Payment Dates.
CLASS A-1 STATED MATURITY DATE: means the Payment Date
occurring in November, 2000.
CLASS A-2 MONTHLY INTEREST: means, for any Payment Date
(except the Initial Payment Date), the product of (i) one-twelfth, (ii) the
Class A-2 Note Rate and (iii) the Class A-2 Note Balance on the immediately
preceding Payment Date (or, in the case of the Initial Payment Date, the Closing
Date) after giving effect to all principal payments on the Class A-2 Notes on
such Payment Date. The Class A-2 Monthly Interest shall be calculated on a
twelve month year of thirty days in each month, except for the Initial Payment
Date, for which interest shall accrue from the Closing Date to but excluding
such Initial Payment Date.
CLASS A-2 MONTHLY PRINCIPAL: means (A) prior to the Payment
Date upon which the Class A-1 Note Balance is paid in full, zero, (B) on each
Payment Date after the Class A-1 Note Balance has been reduced to zero and until
the Class A-2 Note Balance has been reduced to zero, the product of (x) the
Class A Percentage and (y) Monthly Principal; PROVIDED HOWEVER, that in no case
shall the Class A-2 Monthly Principal due on any Payment Date exceed the Class
A-2 Note Balance, and (C) on the Class A-2 Stated Maturity Date, the entire
amount of the then outstanding Class A-2 Note Balance.
CLASS A-2 NOTE BALANCE: means, as of the Closing Date,
$42,182,000 and thereafter shall equal the Class A-2 Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A-2 Notes.
CLASS A-2 NOTE RATE: means six and 54/100 percent (6.54%) per
annum based upon thirty days elapsed each month in a twelve-month year.
CLASS A-2 NOTEHOLDER: means, at any time, any Person in whose
name a Class A-2 Note is registered in the Note Register.
CLASS A-2 NOTES: means any Class A-2 Notes described in
Article II of, and authorized by, and authenticated and delivered under, the
Amended and Restated Indenture.
CLASS A-2 OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A-2 Monthly Interest
payable on all prior Payment Dates over (b) the aggregate amount of interest
actually paid to the Class A-2 Noteholders on all prior Payment Dates.
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CLASS A-2 OVERDUE PRINCIPAL: means, as of any Payment Date,
the excess, if any, of (a) the aggregate amount of Class A-2 Monthly Principal
due on the Class A-2 Notes on all prior Payment Dates over (b) the aggregate
amount of principal actually paid to the Class A-2 Noteholders on all prior
Payment Dates.
CLASS A-2 STATED MATURITY DATE: means the Payment Date
occurring in March, 2002.
CLASS A-3 MONTHLY INTEREST: means, for any Payment Date
(except the Initial Payment Date), the product of (i) one-twelfth, (ii) the
Class A-3 Note Rate and (iii) the Class A-3 Note Balance on the immediately
preceding Payment Date (or, in the case of the Initial Payment Date, the Closing
Date) after giving effect to all principal payments on the Class A-3 Notes on
such Payment Date. The Class A-3 Monthly Interest shall be calculated based upon
a twelve month year of thirty days in each month, except for the Initial Payment
Date, for which interest shall accrue from the Closing Date to but excluding
such Initial Payment Date.
CLASS A-3 MONTHLY PRINCIPAL: means (A) prior to the Payment
Date upon which the Class A-2 Note Balance is paid in full, zero, (B) on each
Payment Date after the Class A-2 Note Balance has been reduced to zero and until
the Class A-3 Note Balance has been reduced to zero, the product of (x) the
Class A Percentage and (y) Monthly Principal; PROVIDED HOWEVER, that in no case
shall the Class A-3 Monthly Principal due on any Payment Date exceed the Class
A-3 Note Balance, and (C) on the Class A-3 Stated Maturity Date, the entire
amount of the then outstanding Class A-3 Note Balance.
CLASS A-3 NOTE BALANCE: means, as of the Closing Date,
$65,098,000 and thereafter shall equal the Class A-3 Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A-3 Notes.
CLASS A-3 NOTE RATE: means six and 83/100 percent (6.83%) per
annum based upon thirty days elapsed each month in a twelve-month year.
CLASS A-3 NOTEHOLDER: means, at any time, any Person in whose
name a Class A-3 Note is registered in the Note Register.
CLASS A-3 NOTES: means any Class A-3 Notes described in
Article II of, and authorized by, and authenticated and delivered under, the
Amended and Restated Indenture.
CLASS A-3 OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A-3 Monthly Interest
payable on all prior Payment Dates over (b) the aggregate amount of interest
actually paid to the Class A-3 Noteholders on all prior Payment Dates.
CLASS A-3 OVERDUE PRINCIPAL: means, as of any Payment Date,
the excess, if any, of (a) the aggregate amount of Class A-3 Monthly Principal
due on the Class A-3 Notes on all prior Payment Dates over (b) the aggregate
amount of principal actually paid to the Class A-3 Noteholders on all prior
Payment Dates.
CLASS A-3 STATED MATURITY DATE: means the Payment Date
occurring in June, 2003.
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CLASS A-4 MONTHLY INTEREST: means, for any Payment Date
(except the Initial Payment Date), the product of (i) one-twelfth, (ii) the
Class A-4 Note Rate and (iii) the Class A-4 Note Balance on the immediately
preceding Payment Date (or, in the case of the Initial Payment Date, the Closing
Date) after giving effect to all principal payments on the Class A-4 Notes on
such Payment Date. The Class A-4 Monthly Interest shall be calculated based upon
a twelve month year of thirty days in each month, except for the Initial Payment
Date, for which interest shall accrue from the Closing Date to but excluding
such Initial Payment Date.
CLASS A-4 MONTHLY PRINCIPAL: means (A) prior to the Payment
Date upon which the Class A-3 Note Balance is paid in full, zero, (B) on each
Payment Date after the Class A-3 Note Balance has been reduced to zero and until
the Class A-4 Note Balance has been reduced to zero, the product of (x) the
Class A Percentage and (y) Monthly Principal; PROVIDED HOWEVER, that in no case
shall the Class A-4 Monthly Principal due on any Payment Date exceed the Class
A-4 Note Balance, and (C) on the Class A-4 Stated Maturity Date, the entire
amount of the then outstanding Class A-4 Note Balance.
CLASS A-4 NOTE BALANCE: means, as of the Closing Date,
$99,051,000 and thereafter shall equal the Class A-4 Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A-4 Notes.
CLASS A-4 NOTE RATE: means seven and 22/100 percent (7.22%)
per annum based upon thirty days elapsed each month in a twelve-month year.
CLASS A-4 NOTEHOLDER: means, at any time, any Person in whose
name a Class A-4 Note is registered in the Note Register.
CLASS A-4 NOTES: means any Class A-4 Notes described in
Article II of, and authorized by, and authenticated and delivered under, the
Amended and Restated Indenture.
CLASS A-4 OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A-4 Monthly Interest
payable on all prior Payment Dates over (b) the aggregate amount of interest
actually paid to the Class A-4 Noteholders on all prior Payment Dates.
CLASS A-4 OVERDUE PRINCIPAL: means, as of any Payment Date,
the excess, if any, of (a) the aggregate amount of Class A-4 Monthly Principal
due on the Class A-4 Notes on all prior Payment Dates over (b) the aggregate
amount of principal actually paid to the Class A-4 Noteholders on all prior
Payment Dates.
CLASS A-4 STATED MATURITY DATE: means the Payment Date
occurring in November, 2007.
CLASS B DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.
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CLASS B MONTHLY INTEREST: means, for any Payment Date (except
the Initial Payment Date), the product of (i) one-twelfth, (ii) the Class B Note
Rate and (iii) the Class B Note Balance on the immediately preceding Payment
Date (or, in the case of the Initial Payment Date, the Closing Date) after
giving effect to all principal payments on the Class B Notes on such Payment
Date. The Class B Monthly Interest shall be calculated based upon a twelve month
year of thirty days in each month, except for the Initial Payment Date, for
which interest shall accrue from the Closing Date to but excluding such Initial
Payment Date.
CLASS B MONTHLY PRINCIPAL: means (A) on any Payment Date other
than the Class B Stated Maturity Date, the product of (x) the Class B Percentage
and (y) Monthly Principal, and (B) on the Class B Stated Maturity Date, the
entire amount of the then outstanding Class B Note Balance.
CLASS B NOTE BALANCE: means, as of the Closing Date,
$4,054,000 and thereafter shall equal the Class B Note Balance as of the Closing
Date reduced by all principal payments on the Class B Notes.
CLASS B NOTE RATE: means seven and 30/100 percent (7.30%) per
annum based upon thirty days elapsed each month in a twelve-month year.
CLASS B NOTEHOLDER: means, at any time, any Person in whose
name a Class B Note is registered in the Note Register.
CLASS B NOTES: means any Class B Notes described in Article II
of, and authorized by, and authenticated and delivered under, the Amended and
Restated Indenture.
CLASS B OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class B Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class B Noteholders on all prior Payment Dates.
CLASS B OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class B Monthly Principal due on
the Class B Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class B Noteholders on all prior Payment Dates.
CLASS B PERCENTAGE: means 1.5%.
CLASS B STATED MATURITY DATE: means the Payment Date occurring
in November, 2007.
CLASS C DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.
CLASS C MONTHLY INTEREST: means, for any Payment Date (except
the Initial Payment Date), the product of (i) one-twelfth, (ii) the Class C Note
Rate and (iii) the Class C Note Balance on the immediately preceding Payment
Date (or, in the case of the Initial Payment Date, the Closing
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<PAGE>
Date) after giving effect to all principal payments on the Class C Note on such
Payment Date. The Class C Monthly Interest shall be calculated based upon a
twelve month year of thirty days in each month, except for the Initial Payment
Date, for which interest shall accrue from the Closing Date to but excluding
such Initial Payment Date.
CLASS C MONTHLY PRINCIPAL: means, (A) on any Payment Date
other than the Class C Stated Maturity Date, an amount equal to the product of
(x) the Class C Percentage and (y) the Monthly Principal and (B) on the Class C
Stated Maturity Date, the entire amount of the then outstanding Class C Note
Balance.
CLASS C NOTEHOLDER: means, at any time, any Person in whose
name a Class C Note is registered in the Note Register.
CLASS C NOTE BALANCE: means, as of the Closing Date,
$8,107,000 and thereafter shall equal the Class C Note Balance as of the Closing
Date reduced by all principal payments on the Class C Notes.
CLASS C NOTE RATE: means seven and 48/100 percent (7.48%) per
annum based upon thirty days elapsed each month in a twelve-month year.
CLASS C NOTES: means any Class C Notes described in Article II
of, and authorized by, and authenticated and delivered under, the Amended and
Restated Indenture.
CLASS C OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class C Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class C Noteholders on all prior Payment Dates.
CLASS C OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class C Monthly Principal due on
the Class C Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class C Noteholders on all prior Payment Dates.
CLASS C PERCENTAGE: means 3.0%.
CLASS C STATED MATURITY DATE: means the Payment Date occurring
in November, 2007.
CLASS D DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.
CLASS D MONTHLY INTEREST: means, for any Payment Date (except
the Initial Payment Date), the product of (i) one-twelfth, (ii) the Class D Note
Rate and (iii) the Class D Note Balance on the immediately preceding Payment
Date (or, in the case of the Initial Payment Date, the Closing Date) after
giving effect to all principal payments on the Class D Notes on such Payment
Date. The Class D Monthly Interest shall be calculated based upon a twelve month
year of thirty days in each
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<PAGE>
month, except for the Initial Payment Date, for which interest shall accrue from
the Closing Date to but excluding such Initial Payment Date.
CLASS D MONTHLY PRINCIPAL: means (A) on any Payment Date other
than the Class D Stated Maturity Date, the product of (x) the Class D Percentage
and (y) Monthly Principal, and (B) on the Class D Stated Maturity Date, the
entire amount of the then outstanding Class D Note Balance.
CLASS D NOTE BALANCE: means, as of the Closing Date,
$5,405,000 and thereafter shall equal the Class D Note Balance as of the Closing
Date reduced by all principal payments on the Class D Notes.
CLASS D NOTE RATE: means eight and 25/100 percent (8.25%) per
annum based upon thirty days elapsed each month in a twelve-month year.
CLASS D NOTEHOLDER: means at any time, any Person in whose
name a Class D Note is registered in the Note Register.
CLASS D NOTES: means any Class D Notes described in Article II
of, and authorized by, and authenticated and delivered under, the Amended and
Restated Indenture.
CLASS D OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class D Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class D Noteholders on all prior Payment Dates.
CLASS D OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class D Monthly Principal due on
the Class D Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class D Noteholders on all prior Payment Dates.
CLASS D PERCENTAGE: means 2.0%.
CLASS D STATED MATURITY DATE: means the Payment Date occurring
in November, 2007.
CLASS E DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Amended and Restated Indenture.
CLASS E MONTHLY INTEREST: means, for any Payment Date (except
the Initial Payment Date), the product of (i) one-twelfth, (ii) the Class E Note
Rate and (iii) the Class E Note Balance on the immediately preceding Payment
Date (or, in the case of the Initial Payment Date, the Closing Date) after
giving effect to all principal payments on the Class E Note on such Payment
Date. The Class E Monthly Interest shall be calculated based upon a twelve month
year of thirty days in each month, except for the Initial Payment Date, for
which interest shall accrue from the Closing Date to but excluding such Initial
Payment Date.
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CLASS E MONTHLY PRINCIPAL: means, (A) on any Payment Date
other than the Class E Stated Maturity Date, an amount equal to the product of
(x) the Class E Percentage and (y) the Monthly Principal and (B) on the Class E
Stated Maturity Date, the entire amount of the then outstanding Class E Note
Balance.
CLASS E NOTEHOLDER: means at any time, any Person in whose
name a Class E Note is registered in the Note Register.
CLASS E NOTE BALANCE: means, as of the Closing Date,
$6,756,000 and thereafter shall equal the Class E Note Balance as of the Closing
Date reduced by all principal payments on the Class E Notes.
CLASS E NOTE RATE: means ten and 85/100 percent (10.85%) per
annum based upon thirty days elapsed each month in a twelve-month year.
CLASS E NOTES: means any Class E Notes described in Article II
of, and authorized by, and authenticated and delivered under, the Amended and
Restated Indenture.
CLASS E OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class E Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class E Noteholders on all prior Payment Dates.
CLASS E OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class E Monthly Principal due on
the Class E Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class E Noteholders on all prior Payment Dates.
CLASS E PERCENTAGE: means 2.5%.
CLASS E STATED MATURITY DATE: means the Payment Date occurring
in November, 2007.
CLASS F DISTRIBUTION SUB-ACCOUNT: means the sub-account or
sub-accounts by that name that may be established and maintained by the Trustee
pursuant to Section 3.01 of the Amended and Restated Indenture.
CLASS F INSTRUMENTS: means any Class F Instruments described
in Article II of the Amended and Restated Indenture, that may be issued from
time to time under the Amended and Restated Indenture and the related
Supplement.
CLASS F INSTRUMENTHOLDER: means at any time, any Person in
whose name a Class F Instrument is registered in the Note Register.
CLOSING DATE: means October 28, 1999.
CODE: means the Internal Revenue Code of 1986, as amended.
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<PAGE>
COLLECTION ACCOUNT: means the account or accounts by that name
established and maintained by the Trustee pursuant to Section 3.01 of the
Amended and Restated Indenture.
COLLECTION PERIOD: means, with respect to each Payment Date
related thereto, the entire calendar month immediately preceding such Payment
Date.
COMMISSION: means the Securities and Exchange Commission.
COMPANY ASSETS: means (i) the Contributed Property related to
the Contracts set forth on each Subsequent Contract Transfer Form other than,
and notwithstanding any other provision to the contrary, any and all ownership
interests of the Company in Equipment, with respect to which the Company shall
instead grant to the Issuer a first priority perfected security interest
therein, (ii) all of the Company's rights and privileges, but none of its
obligations, under the Amended and Restated Contribution and Servicing Agreement
and each Substitute Contract Transfer Form and (iii) all payments, income and
proceeds of the foregoing or relating thereto.
CONTRACT: means each separate noncancelable Finance Lease,
Fair Market Value Lease, Leveraged Lease Loan, Lease Receivable Purchase or
Secured Equipment Note acquired from time to time by the Transferor from the
Contributor, directly or indirectly, pursuant to the Amended and Restated
Contribution and Servicing Agreement. The term shall include any Contract
transferred to the Transferor on the Closing Date or, directly or indirectly,
any Substitution Date in connection with any substitution in accordance with the
Amended and Restated Contribution and Servicing Agreement, respectively.
CONTRACT FILE: means the following documents or instruments
with respect to each Contract:
(i) The executed original counterpart of the Contract
that constitutes "chattel paper" or an "instrument" for purposes of
Section 9-105(1)(b) and 9-305 of the UCC;
(ii) Documents evidencing or related to any insurance
policy with respect to the related Equipment;
(iii) A copy of each delivery and acceptance certificate
with respect to each Contract that is a lease or a copy of each
original invoice for the related Equipment and the receipt of delivery
related thereto with respect to each Contract that is a loan;
(iv) A copy of the financing statement filed with
respect to the related Equipment with evidence of proper recording;
(v) A copy of any related agreement with the vendor,
dealer or manufacturer of the Equipment or with any Person from whom
DVI acquired the Contract and rights in the related Equipment (if
applicable); and
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(vi) Copies of such documents that the Servicer or its
Affiliates keep on file indicating that the Equipment is subject to the
interest of the Trustee, in accordance with their customary procedures
relating to the individual Contract, Obligor or Equipment.
CONTRACT PAYMENT: means any payment which the Obligor is
required to make pursuant to a Contract after, with respect to the Initial
Contracts, the Cut-off Date, other than (i) certain amounts included in such
payments for which the Contributor is not the ultimate beneficiary thereof,
including, but not limited to, property taxes, sales taxes, manufacturer's
maintenance costs, insurance premiums and supplies and transaction costs and
(ii) Purchase Option Payments.
CONTRACT SCHEDULE: means the schedule of Contracts attached to
the Amended and Restated Contribution and Servicing Agreement and the Amended
and Restated Indenture and as amended from time to time, setting forth the
following information as to each Contract: (i) the Contract Number, (ii) the
Original Equipment Cost, if available, (iii) the Discounted Contract Balance as
of the Cut-off Date, (iv) the Obligor, (v) the State of location of the related
Equipment, (vi) the commencement date and original term of each Contract, (vii)
the remaining term and amount of the Contract Payments for each original
Contract as of the Cut-off Date, (viii) the type of related Equipment, (ix) the
related cash flow schedule, (x) the type of Contract and (xi) the applicable
Pool on such Contracts. The Contract Schedule shall be deemed supplemented and
amended to incorporate therein any Substitute Contracts.
CONTRACT TRANSFER DATE: means any date on or prior to the
Closing Date that, pursuant to the Amended and Restated Contribution and
Servicing Agreement, the Contributor may transfer a Contract to the Transferor.
CONTRIBUTED PROPERTY: means all of the Contributor's right,
title and interest in and to (a) all Contracts, including those listed on the
Contract Schedule delivered by the Contributor to the Transferor and all
Substitute Contracts (including its interest in the proceeds of such Contracts
and including the assignment of the security interest of the Obligor of a
Leveraged Lease Loan in the equipment lease that is subject thereto), including
all payments received on or with respect to such Contracts after the Cut-off
Date but excluding the Retained Interest, and including any Broker Agreement
Rights relating to such Contracts, (b) any documents in the Contract Files
relating to the Contracts listed on the Contract Schedule delivered by the
Contributor to the Transferor, (c) Insurance Policies and Insurance Proceeds
relating to the Contracts (or the related Equipment) listed on the Contract
Schedule delivered by the Contributor to the Transferor, (d) the Equipment
(which shall be either a first priority perfected security interest in Equipment
(other than with respect to Equipment relating to a Secured Equipment Note or
Finance Lease and for which the Original Equipment Cost is less than $20,000)
or, with respect to DVI Fair Market Value Leases, an ownership interest in the
Equipment) and any collateral, including, without limitation, any credit
enhancement (other than accounts receivable of an Obligor), which relates
specifically to a Contract and (e) all payments, income and proceeds of the
foregoing or relating thereto.
CONTRIBUTION DATE: means, with respect to the Initial
Contracts, the Closing Date, and, with respect to any Substitute Contract, the
related Substitution Date.
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CONTRIBUTOR: means DVI Financial Services Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors.
CORPORATE TRUST OFFICE: means the principal corporate trust
office of the Trustee located on the Closing Date at 180 Fifth Street, St. Paul,
Minnesota 55101, or at such other address as the Trustee may designate from time
to time by notice to the Noteholders and the Transferor.
CUT-OFF DATE: means for each Initial Contract, September 30,
1999; and as to any Substitute Contract, the last day of the month prior to the
month in which such Substitute Contract is substituted.
DEFAULT: means any occurrence that is, or with notice or the
lapse of time or both would become, an Indenture Event of Default.
DEFAULTED CONTRACT: means any Contract with respect to which
under the Amended and Restated Contribution and Servicing Agreement, (i) any
Contract Payment (or portion thereof) is delinquent for more than 180 days as of
the last day of the calendar month, (ii) the Servicer has declined to make a
Servicer Advance with respect to any delinquent amounts in accordance with the
Amended and Restated Contribution and Servicing Agreement on the grounds that
such advance would be a Nonrecoverable Advance, (iii) any Contract has been
rejected by or on behalf of the Obligor in a bankruptcy proceeding or (iv) the
Lessor with respect to any Leveraged Lease Loan has rejected the related lease
in a bankruptcy proceeding. For purposes of clause (i), the delinquency of a
Contract Payment shall be measured based on the Contract Payments required to be
made during the term of such Contract as of the date that such Contract became
part of the Trust Property without giving effect to any modifications, (except
those modifications permitted pursuant to Section 4.02 of the Amended and
Restated Contribution and Servicing Agreement) waivers or extensions
subsequently granted by the Servicer.
DEFINITIVE NOTE: a Note issued in definitive form pursuant to
the terms and conditions of Article Two of the Amended and Restated Indenture.
DELINQUENCY CONDITION: shall be deemed to exist on and as of
any Determination Date if (x) the quotient of (1) the sum of the Discounted
Contract Balances of all Contracts listed as more than 90 days delinquent as of
the last day of the three immediately preceding calendar months, divided by (2)
three exceeds (y) the product of (1) 0.06 and (2) the quotient of (A) the sum of
the Aggregate Discounted Contract Balance as of the last day of the three
immediately preceding Collection Periods, divided by (B) three.
DELINQUENT CONTRACT: means, as of any Determination Date, any
Contract (other than a Contract which became a Defaulted Contract prior to such
Determination Date) with respect to which the Obligor has not paid all Contract
Payments due as of the end of the immediately preceding Collection Period. The
delinquency of a Contract Payment shall be measured based on the Contract
Payments required to be made during the term of such Contract as of the date
such Contract became part of the Trust Property without giving effect to any
modifications, waivers or extensions subsequently granted by the Servicer.
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DEPOSITARY: means The Depository Trust Company until a
successor depositary shall have become such pursuant to the applicable
provisions of the Amended and Restated Indenture, and thereafter "Depositary"
shall mean or include each Person who is then a Depositary thereunder. For
purposes of the Amended and Restated Indenture, unless otherwise specified
pursuant to Section 2.02 thereof, any successor Depositary shall, at the time of
its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Exchange Act, and any other applicable statute or
regulation.
DEPOSITARY PARTICIPANT: means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Depositary
effects book-entry transfers and pledges of securities deposited with the
Depositary.
DEPOSITED AVAILABLE FUNDS: has the meaning set forth in
Section 3.04(c) of the Amended and Restated Indenture.
DETERMINATION DATE: means, with respect to any Payment Date,
the third Business Day immediately preceding each Payment Date.
DISCOUNT RATE: means 7.79407% per annum.
DISCOUNTED CONTRACT BALANCE: means, with respect to any
Contract, on any date of determination, an amount equal to the sum of (a) the
present value of each remaining Contract Payment to become due under a Contract
before the last day of the month prior to the month of the Stated Maturity Date,
discounted monthly from the last day of the Collection Period in which such
Contract Payment is to become due at a rate equal to one-twelfth (or with
respect to the period from the Closing Date to but excluding the Initial Payment
Date, a fraction, the numerator of which is equal to the number of days from the
Closing Date to but excluding the Initial Payment Date, and the denominator of
which is equal to 360) of the Discount Rate and (b) one hundred percent (100%)
of the unpaid balance, as of such date of determination of Contract Payments due
with respect to such Contract which were not the subject of a Servicer Advance;
PROVIDED, HOWEVER, that, except for purposes of computing the Repurchase Amount
or for computing the Discounted Contract Balance of a Predecessor Contract, (x)
on the date a Contract becomes a Defaulted Contract, the Discounted Contract
Balance for such Contract will be zero and (y) any Purchase Option Payments
shall not be included in the Discounted Contract Balance. For purposes of
calculating the Discounted Contract Balance of a Contract, any Contract Payment
for which the Contributor received on or prior to the Cut-off Date a security
deposit or an advance payment shall be deemed to be zero.
DISTRIBUTION ACCOUNT: means the account or accounts by that
name established and maintained by Trustee pursuant to Section 3.01 of the
Amended and Restated Indenture.
DVI: means DVI Financial Services Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors.
DVI FAIR MARKET VALUE LEASE: means a Fair Market Value Lease
originated by DVI.
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DVI GROUP: means, as of any relevant date, the affiliated
group within the meaning of section 1504 of the Code of which DVI, Inc., or any
successor thereto, is the common parent, or of which DVI, the Transferor, the
Managing Member and the Issuer are members, and shall mean any group eligible to
file consolidated or combined returns for state, local or foreign tax purposes
which includes DVI, the Managing Member and the Transferor, regardless of the
identity of the common parent.
DVI, INC.: means DVI, Inc., a corporation organized and
existing under the laws of the State of Delaware, and its successors.
DUFF & PHELPS: means Duff & Phelps Credit Rating Co. and any
successor.
ELIGIBLE CONTRACT: means any Initial Contract which meets the
Contributor's credit requirements in effect on the Closing Date and satisfies
each of the representations and warranties set forth in Section 2.03 of the
Amended and Restated Contribution and Servicing Agreement and, with respect to
any Substitute Contract, satisfies the requirements of Section 7.01(d) of the
Amended and Restated Contribution and Servicing Agreement on the related
Substitution Date.
ELIGIBLE DEPOSIT ACCOUNT: any one or more of the following
accounts:
(i) a segregated account with an Eligible Institution;
or
(ii) a segregated trust account with the corporate trust
department of a depositary institution organized under the laws of the
United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank) subject
to regulations regarding fiduciary funds on deposit, having corporate
trust powers and acting as a trustee for funds deposited in such
account acceptable to the Rating Agencies.
ELIGIBLE INSTITUTION: means any one or more of the following
institutions: (i) the corporate trust department of the Trustee, or (ii) a
depositary institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia acceptable to the
Rating Agencies (or any domestic branch of a foreign bank), which (a)(1) has
either (w) a long-term unsecured debt rating acceptable to the Rating Agencies
or (x) a short-term unsecured debt rating or certificate of deposit rating
acceptable to the Rating Agencies or (2) the parent corporation of which has
either (y) a long-term unsecured debt rating acceptable to the Rating Agencies
or (z) a short-term unsecured debt rating or certificate of deposit rating
acceptable to the Rating Agencies and (b) whose deposits are insured by the
Federal Deposit Insurance Corporation.
ELIGIBLE INVESTMENTS: means any and all of the following:
(i) direct obligations of, and obligations fully
guaranteed for timely payment by, the United States of America, the
Federal Home Loan Mortgage Corporation, the Federal National Mortgage
Association, the Federal Home Loan Banks or any agency or
instrumentality of the United States of America which has a rating of
at least "AAA" by Duff & Phelps and "Aaa" by Moody's at the time of
such investment the obligations of which are backed by the full faith
and credit of the United States of America;
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(ii) (A) demand and time deposits in, certificates of
deposit of, banker's acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any State thereof and
subject to supervision and examination by federal and/or state
authorities, so long as at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company has a long term unsecured debt rating of at least "A1"
by Moody's and "AA+" by Duff & Phelps or "A+" by Fitch IBCA and a short
term unsecured debt rating in the highest available rating category of
each of the Rating Agencies and provided that each such investment has
an original maturity of no more than 365 days, and (B) any other demand
or time deposit or deposit which is fully insured by the Federal
Deposit Insurance Corporation;
(iii) repurchase obligations with a term not to exceed 30
days with respect to any security described in clause (i) above and
entered into with a depository institution or trust company (acting as
a principal) rated "AA+" by Duff & Phelps or "A" by Fitch IBCA, at
least "A1" or higher by Moody's or Prime-1 by Moody's and "A" or higher
by S&P; PROVIDED, HOWEVER, that collateral transferred pursuant to such
repurchase obligation must (A) be valued weekly at current market price
plus accrued interest, (B) pursuant to such valuation, equal, at all
times, 105% of the cash transferred by the Trustee in exchange for such
collateral and (C) be delivered to the Trustee or, if the Trustee is
supplying the collateral, an agent for the Trustee, in such a manner as
to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any State thereof which has a long term unsecured
debt rating in the highest available rating category of each of the
Rating Agencies at the time of such investment;
(v) commercial paper having an original maturity of
less than 365 days and issued by an institution having a long term
unsecured debt rating of "AA+" by Duff & Phelps, "A+" by Fitch IBCA or
"A1" by Moody's and a short term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time of
such investment;
(vi) a guaranteed investment contract approved in
writing by each of the Rating Agencies and issued by an insurance
company or other corporation having a long term unsecured debt rating
in the highest available rating category of each of the Rating Agencies
at the time of such investment;
(vii) money market funds having ratings in the highest
available rating category of each of the Rating Agencies at the time of
such investment; any such money market funds which provide for demand
withdrawals being conclusively deemed to satisfy any maturity
requirements for Eligible Investments set forth in the Amended and
Restated Indenture; and
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(viii) any investment approved in writing by each of the
Rating Agencies.
EQUIPMENT: means the underlying equipment subject to a
Contract, which is principally medical diagnostic and therapeutic equipment,
together with the income and proceeds thereof.
ERISA: means the Employee Retirement Income Security Act of
1974, as amended.
EXCHANGE ACT: means the Securities Exchange Act of 1934, as
amended.
EXCLUDED AMOUNTS: means any payments received from an Obligor
in connection with any late charges, taxes, fees or other charges imposed by any
Governmental Authority, any indemnity payments made by an Obligor for the
benefit of the originator or vendor under the related Contract or any payments
collected from an Obligor for the benefit of the originator or vendor which
relate to maintenance payments pursuant to the related Contract or maintenance
agreement, as applicable.
FAIR MARKET VALUE LEASE: means any Contract in the form of a
lease that contains a purchase option based on either (a) a stated non de
minimus percentage of the original cost of the related Equipment or (b) the fair
market value of the related Equipment at the expiration, or earlier termination,
of the Contract. A Fair Market Value Lease is identified as "FMV" on the
Contract Schedule.
FINANCE LEASE: means any Contract in the form of a lease that
contains an end of term purchase option for a nominal amount. A Finance Lease is
identified as "FL" on the Contract Schedule.
FITCH IBCA: means Fitch IBCA, Inc.
GAAP: means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
GLOBAL NOTE: means either a Rule 144A Global Note or a Public
Global Note.
GRANT: means to grant, bargain, sell, convey, assign,
transfer, mortgage, pledge, create and perfect a security interest in and right
of set-off against, deposit, set over and confirm.
HOLDER OR NOTEHOLDER: means, at any time, any Person in whose
name a Note is registered in the Note Register.
INDENTURE EVENT OF DEFAULT: as defined in Section 6.01 of the
Amended and Restated Indenture.
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INITIAL AGGREGATE DISCOUNTED CONTRACT BALANCE: means an amount
equal to $273,939,121.58.
INITIAL CONTRACT: means any Contract acquired by the
Transferor on or prior to the Closing Date as set forth on Schedule 1 of the
Amended and Restated Indenture.
INITIAL PAYMENT DATE: means the initial Payment Date pursuant
to the Transaction Documents, which is contemplated (subject to prepayment
provisions of the Amended and Restated Indenture) to be, when used with respect
to interest on any Note, November 15, 1999, and when used with regard to
principal, with respect to the Class A-1 Notes, the Class B Notes, the Class C
Notes, the Class D Notes or the Class E Notes, November 15, 1999, when used with
respect to the Class A-2 Notes, June 13, 2000, when used with respect to the
Class A-3 Notes, March 13, 2001 and when used with respect to the Class A-4
Notes, June 13, 2002.
INSURANCE POLICY: means, with respect to an item of Equipment,
any insurance policy required to be maintained by the Obligor pursuant to the
related Contract that covers physical damage to the Equipment.
INSURANCE PROCEEDS: means proceeds paid (i) by any insurer
pursuant to any Insurance Policy covering a Contract or (ii) if the Obligor has
self-insured with respect to a Contract, by the Obligor, in either case, net of
reasonable costs of collecting such proceeds not otherwise reimbursed.
INSURED EXPENSES: means expenses covered by any Insurance
Policy.
ISSUER: means DVI Receivables X, L.L.C., a Delaware limited
liability company.
ISSUER ORDER or ISSUER REQUEST: means a written order or
request delivered to the Trustee and signed in the name of the Issuer by an
Authorized Officer.
LEASE RECEIVABLE PURCHASE: means any Contract in the form of a
purchase by DVI from a lessor of lessor's right, title and interest in Contract
Payments related to an underlying equipment lease and that is secured by the
lessor's rights in the related Equipment. A Lease Receivable Purchase is
identified as "LRP" on the Contract Schedule.
LESSOR: means the Person who is the lessor under the equipment
lease related to a Leveraged Lease Loan or Lease Receivable Purchase.
LEVERAGED LEASE LOAN: means any Contract in the form of a loan
that is (a) made by the Contributor to a lessor of the related Equipment
pursuant to an underlying noncancelable equipment lease and (b) secured by a
pledge by such lessor to the Contributor of all of its right, title and interest
to such noncancelable equipment lease (including such lessor's right to receive
rental payments from the lessee on such equipment lease) and the related
Equipment. A Leveraged Lease Loan is identified as "LL" on the Contract
Schedule.
LOCK-BOX ACCOUNT: means an account designated as such,
established and maintained pursuant to Section 3.01 of the Amended and Restated
Indenture.
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LOCK-BOX AGREEMENT: means (i) the agreement dated as of June
30, 1999, by and between the Contributor and First Union National Bank or (ii)
the agreement dated as of October 5, 1994, by and between the Contributor (as
assignee of Affiliated Capital Corporation) and First National Bank of Chicago,
pursuant to which a Lock-Box Account is established and maintained.
LOCK-BOX BANK: means, as of any date, the bank or trust
company at which a Lock- Box Account is established and maintained as of such
date.
MANAGING MEMBER: means DVI Receivables Corp. VIII, a Delaware
corporation.
MONTHLY INTEREST: means as of any Payment Date, the sum of (i)
the Class A Monthly Interest, (ii) the Class B Monthly Interest, (iii) the Class
C Monthly Interest, (iv) the Class D Monthly Interest and (v) the Class E
Monthly Interest.
MONTHLY PRINCIPAL: means, with respect to any Payment Date, an
amount equal to the excess of (a) the Aggregate Discounted Contract Balance at
the close of business on the last day of the second preceding Collection Period
over (b) the Aggregate Discounted Contract Balance at the close of business on
the last day of the immediately preceding Collection Period.
MONTHLY SERVICER REPORT: means the report attached as Exhibit
B to the Amended and Restated Contribution and Servicing Agreement.
MOODY'S: means Moody's Investors Service, Inc. and any
successor.
NONRECOVERABLE ADVANCE: means any Servicer Advance previously
made in respect of a Delinquent Contract by the Servicer pursuant to the terms
of the Amended and Restated Contribution and Servicing Agreement, which in the
good faith judgment of the Servicer and pursuant to an Officer's Certificate,
will not be ultimately recoverable by the Servicer from payments by the related
Obligor or disposition of the related Equipment.
NOTE BALANCE: means, as of the Closing Date, $237,814,000 for
the Class A Notes cumulatively (and, with respect to each tranche thereof,
$31,483,000 for the Class A-1 Notes, $42,182,000 for the Class A-2 Notes,
$65,098,000 for the Class A-3 Notes and $99,051,000 for the Class A-4 Notes),
$4,054,000 for the Class B Notes, $8,107,000 for the Class C Notes, $5,405,000
for the Class D Notes and $6,756,000 for the Class E Notes and thereafter shall
equal the Note Balance for such class reduced by all principal payments on such
class of Notes.
NOTE OWNER: means, with respect to a Global Note, the Person
who is the owner of such Global Note, as reflected on the books of the
Depositary, or on the books of a Person maintaining an account with the
Depositary (directly as a Depositary Participant or an indirect participant, in
each case in accordance with the rules of the Depositary).
NOTE PURCHASE AGREEMENT: means any agreement (other than the
Underwriting Agreement) between the Issuer, the Transferor, the Contributor, the
purchaser(s) specified therein and any other parties specified therein, relating
to the purchase of Notes.
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NOTE RATE: means the annualized rate of interest on the
relevant class of Notes (6.17% on the Class A-1 Notes, 6.54% on the Class A-2
Notes, 6.83% on the Class A-3 Notes, 7.22% on the Class A-4 Notes, 7.30% on the
Class B Notes, 7.48% on the Class C Notes, 8.25% on the Class D Notes, 10.85% on
the Class E Notes and the interest rate set forth in the Supplement for the
Class F Instruments).
NOTE REGISTER: as defined in Section 2.04 of the Amended and
Restated Indenture.
NOTEHOLDER OR HOLDER: means, at any time, any Person in whose
name a Note is registered in the Note Register.
NOTEHOLDER COUNSEL: means the single legal counsel as selected
by Noteholders evidencing more than 50% of the Voting Rights.
NOTES: means any of the Class A Notes, Class B Notes, Class C
Notes, Class D Notes or Class E Notes described in Article II of the Amended and
Restated Indenture, and authorized by, and authenticated and delivered under,
the Amended and Restated Indenture or any Supplement.
OBLIGOR: means the obligor under any Contract, including any
guarantor.
OFFERED NOTES: means the Class A Notes, the Class B Notes, the
Class C Notes, the Class D Notes and the Class E Notes.
OFFICER'S CERTIFICATE: means a certificate delivered to the
Trustee and signed by Chairman, the President, a Vice President, the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the relevant
entity.
OPINION OF COUNSEL: means a written opinion of counsel, which
shall be reasonably satisfactory in form and substance to the Person to whom it
is to be delivered. Except as otherwise expressly provided in the Amended and
Restated Indenture, such opinion may be delivered by inside or outside counsel
for the Contributor, the Transferor or the Issuer.
ORIGINAL EQUIPMENT COST: means (i) with respect to each
Contract originated by DVI, the vendor's invoice price of the related Equipment
at the time of origination of the related Contract and (ii) with respect to each
Contract acquired by DVI from others, the amount recorded on DVI's records as
paid by DVI to acquire such Contract and the broker's interest in the related
Equipment.
OUTSTANDING OR OUTSTANDING: means, when used with reference to
the Notes and as of any particular date, any Note theretofore and thereupon
being authenticated and delivered except:
(i) any Note canceled by the Trustee at or before
said date;
(ii) any Note, or portion thereof, for payment of
redemption of which monies equal to the principal amount or redemption price
thereof, as the case may be, with interest to the date of maturity or
redemption, shall have theretofore been irrevocably deposited with the Trustee
(whether upon or prior to maturity or the redemption date of such Note);
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(iii) any Note in lieu of or in substitution for
which another Note shall have been authenticated and delivered; and
(iv) any Note owned either by the Transferor or by
the Managing Member or any Affiliate of either the Transferor or the Managing
Member (except that, in determining whether the Trustee shall be protected in
relying upon any request, demand, authorization, direction, notice, consent or
waiver of Noteholders under the Amended and Restated Indenture, only Notes which
the Trustee knows to be so owned shall be disregarded).
OVERDUE INTEREST: means, for any Payment Date, the sum of (i)
the Class A Overdue Interest, (ii) the Class B Overdue Interest, (iii) the Class
C Overdue Interest, (iv) the Class D Overdue Interest and (v) the Class E
Overdue Interest.
OWNERSHIP INTEREST: means an ownership interest in a Global
Note.
PARTIAL PREPAYMENT AMOUNT: means, with respect to the
Collection Period and a Contract for which the Obligor has requested to make a
voluntary partial prepayment and for which no Substitute Contract has been
provided, an amount equal to the excess, if any, of (A) the difference between
(i) the Discounted Contract Balance of such Contract as of the first day of such
Collection Period together with one month of interest thereon at the Discount
Rate and (ii) the Discounted Contract Balance of such Contract as of the first
day of such Collection Period calculated based on the amount of each Contract
Payment payable by the Obligor after giving effect to the reduction of such
Contract Payment which will result from such partial prepayment, minus (B) any
Contract Payments actually received by the Servicer with respect to the prepaid
portion of such Contract for the current Collection Period on or before the date
of such partial prepayment.
PARTIAL REDEMPTION PRICE: with respect to any Offered Note,
and as of any date of partial redemption fixed by the Issuer, an amount equal to
the sum of (x) the product of (i) the quotient of (A) the aggregate Discounted
Contract Balance of the Contracts in Pool B as of such date of partial
redemption, divided by (B) the Aggregate Discounted Contract Balance as of such
date of partial redemption and (ii) the outstanding Note Balance of such Offered
Note and (y) interest accrued thereon to, but not including, such Redemption
Date at the applicable Note Rate.
PAYMENT DATE: means the thirteenth day of each month (or if
such date is not a Business Day, the immediately succeeding Business Day),
commencing November 15, 1999.
PERSON: means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
PLACEMENT AGENT: means Lehman Brothers Inc.
PLAN: means an "employee benefit plan" within the meaning of
Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Code.
POOL: means either Pool A or Pool B.
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POOL A: means the Contracts identified on the Contract
Schedule as constituting Pool A and the other Trust Property related thereto.
POOL A AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with
respect to any date of determination, the sum of the Discounted Contract
Balances of all Contracts in Pool A.
POOL A NON-PERFORMING CONTRACT SUBSTITUTION: shall have the
meaning ascribed thereto in Section 7.01(a)(1) of the Amended and Restated
Contribution and Servicing Agreement.
POOL A PREPAID CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(a)(2) of the Amended and Restated Contribution
and Servicing Agreement.
POOL B: means the Contracts identified on the Contract
Schedule as constituting Pool B and the other Trust Property related thereto.
POOL B AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with
respect to any date of determination, the sum of the Discounted Contract
Balances of all Contracts in Pool B.
POOL B GENERAL CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(b)(1) of the Amended and Restated Contribution
and Servicing Agreement.
POOL B PREPAID CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(b)(2) of the Amended and Restated Contribution
and Servicing Agreement.
PREDECESSOR NOTES: means, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.05 of the Amended and Restated
Indenture in lieu of a lost, destroyed or stolen Note (or a mutilated Note
surrendered to the Trustee) shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note (or a mutilated Note surrendered to the Trustee).
PREDECESSOR CONTRACT: means, with respect to any Substitute
Contract acquired by the Transferor by substitution pursuant to Section 7 of the
Amended and Restated Contribution and Servicing Agreement and by the Issuer by
substitution pursuant to Section 7 of the Amended and Restated Subsequent
Contract Transfer Agreement, the Contract or Contracts for which such Substitute
Contract or any intervening Substitute Contract has been substituted.
PREPAYMENT AMOUNT: means, with respect to any Contract, the
sum of (1) the Discounted Contract Balance as of the first day of the Collection
Period preceding such prepayment, together with one month of interest thereon at
the Discount Rate, (2) any unreimbursed Servicer Advances with respect to such
Contract and (3) any Contract Payments due and outstanding under such Contract
that are not the subject of a Servicer Advance.
PRINCIPAL TERMS: as defined in Section 2.06(b) of the Amended
and Restated Indenture.
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PRIORITY PAYMENTS: shall have the meaning ascribed thereto in
Section 3.04(c) of the Amended and Restated Indenture.
PROSPECTUS SUPPLEMENT: means the prospectus supplement, dated
October 25, 1999, relating to the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes.
PUBLIC GLOBAL NOTE: means a Book-Entry Note evidencing all or
part of an issuance of the Class A Notes, Class B Notes, Class C Notes or Class
D Notes to which the provisions of Article II of the Amended and Restated
Indenture shall apply.
PURCHASE OPTION PAYMENT: means as specified in each Contract,
any payment made by the Obligor to purchase the Equipment covered thereby,
including any funds received in respect of either (w) an end of term purchase
option for $1, (x) an end of term option to purchase the Equipment at a stated
percentage of the original cost of the Equipment, (y) an option to purchase the
Equipment at the fair market value of the Equipment determined at the end of the
Contract term or (z) an end of term option to extend the term of the lease for
another immediately successive twelve month period upon the expiration of which
the lessee will own the equipment.
RATING AGENCIES: means, when used in the singular, any one of,
and, when used in the plural, each of Duff & Phelps, Fitch IBCA and Moody's.
RATINGS EFFECT: means a reduction or withdrawal of a rating on
a class of Notes by a Rating Agency.
RECORD DATE: means, with respect to any Payment Date relating
to any Definitive Note, the fifth Business Day immediately preceding such
Payment Date, and, with respect to any Payment Date relating to any Book-Entry
Note, the Business Day immediately preceding such Payment Date.
RECOVERIES: means, with respect to any Contract, any cash sale
proceeds, vendor recourse, payments under personal and other guaranties,
litigation judgments and the present value (calculated at the implicit yield on
each of the Defaulted Contracts) of re-lease rents.
REDEMPTION DATE: means, with respect to any redemption or
partial redemption of Notes, a date fixed pursuant to Section 10.01 of the
Amended and Restated Indenture.
REDEMPTION PRICE: means, with respect to any Note, and as of
any redemption date fixed by the Issuer, the sum of (x) the outstanding Note
Balance of such Note, and (y) interest accrued thereon to, but not including,
such Redemption Date at the applicable Note Rate.
REDEMPTION RECORD DATE: means, with respect to any redemption
of Notes, a date fixed pursuant to Section 10.01 of the Amended and Restated
Indenture.
RELATED PERSON: means any Person (whether or not incorporated)
which is under common control with the Contributor within the meaning of Section
414(b) or (c) of the Code, or of Section 4001(b) of ERISA.
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REPORTABLE EVENT: means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, a withdrawal from a "Pension
Plan" described in Section 4063 of ERISA, or a cessation of operations described
in Section 4062(3) of ERISA.
REPURCHASE AMOUNT: means, with respect to any Contract, the
sum of (1) the Discounted Contract Balance as of the first day of the Collection
Period preceding such repurchase, together with one month of interest thereon at
the Discount Rate and (2) any unreimbursed Servicer Advances with respect to
such Contract.
RESERVE ACCOUNT: means the account specified in Section
3.01(a) of the Amended and Restated Indenture.
RESERVE ACCOUNT BALANCE: means an amount equal to deposits of
all Reserve Account Deposit Amounts as reduced by (a) all Reserve Account Draws
and (b) all Reserve Account Withdrawals paid to the Transferor, or the Class F
Instrumentholder, if any.
RESERVE ACCOUNT DEPOSIT AMOUNT: means, on any Payment Date, an
amount equal to the excess of (A) the Reserve Account Required Amount over (B)
the amount on deposit in the Reserve Account (after giving effect to any Reserve
Account Draws on such Payment Date).
RESERVE ACCOUNT DRAW: means, with respect to each Payment
Date, the amount, if any, withdrawn by the Trustee from the Reserve Account for
payment of the Priority Payments pursuant to Section 3.04(c) of the Amended and
Restated Indenture.
RESERVE ACCOUNT PROPERTY: means the property set forth in
Section 3.08(a) of the Amended and Restated Indenture.
RESERVE ACCOUNT REQUIRED AMOUNT: means, with respect to the
Initial Payment Date, $2,702,437.25 (the "INITIAL RESERVE ACCOUNT REQUIRED
AMOUNT"); and, with respect to each Payment Date thereafter, the lesser of
either (i) the Initial Reserve Account Required Amount or (ii) the sum of (a)
the Class A Note Balance, (b) the Class B Note Balance, (c) the Class C Note
Balance, (d) the Class D Note Balance and (e) the Class E Note Balance;
PROVIDED, HOWEVER, that if a Restricting Event has occurred and is then
continuing, then notwithstanding the foregoing, the Reserve Account Required
Amount shall be equal to the sum of (i) the Reserve Account Required Amount on
the immediately preceding Payment Date (after giving effect to any additions to
or withdrawals from the Reserve Account on such Payment Date) and (ii) all
amounts otherwise payable to the Issuer or the Class F Instrumentholder, if any,
in accordance with Section 3.04(b) of the Amended and Restated Indenture.
RESERVE ACCOUNT WITHDRAWAL: means, for each Payment Date, the
amount of such excess, if any, withdrawn from the Reserve Account for payment to
the Issuer or the Class F Instrumentholder pursuant to Section 3.08 of the
Amended and Restated Indenture.
RESIDUAL PAYMENT: means any amount received either by the
Servicer or the Trustee as a Purchase Option Payment under a Contract or
proceeds of the sale of an item of Equipment subject to the lien of the Amended
and Restated Indenture or rental payments from the re-leasing of
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an item of Equipment subject to the lien of the Amended and Restated Indenture
after the final Contract Payment due and payable under the initial terms of the
Contract to which such item of Equipment is subject is made.
RESIDUAL PRINCIPAL BALANCE: means the excess of (x) the
Aggregate Discounted Contract Balance, over (y) the sum of the Class A Note
Balance, the Class B Note Balance, the Class C Note Balance, the Class D Note
Balance and the Class E Note Balance.
RESPONSIBLE OFFICER: means, with respect to the Trustee, any
President, Senior Vice President, Vice President, Assistant Vice President,
Trust Officer or Assistant Secretary with direct responsibility for the
administration of the Trustee's obligations and duties under the Amended and
Restated Indenture and with respect to a particular matter, any officer to whom
such matter is referred because of such other officer's knowledge or familiarity
with the particular subject.
RESTRICTING EVENT: means the condition that exists on any
Payment Date if any one of the following conditions exists: (i) a Delinquency
Condition exists or (ii) an Indenture Event of Default has occurred and is then
continuing.
RETAINED INTEREST: means all right, title and interest of the
Contributor in and to (i) the Contributed Property prior to and including the
Cut-off Date, (ii) each periodic payment, if any, set forth in a Contract in
respect of maintenance, insurance or taxes and (iii) each Purchase Option
Payment, if any.
RULE 144A GLOBAL NOTE: means a Note evidencing all or a part
of an issuance of the Class E Notes, registered in the name of the Depositary or
its nominee, and delivered to the Depositary pursuant to the Depositary's
instruction, in accordance with Section 2.02 of the Amended and Restated
Indenture and bearing the legend prescribed in Section 2.02 of the Amended and
Restated Indenture.
S&P: means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc. and any successor.
SCHEDULED TERMINATION DATE: means, with respect to any
Contract, the date upon which such Contract is scheduled to terminate in
accordance with its terms.
SECURED EQUIPMENT NOTE: means any Contract in the form of a
loan to the user of the related Equipment secured by such Equipment. A Secured
Equipment Note is identified as "LOAN" on the Contract Schedule.
SECURITIES ACT: means The Securities Act of 1933 as amended.
SERVICER: means initially, the Contributor and thereafter,
either the Contributor or the then-acting Successor Servicer(s), if any,
appointed pursuant to the terms of the Amended and Restated Contribution and
Servicing Agreement.
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SERVICER ADVANCE: means an advance made by the Servicer in
accordance with Section 5.01 of the Amended and Restated Contribution and
Servicing Agreement.
SERVICER EVENT OF DEFAULT: means as defined in Section 10.01
of the Amended and Restated Contribution and Servicing Agreement.
SERVICER ORDER: means a written order or request delivered to
the Trustee and signed in the name of the Servicer by an Authorized Officer.
SERVICING FEE: means an amount equal to the product of (i)
one-twelfth (or with respect to the Initial Payment Date, a fraction, the
numerator of which is equal to the number of days from the Closing Date to but
excluding the Initial Payment Date, and the denominator of which is equal to
360), (ii) the Servicing Fee Rate and (iii) the Aggregate Discounted Contract
Balance as of the beginning of the previous Collection Period.
SERVICING FEE RATE: means 0.45 %.
STATED MATURITY DATE: means, with respect to the Class A-1
Notes, the Payment Date occurring on November 13, 2000, with respect to the
Class A-2 Notes, the Payment Date occurring on March 13, 2002, with respect to
the Class A-3 Notes, the Payment Date occurring on June 13, 2003 and for the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and the
Class E Notes, the Payment Date occurring on November 13, 2007.
SUBORDINATION DEFICIENCY EVENT: means the occurrence of the
Class A Note Balance being greater than the Aggregate Discounted Contract
Balance as of the date of determination.
SUBSTITUTE CONTRACT: means an Eligible Contract substituted by
the Contributor pursuant to either Section 5.03 or Section 7.01 of the Amended
and Restated Contribution and Servicing Agreement.
SUBSTITUTE CONTRACT TRANSFER FORM: means a Substitute Contract
Transfer Form, substantially in the form of Exhibit A to the Amended and
Restated Subsequent Contract Transfer Agreement.
SUBSTITUTION DATE: means any Business Day on which the
Contributor transfers a Substitute Contract to the Transferor (which Substitute
Contract is subsequently transferred by the Transferor to the Issuer and then
pledged by the Issuer to the Trustee).
SUCCESSOR SERVICER: means the Trustee or any successor to the
Servicer pursuant to the Amended and Restated Contribution and Servicing
Agreement.
SUPPLEMENT: means a supplement to the Amended and Restated
Indenture complying with the terms of the Amended and Restated Indenture.
TRANSACTION DOCUMENTS: means collectively, the Amended and
Restated Contribution and Servicing Agreement, the Amended and Restated
Subsequent Contract Transfer Agreement, the
27
<PAGE>
Amended and Restated Indenture, the Underwriting Agreement, any Note Purchase
Agreement(s) and any and all agreements relating to the servicing of the
Contracts and the issuance of the Notes.
TRANSFEROR: means DVI Receivables Corp. X, a corporation
organized and existing under the laws of the State of Delaware and wholly-owned
by DVI, and its permitted successors and assigns.
TRANSFEROR ORDER or TRANSFEROR REQUEST: means a written order
or request delivered to the Trustee and signed in the name of the Transferor by
an Authorized Officer.
TRUST INDENTURE ACT OR TIA: means the Trust Indenture Act of
1939, as amended from time to time, as in effect on any relevant date.
TRUST PROPERTY: means (a) the Company Assets, (b) all moneys
from time to time held by the Trustee pursuant to Section 3.01 of the Amended
and Restated Indenture pending deposit in one of the accounts referred to
therein, (c) all moneys from time to time on deposit in each Lock-Box Account,
Collection Account, the Reserve Account, the Distribution Account, Class A
Distribution Sub-Account, Class B Distribution Sub-Account, Class C Distribution
Sub-Account, Class D Distribution Sub-Account, the Class E Distribution
Sub-Account and Class F Distribution Sub- Account, if any, including all
investments and income from the investment of such moneys, (d) all of the
Issuer's right, title and interest then or thereafter acquired under the Amended
and Restated Contribution and Servicing Agreement, (e) all of the Issuer's
right, title and interest then or thereafter acquired under the Amended and
Restated Subsequent Contract Transfer Agreement and (f) all income, payments and
proceeds of any of the foregoing.
TRUST STATUTE: means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C.ss.3801 ET. SEQ.
TRUSTEE: means the Person named as the "Trustee" in the first
paragraph of the Amended and Restated Indenture until a successor Person shall
have become the Trustee pursuant to the applicable provisions of the Amended and
Restated Indenture, and thereafter "Trustee" shall mean such successor Person;
PROVIDED, that the provisions of Sections 7.06 and 8.11 of the Amended and
Restated Indenture, as applicable to any Person at any time serving as Trustee
under the Amended and Restated Indenture, shall survive (with respect to any
period prior to the date of such termination) the termination of such Person's
status as Trustee under the Amended and Restated Indenture and the succession of
any other Person to such status.
UNDERWRITERS: means Lehman Brothers, Inc., Prudential
Securities Incorporated and Banc One Capital Markets, Inc.
UNDERWRITING AGREEMENT: means the underwriting agreement dated
as of October 21, 1999, by and among Lehman Brothers Inc., Prudential Securities
Incorporated, Banc One Capital Markets, Inc., the Contributor, the Issuer and
the Transferor.
28
<PAGE>
UNIFORM COMMERCIAL CODE or UCC: means, with respect to a
particular jurisdiction, the Uniform Commercial Code, as in effect from time to
time in such jurisdiction, or any successor statute thereto.
UNITS: means the membership interests in the Issuer.
VOTING RIGHTS: means, for so long as any Notes remain
outstanding, and shall encompass, for so long as any Class A Note, Class B Note,
Class C Note, Class D Note or Class E Note is outstanding, the voting rights as
of the date of determination (i) the votes of Class A-1 Noteholders evidencing
100% of the then-outstanding Class A-1 Note Balance, and, after the Note Balance
of such class equals zero, then (ii) the votes of Class A-2 Noteholders
evidencing 100% of the then-outstanding Class A-2 Note Balance, and, after the
Note Balance of such class equals zero, then (iii) the votes of the Class A-3
Noteholders evidencing 100% of the then-outstanding Class A-3 Note Balance, and,
after the Note Balance of such class equals zero, then (iv) the votes of the
Class A-4 Noteholders evidencing 100% of the then-outstanding Class A-4 Note
Balance, and, after the Note Balance of such class equals zero, then (v) the
votes of Class B Noteholders evidencing 100% of the then-outstanding Class B
Note Balance, and, after the Note Balance of such class equals zero, then (vi)
the votes of the Class C Noteholders evidencing 100% of the then-outstanding
Class C Note Balance, and, after the Note Balance of such class equals zero,
then (vii) the votes of Class D Noteholders evidencing 100% of the
then-outstanding Class D Note Balance, and, after the Note Balance of such class
equals zero, then (viii) the votes of the Class E Noteholders evidencing 100% of
the then-outstanding Class E Note Balance. When none of the Class A Notes, Class
B Notes, Class C Notes, Class D Notes and Class E Notes is outstanding, 100% of
the Voting Rights shall be exercised by the Holders of the Class F Instrument,
if any. When used in the Transaction Documents, "50% of the Voting Rights" and
"662/3% of the Voting Rights" shall be deemed to refer to fifty and sixty-six
and two-thirds percent, respectively, of each class of Notes then Outstanding
and then entitled to vote as measured by the Outstanding Note Balance of such
class on such date of determination.
29
EXHIBIT 4.2
<PAGE>
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
DVI RECEIVABLES X, L.L.C.
<PAGE>
AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
DVI RECEIVABLES X, L.L.C.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I
DEFINITIONS
1.1 ACT.............................................................................................1
1.2 ADDITIONAL CONTRIBUTION.........................................................................1
1.3 AFFILIATE.......................................................................................1
1.4 AGREEMENT.......................................................................................1
1.5 ARTICLES........................................................................................1
1.6 ASSIGNEE........................................................................................1
1.7 CAPITAL CONTRIBUTION............................................................................1
1.8 CLOSING.........................................................................................1
1.9 COMPANY.........................................................................................1
1.10 DISPOSITION (DISPOSE)...........................................................................1
1.11 DISSOLUTION EVENT...............................................................................1
1.12 DISTRIBUTION....................................................................................2
1.13 DVI.............................................................................................2
1.14 EFFECTIVE DATE..................................................................................2
1.15 EVENT OF BANKRUPTCY.............................................................................2
1.16 FISCAL YEAR.....................................................................................2
1.17 INDENTURE.......................................................................................2
1.18 INDEPENDENT DIRECTOR............................................................................2
1.19 INITIAL ASSETS..................................................................................2
1.20 INITIAL CAPITAL CONTRIBUTION....................................................................2
1.21 MANAGEMENT RIGHT................................................................................2
1.22 MANAGING MEMBER.................................................................................2
1.23 MEMBER..........................................................................................2
1.24 MEMBERSHIP INTEREST.............................................................................2
1.25 NOTES...........................................................................................2
1.26 OFFICER.........................................................................................2
1.27 ORGANIZATION....................................................................................2
1.28 PERSON..........................................................................................3
1.29 PRINCIPAL OFFICE................................................................................3
1.30 PROCEEDING......................................................................................3
1.31 PROPERTY........................................................................................3
1.32 RELATED COMPANY.................................................................................3
1.33 TAX CHARACTERIZATION AND ADDITIONAL TAX TERMS...................................................3
1.34 TERM............................................................................................3
1.35 UNIT............................................................................................3
ARTICLE II
FORMATION
2.1 ORGANIZATION....................................................................................3
2.2 AGREEMENT.......................................................................................3
2.3 NAME............................................................................................4
<PAGE>
2.4 TERM............................................................................................4
2.5 REGISTERED AGENT AND OFFICE.....................................................................4
2.6 PRINCIPAL OFFICE................................................................................4
ARTICLE III
LIMITED PURPOSE; NATURE OF BUSINESS
3.1 LIMITED BUSINESS PURPOSE........................................................................4
ARTICLE IV
LIMITATIONS ON ACTIVITIES
4.1 LIMITATIONS ON ACTIVITIES.......................................................................6
ARTICLE V
ACCOUNTING AND RECORDS
5.1 RECORDS TO BE MAINTAINED........................................................................7
5.2 REPORTS.........................................................................................7
5.3 TAX RETURNS AND REPORTS.........................................................................7
5.4 RECORDS TO BE KEPT SEPARATE.....................................................................7
ARTICLE VI
NAME AND ADDRESS OF MEMBER
ARTICLE VII
RIGHTS AND DUTIES OF MEMBER
7.1 LIABILITY OF MEMBER.............................................................................8
7.2 REPRESENTATIONS AND WARRANTIES..................................................................8
7.3 CONFLICTS OF INTEREST...........................................................................8
ARTICLE VIII
MANAGEMENT
8.1 MANAGEMENT OF THE COMPANY.......................................................................8
8.2 AUTHORITY OF MANAGING MEMBER TO BIND THE COMPANY................................................9
8.3 ACTIONS OF THE MANAGING MEMBER..................................................................9
8.4 COMPENSATION OF MANAGING MEMBER.................................................................9
8.5 MANAGING MEMBER'S STANDARD OF CARE..............................................................9
8.6 RESIGNATION....................................................................................10
8.7 PAYMENT OF LIABILITIES.........................................................................10
ARTICLE IX
CONTRIBUTIONS
9.1 INITIAL CONTRIBUTIONS..........................................................................10
9.2 ADDITIONAL CONTRIBUTIONS.......................................................................10
9.3 WITHDRAWAL.....................................................................................10
9.4 INTEREST.......................................................................................10
9.5 NO PERSONAL LIABILITY..........................................................................10
ARTICLE X
ALLOCATIONS AND DISTRIBUTIONS
10.1 TAXABLE INCOME ALLOCATIONS.....................................................................10
10.2 DISTRIBUTIONS..................................................................................11
ARTICLE XI
TRANSFER OF MEMBERSHIP INTEREST
11.1 COMPLIANCE WITH SECURITIES LAWS................................................................11
11.2 TRANSFER OF ECONOMIC INTEREST..................................................................11
<PAGE>
11.3 TRANSFER OF MEMBERSHIP INTEREST................................................................11
11.4 STATUS OF TRANSFEREE...........................................................................11
11.5 DISSOLUTION OR BANKRUPTCY OF THE MEMBER........................................................12
ARTICLE XII
DISSOLUTION AND WINDING UP
12.1 DISSOLUTION....................................................................................12
12.2 EFFECT OF DISSOLUTION..........................................................................13
12.3 DISTRIBUTION OF ASSETS ON DISSOLUTION..........................................................13
12.4 WINDING UP AND FILING ARTICLES OF DISSOLUTION..................................................13
ARTICLE XIII
MISCELLANEOUS
13.1 NOTICES........................................................................................13
13.2 HEADINGS.......................................................................................13
13.3 ENTIRE AGREEMENT...............................................................................14
13.4 BINDING AGREEMENT..............................................................................14
13.5 SAVING CLAUSE..................................................................................14
13.6 COUNTERPARTS...................................................................................14
13.7 GOVERNING LAW..................................................................................14
13.8 NO MEMBERSHIP INTENDED FOR NONTAX PURPOSES.....................................................14
13.9 NO RIGHTS OF CREDITORS AND THIRD PARTIES UNDER AGREEMENT.......................................14
13.10 GENERAL INTERPRETIVE PRINCIPLES................................................................14
</TABLE>
<PAGE>
AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
DVI RECEIVABLES X, L.L.C.
This Amended and Restated Limited Liability Company Operating Agreement
of DVI Receivables X, L.L.C. (the "Company"), a Delaware limited liability
company organized pursuant to the Delaware Limited Liability Company Act, is
entered into and shall be effective as of June 1, 1999, by and between the
Company and DVI Receivables Corp. VIII, as the sole member of the Company.
ARTICLE I
DEFINITIONS
Capitalized terms not defined herein shall have the meaning set forth
in the Indenture (as defined below). For purposes of this Agreement (as defined
below), unless the context clearly indicates otherwise, the following terms
shall have the following meanings:
1.1 ACT. The Delaware Limited Liability Company Act and all amendments
thereto.
1.2 ADDITIONAL CONTRIBUTION. An additional Capital Contribution payable
by the Member to the Company pursuant to Article IX.
1.3 AFFILIATE. Any entity other than the Member (i) which owns
beneficially, directly or indirectly, 10% or more of the outstanding shares of
common stock of the Managing Member; or (ii) of which 10% or more of the
outstanding shares of its common stock is owned beneficially, directly or
indirectly, by any entity described in clause (i) above, or (iii) which is
"controlled", as defined in Section 230.405 of the Rules and Regulations of the
Securities and Exchange Commission, 17 C.F.R. Section 230.405, by an entity
described in clause (i) above.
1.4 AGREEMENT. This Limited Liability Company Operating Agreement
including all amendments adopted in accordance with this Agreement and the Act.
1.5 ARTICLES. The Articles of Organization of the Company, as amended
from time to time, and filed with the Department of State of the State of
Delaware.
1.6 ASSIGNEE. A transferee of the Membership Interest.
1.7 CAPITAL CONTRIBUTION. Any contribution of rights, Property or
services made by or on behalf of the Member or its Assignee.
1.8 CLOSING. The Closing as defined in that certain Amended and
Restated Indenture, dated the date hereof, by and between the Company, DVI and
the Purchaser (as defined therein).
1.9 COMPANY. DVI Receivables X, L.L.C., a limited liability company
formed under the laws of Delaware, and any successor limited liability company.
1.10 DISPOSITION (DISPOSE). Any sale, assignment, exchange, mortgage,
pledge, grant, hypothecation, or other transfer, absolute or as security or
encumbrance (including dispositions by operation of law).
1.11 DISSOLUTION EVENT. An event, the occurrence of which will result
in the dissolution of the Company under Article XIV.
1.12 DISTRIBUTION. A transfer of Property to the Member on account of
its Membership Interest as described in Article X.
<PAGE>
2
1.13 DVI. DVI Financial Services Inc., a Delaware corporation.
1.14 EFFECTIVE DATE. June 1, 1999.
1.15 EVENT OF BANKRUPTCY. As to any Person means the filing of a
petition for relief as to such Person as debtor or bankrupt under the Bankruptcy
Reform Act of 1978, as amended, or other similar provision of law of any
jurisdiction (except if such petition is contested by such Person and has been
dismissed within 90 days); insolvency of such Person as finally determined by a
court proceeding; filing by such Person of a petition or application to
accomplish the same or for the appointment of a receiver or a trustee for such
Person or a substantial part of its assets; commencement of any proceedings
relating to such Person as a debtor under any other reorganization, arrangement,
insolvency, adjustment of debt or liquidation law of any jurisdiction, whether
now in existence or hereinafter enacted, if such Person indicates its approval
of such proceeding, consents thereto or acquiesces therein, or such proceeding
is contested by such Person and has not been finally dismissed within 90 days.
1.16 FISCAL YEAR. The year commencing on the opening of business on the
first day of July of each calendar year and terminating on the close of business
on the last day of June of the immediately succeeding calendar year thereto.
1.17 INDENTURE. That certain Amended and Restated Indenture, dated of
even date herewith, by and between the Company and U.S. Bank Trust National
Association, as Trustee.
1.18 INDEPENDENT DIRECTOR. An individual who is not, at the time of
initial appointment, nor has been, a director of any Affiliate of the Member
(except that an individual who serves in similar capacities for other "special
purpose corporations" formed by DVI or its affiliates is not thereby
disqualified from being an Independent Director) or is an officer of, employed
by, a creditor, supplier or contractor of, or holding any beneficial or economic
interest in the Member or any Affiliate of the Member, or is a family member of
any of the foregoing.
1.19 INITIAL ASSETS. The Initial Assets as defined in Section 2.2(b)
hereof.
1.20 INITIAL CAPITAL CONTRIBUTION. The Capital Contribution agreed to
be made by the Member as described in Article IX.
1.21 MANAGEMENT RIGHT. The right of the Member to participate in the
management of the Company, to vote on any matter, and to grant or to withhold
consent or approval of actions of the Company.
1.22 MANAGING MEMBER. The Member, as set forth in Section 8.1.
1.23 MEMBER. DVI Receivables Corp. VIII, or any Assignee thereof.
1.24 MEMBERSHIP INTEREST. The rights of the Member to Distributions
(liquidating or otherwise) and allocations of the profits, losses, gains,
deductions, and credits of the Company, and, to the extent permitted by this
Agreement, to possess and exercise Management Rights.
1.25 NOTES. The Notes, as set forth in the Indenture.
1.26 OFFICER. An individual appointed as an officer of the Company
pursuant to Section 8.1(c).
1.27 ORGANIZATION. A Person other than a natural person, including
without limitation corporations (both non-profit and other corporations),
partnerships (both limited and general), joint ventures, limited liability
companies, business trusts and unincorporated associations, but the term does
not include joint tenancies and tenancies by the entirety.
<PAGE>
3
1.28 PERSON. An individual, trust, estate, or any Organization
permitted to be a member of a limited liability company under the laws of the
State of Delaware.
1.29 PRINCIPAL OFFICE. The Principal Office of the Company set forth in
Section 2.6.
1.30 PROCEEDING. Any administrative, judicial, or other adversary
proceeding, including without limitation litigation, arbitration, administrative
adjudication, mediation, and appeal or review of any of the foregoing.
1.31 PROPERTY. Any property, real or personal, tangible or intangible,
including money, and any legal or equitable interest in such property, but
excluding services and promises to perform services in the future.
1.32 RELATED COMPANY. The Member of the Company or any entity other
than the Company now or hereafter controlled directly or indirectly by, or under
direct or indirect common control with, the Member of the Company.
1.33 TAX CHARACTERIZATION AND ADDITIONAL TAX TERMS. For federal income
tax purposes, and to the extent applicable for state and local income and
franchise tax purposes, it is intended that the Company be disregarded as an
entity separate from the Member; provided, however, if it is determined that
there are two or more members of the Company then it is intended that the
Company be treated as a partnership for such purposes, and the Managing Member
shall (i) file any information returns and reports and make any elections or
take any other similar action required for the Company to be classified as a
partnership for such purposes and (ii) act as the tax matters partner of the
Company pursuant to Section 6231(a)(7) of the Code and applicable Tax
Regulations.
(a) Code shall mean the Internal Revenue Code of 1986.
(b) Tax Regulations shall mean the federal income tax
regulations promulgated by the United States Treasury Department under
the Code as such Tax Regulations may be amended from time to time. All
references herein to a specific section of the Tax Regulations shall be
deemed also to refer to any corresponding provision of succeeding Tax
Regulations.
1.34 TERM. The term of this Agreement, as set forth in Section 2.4
hereof.
1.35 UNIT. One of the one hundred (100) units of Membership Interest
that are authorized to be issued under this Agreement. Each unit represents a
Membership Interest of one percent (1%). All Units issued pursuant this
Agreement are issued to the Member, as sole member of the Company.
ARTICLE II
FORMATION
2.1 ORGANIZATION. The Member hereby organizes the Company as a Delaware
limited liability company pursuant to the provisions of the Act.
2.2 AGREEMENT. (a) For and in consideration of the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, (i) the Company and DVI Receivables
Corp. VIII hereby agree to the terms and conditions of this Agreement, as it may
from time to time be amended and (ii) in exchange for issuance of 100% of the
Membership Interests of the Company, the Company hereby assigns, transfers and
conveys all of its Membership Interests to DVI Receivables Corp. VIII, and,
prior to and at all times after the Effective Date, the term "Member" shall be
deemed to refer to DVI Receivables Corp. VIII, its successors and assigns. It is
the express intention of the Company and DVI Receivables Corp. VIII that this
Agreement shall be the sole source of agreement of the parties, and, except to
the extent a provision of this Agreement expressly incorporates federal income
tax rules by reference to sections of the Code or Tax Regulations or is
expressly prohibited or ineffective under the Act, this Agreement shall govern,
even when inconsistent with, or different than, the provisions
<PAGE>
4
of the Act or any other law or rule, and to the extent any provision of this
Agreement is prohibited or ineffective under the Act, this Agreement shall be
deemed to be amended to the least extent necessary in order to make this
Agreement effective under the Act, in the event the Act is subsequently amended
or interpreted in such a way to make any provision of this Agreement that was
formerly invalid valid, such provision shall be considered to be valid from the
effective date of such interpretation or amendment.
(b) The Company has been formed by DVI Receivables Corp. VIII
to serve as a special purpose entity in connection with securitization of
certain financial assets of DVI Receivables Corp. VIII. To facilitate the
optimal securitization of the Contributed Property (as defined in the
Contribution and Servicing Agreement), DVI has formed DVI Receivables Corp. VIII
to be the sole member and the Managing Member of the Company, to receive from
DVI all Contributed Property pursuant to the Contribution and Servicing
Agreement, and to transfer all such Contributed Property to the Company pursuant
to the Subsequent Contract Transfer Agreement.
2.3 NAME. The name of the Company is DVI Receivables X, L.L.C., and all
business of the Company shall be conducted under that name.
2.4 TERM. The Company shall be dissolved and its affairs wound up in
accordance with the Act and this Agreement one year and one day after the Notes
have been paid in full pursuant to the Indenture, unless the Term shall
be extended by amendment to this Agreement and the Articles.
2.5 REGISTERED AGENT AND OFFICE. The registered agent for the service
of process and the registered office shall be that Person and location reflected
in the Articles. The Member may, from time to time, change the registered agent
or office through appropriate filings with the Secretary of State of the State
of Delaware. In the event the registered agent ceases to act as such for any
reason or the registered office shall change, the Managing Member shall promptly
designate a replacement registered agent or file a notice of change of address
as the case may be.
2.6 PRINCIPAL OFFICE. The Principal Office of the Company shall be
located at
c/o DVI Financial Services Inc.
500 Hyde Park
Doylestown, PA 18901
Attention: Lisa Cruikshank, Securitization Manager
Telephone: (215) 230-6375
ARTICLE III
LIMITED PURPOSE; NATURE OF BUSINESS
3.1 LIMITED BUSINESS PURPOSE. The business purpose to be conducted or
promoted by the Company is limited to the following activities and none other:
(a) To acquire, own, purchase, hold, transfer, pledge and
otherwise deal with notes, debt, or other securities;
(b) To acquire, own, and hold one or more series of securities
("Pass-Through Securities") issued pursuant to one or more pooling
agreements (each, a "Pooling Agreement"), and to issue one or more
series of Pass-Through Securities; such Pass-Through Securities of each
series (i) will represent ownership interests in various equipment
finance contracts, the cash flow, income, payments and proceeds
therefrom and any related property and/or collections in respect
thereof, and (ii) may be structured to contain one or more classes of
Pass-Through Securities, each class having the characteristics
specified in the related Pooling Agreement; and to sell, transfer,
assign, finance and refinance one or more Pass-Through Securities or
classes of Pass- Through Securities of any series;
<PAGE>
5
(c) To issue, acquire, own and hold one or more series of debt
obligations ("Notes") with the prior written consent of Moody's
Investors Service Inc., pursuant to one or more indentures, which Notes
are collateralized by equipment finance contracts or income, payments
or proceeds therefrom ("Funding Agreements"), Pass-Through Securities
or supplemental collateral (collectively, the "Collateral"); and to
sell, transfer, assign and finance such Notes with Lehman Commercial
Paper Inc. or Prudential Securities Credit Corporation and such other
organizations as either of them shall designate;
(d) To establish one or more trusts ("Trusts") to engage in
any one or more of the activities described in any of the clauses above
or to issue, acquire, own, hold and sell a particular series of notes
to be issued pursuant to an indenture between such trust and an
indenture trustee (the "Trustee"); to receive upon the formation of any
such Trust one or more certificates ("Trust Certificates") representing
the beneficial ownership interest in such Trust; and to acquire, own,
hold, sell, transfer, assign, pledge, finance, refinance and otherwise
deal with any or all of the Trust Certificates in any such Trust;
(e) To invest and reinvest the funds received or collected by
the Company on Collateral in other investments of such types or in
other interest-bearing or discount securities, loans or other
investments;
(f) To convey or transfer all or any portion of the Company's
right, title and interest in and to the Collateral for any series of
Notes, subject and subordinate to the rights of the related
Noteholders;
(g) To transfer the Company's rights to (i) any cash flow in
excess of amounts necessary to pay holders of the Notes remitted, or to
be remitted to, the Company pursuant to an indenture with respect to
such Notes or (ii) amounts remitted or to be remitted to the Company
pursuant to a Pooling Agreement or a funding agreement;
(h) To acquire, own, hold, sell, transfer, assign, pledge,
finance, refinance and otherwise deal with (i) installment sales
contracts, equipment leases, equipment finance leases, rental and other
contract payments from leases or other contracts, equipment finance
loans and secured equipment notes (collectively, "Contracts"), (ii) the
equipment which is the subject of such Contracts, (iii) policies of
insurance relating to such Contracts, Contract payments due thereunder,
equipment, or proceeds of any of the foregoing, (iv) any other assets
which may be incidental to the ownership of such Contracts, or (v) any
participation interest in or security based on or backed by assets
described in (i) through (v) (collectively, "Lease Receivables"); and
(i) To borrow money pursuant to one or more interim finance
agreements between the Corporation and one or more lenders and
acquiring, owning, leasing, purchasing, investing, transferring,
selling and/or pledging certain property to be contributed to the
Corporation pursuant to a contribution agreement or subsequent contract
transfer agreement in connection with such borrowing; provided,
however, that there may be only one interim finance agreement
outstanding at one time;
(j) To engage in any other acts or activities and to exercise
any power permitted to the Company under the Act so long as the same
are incidental to, or connected with, the foregoing or are necessary,
suitable or convenient to accomplish the foregoing;
(k) Provided, however, that the Company shall not engage in
any of the permitted activities set forth in (a) through (j) above if
doing so shall result in a downgrade of the rating by a nationally
recognized rating agency requested by the Company to rate the
securities related to any previously issued (by the Company or one of
the Trusts) Notes, Pass-Through Securities or Trust Certificates;
(l) The Company shall pay its liabilities from its own assets,
and not have any liability to any Related Company or any creditor of
any Related Company.
<PAGE>
6
ARTICLE IV
LIMITATIONS ON ACTIVITIES
4.1 LIMITATIONS ON ACTIVITIES. Notwithstanding any other provision of
this Agreement and any provision of law which otherwise so empowers the Company,
the Company shall not, and no Member shall have any right, power or authority to
cause the Company, without the unanimous affirmative vote of the Member's board
of directors, to perform any act in contravention of any of the following:
(a) The Company shall not
(i) consolidate or merge with or into any other
entity or person or dissolve or liquidate in whole or in part
or transfer its properties and assets substantially as an
entirety to any entity or
(ii) engage in any other action that bears on whether
the separate legal identity of the Company and the Member will
be respected, including, without limitation (A) holding itself
out as being liable for the debts of any other party; (B)
forming, or causing to be formed, any subsidiaries or (C)
acting other than in its name and through its duly authorized
officers or agents;
(b) The Company shall not engage in any joint activity or
transaction of any kind with or for the benefit of any Related Company,
including loans to or from any Related Company and any guarantee of the
indebtedness of any Related Company, except for
(i) entering into the agreements referenced in or
contemplated by Article III,
(ii) purchasing management services and leasing
office space or equipment, in each case only to the extent
necessary for the conduct of the Company's business, and
(iii) payment of capital distributions to the Member;
(c) The Company shall not create, incur, assume, guarantee or
in any manner become liable in respect of any indebtedness, except as
stated in Article III, other than trade payables and expense accruals
incurred in the ordinary course of business and which are incident to
the business purpose of the Company as stated in Article III above;
(d) The Company shall not commingle its funds and assets with
those of any Related Company;
(e) Neither the Member nor the Company shall file or otherwise
initiate on behalf of the Company (i) a voluntary petition for relief
under any Chapter of the Bankruptcy Code, (ii) a receivership,
conservatorship or custodianship, (iii) an assignment for the benefit
of creditors or (iv) any other bankruptcy or insolvency related
proceeding;
(f) The Company shall not dissolve or wind up its affairs upon
the dissociation, dissolution or Event of Bankruptcy of any of its
Members;
(g) The company shall not dissolve even if it has no remaining
Members if a personal representative of the last Member agrees in
writing to continue the Company and to act as the
<PAGE>
7
Member hereunder until such time as another Member is effectively
appointed hereunder or, in the event that no such personal
representative shall agree, the Company shall make reasonable
commercial efforts to cause the Trustee to act as interim Member until
a replacement Member is effectively appointed; and
(h) In the event that the Member undergoes an Event of
Bankruptcy, the Member shall not reject the Agreement.
ARTICLE V
ACCOUNTING AND RECORDS
5.1 RECORDS TO BE MAINTAINED. The Company shall maintain the following
records at the Principal Office:
(a) a record of the full name and last known mailing address
of the Member, together with information relating to the Member's
Initial Capital Contribution and Membership interest;
(b) a copy of the Articles and all amendments thereto,
together with executed copies of any powers of attorney pursuant to
which the Articles or any such amendment has been executed;
(c) a copy of the Company's federal, state and local income or
information tax returns and reports;
(d) a copy of this Agreement including all amendments thereto;
and
(e) the Company's books and records, including financial
statements of the Company, which shall be open to inspections by the
Member or its agents at reasonable times.
5.2 REPORTS. The Managing Member shall prepare annual reports,
including a balance sheet, statement of profit and loss and changes in the
Member's account, and a statement of cash flows.
5.3 TAX RETURNS AND REPORTS. The Managing Member shall prepare and
timely file income tax returns of the Company in all jurisdictions where such
filings are required.
5.4 RECORDS TO BE KEPT SEPARATE. The Company (a) shall maintain its
financial and accounting books and records separate from those of any other
entity or person, (b) shall pay from its assets all obligations and indebtedness
of any kind incurred by it, and shall not pay from its assets any obligations or
indebtedness of any other entity or person, and (c) shall observe all
formalities required by its Articles, this Agreement and the laws of the State
of Delaware.
<PAGE>
8
ARTICLE VI
NAME AND ADDRESS OF MEMBER
The name and address of the Member on and after the Closing shall be:
DVI Receivables Corp. VIII
c/o DVI Financial Services Inc.
500 Hyde Park
Doylestown, PA 18901
ARTICLE VII
RIGHTS AND DUTIES OF MEMBER
7.1 LIABILITY OF MEMBER. The Member shall not have any liability for
the obligations or liabilities of the Company except to the extent provided in
the Act.
7.2 REPRESENTATIONS AND WARRANTIES. The Member hereby represents and
warrants to the Company that: (a) the Member is an entity that has power to
enter into this Agreement and to perform its obligations hereunder and that the
persons executing this Agreement on behalf of the entity have the power to do
so; and (b) the Member is acquiring its interest in the Company for the Member's
own account as an investment and without an intent to distribute the interest.
The Member acknowledges that its interest in the Company has not been registered
under the Securities Act of 1933 or any state securities laws, and may not be
resold or transferred without appropriate registration or the availability of an
exemption from such requirements.
7.3 CONFLICTS OF INTEREST.
(a) The Member shall be entitled to enter into transactions
that may be considered to be competitive with the Company, it being
expressly understood that the Member may enter into transactions that
are similar to the transactions into which the Company may enter.
Notwithstanding the foregoing, the Member shall account to the Company
and hold as trustee for it any Property, profit, or benefit derived by
the Member in the conduct and winding up of the Company business or
from a use or appropriation by the Member of Company Property including
information developed exclusively for the Company and opportunities
expressly offered to the Company.
(b) The Member does not violate a duty or obligation to the
Company merely because the Member's conduct furthers the Member's own
interest. No transaction with the Company shall be voidable solely
because the Member has a direct or indirect interest in the transaction
if the transaction is fair and reasonable to the Company.
<PAGE>
9
ARTICLE VIII
MANAGEMENT
8.1 MANAGEMENT OF THE COMPANY.
(a) The Member shall be the managing member of the Company
(the "Managing Member") and, in such capacity, shall manage the Company
in accordance with this Agreement. The Managing Member is an agent of
the Company's business, and the actions of the Managing Member taken in
such capacity and in accordance with this Agreement shall bind the
Company.
(b) The Managing Member shall have full, exclusive and
complete discretion to manage and control the business and affairs of
the Company, to make all decisions affecting the business and affairs
of the Company and to take all such actions as it deems necessary or
appropriate to accomplish the purpose of the Company as set forth
herein. The Managing Member shall be the sole person or entity with the
power to bind the Company, except and to the extent that such power is
expressly delegated to any other person or entity by the Managing
Member, and such delegation shall not cause the Managing Member to
cease to be the Member or the Managing Member. There shall not be a
"manager" (within the meaning of the Act) of the Company.
(c) The Managing Member may appoint individuals ("Officers")
with or without such titles as it may elect, including the titles of
President, Vice President, Treasurer, Secretary, and Assistant
Secretary, to act on behalf of the Company with such power and
authority as the Managing Member may delegate in writing to any such
persons.
8.2 AUTHORITY OF MANAGING MEMBER TO BIND THE COMPANY. Only the Managing
Member and authorized agents of the Company shall have the authority to bind the
Company. Subject to Section 4.1, the Managing Member has the power, on behalf of
the Company, to do all things necessary or convenient to carry out the business
and affairs of the Company (as described in Article III), including, without
limitation:
(a) the institution, prosecution and defense of any Proceeding
in the Company's name;
(b) the entering into contracts;
(c) investment and reinvestment of the Company's funds, and
receipt and holding of Property as security for repayment;
(d) the conduct of the Company's business, the establishment
of Company offices, and the exercise of the powers of the Company;
(e) the appointment of employees and agents of the Company,
the defining of their duties and the establishment of their
compensation, and the dealing with tradespeople, accountants and
attorneys, on such terms as the Managers shall determine;
(f) the indemnification of any Person;
(g) the making of such elections under the Code and Tax
Regulations and other relevant tax laws as to the treatment of items of
Company income, gain, loss, deduction and credit, and as to all other
relevant matters as the Managing Member deems necessary or appropriate,
including without limitation, elections referred to in Section 754 of
the Code, the determination of which items
<PAGE>
10
of cash outlay shall be capitalized or treated as current expenses, and
the selection of the method of accounting and bookkeeping procedures to
be used by the Company;
(h) the amendment of any provision to this Agreement;
provided, however, that no provision of Article III and Article IV
Sections 8.01, 8.06 and 5.04 of the Amended and Restated Subsequent
Contract Transfer Agreement (the "SCTA") dated as of June 1, 1999,
between the Company and DVI Receivables Corp. X, shall not be amended
without the consent of the Independent Directors of the Member.
8.3 ACTIONS OF THE MANAGING MEMBER. The Managing Member has the power
to bind the Company as provided in this Article VIII. No Person dealing with the
Company shall have any obligation to inquire into the power or authority of the
Managing Member acting on behalf of the Company.
8.4 COMPENSATION OF MANAGING MEMBER. The Managing Member shall be
reimbursed for all reasonable expenses incurred in managing the Company and
shall be entitled to compensation , in an amount to be determined from time to
time by consent of the Member, in its sole discretion. The Managing Member shall
not be required to devote full time to the management of the Company business,
but only so much time as shall be necessary or appropriate for the proper
management of such business.
8.5 MANAGING MEMBER'S STANDARD OF CARE. The Managing Member shall
discharge its duties to the Company in good faith and with that degree of care
that an ordinarily prudent person in a similar position would use under similar
circumstances. In discharging its duties, the Managing Member shall be fully
protected in relying in good faith upon the records required to be maintained
under Article VI and upon such information, opinions, reports or statements by
any Person as to matters the Managing Member reasonably believes are within such
other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits or losses of the Company or any other facts pertinent to the existence
and amount of assets from which Distributions to the Member might properly be
paid. The Company shall indemnify and hold harmless the Managing Member against
any loss, damage or expense (including attorneys' fees) incurred by the Managing
Member as a result of any act performed or omitted on behalf of the Company or
in furtherance of the Company's interests without, however, relieving the
Managing Member of liability for failure to perform his or her duties in
accordance with the standards set forth herein. The satisfaction of any
indemnification and any holding harmless shall be from and limited to Company
Property.
8.6 RESIGNATION. Other than as set forth in Section 4.1(g) hereof, the
Member shall not resign or dissociate itself from the Company at any time
without first obtaining the effective appointment of a successor Member approved
by the Rating Agencies.
8.7 PAYMENT OF LIABILITIES. The Member shall at all times pay its
liabilities from its own assets, and not have any liability to any Related
Company or any creditor thereof.
ARTICLE IX
CONTRIBUTIONS
9.1 INITIAL CONTRIBUTIONS. DVI Receivables Corp. VIII, as the Member,
has contributed the following property and no other Property, to the Company:
<PAGE>
11
All right, title and interest of DVI Receivables
Corp. VIII in and to certain Contracts and other
Contributed Property as further described in the SCTA
and each Subsequent Contract Transfer Form.
The Member holds all of the Units of Membership Interest.
9.2 ADDITIONAL CONTRIBUTIONS. The Member is not required to make any
additional Capital Contribution to the Company.
9.3 WITHDRAWAL. The Member shall not be entitled to withdraw any part
of its Capital Contribution or to receive any distribution from the Company,
except as specifically provided in this Agreement.
9.4 INTEREST. The Member shall not be entitled to interest on the
Member's Capital Contribution or on any profits retained by the Company.
9.5 NO PERSONAL LIABILITY. The Member shall not have any liability for
the obligations or liabilities of the Company except to the extent provided in
the Act.
ARTICLE X
ALLOCATIONS AND DISTRIBUTIONS
10.1 TAXABLE INCOME ALLOCATIONS. Profits and losses, and each item of
Company income, gain, loss, deduction, credit and tax preference with respect
thereto, for each Fiscal Year (or shorter period in respect of which such items
are to be allocated) shall be allocated to the Member; provided, however, if it
is determined that there are two or more members of the Company, then such items
shall be allocated among the members in accordance with their respective
economic interests in the Company, determined generally by taking into account
the priorities of cash distributions, the actual distributions and the economic
allocation of losses and other expenses among the Members as determined in
accordance with Sections 3.04(b), 3.04(c) and 6.06 of the Indenture as
applicable.
10.2 DISTRIBUTIONS. Distributions shall be made to the Member in
accordance with Section 3.04(b)(xii) and 6.06 of the Indenture, as applicable.
ARTICLE XI
TRANSFER OF MEMBERSHIP INTEREST
11.1 COMPLIANCE WITH SECURITIES LAWS. No Unit of Membership Interest
has been registered under the Securities Act of 1933, as amended, or under any
applicable state securities laws. The Member may not transfer (a transfer, for
purposes of this Agreement, shall be deemed to include, but not be limited to,
any sale, transfer, assignment, pledge, creation of a security interest or other
Disposition) all or any part of the Member's Units of Membership Interest,
except upon compliance with the applicable federal and state securities laws.
The Managing Member shall have no obligation to register the Member's Units of
Membership Interest under the Securities Act of 1933, as amended, or under any
applicable state securities laws, or to make any exemption therefrom available
to the Member.
11.2 TRANSFER OF ECONOMIC INTEREST. The right to receive allocations of
profits and losses and to receive Distributions may not be transferred in whole
or in part unless the following terms and conditions have been satisfied:
The transferor shall have:
(a) assumed all costs incurred by the Company in connection
with the transfer;
<PAGE>
12
(b) furnished the Company with a written opinion of counsel,
satisfactory in form and substance to counsel for the Company, that
such transfer complies with applicable federal and state securities
laws and this Agreement and that such transfer, for federal income tax
purposes, will not cause the termination of the Company under Section
708(b) of the Code, cause the Company to be treated as an association
taxable as a corporation for income tax purposes or otherwise adversely
affect the Company or the Member; and
(c) complied with such other conditions as the Managing Member
may reasonably require from time to time.
Transfers will be recognized by the Company as effective only upon the close of
business on the last day of the calendar month following satisfaction of the
above conditions. Any transfer in contravention of this Article XII and any
transfer which if made would cause a termination of the Company for federal
income tax purposes under Section 708(b) of the Code shall be void AB INITIO and
ineffectual and shall not bind the Company.
11.3 TRANSFER OF MEMBERSHIP INTEREST.
(a) The Member may not sell, assign, encumber, transfer or
otherwise Dispose of any Units of its Membership Interest (or take or
omit to take any action, filing, election or other action that could
result in a deemed sale, assignment, encumbrance, transfer or other
Disposition); provided, however that the Member may make such a
transfer to an Affiliate of the Member, which Affiliate shall have a
special purpose charter and bylaws substantially similar in all
material respects to those of the Member. Any attempted Disposition not
in accordance with this Agreement shall be void.
(b) Upon the transfer and admission of an additional Member in
accordance with this Agreement, this Agreement shall be amended to
reflect the admission of the substitute Member, and the Member shall
take any action required to record to reflect such admission.
11.4 STATUS OF TRANSFEREE. A transferee of a Unit of Membership
Interest shall be entitled to receive that share of Profits, Losses and
Distributions, and the return of Capital Contribution, to which the transferor
would otherwise be entitled with respect to the interest transferred, and shall
have the rights of the transferring Member of the Company under the Act or this
Agreement. The Company shall also, if the transferee and transferor jointly
advise the Company in writing of a transfer of the Unit of Membership Interest,
furnish the transferee with pertinent tax information at the end of each Fiscal
Year.
11.5 DISSOLUTION OR BANKRUPTCY OF THE MEMBER. Upon the dissolution or
adjudication of bankruptcy of the Member, the Member's successors or assigns
shall have all the rights of the Member for the purpose of settling
or managing the Member's estate.
ARTICLE XII
DISSOLUTION AND WINDING UP
12.1 DISSOLUTION. The Company shall be dissolved and its affairs wound
up, upon the first to occur of any of the following events (each of which shall
constitute a Dissolution Event):
(a) the expiration of the Term of this Agreement, unless the
Company is continued with the consent of the Member, in its sole
discretion; or
(b) the determination in writing of the Managing Member to
dissolve and terminate the Company; provided, however, that the
Managing Member shall not, and the Managing Member hereby agrees not
to, take any action to dissolve or terminate the Company prior to the
expiration of the Term;
(c) the entry of a decree of judicial dissolution pursuant to
the Act; or
<PAGE>
13
(d) the occurrence of an Event of Bankruptcy as to a Member or
the resignation, expulsion or dissolution of a Member or the occurrence
of any other event that terminates the membership of a Member, unless,
within 90 days of such event, there is at least one remaining Member
and the remaining Members unanimously agree to continue the business of
the Company, in which event the Company shall not be dissolved and the
Company and the business of the Company shall be continued; provided,
however, that if any Member is a partnership or a limited liability
company on the date of such occurrence, the dissolution of such Member
as a result of the dissolution, termination, resignation, death,
incompetence, removal or Event of Bankruptcy of a partner or member in
such partnership or limited liability company, as the case may be,
shall not be an event of dissolution of this Company if the business of
such Member is continued by its remaining partner(s) or member(s), as
the case may be, either alone or with additional partners or members,
and such Member and such partners or members comply with any other
applicable requirements of this Agreement; or
(e) the passage of 30 days after the sale or other disposition
of all or substantially all the assets of the Company (except that if
the Company receives an installment obligation as consideration for
such sale, the Company shall continue, unless sooner dissolved under
the provisions of this Agreement, until such time as such note or notes
are paid in full).
Upon the dissolution of the Company for any reason, the Member shall
proceed promptly to wind up the affairs of and liquidate the Company; provided,
however, that if the Notes are outstanding, the Member shall not liquidate the
assets of the Company securing the Notes, except as permitted by the deed of
trust and assignment of leases pursuant to which such assets were encumbered,
without the consent of the secured party under such document, which may continue
to exercise all of its rights under such document and shall have complete and
independent ability to retain such assets until the Notes have been paid in full
or otherwise completely discharged pursuant to the Indenture. Subject to the
foregoing, the Member shall have reasonable discretion to determine the time,
manner and terms of any sale or sales of the Company's property pursuant to such
liquidation.
12.2 EFFECT OF DISSOLUTION. Upon dissolution, the Company shall not be
terminated and shall continue until the winding up of the affairs of the Company
is completed and a certificate of dissolution has been issued by the Secretary
of State of Delaware.
12.3 DISTRIBUTION OF ASSETS ON DISSOLUTION. Upon the winding up of the
Company, the Managing Member shall take full account of the assets and
liabilities of the Company, shall liquidate the assets (unless the Managing
Member determines that a distribution of any Company Property in-kind would be
more advantageous to the Member than the sale thereof) as promptly as is
consistent with obtaining the fair value thereof, and shall apply and distribute
the proceeds therefrom in the following order:
(a) first, to the payment of the debts and liabilities of the
Company to creditors, including the Member, if it is a creditor, to the
extent permitted by law, in satisfaction of such debts and liabilities,
and to the payment of necessary expenses of liquidation;
(b) second, to the setting up of any reserves which the
Managing Member may deem necessary or appropriate for any anticipated
obligations or contingencies of the Company arising out of or in
connection with the operation or business of the Company. Such reserves
may be paid over by the Managing Member to an escrow agent or trustee
selected by the Managing Member to be disbursed by such escrow agent or
trustee in payment of any of the aforementioned obligations or
contingencies and, if any balance remains at the expiration of such
period as the Managing Member shall deem advisable, shall be
distributed by such escrow agent or trustee in the manner hereinafter
provided;
(c) then, to the Member.
Liquidation proceeds shall be paid within 60 days of the end of the Company's
taxable year in which the liquidation occurs. Such distributions shall be in
cash or Property (which need not be distributed proportionately) or partly in
both, as determined by the Managing Member.
<PAGE>
14
If at the time of liquidation the Managing Member shall determine that an
immediate sale of some or all Company Property would cause undue loss to the
Member, the Managing Member may, in order to avoid such loss, defer liquidation.
12.4 WINDING UP AND FILING ARTICLES OF DISSOLUTION. Upon the
commencement of the winding up of the Company, articles of dissolution shall be
delivered by the Company to the Secretary of the State of Delaware for filing.
The articles of dissolution shall set forth the information required by the Act.
The winding up of the Company shall be completed when all debts, liabilities,
and obligations of the Company have been paid and discharged or reasonably
adequate provision therefor has been made, and all of the remaining Property of
the Company has been distributed to the Member.
ARTICLE XIII
MISCELLANEOUS
13.1 NOTICES. Notices to the Member shall be sent to the Principal
Office of the Company. Any notice or other communication required or permitted
hereunder shall be in writing, and shall be deemed to have been given with
receipt confirmed if and when delivered personally, given by prepaid telegram or
mailed first class, postage prepaid, delivered by courier, or sent by facsimile,
to the Member at such address.
13.2 HEADINGS. All Article and section headings in this Agreement are
for convenience of reference only and are not intended to qualify the meaning of
any Article or section.
13.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes any prior agreement or understanding between
them respecting the subject matter of this Agreement.
13.4 BINDING AGREEMENT. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their permitted successors and
assigns.
13.5 SAVING CLAUSE. If any provision of this Agreement, or the
application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby. If the operation of any provision of this
Agreement would contravene the provisions of the Act, such provision shall be
void and ineffectual.
13.6 COUNTERPARTS. This Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement, binding on all
the parties hereto, even though all parties are not signatory to the original or
the same counterpart. Any counterpart of either this Agreement shall for all
purposes be deemed a fully executed instrument.
13.7 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
13.8 NO MEMBERSHIP INTENDED FOR NONTAX PURPOSES. The Member has formed
the Company under the Act, and expressly does not intend hereby to form a
partnership, either general or limited, under the Delaware partnership laws.
13.9 NO RIGHTS OF CREDITORS AND THIRD PARTIES UNDER AGREEMENT. This
Agreement is entered into between the Company and the Member for the exclusive
benefit of the Company, its Member, and their successors and assignees. This
Agreement is expressly not intended for the benefit of any creditor of the
Company or any other Person. Except and only to the extent provided by
applicable statute, no such creditor or any third party shall have any rights
under this Agreement or any agreement between the Company and the Member with
respect to any Capital Contribution or otherwise.
<PAGE>
15
13.10 GENERAL INTERPRETIVE PRINCIPLES. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Agreement include the plural as
well as the singular, and the use of any gender herein shall be deemed
to include the other gender;
(b) accounting terms not otherwise defined herein have the
meanings given to them in the United States in accordance with
generally accepted accounting principles;
(c) references herein to "Sections", "paragraphs", and other
subdivisions without reference to a document are to designated
Sections, paragraphs and other subdivisions of this Agreement;
(d) a reference to a paragraph without further reference to a
Section is a reference to such paragraph as contained in the same
Section in which the reference appears, and this rule shall also apply
to other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
<PAGE>
16
[AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the Effective Date.
DVI Receivables Corp. VIII
By: /s/ Lisa J. Cruikshank
----------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
DVI Financial Services Inc.
By: /s/ Lisa J. Cruikshank
----------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
DVI Receivables X, L.L.C.
By: DVI Receivables Corp. VIII
Its Managing Member
By: /s/ Lisa J. Cruikshank
----------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
EXHIBIT 4.3
<PAGE>
================================================================================
DVI FINANCIAL SERVICES INC.,
CONTRIBUTOR AND SERVICER
AND
DVI RECEIVABLES CORP. X
AMENDED AND RESTATED CONTRIBUTION AND SERVICING AGREEMENT
Dated as of June 1, 1999
================================================================================
ALL RIGHTS IN AND TO THIS AGREEMENT ON THE PART OF DVI RECEIVABLES CORP. X HAVE
BEEN ASSIGNED TO DVI RECEIVABLES X, L.L.C. AND REASSIGNED AND ARE SUBJECT TO A
SECURITY INTEREST IN FAVOR OF U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE,
UNDER THE AMENDED AND RESTATED INDENTURE DATED AS OF JUNE 1, 1999 FOR THE
BENEFIT OF THE PERSONS REFERRED TO THEREIN.
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. CAPITAL CONTRIBUTION...............................................2
1.01 Contribution.......................................................2
SECTION 2. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF
THE CONTRIBUTOR.............................................................4
2.01 Corporate Organization and Authority...............................4
2.02 Business and Property..............................................5
2.03 Equipment and Contracts............................................5
2.04 Contract Schedule.................................................10
2.05 Pending Litigation................................................10
2.06 No Material Event.................................................10
2.07 Transactions Legal and Authorized.................................10
2.08 Governmental Consent..............................................11
2.09 Compliance with Law...............................................11
2.10 Ordinary Course; No Insolvency....................................11
2.11 Assets and Liabilities............................................11
2.12 Fair Consideration; Valid Sale....................................11
2.13 Ability to Pay Debts..............................................12
2.14 Bulk Transfer Provisions..........................................12
2.15 Tax Returns.......................................................12
2.16 Transfer Taxes....................................................12
2.17 Principal Executive Office........................................12
2.18 Legal Name........................................................12
2.19 Servicing Provisions Customary....................................13
2.20 Defaults..........................................................13
2.21 ERISA.............................................................13
2.22 All Filings Made..................................................13
2.23 Nonconsolidation..................................................13
2.24 All Representations and Warranties True...........................14
2.25 Prospectus Supplement. ..........................................14
2.26 Insurance. ......................................................14
2.27 No Bankruptcy Petition Against the Transferor, the Managing
Member or the Issuer .............................................15
SECTION 3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF
THE TRANSFEROR....................................................15
3.01 Transferor Organization and Authority; Subsidiaries...............15
3.02 Due Authorization and No Violation................................15
3.03 No Litigation.....................................................15
3.04 Principal Office..................................................16
3.05 Tax Returns.......................................................16
3.06 Solvency..........................................................16
i
<PAGE>
Page
----
3.07 Approvals.........................................................16
3.08 Nonconsolidation..................................................16
SECTION 4. ADMINISTRATION OF CONTRACTS.......................................17
4.01 Servicer to Act...................................................17
4.02 Contract Amendments and Modifications; Repurchase of
Contracts by Servicer.............................................18
4.03 Contract Defaults; Residual Realizations..........................19
4.04 Costs of Servicing; Servicer's Fee................................20
4.05 Other Transactions................................................21
4.06 Collection of Moneys..............................................21
4.07 Voluntary Termination.............................................21
SECTION 5. SERVICER ADVANCES; REPURCHASE OF CONTRACTS........................22
5.01 Servicer Advances.................................................22
5.02 Indemnification...................................................22
5.03 Repurchase and Substitution of Contracts; Other Payments..........23
SECTION 6. INFORMATION TO BE PROVIDED........................................24
6.01 Monthly Servicer Report...........................................24
6.02 Tax Reporting and Treatment.......................................24
6.03 Other Information.................................................24
6.04 Annual Independent Certified Public Accountant's Report...........25
6.05 Payment Advices...................................................25
SECTION 7. SUBSTITUTION OF CONTRACTS.........................................25
7.01 Substitution......................................................25
7.02 Notice of Substitution............................................27
7.03 Contributor's and Servicer's Subsequent Obligations...............28
7.04 Usage of Predecessor Contracts in Calculations....................28
SECTION 8. THE SERVICER......................................................28
8.01 Corporate Existence of the Servicer...............................28
8.02 Limitation on Liability of the Servicer and Others................28
8.03 Servicer Not to Resign or be Removed..............................29
8.04 Financial and Business Information................................29
8.05 Officer's Certificates............................................30
8.06 Inspection........................................................30
8.07 Servicer Records..................................................31
8.08 Insurance.........................................................31
8.09 No Bankruptcy Petition Against the Transferor, the Managing
Member or the Issuer .............................................31
8.10 Fidelity Bond and Errors and Omissions Insurance..................31
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Page
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SECTION 9. THE CONTRIBUTOR...................................................31
9.01 Corporate Existence of the Contributor............................31
9.02 Financial and Business Information................................32
9.03 Inspection........................................................32
9.04 No Bankruptcy Petition Against the Managing Member,
the Transferor or the Issuer .....................................33
9.05 Accounts, Books and Records.......................................33
9.06 Tax Returns.......................................................33
9.07 Insurance.........................................................34
9.08 Protection of Right, Title and Interest...........................34
9.09 Other Liens or Interests..........................................34
9.10 Costs and Expenses................................................35
SECTION 10. EVENTS OF DEFAULT.................................................35
10.01 Servicer Events of Default........................................35
10.02 Termination.......................................................37
10.03 Trustee to Act; Appointment of Successor..........................37
10.04 Servicer to Cooperate.............................................38
10.05 Remedies Not Exclusive............................................38
10.06 Waiver of Past Defaults...........................................38
SECTION 11. ASSIGNMENT........................................................38
11.01 Assignment to Trustee.............................................38
11.02 Assignment by Contributor or Servicer.............................39
SECTION 12. NATURE OF CONTRIBUTOR'S OBLIGATIONS AND SECURITY THEREFOR ........39
12.01 Contributor's Obligations Absolute................................39
12.02 Power of Attorney.................................................40
SECTION 13. MISCELLANEOUS PROVISIONS..........................................40
13.01 Sale..............................................................40
13.02 Amendment.........................................................40
13.03 Waivers...........................................................41
13.04 Notices...........................................................41
13.05 Costs and Expenses................................................42
13.06 Third Party Beneficiaries.........................................42
13.07 Survival of Representations.......................................43
13.08 Confidential Information..........................................43
13.09 Headings and Cross-References.....................................43
13.10 GOVERNING LAW.....................................................43
13.11 Consent to Jurisdiction...........................................43
13.12 Counterparts......................................................43
13.13 Statutory References..............................................43
EXHIBITS
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Exhibit A Contract Schedule
Exhibit B Monthly Servicer Report
Exhibit C Reserved
Exhibit D Substitute Contract Transfer Form
Exhibit E Form of Re-Assignment
Exhibit F Form of Officer's Certificate for Section 7
Exhibit G Forms of Contracts
Exhibit H Underwriting Guidelines
APPENDICES
Appendix I Defined Terms
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AMENDED AND RESTATED CONTRIBUTION AND SERVICING AGREEMENT
This Agreement is made and dated as of June 1, 1999, by and between
DVI FINANCIAL SERVICES INC., a Delaware corporation ("DVI"), as contributor (in
such capacity, the "CONTRIBUTOR") and servicer (in such capacity, the
"SERVICER") hereunder, and DVI RECEIVABLES CORP. X, a Delaware corporation (the
"TRANSFEROR").
RECITALS
A. Pursuant to this Agreement, the Contributor is contributing and
assigning to the Transferor, (i) all right, title and interest of the
Contributor in, to and under, INTER ALIA, a pool of non-cancelable Finance
Leases, Fair Market Value Leases, Leveraged Lease Loans, Lease Receivable
Purchases and Secured Equipment Notes described in Exhibit A hereto (the
"INITIAL CONTRACTS"), (ii) certain payments and proceeds received relating to
the Initial Contracts that are payable after the Cut-Off Date and (iii) an
interest in each item of underlying Equipment that is subject to each Initial
Contract. The Contributor may contribute and assign certain Substitute Contracts
and an interest in the Equipment related thereto and certain other related
payments and proceeds in accordance with the terms of this Agreement.
B. Pursuant to the Amended and Restated Subsequent Contract Transfer
Agreement (the "SCTA"), dated as of June 1, 1999 by and between the Transferor
and the Issuer, the Transferor is transferring to the Issuer all of its right,
title and interest in and to the Trust Property.
C. Pursuant to the Amended and Restated Indenture (the "AMENDED AND
RESTATED INDENTURE"), dated as of June 1, 1999, the Issuer is issuing its
Asset-Backed Securities (the "NOTES"). Pursuant to the Amended and Restated
Indenture, the Issuer is granting to the trustee thereunder (the "TRUSTEE"), for
the benefit and security of the holders from time to time of the Notes, a
security interest in the Trust Property, which includes, INTER ALIA, all right,
title (other than ownership of any Equipment) and interest of the Transferor in,
to and under the Contracts, the Equipment and this Agreement.
D. In connection with the contribution and assignment of such
Contracts and the transfer of an interest in the related Equipment, the
Contributor agrees to undertake certain obligations set forth herein.
E. In consideration for the Servicing Fee and other amounts as more
particularly set forth herein, the Servicer agrees to undertake certain
obligations set forth herein.
F. Capitalized terms used but not defined herein shall have the
respective meanings set forth in Appendix I hereto.
<PAGE>
AGREEMENTS
SECTION 1. CAPITAL CONTRIBUTION
1.01 CONTRIBUTION.
(a) Upon the terms and conditions herein set forth, the Contributor
hereby agrees to transfer, assign and contribute, on one or more Contract
Transfer Dates, to the Transferor as a capital contribution (or, in case of any
Substitute Contracts, the related Substitution Date), without recourse except as
set forth herein, all of the Contributor's right, title and interest in and to
the Contributed Property. The Transferor assumes all of the Contributor's
obligations under the Contracts arising after the related Cut-Off Date. All
funds received by the Contributor on or in connection with the Contracts that
are payable after the applicable Cut-Off Date shall be received, held and
applied by the Contributor in trust for the benefit of the Transferor as owner
of the Contracts.
(b) After giving effect to such contribution, the ownership of each
Contract will be vested in the Transferor. The Contract Files and any other
documents relating to the Contracts and the other Contributed Property that are
delivered as part of the Contributed Property or as incidental thereto are and
shall be held in trust by the Trustee for the benefit of the Noteholders. The
Contributor agrees to take no action inconsistent with the ownership of the
Contracts and the other Contributed Property, to promptly indicate to all
parties with a valid interest inquiring as to the true ownership of the
Contracts and the other Contributed Property, that the Contracts and the other
Contributed Property have been contributed and assigned to the Transferor and to
claim no ownership interest in the Contracts and the other Contributed Property.
(c) The Contributor shall take, or cause to be taken, such actions and
execute such documents as are necessary to protect the Trustee's interest in the
Contracts, security interest in the Equipment and the other Contributed Property
against all other Persons, including, without limitation, the following: (i) in
the case of the Contracts, on or before the Closing Date (or, in case of any
Substitute Contracts, the related Substitution Date), (A) filing UCC-1 financing
statements naming the Contributor as debtor, the Transferor as secured party,
the Issuer as assignee of the secured party and the Contracts as collateral in
the jurisdiction in which the principal place of business of the Contributor is
located, (B) UCC-1 financing statements naming the Transferor as debtor, the
Issuer as secured party, the Trustee as assignee of the secured party and the
Contracts as collateral in the jurisdiction in which the principal place of
business of the Transferor is located, (C) filing UCC financing statements
naming the Issuer as debtor and the Trustee as secured party in the jurisdiction
in which the principal place of business of the Issuer is located, and (D)
filing UCC-3 termination statements or releases from lenders, if any, with liens
on the Contracts; (ii) in the case of the assignment or grant of its interests
in the Equipment, within thirty days after the Closing Date (or, in case of any
Substitute Contracts, the related Substitution Date), (A) with respect to a
security interest in Equipment (other than Equipment for which the Original
Equipment Cost is less than $20,000 and subject to Finance Leases or Secured
Equipment Notes), filing UCC financing statements naming the Obligor as debtor,
the Contributor as secured party, U.S. Bank Trust National Association, as
custodian or as trustee, as assignee of the secured party and the Equipment as
collateral, in the appropriate filing offices in the jurisdiction in which the
Equipment was located on the date on which the Contract was originated, (B) with
respect to the Transferor's interest in the Equipment related to DVI Fair Market
Value Leases, filing precautionary UCC-1 financing
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statements (i) naming the Contributor as debtor, the Transferor as secured
party, and the Issuer as assignee of secured party, and the Equipment as
Collateral, in the appropriate filing offices in the jurisdiction in which the
Equipment is located on the relevant transfer date, (ii) naming the Transferor
as debtor, the Issuer as secured party, and U.S. Bank Trust National
Association, as trustee or as custodian as assignee of the secured party, and
the Equipment as Collateral, in the appropriate filing offices in the
jurisdiction in which the Equipment is located on the relevant transfer date,
(iii) naming the Issuer as debtor and U.S. Bank Trust National Association, as
trustee or as custodian as secured party, and the Equipment as Collateral, in
the appropriate filing offices in the jurisdiction in which the Equipment is
located on the relevant transfer date, (C) with respect to all Fair Market Value
Leases other than DVI Fair Market Value Leases, filing UCC-1 financing
statements (i) naming the originator as debtor, the Contributor as secured party
and DVI's interest in the Equipment as Collateral, (ii) naming the Contributor
as debtor, the Transferor as secured party, and the Issuer as assignee of the
secured party, and the related Equipment as Collateral, filed in the appropriate
filing offices in the jurisdiction in which the Transferor maintains its chief
executive office, (iii) naming the Transferor as debtor, the Issuer as secured
party, and U.S. Bank Trust National Association, as custodian or as Trustee, as
assignee of the secured party, and the related Equipment as Collateral, filed in
the appropriate filing offices in the jurisdiction in which the Transferor
maintains its chief executive office, (iv) naming the Issuer as debtor, and U.S.
Bank Trust National Association, as custodian or as Trustee, as secured party
and the related Equipment as Collateral, filed in the appropriate filing offices
in the jurisdiction in which the Transferor maintains its chief executive
office, (D) with respect to all Fair Market Value Leases, filing UCC-1 financing
statements naming the Transferor as debtor, U.S. Bank Trust National
Association, as custodian or trustee, as secured party and the Transferor's
security interest in the Equipment as collateral in the appropriate filing
offices in the jurisdiction in which the Transferor maintains its chief
executive office, (E) filing UCC-3 assignments of any "precautionary" filings
naming the Obligor as debtor, the Contributor as secured party, U.S. Bank Trust
National Association, as custodian or as trustee, as assignee of the secured
party and the Equipment as collateral (other than Equipment subject to either
Finance Leases or Secured Equipment Notes and for which the Original Equipment
Cost is less than $20,000), in the appropriate filing offices where the
Equipment was located at the time the Contract was originated, (F) with respect
to Equipment subject to Leveraged Lease Loans or Lease Receivable Purchases,
filing UCC-3 assignments naming the Obligor as debtor, the Contributor as
secured party, U.S. Bank Trust National Association, as custodian or as trustee,
as assignee of the secured party and the Equipment as collateral, in the
appropriate filing offices in the jurisdiction where the Equipment was located
on the date the underlying contract was originated, (G) filing UCC-3 termination
statements or releases from lenders, if any, with liens on the Equipment, (H)
with respect to any Equipment for which a certificate of title has been issued,
making an application for notation of lien on each such certificate of title
indicating the interest of the Trustee, (I) filing UCC assignments with respect
to each Contract acquired by the Contributor from a third party, naming such
person as debtor/seller, the Contributor as secured party/purchaser, the Trustee
as assignee of the secured party and such acquired contracts as collateral, (J)
filing UCC assignments with respect to each Leveraged Lease Loan or Lease
Receivable Purchase, naming the related Obligor as debtor, the Contributor as
secured party, the Trustee as assignee of the secured party and the related
underlying equipment lease as collateral, (K) delivering a certificate
certifying that it has (1) made the filings of UCC financing statements set
forth above and certifying that copies of such UCC financing statements are on
file with the Trustee and (2) made the applications set forth above and
attaching copies of such applications. Thereafter, the Contributor promptly
shall file such additional UCC financing statements, continuation statements and
assignments and cause to be made such
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notations on certificates of title with respect thereto as may be necessary
because of equipment replacements in accordance with the provisions of any
Contract, or otherwise so that the interest of the Trustee in (x) each of the
Contracts, (y) the Equipment which is subject to the Contracts and (z) the
remainder of the Trust Property will be perfected by such filings with the
appropriate UCC filing offices and/or notations on the appropriate certificates
of title.
(d) If (i) any change in either the Contributor's name, structure or
the location of its principal place of business or chief executive office
occurs, then the Contributor shall deliver thirty (30) days' prior written
notice of such change or relocation to the Transferor and the Trustee and (ii)
if the Contributor becomes aware of the change in location of any Equipment,
then, no later than sixty (60) days after the effective date of such change or
relocation, shall file such amendments or statements as may be required to
preserve and protect the Transferor's, the Issuer's and the Trustee's interest
in the Contracts, the Equipment and the other Trust Property. The Contributor
shall pay all filing fees or taxes payable in respect of any UCC financing or
continuation statements required to be filed pursuant to this Section 1.01(d).
(e) On or prior to the Closing Date or the related Substitution Date,
as applicable, the Contributor shall deliver to the Trustee the sole original,
manually executed counterpart of each Contract that constitutes "chattel paper"
(or, if the original Contract is in the form of a schedule or supplement to a
master lease or loan, all original counterparts of such schedule or supplement
previously in the possession of the Contributor or the Transferor together with
a true and correct copy of such master lease or loan) or an "instrument". The
Contributor will cause its accounting records to be clearly and unambiguously
marked to show that such Contract has been transferred by the Contributor to the
Transferor, and by the Transferor to the Issuer, and then pledged by the Issuer
to the Trustee for the benefit of the Noteholders.
SECTION 2. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE
CONTRIBUTOR
The Contributor (in its capacity as such and as the initial Servicer
under this Agreement) hereby represents and warrants to the Transferor and
covenants and agrees with the Transferor for the benefit of the Transferor, the
Issuer, the Trustee and the Noteholders with respect to the Initial Contracts,
as of the Closing Date and, with respect to any Substitute Contracts (except for
Sections 2.02 and 2.25) as of each Substitution Date (unless otherwise indicated
herein):
2.01 CORPORATE ORGANIZATION AND AUTHORITY. The Contributor (in its
capacity as such and as the initial Servicer under this Agreement):
(a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry on its
business as now conducted (except where the failure to have such licenses
and permits could not individually or in the aggregate have a material
adverse effect on the business or condition (financial or otherwise) of the
Contributor or impair the enforceability of any Contract) and to enter into
and perform
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its obligations under this Agreement and each Transaction Document to which
it is a party and the transactions contemplated hereby, including
performance of the duties of the Servicer and the Contributor hereunder;
(c) has duly qualified and is authorized to do business and is in
good standing as a foreign corporation in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary (except where the failure to be so qualified or in
good standing could not individually or in the aggregate have a material
adverse effect on the Trust Property or the business or condition
(financial or otherwise) of the Contributor or impair the enforceability of
any Contract); and
(d) has duly executed and delivered this Agreement and each
Transaction Document to which it is a party and all other documents
delivered in connection herewith, and this Agreement are each the legal,
valid and binding obligation of the Contributor enforceable in accordance
with the terms hereof except as enforcement of such terms may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
rights of creditors generally and by equitable principles (regardless of
whether such enforceability is in a proceeding in equity or at law).
2.02 BUSINESS AND PROPERTY. The Prospectus Supplement (the "PROSPECTUS
SUPPLEMENT") dated October 25, 1999, to the Prospectus, dated July 12, 1999,
correctly describes in all material respects the Initial Contracts and the
general nature of the business of the Contributor.
2.03 EQUIPMENT AND CONTRACTS.
(a) As to each Contract:
(i) (A) immediately prior to the transfers and conveyances set forth
herein, the Contributor will be the sole owner of, and have good and marketable
title to, the subject Contracts. With respect to any Leveraged Lease Loans, Fair
Market Value Lease or Lease Receivable Purchase, the Contributor will have a
valid first priority security interest in the equipment lease and the Equipment
that has been pledged as collateral security for such Leveraged Lease Loan, Fair
Market Value Lease or Lease Receivable Purchase; (B) immediately prior to the
transfers and conveyances set forth herein, the Contributor will have acquired
either good title to each item of Equipment or, with respect to the Equipment
that is the subject of a Secured Equipment Note, Lease Receivables Purchase,
Finance Lease or a Leveraged Lease Loan, a valid first priority perfected
security interest therein from the related Obligor (except for Equipment
relating to a Secured Equipment Note or Finance Lease and for which the Original
Equipment Cost is less than $20,000). Immediately prior to such date, with
respect to each item of Equipment related to Fair Market Value Leases, the
Contributor will have paid in full to the manufacturer or supplier or Obligor,
as the case may be, the purchase price and any related charges in connection
with the acquisition of such Equipment; (C) upon the transfer to the Transferor
by the Contributor of the Contributor's interest in the Contracts and its
interest in the Equipment pursuant to Section 1 hereof, the Transferor will,
after giving effect to the provisions of Section 1.01(d), have a valid first
priority perfected ownership interest in, and have good title to the Contributed
Property including the Contracts and either a valid first priority security
interest in the Contributor's interest in the Equipment (except for Equipment
relating to a Secured Equipment Note or Finance Lease and for which the Original
Equipment Cost is less than
5
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$20,000), or, with respect to DVI Fair Market Value Leases, an ownership
interest in the related Equipment subject to any Contract; at such time, the
Contracts and the Transferor's interest in the Equipment will be free and clear
of all Liens other than the rights of each Obligor under the Contract to which
such Obligor is a party and Liens to be discharged on the Closing Date; and
there will be no delinquent taxes or other outstanding charges affecting the
Equipment which are or may be Liens;
(ii) each of the Contracts is a legal, valid and binding full recourse
obligation of the related Obligor, enforceable by the Contributor (and its
designee) against such Obligor in accordance with the terms thereof, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization or
other laws relating to or affecting the enforcement of creditors' rights and by
general equitable principles, and is in full force and effect, and any and all
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending and equal credit opportunity laws applicable to the
origination, enforceability or assignment of each Contract have been complied
with; and the Contributor has no knowledge of any challenge, dispute or claim by
the Obligor under or affecting any Contract or of the bankruptcy or the
insolvency of any such Obligor;
(iii) the obligation of each Obligor to pay Contract Payments under
each of its related Contract(s) throughout the term thereof is and will be
unconditional, without any right of set-off by such Obligor and without regard
to any event affecting the Equipment, the obsolescence of any Equipment, any
claim of such Obligor against the Contributor or any change in circumstance of
such Obligor or any other circumstance whatsoever;
(iv) the Contributor has no knowledge that any item of the Equipment
has suffered any loss or damage except for such Equipment that has been restored
to its original condition, ordinary wear and tear excepted;
(v) each Contract requires the Obligor thereunder to either maintain
insurance covering damage to, destruction or theft of the Equipment subject
thereto in an amount at least equal to the remaining Discounted Contract Balance
of such Contract;
(vi) as of the Cut-Off Date, (A) no Contract had a remaining term of
more than 86 months, (B) no Contract Payment under any Contract is delinquent
for more than sixty (60) days and (C) no event of default has occurred and is
continuing under any Contract;
(vii) there will be no facts or circumstances existing as of the time
of the transfer pursuant to this Agreement which give rise, or would give rise
at any time in the future, to any right of rescission, offset, counterclaim or
defense, including the defense of usury, to the obligations of any Obligor,
including the obligation of such Obligor to pay all amounts due with respect to
any Contract and neither the operation of any of the terms of any Contract or
the exercise of any right thereunder will render such Contract unenforceable in
whole or in part or subject to any right of rescission, offset, counterclaim or
defense, including the defense of usury, and no such right of rescission,
offset, counterclaim or defense has been asserted with respect thereto;
(viii) no Contract has been amended, altered or modified in any
respect and no provision of any Contract has been waived, except in writing and
copies of all such writings are attached to the Contract delivered to the
Transferor;
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(ix) no Obligor has been released, in whole or in part, from any of
its obligations in respect of a Contract; no Contract has been satisfied,
cancelled or subordinated, in whole or in part, or rescinded, and no Equipment
has been released from the related Contract, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction, release,
cancellation, subordination or rescission;
(x) each Contract is in substantially one of the forms included as
Exhibit G to this Agreement, and no Contract shall have been the subject of any
restructuring of the terms and provisions thereof;
(xi) no Contract permits early termination or voluntary prepayment by
the Obligor;
(xii) no right of the Contributor with respect to an Obligor's failure
to pay all rent due under any Contract has been waived by the Contributor;
(xiii) each Contract is "chattel paper" or an "instrument" under the
UCC as in effect in the applicable jurisdiction; the sole executed counterpart
of each Contract that constitutes chattel paper or an instrument is in the
possession of the Trustee and all of the documents required to be delivered to
the Trustee in connection therewith pursuant to Section 1 have been so
delivered;
(xiv) no Obligor is an Affiliate of the Contributor or the Servicer;
(xv) the Contributor has no knowledge that the obligations of any
Obligor under any Contract will not be paid in full;
(xvi) no Contract will have been originated in or be subject to the
laws of any jurisdiction whose laws would make the assignment and transfer
thereof pursuant to the terms hereof or of the other Transaction Documents
unlawful;
(xvii) in the case of each Contract which consists of a master lease
and one or more exhibits or schedules thereto, (A) the Contributor has not
assigned and will not assign such master lease in its entirety, and has not
delivered and will not deliver physical possession of such master lease, to any
Person other than the Trustee and (B) such exhibits or schedules constitute a
separate contract and are not part of any other contract not sold to the
Transferor;
(xviii) all parties to each Contract had requisite authority and
capacity to execute such Contract;
(xix) prior to the time of assignment, transfer, sale and contribution
to the Transferor, each Contract will have been originated by the Contributor in
the ordinary course of its business, except for certain Contracts which have
been acquired by the Contributor in the ordinary course of its business, and
each Contract shall have been underwritten by the Contributor in accordance with
the standards set forth on Exhibit H hereto;
(xx) the Contributor is not aware of any fact that would prevent or
prohibit Obligors from being reimbursed by Medicare or Medicaid for any services
provided;
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(xxi) the Contract Schedule accurately reflects the information
relating to each Contract;
(xxii) there are no proceedings or investigations pending or, to the
knowledge of the Contributor, threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality (A)
asserting the invalidity of any of the Contracts, (B) seeking to prevent the
payment and discharge of any of the Contracts or (C) seeking any determination
or ruling that would materially and adversely affect the performance by an
Obligor of its obligations under, or the validity or enforceability of the
Contracts;
(xxiii) each Contract effects either the lease of or the grant of a
perfected first priority security interest in, a specified item of Equipment
(other than Equipment relating to a Secured Equipment Note or Finance Lease and
for which the Original Equipment Cost is less than $20,000) in favor of the
Contributor as lessor, secured party or seller as the case may be, and contains
provisions sufficient for the realization of such leasehold interest, security
interest or ownership interest as the case may be, as against such Equipment,
and is assignable by the Contributor without the consent of any other Person;
(xxiv) each Contract provides that the Contributor has no obligation
to assemble, install, test, adjust or service the Equipment subject to a
Contract. Each Contract provides that the Obligor, at its sole expense, at all
times during the term of the Contract and until return of the Equipment will
maintain the Equipment in good operating order, repair, condition, appearance
and protect the Equipment from deterioration, and provide all accessories,
upgrades, repairs, replacement parts and service required therefor except that
the equipment lease pledged as collateral security for a Leveraged Lease Loan
may in certain instances provide that the related lessor is responsible for
maintaining such Equipment;
(xxv) the Contributor has no knowledge that any Obligor under a
Contract is a Person involved in the business of selling medical equipment of
the same type as the Equipment subject to such Contract;
(xxvi) with respect to each item of Equipment either (A) no such
Equipment has been relocated from the jurisdiction set forth in the Contract or,
(B) if such Equipment has been relocated from the jurisdiction set forth in the
Contract and the Contributor has knowledge of any such relocation, all UCC
filings necessary to continue the first priority security interest in such
Equipment have been made (other than Equipment relating to a Secured Equipment
Note or Finance Lease and for which the Original Equipment Cost is less than
$20,000);
(xxvii)no Contract is a consumer lease as defined in Article 2A of the
UCC;
(xxviii) each Obligor has accepted the related Equipment and, after
reasonable opportunity to inspect and test, has not notified the Contributor of
any defects therein;
(xxix) no Obligor is a government or municipality; and
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(xxx) no Contract requires the prior written consent of the Obligor or
contains any other restriction relating to the transfer or assignment of such
Contract by the Contributor or the seller except such consent as has been
obtained on or prior to the date of such transfer.
(b) The Contributor represents and warrants, as to the Contracts in
the aggregate:
(i) the Aggregate Discounted Contract Balance of the Contracts as of
the Closing Date is equal to $270,243,724.70; and
(ii) the Contracts have the following characteristics: (A) each
Initial Contract has a Discounted Contract Balance as of the Cut-Off Date
of not more than $4,810,917.90; (B) no Discounted Contract Balance of any
Contract will include an amount attributable to any (i) Purchase Option
Payment for such Contract, (ii) Contract Payment due on or prior to the
Cut-Off Date, (iii) security deposit or (iv) advance payment; (C) as of the
Cut-Off Date, no item of Equipment has been repossessed; (D) as of the
Cut-Off Date no Contract is a refinancing due to delinquencies under a
prior lease, security agreement or loan with the same Obligor relating to
the Equipment; (E) the Obligor with respect to each Contract has a place of
business in, or is organized under, the laws of any state or territory of
the United States of America; (F) with respect to the Initial Contracts,
each Contract will have a Scheduled Termination Date no later than a day in
November, 2006; (G) as of the Cut-Off Date, (i) the Discounted Contract
Balance of Contracts that have Balloon Payments constitute not more than
14.2% of the Aggregate Discounted Contract Balance, (ii) the Discounted
Contract Balance of Contracts that have non-level payments to the Scheduled
Termination Date (excluding Contracts that have Balloon Payments)
constitutes not more than 29.4% of, with respect to the Initial Contracts,
the Aggregate Discounted Contract Balance of the Initial Contracts as of
the Closing Date; (H) as of the Closing Date, (i) the sum of the Discounted
Contract Balances of all Contracts with Equipment located in any one State
will not exceed 16.0% of, with respect to the Initial Contracts, the
Aggregate Discounted Contract Balance of the Initial Contracts, (ii) no
single Obligor will have a Discounted Contract Balance that exceeds 2.55%
of the Aggregate Discounted Contract Balance on the Closing Date, (iii) the
sum of the Discounted Contract Balances of any six Contracts shall not
exceed 13.5% of the Aggregate Discounted Contract Balance on the Closing
Date and (iv) the sum of the Discounted Contract Balances of all Contracts
for which the related Equipment is magnetic resonance imaging equipment
will not exceed $109,000,000 of the Aggregate Discounted Contract Balance
as of the Closing Date; (I) not more than 10.0% of the Aggregate Discounted
Contract Balance will arise from Contracts which constitute loans to
manufacturers, wholesalers, and retailers; (J) the Obligor under each
Contract has made at least one Contract Payment under such Contract prior
to the first Payment Date occurring after the time such Contract was
executed by the parties thereto in addition to any payment made at the time
of the signing of such Contract except for Contracts representing 19.0% of
the Aggregate Discounted Contract Balance as of the Closing Date which
Contracts provide for the related initial Contract Payment to be due within
30 days of the Payment Date occurring on November 13, 1999; and (K) the sum
of the Discounted Contract Balance of all Contracts that are Lease
Receivable Purchases shall not exceed, at any time, more than 3.0% of the
Aggregate Discounted Contract Balance as of the Closing Date.
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2.04 CONTRACT SCHEDULE. The Contract Schedule (i) accurately sets
forth the identifying number of each Contract, the Obligor's name and address,
the original Scheduled Maturity Date of each Contract, the remaining maturity of
each Contract, the Discounted Contract Balance of each Contract as of the
Cut-Off Date, the amount and scheduled due date of each Contract Payment due
under each of the Contracts, and the original amount funded on each Contract,
(ii) accurately sets forth the information with respect to certain other
characteristics of the Contracts and the Equipment described on such list, (iii)
identifies those Contracts which constitute Pool A and those Contracts which
constitute Pool B and (iv) is otherwise true and correct in all material
respects.
2.05 PENDING LITIGATION. There are no actions, suits, proceedings,
investigations or injunctive or other orders pending, or to the knowledge of the
Contributor or Servicer threatened, against or affecting the Contributor or
Servicer or any subsidiary in or before any court, governmental authority or
agency or arbitration board or tribunal, including, but not limited to, any such
actions, suits, proceeding, investigation or order with respect to any
environmental or other liability resulting from the ownership or use of any of
the Equipment which, individually or in the aggregate, involve the possibility
of materially and adversely affecting the properties, business, or condition
(financial or otherwise) of the Contributor or Servicer and its subsidiaries, or
the ability of the Contributor or Servicer to perform its obligations under this
Agreement or the payment or enforceability of any Contract.
2.06 NO MATERIAL EVENT. No event has occurred which materially
adversely affects the Contributor's operations, including, but not limited to,
its ability to perform the transaction contemplated hereunder.
2.07 TRANSACTIONS LEGAL AND AUTHORIZED. This Agreement and all other
documents delivered in connection herewith and the assignment, transfer and
contribution by the Contributor to the Transferor of all of the Contributor's
right, title and interest in and to each Contract and a security interest in
each item of Equipment at any time transferred hereunder and compliance by the
Contributor and the Servicer with all of the provisions of this Agreement:
(a) have been duly authorized by all necessary corporate action
on the part of the Contributor or the Servicer, as the case may be, and do
not and will not require any stockholder approval, or approval or consent
of any trustee or holders of any indebtedness or obligations of the
Contributor or the Servicer, as the case may be;
(b) are within the corporate powers of the Contributor and the
Servicer; and
(c) are legal and will not conflict with, result in any breach in
any of the provisions of, constitute a default under, or result in the
creation of any lien upon any property of the Contributor or the Servicer,
as the case may be, under the provisions of, any agreement, charter
instrument, by-law or other instrument to which the Contributor or the
Servicer, as the case may be, is or will be a party or by which it or its
property may be bound or result in the violation of any law, regulation,
rule, order or judgment applicable to the Contributor or the Servicer, as
the case may be, or its properties, or any order to which the Contributor
or the Servicer, as the case may be, or its properties is subject, of or by
any government or governmental agency or authority.
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2.08 GOVERNMENTAL CONSENT. Except for the filing of the UCC financing
statements and the making of applications as set forth in Section 1.01(c)
hereof, no consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority is or will be necessary or
required on the part of the Contributor in connection with the execution and
delivery of this Agreement or the assignment, transfer and contribution of the
Contracts and the Equipment hereunder.
2.09 COMPLIANCE WITH LAW. Each of the Contributor and the Servicer:
(a) is not in violation of any laws, ordinances, governmental
rules or regulations or court orders to which it is subject; and
(b) has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its
property or to the conduct of its business.
2.10 ORDINARY COURSE; NO INSOLVENCY. The transactions contemplated by
this Agreement are being consummated by the Contributor and the Servicer,
respectively, in furtherance of the Contributor's and the Servicer's ordinary
business purposes and constitute a practical and reasonable course of action by
the Contributor and the Servicer, respectively, designed to improve the
financial position of the Contributor and the Servicer, respectively, with no
contemplation of insolvency and with no intent to hinder, delay or defraud any
of its present or future creditors. Neither as a result of the transactions
contemplated by this Agreement, nor immediately before or after such
transactions, will the Contributor or the Servicer be insolvent, and both the
Contributor and the Servicer shall have adequate capital for the conduct of its
business and the payment of anticipated obligations.
2.11 ASSETS AND LIABILITIES.
(a) Both immediately before and after the assignment, transfer and
contribution of Contracts (including the right to receive all payments due or to
become due thereunder) and the other Contributed Property, the present fair
salable value of the Contributor's assets will be in excess of the amount that
will be required to pay the Contributor's probable liabilities as they then
exist and as they become absolute and matured.
(b) Both immediately before and after the assignment and transfer of
Contracts and the other Contributed Property, the sum of the Contributor's
assets will be greater than the sum of the Contributor's debts, valuing the
Contributor's assets at a fair salable value.
2.12 FAIR CONSIDERATION; VALID SALE. The consideration received and to
be received by the Contributor in exchange for the assignment, transfer and
contribution of the Contracts and the Contributed Property is fair consideration
having value equivalent to or in excess of the value of the assets being
transferred by the Contributor. This Agreement effects a valid assignment,
transfer and contribution of the Contributor's interest in the Contracts and the
other Contributed Property, enforceable against creditors of and purchasers from
the Contributor.
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2.13 ABILITY TO PAY DEBTS. Neither as a result of the transactions
contemplated by this Agreement nor otherwise does the Contributor believe that
it will incur debts beyond its ability to pay or which would be prohibited by
its charter documents or by-laws. The Contributor's assets and cash flow enable
it to meet its present obligations in the ordinary course of business as they
become due.
2.14 BULK TRANSFER PROVISIONS. No transfer, assignment or conveyance
of Contracts or the other Contributed Property by the Contributor to the
Transferor contemplated by this Agreement will be subject to the bulk transfer
or any similar statutory provisions in effect in any applicable jurisdiction.
2.15 TAX RETURNS.
(a) The provisions for taxes on the books of the Contributor and
each subsidiary are in accordance with generally accepted accounting principles.
(b) The Contributor and the Transferor are members of an
affiliated group, within the meaning of Section 1504 of the Code, that files a
consolidated return for federal income tax purposes, and all of the entities
with which the Contributor is consolidated for federal income tax purposes
(including the Transferor) have timely filed all tax returns required to be
filed in any jurisdiction and have paid all taxes, assessments, fees and other
governmental charges upon them or their properties, income or franchises, shown
to be due and payable on such returns, except to the extent any such entity is
contesting the same in good faith by appropriate proceedings and has set aside
adequate reserves in accordance with generally accepted accounting principles
for the payment thereof. The Contributor does not know of any proposed
additional tax assessment against any such entity in any material amount or of
any basis therefor.
2.16 TRANSFER TAXES. No transfer, assignment or conveyance of
Contracts or the other Contributed Property contemplated by this Agreement is
subject to or will result in any tax, fee or governmental charge payable by the
Contributor or the Transferor to any federal, state or local government
("Transfer Taxes"). In the event that the Contributor or the Transferor receives
actual notice of any Transfer Taxes arising out of the transfer, assignment and
conveyance of any Contracts and/or the other Contributed Property, on written
demand by the Transferor, or upon the Contributor otherwise being given notice
thereof, the Contributor shall pay, and otherwise indemnify and hold the
Transferor, the Issuer, the Trustee and the holders of the Notes harmless, on an
after-tax basis, from and against any and all such Transfer Taxes (it being
understood that neither the holders of the Notes nor the Trustee shall have any
obligation to pay such Transfer Taxes).
2.17 PRINCIPAL EXECUTIVE OFFICE. The principal place of business and
chief executive office of each of the Contributor and the Servicer, and has been
for at least four months prior to the date of execution and delivery of this
Amended and Restated Agreement, is located at 500 Hyde Park, Doylestown,
Pennsylvania 18901.
2.18 LEGAL NAME. The legal name of the Contributor is as set forth in
this Agreement and the Contributor has not changed its name in the last six
years and does not have any trade names, fictitious names, assumed names or
"doing business as" names except Medical Equipment Finance Company, DVI Capital,
DVI Vendor, DVI Strategic Partner Group, DVI Health
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Services Corp., DVI Finance Inc., DVI Affiliated Capital, Third Coast Capital
and Medical Devices Capital Company.
2.19 SERVICING PROVISIONS CUSTOMARY. The servicing arrangements
hereunder, including, without limitation, the terms and conditions pursuant to
which the Contributor will act as Servicer and the Servicer's Fee and other
amounts to be paid to the Contributor, are consistent with the arrangements and
customary practices of the Contributor when providing comparable services to
nonaffiliated entities and of other services in the equipment leasing industry.
2.20 DEFAULTS. As of the Closing Date, neither the Contributor nor the
Servicer is in default with respect to any debt or obligation.
2.21 ERISA. The Contributor neither maintains, contributes to, nor has
any obligations to contribute to any "employee pension benefit plans," as such
term is defined in Section 3(2) of ERISA (other than the 401(k) Plan of DVI,
Inc.). The execution and delivery of this Agreement and the other applicable
Transaction Documents and the consummation of the transactions contemplated
thereby will neither result in, constitute or otherwise give rise to a
"prohibited transaction" as described in Section 406 of ERISA or Section 4975 of
the Code, with respect to a Contributor Plan. For the purpose of this Section
2.21, the term "Contributor Plan" shall mean an "employee benefit plan" (as
defined in Section 3 of ERISA) which is or has been established or maintained,
or to which contributions are, have been or are required to be made, by the
Contributor or by any trade or business, whether or not incorporated, which,
together with the Contributor, is under common control, as described in Section
414(b) or (c) of the Code or Section 4001 of ERISA.
2.22 ALL FILINGS MADE. At the Closing Date, no further filings
(including, without limitation, UCC filings) or other actions are necessary in
any jurisdiction to give the Transferor either a security or an ownership
interest in the Contracts and the other Contributed Property, except that with
respect to the Equipment, the Contributor shall, within 30 days of the Closing
Date, file the UCC financing statements and made the necessary applications with
respect to the Equipment that are described in Section 1.01(c) hereof.
2.23 NONCONSOLIDATION. The Contributor is operated in such a manner
that it would not be substantively consolidated with the Transferor or the
Issuer, such that the separate existence of the Contributor and the Transferor
or the Issuer would not be disregarded in the event of a bankruptcy or
insolvency of the Contributor or the Transferor or the Issuer, and in such
regard, among other things:
(a) the Contributor is not involved in the day to day management
of the Transferor or the Issuer;
(b) the Contributor maintains separate corporate records and
books of account from the Transferor and the Issuer and otherwise observes
corporate formalities and has a separate business office from the
Transferor and the Issuer;
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(c) the financial statements and books and records of the
Contributor prepared after the respective dates of creation of the
Transferor and the Issuer reflect and will reflect the separate existence
of the Transferor and the Issuer;
(d) the Contributor maintains its assets separately from the
assets of the Transferor and the Issuer (including through the maintenance
of a separate bank account), the Contributor's funds and assets, and
records relating thereto, have not been and are not commingled with those
of the Transferor or the Issuer and the separate creditors of the
Transferor and the Issuer will be entitled to be satisfied out of the
Transferor's assets or the Issuer's assets, respectively, prior to any
value in the Transferor becoming available to the Transferor's
equityholders or the Contributor's creditors;
(e) all business correspondence of the Contributor and other
communications are conducted in the Contributor's own name and on its own
stationery;
(f) the Transferor and the Issuer do not act as an agent of the
Contributor in any capacity and the Contributor does not act as agent for
the Transferor or the Issuer, but instead presents itself to the public as
a corporation separate from the Transferor and the Issuer; PROVIDED that
the Contributor is the Servicer hereunder; and
(g) the Transferor is not engaged in any other activities other
than the transactions contemplated by the Transaction Documents.
2.24 ALL REPRESENTATIONS AND WARRANTIES TRUE. All representations and
warranties made by the Contributor in any certificate or other document
delivered at the closing of the transactions contemplated by the applicable
Transaction Document, including all representations and warranties made to
Thacher Proffitt & Wood in support of their opinions, are true and correct in
all material respects.
2.25 PROSPECTUS SUPPLEMENT. The Prospectus Supplement does not contain
any untrue statement of material fact or omit to state a material fact necessary
to make the statements contained therein not misleading in light of the
circumstances under which they were made; PROVIDED, HOWEVER, the Contributor
makes no representation or warranty as to the information contained in or
omitted from the Prospectus Supplement in reliance upon and in conformity with
information furnished to the Contributor in writing by Lehman Brothers, Inc.,
Prudential Securities Incorporated or Banc One Capital Markets, Inc. or any of
their respective Affiliates (I.E. the paragraphs under the headings "THE
UNDERWRITING" or "PLAN OF DISTRIBUTION") or by the Trustee (under the heading
"THE TRUSTEE").
2.26 INSURANCE. In addition to the insurance maintained by the
Obligors with respect to the Equipment, the Contributor maintains, among other
policies, a general liability insurance policy in the aggregate amount of
$1,000,000 and an excess liability insurance policy in umbrella form in the
aggregate amount of $3,000,000 for a total of $4,000,000 of liability insurance.
Each of such policies is in full force and effect and covers all Equipment owned
by the Contributor and the Transferor. All premiums in respect of such policies
have been paid. Each of the Trustee on behalf of the Noteholders, and the
Transferor is named as additional insureds on such liability policies.
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2.27 NO BANKRUPTCY PETITION AGAINST THE TRANSFEROR, THE MANAGING
MEMBER OR THE ISSUER. The Contributor covenants and agrees it will not, prior to
the date that is one year and one day after the payment in full of all amounts
owing pursuant to the Transaction Documents, institute against, or join any
other Person in instituting against, any of the Transferor, the Managing Member
or the Issuer, any bankruptcy, reorganization, receivership, arrangement,
insolvency or liquidation proceedings or other similar proceedings under any
federal or state bankruptcy or similar law. This Section 2.27 shall survive the
termination of this Agreement.
SECTION 3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF
THE TRANSFEROR
The Transferor hereby represents to the Contributor as of the Closing
Date and warrants, covenants and agrees as follows:
3.01 TRANSFEROR ORGANIZATION AND AUTHORITY; SUBSIDIARIES. The
Transferor is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation, and has full power and
authority to own and convey the Contracts and execute and deliver the
Transaction Documents to which the Transferor is a party (collectively, the
"Transferor Documents") and all related documents, and to perform the terms and
provisions hereof. The Transferor has no subsidiaries, but is the sole
beneficial owner of the Issuer.
3.02 DUE AUTHORIZATION AND NO VIOLATION. Each of the Transferor
Documents and all related documents have been duly authorized, executed and
delivered by the Transferor, and is the legal, valid and binding obligation of
the Transferor enforceable in accordance with its terms, except as the same may
be limited by insolvency, bankruptcy, reorganization or other laws relating to
or affecting the enforcement of creditors' rights or by general equitable
principles. The consummation of the transactions contemplated by the Transferor
Documents and all related documents and the fulfillment of the terms hereof,
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the property or assets of the
Transferor pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement, guarantee or similar agreement or instrument under which the
Transferor is a debtor or guarantor (other than the liens created pursuant to
the Transaction Documents), nor will such action result in any violation of the
provisions of the certificate of incorporation or the by-laws of the Transferor.
All applicable laws, rules, regulations, and orders with respect to the
Transferor, its business and properties, have been complied with. No consents
and no filings or governmental approvals that have not been made or obtained are
required for due execution, delivery and performance of the agreements by the
Transferor.
3.03 NO LITIGATION. No legal or governmental proceedings are pending
to which the Transferor is a party or of which any property of the Transferor is
the subject, and, to the knowledge of the Transferor, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others
and no injunctions, writs, restraining orders or other orders of any nature are
in effect or, to the knowledge of the Transferor, threatened, other than such
proceedings which will not have a material adverse effect upon the general
affairs, financial position, net worth or results of operations of the
Transferor and will not materially and adversely affect the performance
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by the Transferor of its obligations under, or the validity and enforceability
of, the Transferor Documents and all related documents.
3.04 PRINCIPAL OFFICE. The Transferor's principal place of business
and chief executive office is located at 500 Hyde Park, Doylestown, Pennsylvania
18901. The legal name of the Transferor is as set forth herein and the
Transferor has no tradenames, fictitious names, assumed names or "doing
business" names.
3.05 TAX RETURNS. The Transferor has filed on a timely basis all tax
returns required to be filed in any jurisdiction and has paid all taxes,
assessments, fees and other governmental charges upon it or its properties,
income or franchises, shown to be due and payable on such returns, except to the
extent the Transferor is contesting the same in good faith by appropriate
proceedings and has set aside adequate reserves in accordance with generally
accepted accounting principles for the payment thereof. The Transferor does not
know of any proposed additional tax assessment against it in any material amount
or of any basis therefor.
3.06 SOLVENCY. The Transferor is solvent and will not become insolvent
after giving effect to the contemplated transactions. The Transferor is paying
its debts as they become due and will have adequate capital to conduct its
business after giving effect to the contemplated transactions.
3.07 APPROVALS. All approvals, authorizations, consents, orders or
other actions of any person, corporation or other organization, or of any court,
governmental agency or body or official, required in connection with the
execution and delivery of the Transferor Documents have been or will be taken or
obtained on or prior to the Closing Date.
3.08 NONCONSOLIDATION. The Transferor is operated in such a manner
that it would not be substantively consolidated with the Contributor, such that
the separate existence of the Transferor and the Contributor would not be
disregarded in the event of a bankruptcy or insolvency of the Transferor or the
Contributor, and in such regard, among other things:
(a) the Transferor is not involved in the day to day management
of the Contributor;
(b) the Transferor maintains separate Transferor records and
books of account from the Contributor and otherwise observes Transferor
formalities and has a separate business office from the Contributor;
(c) the financial statements and books and records of the
Transferor prepared after the date of creation of the Contributor reflect
and will reflect the separate existence of the Contributor;
(d) the Transferor maintains its assets separately from the
assets of the Contributor (including through the maintenance of a separate
bank account), the Transferor's funds and assets, and records relating
thereto, have not been and are not commingled with those of the Contributor
and the separate creditors of the Contributor will be entitled to be
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satisfied out of the Contributor's assets prior to any value in the
Contributor becoming available to the Contributor's equityholders or the
Transferor's creditors;
(e) all business correspondence of the Transferor and other
communications are conducted in the Transferor's own name and on its own
stationery;
(f) the Contributor does not act as an agent of the Transferor in
any capacity and the Transferor does not act as agent for the Contributor,
but instead presents itself to the public as a corporation separate from
the Contributor; PROVIDED that the Contributor is the Servicer hereunder;
and
(g) the Transferor will at all times maintain two Independent
Directors (as such term is defined in the certificate of incorporation of
the Transferor).
SECTION 4. ADMINISTRATION OF CONTRACTS
4.01 SERVICER TO ACT.
(a) Notwithstanding the transfers and assignments of the Contracts and
the other Contributed Property contemplated hereby, the Servicer, for the
benefit of the Transferor, and, upon assignment of the Transferor's rights
hereunder to the Issuer (and the Issuer's assignment thereof to the Trustee for
the benefit of the Trustee and the Noteholders), will service and administer
each Contract in accordance with the terms thereof and of this Agreement. The
Servicer shall provide the Obligors with appropriate invoices and such other
notices as may be required to ensure that all Contract Payments, Prepayment
Amounts and Partial Prepayment Amounts on or in respect of each Contract are
remitted by the Obligors directly to a Lock-Box Account.
(b) The Servicer shall do, and shall have full power and authority to
do, subject only to the specific requirements and prohibitions of this
Agreement, any and all things in connection with the servicing and
administration of the Contracts and the Equipment which are in the same manner
in which it services contracts and equipment held for its own account
(including, without limitation, servicing and administration of Contracts with
respect to which the related Equipment may be substituted or upgraded) and
consistent with prudent and customary practices of servicers in the industry,
but in performing its duties hereunder, the Servicer will act on behalf and for
the benefit of the Transferor, the Issuer, the Trustee and the Noteholders,
subject at all times to the provisions of the Transaction Documents, without
regard to any relationship which the Servicer or any Affiliate of the Servicer
may otherwise have with an Obligor. Notwithstanding the prior sentence, the
Servicer shall, within ten (10) Business Days after the Closing Date, notify
each Obligor to make all payments with respect to its respective Contracts which
are due after the Cut-Off Date directly to a Lock-Box Account. The Servicer
shall give the Trustee and the Rating Agencies prior written notice of any
change in the location of a Lock-Box Account and the Servicer shall give at
least ten (10) days' prior written notice of the new location to each Obligor.
The Servicer shall at all times act in accordance with the provisions of each
Contract, and shall observe and comply with all requirements of law applicable
to it. Except as permitted by the terms of any Contract following a default
thereunder, the Servicer shall not take any action which would result in the
interference
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with the Obligor's right to quiet enjoyment of the Equipment subject to the
Contract during the term thereof.
(c) Without limiting the generality of the foregoing, the Servicer
will be responsible, among other duties, to (i) invoice each Obligor for all
Contract Payments required to be paid by such Obligor in such manner and to the
same extent as the Servicer does with respect to similar contracts held for its
own account, (ii) maintain with respect to each Contract and each item of
Equipment, and with respect to each payment by each Obligor and compliance by
each Obligor with the provisions of each Contract, complete and accurate records
in such manner and to the same extent as the Servicer does with respect to
similar contracts held for its own account and (iii) execute, deliver and file
(or cause the same to be done), and the Servicer is hereby authorized and
empowered to execute, deliver, and file on behalf of the Transferor, the Issuer
and the Trustee, any and all tax returns with respect to sales, use, personal
property and other taxes (other than corporate income and franchise tax returns)
and any and all reports or licensing applications required to be filed in any
jurisdiction with respect to any Contract or any item of Equipment and any and
all filings required by Section 4.01(d) below.
(d) The Servicer will file the UCC financing statements as set forth
in Sections 1.01(c) and 7.01(c) hereof within the time frames set forth therein
and thereafter will file such additional UCC financing statements and
continuation statements and assignments in accordance with the provisions of any
Contract and item of Equipment or otherwise so that the security interest in
favor of the Trustee in each of the Contracts and the related Equipment will be
perfected by such filings with the appropriate UCC filing offices. The
Transferor agrees to execute such UCC financing statements and continuation
statements as shall be necessary and shall furnish the Servicer with any powers
of attorney or other documents necessary and appropriate to carry out its
servicing and administration duties hereunder.
(e) The Servicer will maintain, or cause to be maintained, with
respect to the Contracts and the Equipment, liability insurance in amounts at
least as great as those described in Section 2.26.
4.02 CONTRACT AMENDMENTS AND MODIFICATIONS; REPURCHASE OF CONTRACTS BY
SERVICER. (a) In performing its obligations hereunder, the Servicer may, acting
in the name of the Transferor and without the necessity of obtaining the prior
consent of the Transferor or the Trustee, enter into and grant modifications,
waivers and amendments to the terms of any Contract except for modifications,
waivers or amendments that (i) are inconsistent with the servicing standards set
forth in Section 4.01 above, (ii) would extend the date of the final Contract
Payment on any Contract by more than 24 months, (iii) would reduce or adversely
affect, individually or in the aggregate, the Obligor's obligation to maintain,
service, insure and care for the Equipment or would permit the alteration of any
item of Equipment in any way which could adversely affect its present or future
value,(iv) extend the Stated Maturity Date of the Notes, (v) have a material
adverse effect on the weighted average life of any Class of Notes, (vi) be
implemented on more than twenty percent of the Initial Aggregate Discounted
Contract Balance of the Contracts, (vii) be effected on any Contract that is
either 90 days or more delinquent or Defaulted Contract, (viii) PROVIDED that
the Issuer fails to deposit an amount into the Collection Account equal to such
decrease, decrease the Discounted Contract Balance of any Contract or (ix)
otherwise could adversely affect, individually or in the aggregate, the
interests of any of the Transferor, the Issuer, the Trustee or the Noteholders.
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Notwithstanding the provisions of clause (ii) of the preceding sentence, the
Servicer may (1) permit any of the actions set forth in clause (ii) of the
preceding sentence, which in the Servicer's sole discretion, in accordance with
the same manner in which it services contracts and equipment held for its own
account, would maximize Recoveries on any Defaulted Contract, or (2) permit
termination of a Contract which does not otherwise provide for termination by
requiring, in the case of either clause (1) or (2), that the Obligor pay, or, if
the terms of such extension or termination do not provide for such payment by
the Obligor that the Servicer deposit, in lieu of all future Contract Payments
with respect to such Contract, an amount which equals or exceeds the applicable
Prepayment Amount for such Contract as of 11:00 A.M. New York time on the second
Business Day prior to the Payment Date next succeeding the making of such
payment is deposited into the Collection Account; PROVIDED, HOWEVER, that the
Servicer will not be permitted to allow prepayment by an Obligor if there are
any amounts due under the related Contract after such prepayment.
In the event of any modification, waiver or amendment of any Contract
in accordance with this Section 4.02, the Servicer will promptly furnish the
Transferor, the Issuer and the Trustee with a copy thereof, together with a
certificate of the Servicer signed by one of its executive or financial officers
stating that such modification, waiver or amendment is not prohibited by the
provisions of this Section 4.02.
(b) If an Obligor requests either an upgrade or a trade-in of an item
of Equipment, the Servicer may either (x) remove such Contract and the related
Equipment from the Trust Property PROVIDED that the Servicer either (i) subject
to the limitations set forth in Section 7.01(c), transfers a Substitute Contract
and the related Equipment to the Transferor in accordance with Section 7 of this
Agreement or (ii) deposits an amount equal to the Prepayment Amount for such
Contract into the Collection Account or (y) permit such Contract and remaining
related Equipment to remain in the Trust Property, PROVIDED that the Servicer
deposits an amount equal to the Partial Prepayment Amount for such Contract into
the Collection Account.
4.03 CONTRACT DEFAULTS; RESIDUAL REALIZATIONS.
(a) Upon receipt of notice from the Transferor, the Issuer, the
Trustee or any other Person, or if the Servicer otherwise learns that the
Obligor under any Contract is in default thereunder, the Servicer will take such
action as is appropriate, consistent with the Servicer's administration of
contracts held for its own account and consistent with the customary practices
of servicers in the industry, including such action as may be necessary to
cause, or attempt to cause, the Obligor thereunder to cure such default (if the
same may be cured) or to terminate or attempt to terminate such Contract and to
recover, or attempt to recover, all damages resulting from such default.
(b) The Servicer will use its best efforts (i) to sell or re-lease any
Equipment and realize on any other collateral related to a Defaulted Contract in
a timely manner and upon reasonable terms and conditions so as to maximize, to
the extent possible under then prevailing market conditions, as expeditiously as
is consistent with sound commercial practice and the Servicer standard
referenced in Section 4.01, the net proceeds from such Equipment and other
collateral, if any and (ii) to sell or re-lease any Equipment remaining subject
to the lien of the Amended and Restated Indenture upon the expiration of the
Contract to which such Equipment is subject, in a timely manner and in a manner
consistent with that utilized by the Servicer with respect to
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equipment owned by it so as to maximize, to the extent possible under then
prevailing market conditions, the net proceeds from such Equipment.
(c) In the event that the Servicer is required to sell any item of
Equipment pursuant to the provisions of this Section 4.03 at a time when the
Servicer is trying to lease or sell other similar items of equipment, the
Servicer will not favor any such other item in its remarketing efforts.
4.04 COSTS OF SERVICING; SERVICER'S FEE.
(a) All costs of servicing each Contract in the manner required by
this Section 4 shall be borne by the Servicer, but the Servicer shall be
entitled to retain, out of any amounts actually recovered by the Servicer in the
performance of its obligations under Section 4.03 hereof with respect to any
Contract or the Equipment subject thereto, the Servicer's actual out-of-pocket
expenses reasonably incurred in the course of such performance with respect to
such Contract or Equipment (For all purposes of this Section 4, the Servicer's
"out-of-pocket expenses" means only those expenses incurred to non-Affiliated
third parties (E.G., outside counsel in a collection suit) and shall not include
salaries, operating costs, overtime wages and other such "overhead" costs or
expenses of the Servicer or its Affiliates, and shall not include expenses of or
payments to an agent or subservicer allowed under Section 11.02, except that
out-of-pocket expenses for the fees and expenses of an agent used to remarket
Equipment subject to Contracts shall be included as "out-of-pocket expenses").
In addition, the Servicer shall be entitled to receive from the Transferor on
each Payment Date any unreimbursed Nonrecoverable Advances or Servicer Advances
with respect to any Contract (in accordance with Section 5) and a servicing fee
(the "Servicing Fee") in the amount described in paragraph (b) below.
(b) As compensation to the Servicer for its servicing of the
Contracts, the Servicer will be entitled to receive on each Payment Date from
amounts on deposit in the Collection Account the Servicing Fee in an amount
equal to the product of (i) one-twelfth, (ii) the Servicing Fee Rate and (iii)
the Aggregate Discounted Contract Balance as of the beginning of the related
Collection Period. In addition, the Servicer will be entitled to receive as
additional compensation late payment fees, the penalty portion of interest paid
on past due amounts, origination fees, documentation fees, other administrative
fees or similar charges allowed by applicable law with respect to the Contracts,
and certain other similar fees paid by the Obligors ("Servicing Charges") and
earnings from any Eligible Investments of amounts on deposit in the Collection
Account.
(c) The Servicer hereby agrees:
(i) to pay to the Trustee from time to time such compensation for
all services rendered by it under the Amended and Restated Indenture as the
Servicer and the Trustee have agreed in writing prior to the Closing Date,
such payment to be made independent of the other payment obligations of the
Servicer hereunder;
(ii) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements,
and advances incurred or made by the Trustee in accordance with any
provision of the Amended and Restated Indenture (including the reasonable
compensation and the expenses and disbursements of its
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agents and counsel), except any such expense, disbursement, or advance as
may be attributable to its negligence or bad faith;
(iii) to pay the Trustee its annual administrative fee on the
Closing Date;
(iv) to pay the reasonable fees and expenses of Trustee's
counsel, Dorsey and Whitney, on the Closing Date; and
(v) to pay the reasonable annual administrative fee of each
Lock-Box Bank.
To the extent the Trustee has not been paid pursuant to the Amended
and Restated Indenture, then all of the expenses set forth in this clause (c)
shall be borne by the Servicer, and the Servicer shall not be entitled to
reimbursement of such amounts from the Trust Property.
4.05 OTHER TRANSACTIONS. Nothing in this Agreement shall preclude the
Contributor or the Servicer from entering into other contracts or other
financial transactions with any Obligor or selling or discounting any such
contract with any Person.
4.06 COLLECTION OF MONEYS.
(a) Subject to Section 4.06(b), the Servicer shall remit or cause each
Lock-Box Bank to remit all payments received by it on or in respect of any
Contract or Equipment (including any Residual Payment) during such Collection
Period into the Collection Account (including any such amounts then held by the
Servicer) as soon as practicable, but in any event within two Business Days
after receipt thereof; PROVIDED, HOWEVER, that upon satisfaction of conditions
provided by the Rating Agencies from time to time, the Servicer shall be
permitted to deposit such amounts received during a particular Collection Period
into the Collection Account within two Business Days prior to the related
Payment Date.
(b) Any such amounts remitted to the Collection Account may not
include Excluded Amounts.
(c) Notwithstanding the provisions of paragraph (a) hereof, the
Servicer may retain, or will be entitled to be reimbursed, from amounts
otherwise payable into, or on deposit in, the Collection Account with respect to
a Collection Period, amounts previously deposited in the Collection Account but
later determined to have resulted from mistaken deposits or payments due before
or on the Cut-Off Date or postings of checks returned for insufficient funds
(PROVIDED that the Servicer accounts for such amounts in the Monthly Servicer's
Report for the related Collection Period). The amount to be retained or
reimbursed hereunder shall not be included in funds available for distribution
with respect to the related Payment Date.
(d) Pending their deposit into the Collection Account, all collections
shall be segregated by book-entry or similar form of identification on the
Servicer's books and records and identified as the property of the Transferor.
4.07 VOLUNTARY TERMINATION.
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(a) At the option of the Servicer, the obligations and
responsibilities of the Servicer with respect to all of the Contracts shall
terminate on any Payment Date on which the Pool A Aggregate Discounted Contract
Balance is less than 10% of the Pool A Aggregate Discounted Contract Balance as
of the Closing Date and the Pool B Aggregate Discounted Contract Balance is less
than 20% of the Pool B Aggregate Discounted Contract Balance as of the Closing
Date so long as the Servicer deposits or causes to be deposited into the
Collection Account the Repurchase Amount for each Contract.
(b) At the option of the Servicer, the obligations and
responsibilities of the Servicer with respect to the Contracts in Pool B shall
terminate on any Payment Date on which the Pool B Aggregate Discounted Contract
Balance is less than 20% of the Pool B Aggregate Discounted Contract Balance as
of the Closing Date so long as the Servicer deposits or causes to be deposited
into the Collection Account the Repurchase Amount for each Contract in Pool B.
SECTION 5. SERVICER ADVANCES; REPURCHASE OF CONTRACTS
5.01 SERVICER ADVANCES. Following each Determination Date, the
Servicer shall advance and remit to the Trustee, in such manner as will ensure
that the Trustee will have immediately available funds on account thereof by
11:00 A.M. New York time on the second Business Day prior to the next succeeding
Payment Date, a Servicer Advance equal to an amount sufficient to cover all
amounts due and unpaid on any Delinquent Contract as of the related
Determination Date; PROVIDED, HOWEVER, that the Servicer will not be obligated
to make a Servicer Advance with respect to (a) any Defaulted Contract, (b) any
Contract that was finally liquidated on or prior to such Determination Date or
(c) any Contract if the Servicer, in its good faith judgment, believes that such
Servicer Advance would be a Nonrecoverable Advance. If the Servicer determines
that any Servicer Advance it has made, or is contemplating making, would be a
Nonrecoverable Advance, the Servicer shall deliver to the Trustee an Officer's
Certificate stating the basis for such determination.
The Servicer shall be reimbursed for Servicer Advances on each Payment
Date from amounts on deposit in the Collection Account as follows: (i) for any
Servicer Advance made with respect to a Delinquent Contract, from subsequent
collections of such delinquent Contract Payments, Prepayment Amounts or
Repurchase Amounts and (ii) for any Nonrecoverable Advance, from all collections
received on all of the Contracts.
5.02 INDEMNIFICATION. Each of the Contributor and the Servicer agrees
to indemnify and hold harmless the Transferor, the Issuer, the Managing Member,
the Servicer, the Trustee, (which shall include each of their respective
members, directors, officers, employees and agents), the Contributor and each
Noteholder, as the case may be, (each an "Indemnified Party") against any and
all liabilities, losses, damages, penalties, costs and expenses (including costs
of defense and legal fees and expenses) which may be incurred or suffered by
such Indemnified Party (except to the extent caused by gross negligence or
willful misconduct on the part of the Indemnified Party) as a result of claims,
actions, suits or judgments asserted or imposed against an Indemnified Party and
arising out of the transactions contemplated hereby or by the Amended and
Restated Indenture or arising out of, or based upon, action or inaction by the
Contributor or the Servicer, as the case may be, that is contrary to the terms
of this Agreement or the other Transaction Documents to which it
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is a party or a breach by the Contributor or the Servicer, as the case may be,
of any of its covenants set forth in any of the Transaction Documents to which
it is a party or any information certified in any schedule delivered by the
Contributor or the Servicer, as the case may be, being untrue in any material
respect as of the date of such Certification, including without limitation, any
claims resulting from any use, operation, maintenance, repair, storage or
transportation of any item of Equipment, whether or not in the Servicer's
possession or under its control pursuant to this Agreement, and any tort claims
and any fines or penalties arising from any violation of the laws or regulations
of the United States or any state or local government or governmental authority,
PROVIDED that the foregoing indemnity shall in no way be deemed to impose on the
Contributor any obligation, other than to the extent specifically set forth in
this Section 5, to make any payment with respect to principal or interest on the
Notes or to reimburse the Transferor for any payments on account of the Notes.
In every circumstance where the Indemnified party seeking indemnity hereunder
for legal fees, counsel fees and related costs and expenses is a Noteholder it
is understood, and the Noteholders by their acceptance of their respective Notes
agree, that such reimbursement, indemnification and holding harmless is limited
to the reasonable fees, related costs and expenses of the Noteholders Counsel
only. The obligations of the Contributor under this Section 5.02 shall survive
the termination of the Agreement the resignation or removal of the Trustee and
the termination of the Servicer pursuant to the terms hereof.
5.03 REPURCHASE AND SUBSTITUTION OF CONTRACTS; OTHER PAYMENTS. (a) The
Contributor or the Servicer, as the case may be, shall inform the Transferor,
the Issuer, the Managing Member and the Trustee promptly, in writing, upon the
discovery of a breach of any of the Contributor's representations and warranties
set forth herein. With respect to any breach of the Contributor's
representations and warranties set forth herein which materially and adversely
affects the interest of the Noteholders in any Contract or Contracts, the
Contributor, unless within 90 days following the discovery or receipt of notice
of such breach such breach has been cured or waived in all respects by the
Noteholders evidencing more than 50% of the Voting Rights, shall either (a)
purchase such Contract and the security interest in the related Equipment from
either the Transferor or the Issuer, as the case may be, or (b) replace such
Contract and the security interest in the related Equipment with a Substitute
Contract in accordance with the provisions of Sections 7.01, 7.02 and 7.03 of
this Agreement. In the event of a repurchase of a Contract, the Contributor
shall remit to the Trustee (upon written notice to the Trustee thereof) for
deposit into the Collection Account the Repurchase Amount of each such Contract
to be repurchased on or prior to 11:00 A.M. New York City time on the second
Business Day prior to the Payment Date immediately following the date when the
Contributor shall become obligated to purchase (or, if such Contract is then a
Defaulted Contract, an amount equal to the Repurchase Amount as of the date such
Contract first became a Defaulted Contract, together with interest thereon at
the Discount Rate from the date such Contract first became a Defaulted Contract
to the end of the month preceding the date of payment). In connection with such
repurchase, the Servicer shall be reimbursed in accordance with Section 3.04(b)
of the Amended and Restated Indenture for all amounts, if any, theretofore
advanced by the Servicer pursuant to Section 5.01 with respect to such Contract.
The Trustee shall deposit such Repurchase Amounts in the Collection Account on
or prior to 11:00 A.M. New York City time on the second Business Day immediately
following the date on which the Trustee receives such Repurchase Amounts.
Without limiting the generality of the foregoing, it is agreed and understood
that for purposes of this Section 5.03, any inaccuracy in any representation or
warranty with respect to (i) the priority of the lien of the Amended and
Restated Indenture with respect to any Contract or
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(ii) the amount (if less than represented) of the Contract Payments or
Repurchase Amount under any Contract shall be deemed to be material.
(b) With respect to all Predecessor Contracts and the security
interest in the related Equipment purchased or replaced by the Contributor
pursuant to this Section 5 hereof, the Transferor will deliver to the
Contributor, an instrument substantially in the form of Exhibit E hereto,
assigning to the Contributor, without recourse, representation or warranty
(except as to the absence of liens, claims, or encumbrances resulting from
actions taken, or failed to be taken, by the Transferor), all of the
Transferor's right, title and interest in and to such Predecessor Contracts and
the security interest in the related Equipment, and all security and documents
relating thereto.
(c) The Transferor, the Issuer and the Trustee agree that the
obligation of the Contributor to repurchase or substitute any Contract pursuant
to this Section 5.03 shall constitute the sole remedy for any such breach
available against the Contributor by the Transferor, the Issuer, any Noteholder
or the Trustee; PROVIDED, that the limitation contained in this clause (c) shall
not otherwise limit the rights of any such Person under Section 5.02.
SECTION 6. INFORMATION TO BE PROVIDED
6.01 MONTHLY SERVICER REPORT. On or prior to each Determination Date,
the Servicer shall deliver a report in writing substantially in the form of
Exhibit B (the "Monthly Servicer Report") to the Trustee and the Rating
Agencies.
6.02 TAX REPORTING AND TREATMENT. (a) The Servicer shall furnish or
cause to be furnished to each Noteholder, within a reasonable time after the end
of each calendar year, to each Noteholder who was a Noteholder at any time
during such year, a report setting forth the amount of principal and interest
paid on the Notes during such year and indicating such other customary factual
information as the Servicer deems necessary, or as any Noteholder reasonably
requests, to enable Noteholders to prepare their respective tax returns. In
addition, the Servicer shall provide, or cause to be provided to the Internal
Revenue Service and each Noteholder, information statements required by the Code
(and the regulations issued thereunder) or as such Noteholders may reasonably
request from time to time with respect to in the case of any class of Notes that
is issued with original issue discount within the meaning of section 1273 of the
Code ("OID"), information statements with respect to OID. For purposes of
consolidated federal and state income and franchise tax reporting, the
Contributor will be treated (i) as the owner of the Contracts and the other
Contributed Property and (ii) as the borrower under the Amended and Restated
Indenture.
(b) The Transferor, the Issuer, the Managing Member, the Contributor,
the Servicer, any subservicer and each Noteholder by acceptance of its Note (and
any Person that is a beneficial owner of any interest in a Note, by virtue of
such Person's acquisition of a beneficial interest therein) agrees to treat the
Notes as indebtedness for purposes of federal, state and local income or
franchise taxes (and any other tax imposed on or measured by income).
6.03 OTHER INFORMATION. The Servicer shall, at the Trustee's request,
furnish to the Trustee from time to time certain information and make various
calculations which are relevant to
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the performance of the Trustee's duties as set forth in the Amended and Restated
Indenture. Copies of all information furnished pursuant to this Section shall
also be furnished to the Rating Agencies.
6.04 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REPORT. The
Servicer shall cause a firm of independent certified public accountants (who may
also render other services to the Servicer or to the Contributor) to deliver to
the Trustee, the Rating Agencies and each Noteholder within 90 days following
the end of each fiscal year of the Servicer, beginning with June 30, 2000, a
written statement to the effect that such firm has examined in accordance with
generally accepted practices samples of the accounts, records, and computer
systems of the Servicer for the fiscal year ended on the previous June 30
relating to the Contracts (which accounts, records, and computer systems shall
be described in one or more schedules to such statement), that such firm has
compared the information contained in the Servicer's reports delivered in the
relevant period with information contained in the accounts, records, and
computer systems for such period, and that, on the basis of such examination and
comparison, such firm is of the opinion that the Servicer has, during the
relevant period, serviced the Contracts in compliance with such servicing
procedures, manuals, and guides and in the same manner as it services comparable
leases for itself or others, and that such certificates, accounts, records, and
computer systems have been properly prepared and maintained in all material
respects, except in each case for (a) such exceptions as such firm shall believe
to be immaterial and (b) such other exceptions as shall be set forth in such
statement. Copies of all information furnished pursuant to this Section shall
also be furnished to the Rating Agencies.
6.05 PAYMENT ADVICES. Each payment by the Contributor or the
Transferor or the Servicer to the Trustee pursuant to any of the provisions of
the Transaction Documents shall be accompanied by written advice containing
sufficient information to identify the Contract and/or Equipment to which such
payment relates, the Section of the Transaction Documents pursuant to which such
payment is made, and the proper application pursuant to the provisions of the
applicable Transaction Document of the amounts being paid.
SECTION 7. SUBSTITUTION OF CONTRACTS
7.01 SUBSTITUTION. (a) (1) With respect to Pool A, in addition to the
Servicer's other rights of substitution, the Servicer will have the right (but
not the obligation), at any time in connection with exercise by the Transferor
of its rights of substitution under the SCTA, to substitute (a "POOL A
NON-PERFORMING CONTRACT SUBSTITUTION") one or more Eligible Contracts and the
security interest in the related Equipment subject thereto (the foregoing
collectively, a "SUBSTITUTE CONTRACT") for a Contract in Pool A and the security
interest in the related Equipment subject thereto (the foregoing collectively, a
"PREDECESSOR CONTRACT") if:
(i) (A) any Contract Payment on the Predecessor Contract is delinquent
for at least sixty (60) consecutive days as of the most recent
Determination Date; or
(B) a bankruptcy petition has been filed by or against the
Obligor or, with respect to a Leveraged Lease Loan, the related Lessor,
under any Predecessor Contract; or
(C) the Predecessor Contract was initially classified as a
Defaulted Contract during the related Collection Period;
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PROVIDED, HOWEVER, that if the Predecessor Contract included a first
priority perfected security interest in Equipment related to a Fair Market
Value Lease, the related Substitute Contract, if related to a Fair Market
Value Lease, shall also include a first priority perfected security
interest in the Equipment related thereto; and
(ii) the conditions set forth in Section 7.01(d) have been satisfied
and the sum of (x) the Discounted Contract Balances of all Substitute
Contracts substituted under this Section 7.01(a)(1) and (y) amounts
deposited by the Servicer in the Collection Account in connection with all
such substitutions under this Section 7.01(a)(1) does not exceed 10% of the
Pool A Aggregate Discounted Contract Balance as of the Closing Date.
(2) With respect to Pool A, in addition to the Servicer's other rights
of substitution, the Servicer will have the right (but not the obligation) at
any time in connection with exercise by the Transferor of its rights of
substitution under the SCTA, to substitute (a "Pool A Prepaid Contract
Substitution") one or more Substitute Contracts for a Predecessor Contract in
Pool A if (i) the Predecessor Contract has been prepaid and (ii) the conditions
set forth in Section 7.01(d) have been satisfied and the sum of (x) the
Discounted Contract Balance of all Substitute Contracts substituted under this
Section 7.01(a)(2) and Section 4.02(b) and (y) amounts deposited by the Servicer
in the Collection Account in connection with all such substitutions under this
Section 7.01(a)(2) and Section 4.02(b) does not exceed 10% of the Pool A
Aggregate Discounted Contract Balance as of the Closing Date.
(b) (1) With respect to Pool B, in addition to the Servicer's other
rights of substitution, the Servicer will have the right (but not the
obligation), at any time in connection with exercise by the Transferor of its
rights of substitution under the SCTA, to substitute (a "Pool B General Contract
Substitution") one or more Substitute Contracts for a Predecessor Contract in
Pool B if the conditions set forth in Section 7.01(d) have been satisfied and
the sum of (x) the Discounted Contract Balances of all Substitute Contracts
substituted under this Section 7.01(b)(1) and (y) amounts deposited by the
Servicer in the Collection Account in connection with all such substitutions
under this Section 7.01(b)(1) does not exceed 10% of the Pool B Aggregate
Discounted Contract Balance as of the Closing Date.
(2) With respect to Pool B, in addition to the Servicer's other rights
of substitution, the Servicer will have the right (but not the obligation), at
any time in connection with exercise by the Transferor of its rights of
substitution under the SCTA, to substitute (a "Pool B Prepaid Contract
Substitution") one or more Substitute Contracts for a Predecessor Contract in
Pool B if (i) the Predecessor Contract has been prepaid and (ii) the conditions
set forth in Section 7.01(d) have been satisfied and the sum of (x) the
Discounted Contract Balance of all Substitute Contracts substituted under this
Section 7.01(b)(2) and Section 4.02(b) and (y) amounts deposited by the Servicer
in the Collection Account in connection with all such substitutions under this
Section 7.01(b)(2) and Section 4.02(b) does not exceed 10% of the Pool B
Aggregate Discounted Contract Balance as of the Closing Date; unless the Rating
Agencies have otherwise permitted.
(c) Any substitution pursuant to this Section 7.01 or Section 5.03
shall become effective upon (i) delivery to the Trustee and the Transferor of
the Substitute Contract Contribution Form, substantially in the form of Exhibit
D hereto, transferring to the Transferor (and the Issuer, as assignee of the
Transferor) all right, title and interest of the Contributor or the Servicer in
and to
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the Eligible Contract being substituted and a security interest in the related
Equipment subject thereto, and granting the Trustee a valid and first priority
security interest in such Substitute Contracts and the related Equipment (other
than with respect to a Secured Equipment Note or Finance Lease and for which the
Original Equipment Cost is less than $20,000) subject thereto, (ii) delivery to
the Trustee of amendments to, or executed originals of, the UCC financing
statements referred to in Section 1.01(c) hereof reflecting the deletion of the
Predecessor Contract and the addition of the Substitute Contract, (iii) delivery
to the Contributor by the Transferor of an instrument, substantially in the form
of Exhibit E hereto, transferring to the Contributor or the Servicer, without
representation or warranty, all of the Transferor's right, title and interest in
and to the Predecessor Contract, (iv) delivery to the Trustee of the sole
original, manually executed counterpart of each Contract that constitutes
"chattel paper" or an "instrument" under the UCC and (v) delivery to the Trustee
of an amendment to the Contract Schedule, reflecting the deletion of the
Predecessor Contract and the addition of the Substitute Contract. Upon delivery
of each Substitute Contract and the Substitute Contract Transfer Form therefor,
the definition of "Contributed Property" will be automatically amended to
include such Substitute Contract and all related property and rights contained
in the definition of Contributed Property.
(d) With respect to a substitution of Contracts in accordance with the
provisions of this Section 7 and Section 5.03 hereof, each proposed Substitute
Contract must (i) be an Eligible Contract; (ii) satisfy all of the
representations and warranties set forth in Section 2.03(a) of this Agreement;
(iii) have a Discounted Contract Balance such that the sum of its Discounted
Contract Balance, including any additional cash delivered by the Servicer into
the Collection Account in connection therewith, is not less than the Discounted
Contract Balance of the Contract(s) being replaced; (iv) not cause the remaining
weighted average life of the Contracts (as calculated based upon the Contract
Payments which constitute the Discounted Contract Balance of the Contracts) to
be materially altered; and (v) in accordance with the Servicer's standard credit
evaluation policies, be of equal or better credit quality than the Contract
being replaced. For purposes of determining compliance with clause (iii) of the
preceding sentence, if more than one Substitute Contract is being provided on
any date, the Discounted Contract Balance of the Substitute Contracts and the
Contracts being replaced shall be determined on an aggregate basis.
7.02 NOTICE OF SUBSTITUTION. In the Monthly Servicer Report to be
delivered on each Determination Date, the Contributor shall give written notice
to the Trustee, each Noteholder, the Rating Agencies and the Servicer of each
substitution of Contracts pursuant to Section 7.01(a) hereof and of any
substitution or repurchase pursuant to Section 5.03 hereof during the preceding
Collection Period. Such Monthly Servicer Report or other written notice shall
(i) specify the amount of each periodic Contract Payment under the Predecessor
Contract and the amount of each periodic Contract Payment under each Eligible
Contract being substituted, (ii) specify the residual values of the Equipment
subject to the Predecessor Contract and the Equipment subject to the Eligible
Contract being substituted, (iii) specify the Discounted Contract Balance of the
Predecessor Contracts, the Discounted Contract Balance of the Substitute
Contracts, any Excess Substituted Discounted Contract Balance, and any amounts
to be deposited in the Collection Account in connection with such Substitute
Contracts and (iv) with respect to a substitution pursuant to Section 7.01(a)
hereof, be accompanied by an Officer's Certificate, substantially in the form of
Exhibit F hereto, certifying as to compliance with the provisions of Section
7.01(a) hereof.
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7.03 CONTRIBUTOR'S AND SERVICER'S SUBSEQUENT OBLIGATIONS. Upon any
substitution of Contracts in accordance with the provisions of this Section 7 or
Section 5.03, the Contributor's and the Servicer's obligations hereunder with
respect to the Predecessor Contract shall cease (except for the Servicer's
obligation as set forth in Section 4.03 hereof to take such action as is
necessary and appropriate to maximize net proceeds to be paid to the Trustee)
but the Contributor and the Servicer shall each thereafter have the same
obligations with respect to the Substitute Contract substituted as it has with
respect to all other Contracts subject to the terms hereof.
7.04 USAGE OF PREDECESSOR CONTRACTS IN CALCULATIONS. After
substitution therefore in accordance with the terms and conditions of the
Transaction Documents, no Predecessor Contract or any other Contract repurchased
or substituted for in accordance with the Transaction Documents, including the
subsequent default, delinquency or breach thereof, shall be included in any
calculation or determination made under the Transaction Documents, including,
without limitation, the calculation of either any Amortization Event or
Indenture Event of Default.
SECTION 8. THE SERVICER
8.01 CORPORATE EXISTENCE OF THE SERVICER. The Servicer will keep in
full force and effect its existence, rights and franchise as a corporation under
the laws of its jurisdiction of incorporation and will preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is necessary to protect the validity and enforceability
of any of the Contracts or to permit performance of the Servicer's duties under
this Agreement.
The Servicer shall not merge or consolidate with any other Person
unless: (i) the entity surviving such merger or consolidation is a corporation
organized under the laws of the United States or any state thereof, (ii) the
surviving entity, if not the Servicer, shall execute and deliver to the
Transferor and the Trustee, in form and substance satisfactory to each of them,
(x) an instrument expressly assuming all of the obligations of the Servicer
hereunder, and (y) an Officer's Certificate to the effect that such Person is a
corporation of the type described in the preceding clause (i), has effectively
assumed the obligations of the Servicer hereunder, that all conditions precedent
provided for in this Agreement relating to such transaction have been complied
with, that 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 Transferor, the Issuer and Trustee in the Trust
Property, and reciting the details of such filings, or stating that no such
action shall be necessary to preserve and protect such interest, (iii) the
Servicer shall deliver to the Trustee a letter from each Rating Agency to the
effect that such consolidation, merger or succession will not, in and of itself,
result in a downgrading of the ratings for the Notes and (iv) immediately after
giving effect to such transaction, no Servicer Event of Default, and no event
which, after notice or lapse of time, or both, would become a Servicer Event of
Default shall have occurred and be continuing.
8.02 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS. (a) Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall incur any liability to the Transferor, the Issuer, the Trustee or
the holders of the Notes, for any action taken or not taken in good faith
pursuant to the terms of this Agreement with respect to any Contract (including
any Defaulted Contract) or the Equipment subject thereto; PROVIDED, HOWEVER,
that this provision shall not protect the Servicer or any such person against
any breach of representations or warranties made
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by it herein or in any certificate delivered in conjunction with the purchase of
the Notes or for any liability that would otherwise be imposed by reason of
willful misfeasance or negligence in the performance of its duties hereunder or
by reason of reckless disregard of obligations and duties hereunder.
(b) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute, or defend any legal action that
shall not be incidental to its duties to service the Contracts in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; PROVIDED, HOWEVER, that the Servicer may undertake, at its expense,
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties to this Agreement and the
interests of the Noteholders under this Agreement.
(c) The Servicer, and any director or officer or employee or agent of
the Servicer, may rely in good faith on the advice of counsel selected by it
with due care or on any document of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
8.03 SERVICER NOT TO RESIGN OR BE REMOVED. The Servicer shall not
resign from the servicing obligations and duties hereby imposed on it except in
connection with an assignment permitted by Section 11.02 hereof or upon
determination that such duties hereunder are no longer permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced by an opinion of independent counsel, in form and
substance satisfactory to the Noteholders evidencing more than 50% of the Voting
Rights, to such effect delivered to the Trustee.
Except as provided in Section 10.02 hereof, the Servicer shall not be
removed or be replaced as Servicer with respect to any Contract or Equipment;
PROVIDED, HOWEVER, that upon the occurrence of any Amortization Event,
Noteholders evidencing not less than 66-2/3% of the Voting Rights shall have the
right to replace DVI as Servicer with a successor Servicer in accordance with
Section 10.02 hereof.
No resignation or removal of the Servicer shall in any event (i)
become effective until the successor Servicer shall have assumed the Servicer's
servicing responsibilities and obligations in accordance with Section 10.02
hereof, or (ii) affect the Contributor's obligations pursuant to this Agreement.
8.04 FINANCIAL AND BUSINESS INFORMATION. The Servicer will deliver to
the Transferor, the Issuer, the Trustee (who shall forward copies to each
Noteholder) and the Rating Agencies:
(a) promptly upon their becoming available, one copy of each
report (including the Servicer's (or for so long as DVI Financial Services
Inc. is the Servicer, DVI, Inc.'s) annual report to shareholders and
reports on Form 8-K, 10-K, and 10-Q, proxy statement, registration
statement, prospectus and notices filed with or delivered to any securities
exchange, the Securities and Exchange Commission or any successor agencies,
in each case relating to the Transferor or the Notes;
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(b) immediately upon becoming aware of the existence of any
condition or event which constitutes a Servicer Event of Default, a written
notice describing its nature and period of existence and what action the
Servicer is taking or proposes to take with respect thereto;
(c) promptly upon the Servicer's becoming aware of:
(i) any proposed or pending investigation of it by any
governmental authority or agency, or
(ii) any court or administrative proceeding
which individually or in the aggregate involves the possibility of
materially and adversely affecting the properties, business, profits or
conditions (financial or otherwise) of the Servicer, a written notice
specifying the nature of such investigation or proceeding and what action
the Servicer is taking or proposes to take with respect thereto and
evaluating its merits; and
(d) (i) upon request, the Servicer shall furnish to the
Transferor, the Issuer and the Trustee, within ten (10) Business Days, a
list of all Contracts (by contract number and name of Obligor), as of the
end of the most recent Collection Period, held as part of the Trust
Property, together with a reconciliation of such list to the Contract
Schedule and (ii) with reasonable promptness, any other data and
information which may be reasonably requested from time to time.
8.05 OFFICER'S CERTIFICATES. With each set of documents delivered
pursuant to Section 8.04(a), the Servicer will deliver an Officer's Certificate
stating (i) that the officer signing such Certificate have reviewed the relevant
terms of this Agreement and have made, or caused to be made under such officer's
supervision, a review of the activities of the Servicer during the period
covered by the statements then being furnished, (ii) that the review has not
disclosed the existence of any Servicer Event of Default or, if a Servicer Event
of Default exists, describing its nature and what action the Servicer has taken
and is taking with respect thereto and (iii) that on the basis of such review
the officer signing such certificate is of the opinion that during such period
the Servicer has serviced the Contracts in compliance with the procedures hereof
except as described in such certificate.
8.06 INSPECTION. The Servicer shall make available to the Trustee or
its duly authorized representatives, attorneys or auditors, and the Noteholders
or their duly authorized representative attorneys or auditors copies of the
Contract Files and the related accounts, records and computer systems maintained
by the Servicer at such times during normal operating hours as the Trustee shall
reasonably request which does not unreasonably interfere with the Servicer's
normal operations or customer or employee relations. Nothing in this Section
8.06 shall affect the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors, and the failure of
the Servicer to provide access to information as a result of such obligation
shall not constitute a breach of this Section 8.06. Any expense incident to the
exercise by the Trustee or any Noteholder during the continuance of a Servicer
Event of Default of any right under this Section 8.06 shall be borne by the
Servicer, but any expense due to the exercise of a right
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by any such Person prior to the occurrence of a Servicer Event of Default shall
be borne by such Person.
8.07 SERVICER RECORDS. On or before the Closing Date, the Servicer
will indicate in its records that it is servicing and administering each
Contract in its capacity as Servicer hereunder, at the request and for the
benefit of the Transferor (and subject to the provisions of the applicable
Transaction Documents) and its successors and assigns (including the Issuer and
the Trustee).
8.08 INSURANCE. The Servicer will track, on a quarterly basis,
casualty insurance premium payments by Obligors as required by the Contracts, in
the same manner in which the Servicer would service contracts and equipment held
for its own account.
8.09 NO BANKRUPTCY PETITION AGAINST THE TRANSFEROR, THE MANAGING
MEMBER OR THE ISSUER. The Servicer covenants and agrees it will not, prior to
the date that is one year and one day after the payment in full of all amounts
owing pursuant to the Transaction Documents, institute against, or join any
other Person in instituting against, any of the Transferor, the Managing Member
or the Issuer, any bankruptcy, reorganization, receivership, arrangement,
insolvency or liquidation proceedings or other similar proceedings under any
federal or state bankruptcy or similar law. This Section 8.09 shall survive the
termination of this Agreement.
8.10 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE. The Servicer
shall maintain, at its own expense, a blanket fidelity bond and an errors and
omissions insurance policy, with coverage appropriate and customary in the
industry with responsible companies on all officers, employees or other persons
acting in any capacity with regard to the Contracts to handle funds, money,
documents and papers relating to the Contracts. Any such fidelity bond and
errors and omissions insurance shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons and shall be maintained in a form and amount that
would meet the requirements of a prudent institutional servicer. No provision of
this Section 8.10 requiring such fidelity bond and errors and omissions
insurance shall diminish or relieve the Servicer from its duties and obligations
as set forth in this Agreement. Any such fidelity bond or insurance policy shall
not be cancelled or modified in a materially adverse manner without ten days'
prior written notice to the Rating Agencies. Promptly upon receipt of any notice
from the surety or the insurer that such fidelity bond or insurance policy has
been terminated or materially modified, the Servicer shall notify the Trustee
and the Rating Agency of any such termination or modification.
SECTION 9. THE CONTRIBUTOR
9.01 CORPORATE EXISTENCE OF THE CONTRIBUTOR. The Contributor will keep
in full force and effect its existence, rights and franchise as a corporation
under the laws of its jurisdiction of incorporation and will preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is necessary to protect the validity and enforceability
of any of the Contracts or to permit performance of the Contributor's duties
under this Agreement.
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The Contributor shall not merge or consolidate with any other Person
unless (i) the entity surviving such merger or consolidation is a corporation
organized under the laws of the United States or any jurisdiction thereof, (ii)
the surviving entity, if not the Contributor, shall execute and deliver to the
Transferor, the Servicer and the Trustee, in form and substance satisfactory to
each of them, (x) an instrument expressly assuming all of the obligations of the
Contributor hereunder, and (y) an Officer's Certificate to the effect that such
Person is a corporation of the type described in the preceding clause (i), has
effectively assumed the obligations of the Contributor hereunder, that all
conditions precedent provided for in this Agreement relating to such transaction
have been complied with, and, that all UCC 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 Transferor, the
Issuer and Trustee in the Trust Property, and reciting the details of such
filings, or stating that no such action shall be necessary to preserve and
protect such interest, (iii) the Contributor shall deliver to the Trustee a
letter from each Rating Agency to the effect that such consolidation, merger or
succession will not, in and of itself, result in a downgrading of the ratings
for the Notes and (iv) immediately after giving effect to such transaction, no
event of default under any Transaction Document, and no event which, after
notice or lapse of time, or both, would become an event of default shall have
occurred and be continuing.
9.02 FINANCIAL AND BUSINESS INFORMATION. The Contributor will deliver
to the Transferor, the Issuer, the Trustee and the Rating Agencies and, upon
request, to each Noteholder:
(a) promptly upon their becoming available, one copy of each
report (including DVI, Inc.'s annual report to shareholders and reports on
Form 8-K, 10-K, and 10-Q), proxy statement, registration statement,
prospectus and notice filed with or delivered to any securities exchange,
the Securities and Exchange Commission or any successor agencies;
(b) promptly upon the Contributor's becoming aware of
(i) any proposed or pending investigation of it by any
governmental authority or agency, or
(ii) any court or administrative proceedings
which individually or in the aggregate involves or may involve the
possibility of materially and adversely affecting the properties,
business, profits or conditions (financial or otherwise) of the
Contributor, a written notice specifying the nature of such
investigation or proceeding and what action the Contributor is taking
or proposes to take with respect thereto and evaluating its merits; and
(c) with reasonable promptness, any other data and information
which may be reasonably requested from time to time.
9.03 INSPECTION. The Contributor shall make available to the
Transferor, the Managing Member, the Issuer or the Trustee or their respective
duly authorized representatives, attorneys or auditors and the Noteholders or
their duly authorized representatives, attorneys or auditors its accounts,
records and computer systems regarding any Contract maintained by the
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Contributor at such times during normal operating hours as the Trustee, the
Managing Member, the Issuer or the Transferor shall reasonably instruct which do
not unreasonably interfere with the Contributor's normal operations or customer
or employee relations. Nothing in this Section 9.03 shall affect the obligation
of the Contributor to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Contributor to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 9.03. Any expense incident to the exercise
by the Trustee or any Noteholder during the continuance of a Servicer Event of
Default of any right under this Section 9.03 shall be borne by the Servicer, but
any expense due to the exercise of a right by any such Person prior to the
occurrence of a Servicer Event of Default shall be borne by such Person.
9.04 NO BANKRUPTCY PETITION AGAINST THE MANAGING MEMBER, THE
TRANSFEROR OR THE ISSUER. The Contributor covenants and agrees it will not,
prior to the date that is one year and one day after the payment in full of all
amounts owing pursuant to the Amended and Restated Indenture, institute against,
or join any other Person in instituting against, any of the Managing Member, the
Transferor or the Issuer, any bankruptcy, reorganization, receivership,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under any federal or state bankruptcy or similar law. This Section 9.04 shall
survive the termination of this Agreement.
9.05 ACCOUNTS, BOOKS AND RECORDS.
(a) The Contributor shall maintain accounts and records as to each
Contract accurately and in sufficient detail to permit the reader thereof to
know at any time the status of such Contract, including payments and recoveries
made and payments owing (and the nature of each). Prior to the transfer of the
Contracts to the Transferor, the Contributor will clearly mark its books and
records and each Contract File (including each Contract) to reflect each sale of
a Contract and the Equipment subject thereto to the Transferor, the resale to
the Issuer and to show that the Issuer owns the Contracts absolutely. The
Contributor or the Transferor, as the case may be, will cause the electronic
ledger, the Contract File (including the Contract), with respect to each
Contract and the related Contract and the Contract Schedule to be clearly and
unambiguously marked to show that such Contract and the related Contract has
been contributed by Contributor to the Transferor, resold by the Transferor to
the Issuer and pledged by the Issuer to the Trustee for the benefit of the
Noteholders pursuant to the Amended and Restated Indenture.
(b) The Contributor shall maintain its computer systems so that, from
and after the time of sale hereunder of the Contracts to the Transferor, the
Contributor's master computer records (including archives) that refer to a
Contract and the related Contract shall indicate clearly the interest of the
Transferor in such Contract and that such Contract has been resold to the Issuer
and pledged by the Issuer to the Trustee for the benefit of the Noteholders.
Indication of the Transferor's ownership of a Contract, the resale to the
Issuer, and the pledge of such Contract by the Issuer to the Trustee for the
benefit of the Noteholders shall be deleted from or modified on the
Contributor's computer systems when, and only when, the Contract shall have been
paid in full or purchased or substituted by the Contributor pursuant to the
terms hereof.
9.06 TAX RETURNS. (a) At all times, so long as any of the Notes or the
other obligations secured by the Amended and Restated Indenture remain
outstanding, the Contributor, the Managing Member and the Transferor shall be
members of the same affiliated group within the
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meaning of Section 1504 of the Code (the "DVI Group") and shall join in the
filing of a consolidated return for federal income tax purposes.
(b) The Contributor shall promptly pay and discharge, or cause the
payment and discharge of, all federal income taxes (and all other material
taxes) when due and payable by Contributor, the DVI Group, the Managing Member,
or the Transferor, except (i) such as may be paid thereafter without penalty or
(ii) such as may be contested in good faith by appropriate proceedings and for
which an adequate reserve has been established and is maintained in accordance
with GAAP. The Contributor shall promptly notify the Transferor, the Trustee,
the Managing Member and the Noteholders of any material challenge, contest or
proceeding pending by or against Contributor, the Managing Member, or the DVI
Group before any taxing authority.
9.07 INSURANCE. The Contributor will at all times maintain general
liability and excess liability insurance policies in at least the amount set
forth in Section 2.26.
9.08 PROTECTION OF RIGHT, TITLE AND INTEREST.
(a) The Contributor shall not change its name, identity, or corporate
structure in any manner that would, could, or might make any UCC financing
statement or continuation statement filed by the Contributor in accordance with
Section 1.01(c) seriously misleading within the meaning of ss. 9-402(7) of the
UCC, unless it shall have given the Transferor at least thirty (30) days' prior
written notice thereof and shall promptly file appropriate amendments to all
previously filed UCC financing statements or continuation statements.
(b) If at any time the Contributor shall propose to sell, grant a
security interest in, or otherwise transfer any interest in contracts to any
prospective purchaser, lender, or other transferee, the Contributor shall give
to such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if they
shall refer in any manner whatsoever to any Contract, shall indicate clearly
that such Contract has been sold to the Transferor and then resold to the Issuer
and pledged by the Issuer to the Trustee for the benefit of the Noteholders.
(c) The Contributor shall deliver to the Transferor, the Managing
Member, the Rating Agencies and the Trustee promptly after the execution and
delivery of each amendment hereto, an opinion of counsel either (i) stating
that, in the opinion of such counsel, all UCC financing statements and
continuation statements necessary to preserve and protect fully the interest of
the Transferor, the Issuer and the Trustee in the Trust Property have been filed
or, with respect to the Equipment, are required to be filed within thirty (30)
days following the Closing Date or the Substitution Date, as applicable, or (ii)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest.
9.09 OTHER LIENS OR INTERESTS. Except for the conveyances hereunder,
the Contributor will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any lien on the Contracts or
any other Trust Property or any interest therein, and the Contributor shall
defend the right, title, and interest of the Transferor, the Issuer and the
Trustee in, to and under the Contracts and the other Trust Property against all
claims of third parties claiming through or under the Contributor; PROVIDED,
HOWEVER, that the Contributor's obligations to
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the Trustee under this Section 9.09 shall terminate upon the repayment in full
of the Notes and the expiration of any applicable preference period and, with
respect to any Contract, on the date it is paid in full or purchased by the
Contributor pursuant to Section 5.03 hereof.
9.10 COSTS AND EXPENSES. The Contributor agrees to pay all reasonable
costs and disbursements in connection with the performance of its obligations
hereunder and under the Amended and Restated Indenture.
SECTION 10. EVENTS OF DEFAULT
10.01 SERVICER EVENTS OF DEFAULT. The following events and conditions
shall constitute Servicer Events of Default hereunder:
(i) failure on the part of the Servicer (or for so long as the
Contributor is the Servicer, the Transferor) to (A) remit any payment to
the Trustee within the time period required by Section 4.06 hereof or (B)
make any Servicer Advance required by Section 5.01 hereof;
(ii) failure to pay to the Trustee on or before the date when due
in accordance with the terms hereof, any deposit required to be made by the
Servicer pursuant to Section 4.02 hereof;
(iii) failure on the part of either the Servicer (or for so long
as the Contributor is the Servicer, the Transferor) duly to observe or
perform in any material respect any other of their respective covenants or
agreements in this Agreement (including without limitation, failure of the
Servicer to deliver a Monthly Servicer Report on the date required pursuant
to Section 6.01 or the delivery of a Monthly Servicer Report which is
materially incorrect) which failure materially and adversely affects the
rights of the Noteholders and continues unremedied for a period of 30 days
after the Servicer becomes aware of such failure or the giving of written
notice of such failure (A) to the Servicer (or the Transferor, if
applicable) by the Trustee or (B) to the Servicer (or the Transferor, if
applicable) and the Trustee by Noteholders evidencing not less than 66-2/3%
of the Voting Rights, taken together.
(iv) if any representation or warranty of the Servicer made in
this Agreement or in any certificate or other writing delivered pursuant
hereto or the Transaction Documents or made by any successor Servicer in
connection with such successor Servicer's assumption of the duties of the
Servicer shall prove to be incorrect in any material respect as of the time
when the same shall have been made;
(v) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Servicer (or for so long
as the Contributor is the Servicer, the Transferor) in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or (B) a decree or order adjudging the
Servicer (or for so long as the Contributor is the Servicer, the
Transferor) bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization,
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arrangement, adjustment, or composition of or in respect of the Servicer
(or for so long as the Contributor is the Servicer, the Transferor) under
any applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator, or other similar official of
the Servicer (or for so long as the Contributor is the Servicer, the
Transferor) or of any substantial part of the property of either, or
ordering the winding up or liquidation of the affairs of either, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 90 consecutive days;
(vi) the commencement by the Servicer (or for so long as the
Contributor is the Servicer, the Transferor) of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by either to the
entry of a decree or order for relief in respect of the Servicer (or for so
long as the Contributor is the Servicer, the Transferor) in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against either, or the
filing by either of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state law, or the consent by
either to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or similar official of the Servicer (or for so long as the
Contributor is the Servicer, the Transferor) or of any substantial part of
the property of either, or the making by either of an assignment for the
benefit of creditors, or the failure by the Servicer (or for so long as the
Contributor is the Servicer, the Transferor) to pay its debts generally as
they become due, or the taking of corporate action by the Servicer (or for
so long as the Contributor is the Servicer, the Transferor) in furtherance
of any such action;
(vii) any assignment by the Servicer, or any attempt by the
Servicer to assign its duties or rights hereunder, except as specifically
permitted hereunder;
(viii) (A) the failure of the Servicer to make one or more
payments with respect to aggregate recourse indebtedness for borrowed money
exceeding $2,000,000 or (B) the occurrence of any other event or the
existence of any other condition, the effect of which event or condition is
to cause more than $2,000,000 of aggregate recourse indebtedness for
borrowed money of the Servicer to become due before its (or their) stated
maturity or before its (or their) regularly scheduled dates of payment, so
long as such failure, event or condition specified in either clause (A) or
(B) shall be continuing and shall not have been waived by the Person or
Persons entitled to performance;
(ix) the rendering against the Servicer of a final judgment,
decree or order (all possible appeals having been exhausted) for the
payment of money in excess of $2,000,000 which is uninsured, and the
continuance of such judgment, decree or order unsatisfied and in effect for
any period of 60 consecutive days without a stay of execution; or
(x) the occurrence of an Amortization Event (so long as the
Contributor is the Servicer).
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10.02 TERMINATION. If a Servicer Event of Default shall have occurred
and be continuing, the Trustee shall, upon the request of Noteholders evidencing
more than 66-2/3% of the Voting Rights, give written notice to the Servicer of
the termination of all of the rights and obligations of the Servicer (but none
of the Contributor's obligations hereunder, which shall survive any such
termination) under this Agreement. On the receipt by the Servicer of such
written notice, all rights and obligations of the Servicer under this Agreement,
including without limitation the Servicer's right hereunder to receive Servicing
Fees accruing subsequent to such termination date, but none of the Contributor's
obligations hereunder, shall cease and the same shall pass to and be vested in,
and assumed by, the Trustee pursuant to and under this Agreement and the Amended
and Restated Indenture subject to the provisions of Section 10.03; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and assignment of any
Contract and the related Contract and Equipment or such passing, vesting or
assumption or to cause Obligors to remit all future Contract Payments and other
amounts due under any Contract to such account as shall be specified by the
Trustee. The Servicer may be removed only pursuant to a Servicer Event of
Default.
10.03 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 10.02 hereof, the Trustee (subject to subsection
(b) hereof) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement of the Contracts and, to such extent,
shall be subject to all the responsibilities, duties and liabilities (other than
the duty to advance funds and to indemnify) relating thereto placed on the
Servicer by the terms and provisions hereof (but not the obligations of the
Contributor contained herein which shall survive any such termination as above
provided) and shall be entitled to receive from the Transferor the Servicing Fee
and other servicing compensation provided for in Section 4.04 hereof; PROVIDED
that the Trustee shall in no way be responsible or liable for any action or
actions of the Servicer before the time the Servicer receives such a notice of
termination.
(b) The Trustee may, if it is unwilling or unable to act as the
successor Servicer, give notice of such fact to each Noteholder and (i) appoint
a successor Servicer with a net worth of at least $15,000,000 and reasonably
acceptable to Noteholders evidencing more than 50% of the Voting Rights and
whose regular business includes the servicing of receivables arising from
equipment similar to the Equipment, as the successor Servicer hereunder to
assume all of the rights and obligations of the Servicer hereunder, including,
without limitation, the Servicer's right (but not the obligations of the
Contributor contained herein) hereunder to receive the Servicing Fee (PROVIDED
THAT, notwithstanding any other provision to the contrary contained in any
Transaction Document, no increase in the Servicer Fee due to any successor
Servicer shall be made without the consent of the Noteholders that hold, as of
the date of determination, more than 50% of the then-Outstanding Note Balance of
each class of Notes then Outstanding) or, (ii) if no such institution is so
appointed, petition a court of competent jurisdiction to appoint an institution
meeting such criteria as the Servicer hereunder. Pending appointment of a
successor Servicer hereunder, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee shall cause such successor Servicer to enter into a servicing agreement
substantially in the form of this Agreement except that such agreement shall not
include any of the Contributor's representations, warranties or obligations and
the Trustee may make arrangements for the compensation of such
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successor Servicer out of payments on Contracts and the related Contracts as it
and such successor Servicer shall agree; PROVIDED, HOWEVER, that no such
compensation shall be in excess of that provided in Section 4.04 hereof. Neither
the Trustee nor a Successor Servicer shall be deemed to be in default hereunder
by reason of its failure to make, or its delay in making, any distribution
hereunder or any portion thereof which failure or delay was caused by (i) the
failure of the prior Servicer to deliver, or any delay in delivering, cash,
documents or records to it, or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the prior Servicer.
10.04 SERVICER TO COOPERATE. The Servicer hereby agrees to cooperate
with the successor Servicer appointed in accordance with Section 10.02 or 10.03
hereof, as applicable, in effecting the termination and transfer of the
responsibilities and rights of the Servicer hereunder to the successor Servicer,
including, without limitation, the execution and delivery of assignments of UCC
financing statements, and the transfer to the successor Servicer for
administration by it of all cash amounts which shall at the time be held by the
Servicer or thereafter received with respect to the Contracts and the related
Contracts. The Servicer hereby agrees to transfer to any successor Servicer its
electronic records and all other records, correspondence and documents relating
to the Contracts and the related Contracts in the manner and at such times as
the successor Servicer shall reasonably request. The Servicer hereby designates
the successor Servicer its agent and attorney-in-fact to execute transfers of
UCC financing statements (including any and all UCC financing statements naming
an individual Obligor as debtor and the Contributor as secured party) and any
other filings or instruments which may be necessary or advisable to effect such
transfer of the Servicer's responsibilities and rights hereunder. Upon any such
termination or appointment of a successor Servicer, the Trustee shall give
prompt written notice thereof to each Noteholder in the manner provided in the
Amended and Restated Indenture.
10.05 REMEDIES NOT EXCLUSIVE. Nothing in the preceding provisions of
this Section 10 shall be interpreted as limiting or restricting any rights or
remedies which the Transferor, the Issuer, the Trustee, the Noteholders or any
other Person would otherwise have at law or in equity on account of the breach
or violation of any provision of this Agreement by the Servicer, including
without limitation the right to recover full and complete damages on account
thereof to the extent not inconsistent with Section 8.02 hereof.
10.06 WAIVER OF PAST DEFAULTS. Holders of Notes evidencing more than
50% of the Voting Rights may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
SECTION 11. ASSIGNMENT
11.01 ASSIGNMENT TO TRUSTEE. It is understood that this Agreement and
all rights of the Transferor hereunder and with respect to the Contributed
Property will be assigned by the Transferor to the Issuer, and then assigned by
the Issuer to the Trustee, for the benefit of the Trustee and the Noteholders,
and may be subsequently assigned by the Trustee to any successor Trustee. Each
of the Contributor and the Servicer hereby expressly agrees to each such
assignment and agrees that
38
<PAGE>
all of its duties, covenants, obligations, indemnities, representations and
warranties hereunder, and all of the rights and remedies of the Transferor
hereunder, shall be for the benefit of, and may be enforced directly by, the
Issuer, the Trustee, the Noteholders and any successor to or assignee of any
thereof.
11.02 ASSIGNMENT BY CONTRIBUTOR OR SERVICER. None of the respective
rights or obligations of the Contributor and the Servicer hereunder may be
assigned without the prior written consent of the Transferor and the Trustee
(acting upon the instructions of Noteholders evidencing not less than 66-2/3% of
the Voting Rights); PROVIDED that nothing herein shall preclude the Servicer
from performing its duties hereunder through the use of agents to the extent
that such use is consistent with the Servicer's business practices in dealing
with similar contracts and equipment for its own account, and PROVIDED, FURTHER,
that the use of an agent shall not relieve the Servicer from any of its
obligations hereunder.
SECTION 12. NATURE OF CONTRIBUTOR'S OBLIGATIONS AND SECURITY THEREFOR
12.01 CONTRIBUTOR'S OBLIGATIONS ABSOLUTE. The obligations of the
Contributor hereunder, and the rights of the Issuer and the Trustee, as assignee
of the Transferor, in and to all amounts payable by the Contributor hereunder,
shall be absolute and unconditional and shall not be subject to any abatement,
reduction, setoff, defense, counterclaim or recoupment whatsoever including,
without limitation, abatements, reductions, setoffs, defenses, counterclaims or
recoupments due or alleged to be due to, or by reason of, any past, present or
future claims which the Contributor may have against the Servicer, the Issuer,
the Managing Member, the Transferor, the Trustee, any holder of the Notes or any
other Person for any reason whatsoever; nor, except as otherwise expressly
provided herein, shall this Agreement terminate, or the respective obligations
of the Transferor, the Contributor or the Servicer be otherwise affected, by
reason of any defect in any Contract or in any unit of Equipment or in the
respective rights and interests of the Transferor, the Issuer, the Contributor
and the Trustee in any thereof, or by reason of any liens, encumbrances,
security interests or rights of others with respect to any Contract or any unit
of Equipment, or any failure by the Transferor, or the Servicer to perform any
of its obligations herein contained, or by reason of any other indebtedness or
liability, howsoever and whenever arising, of the Transferor, the Issuer, the
Managing Member, the Servicer, the Trustee or any holder of the Notes to the
Contributor or any other Person or by reason of any insolvency, bankruptcy, or
similar proceedings by or against the Contributor, the Servicer, the Transferor,
the Issuer, the Trustee or any other Person or for any other cause whether
similar or dissimilar to the foregoing, any present or future law to the
contrary notwithstanding, it being the intention of the parties hereto that all
obligations of the Contributor hereunder and all amounts payable by the
Contributor hereunder shall continue to be due and payable in all events and in
the manner and at the times herein provided unless and until the obligation to
perform or pay the same shall be terminated or limited pursuant to the express
provisions of this Agreement; PROVIDED that nothing in this Section 12.01 shall
be interpreted as precluding the Contributor from pursuing independently any
claim it may have against the Transferor, the Servicer, the Issuer, the Managing
Member, any holder of the Notes or any other Person; PROVIDED, FURTHER, that any
claims of the Contributor against the Transferor shall be subordinate in right
of payment to amounts due and owing to the Trustee under the Amended and
Restated Indenture and any amounts received by the Contributor on such claims
shall be held in trust by the Contributor for the Trustee and turned over
39
<PAGE>
to the Trustee until such time as all amounts due the Trustee under the
Transaction Document are fully paid.
12.02 POWER OF ATTORNEY. Each of the Contributor and Servicer hereby
grants to each of the Transferor and the Trustee the power as its
attorney-in-fact (i) to file UCC financing statements in the appropriate offices
evidencing the conveyance of the Contracts and other Contributed Property to the
Transferor and (ii) in the event an event of default exists under any
Transaction Document, to do any and all other acts as may be necessary or
appropriate to effect the transaction contemplated herein. The Contributor will
execute any document or instrument deemed necessary by the Transferor or the
Trustee to effect or to evidence this power of attorney. All costs associated
with such filings or instructions shall be paid by the Contributor.
SECTION 13. MISCELLANEOUS PROVISIONS
13.01 SALE. The Contributor agrees to treat the conveyances to the
Transferor of the Contributor's interest in the Contracts and Equipment pursuant
to the terms of this Agreement for all purposes other than taxes measured by
income (including, without limitation, financial accounting purposes of the
Contributor on a stand alone basis) as a sale of the Contributor's interest in
the Contracts and Equipment on all relevant books, records, financial statements
and other applicable documents. The execution and delivery of this Agreement
shall constitute an acknowledgment by the Contributor and the Transferor that
each intends that the assignment and transfer herein contemplated constitutes an
outright sale and assignment to the Transferor by the Contributor of its
interest in the Contracts and the other Contributed Property, and not for
security, conveying good title in such interests free and clear of any liens,
and that such interest shall not be a part of the Contributor's estate in the
event of the bankruptcy or the occurrence of another similar event, of, or with
respect to, the Contributor. In the event that such conveyance is determined to
be made as security for a loan made by the Transferor, the Issuer, the Trust or
the Noteholders to the Contributor, the parties intend that the Contributor
shall have granted to the Transferor, and its successors and assigns, a security
interest in the Contracts and other Contributed Property and that this Agreement
shall constitute a security agreement under applicable law.
The conveyance to the Transferor shall be treated as a sale to the
extent of cash remitted to the Contributor and shall be treated as an additional
contribution to the capital of the Transferor to the extent of the excess of the
Discounted Contract Balances of the Contracts conveyed over the amount of such
cash.
13.02 AMENDMENT. This Agreement may be amended from time to time by
the parties hereto, without the consent of any of the Noteholders, to cure any
ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other provisions
with respect to matters or questions arising under this Agreement which shall
not be materially inconsistent with the provisions of this Agreement, PROVIDED
that such actions shall not adversely affect in any respect the interests of any
Noteholder.
This Agreement may also be amended from time to time by the parties
hereto with the consent of the Holders of Notes evidencing more than 50% of the
Voting Rights (and with prior written notice to the Rating Agencies) for the
purpose of adding any provisions to or changing in any
40
<PAGE>
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Notes; PROVIDED, HOWEVER, that such
amendment may not, without the consent of all of the Noteholders (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on the Contracts or distributions that are required to
be made for the benefit of such Noteholders, (ii) reduce the aforesaid
percentage of the Voting Rights which are required to consent to any such
amendment, or (iii) modify this Section 13.02. The Servicer shall deliver copies
of any amendment to this Agreement to each of the Rating Agencies and each
Noteholder.
13.03 WAIVERS. No failure or delay on the part of the Transferor, the
Issuer or the Trustee in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy.
13.04 NOTICES. All communications and notices pursuant hereto to any
party shall be in writing or by telegraph, telex or telecopy and addressed or
delivered to it at its address (or in case of telex or telecopy, at its telex or
telecopy number at such address) as follows or at such other address as may be
designated by it by notice to the other party and, if mailed or sent by
telegraph or telex, shall be deemed given when mailed, communicated to the
telegraph office or transmitted by telex or telecopy:
(a) in the case of the Contributor or Servicer:
500 Hyde Park
Doylestown, Pennsylvania 18901
Attention: Securitization Manager
Telephone: (215) 489-8015
Telecopier: (215) 230-5328
(b) in the case of the Transferor:
500 Hyde Park
Doylestown, Pennsylvania 18901
Attention: Securitization Manager
Telephone: (215) 489-8015
Telecopier: (215) 230-5328
41
<PAGE>
(c) in the case of the Managing Member:
500 Hyde Park
Doylestown, Pennsylvania 18901
Attention: Securitization Manager
Telephone: (215) 489-8015
Telecopier: (215) 230-5328
(d) in the case of the Trustee:
181 Fifth Street
St. Paul, Minnesota 55101
Attention: Structured Finance
Telephone: (651) 244-0727
Telecopier: (651) 244-0089
(e) in the case of the Rating Agencies:
Duff & Phelps Credit Rating Co.
55 East Monroe Street
Chicago, IL 60603
Attention: Asset Backed Monitoring Group
Telephone: (312) 368-3100
Telecopier: (312) 263-2852
Fitch IBCA, Inc.
One State Street Plaza
New York, NY 10004
Attention: Ms. Wendy Geneen Cohn
Telephone: (212) 908-0681
Telecopier: (212) 480-4438
Moody's Investors Service, Inc.
99 Church Street, 4th Floor
New York, NY 10007
Attention: ABS Monitoring Department
Telephone: (212) 553-0300
Telecopier: (212) 553-3856
13.05 COSTS AND EXPENSES. The Contributor will pay all reasonable
expenses incident to the performance of its obligations under this Agreement and
any other Transaction Document and the Contributor agrees to pay all reasonable
out-of-pocket costs and expenses of the Transferor, including fees and expenses
of counsel, in connection with the enforcement of any obligation of the
Contributor hereunder.
13.06 THIRD PARTY BENEFICIARIES. The Issuer, the Trustee and the
Noteholders are express third party beneficiaries to this Agreement.
42
<PAGE>
13.07 SURVIVAL OF REPRESENTATIONS. The respective agreements,
representations, warranties and other statements by the Contributor and the
Transferor set forth in or made pursuant to this Agreement shall remain in full
force and effect and will survive the Closing Date.
13.08 CONFIDENTIAL INFORMATION. The Transferor agrees that it will
neither use nor disclose to any person the names and addresses of the Obligors,
except in connection with the enforcement of the Transferor's rights hereunder,
under the Contracts, under the applicable Transaction Documents or as required
by law.
13.09 HEADINGS AND CROSS-REFERENCES. The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this Agreement
to Section names or numbers are to such Sections of this Agreement.
13.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
13.11 CONSENT TO JURISDICTION. Each of the parties hereto irrevocably
submits to the jurisdiction of any New York State or Federal court sitting in
the Borough of Manhattan in the City of New York over any suit, action or
proceeding arising out of or relating to this Agreement. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by law, any objection
which it may have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit, action or
proceeding brought in such a court has been brought in any inconvenient forum.
Each of the parties hereto agrees that the final judgment in any such suit,
action or proceeding brought in such a court shall be conclusive and binding
upon each of the parties hereto and may be enforced by the courts of New York
(or any other courts to the jurisdiction of which it is subject) by a suit upon
such judgment; PROVIDED that service of process is effected upon it as permitted
by law; PROVIDED, HOWEVER, that each of the parties hereto does not waive, and
the foregoing provisions of this sentence shall not constitute or be deemed to
constitute a waiver of, (i) any right to appeal any such judgment, to seek any
stay or otherwise to seek reconsideration or review of any such judgment or (ii)
any stay of execution or levy pending an appeal from, or a suit, action or
proceeding for reconsideration or review of, any such judgment.
13.12 COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
13.13 STATUTORY REFERENCES. References in this Agreement to any
section of the UCC shall mean, on or after the effective date of adoption of any
revision to the UCC in the applicable jurisdiction, such revised or successor
section thereto.
43
<PAGE>
AMENDED AND RESTATED CONTRIBUTION AND SERVICING AGREEMENT
DATED AS OF JUNE 1, 1999
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
date first above written.
DVI FINANCIAL SERVICES INC.
By: /s/ Lisa J. Cruikshank
----------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
DVI RECEIVABLES CORP. X
By: /s/ Lisa J. Cruikshank
----------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
44
<PAGE>
EXHIBIT A
CONTRACT SCHEDULE
-----------------
A-1
<PAGE>
EXHIBIT B
MONTHLY SERVICER REPORT
-----------------------
B-1
<PAGE>
EXHIBIT C
RESERVED
--------
C-1
<PAGE>
EXHIBIT D
SUBSTITUTE CONTRACT TRANSFER FORM
---------------------------------
DVI Financial Services Inc. (the "CONTRIBUTOR") and DVI Receivables
Corp. X (the "TRANSFEROR"), pursuant to the Amended and Restated Contribution
and Servicing Agreement, dated as of June 1, 1999 (the "CONTRIBUTION AND
SERVICING AGREEMENT"), hereby confirm their understanding with respect to the
contribution by the Contributor to the Transferor of those substitute Contracts
listed on the Schedule 1 attached hereto (the "SUBSTITUTE CONTRACTS"), together
with a security interest in all of the Contributor's right, title and interest
in and to the related Equipment and other related property described herein.
Conveyance of Substitute Contracts. The Contributor hereby makes a
capital contribution to the Transferor of all of Contributor's rights, title and
interest in, to, and under (i) the Substitute Contracts listed on Schedule 1
hereto including, without limitation, its interests in the proceeds of such
Substitute Contracts, the right to receive all amounts due or to become due
thereunder after __________ (the "CUT-OFF DATE"), but excluding any Retained
Interest, (ii) the Contract Files relating to such Contracts, (iii) a security
interest in the Equipment subject to such Substitute Contracts, (iv) any
remarketing agreement to the extent specifically relating to a Substitute
Contract, and all guarantees, cash deposits or credit support (other than any
accounts receivable of the related Obligor) supporting or securing payment of
any arrangements with the vendor, dealer or manufacturer of the Equipment to the
extent specifically relating to any Substitute Contract, (v) any insurance
carried by any Obligor under any Substitute Contract (or the related Equipment)
and (vi) all income, payments and proceeds of the foregoing.
The Contributor hereby confirms that:
(1) On or prior to ___________ (the "Substitution Date"), the
Contributor shall have deposited in the Collection Account all collections in
respect of the Substitute Contracts that were due on or after the related
Cut-Off Date;
(2) As of the Substitution Date, the Contributor was not insolvent nor
will it be made insolvent by such transfer nor is any of them aware of any
pending insolvency;
(3) Each Substitute Contract is an Eligible Contract;
(4) On or prior to the Substitution Date, the Contributor shall have
delivered to the Trustee the sole original, manually executed counterpart of
each Substitute Contract that constitutes "chattel paper" or an "instrument", as
such terms are defined in the UCC;
(5) The sum of the Discounted Contract Balances as of the Cut-Off Date
of the Substitute Contracts listed on Schedule 1 attached hereto is $__________;
(6) When the Substitute Contracts are added to the Trust Property, all
representations and warranties will be true and correct as of the Substitution
Date unless any breach of such representations and warranties resulting from the
inclusion of such Substitute Contract shall have been waived in advance by
Noteholders evidencing more than 50% of the Voting Rights;
D-1
<PAGE>
(7) The Contributor has delivered to the Trustee evidence of all UCC
filings necessary to give the Trustee a perfected first priority security
interest in the Substitute Contract and the related Equipment (other than
Equipment relating to a Secured Equipment Note or Finance Lease and for which
the Original Equipment Cost is less than $20,000);
(8) Such Substitute Contract(s) shall be added to, and constitute a
part of, [Pool A] [Pool B]; and
(9) Such Substitute Contract(s) is/are being substituted pursuant to
[Section 5.03 of the Agreement] [Section 7.01(a)(1) of the Agreement] [Section
7.01(a)(2) of the Agreement] [Section 7.01(b)(1) of the Agreement] [Section
7.01(b)(2) of the Agreement].
All terms and conditions of the Contribution and Servicing Agreement
and the other Transaction Documents with respect to the Contributor and the
Substitute Contracts have been complied with and are hereby ratified, confirmed
and incorporated herein; PROVIDED THAT in the event of any conflict, the
provisions of this Substitute Contract Transfer Form shall control over the
conflicting provisions of the Contribution and Servicing Agreement.
Terms capitalized herein and not defined herein shall have their
respective meanings as set forth in the Contribution and Servicing Agreement.
DVI FINANCIAL SERVICES INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
DVI RECEIVABLES CORP. X
By:____________________________________
Name:__________________________________
Title:_________________________________
D-2
<PAGE>
EXHIBIT E
FORM OF RE-ASSIGNMENT BY TRANSFEROR
PURSUANT TO SECTION 5.03(b) OR 7.01(c) OF THE
AMENDED AND RESTATED CONTRIBUTION AND SERVICING AGREEMENT
DVI Receivables Corp. X (the "TRANSFEROR") pursuant to the Amended and
Restated Contribution and Servicing Agreement, dated as of June 1, 1999, between
the Transferor and DVI Financial Services Inc. (the "CONTRIBUTOR") does hereby
sell, transfer, assign, deliver and otherwise convey to Contributor, without
recourse, representation or warranty, all of the Transferor's right, title and
interest in and to all of the Predecessor Contracts listed on Schedule A hereto
and all security and documents relating thereto.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
______________________.
DVI RECEIVABLES CORP. X
By:____________________________________
Name:__________________________________
Title:_________________________________
E-1
<PAGE>
EXHIBIT F
FORM OF OFFICER'S CERTIFICATE PURSUANT TO SECTION 7
---------------------------------------------------
The undersigned certifies that the undersigned is a duly authorized
officer of DVI Financial Services Inc. (the "CONTRIBUTOR"), and that, as such
the undersigned is authorized to execute and deliver this certificate on behalf
of the Contributor, and further certifies pursuant to Section 7.02 of the
Amended and Restated Contribution and Servicing Agreement (the "AGREEMENT")
dated as of June 1, 1999, between the Contributor and DVI Receivables Corp. X
(the "TRANSFEROR"), that to his or her knowledge, the Contributor's contribution
to the Transferor of those Substitute Contracts listed in Schedule 1 attached
hereto, together with all of the Contributor's right, title and interest in and
to the related Contracts and the related Contributed Property, is in compliance
with Section 7 of the Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name.
Date:
DVI FINANCIAL SERVICES INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
<PAGE>
EXHIBIT G
FORMS OF CONTRACTS
------------------
Copies are on file at the offices of U.S. Bank Trust National
Association, as Indenture Trustee, and are available upon request.
G-1
<PAGE>
EXHIBIT H
UNDERWRITING GUIDELINES
-----------------------
Copies are on file at the offices of U.S. Bank Trust National
Association, as Indenture Trustee, and are available upon request.
H-1
EXHIBIT 4.4
<PAGE>
AMENDED AND RESTATED
SUBSEQUENT CONTRACT TRANSFER AGREEMENT
between
DVI RECEIVABLES CORP. X,
as Company
and
DVI RECEIVABLES X, L.L.C.,
as Issuer
Dated as of June 1, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I.
DEFINITIONS..............................................................................................1
SECTION 1.01 DEFINITIONS............................................................................1
ARTICLE II.
PROCEDURES FOR PURCHASES OF ELIGIBLE CONTRACTS...........................................................1
SECTION 2.01 TRANSFER...............................................................................1
SECTION 2.02 SUBSTITUTE CONTRACTS...................................................................2
SECTION 2.03 INTENT OF PARTIES; SECURITY INTEREST...................................................2
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................3
SECTION 3.01 ORGANIZATION AND GOOD STANDING.........................................................3
SECTION 3.02 AUTHORIZATION..........................................................................3
SECTION 3.03 BINDING OBLIGATION.....................................................................3
SECTION 3.04 NO VIOLATION...........................................................................4
SECTION 3.05 NO PROCEEDINGS.........................................................................4
SECTION 3.06 APPROVALS..............................................................................4
SECTION 3.07 ABILITY TO PERFORM.....................................................................4
SECTION 3.08 EQUIPMENT AND CONTRACTS................................................................4
SECTION 3.09 PRINCIPAL EXECUTIVE OFFICE.............................................................5
SECTION 3.10 NO PRIOR ASSIGNMENTS...................................................................5
SECTION 3.11 FAIR CONSIDERATION.....................................................................5
SECTION 3.12 NONCONSOLIDATION.......................................................................6
SECTION 3.13 ORDINARY COURSE; NO INSOLVENCY.........................................................6
SECTION 3.14 ASSETS AND LIABILITIES.................................................................7
SECTION 3.15 VALID SALE.............................................................................7
SECTION 3.16 ABILITY TO PAY DEBTS...................................................................7
SECTION 3.17 BULK TRANSFER PROVISIONS...............................................................7
SECTION 3.18 TRANSFER TAXES.........................................................................7
ARTICLE IV.
CONDITIONS TO PURCHASE...................................................................................8
SECTION 4.01 REPRESENTATIONS AND WARRANTIES.........................................................8
ARTICLE V.
COVENANTS OF THE COMPANY.................................................................................8
SECTION 5.01 BOOKS AND RECORDS......................................................................8
SECTION 5.02 PRESERVATION OF OFFICE.................................................................8
SECTION 5.03 LIENS..................................................................................9
-i-
<PAGE>
SECTION 5.04 NO BANKRUPTCY PETITION AGAINST THE ISSUER OR MANAGING
MEMBER..........................................................................................9
SECTION 5.05 PROTECTION OF RIGHT, TITLE AND INTEREST................................................9
ARTICLE VI.
REPRESENTATIONS AND COVENANTS OF
THE ISSUER...............................................................................................9
SECTION 6.01 NONCONSOLIDATION......................................................................10
SECTION 6.02 NO BANKRUPTCY PETITION AGAINST THE COMPANY............................................10
ARTICLE VII.
SUBSTITUTION............................................................................................11
SECTION 7.01 SUBSTITUTION..........................................................................11
SECTION 7.02 NOTICE OF SUBSTITUTION................................................................11
SECTION 7.03 CONTRIBUTOR'S AND COMPANY'S SUBSEQUENT OBLIGATIONS.
..............................................................................................11
SECTION 7.04 USAGE OF PREDECESSOR CONTRACTS IN CALCULATION.........................................11
ARTICLE VIII.
MISCELLANEOUS...........................................................................................12
SECTION 8.01 AMENDMENT.............................................................................12
SECTION 8.02 EFFECT OF INVALIDITY OF PROVISIONS....................................................13
SECTION 8.03 NOTICES...............................................................................13
SECTION 8.04 ENTIRE AGREEMENT......................................................................13
SECTION 8.05 SURVIVAL..............................................................................13
SECTION 8.06 CONSENT TO SERVICE....................................................................13
SECTION 8.07 JURISDICTION NOT EXCLUSIVE............................................................14
SECTION 8.08 CONSTRUCTION..........................................................................14
SECTION 8.09 FURTHER ASSURANCES....................................................................14
SECTION 8.10 THIRD PARTY BENEFICIARIES.............................................................14
SECTION 8.11 GOVERNING LAW.........................................................................15
SECTION 8.12 CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO
VENUE..........................................................................................15
SECTION 8.13 WAIVER OF JURY TRIAL..................................................................15
SECTION 8.14 HEADINGS AND CROSS-REFERENCES.........................................................15
SECTION 8.15 COSTS AND EXPENSES....................................................................15
SECTION 8.16 CONFIDENTIAL INFORMATION..............................................................16
SECTION 8.17 STATUTORY REFERENCES..................................................................16
SECTION 8.18 EXECUTION IN COUNTERPARTS.............................................................16
</TABLE>
EXHIBIT A SUBSEQUENT CONTRACT TRANSFER FORM
-ii-
<PAGE>
AMENDED AND RESTATED SUBSEQUENT CONTRACT TRANSFER AGREEMENT
("Agreement") dated as of June 1, 1999, between DVI RECEIVABLES X, L.L.C., a
Delaware limited liability company (the "Issuer"), and DVI RECEIVABLES CORP. X,
a Delaware corporation (the "Company").
WHEREAS, the Company will from time to time acquire certain
Contracts and other Contributed Property related thereto pursuant to the Amended
and Restated Contribution and Servicing Agreement dated as of the date hereof,
between the Company and DVI Financial Services Inc. (the "Contributor").
WHEREAS, the Company desires to transfer to Issuer all
Contributed Property (other than any ownership interest in certain Equipment)
which it acquires from the Contributor and certain other assets, and Issuer
desires to purchase such Contributed Property and other assets, in each instance
in accordance with the terms and conditions set forth in this Agreement.
WHEREAS, pursuant to the Amended and Restated Indenture (the
"Amended and Restated Indenture"), dated as of the date hereof, by and between
the Issuer and U.S. Bank Trust National Association (the "Trustee"), the Issuer
intends to issue its Series 1999-2 Notes, which will be collateralized by a
pledge by the Issuer to the Trustee, on behalf of the Noteholders of all of the
Issuer's right, title and interest in, to and under the Trust Property.
WHEREAS, to facilitate the issuance of its Series 1999-2
Notes, the Issuer and the Company desire to amend and restate this Agreement in
its entirety.
NOW, THEREFORE, the parties, in consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
-----------
SECTION 1.01 Definitions.
-----------
For purposes of this Agreement, capitalized terms used herein but not
otherwise defined shall have the respective meanings assigned to such terms in
Appendix I hereto.
ARTICLE II.
PROCEDURES FOR PURCHASES OF ELIGIBLE CONTRACTS
----------------------------------------------
SECTION 2.01 Transfer.
--------
(a) Conveyance. Upon the terms and conditions herein set forth, in
exchange for cash consideration received therefore and for other good and
valuable consideration, the Company hereby transfers, pledges, assigns and sells
to the Issuer on each Contribution Date (or, in the case of any
<PAGE>
Substitute Contracts the related Substitution Date), without recourse except as
set forth herein, all of the Company's right, title and interest in and to the
Company Assets as set forth on the related Subsequent Contract Transfer Form.
All funds received by the Company on or in connection with the Company Assets
that are payable on and after the applicable Cut-off Date shall be received,
held and applied by the Company in trust for the benefit of the Issuer as owner
of the Contracts.
(b) After giving effect to such transfer and sale, the ownership of
each such Contract transferred on the related Contribution Date shall be vested
in the Issuer. The Contract Files and any other documents relating to each
Contract shall be held in trust by the Trustee for the benefit of the
Noteholders pursuant to the terms of the Amended and Restated Indenture. The
Company agrees to take no action inconsistent with the ownership of any
Contract, to promptly indicate to all parties with a valid interest inquiring as
to the true ownership of each Contract, that each Contract has been transferred
and sold to the Issuer and to claim no ownership interest in any such Contracts
and the other Company Assets.
(c) Any Company Assets transferred to the Company from time to time
shall forthwith be transferred to the Issuer without further act,
notwithstanding the delivery of any Subsequent Contract Transfer Forms in
respect thereof.
SECTION 2.02 Substitute Contracts.
--------------------
In consideration for the transfer by the Issuer to the Company of any
Predecessor Contract transferred to the Company by the Issuer in accordance with
the terms and conditions of Section 7 of the Amended and Restated Contribution
and Servicing Agreement, the Company shall transfer to the Issuer on the
Substitution Date related thereto, and the Issuer shall accept, a Substitute
Contract; PROVIDED that such Substitute Contract is in accordance with the terms
and conditions of the Amended and Restated Contribution and Servicing Agreement.
SECTION 2.03 Intent of Parties; Security Interest.
------------------------------------
The Issuer and the Company hereby confirm that the transactions
contemplated in this Agreement are intended as transfers, assignments,
conveyances and sales rather than as loan transactions. In the event, for any
reason, and solely in such event, any transaction hereunder is construed by any
court or regulatory authority as a loan or other than a transfer, assignment,
conveyance and sale of any or all Company Assets, then the Company shall be
deemed to have hereby pledged to the Issuer as security for the performance by
the Company of all of its obligations from time to time arising hereunder and
with respect to any and all purchases effected pursuant hereto, and shall be
deemed to have either assigned or granted to the Issuer a first priority
perfected (except Equipment for which the Original Equipment Cost is less than
$20,000 and subject to Finance Leases or Secured Equipment Notes, in which case,
the Company shall be deemed to have granted a valid security interest) security
interest in all of the Company Assets. In furtherance of the foregoing, (i) this
Agreement shall constitute a security agreement, (ii) the Trustee shall be
deemed to be a bailee for purposes of perfection of the security interest
granted to Issuer, (iii) Issuer shall have all of the rights of a secured party
with respect to the Company Assets pursuant to applicable
-2-
<PAGE>
law and (iv) in the manner consistent with the Amended and Restated Indenture,
the Company shall execute all documents, including, but not limited to, UCC
financing statements, to effectively perfect and evidence Issuer's first
priority security interest in the Company Assets except that UCC financing
statements need not be filed with respect to Equipment for which the Original
Equipment Cost is less than $20,000 and subject to Finance Leases or Secured
Equipment Notes. The Company also covenants not to pledge, assign or grant any
security interest to any other party in any of the Company Assets. The
consideration received and to be received by the Company in exchange for the
transfer, assignment and conveyance of the Company Assets is intended to be fair
consideration having value equivalent to or in excess of the value of the assets
being transferred by the Company.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby makes the following representations and warranties
for the benefit of the Issuer, the Trustee and the Noteholders on which the
Issuer relies in purchasing and otherwise acquiring the Company Assets and on
which the Noteholders rely in funding advances under their respective Notes.
Other than as set forth in Section 3.08 hereof, such representations and
warranties are and will be true and correct as of the Closing Date and as of
each Contribution Date or Substitution Date, as the case may be (unless an
earlier date is specified therein) and shall survive each transfer, assignment,
conveyance and sale to the Issuer of the Company Assets and the subsequent
pledge thereof by the Issuer pursuant to the Amended and Restated Indenture.
SECTION 3.01 Organization and Good Standing.
------------------------------
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
SECTION 3.02 Authorization.
-------------
Company has all requisite power and authority and all necessary
licenses and permits to enter into and perform its obligations under this
Agreement and each Subsequent Contract Transfer Form (each, an "SCTF") and the
transactions contemplated hereby and thereby, and the execution, delivery, and
performance of this Agreement and each SCTF, have been duly authorized by the
Company by all necessary corporate action.
SECTION 3.03 Binding Obligation.
------------------
This Agreement has been, and each SCTF will be, duly and validly
executed and delivered by the Company and will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its respective terms, subject to bankruptcy, insolvency and other laws of
general application affecting the rights of creditors and equitable principles
(whether considered in a proceeding at law or in equity).
-3-
<PAGE>
SECTION 3.04 No Violation.
------------
The consummation of the transactions contemplated by this Agreement and
each SCTF and the fulfillment of the terms thereof, will not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice, lapse of time or both) a default under the certificate of
incorporation or bylaws of the Company, or any indenture, agreement, mortgage,
deed of trust or other instrument to which the Company 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 such indenture, agreement, mortgage, deed of
trust or other such instrument, other than this Agreement, or violate any law,
or, to the best of the Company's knowledge, any order, rule or regulation
applicable to it of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Company or any of its properties.
SECTION 3.05 No Proceedings.
--------------
The Company is not subject to any injunction, writ, action, suit,
restraining order or other order of any nature, and there are no actions, suits,
proceedings or investigations to which the Company is a party pending or, to the
knowledge of the Company, threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality (A)
asserting the invalidity of this Agreement or any SCTF, (B) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement or
any SCTF or (C) seeking any determination or ruling that would materially and
adversely affect the performance by the Company of its obligations under, or the
validity or enforceability of this Agreement or any SCTF.
SECTION 3.06 Approvals.
---------
All approvals, authorizations, consents, orders or other actions of any
person, corporation or other organization, or of any court, governmental agency
or body or official, required in connection with the execution and delivery of,
and compliance with the terms of, this Agreement or any SCTF, have been or will
be taken or obtained on or prior to the related Contribution Date.
SECTION 3.07 Ability to Perform.
------------------
The Company has the ability to perform all of its obligations under
this Agreement, any SCTF and the Amended and Restated Contribution and Servicing
Agreement.
SECTION 3.08 Equipment and Contracts.
-----------------------
With respect to each Contract, the Company hereby represents and
warrants to the Issuer, as of each Contribution Date that:
(a) the sale to the Issuer of the Company's interest in such
Contract(s) transferred on such date and the assignment of the Company's
security interest, or grant of a first priority perfected security interest, as
the case may be, in the Equipment related thereto pursuant to Section 2.01 or
Section 2.02 hereof constitutes a valid transfer of all of the Company's right,
title and interest in such
-4-
<PAGE>
Company Assets or a grant of a first-priority perfected (except for Equipment
for which the Original Equipment Cost is less than $20,000 and subject to
Finance Leases or Secured Equipment Notes, with respect to which the Company
shall be deemed to have granted a valid security interest) security interest
therein from the Company in favor of the Issuer, free and clear of any and all
claims, charges, liens or security interests created by the Company or any of
its affiliates;
(b) the Company did not, in the exercise of its interest in any such
Company Assets waive, discharge, release or otherwise permit any modification
thereto not in effect or agreed to at the time the Company acquired its interest
therein; and
(c) notwithstanding the foregoing clauses (a) and (b), the Company
makes no representation or warranty with respect to claims, charges, liens or
security interests created, or waivers, discharges, releases or modifications
made, by the Contributor.
The representations and warranties described in this Section 3.08 shall
survive the conveyance of the Company Assets to the Issuer.
SECTION 3.09 Principal Executive Office.
--------------------------
The principal executive office of the Company is located at 500 Hyde
Park, Doylestown, PA 18901, and has been so located for at least four months
immediately preceding the Closing Date. The Company has no trade names,
fictitious names, assumed names or "doing business as" names. If (i) any change
in either the Company's name, structure or the location of its principal place
of business or chief executive office occurs, then the Company shall deliver
thirty (30) days' prior written notice of such change or relocation to the
Issuer and the Trustee and (ii) if the Company becomes aware of the change in
location of any Equipment, then, no later than sixty (60) days after the
effective date of such change or relocation, shall file such amendments or
statements as may be required to preserve and protect the Issuer's and the
Trustee's interest in the Contracts, the Equipment and the other Trust Property.
The Company shall pay all filing fees or taxes payable in respect of any UCC
financing or continuation statements required to be filed pursuant to Section
1.03 of the Amended and Restated Contribution and Servicing Agreement and not
paid by the Contributor.
SECTION 3.10 No Prior Assignments.
--------------------
The Company has not pledged, assigned or encumbered or terminated, in
whole or in part, any of the Company Assets.
SECTION 3.11 Fair Consideration.
------------------
The consideration received by the Company in connection with the
transfer and sale of the Company Assets constitutes reasonably equivalent value
and fair consideration for the Company Assets.
-5-
<PAGE>
SECTION 3.12 Nonconsolidation.
----------------
The Company is operated in such a manner that it would not be
substantively consolidated with Contributor, such that the separate existence of
the Company and Contributor would not be disregarded in the event of a
bankruptcy or insolvency of the Company or Contributor, and in such regard,
among other things:
(a) the Company is not involved in the day to day management of
Contributor;
(b) the Company maintains separate corporate records and books of
account from Contributor and otherwise observes corporate formalities and has a
separate business office from Contributor (which may be at the same address as
Contributor; PROVIDED that the Company and Contributor have entered into a
written agreement specifying a reasonable allocation of expenses with respect to
overhead and other shared costs with respect to such premises or a lease
agreement);
(c) the financial statements and books and records of the Company
prepared after the date of creation of Contributor reflect and will reflect the
separate existence of Contributor;
(d) the Company maintains its assets separately from the assets of
Contributor (including through the maintenance of a separate bank account), the
Company's funds and assets, and records relating thereto, have not been and are
not commingled with those of Contributor and the separate creditors of
Contributor will be entitled to be satisfied out of Contributor's assets prior
to any value in Contributor becoming available to Contributor's equityholders or
the Company's creditors;
(e) all business correspondence of the Company and other communications
are conducted in the Company's own name and on its own stationery;
(f) Contributor does not act as an agent of the Company in any capacity
and the Company does not act as agent for Contributor, but instead presents
itself to the public as a corporation separate from Contributor; PROVIDED that
Contributor is the Servicer under the Amended and Restated Contribution and
Servicing Agreement; and
(g) the Company will cause its accounting records to be clearly and
unambiguously marked to show that such Contract has been transferred by the
Company to the Issuer and pledged by the Issuer to the Trustee for the benefit
of the Noteholders.
SECTION 3.13 Ordinary Course; No Insolvency.
------------------------------
The transactions contemplated by this Agreement are being consummated
by the Company and the Issuer, respectively, in furtherance of the Company's
ordinary business purposes and constitute a practical and reasonable course of
action by the Company designed to improve the financial position of the Company
with no contemplation of insolvency and with no intent to hinder, delay or
defraud any of its present or future creditors. Neither as a result of the
transactions contemplated by this Agreement, nor immediately before or after
such transactions, will the
-6-
<PAGE>
Company be insolvent, and the Company has adequate capital for the conduct of
its business and the payment of anticipated obligations.
SECTION 3.14 Assets and Liabilities.
----------------------
(a) Both immediately before and after the assignment, transfer and
conveyance of Contracts (including the right to receive all payments due or to
become due thereunder) and the other Company Assets, the present fair salable
value of the Company's assets will be in excess of the amount that will be
required to pay the Company's probable liabilities as they then exist and as
they become absolute and matured.
(b) Both immediately before and after the assignment and transfer of
Contracts and the other Company Assets, the sum of the Company's assets will be
greater than the sum of the Company's debts, valuing the Company's assets at a
fair salable value.
SECTION 3.15 Valid Sale.
----------
This Agreement effects a valid assignment, transfer and conveyance of
the Company's interest in the Company Assets, enforceable against creditors of
the Company.
The consideration received by the Transferor upon the sale of the
Company Assets to the Issuer constitutes reasonably equivalent value and fair
consideration for such Company Assets.
SECTION 3.16 Ability to Pay Debts.
--------------------
Neither as a result of the transactions contemplated by this Agreement
nor otherwise does the Company believe that it will incur debts beyond its
ability to pay or which would be prohibited by its charter documents or by-laws.
The Company's assets and cash flow enable it to meet its present obligations in
the ordinary course of business as they become due.
SECTION 3.17 Bulk Transfer Provisions.
------------------------
No transfer, assignment or conveyance of Contracts or the other Company
Assets by the Company to the Issuer contemplated by this Agreement will be
subject to the bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction.
SECTION 3.18 Transfer Taxes.
--------------
No transfer, assignment or conveyance of Company Assets contemplated by
this Agreement is subject to or will result in any tax, fee or governmental
charge payable by the Company or the Issuer to any federal, state or local
government ("Transfer Taxes"). In the event that the Company or the Issuer
receives actual notice of any Transfer Taxes arising out of the transfer,
assignment and conveyance of any Company Assets, on written demand by the
Issuer, or upon the Company otherwise being given notice thereof, the Company
shall pay, and otherwise indemnify and hold the Issuer, the Trustee and the
holders of the Notes harmless, on an after-tax basis, from and against any
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<PAGE>
and all such Transfer Taxes (it being understood that neither the holders of the
Notes nor the Trustee shall have any obligation to pay such Transfer Taxes).
ARTICLE IV.
CONDITIONS TO PURCHASE
----------------------
SECTION 4.01 Representations and Warranties.
------------------------------
The obligation of the Issuer to purchase any Contracts on the Closing
Date each Contribution Date, is subject to receipt by the Issuer of the
following:
(a) an Officer's Certificate from Company to the effect that, on or
before such Contribution Date (after giving effect to the sale of the Subsequent
Contracts on such date), all representations and warranties of the Company
contained herein shall be true and correct in all respects, with respect to each
Contract individually and all Contracts in the aggregate, with the same force
and effect as though such representations and warranties had been made on and as
of such date (unless such representations and warranties specifically relate to
an earlier date); and
(b) an Officer's Certificate from the Contributor to the effect that,
on or before such Contribution Date (after giving effect to the sale of
Subsequent Contracts on such date), all representations and warranties of the
Contributor contained in Section 2 of the Amended and Restated Contribution and
Servicing Agreement shall be true and correct in all respects, with respect to
each Contract individually and all Contracts in the aggregate as stated therein,
with the same force and effect as though such representations and warranties had
been made on and as of such date (unless such representations and warranties
specifically relate to an earlier date).
ARTICLE V.
COVENANTS OF THE COMPANY
------------------------
So long as this Agreement remains in effect or the Company shall have
any obligations hereunder, Company hereby covenants and agrees with Issuer as
follows:
SECTION 5.01 Books and Records.
-----------------
The Company will clearly mark its books and records to reflect each
sale to the Issuer of all Company Assets and to show that the Issuer owns the
Company Assets absolutely.
SECTION 5.02 Preservation of Office.
----------------------
The Company will give the Issuer, each Noteholder and the Trustee prior
written notice of any relocation of its principal 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.
-8-
<PAGE>
SECTION 5.03 Liens.
-----
The Company shall defend the right, title and interest of the Issuer in
the Company Assets against all claims of third parties claiming through or under
the Company (excluding claims arising from actions of the Contributor, in its
capacity as Servicer under the Amended and Restated Contribution and Servicing
Agreement, or any agent of Contributor as such Servicer).
SECTION 5.04 No Bankruptcy Petition Against the Issuer or Managing
Member.
-----------------------------------------------------
The Company covenants and agrees it will not, prior to the date that is
one year and one day after the payment in full of all amounts owing pursuant to
the Transaction Documents, institute against, or join any other Person in
instituting against, any of the Issuer, the Managing Member or itself, any
bankruptcy, reorganization, receivership, arrangement, insolvency or liquidation
proceedings or other similar proceedings under any federal or state bankruptcy
or similar law. This Section 5.04 shall survive the termination of this
Agreement.
SECTION 5.05 Protection of Right, Title and Interest.
---------------------------------------
(a) The Company shall not change its name, identity, or corporate
structure in any manner that would, could, or might make any UCC financing
statement or continuation statement filed by the Contributor in accordance with
Section 1.01(d) of the Amended and Restated Contribution and Servicing Agreement
seriously misleading within the meaning of Section 9-402(7) of the UCC, unless
it shall have given the Issuer at least thirty (30) days' prior written notice
thereof and shall promptly file appropriate amendments to all previously filed
UCC financing statements or continuation statements.
(b) If at any time the Company shall propose to sell, grant a security
interest in or otherwise transfer any interest in contracts to any prospective
lender, or other transferee, the Company shall give to such prospective lender,
or other transferee, computer tapes, records, or print-outs (including any
restored from archives) that, if they shall refer in any manner whatsoever to
any Contract, shall indicate clearly that such Contract have been sold to the
Issuer and pledged by the Issuer to the Trustee for the benefit of the
Noteholders.
(c) The Company shall not amend its certificate of incorporation
without the prior written consent of the Rating Agencies.
ARTICLE VI.
REPRESENTATIONS AND COVENANTS OF
THE ISSUER
----------
The Issuer hereby represents and warrants to the Company as of the
Closing Date and as of each Contribution Date:
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<PAGE>
SECTION 6.01 Nonconsolidation.
----------------
The Issuer is operated in such a manner that it would not be
substantively consolidated with Contributor, such that the separate existence of
the Issuer and Contributor would not be disregarded in the event of a bankruptcy
or insolvency of the Issuer or Contributor, and in such regard, among other
things:
(a) the Issuer is not involved in the day to day management of
Contributor;
(b) the Issuer maintains separate company records and books of account
from Contributor and otherwise observes company formalities and has a separate
business office from the Company;
(c) the financial statements and books and records of the Issuer
prepared after the date of creation of Contributor reflect and will reflect the
separate existence of Contributor;
(d) the Issuer maintains its assets separately from the assets of
Contributor (including through the maintenance of a separate bank account), the
Issuer's funds and assets, and records relating thereto, have not been and are
not commingled with those of Contributor and the separate creditors of
Contributor will be entitled to be satisfied out of Contributor's assets prior
to any value in Contributor becoming available to Contributor's equityholders or
the Issuer's creditors;
(e) all business correspondence of the Issuer and other communications
are conducted in the Issuer's own name and on its own stationery;
(f) Contributor does not act as an agent of the Issuer in any capacity
and the Issuer does not act as agent for Contributor, but instead presents
itself to the public as a limited liability company separate from Contributor
and the Company; PROVIDED that Contributor is the Servicer under the
Contribution and Servicing Agreement.
(g) The Issuer shall not issue any securities or cause any Person of
which it is the sole shareholder or economic owner to issue any securities
(other than the Notes, any Class F Instruments and any securities issued prior
to the Closing Date) unless it shall have received from the Rating Agencies a
written confirmation that the issuance of such securities will not result in a
Ratings Effect with respect to any class of Notes.
SECTION 6.02 No Bankruptcy Petition Against the Company.
------------------------------------------
The Issuer covenants and agrees it will not, prior to the date that is
one year and one day after the payment in full of all amounts owing pursuant to
the Transaction Documents, institute against, or join any other Person in
instituting against, any of the Company, the Managing Member or itself, any
bankruptcy, reorganization, receivership, arrangement, insolvency or liquidation
proceedings or other similar proceedings under any federal or state bankruptcy
or similar law. This Section 6.01 shall survive the termination of this
Agreement.
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<PAGE>
ARTICLE VII.
SUBSTITUTION
------------
SECTION 7.01 Substitution.
------------
In the event that the Contributor contributes and assigns a Substitute
Contract to the Company pursuant to Section 7.01 of the Amended and Restated
Contribution and Servicing Agreement, the Company hereby agrees to sell,
transfer, convey and assign any such Substitute Contract and the security
interest in the related Equipment to the Issuer. In addition, the Company hereby
agrees to take any action to facilitate the transfer of any Predecessor
Contract, including (i) delivery to the Contributor by the Company of an
instrument, substantially in the form of Exhibit D of the Amended and Restated
Contribution and Servicing Agreement, transferring to the Contributor, without
representation or warranty, all of the Company's right, title and interest in
and to the related Predecessor Contract, (ii) delivery to the Trustee of the
original, manually executed counterpart of each Contract that constitutes
"chattel paper" or an "instrument" under the UCC as appropriate for the purposes
of perfecting a security interest under the UCC and (iii) delivery to the
Trustee of an amendment to the Contract Schedule, reflecting the deletion of the
Predecessor Contract and the addition of the Substitute Contract.
SECTION 7.02 Notice of Substitution.
----------------------
In the Monthly Servicer Report to be delivered on each Determination
Date, the Company shall cause the Servicer to give written notice to the
Trustee, each Noteholder, and the Company of each substitution of Contracts
pursuant to Section 7.01 hereof during the preceding Collection Period. Such
Monthly Servicer Report or other written notice shall (i) specify the amount of
each periodic Contract Payment under the Predecessor Contract and the amount of
each periodic Contract Payment under each Eligible Contract being substituted,
(ii) specify the residual values of the Equipment subject to the Predecessor
Contract and the Equipment subject to the Eligible Contract being substituted,
(iii) specify the Discounted Contract Balance of the Predecessor Contracts, the
Discounted Contract Balance of the Substitute Contracts, and any amounts to be
deposited in the Collection Account in connection with such Substitute Contracts
and (iv) with respect to a substitution pursuant to Section 7.01 hereof, be
accompanied by an Officer's Certificate, substantially in the form of Exhibit F
of the Amended and Restated Contribution and Servicing Agreement, certifying as
to compliance with the provisions of Section 7.01 hereof.
SECTION 7.03 Contributor's and Company's Subsequent Obligations.
--------------------------------------------------
Upon any substitution of Contracts in accordance with the provisions of
this Section 7, the Company's obligations hereunder with respect to the
Predecessor Contract shall cease but the Contributor and the Company shall each
thereafter have the same obligations with respect to the Substitute Contract
substituted as it has with respect to all other Contracts subject to the terms
hereof.
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<PAGE>
SECTION 7.04 Usage of Predecessor Contracts in Calculation.
---------------------------------------------
After substitution therefor in accordance with the terms and conditions
of the Transaction Documents, no Predecessor Contract or any other Contract
repurchased or substituted for in accordance with the terms and conditions of
the Transaction Documents, including the subsequent default, delinquency or
breach thereof, shall be included in any calculation or determination made under
the Transaction Documents, including, without limitation, the calculation of
either any Amortization Event or Indenture Event of Default.
ARTICLE VIII.
MISCELLANEOUS
-------------
SECTION 8.01 Amendment.
---------
(a) This Agreement may be amended from time to time by the
Issuer and the Company with the consent of the Rating Agencies (but without the
consent of the Trustee or any of the Noteholders), to cure any ambiguity, to
correct or supplement any provision herein that may be inconsistent with any
other provisions herein, or to add or amend any other provisions with respect to
matters or questions arising under this Agreement; PROVIDED, HOWEVER, that such
amendment shall not adversely affect in any material respect the interests of
either the Trustee or the Noteholders, unless so consented to by each entity so
affected.
(b) This Agreement may also be amended from time to time by
the Issuer and the Company, with the consent of the Rating Agencies and the
Majority of Voting Rights, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
PROVIDED, HOWEVER, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Contracts or payments that are required to be made on any Note
without the consent of the Holder of such Note, (b) reduce the aforesaid
percentage required to consent to any such amendment or (c) adversely affect in
any material respect the interests of the Trustee or any Noteholder without, in
each instance, the consent of each entity so affected.
(c) Approval of the particular form of any proposed amendment
or consent shall not be necessary for the consent of the Noteholders under
Section 8.01(b), but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Noteholders shall be subject to such
reasonable requirements as the Trustee may prescribe.
(d) Prior to the execution of any such amendment to this
Agreement proposed in accordance with Section 8.01(b), the Issuer shall deliver
a copy of the proposed amendment to the Company, the Rating Agencies and the
Trustee.
(e) In executing any amendment to this Agreement pursuant to
this Section 8.01, the Trustee shall be entitled to receive (i) an Officer's
Certificate of the Company stating that all conditions precedent for entering
into such amendment as set forth in this Agreement have been met,
-12-
<PAGE>
and (ii) an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement.
SECTION 8.02 Effect of Invalidity of Provisions.
----------------------------------
In case any one or more of the provisions contained in this Agreement
should be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 8.03 Notices.
-------
All demands, notices and communications hereunder shall be in writing,
personally delivered or mailed by certified mail-return receipt requested, or
delivered by courier, or delivered by facsimile to a facsimile and telephone
number provided by the relevant Person in writing, with subsequent telephone
confirmation of the receipt thereof, and shall be deemed to have been duly given
upon receipt (a) in the case of the Trustee, at the following address: 180 East
Fifth Street, St. Paul, Minnesota 55101, Attention: Structured Finance,
Facsimile: (651) 244-0089, (b) in the case of the Servicer, at the following
address: 500 Hyde Park, Doylestown, Pennsylvania 18901, Attention:
Securitization Manager, Facsimile: (215) 230-5328, (c) in the case of the
Issuer, 500 Hyde Park, Doylestown, Pennsylvania, 18901, Attn: Securitization
Manager, Facsimile (215) 230-5328, with a copy to the Servicer at the address
set forth in clause (b) above, (d) in the case of the Company at the following
address: 500 Hyde Park, Doylestown, Pennsylvania 18901, Attention:
Securitization Manager, Facsimile: (215) 230-5328, (e) in the case of the Rating
Agencies, to the following addresses: Duff & Phelps Credit Rating Co., 55 East
Monroe St., Chicago, Illinois 60603, Attention: Asset Backed Monitoring Group,
Facsimile: (312) 263-2852; Fitch IBCA, Inc., One State Street Plaza, New York,
New York 10004, Attention: Ms. Wendy Geneen Cohn, Facsimile: (212) 480- 4438;
and Moody's Investors Service, Inc., 99 Church Street, 4th Fl., New York, New
York 10007, Attention: ABS Monitoring Department, Facsimile: (212) 553-3856, or
at other such respective address as shall be designated by such party in a
written notice to the other parties. Any notice required or permitted to be
mailed to a Noteholder shall be given by first class mail, postage prepaid, at
the address of such Holder as shown in the Note Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Noteholder receives such notice.
SECTION 8.04 Entire Agreement.
----------------
This Agreement, including the Exhibits hereto, contains the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements between them, whether oral
or written, of any nature whatsoever with respect to the subject matter hereof.
SECTION 8.05 Survival.
--------
All indemnities and undertakings of the Company and the Issuer
hereunder shall survive the termination of this Agreement.
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<PAGE>
SECTION 8.06 Consent to Service.
------------------
Each party irrevocably consents to the service of process by registered
or certified mail, postage prepaid, to it at its address provided on the
signature page hereto.
SECTION 8.07 Jurisdiction Not Exclusive.
--------------------------
Nothing herein will be deemed to preclude either party hereto from
bringing an action or proceeding in respect of this Agreement in any
jurisdiction other than as set forth in Section 8.12 hereof.
SECTION 8.08 Construction.
------------
The headings in this Agreement are for convenience only and are not
intended to influence its construction. References to Sections, Schedules and
Exhibits in this Agreement are to the Sections of and Schedules and Exhibits to
this Agreement. Any Schedules and Exhibits are hereby incorporated into and form
a part of this Agreement. In this Agreement, the singular includes the plural,
the plural the singular, the words "and" and "or" are used in the conjunctive or
disjunctive as the sense and circumstances may require and the word "including"
means "including, but not limited to." Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
SECTION 8.09 Further Assurances.
------------------
In addition to its agreements set forth herein, the Company (at the
Issuer's expense) agrees to do such further acts and things and to execute and
deliver such additional assignments, agreements, powers and instruments as are
reasonably requested by the Issuer to carry into effect the purposes of this
Agreement and the transactions contemplated herein.
SECTION 8.10 Third Party Beneficiaries.
-------------------------
Each Noteholder and the Trustee shall be an express third party
beneficiary of this Agreement. The obligations of the Company hereunder may be
assigned by the Issuer to the Trustee under the Amended and Restated Indenture.
The Company acknowledges that the Issuer intends, pursuant to the Amended and
Restated Indenture, to pledge the Company Assets, together with its respective
rights under this Agreement to the Trustee on the Closing Date, each
Contribution Date and each Substitution Date, with respect to each Contract and
each Substitute Contract. The Company acknowledges and consents to such
conveyance and waives any further notice thereof and covenants and agrees that
the representations and warranties of the Company contained in this Agreement
and the rights of the Issuer hereunder, are intended to benefit the Trustee, and
each Securityholder. In furtherance of the foregoing, the Company covenants and
agrees to perform its duties and obligations hereunder, in accordance with the
terms hereof and for the benefit of the Trustee and the Noteholder and that,
notwithstanding anything to the contrary in this Agreement, the Company shall be
directly liable to the Trustee (notwithstanding any failure by the Servicer or
the
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<PAGE>
Issuer to perform its duties and obligations hereunder, or under the Amended and
Restated Indenture or Amended and Restated Contribution and Servicing
Agreement), and that the Trustee may enforce the duties and obligations of the
Company under this Agreement against the Company for the benefit of the
Securityholder.
SECTION 8.11 GOVERNING LAW.
-------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS RULES REGARDING
CONFLICT OF LAWS.
SECTION 8.12 CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO
VENUE.
-----------------------------------------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, EACH OF THE ISSUER AND THE COMPANY HEREBY
AGREED TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITH THE
STATE OF NEW YORK. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, AND
EACH PARTY IRREVOCABLY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENT TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
SECTION 8.13 WAIVER OF JURY TRIAL.
--------------------
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE ISSUER AND THE
COMPANY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
SECTION 8.14 Headings and Cross-References.
-----------------------------
The various headings in this Agreement are included for convenience
only and shall not affect the meaning or interpretation of any provision of this
Agreement. References in this Agreement to Section names or numbers are to such
Sections of this Agreement.
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<PAGE>
SECTION 8.15 Costs and Expenses.
------------------
The Company will pay all reasonable expenses incident to the
performance of its obligations under this Agreement and under the Amended and
Restated Indenture and the Company agrees to pay all reasonable out-of-pocket
costs and expenses of the Issuer, including fees and expenses of counsel, in
connection with the enforcement of any obligation of the Company hereunder.
SECTION 8.16 Confidential Information.
------------------------
The Issuer agrees and covenants that it will neither use nor disclose
to any person the names and addresses of the Obligors, except in connection with
the enforcement of the Issuer's rights hereunder, under the Contracts, under the
applicable Transaction Documents or as required by law.
SECTION 8.17 Statutory References.
--------------------
References in this Agreement to any section of the UCC shall mean, on
and after the effective date of adoption of any revision to the UCC in the
applicable jurisdiction, such revised or successor section thereto.
SECTION 8.18 Execution in Counterparts.
-------------------------
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same instrument.
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<PAGE>
[AMENDED AND RESTATED SUBSEQUENT CONTRACT TRANSFER AGREEMENT]
IN WITNESS WHEREOF, Issuer and Company have duly executed this
Subsequent Contract Transfer Agreement as of the date and year first above
written.
DVI RECEIVABLES CORP. X
By: /s/ Lisa J. Cruikshank
---------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
Address: 500 Hyde Park
Doylestown, Pennsylvania 18901
Attn: Securitization Manager
Telephone: (215) 489-8015
Facsimile: (215) 230-5328
DVI RECEIVABLES X, L.L.C.
By: DVI Receivables Corp. VIII,
its managing member
By: /s/ Lisa J. Cruikshank
---------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
Address: 500 Hyde Park
Doylestown, Pennsylvania 18901
Attn: Securitization Manager
Telephone: (215) 489-8015
Facsimile: (215) 230-5328
Consented to with respect to Section 8.01 only by:
LEHMAN COMMERCIAL PAPER INC.
By: /s/ Vincent Primiano
--------------------------------
Name: Vincent Primiano
Title: Vice President
<PAGE>
EXHIBIT A
SUBSEQUENT CONTRACT TRANSFER FORM
---------------------------------
[DATE]
DVI Receivables Corp. X, (the "Company") and DVI Receivables X, L.L.C.
("the Issuer"), pursuant to the Amended and Restated Subsequent Contract
Transfer Agreement, dated as of June 1, 1999 (the "SCTA"), hereby confirm their
understanding with respect to the sale, transfer, assignment and conveyance by
the Company to the Issuer of those Contracts listed on Schedule 1 attached
hereto (the "Contracts"), together with a first priority perfected (except with
regard to Equipment related to either a Finance Lease or a Secured Equipment
Note that had an Original Equipment Cost of less than $20,000) security interest
in all of the Company's right, title and interest in and to the related
Equipment (except for (i) such item of Equipment related to either a Finance
Lease or a Secured Equipment Note that had an Original Equipment Cost of less
than $20,000 and (ii) any ownership interest in such item of Equipment, with
respect to which the Company instead grants to the Issuer a first priority
perfected security interest therein), and other related property described
herein.
CONVEYANCE OF COMPANY ASSETS. On the date set forth above, the Company
hereby transfers to the Issuer all of the Company's rights, title and interest
in, to, and under the Contracts listed on Schedule 1 hereto including, without
limitation, its interests in the proceeds of such Contracts, the right to
receive all amounts due or to become due thereunder after __________ (the
"Cut-off Date") together with all of the other Company Assets related thereto.
The Company hereby confirms that:
(1) On or prior to the date hereof (the "Subsequent Contract Transfer
Date"), the Contributor shall have deposited in the Collection Account all
collections in respect of the Contracts that were due on or after the Cut-off
Date;
(2) Each representation and warranty of the Company under the Amended
and Restated Contribution and Servicing Agreement and the SCTA is true and
correct as of the date hereof, the Contributor was not insolvent nor will it be
made insolvent by the transfer contemplated herein nor is it aware of any
pending insolvency and the Company is not in breach of any covenant under the
SCTA;
(3) Each Contract sold, transferred, assigned and conveyed pursuant
hereto is an Eligible Contract;
(4) On or prior to the Subsequent Contract Transfer Date, the Company
shall have delivered to the Trustee the sole original, manually executed
counterpart of each Contract;
(5) The sum of the Discounted Contract Balances as of the Cut-off Date
of the Contracts listed on Schedule 1 attached hereto is $__________ (calculated
using a Discount Rate of _____%);
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<PAGE>
(6) Reserved
(7) When the Contracts are added to the Trust Property, all
representations and warranties of the Company in the SCTA will be true and
correct as of the date set forth in the heading of this Subsequent Contract
Transfer Form unless any breach of such representations and warranties resulting
from the inclusion of such Contract shall have been waived in advance by
Noteholders evidencing more than 50% of the Voting Rights; and
(8) The Contributor has delivered to the Trustee (i) amendments to, or
executed originals of, the UCC financing statements referred to in Section
1.01(d) of the Amended and Restated Contribution and Servicing Agreement (the
"Amended and Restated Contribution and Servicing Agreement"), dated as of June
1, 1999 between Contributor Financial Services Inc. and the Company, reflecting
the addition of the Contract(s) and (ii) an amendment to the Contract Schedule.
All terms and conditions of the SCTA with respect to the Company and
the Contracts have been complied with and are hereby ratified, confirmed and
incorporated herein;, PROVIDED THAT in the event of any conflict, the provisions
of this Subsequent Contract Transfer Form shall control over the conflicting
provisions of the Amended and Restated Contribution and Servicing Agreement.
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<PAGE>
Terms capitalized herein and not defined herein shall have their
respective meanings as set forth in the SCTA and if not defined therein, then as
such terms are defined in Appendix I to the Amended and Restated Contribution
and Servicing Agreement.
DVI RECEIVABLES CORP. X
By:
---------------------------------
Name:
Title:
By: DVI RECEIVABLES CORP. VIII,
its managing member
By:
---------------------------------
Name:
Title:
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