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$250,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 2, 2000
among
MCII FUNDING II, INC.
as the Seller
and
SPECIAL PURPOSE ACCOUNTS RECEIVABLE COOPERATIVE CORPORATION
as the Purchaser
and
CANADIAN IMPERIAL BANK OF COMMERCE
as the Administrative Agent
and
BUSLEASE, INC.
as the Servicer
and
BNY ASSET SOLUTIONS LLC
as the Backup Servicer
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TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS............................................................................................1
Section 1.01 Certain Defined Terms..................................................................1
Section 1.02 Other Terms...........................................................................31
ARTICLE II. AMOUNTS AND TERMS OF THE PURCHASES...................................................................31
Section 2.01 Purchase Facility.....................................................................31
Section 2.02 Making Purchases......................................................................31
Section 2.03 Settlement Procedures.................................................................32
Section 2.04 Fees..................................................................................37
Section 2.05 Payments and Computations, Etc........................................................37
Section 2.06 Cash Collateral Account...............................................................37
Section 2.07 Blocked Accounts......................................................................38
ARTICLE III. CONDITIONS OF PURCHASES.............................................................................39
Section 3.01 Conditions Precedent to Initial Purchase..............................................39
Section 3.02 Conditions Precedent to All Purchases.................................................41
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.......................................................................44
Section 4.01 Representations and Warranties of the Seller..........................................44
Section 4.02 Representations and Warranties of the Servicer........................................49
Section 4.03 Representations and Warranties of the Backup Servicer.................................51
ARTICLE V. COVENANTS.............................................................................................52
Section 5.01 Covenants of the Seller...............................................................52
Section 5.02 Covenants of the Servicer.............................................................58
Section 5.03 Negative Covenants of the Seller......................................................60
Section 5.04 Negative Covenants of the Servicer....................................................62
Section 5.05 Reporting Covenants of the Seller and the Servicer....................................63
ARTICLE VI. ADMINISTRATION AND COLLECTION........................................................................66
Section 6.01 Retention and Termination of Servicer.................................................66
Section 6.02 Duties of the Servicer................................................................68
Section 6.03 Rights of the Administrative Agent....................................................69
Section 6.04 Responsibilities of the Servicer......................................................70
Section 6.05 Further Actions Evidencing Purchases..................................................71
Section 6.06 Servicer Fee..........................................................................71
Section 6.07 Claims Under Policy...................................................................72
Section 6.08 Preference Claims.....................................................................72
Section 6.09 Surrender of Policy...................................................................73
ARTICLE VII. SERVICER TERMINATION EVENTS.........................................................................73
Section 7.01 Servicer Termination Events...........................................................73
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ARTICLE VIII. INDEMNIFICATION....................................................................................76
Section 8.01 Indemnities by the Seller.............................................................76
Section 8.02 Indemnities by the Servicer...........................................................79
Section 8.03 Indemnification Due to Failure to Consummate Purchase.................................80
Section 8.04 Increased Costs under Liquidity Facilities and Credit Facilities......................80
Section 8.05 Notices...............................................................................80
ARTICLE IX. THE ADMINISTRATIVE AGENT.............................................................................80
Section 9.01 Appointment of Administrative Agent...................................................80
Section 9.02 Replacement of Administrative Agent...................................................80
ARTICLE X. MISCELLANEOUS.........................................................................................81
Section 10.01 Amendments, Etc.......................................................................81
Section 10.02 Notices, Etc..........................................................................81
Section 10.03 Costs, Expenses.......................................................................81
Section 10.04 Payments Net of Taxes.................................................................81
Section 10.05 No Waiver; Remedies...................................................................82
Section 10.06 Assignment, Successors and Assigns....................................................82
Section 10.07 Construction of the Agreement.........................................................82
Section 10.08 No Proceedings........................................................................83
Section 10.09 Confidentiality.......................................................................83
Section 10.10 No Recourse...........................................................................83
Section 10.11 Governing Law; Execution in Counterparts..............................................84
Section 10.12 Submission to Jurisdiction; Appointment of Agent to Accept Service of Process.........84
Section 10.13 Third Party Beneficiary Rights........................................................84
Section 10.14 No Claims.............................................................................84
Section 10.15 Waiver of Set-off.....................................................................85
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EXHIBITS
EXHIBIT A - Form of Monthly Report
EXHIBIT B - Form of Officer's Certificate
EXHIBIT C - Form of Termination Notice
EXHIBIT D - Form of Consent
EXHIBIT E - Form of Performance Indemnity - Servicer
EXHIBIT F - Form of Performance Indemnity - Transferors
EXHIBIT G - Form of Vehicle Loan
EXHIBIT H - Form of Vehicle Lease
EXHIBIT I - Form of Lockbox Agreement
EXHIBIT J - Form of Condition Precedent Certificate
SCHEDULES
Schedule 1.01(a) - Preclosing Consolidated EBITDA
Schedule 1.01(b) - Cash Management Systems
Schedule 1.01(c) - Credit and Collection Policy
Schedule 1.01(e) - Stated Term of Eligible Receivables
Schedule 1.01(s) - Special Concentration Limits
Schedule 1.01(t) - Transferors
Schedule 4.01(v) - Lockbox Accounts
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RECEIVABLES PURCHASE AGREEMENT dated as of May 2, 2000 (as
amended, restated, supplemented or otherwise modified from time to time and in
effect, this "AGREEMENT") among MCII FUNDING II, INC., a Delaware corporation,
as seller (together with its permitted successors and assigns in such capacity,
the "SELLER"), SPECIAL PURPOSE ACCOUNTS RECEIVABLE COOPERATIVE CORPORATION
(together with its permitted successors and assigns in such capacity, the
"PURCHASER"), CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as agent for the
Purchaser (the "ADMINISTRATIVE AGENT"), BUSLEASE, INC. ("BUSLEASE"), as servicer
(together with its permitted successors and assigns in such capacity, the
"SERVICER"), and BNY ASSET SOLUTIONS LLC (the "BACKUP SERVICER"). Unless
defined elsewhere herein, capitalized terms used in this Agreement shall have
the meanings assigned to such terms in Article I hereof.
ARTICLE I.
DEFINITIONS
Section 1.01 CERTAIN DEFINED TERMS. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"ADMINISTRATIVE AGENT" has the meaning set forth in the recital to
this Agreement.
"ADVERSE CLAIM" means, in respect of the property of any Person,
any ownership interest of any other Person, any mortgage, deed of trust,
hypothecation, pledge, lien, security interest, grant of a power to confess
judgment, preference, right to priority payment, charge or other encumbrance or
security arrangement of any nature whatsoever, including, without limitation,
any conditional sale or title retention arrangement, and any assignment, deposit
arrangement, consignment or lease intended as, or having the effect of,
security.
"AFFECTED PARTY" means the Purchaser, the Administrative Agent,
the Transaction L/C Issuer, the Custodian, FSA and each Affiliate of the
foregoing Persons.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"AGREEMENT" has the meaning set forth in the recital hereto.
"AVAILABLE L/C AMOUNT" means, with respect to any Transaction
Letter of Credit, the meaning ascribed to such term in such Transaction Letter
of Credit MINUS the portion of the Available L/C Amount, if any, allocated to
the "Required Credit Enhancement" (as defined in the Secondary Purchase
Agreement) under the Secondary Purchase Agreement.
"BACKUP SERVICER" means BNY Asset Solutions LLC, and its permitted
successors and permitted assigns.
"BACKUP SERVICER FEE" has the meaning set forth in the Backup
Servicing Agreement.
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"BACKUP SERVICING AGREEMENT" means that certain Backup Servicing
Agreement dated as of May 2, 2000 among the Seller, the Administrative Agent,
the Servicer and the Backup Servicer, as the same shall be amended, modified or
supplemented and in effect from time to time.
"BALLOON PAYMENT" means, with respect to any Receivable, a final
Scheduled Contract Payment which, pursuant to the related Contract, equals an
amount which is greater than other Scheduled Contract Payments including,
without limitation, payments in respect of purchase options under any Finance
Leases) with respect thereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
U.S.C. Section 101 et seq.), as amended from time to time, or any successor
statute.
"BASE RATE" means, for any day, the rate of interest publicly
announced from time to time by the [***] as its base rate, each change in
such rate to take effect at the opening of business on the date specified in
the public announcement of such change.
"BLOCKED ACCOUNTS" means the accounts described in Section 2.07.
"BLOCKED ACCOUNT BANK" means any Eligible Institution at which a
Blocked Account is kept.
"BUSINESS DAY" means any day on which banks are not authorized or
required to close in New York, New York.
"BUSLEASE" has the meaning set forth in the recital to this
Agreement.
"CAPITAL EXPENDITURES" means, for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"CASH COLLATERAL ACCOUNT" means the account designated as such,
established and maintained pursuant to SECTION 2.06.
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"CASH COLLATERAL ACCOUNT REQUIREMENT" means, as of any time of
determination, (a) prior to the date of termination of this Agreement in
accordance with Section 2.01(b), the occurrence of a Servicer Termination Event
or an Insurance Agreement Event of Default (unless such Servicer Termination
Event or Insurance Agreement Event of Default has been waived by the Controlling
Party), the greater of (i) the greater of (a) [**]% of the Investment at such
time of determination and (b) $[***] and (ii) an amount equal to the Required
Credit Enhancement at such time of determination MINUS the Available L/C Amount
at such time of determination of all Transaction Letters of Credit, and (b) on
or after the date of termination of this Agreement in accordance with Section
2.01(b), the occurrence of a Servicer Termination Event or an Insurance
Agreement Event of Default (unless such Servicer Termination Event or Insurance
Agreement Event of Default has been waived by the Controlling Party), the
greater of (i) an amount equal to the Required Credit Enhancement on the day
immediately preceding such date of termination or occurrence of such Servicer
Termination Event or Insurance Agreement Event of Default, MINUS the aggregate
Available L/C Amount on such day of determination of all Transaction Letters of
Credit, and (ii) the greater of (A) the lesser of (1) [**]% of the Investment at
such time of determination and (2) of the Investment at such time of
determination and (B) $[***].
"CASH MANAGEMENT SYSTEMS" means the cash management systems
relating to Receivables in effect on the date hereof, set forth on SCHEDULE
1.01(b) hereto
"CERTIFICATE OF TITLE" means, with respect to each Vehicle, the
certificate of title applicable to such Vehicle duly issued in accordance with
the certificate of title act or statute of the jurisdiction applicable to such
Vehicle.
"CHARGES" means (i) all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable); (ii) all levies, assessments, charges, or claims of
any governmental entity or any claims of statutory lienholders, the nonpayment
of which could give rise by operation of law to a Lien on the Receivables, the
related Contracts or the related Vehicles or any other property of the Seller or
any Transferor and (iii) any such taxes, levies, assessment, charges or claims
which constitute a lien or encumbrance on any property of the Seller or any
Transferor.
"CIBC" has the meaning set forth in the recital to this Agreement.
"CLOSING DATE" means the date on which all of the conditions set
forth in SECTION 3.01 are satisfied or waived by the Purchaser.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
"COLLECTIONS" mean, with respect to any Purchased Receivable, all
cash collections and other proceeds of such Receivable (including fees and
interest arising thereon, and all Recoveries with respect thereto).
"COMMITMENT FEE" has the meaning set forth in the SPARC Fee
Letter.
"CONSENT" means the consent and acknowledgment, substantially in
the form of EXHIBIT D hereto, by each Transferor in favor of the Purchaser, the
Secondary Purchaser, the Administrative Agent and FSA.
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"CONSOLIDATED EBITDA" means, for any period, Consolidated Net
Income for such period PLUS, without duplication and to the extent reflected
as a charge in the statement of such Consolidated Net Income for such period,
the sum of (a) income tax expense, (b) interest expense, amortization or
write-off of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness, (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary losses,
non-recurring cumulative effects of accounting changes (to the extent
reflected as a charge in the statement of such Consolidated Net Income) and,
without duplication, non-recurring or unusual losses and all restructuring
charges (including, whether or not otherwise includable as a separate item in
the statement of such Consolidated Net Income for such period, non-cash
losses on sales of assets outside of the ordinary course of business), (f)
any other non-cash charges (other than any non-cash item requiring an accrual
or reserve for cash disbursements in any future period) and (g) any non-cash
charges attributable to applying the purchase method of accounting in
accordance with GAAP, and MINUS, to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (a) interest income,
(b) any extraordinary gains, non-recurring cumulative effects of accounting
changes (to the extent included as an addition to such Consolidated Net
Income for such period) and, without duplication, non-recurring or unusual
gains (including, whether or not otherwise includable as a separate item in
the statement of such Consolidated Net Income for such period, gains on the
sales of assets outside of the ordinary course of business), (c) any other
non-cash income (other than any non-cash item which represents a reversal of
an accrual or reserve initially recorded in anticipation of a cash
disbursement to be made in a future period), all as determined on a
consolidated basis and (d) the corporate overhead expenses of MCII Holdings,
Inc. paid by any Subsidiary thereof to MCII Holdings, Inc. in the form of a
dividend.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, for any period,
the ratio of (a) Consolidated EBITDA for such period less the aggregate amount
actually paid by Motor Coach and its Subsidiaries in cash during such period on
account of Capital Expenditures to (b) Consolidated Fixed Charges for such
period; PROVIDED, that the Seller shall have the option at one time during the
term of this Agreement to elect that during the Measurement Period Consolidated
EBITDA for purposes calculating the Consolidated Fixed Charge Coverage Ratio be
computed in accordance with the Covenant Smoothing Method.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum
(without duplication) of (a) Consolidated Interest Expense for such period and
(b) scheduled payments made during such period on account of principal of
Indebtedness of Motor Coach or any of its Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total cash
interest expense (including that attributable to Capital Lease Obligations) of
Motor Coach and its Subsidiaries for such period with respect to all outstanding
Indebtedness of Motor Coach and its Subsidiaries (including, without limitation,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under Interest
Rate Protection Agreements to the extent such net costs are allocable to such
period in accordance with GAAP), MINUS net payments received during such period
under Interest Rate Protection Agreements and minus interest income.
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"CONSOLIDATED NET INCOME" means, for any period, the consolidated
net income (or loss) of Motor Coach and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; PROVIDED, that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of Motor Coach or is merged into or consolidated with Motor
Coach or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of Motor Coach) in which Motor Coach or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by Motor Coach or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of Motor Coach to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any
Related Document) or Requirement of Law applicable to such Subsidiary.
"CONSOLIDATED SENIOR LEVERAGE RATIO" means, as at the last day of
any period, the ratio of (a) the difference between (i) (x) Consolidated Total
Debt on such day (other than the aggregate principal amount of Revolving
Extensions of Credit (as such term is defined in the Credit Agreement)
outstanding on such day) plus (y) the average daily principal amount of the
Revolving Extensions of Credit outstanding during the period of four fiscal
quarters ending on such day and (ii) the aggregate then outstanding principal
amount of Subordinated Indebtedness (as such term is defined in the Credit
Agreement) to (b) Consolidated EBITDA for such period; PROVIDED, that the Seller
shall have the option at one time during the term of this Agreement to elect
that during the Measurement Period Consolidated EBITDA for purposes of
calculating the Consolidated Senior Leverage Ratio be computed in accordance
with the Covenant Smoothing Method.
"CONSOLIDATED TOTAL DEBT" means, at any date, the aggregate
principal amount of all Indebtedness of Motor Coach and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP (other than
Indebtedness in respect of letters of credit backing obligations which do not
constitute Indebtedness).
"CONTRACT" means either a Vehicle Lease or a Vehicle Loan.
"CONTRACT FILE" means, with respect to each Contract, the
following documents:
(i) The executed original of each Contract (which
Contract shall contain, among other things, the name of the related
Obligor, the contract number, the amount of the related loan and the
identification number of the related Vehicle);
(ii) Evidence of insurance and any other documents
evidencing or related to any insurance policy maintained by the related
Obligor pursuant to the Contract that covers physical damage to the
related Vehicle, together with an endorsement showing the Seller as loss
payee, which interest as loss payee has been assigned to the
Administrative Agent, for the benefit of the Purchaser, the Secondary
Purchaser and FSA, PROVIDED, HOWEVER that with respect to the initial
Purchase hereunder, such endorsement shall be delivered to the Custodian
within forty-five (45) days of the date of such initial Purchase;
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(iii) either:
(A) the original related Certificate of Title,
indicating sole ownership thereof by the Seller (if a Leased Vehicle) or
the applicable Obligor (if a Financed Vehicle) and the Administrative
Agent, for the benefit of the Purchaser, the Secondary Purchaser and FSA,
as sole lien holder; or
(B) if (1) the Certificate of Title with respect to the
related Vehicle does not indicate sole ownership thereof by the Seller
(if a Leased Vehicle) or the applicable Obligor (if a Financed Vehicle)
and/or the Administrative Agent, for the benefit of the Purchaser, the
Secondary Purchaser and FSA, as sole lien holder, (2) such Certificate of
Title is not issued by the appropriate office in the jurisdiction in
which such Vehicle is or is to be titled, or (3) such Certificate of
Title must be amended for any other reason, (i) a copy of the related
Certificate of Title, the original of which has been sent (x) in the case
of Receivables sold in connection with the initial Purchase, to Lexis
Document Services, Inc. for preparation of an application for a new, a
duplicate or an amended Certificate of Title indicating sole ownership of
the related Vehicle by the Seller (if a Leased Vehicle) or the applicable
Obligor (if a Financed Vehicle) and the Administrative Agent, for the
benefit of the Purchaser, the Secondary Purchaser and FSA, as sole lien
holder, to be filed by Lexis Document Services, Inc. in the appropriate
office in the jurisdiction in which such Vehicle is or is to be titled,
or (y) in the case of each subsequent Purchase of Receivables, by the
Servicer, together with an application for a new, a duplicate or an
amended Certificate of Title indicating sole ownership of the related
Vehicle by the applicable Obligor and the Administrative Agent, for the
benefit of the Purchaser, the Secondary Purchaser and FSA, as sole lien
holder, to the appropriate office in the jurisdiction in which such
Vehicle is or is to be titled, and (ii) in the case of each subsequent
Purchase of Receivables a copy of such application for a new, a duplicate
or an amended Certificate of Title;
(C) if a Certificate of Title has not previously been
issued with respect to the related Vehicle, (i) a copy of the
manufacturer's statement of origin with respect to such Vehicle, the
original of which has been sent (x) in the case of Receivables sold in
connection with the initial Purchase, to Lexis Document Services, Inc.
for preparation of an application for a new Certificate of Title
indicating sole ownership thereof by the Seller (if a Leased Vehicle) or
the applicable Obligor (if a Financed Vehicle) and the Administrative
Agent, for the benefit of the Purchaser, the Secondary Purchaser and FSA,
as sole lien holder,
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to be filed by Lexis Document Services, Inc. in the appropriate office
in the jurisdiction in which such Vehicle is to be titled, or (y) in
the case of each subsequent Purchase of Receivables, by the Servicer,
together with an application for a new Certificate of Title indicating
sole ownership thereof by the applicable Obligor and the
Administrative Agent, for the benefit of the Purchaser, the Secondary
Purchaser and FSA, as sole lien holder, to the appropriate office in
the jurisdiction in which such Vehicle is to be titled, and (ii) in
the case of each such subsequent Purchase of Receivables, a copy of
such application for a new Certificate of Title;
(iv) A copy of the invoice or bill of sale concerning the
related Vehicle;
(v) Copies of any UCC financing statements filed by the
Seller or the Servicer against the Obligor with respect to the related
Vehicle; and
(vi) copies of any amendments, UCC filings or other
documents executed in connection with a Permitted Restructuring.
"CONTRACT PAYMENT" means each periodic installment payable by an
Obligor under a Contract for rent, principal and/or interest, excluding all
supplemental or additional payments required by the terms of such Contract with
respect to sales or other taxes, insurance, maintenance, ancillary products and
services, late fees, penalties, default interest and other specific charges.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROLLING PARTY" means FSA, so long as no FSA Default shall
have occurred and be continuing, and in the event an FSA Default shall have
occurred and be continuing, the Administrative Agent, PROVIDED, HOWEVER, that
the Administrative Agent shall be the Controlling Party after all amounts due to
FSA have been paid and the Policy has expired in accordance with its terms.
"COVENANT SMOOTHING DATE" means the date selected by the Seller as
the date on which Consolidated EBITDA shall begin, for purposes of calculating
the Consolidated Fixed Charge Coverage Ratio and the Consolidated Senior
Leverage Ratio, to be computed in accordance with the Covenant Smoothing Method.
"COVENANT SMOOTHING METHOD" means, at any date of measurement
of the Consolidated Senior Leverage Ratio or the Consolidated Fixed Charge
Coverage Ratio, the average of Consolidated EBITDA for each of the
consecutive non-overlapping four-fiscal quarter periods ended during the
Reference Period, with Consolidated EBITDA for any fiscal quarters ending
prior to the Closing Date being the amounts set forth on SCHEDULE 1.01(a).
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"CREDIT AGREEMENT" means that certain Credit Agreement, dated as
of June 16, 1999, as amended, among MCII Holdings, Inc., Motor Coach, the
several lenders party thereto, The Bank of Nova Scotia, General Electric Capital
Corporation and CIBC, as the same shall be further amended, modified or
supplemented and in effect from time to time.
[***]
"CREDIT FACILITIES" means each of the committed loan facilities,
lines of credit, letters of credit and other forms of credit enhancement
available to the Purchaser to support the Purchaser's Notes which are not
Liquidity Facilities.
"CUSTODIAL AGREEMENT" means the Custodial Agreement, dated as of
the date hereof, among the Seller, the Administrative Agent and the Custodian,
and any similar agreement among the Seller, the Administrative Agent, and any
successor Custodian, as the same shall be amended, modified or supplemented and
in effect from time to time.
"CUSTODIAN" means, initially, The Bank of New York, and includes
any successor thereto.
"DEALER FEE" means a commission payable by the Purchaser to a
dealer or placement agent in connection with the sale of the Purchaser's
commercial paper notes.
"DEFAULTED AMOUNT" means (a) with respect to a Defaulted
Receivable described in clause (i), (ii) or (iii) of the definition thereof, an
amount equal to the Outstanding Balance of such Defaulted Receivable, or (b)
with respect to a Defaulted Receivable described in clause (iv) of the
definition thereof, an amount equal to the amount which has been or should be
written off.
"DEFAULTED RECEIVABLE" means a Receivable:
(i) as to which the related Vehicle has been
repossessed;
(ii) as to which any Scheduled Contract Payment or part
thereof is unpaid more than 200 days from its original due date and the
related Vehicle has not been repossessed;
(iii) as to which the Obligor thereof has taken any action
as to itself, or suffered any event to occur as to itself, of the type
described in SECTION 7.01(f) or (g) of this Agreement; or
(iv) any Receivable not described in clauses (i) or (ii)
above, which, consistent with the Credit and Collection Policy, has been
or should be written off the Seller's books as uncollectible.
"DELINQUENCY RATIO" means, as of any date of determination, a
fraction, expressed as a percentage, the numerator of which is the average
Outstanding Balance of all Purchased
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Receivables which were Delinquent Receivables at the end of the calendar
month preceding the month in which such date of determination occurs and the
three most recently completed calendar months preceding such date, and the
denominator of which is the average aggregate Outstanding Balance of all
Purchased Receivables as of the end of such calendar months.
"DELINQUENT RECEIVABLE" means a Receivable that is not a Defaulted
Receivable and as to which any Scheduled Contract Payment or part thereof, is
unpaid more than 60 days from its original due date.
"ELIGIBLE CONTRACT" means a Contract satisfying the following
criteria:
(a) which Contract constitutes either (i) a Vehicle Loan
substantially in the form of EXHIBIT G or (ii) a Vehicle Lease substantially in
the form of EXHIBIT H; provided, however, that a Vehicle Lease shall only be an
Eligible Contract with respect to the initial Purchase hereunder;
(b) which Contract requires the Obligor to maintain insurance
against loss or damage to the Vehicles related thereto in the amounts
required under the Credit and Collection Policy and to maintain liability
insurance in an amount not less than that required under applicable
regulations of the I.C.C. or any other Governmental Authority under insurance
policies which name the Seller as loss payee (either directly or by transfer
of a Transferor's interest as loss payee under the applicable Transfer
Agreement) which interest as loss payee has been assigned to the
Administrative Agent, for the benefit of the Purchaser, the Secondary
Purchaser and FSA;
(c) which Contract requires the related Obligor to assume all
risk of loss or malfunction of the Vehicles subject thereto and to continue
making payments thereunder notwithstanding any defective or malfunctioning
Vehicles or any casualty loss with respect thereto;
(d) which Contract requires the Obligor to be liable for the
payment of all sales, use, property and other similar taxes imposed on or
with respect to the related Vehicles;
(e) which Contract contains a "hell or high water" clause in
favor of the related Transferor under which the Obligor cannot abate any
Contract Payments owed to such Transferor on account of any setoff,
counterclaim or other defense as against the Manufacturer or for any other
reason (except, in the case of a Vehicle Lease, disturbance of such Obligor's
quiet enjoyment by such Transferor or any permitted assignee);
(f) which does not constitute a "consumer lease" under the UCC
of any applicable jurisdiction;
(g) which, in the case of a Vehicle Lease, does not permit the
related Obligor to cancel such Vehicle Lease;
(h) which, in the case of a Vehicle Lease with a fixed rate of
interest, has Scheduled Contract Payments which do not vary, except for any
Balloon Payments;
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(i) which, in the case of a Vehicle Lease, the related
Contract does not permit the related Obligor to sublease the Vehicle subject
thereto to any Person without the written consent of the Servicer and
requires such Obligor to maintain such Vehicle in reasonably good condition
and working order;
(j) which, in the case of a Vehicle Lease, does not permit
early termination by the related Obligor except upon (i) continued payments
of Scheduled Contract Payments pending the remarketing, re-leasing or resale
of the related Vehicles and (ii) payment of a make-whole premium sufficient
to pay in full the Outstanding Balance of the Receivables arising thereunder
less the amounts realized by the related Transferor or the Servicer upon the
remarketing, release or resale of the related Vehicle or Vehicles;
(k) which, in the case of a Contract with a Balloon Payment
purchased after the initial Purchase, such Balloon Payment is not greater than
[**]% of the initial Outstanding Balance of such Contract;
(l) which, in the case of a Contract with a Balloon Payment,
has a maturity date not exceeding eighty-five (85) months from the date of such
Contract; and
(m) which, in the case of a Contract with a floating or
variable interest rate, has the same current base rate as set forth in such
Contract, based on the Prime Rate, and the same interest rate reset date as each
of the other Contracts with a floating or variable interest rate.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any United States branch of a foreign bank), having corporate
trust powers and acting as trustee or depository for funds deposited in such
account, so long as any of the securities of such depository institution shall
have a credit rating from each of S&P and Moody's in one of its generic rating
categories which signifies investment grade (and if neither S&P nor Moody's
rates securities of such depository institution, then so long as such depository
institution is otherwise acceptable to the Controlling Party).
"ELIGIBLE INSTITUTION" means a commercial bank, depositary
institution or trust company or Affiliate of any of the foregoing which has a
short-term indebtedness rating from S&P and Moody's of not lower than A-1 and
P-1, respectively.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the laws of
the United States of America or any state thereof or the District of Columbia
(or any domestic branch of a foreign bank) and subject to supervision and
examination by federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or trust company
as custodian with
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respect to any obligation referred to in clause (a) above or portion of such
obligation for the benefit of the holders of such depository receipts);
PROVIDED, HOWEVER, that at the time of the investment or contractual
commitment to invest therein (which shall be deemed to be made again each
time funds are reinvested following each Settlement Date), the commercial
paper or other short-term senior unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) of such depository institution
or trust company shall have a credit rating from Standard & Poor's of A-1 and
from Moody's of P-1;
(c) commercial paper and demand notes investing solely in
commercial paper having, at the time of the investment or contractual commitment
to invest therein, a rating from Standard & Poor's of A-1 and from Moody's of
P-1;
(d) investments in money market funds (including funds for
which the Administrative Agent in its individual capacities or any of its
respective Affiliates is investment manager, controlling party or advisor)
having a rating from Standard & Poor's of AAA-m or AAAm-G and from Moody's of
Aaa and having been approved by the Controlling Party.
(e) banker's acceptances issued by any depository institution
or trust company referred to in clause (b) above; and
(f) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
referred to in clause (b) above; and any other investment which has been
approved by the Controlling Party.
"ELIGIBLE RECEIVABLE" means, as of the date of Purchase thereof, a
Receivable:
(a) which is not a liability of an Excluded Obligor or an
Obligor which has had any Defaulted Receivables in the twelve month period
immediately preceding such date of Purchase;
(b) which is not a liability of an Obligor (i) organized under
the laws of any jurisdiction outside of the United States of America or (ii)
having its principal place of business outside of the United States of America;
(c) which is only denominated and payable in Dollars in the
United States of America;
(d) which, immediately prior to any Purchase, is both legally
and beneficially owned by the Seller free and clear of all rights, claims, Liens
or other interests of any other Person and is not subject to dispute, any right
of rescission, set-off, recoupment, counterclaim or defense, whether arising out
of transactions concerning the Contract therefor or otherwise;
(e) which arose under an Eligible Contract which was originated
by a Transferor in the ordinary course of its business and sold to the Seller
under a Transfer
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Agreement and which represents a bona fide indebtedness of the Obligor
incurred in connection with the purchase and/or leasing of a Vehicle by such
Obligor;
(f) (i) as to which no Scheduled Contract Payment or part
thereof is unpaid for more than 120 days, with respect to the initial Purchase,
and 30 days with respect to all subsequent Purchases, past its original due date
or (ii) which is not a Defaulted Receivable, and (iii) which, if it was
previously so delinquent or a Defaulted Receivable, has been current in payment
for at least six months since the date such Receivable was no longer delinquent
or defaulted;
(g) which does not arise from a transaction for which any
additional performance by the related Transferor or the Seller, or acceptance by
or other act of the Obligor thereunder, remains to be performed as a condition
to any payments on such Receivable;
(h) as to which representations and warranties set forth in
Article IV of the related Transfer Agreement are true and correct in all
respects as of the date of the sale of such Receivable under such Transfer
Agreement;
(i) as to which the Contract related thereto is not the subject
of any right of offset or counterclaim;
(j) the Vehicle relating to which is an Eligible Vehicle which
has been delivered to and accepted by the applicable Obligor;
(k) which was originated in accordance with, and satisfies in
all material respects all applicable requirements of, the Credit and Collection
Policy;
(l) which represents the genuine, legal, valid and binding
obligation of the Obligor thereunder enforceable by the holder thereof in
accordance with its terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the enforceability of creditors' rights generally and
general equitable principles, whether applied in a proceeding at law or in
equity;
(m) which is entitled to be paid pursuant to the terms of the
Contract therefor and has not been paid in full or been compromised, adjusted,
extended, satisfied, subordinated, rescinded, modified or otherwise
restructured, and is otherwise not subject to compromise, adjustment, extension,
satisfaction, subordination, rescission, or modification except for a Permitted
Restructuring;
(n) which has a stated term which satisfies the terms set forth
in SCHEDULE 1.01(e) hereto;
(o) which does not contravene in any material respect any laws,
rules or regulations applicable thereto (including laws, rules and regulations
relating to usury, consumer protection, truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy) and with respect to which no party to the Contract therefor is in
violation of any such law, rule or regulation that could reasonably be expected
to have a material adverse effect on the collectibility, value or payment terms
of such Receivable;
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(p) with respect to which no proceedings or investigations are
pending or threatened before any Governmental Authority (i) asserting the
invalidity of such Receivable or the Contract therefor, (ii) seeking payment of
such Receivable or payment and performance of such Contract or (iii) seeking any
determination or ruling that might materially and adversely affect the validity
or enforceability of such Receivable or such Contract;
(q) with respect to which the Obligor thereunder is not: (i)
bankrupt, (ii) to the knowledge of the Seller, the Servicer or any Transferor,
after due inquiry, unable to make payment of its obligations when due, (iii) a
debtor in a voluntary or involuntary bankruptcy proceeding, or (iv) the subject
of a comparable receivership or insolvency proceeding;
(r) the related Contract for which constitutes "chattel paper"
within the meaning of the UCC (i) as enacted in the jurisdiction in which the
Seller is located and where the Custodian takes possession thereof and (ii) in
the case of a Receivable acquired under a Transfer Agreement, also as enacted in
the jurisdiction in which the applicable Transferor is located and, in each such
case, there is only one original copy of the Contract (including any note or
instrument) evidencing such Receivable in existence, which original has been
stamped with the notation "original copy" and delivered to the Custodian as
contemplated under the Custodial Agreement;
(s) with respect to which the Obligor thereunder has been
instructed to make payment of its obligations thereunder solely and directly to
a Lockbox Account.
(t) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations with, any Governmental
Authority required to be obtained, effected or given in connection with the
creation of such Receivable or the Contract therefor have been duly obtained,
effected or given and are in full force and effect;
(u) which, together with the related Contract, is not subject
to any provision prohibiting or otherwise restricting the assignment or transfer
thereof, or the granting of a security interest therein;
(v) which, in the case of a Lease Receivable, arises under a
Vehicle Lease no portion of which has been rejected or terminated prior to the
original term of such Contract, and is not subject to rejection, early
termination (except as permitted in clause (j) of the definition of Eligible
Contract) or non-assumption;
(w) which arises under a Contract that requires Scheduled
Contract Payments to be made on a regular monthly basis, PROVIDED that
Receivables arising under Contracts which by their express terms allow no more
than three monthly payments to be missed in any twelve-month period shall be
Eligible Receivables;
(x) with respect to which, except with respect to a Receivable
purchased as part of the initial Purchase if the related Contract File is in the
possession of General Electric Capital Corporation or any agent thereof, such
Contract File has been delivered to the Custodian as contemplated under the
Custodial Agreement, and with respect to a Receivable purchased as part of the
initial Purchase if the related Contract File is in the possession of General
Electric
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Capital Corporation or any agent thereof, such Contract File will be
delivered to the Custodian one Business Day after such Purchase;
(y) which is covered by (i) a commercial crime policy
protecting the Servicer against losses, including, without limitation, forgery,
theft, embezzlement and fraud, by all officers, employees, or other Persons
acting in any capacity with regard to the Contracts, the Receivables and the
handling of any funds, money, documents and papers relating thereto and (ii)
errors and omissions coverage from responsible companies (with a rating of A or
better from Best's Rating Service) on all directors and officers acting in any
capacity with regard to the Contracts, the Receivables and the handling of any
funds, money, documents and papers relating thereto;
(z) in respect of which Receivable, the Administrative Agent,
for the benefit of the Purchaser and FSA, has a valid and perfected first
priority security interest, free and clear of all Liens in favor of any other
Person;
(aa) which is subject to a UCC filing against the applicable
Obligor at its principal place of business and any other applicable
jurisdictions;
(bb) which, together with the related Contract, does not provide
for recourse to any member of the MCII Group for the payment or performance of
any obligation of the applicable Obligor.
"ELIGIBLE VEHICLE" means, as of any date of determination, a
Vehicle:
(a) which, in the case of a Leased Vehicle, is owned by the
Seller free and clear of all Liens and rights of any other Person except the
Liens in favor of the Administrative Agent and the rights of the applicable
Obligor;
(b) either:
(i) the original related Certificate of Title,
indicating sole ownership thereof by the Seller (if a Leased Vehicle) or
the applicable Obligor (if a Financed Vehicle) and the Administrative
Agent, for the benefit of the Purchaser, the Secondary Purchaser and FSA,
as sole lien holder has been delivered to the Custodian, and the
Administrative Agent, for the benefit of the Purchaser, the Secondary
Purchaser and FSA, has acquired a perfected, first priority and valid
Lien in such Vehicle;
(ii) if (1) the Certificate of Title with respect to the
related Vehicle does not indicate sole ownership thereof by the Seller
(if a Leased Vehicle) or the applicable Obligor (if a Financed Vehicle)
and/or the Administrative Agent, for the benefit of the Purchaser, the
Secondary Purchaser and FSA, as sole lien holder, (2) such Certificate
of Title is not issued by the appropriate office in the jurisdiction in
which such Vehicle is or is to be titled, or (3) such Certificate of
Title must be amended for any other reason, as to which the related
original Certificate of Title has been sent (x) in the case of
Receivables sold in connection with the initial Purchase, to Lexis
Document Services, Inc. for
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preparation of an application for a new, a duplicate or an amended
Certificate of Title indicating sole ownership of the related Vehicle
by the Seller (if a Lease Vehicle) or the applicable Obligor (if a
Finance Vehicle) and the Administrative Agent, for the benefit of the
Purchaser, the Secondary Purchaser and FSA, as sole lien holder, to be
filed by Lexis Document Services, Inc. in such appropriate office, or
(y) in the case of each subsequent Purchase of Receivables, by the
Servicer, together with an application for a new, a duplicate or an
amended Certificate of Title indicating sole ownership of the related
Vehicle by the applicable Obligor and the Administrative Agent, for
the benefit of the Purchaser, the Secondary Purchaser and FSA, as sole
lien holder, to such appropriate office; or
(iii) if a Certificate of Title has not previously been
issued with respect to such Vehicle, as to which the original
manufacturer's statement of origin with respect to such Vehicle has been
sent (x) in the case of Receivables sold in connection with the initial
Purchase, to Lexis Document Services, Inc. for preparation of an
application for a new Certificate of Title indicating sole ownership
thereof by the Seller (if a Leased Vehicle) or the applicable Obligor (if
a Financed Vehicle) and the Administrative Agent, for the benefit of the
Purchaser, the Secondary Purchaser and FSA, as sole lien holder, to be
filed by Lexis Document Services, Inc. in the appropriate office in the
jurisdiction in which such Vehicle is to be titled, or (y) in the case of
each subsequent Purchase of Receivables, by the Servicer, together with
an application for a new Certificate of Title indicating sole ownership
thereof by the applicable Obligor and the Administrative Agent, for the
benefit of the Purchaser, the Secondary Purchaser and FSA, as sole lien
holder, to the appropriate office in the jurisdiction in which such
Vehicle is to be titled;
(c) as to which all of the representations or warranties
pertaining to Vehicles set forth in this Agreement or any other Related Document
(including any Transfer Agreement to the extent applicable) are true and
accurate;
(d) which is covered by insurance as required under this
Agreement;
(e) which is a model that has been certified by the
manufacturer thereof and any applicable Governmental Authority and any
applicable state agencies as roadworthy and which model otherwise complies with
all legal requirements for the use of such Vehicle for which it is intended in
the transportation industry;
(f) which is subject to an existing Eligible Contract the
Receivables arising under which are Eligible Receivables;
(g) which has not been attached, seized, levied upon or
subjected to a writ or distress warrant, nor come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors of the
Seller, BusLease, any Transferor, Motor Coach or any Subsidiary or Affiliate of
any of the foregoing; and
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(h) which is located in and titled under the laws of the United
States.
"ENVIRONMENTAL LAWS" means all applicable federal, state, local
and foreign laws, statutes, ordinances, codes, rules, standards and regulations,
now or hereafter in effect, and in each case as amended or supplemented from
time to time, and any applicable judicial or administrative interpretation
thereof, including any applicable judicial or administrative order, consent
decree, order or judgment, imposing liability or standards of conduct for or
relating to the regulation and protection of human health, safety, the
environment and natural resources (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. Sections 9601 ET SEQ.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. Sections 5101 ET SEQ.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 ET
SEQ.; the Solid Waste Disposal Act (42 U.S.C. Sections 6901 ET SEQ.); the Toxic
Substance Control Act (15 U.S.C. Sections 2601 ET SEQ.); the Clean Air Act (42
U.S.C. Sections 7401 ET SEQ.); the Federal Water Pollution Control Act (33
U.S.C. Sections 1251 ET SEQ.); the Occupational Safety and Health Act (29
U.S.C. Sections 651 ET SEQ.); and the Safe Drinking Water Act (42 U.S.C.
Sections 300(f) ET SEQ.), each as from time to time amended, and any and all
regulations promulgated thereunder, and all analogous state, local and foreign
counterparts or equivalents and any transfer of ownership notification or
approval statutes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means, with respect to the Seller or Motor
Coach, any trade or business (whether or not incorporated), which, together with
the Seller or Motor Coach, is treated as a single employer within the meaning of
SECTIONS 414(b), (c), (m) or (o) of the IRC.
"ESOP" means a Plan that is intended to satisfy the requirements
of SECTION 4975(e)(7) of the IRC.
"EXCESS COLLECTIONS" has the meaning specified in Section
2.03(c)(ii).
"EXCLUDED OBLIGOR" means any Obligor (a) that is an Affiliate of
the Seller, (b) that is a Governmental Authority or (c) which has been otherwise
reasonably designated, upon (30) days' prior written notice by the
Administrative Agent and FSA to the Seller, as an Obligor which shall be an
Excluded Obligor.
"FACILITY TERMINATION DATE" has the meaning specified in Section
2.01(b).
"FINAL MATURITY DATE" means (i) with respect to each Purchased
Receivable which is not a Defaulted Receivable, 60 days after the date of the
final Scheduled Contract Payment of the last maturing Purchased Receivable, and
(ii) with respect to all Defaulted Receivables the later of (a) 60 days after
the date of the final Scheduled Contract Payment of the last maturing Purchased
Receivable and (b) 300 days after the date of the last Scheduled Contract
Payment (or portion thereof) made with respect to all Defaulted Receivables.
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"FINANCE CHARGE COLLECTIONS" means that portion of Collections
which are attributable to Finance Charge Receivables.
"FINANCE CHARGE RECEIVABLE" means a Receivable created in respect
of Finance Charges.
"FINANCE CHARGES" means, with respect to any Purchased Receivable,
the portion of any Scheduled Contract Payment due under the Contract giving rise
to such Receivable which represents finance charges, together with any late
fees, delinquency fees and extension fees, paid by the related Obligor as
specified in the related Contract.
"FINANCE LEASE" means a Vehicle Lease which, (i) in accordance
with GAAP, must be accounted for as Indebtedness of the lessee; (ii) would be
treated as a secured loan or a lease intended for a security and not as a "true
lease" for the purposes of Section 365(d)(2) of the Bankruptcy Code in the event
an Obligor or lessor becomes the subject of a proceeding under the Bankruptcy
Code; (iii) does not constitute a "true lease" as meeting the criteria of a
"qualified motor vehicle operating agreement" within the meaning of Section
7701(h) of the Code and (iv) creates a valid and enforceable "security interest"
in favor of the lessor within the meaning of UCC Section 1-201(37).
"FINANCED VEHICLE" means a motor coach sold or financed by a
Transferor pursuant to a Contract, including all goods installed in or otherwise
affixed thereto.
"FISCAL QUARTER" means any of the quarterly accounting periods of
the Seller, ending on March 31, June 30, September 30 and December 31 of each
year.
"FISCAL YEAR" means any of the annual accounting periods of the
Seller ending on December 31 of each year.
[***]
[***]
"FSA" means Financial Security Assurance Inc., a New York monoline
insurance company, incorporated under the laws of the State of New York, or
successors thereto.
"FSA DEFAULT" has the meaning assigned to such term in the
Insurance Agreement.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, consistently applied;
PROVIDED, that when used with
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respect to the Servicer Termination Events set forth in clauses (iv) and (v)
of SECTION 7.01(p), GAAP shall mean generally accepted accounting principles
in the United States of America as in effect on the Closing Date and
consistently applied.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEE OBLIGATION" means, as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i)to purchase
any such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing Person's maximum reasonably
anticipated liability in respect thereof as determined by Motor Coach in good
faith.
"GUARANTEED YIELD" has the meaning specified in the Policy.
"HEDGE AGREEMENT" means any interest rate protection agreement,
interest rate futures contract, interest rate option, interest rate cap or other
interest rate hedge arrangement entered into in connection with the Investment
between the Purchaser or Administrative Agent and a Hedge Counterparty, as the
same shall be amended, modified or supplemented and in effect from time to time.
"HEDGE COUNTERPARTY" means a financial institution which is a
counterparty to a Hedge Agreement (which shall not be the Seller, Motor Coach or
the Servicer) and which has capital and surplus in excess of $100,000,000 and a
long-term unsecured and unsubordinated debt credit rating of at least Aa3 by
Moody's and at least AA- by S&P.
"I.C.C." means the Interstate Commerce Commission.
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"INDEBTEDNESS" means, with respect to any Person at any date,
without duplication, (a) all indebtedness of such Person for borrowed money, (b)
all obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above; and (i) all obligations of the
kind referred to in clauses (a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien (other than a Lien consisting solely of the filing or an
agreement to give a financing statement under the UCC or comparable law) on
property (including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable for the
payment of such obligation.
"INDEMNIFIED AMOUNTS" has the meaning specified in SECTION 8.01.
"INDEMNIFIED PARTY" has the meaning specified in SECTION 8.01.
` "INSURANCE AGREEMENT" means the Insurance and Indemnity Agreement
dated as of May 2, 2000 among FSA, the Seller, MCII Holdings (USA), Inc., MCII
Coaches, Inc., Bus Lease, MCII Financial Services II Inc., MCII Funding Inc.,
Motor Coach, the Purchaser, the Secondary Purchaser and the Administrative
Agent, as the same shall be amended, modified or supplemented and in effect from
time to time.
"INITIAL CLOSING DATE" means May 17, 2000.
"INITIAL CASH COLLATERAL AMOUNT" means $[***].
"INSURANCE AGREEMENT EVENT OF DEFAULT" has the meaning specified
in the Insurance Agreement.
"INSURER OPTIONAL DEPOSIT" means, with respect to any Settlement
Date, an amount delivered by FSA, at its sole option, in respect of a Policy
Claim Amount to the Backup Servicer for application in accordance with Section
2.03(c) for any of the following purposes: (i) to provide funds in respect of
the payment of fees or expenses of any provider of services with respect to such
Settlement Date or (ii) in lieu of the Administrative Agent making a draw on the
Policy.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate
protection agreement, interest rate future contract, interest rate option,
interest rate cap or other interest rate hedge arrangement, to or under which
Motor Coach or any of its Subsidiaries is a party or a beneficiary on the date
hereof or becomes a party or a beneficiary after the date hereof.
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"INVESTMENT" means the aggregate Purchase Price paid in respect of
all Purchased Receivables, reduced from time to time by Principal Collections,
Excess Collections (to the extent applicable) and amounts withdrawn from the
Cash Collateral Account or drawn under any Transaction Letter of Credit, in each
case paid to the Purchaser as a reduction of such Purchase Price; PROVIDED, that
if the Investment shall have been reduced by any distribution and thereafter all
or a portion of such distribution is rescinded or must otherwise be returned for
any reason, the Investment shall be increased by the amount of such rescinded or
returned distribution, as though it had not been made.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940,
as amended.
"IRC" means the Internal Revenue Code of 1986, as amended, and any
successor thereto.
"IRS" means the Internal Revenue Service, or any successor
thereto.
"L/C FUNDING ACCOUNT" shall, with respect to the Transaction
Letter of Credit, have the meaning ascribed to that term in the Credit
Agreement.
"LEASE RECEIVABLE" means a Receivable arising under a Vehicle
Lease.
"LEASED VEHICLE" means a Vehicle subject to a Vehicle Lease.
"LIEN" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or other title retention agreement, any financing lease, in each case having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the UCC or comparable law of any jurisdiction).
"LIQUIDITY FACILITIES" means each of the committed loan
facilities, lines of credit and other financial accommodations available to the
Purchaser to provide liquidity in support of the timely payment of the
Purchaser's Notes.
"LIQUIDITY FEE" has the meaning set forth in the SPARC Fee Letter.
"LOCKBOX ACCOUNT" means the lockbox account to which the Obligors
are directed to remit Collections in accordance with this Agreement.
"LOCKBOX AGREEMENT" means an agreement, in substantially the form
of EXHIBIT I, among a Lockbox Bank, the Servicer and the Administrative Agent.
"LOCKBOX BANK" means any Eligible Institution at which the Lockbox
Account is kept.
20
<PAGE>
"MANUFACTURER" means, with respect to any Financed Vehicle, the
Person who manufactured such Financed Vehicle.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a)
the business, assets, operations or financial or other condition of the Seller,
the Servicer, or any Transferor, (b) the Seller's ability to pay any of the
Obligations in accordance with the terms of the Agreement; (c) the Seller's or
the Servicer's ability to perform its obligations in accordance with the terms
of this Agreement and the other Related Documents; (d) the Purchased
Receivables, the related Vehicles or the Collections with respect thereto or the
Liens created under this Agreement and the other Related Documents or the
priority of any such Liens or (e) Administrative Agent's, the Purchaser's or the
Transaction L/C Issuer's rights and remedies under the Agreement and the other
Related Documents.
"MAXIMUM PERMITTED LEVERAGE RATIO" means, for any twelve month
fiscal period, the amount set forth below opposite such period:
<TABLE>
<CAPTION>
Fiscal Period Ending On: Maximum Permitted Leverage Ratio
------------------------ --------------------------------
<S> <C>
March 31, 2001 [**] to 1
March 31, 2002 [**] to 1
March 31, 2003 [**] to 1
March 31, 2004 [**] to 1
March 31, 2005 and the last [**] to 1
business day of March of
each year thereafter
</TABLE>
"MCII GROUP" has the meaning set forth in the Insurance Agreement.
"MEASUREMENT PERIOD" means the period commencing on the Covenant
Smoothing Date and ending on (and including) the date which is 18 months
thereafter or any earlier date specified by the Seller.
"MEMBER" means a Person who holds membership in the Purchaser
other than as an associate member.
21
<PAGE>
"MINIMUM PERMITTED FIXED CHARGE COVERAGE RATIO" means, for any
twelve month fiscal period, the amount set forth below opposite such period:
<TABLE>
<CAPTION>
fiscal Period Ending On: Minimum Permitted Fixed Charge Coverage Ratio
------------------------ ---------------------------------------------
<S> <C>
March 31, 2001 [**] to 1
March 31, 2002 [**] to 1
March 31, 2003 [**] to 1
March 31, 2004 and the [**] to 1
last business day of
March of each year
thereafter
</TABLE>
"MONTHLY REPORT" means a report, in substantially the form of
EXHIBIT A hereto (appropriately completed), furnished by the Servicer to the
Purchaser pursuant to SECTION 5.05(i) hereof.
"MOODY'S" means Moody's Investors Service, Inc., or any successor
thereto.
"MOTOR COACH" means Motor Coach Industries International, Inc., a
Delaware corporation.
"MOTOR COACH ENTITIES" has the meaning set forth in Section
5.01(l).
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
SECTION 4001(a)(3) of ERISA, and to which the Seller or ERISA Affiliate is
making, is obligated to make, has made or been obligated to make, contributions
on behalf of participants who are or were employed by any of them.
[***]
[***]
22
<PAGE>
"NOTES" means, with respect to the Purchaser, commercial paper
notes or other short-term promissory notes issued by the Purchaser in the United
States commercial paper market from time to time.
"OBLIGATIONS" means all debts, liabilities and obligations for the
payment of monetary amounts (whether or not such performance is then required or
contingent) owing by the Seller to the Administrative Agent, the Custodian, the
Purchaser or the Transaction L/C Issuer, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other instrument,
arising under the Agreement or any of the Related Documents. This term
includes, without limitation, all Investment, Yield (including all interest
which accrues after the commencement of any case or proceeding in bankruptcy
after the insolvency of, or for the reorganization of the Seller, whether or not
allowed in such proceeding), expenses, attorneys' fees and any other sum
chargeable to the Seller under the Agreement or any of the other Related
Documents.
"OBLIGOR" means each Person obligated to make payments under a
Contract.
"OPERATING EXPENSE FEE" has the meaning set forth in the SPARC Fee
Letter.
"OPERATING LEASE" means a Vehicle Lease which is not a Finance
Lease.
"OUTSTANDING BALANCE" means, with respect to a Receivable at any
time of determination, all amounts in respect of which the related Obligor is
obligated as of such time of determination, including all Principal Receivables
and Finance Charge Receivables not paid by such Obligor as of such time of
determination.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERFORMANCE INDEMNITY - SERVICER" means a performance indemnity,
substantially in the form of EXHIBIT E attached hereto, from Motor Coach for the
benefit of the Purchaser, the Secondary Purchaser, FSA and the Administrative
Agent, pursuant to which Motor Coach unconditionally guarantees to the
Purchaser, the Secondary Purchaser, FSA and the Administrative Agent the due and
punctual performance of the obligations of the Servicer under this Agreement.
"PERFORMANCE INDEMNITY - TRANSFERORS" means a performance
indemnity, substantially in the form of EXHIBIT F attached hereto, from Motor
Coach for the benefit of the Purchaser, the Secondary Purchaser, FSA, the
Administrative Agent and the Seller, pursuant to which Motor Coach
unconditionally guarantees to the Purchaser, the Secondary Purchaser, the
Administrative Agent, FSA and the Seller the due and punctual performance of the
obligations of the Transferors under the Transfer Agreements.
"PERMITTED RESTRUCTURING" means a restructuring of a Receivable in
accordance with the Credit and Collection Policy which (i) does not lower the
Outstanding Balance owed thereunder; (ii) does not lower the interest rate
charged thereunder and (iii) does not extend the final maturity thereof by more
than three months, PROVIDED, that (x) no more than one restructuring of a
Receivable shall constitute a Permitted Restructuring; and (y) no restructuring
23
<PAGE>
shall constitute a Permitted Restructuring if, as a result thereof, the
aggregate Outstanding Balances of all Receivables which have been subject to a
Permitted Restructuring would exceed [**]% aggregate Outstanding Balances of all
Purchased Receivables at such time.
"PERSON" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"PLAN" means, at any time, an employee benefit plan, as defined in
SECTION 3(3) of ERISA, which the Seller maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by the Seller.
"POLICY" means the financial guaranty insurance policy number
50930-N dated May 10, 2000, including any endorsement thereto, issued by FSA
pursuant to the Insurance Agreement.
"POLICY CLAIM AMOUNT" has the meaning set forth in the Policy.
"PREMIUM" has the meaning set forth in the Premium Letter.
"PREMIUM LETTER" means that certain letter dated as of May 2, 2000
between the Purchaser, the Secondary Purchaser, MCI International, Inc., the
Seller, the Administrative Agent and FSA with respect to certain fees to be paid
from time to time to FSA, as such letter may be amended, restated or otherwise
defined from time to time.
"PRIME RATE" means the prime interest rate per annum announced
from time to time by Citibank, N.A. for loans to its most credit worthy
commercial borrowers as in effect on the first day of any calendar quarter.
"PRINCIPAL COLLECTIONS" means that portion of Collections
attributable to Principal Receivables.
"PRINCIPAL RECEIVABLE" means, with respect to any Purchased
Receivable, the portion of any Scheduled Contract Payment due under the Contract
giving rise to such Receivable which does not represent Finance Charges.
"PROGRAM FEE" has the meaning set forth in the SPARC Fee Letter.
"PURCHASE" has the meaning specified in SECTION 2.01(a).
"PURCHASE DISCOUNT" means, for each day in a Settlement Period,
the weighted average of the following:
(i) the weighted average, determined on such day, of the
sum of (a) the discount rates on all Notes of the Purchaser issued at a
discount outstanding on such day (other than (1) Notes the proceeds of
which are used by the Purchaser to (x) purchase receivables, or extend
financing secured thereby, at a fixed interest rate or (y) conduct any
arbitrage activities of the Purchaser or
24
<PAGE>
(2) Notes which (A) were issued, and the proceeds of which were used by
the Purchaser, specifically for the purpose of funding the purchase of,
or extending financing secured by, receivables of a specific Person and
(B) are payable from the proceeds of such receivables or from amounts
received by the Purchaser from such Person) plus (b) the Dealer Fees,
converted to an annual yield-equivalent rate on the basis of a 360-day
year;
(ii) the weighted average, determined on such day, of the
annual interest rates payable on all interest-bearing Notes of the
Purchaser outstanding on such day plus the Dealer Fees (other than Notes
the proceeds of which are used by the Purchaser for the purposes
described in clauses (1) and (2) of paragraph (i) above), on the basis of
a 360-day year; and
(iii) the weighted average, determined on such day, of the
annual interest rates applicable to any Liquidity Facilities under which
the Purchaser has borrowed loans on such day;
PROVIDED, HOWEVER, that to the extent that the Investment is funded by a
specific issuance of Notes, the Purchase Discount shall be equal to the rate or
weighted average of the rates applicable to such issuance, and PROVIDED FURTHER,
that if a Hedge Agreement was entered into with respect to any portion of the
Investment, the Purchase Discount with respect to such Investment shall be equal
to the weighted average of the rates of interest set forth in the applicable
confirmations with respect to any applicable Hedge Agreement which is payable by
the Purchaser whether or not such Hedge Agreement is in effect on such day .
"PURCHASE LIMIT" means, at the time any determination thereof is
to be made, $250,000,000 less the "Investment" of the Secondary Purchaser under
the Secondary Purchase Agreement.
"PURCHASE PRICE" means, with respect to any Receivable to be
purchased on any Business Day pursuant to SECTION 2.01, the cash consideration
to be paid for such Receivable in an amount equal outstanding principal amount
thereof as of such Business Day or, if the related Vehicle is a new Vehicle, the
manufacturer's list price thereof if such list price is lower than such
outstanding principal amount.
"PURCHASED RECEIVABLE" means each outstanding Receivable purchased
by the Purchaser pursuant to SECTION 2.01 in respect of which the Investment of
such Purchased Receivable has not been reduced to zero.
"PURCHASER" has the meaning set forth in the recital to this
Agreement.
"PURCHASER'S ACCOUNT" means the account maintained at Bankers
Trust Company, ABA number 021-001-003, for the account of Special Purpose
Accounts Receivable Cooperative Corporation, account number 00-313-226, in favor
of Special Purpose Accounts Receivable Cooperative Corporation or such other
account of the Purchaser maintained at a depository institution in the United
States of America and designated in writing as its account for the purposes of
the Agreement.
25
<PAGE>
"QUALIFIED PLAN" means a Plan which is intended to be
tax-qualified under SECTION 401(a) of the IRC.
"RATING AGENCIES" means, S&P and Moody's.
"RECEIVABLE" means, with respect to any Obligor:
(a) indebtedness of such Obligor arising under a
Contract (whether constituting an account, chattel paper, a document, an
instrument or a general intangible), including the right to payment of
any Scheduled Contract Payments, interest or finance charges and other
obligations of such Obligor with respect thereto;
(b) all Liens and property subject thereto from time to
time securing or purporting to secure any such indebtedness of such
Obligor (including any security deposits made or required to be made by
such Obligor to secure such indebtedness);
(c) all guaranties, indemnities and warranties,
insurance policies, financing statements and other agreements or
arrangements of whatever character from time to time supporting or
securing payment of any such indebtedness;
(d) all Collections with respect to any of the
foregoing; and
(e) all Records with respect to any of the foregoing.
"RECORDS" means all Contracts and other documents, books, records
and other information (including computer programs, tapes, disks, data
processing software and related property and rights) prepared and maintained by
or on behalf of the Seller with respect to Receivables and the Obligors
thereunder and/or the related Vehicles, including, without limitation, all
documents, books, records and other information prepared and maintained by the
Seller, the Transferors or the Servicer with respect to such Receivables,
Obligors or Vehicles.
"RECOVERIES" means, with respect to a Defaulted Receivable, the
sum of all amounts, whether in the form of cash, checks, drafts, insurance
proceeds or other instruments, received by the Seller, the Related Transferor or
the Servicer, net of all expenses incurred in connection with the repossession
and disposition of such Vehicles (including refurbishment costs), in payment
of, or applied to, any amount owed by an Obligor on account of such Defaulted
Receivable.
"RECOVERY RATE" means, on any date of determination, a ratio,
expressed as a percentage, the numerator of which is the aggregate amount of
Recoveries during the four most recently completed calendar months preceding
such date of determination with respect to which there were Recoveries and the
denominator of which is the sum of the aggregate Outstanding Balance at the time
of the repossession of the related Vehicles of all such Purchased Receivables
related to such Recoveries.
26
<PAGE>
"REFERENCE PERIOD" means, with respect to any date, the period of
three Fiscal Years of Motor Coach ending on such date.
"RELATED DOCUMENTS" means the Transferor Agreements, the Lockbox
Agreements, the Backup Servicing Agreement, the Performance Indemnity -
Servicer, the Performance Indemnity - Transferors, the Custodial Agreement, the
Credit Agreement, the Consents, the Insurance Agreement, the Policy, the Premium
Letter, the SPARC Fee Letter and each agreement and document entered into in
connection herewith or therewith.
"REPORT DELIVERY DATE" means, the fourteenth (14th) day (or if
such day is not a Business Day, the next succeeding Business Day) of each
calendar month.
"REQUIRED CREDIT ENHANCEMENT" means, at any time of determination,
either (1) prior to the date of termination of this Agreement in accordance with
SECTION 2.01(b) or the occurrence of a Service Termination Event or an Insurance
Agreement Event of Default (unless such Servicer Termination Event or Insurance
Agreement Event of Default has been waived by the Controlling Party), the
greater of (i) [**]% of the Investment at such time of determination and (ii)
the sum of (a) [**]% of the Investment at such time of determination, (b) [**]%
of the Outstanding Balance at such time of Receivables purchased as part of the
initial Purchase with respect to which any Scheduled Contract Payment or part
thereof was unpaid as of the date of such initial Purchase between 60 days and
120 days, inclusive, from its original due date, and (c) [**]% of the aggregate
outstanding amount of Balloon Payments as such time of determination, (2) from
and after the date of termination of this Agreement in accordance with SECTION
2.01(b), the greatest of (i) an amount determined in clause (1) at such time of
determination, (ii) the lesser of (a) the Investment at such time of
determination and (b) [**]% of the amount of the Required Credit Enhancement on
the day immediately preceding the date of termination of this Agreement in
accordance with SECTION 2.01(b), and (iii) $[***] or (3) from and after the date
of the occurrence of a Servicer Termination Event or an Insurance Agreement
Event of Default (unless such Servicer Termination Event or Insurance Agreement
Event of Default has been waived by the Controlling Party), the greater of (x)
the lesser of (i) the amount determined in accordance with clause (1) on on the
day immediately preceding such date of termination, and (ii) the Investment at
such time of determination and (y) $[***].
"REQUIREMENT OF LAW" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding on such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER" means with respect to the Seller and
BusLease, any officer (including, for the purpose of this Agreement, any
assistant secretary and any assistant treasurer) of such entity or any person
designated in writing by any such officer.
"RETIREE WELFARE PLAN" means, at any time, a Plan that is a
"welfare plan" as defined in SECTION 3(2) of ERISA, that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant
after such participant's termination of employment,
27
<PAGE>
other than continuation coverage provided pursuant to SECTION 4980B of the
IRC and at the sole expense of the participant or the beneficiary of the
participant.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies Inc.
"SCHEDULED CONTRACT PAYMENTS" means the regularly scheduled
Contract Payments due under each Contract.
"SCHEDULED PAYMENTS" has the meaning set forth in the Policy.
"SECONDARY PURCHASER" means Canadian Imperial Bank of Commerce,
and its permitted successors and permitted assigns.
"SECONDARY PURCHASE AGREEMENT" means the Receivables Purchase
Agreement dated as of the date hereof among the Seller, the Secondary Purchaser,
the Servicer and the Administrative Agent, as the same shall be amended,
modified or supplemented and in effect from time to time.
"SELLER" has the meaning set forth in the recital to this
Agreement.
"SERVICER" means at any time the Person (which may include the
Administrative Agent) then authorized pursuant to Article VI to service,
administer and collect Purchased Receivables. Initially, the Servicer shall be
BusLease.
"SERVICER FEE" has the meaning specified in SECTION 6.06.
"SERVICER TERMINATION EVENT" has the meaning specified in Article
VII.
"SETTLEMENT DATE" means, prior to the occurrence of a Servicer
Termination Event, four (4) Business Days after the Report Delivery Date, and on
and after the occurrence of a Servicer Termination Event, the first Business Day
following the receipt by the Servicer of any Collections.
"SETTLEMENT PERIOD" means the period from (and including) a
Settlement Date (or, in the case of the initial Settlement Period under this
Agreement, from the date of the Initial Purchase) to (but excluding) the
immediately succeeding Settlement Date.
"SHORTFALL" has the meaning specified in SECTION 2.03(d).
"SPARC FEE LETTER" means that certain letter dated as of May 2,
2000 between the Administrative Agent and the Seller with respect to certain
fees to be paid from time to time by the Seller to the Administrative Agent, for
the benefit of the Administrative Agent, the Purchaser and the Secondary
Purchaser, as such letter may be amended, restated or otherwise defined from
time to time with the prior written consent of FSA.
"SPECIAL CONCENTRATION LIMIT" means, at any time of determination
with respect to any Obligor listed on SCHEDULE 1.01(s) attached hereto (together
with its Affiliates and
28
<PAGE>
Subsidiaries), the amount calculated pursuant to SCHEDULE 1.01(s) with
respect to such Obligor; PROVIDED, that the Controlling Party may, at any
time in its discretion, reduce or increase the Special Concentration Limit
for any such Obligor, or add the name of any other Obligor to SCHEDULE
1.01(s), through the delivery by the Controlling Party to the parties hereto
and the Rating Agencies of an amended SCHEDULE 1.01(s), which such reduction,
increase or addition shall be applicable only with respect to Purchases made
after the delivery of such amended SCHEDULE 1.01(s); PROVIDED, HOWEVER, that
the Special Concentration Limit for any Obligor shall not be less than the
Standard Concentration Limit.
"STANDARD CONCENTRATION LIMIT" means, at any time of determination
with respect to any Obligor (other than an Obligor listed on SCHEDULE 1.01(s)
attached hereto) together with its Affiliates and Subsidiaries), an amount equal
to (i) for the five Obligors with the largest Outstanding Balances at such time,
[**]% of the Investment at such time, (ii) for the next six Obligors with the
largest Outstanding Balances at such time, [**]% of the Investment at such time
and (iii) for all other Obligors, [**]% of the Investment at such time.
"STATED AMOUNT" means, with respect to any Transaction Letter of
Credit, the L/C Amount as defined in such Transaction Letter of Credit, which
amount shall not be decreased without the consent of FSA, which consent shall
not be unreasonably witheld.
"SUBSIDIARY" means, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Capital Stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether, at the
time, Capital Stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned legally or beneficially by such Person
and/or one or more Subsidiaries of such Person, or with respect to which any
such Person has the right to vote or designate the vote of fifty percent (50%)
or more of such Capital Stock whether by proxy, agreement, operation of law or
otherwise, and (b) any partnership, limited liability company, business trust,
joint venture or other entity in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.
"TITLE IV PLAN" means an employee pension benefit plan, as defined
in SECTION 3(2) of ERISA (other than a Multiemployer Plan), which is covered by
Title IV of ERISA, and which the Seller or an ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
"TRANSACTION L/C DRAW" means any payments made to the Backup
Servicer under the Transaction Letter of Credit.
"TRANSACTION L/C ISSUER" means the financial institution,
satisfactory to Administrative Agent, which from time to time is the issuer of a
Transaction Letter of Credit. Initially, the "TRANSACTION L/C ISSUER" shall be
The Bank of Nova Scotia.
29
<PAGE>
"TRANSACTION LETTER OF CREDIT" means an irrevocable standby letter
of credit issued by a Transaction L/C Issuer in favor of the Administrative
Agent, for the benefit of the Purchaser and the Secondary Purchaser, as
beneficiary, in form and substance satisfactory to FSA and the Administrative
Agent, as the same may be amended, restated or otherwise modified or replaced
from time to time, including any L/C Funding Account.
"TRANSFER AGREEMENTS" means those certain Receivables and Vehicle
Transfer Agreements between each Transferor, as seller, and the Seller, as
buyer, as each such agreement may be amended, restated or otherwise modified
from time to time in accordance with its terms.
"TRANSFEROR" means a direct or indirect Subsidiary or Affiliate of
Motor Coach to the extent party to a Transfer Agreement and approved by the
Administrative Agent and FSA, each in their sole discretion (as of the date
hereof being those Subsidiaries and Affiliates specified in SCHEDULE 1.01(t)).
"UCC" means the Uniform Commercial Code as the same may, from time
to time be enacted and in effect in the State of New York; PROVIDED, HOWEVER, in
the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Administrative Agent's security interest
in any Purchased Receivables, the related Financed Vehicles or Collections with
respect thereto is governed by the Uniform Commercial Code as enacted and in
effect in a jurisdiction other than the State of New York, the term "UCC" shall
mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.
"UNFUNDED PENSION LIABILITY" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five (5) years following a
transaction which could reasonably be expected to be covered by SECTION 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by the
Seller or any ERISA Affiliate as a result of such transaction.
"UTILIZATION FEE" has the meaning set forth in the SPARC Fee
Letter.
"VEHICLE" means a Financed Vehicle and/or a Leased Vehicle.
"VEHICLE LEASE" means an agreement between an Obligor and a
Transferor providing for the leasing of a Vehicle to the Obligor, PROVIDED that
such agreement would be classified for purposes of GAAP as a Finance Lease and
not an Operating Lease.
"VEHICLE LOAN" means an agreement between an Obligor and a
Transferor providing for the extension of credit to such Obligor by such
Transferor, in connection with such Obligor's purchase of a Vehicle from a
Manufacturer.
"WITHDRAWAL AMOUNT" has the meaning specified in SECTION 2.03(d).
30
<PAGE>
"YIELD" means, for any Settlement Period, the sum, for each day in
such Settlement Period, of the product of (i) the outstanding Investment on such
day and (ii) the Purchase Discount for such day; PROVIDED, that no provision of
this Agreement shall require the payment or permit the collection of Yield in
excess of the maximum permitted by applicable law; and PROVIDED, FURTHER, that
Yield shall not be considered paid by any distribution to the extent that at any
time all or a portion of such distribution is rescinded or must otherwise be
returned for any reason.
Section 1.02 OTHER TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. All
terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.
ARTICLE II.
AMOUNTS AND TERMS OF THE PURCHASES
Section 2.01 PURCHASE FACILITY.
(a) On the terms and subject to the conditions herein set
forth, the Seller may, from time to time prior to the delivery of a notice
pursuant to paragraph (b) below, sell to the Purchaser, and, if the Seller
elects so to sell, the Purchaser may, in its sole discretion, purchase (each, a
"PURCHASE") from the Seller, all of the Seller's right, title and interest in
Eligible Receivables and the Contracts with respect thereto, PROVIDED, that with
respect to the right, title and interest of the Seller in the related Vehicles,
such Purchase shall be deemed to transfer only a security interest therein.
Under no circumstances shall the Purchaser make any Purchase if, after giving
effect to such Purchase the Investment would exceed the Purchase Limit.
(b) The "Facility Termination Date" shall be 364 days from the
date hereof; provided, that the Facility Termination Date may be extended for an
additional 364-day period at the end of each 364-day period from the date hereof
if the Seller gives the Administrative Agent, the Rating Agencies and FSA
written notice not later than 120 days prior to each such annual anniversary
(beginning with the first such period) and the Administrative Agent, the Rating
Agencies and FSA provide the Seller with their respective written consents to
such extension not later than 30 days after receipt of the Seller's notice.
Notwithstanding the foregoing, either the Purchaser or the Seller may elect to
terminate this Agreement by notifying the other party and FSA to such effect.
Such notice shall be given by no later than 1:00 p.m., New York time, on the
third Business Day preceding the date such party contemplates terminating this
Agreement. The notice will be in the form of EXHIBIT C, and will specify the
date on which this Agreement will be terminated.
Section 2.02 MAKING PURCHASES.
(a) The Seller shall notify the Purchaser in writing, with a
copy to the Administrative Agent, of its desire to sell Eligible Receivables to
the Purchaser pursuant to the terms of this Agreement, which notice shall
specify (i) the Purchase Price of such Eligible Receivables (which, in the
aggregate, shall not be less than $500,000) and (ii) the proposed date of such
Purchase (which shall be not less than three (3) Business Days after the date of
such notice of Purchase hereunder and shall be a Business Day, PROVIDED, that
the Seller may only
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make one request for a Purchase in any calendar week and shall have attached
thereto a schedule indicating the Contract number of each Contract relating
to such Receivables). The Purchaser shall, not later than 12:00 noon, New
York City time, on the second Business Day prior to the proposed date of
Purchase, notify the Seller in writing (which may be by acknowledgment
endorsed on the Seller's notice) of its decision whether or not it will
purchase such Receivables. The Seller's acceptance of the Purchaser's
decision to purchase such Receivables shall be irrevocable and binding on the
Seller and the Seller shall indemnify the Purchaser against any loss or
expense incurred by the Purchaser as a result of any failure by the Seller to
accept the Purchase Price by reason of the liquidation or reemployment of
funds acquired or requested by the Purchaser to fund such requested amount.
(b) On the date of each Purchase, the Purchaser shall, upon
satisfaction of the applicable conditions set forth in SECTION 3.01 and SECTION
3.02, make available to the Seller in same day funds, at the Seller's account
with Chase Bank of Texas, ABA Number 113000609, account number 08805096557, an
amount equal to the Purchase Price of such Purchased Receivables.
(c) Other than with respect to the initial Purchase, the Seller
shall deliver to the Custodian no later than 11:00 a.m., New York City time,
three (3) Business Days prior to the requested date of Purchase, the Contract
File pertaining to each Receivable to be sold to the Purchaser, in accordance
with the terms and conditions of the Custodial Agreement. The Seller shall,
with respect to the initial Purchase, deliver to the Custodian, one Business Day
after such Purchase, the Contract File pertaining to each Receivable sold to the
Purchaser in connection with such initial Purchase, in accordance with the terms
and conditions of the Custodial Agreement
(d) Pursuant to the Custodial Agreement, the Custodian shall
deliver to the Seller and the Administrative Agent, no later than 5:00 p.m., New
York City time, one Business Day prior to the proposed date of such Purchase, a
trust receipt, in the form attached as Annex 2 to the Custodial Agreement in
respect of all Receivables purchased by the Purchaser on such Funding Date.
Section 2.03 SETTLEMENT PROCEDURES.
(a) Collections with respect to the Purchased Receivables
shall be administered by the Servicer, in accordance with the terms of this
Agreement. The Seller shall provide to the Servicer and the Backup Servicer
on a timely basis all information needed for such administration.
(b) The Servicer shall, for each day on which Collections are
received by it or in any Lockbox Account, determine the allocation of such
Collections between Finance Charge Collections and Principal Collections with
respect to Purchased Receivables. The Servicer shall not commingle with its
other funds Collections received by it prior to their payment to the Purchaser
and shall deposit or cause to be deposited into a Blocked Account, in accordance
with SECTION 6.02(b) all Collections and other proceeds of Purchased
Receivables.
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(c) On or prior to the third Business Day immediately preceding
a Settlement Date, the amount on deposit in any Blocked Account (including all
investment income with respect to amounts on deposit in any Blocked Account) as
of the last Business Day of the most recently completed calendar month, shall be
allocated as follows:
(i) The amount of Principal Collections with respect to
Purchased Receivables shall, upon payment of such amount to the Purchaser
in accordance with the terms of this SECTION 2.03, be applied to reduce
the Investment in the amount of such Principal Collections so allocated
and paid. The Purchaser may reinvest such Principal Collections in new
Receivables PROVIDED that the conditions set forth in SECTIONS 2.02 and
3.02 have been satisfied. On each Settlement Date on and after the Final
Maturity Date with respect to each Purchased Receivable, the
Administrative Agent shall draw first, upon all amounts available in the
Cash Collateral Account and second, upon all amounts available under the
Transaction Letter of Credit and apply the proceeds of such draws and any
Excess Collections to the reduction of the Investment. Once such amounts
are reduced to zero, the Administrative Agent may draw on the Policy on
account of Investment.
(ii) Finance Charge Collections with respect to Purchased
Receivables, all investment income with respect to amounts on deposit in
the Cash Collateral Account, all Recoveries, any Withdrawal Amount, any
Transaction L/C Draw and any Insurer Optional Deposit shall be allocated
in the following order of priority:
(A) first, to the Servicer (if not BusLease or an
Affiliate of BusLease), an amount equal to the unpaid
Servicer Fee accrued through such day and not previously
allocated and held (whether or not accrued during the
current Settlement Period),
(B) second, to the Custodian, an amount equal to
the unpaid fees payable to the Custodian under the
Custodial Agreement accrued through such day and not
previously allocated and held (whether or not accrued
during the current Settlement Period),
(C) third, to the Backup Servicer, an amount
equal to the unpaid Backup Servicer Fee accrued through
such day and not previously allocated and held (whether
or not accrued during the current Settlement Period), plus
any Conversion Fee or transition expenses as defined and
provided for in the Backup Servicing Agreement to the
extent not paid by the Servicer as provided therein,
provided, that such transition expenses shall not exceed
$25,000,
(D) fourth, to the Purchaser, the lesser of
(i) the Yield and (ii) the Guaranteed Yield, if any,
payable to the
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Purchaser accrued through such day and not previously
allocated and held (whether or not accrued during the
current Settlement Period),
(E) fifth, to the Purchaser, the Program Fee,
the Operating Expense Fee, the Utilization Fee and the
Liquidity Fee payable to the Purchaser in accordance
with the SPARC Fee Letter accrued through such day and
not previously allocated and held (whether or not
accrued during the current Settlement Period),
(F) sixth, to the Purchaser to be applied as a
reduction of the Investment, an amount equal to the Net
Defaulted Amount as of the last day of the most recently
completed calendar month and not previously allocated
and held (whether or not such Net Defaulted Amount arose
from Purchased Receivables which became Defaulted
Receivables during such calendar month),
(G) seventh, to FSA, an amount equal to the
unreimbursed payments made under the Policy and the
fees, if any, payable to FSA in accordance with the
Premium Letter, in each case, accrued through such day
and not previously allocated and held (whether or not
accrued during the current Settlement Period),
(H) eighth, to the extent the amount on
deposit in the Cash Collateral Account is less than the
Cash Collateral Account Requirement, to the Cash
Collateral Account, an amount equal to such shortfall,
(I) ninth, to the Purchaser, the
remaining Yield, if any, payable to the Purchaser
through such day and not previously allocated and
held (whether or not accrued during the current
Settlement Period), and not previously allocated
pursuant to clause (D) above,
(J) tenth, to the Administrative Agent, for
the benefit of itself and the Purchaser, the amount of
any costs, expenses or indemnities required to be paid
to either of them under any Related Document which was
not previously allocated and held (whether or not
arising during the current Settlement Period),
(K) eleventh, to FSA, the amount of
any costs, expenses or indemnities required to be
paid to FSA under any Related Document which was not
previously allocated and held (whether or not
arising during the current Settlement Period), and
(L) twelfth, if BusLease or an Affiliate of
BusLease is the Servicer, to the payment of the Servicer
Fee
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accrued through such day and not previously so allocated
and held (whether or not accrued during the current
Settlement Period).
Subject to paragraph (e) below, the excess of the Finance Charge
Collections with respect to Purchased Receivables, Recoveries, income with
respect to amounts on deposit in the Cash Collateral Account and the Blocked
Accounts and any Insurer Optional Deposit over the aggregate amount required to
be allocated to the payments described in clauses (A) through (L) above (such
excess being referred to herein as "EXCESS COLLECTIONS") shall be allocated and
held by the Backup Servicer for the benefit of the Seller.
(d) On each Settlement Date, based upon the Settlement
Worksheet contained in the Monthly Report provided by the Servicer not later
than 10:00 a.m. New York time on the Report Delivery Date in a form reasonably
acceptable to the Backup Servicer (and subject to the Backup Servicer's
obligations pursuant to the Backup Servicing Agreement to verify certain
balances in the Summary and Settlement Report Worksheets contained in the
Monthly Report), the Backup Servicer shall pay to the Custodian, the
Administration Agent, the Purchaser, FSA, the Servicer, if applicable, the
Backup Servicer and the Seller, the amounts held for the account of, the
Custodian, the Administration Agent, the Purchaser, FSA, the Servicer, if
applicable, the Backup Servicer and the Seller, respectively, pursuant to
SECTION 2.03(c) above, in each case to the extent that such payment has not
previously been made by wire transfer pursuant to the payment instructions
provided to the Backup Servicer prior to such Settlement Date. Two Business
Days prior to each Settlement Date, the Backup Servicer shall determine the
amount (the "SHORTFALL"), if any, by which (1) the sum of the amounts required
to be paid pursuant to clauses (A) through (L) of paragraph (ii) of SECTION
2.03(c) on such Settlement Date exceeds (2) the amount on deposit in the Blocked
Account as of the last Business Day of the most recently completed calendar
month. In the event of any Shortfall, the Backup Servicer shall make a
withdrawal from the Cash Collateral Account in the amount of such Shortfall (up
to the amount on deposit in the Cash Collateral Account on such date) (such
amount the "WITHDRAWAL AMOUNT"). In the event that the result of the Shortfall
less the Withdrawal Amount is greater than zero, the Backup Servicer shall, one
Business Day prior to such Settlement Date, make a Transaction L/C Draw in the
amount of such excess (up to the Available L/C Amount on such date). The Backup
Servicer shall pay to itself, the Administrative Agent, the Servicer, the
Custodian, FSA and the Purchaser from the Withdrawal Amount and any Transaction
L/C Draw the unpaid amounts described in clauses (A) through (L) of paragraph
(ii) of SECTION 2.03(c) in the order of priority set forth therein on the
Business Day of receipt of funds from such Transaction L/C draw or, if such
funds are received after 2:00 p.m., New York City time, on any Business Day, on
the Business Day following the receipt of such funds, irrespective of whether
such Business Day is after the Settlement Date. In the event that the result of
the Shortfall less the Withdrawal Amount less the amount of the Transaction L/C
Draw is greater than zero and all amounts due under 2.03(c)(ii)(D) have not been
paid (such unpaid amount the "DEFICIENCY AMOUNT"), the Administrative Agent
shall on such Settlement Date, make a draw under the Policy in the amount of the
Deficiency Amount, which on each Settlement Date shall not exceed the Guaranteed
Yield, and the Administrative Agent shall allocate the proceeds of such draw in
accordance with SECTION 6.07 of this Agreement.
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(e) Following the occurrence and continuance of a Servicer
Termination Event or the termination of this Agreement in accordance with
Section 2.01(b) as a result of FSA not consenting to an extension of the
Facility Termination Date, all amounts in respect of Excess Collections shall be
allocated and applied to reduce the Investment.
(f) At such time as the Investment is reduced to zero and all
amounts of the Purchaser's Yield and other amounts owing to the Purchaser and
FSA have been paid in full, the ownership interest of the Purchaser in respect
of the Purchased Receivables shall be reconveyed to the Seller, and the
Purchaser shall deliver to the Seller all instruments and documents relating
thereto, all Records, and all residual interests thereto; PROVIDED, HOWEVER,
that if any Collections received by the Purchaser must be returned or rescinded
for any reason, such amount shall be deemed to have never been received by the
Purchaser and the Purchaser's interest in the Purchased Receivables shall
continue. In addition, upon the payment or other satisfaction in full of any
Purchased Receivable by or on behalf of an Obligor, the Purchaser shall take
such actions as the Seller shall reasonably request to evidence the termination
of the Purchaser's ownership rights in such Purchased Receivable.
(g) For the purposes of this SECTION 2.03:
(i) if on any day the outstanding principal amount of
any Receivable, the amount of any Scheduled Contract Payment, or any
accrued and unpaid Finance Charges with respect to, any Purchased
Receivable is reduced or adjusted by the Seller or the Servicer as a
result of any defective or rejected Vehicles or otherwise, or any setoff
by any Obligor against the Seller or BusLease shall occur with respect
thereto, the Servicer shall be deemed to have received on such day a
Collection of such Purchased Receivable in the amount of such reduction,
adjustment or setoff and shall on such day deposit, or cause to be
deposited, in a Blocked Account an amount equal to such reduction,
adjustment or setoff;
(ii) if on any day either (w) any of the representations
or warranties contained in (A) SECTION 4.01(q) are no longer true or (B)
SECTION 4.01(x), (y) or (ff) were not true when made, with respect to any
Purchased Receivable, (x) the Seller or the Servicer shall fail to
perform or observe any term, covenant or agreement contained in SECTION
5.02(l) or SECTION 5.03(a) or (y) the Seller or the Servicer shall
extend, amend or otherwise modify the terms of any Purchased Receivable
(except in connection with a Permitted Restructuring), or amend, modify
or waive the terms or conditions of the Contract under which such
Purchased Receivable arises (except in connection with a Permitted
Restructuring), the Servicer shall be deemed to have received on such day
a Collection in an amount equal to the Outstanding Balance of such
Purchased Receivable in full and shall on such day deposit, or cause to
be deposited, in a Blocked Account an amount equal to such Outstanding
Balance;
(iii) if on any day any of the representations or
warranties contained in SECTION 4.01(n), (o), (r), (s), (v) or (cc) are
no longer true with respect to any Purchased Receivable, the Seller may,
in its discretion, repurchase
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such Purchased Receivable on such day for a purchase price in an
amount equal to the Outstanding Balance of such Purchased Receivable,
which purchase price shall be deposited on such day in a Blocked
Account by the Seller; and
(iv) if and to the extent the Purchaser shall be required
for any reason (other than as a result of a bankruptcy of an Obligor) to
pay over to an Obligor any amount received on its behalf hereunder, such
amount shall be deemed not to have been so received but rather to have
been retained by the Seller and, accordingly, the Purchaser shall have a
claim against the Seller for such amount, payable when and to the extent
that any distribution from or on behalf of such Obligor is made in
respect thereof.
(h) Notwithstanding any provision of this Agreement to the
contrary, the Seller shall be absolutely and unconditionally obligated to pay to
the Purchaser the amount of the Investment, the Yield and all fees payable to
the Purchaser under this Agreement.
Section 2.04 FEES. The Seller shall pay to the Purchaser the
fees specified in the SPARC Fee Letter, at the times specified for payment
therein.
Section 2.05 PAYMENTS AND COMPUTATIONS, ETC.
(a) All amounts to be paid or deposited by the Seller, the
Backup Servicer or the Servicer hereunder shall be paid or deposited no later
than 1:00 P.M. (New York City time) on the day when due in same day funds to the
Purchaser's Account or to an account specified by the Administrative Agent or
FSA, as applicable.
(b) The Seller or the Servicer shall, to the extent permitted
by law, pay on demand from time to time interest on any amount not paid or
deposited by the Seller or the Servicer, as the case may be, when due and
payable hereunder at an interest rate per annum equal to [**]% per annum above
the Base Rate in effect from time to time; PROVIDED, HOWEVER, that such interest
rate shall not at any time exceed the maximum rate permitted by applicable law.
(c) All computations of interest under subsection (b) above and
all computations of Yield, fees, and other amounts hereunder shall be made on
the basis of a year of 360 days and the actual number of days elapsed. Whenever
any payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
Section 2.06 CASH COLLATERAL ACCOUNT.
(a) On or prior to the Closing Date, the Cash Collateral
Account will be established by the Seller in the name of the Administrative
Agent for the benefit of the Purchaser and FSA. The Cash Collateral Account
will be funded on the date of the initial Purchase in the amount of the Initial
Cash Collateral Amount from an initial deposit by the Seller. During the term
of the Backup Servicing Agreement (including the term of this Agreement for any
period in which the Backup Servicer is the successor Servicer), the Cash
Collateral Accounts shall be
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maintained with The Bank of New York unless The Bank of New York ceases
to be an Eligible Institution.
(b) Funds on deposit in the Cash Collateral Account shall be
invested in Eligible Investments selected in writing by the Servicer; PROVIDED,
that following the occurrence of a Servicer Termination Event, the Servicer
shall continue to select such Eligible Investments unless the Controlling Party
notifies the Servicer that the Controlling Party shall select such Eligible
Investments; PROVIDED, FURTHER, that it is understood and agreed that the
Controlling Party shall not be liable for any loss arising from such investments
in Eligible Investments. All such Eligible Investments shall be held for the
benefit of the Purchaser, FSA and the Seller. Funds on deposit in the Cash
Collateral Account shall be invested in Eligible Investments that will mature so
that such funds will be available at the close of business on the Business Day
preceding each Settlement Date.
(c) The Backup Servicer, for the benefit of the Purchaser and
the Seller, shall possess all right, title and interest in all funds on deposit
from time to time in the Cash Collateral Account and in all proceeds thereof.
Except as otherwise provided for herein, the Cash Collateral Account shall be
under the sole dominion and control of the Backup Servicer for the benefit of
the Purchaser and the Seller. If at any time, the Cash Collateral Account
ceases to be an Eligible Deposit Account, then the Seller (or the Backup
Servicer on its behalf) shall within five (5) Business Days (or such longer
period as to which the Purchaser may consent) establish a new Cash Collateral
Account as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Cash Collateral Account. In connection with the
foregoing, the Backup Servicer agrees that it shall notify the Administrative
Agent in writing promptly upon the Cash Collateral Account ceasing to be an
Eligible Deposit Account.
(d) The Backup Servicer shall have the power, revocable by the
Controlling Party, to instruct the Eligible Institution to make withdrawals and
payments from the Cash Collateral Account for the purpose of permitting the
Backup Servicer to carry out its duties hereunder; PROVIDED, that if such power
is revoked, the Backup Servicer shall be relieved of its duties to make
allocations of amounts on deposit in the Cash Collateral Account.
(e) If the amount on deposit in the Cash Collateral Account on
any Settlement Date (after giving effect to any deposits therein and withdrawals
therefrom pursuant to SECTIONS 2.03(c)(ii)) and 2.03(d) is greater than the Cash
Collateral Account Requirement for such Settlement Date, such excess shall be
paid to the Seller.
Section 2.07 BLOCKED ACCOUNTS.
(a) The Backup Servicer shall establish and maintain with one
or more Blocked Account Banks, one or more Blocked Accounts, in the name of "BNY
Asset Solutions LLC, as Backup Servicer on behalf of Canadian Imperial Bank of
Commerce as Administrative Agent, for the benefit of Special Purpose Accounts
Receivable Cooperative Corporation, Canadian Imperial Bank of Commerce and
Financial Security Assurance, Inc." The terms and conditions of each Blocked
Account shall be in all respects reasonably satisfactory to the Backup Servicer,
the Administrative Agent and FSA. During the term of the Backup Servicing
Agreement (including the term of this Agreement for any period in which the
Backup Servicer is
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the successor Servicer), the Blocked Account Bank for all Blocked Accounts
shall be The Bank of New York unless The Bank of New York ceases to be an
Eligible Institution.
(b) Funds on deposit in a Blocked Account shall be invested
overnight in Eligible Investments selected in writing by the Servicer; PROVIDED,
that following the occurrence of a Servicer Termination Event, the Servicer
shall continue to select such Eligible Investments unless the Controlling Party
notifies the Servicer and the Backup Servicer that the Controlling Party shall
select such Eligible Investments; PROVIDED, FURTHER, that it is understood and
agreed that the Controlling Party shall not be liable for any loss arising from
such investments in Eligible Investments. All such Eligible Investments shall
be held for the benefit of the Administrative Agent, for the benefit of the
Purchaser and FSA.
(c) Each Blocked Account Bank will maintain for the benefit of
the Administrative Agent, for the benefit of the Purchaser and FSA, possession
of any negotiable instruments or securities evidencing the investment of funds
on deposit in the related Blocked Account. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Blocked Accounts
shall be allocated in accordance with Section 2.03(c). The Backup Servicer
shall, at the request of the Seller and the consent of the Controlling Party
(which consent shall not be unreasonably withheld), remit to the Seller all
amounts on deposit in any Blocked Account that do not represent Collections.
ARTICLE III.
CONDITIONS OF PURCHASES
Section 3.01 CONDITIONS PRECEDENT TO INITIAL PURCHASE. The
Purchaser shall not be obligated to make any Purchase under this Agreement, nor
shall the Purchaser or Administrative Agent be obligated to take, fulfill, or
perform any other action hereunder, unless and until the following conditions
have been satisfied or provided for in a manner satisfactory to FSA,
Administrative Agent and the Purchaser and/or waived in writing by FSA,
Administrative Agent and the Purchaser:
(a) the Purchaser shall have received in form and substance
satisfactory to FSA, the Purchaser and the Administrative Agent certificates of
the Secretary or Assistant Secretary of the Seller, the Servicer, Motor Coach
and the Transferors certifying the names and true signatures of their respective
officers authorized to sign this Agreement, the Related Documents, and the other
documents to be delivered by them hereunder or thereunder or in connection
herewith or therewith, evidence of corporate authorization of the transactions
contemplated hereby or thereby, the articles of incorporation (attached and
appropriately certified by the Secretary of State of their respective
jurisdiction of incorporation) and the by-laws, and all amendments thereto, of
each of them;
(b) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
executed financing statements, to be filed on or before the date of such initial
Purchase under the UCC of all jurisdictions that the Purchaser, the
Administrative Agent and FSA may deem necessary or desirable in order (i) to
perfect to the extent contemplated by SECTION 4.01(q), the Purchaser's interests
contemplated by this Agreement and (ii) to perfect the ownership interests of
the Seller in the Receivables
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purchased by the Seller from the Transferors pursuant to the Transfer
Agreements, except to the extent any filings or other actions are necessary
to convey the interest in the related Vehicles under the applicable titling
laws;
(c) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, Administrative Agent and FSA completed
requests for information listing all effective financing statements filed in the
jurisdictions referred to in SECTION 3.01(b) above that name the Seller or a
Transferor as debtor, together with copies of such financing statements (none of
which shall cover any Purchased Receivables, the related Contracts or the
related Vehicles) or any interest therein;
(d) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
executed UCC termination statements, if any, necessary to release all security
interests and other rights of any Person in the Receivables, the related
Contracts or the Vehicles previously granted by the Seller, any Transferor or
Motor Coach;
(e) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
favorable opinions of counsel for the Seller, the Servicer, Motor Coach and the
Transferors, in form and substance satisfactory to the Purchaser, the
Administrative Agent and FSA, as to such matters as the Administrative Agent may
reasonably request;
(f) the Purchaser shall have received in form and substance
satisfactory to the Purchaser and the Administrative Agent evidence that the
Seller has been admitted as a Member upon terms satisfactory to the Purchaser;
(g) no Servicer Termination Event or Insurance Agreement Event
of Default shall have occurred and be continuing or would result after giving
effect to any of the transactions contemplated on the Initial Closing Date;
(h) the Seller shall have paid to the Purchaser and the
Administrative Agent fees payable (if any) in accordance with the SPARC Fee
Letter;
(i) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
good standing certificates with respect to the Seller, the Servicer, Motor
Coach and the Transferors from the Secretary of the State of the respective
States of incorporation of the Seller, the Servicer, Motor Coach and the
Transferors;
(j) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA the
Related Documents executed by each of the Persons party thereto;
(k) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA
evidence that the Cash Collateral Account has been established with an
Eligible Institution and that such Cash Collateral Account is in the name of
Administrative Agent, for the benefit of the Purchaser and FSA;
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(l) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser, the Administrative Agent and FSA such
other documents as the Purchaser, FSA or the Administrative Agent shall have
reasonably requested;
(m) the Purchaser and FSA shall have received (i) confirmation
from each rating agency rating the Notes that the then current rating of the
Notes (without giving effect to the Policy) shall not be withdrawn or downgraded
after giving effect to this Agreement and the transactions contemplated hereby
and (ii) evidence from each rating agency that this Agreement and the
transaction contemplated hereby have at least an investment grade "shadow"
rating;
(n) FSA shall have received notice from S&P of FSA's capital
charge for the current transaction without giving effect to the Policy;
(o) the Administrative Agent shall have received the original
Transaction Letter of Credit executed by the Transaction L/C Issuer;
(p) the Purchaser, Administrative Agent and FSA shall have
received satisfactory evidence that the Seller, Motor Coach, the Transferors and
the other parties to the Related Documents have obtained all required licenses,
consents and approvals of all Persons including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Related Documents;
(q) the Administrative Agent and FSA shall have received an
executed Lockbox Agreement with respect to each Lockbox Account;
(r) the Purchaser and FSA shall have received in form and
substance satisfactory to the Purchaser and FSA, the executed pay-off letters
reasonably requested by the Purchaser, the Administrative Agent or FSA; and
(s) FSA shall have reviewed each of the Contract Files in the
possession of General Electric Capital Corporation or any agent thereof and FSA
shall be satisfied with the results of such review.
Section 3.02 CONDITIONS PRECEDENT TO ALL PURCHASES.Each
Purchase (including the initial Purchase) shall be subject to the further
conditions precedent that:
(a) in the case of each Purchase, the Servicer shall have
delivered to the Purchaser and the Administrative Agent on or prior to the date
of such Purchase, in form and substance satisfactory to the Purchaser, all
reports as and when due under SECTION 6.02(g), and, on or prior to the date of
the initial Purchase, a report, reasonably acceptable to the Purchaser,
containing information reasonably requested by the Purchaser with respect to the
Purchased Receivables and the Receivables to be purchased,
(b) on the date of each Purchase, the following statements
shall be true (and acceptance of the proceeds of such Purchase shall be deemed a
representation and warranty by the Seller that such statements are then true):
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(i) the representations and warranties contained in
Article IV are correct on and as of the date of such Purchase as though
made on and as of such date,
(ii) no event has occurred and is continuing, or would
result from such Purchase, that constitutes a Servicer Termination Event
or an Insurance Agreement Event of Default,
(iii) the amount on deposit in the Cash Collateral Account
is at least equal to the Required Cash Collateral Amount, and the sum of
the amount of deposit in the Cash Collateral Account PLUS the Available
L/C Amount of all Transaction Letters of Credit is at least equal to the
Required Credit Enhancement,
(iv) no event or circumstance that is reasonably likely
to have a Material Adverse Effect shall have occurred since the date
hereof,
(v) after giving effect to any Purchase, the Investment
shall not exceed the Purchase Limit,
(vi) other than with respect to the initial Purchase, the
Custodian shall have received and reviewed the Contract Files with
respect to Receivables being funded or acquired in connection with such
Purchase and shall have issued a trust receipt with respect thereto, in
accordance with the Custodial Agreement,
(vii) other than with respect to the initial Purchase, at
least three business days prior to the date of any Purchase, FSA shall
have received from the Servicer a credit write up with respect to each
Receivable being funded or acquired in connection with such Purchase,
(viii) after giving effect to any Purchase, the aggregate
Outstanding Balance of all Purchased Receivables due from any Obligor
does not exceed the Standard Concentration Limit or the Special
Concentration Limit with respect to such Obligor,
(ix) after giving effect to any Purchase, the aggregate
Outstanding Balance of Purchased Receivables with respect to which the
related Vehicles were not manufactured by Motor Coach Entities does not
exceed [**]% of the aggregate Outstanding Balance of all Purchased
Receivables,
(x) after giving effect to any Purchase, the aggregate
Outstanding Balance of Purchased Receivables arising under Contracts with
respect to which the related Obligors are located (1) in the two States
in the United States of America with the largest aggregate Outstanding
Balance of all Purchased Receivables does not exceed, in either State,
[**]% of the aggregate Outstanding Balance of all Purchased Receivables
and (2) in the same State in the
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United States of America (other than a State referred to in clause
(1) above) is less than [**]% of the aggregate Outstanding Balance of
all Purchased Receivables,
(xi) after giving effect to any Purchase, the result of
(i) the weighted average imputed rate of interest for all Purchased
Receivables less (ii) the sum of (1) the weighted average of the rates at
which the Guaranteed Yield is computed for the immediately preceding
Settlement Period, or, with respect to the initial Purchase only, the
average of the fixed periodic rates of interest set forth in the Hedge
Agreements entered into in connection with such Purchase, plus (2) sum of
the percentages used to calculate the Premium, the Operating Expense Fee,
the Program Fee, the Liquidity Fee, the Servicer Fee, the Utilization Fee
and the Backup Servicer Fee for such Settlement Period shall be equal to
or greater than [**]%,
(xii) after giving effect to any Purchase, the aggregate
Outstanding Balance of Purchased Receivables arising under Contracts
which by their express terms allow no more than three monthly payments to
be missed in any twelve-month period does not exceed [**]% of the
aggregate Outstanding Balance of all Purchased Receivables,
(xiii) after giving effect to any Purchase, the aggregate
Outstanding Balance of Purchased Receivables arising under Contracts with
respect to Vehicles which were repossessed and subsequently financed does
not exceed [**]% of the aggregate Outstanding Balance of all Purchased
Receivables,
(xiv) after giving effect to any Purchase, the aggregate
Outstanding Balance of Purchased Receivables arising under Contracts with
respect to Vehicles which are of a model year (1) between 10 and 15 years
old as of the date of such Purchase does not exceed [**]% of the
aggregate Outstanding Balance of all Purchased Receivables and (2) more
than 15 years old as of the date of such Purchase does not exceed [**]%
of the aggregate Outstanding Balance of all Purchased Receivables,
(xv) all Receivables being funded or acquired in
connection with such Purchase are Eligible Receivables,
(xvi) after giving effect to any Purchase of Receivables
arising under Contracts that provide for Balloon Payments, other than in
connection with the initial Purchase, the aggregate Outstanding Balance
of Purchased Receivables arising under Contracts which are Vehicle Loans
that provide for Balloon Payments does not exceed [**]% of the aggregate
Outstanding Balance of all Purchased Receivables, and
(xvii) after giving effect to any Purchase, none of the
Purchased Receivables is an Operating Lease;
(c) there shall be in place Hedge Agreements reasonably
satisfactory to the Controlling Party, the Seller and the Rating Agencies;
provided, that any Hedge Agreement
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entered into in connection with any Purchase after the initial Purchase which
is substantially similar in all material respects to the Hedge Agreement
entered into in connection with the initial Purchase shall be deemed to be
satisfactory to FSA, the Administrative Agent, the Seller and the Rating
Agencies; and
(d) the Purchaser and FSA shall have received such other
approvals, opinions or documents as it may reasonably request, including,
without limitation, information with respect to the performance of the Purchased
Receivables.
One Business Day prior to the date of each Purchase, FSA shall have
received, in the form attached as Exhibit J hereto, a certificate of an officer
of the Seller certifying that all conditions to purchase set forth in this
Section shall have been satisfied, and setting forth the calculation showing
that the condition specified in Section 3.02(b)(xi) has been satisfied.
The request and acceptance by the Seller of the proceeds of any Purchase shall
be deemed to constitute, as of the date of such request or acceptance, a
representation and warranty by the Seller that the conditions in this Article
III have been satisfied.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01 REPRESENTATIONS AND WARRANTIES OF THE SELLER. To
induce the Purchaser to make the Purchases and the Administrative Agent to take
any action hereunder, the Seller hereby makes the following representations and
warranties to the Purchaser, the Administrative Agent and FSA, as of the Closing
Date and as of the date of each Purchase, each and all of which shall survive
the execution and delivery of this Agreement:
(a) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business, and is in good standing, in
each jurisdiction in which the nature of its business and the performance of its
obligations hereunder and under the other Related Documents to which it is a
party requires it to be so qualified.
(b) The Seller has the power and authority to own, pledge,
mortgage, operate and convey all of its properties, to conduct its business as
now or proposed to be conducted and to execute and deliver this Agreement and
the Related Documents to which it is a party and to perform the transactions
contemplated hereby and thereby.
(c) The Seller is and has been at all times since its
incorporation a wholly-owned Subsidiary of MCII Coaches, Inc.
(d) The execution, delivery and performance by the Seller of
this Agreement, the Related Documents and the transactions contemplated hereby
and thereby (i) have been duly authorized by all necessary corporate or other
action on the part of the Seller, (ii) do not contravene or cause the Seller to
be in default under (A) the Seller's certificate or articles of incorporation or
by-laws, (B) any contractual restriction contained in any indenture, loan or
credit agreement, lease, mortgage, security agreement, bond, note, or other
agreement or instrument binding on or affecting the Seller or its property
(including any property acquired
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under any Transfer Agreement), or (C) any law, rule, regulation, order,
license requirement, writ, judgment, award, injunction, or decree applicable
to, binding on or affecting the Seller or its property, and (iii) do not
result in or require the creation of any Lien upon or with respect to any of
the property of the Seller (other than Liens created in favor of the Seller
under the Transfer Agreements and the Liens created in favor of the
Administrative Agent as contemplated hereunder).
(e) This Agreement and each Related Document to which the
Seller is a party have each been duly executed and delivered by the Seller.
(f) No approval, consent of, notice to, filing with or permits,
licenses, qualifications or other action by any Governmental Authority or any
other party is required or necessary (i) for the conduct of the Seller's
business as currently conducted, for the ownership, use, operation or
maintenance of its properties and for the due execution, delivery and
performance by the Seller of this Agreement or any of the Related Documents,
(ii) for the perfection of or the exercise by each of FSA, the Purchaser, the
Custodian, or the Administrative Agent of any of its rights or remedies
hereunder or thereunder, or (iii) to ensure the legality, validity, or
enforceability of this Agreement in any jurisdiction in which the Seller or the
Servicer does business, in each case other than consents, notices, filings and
other actions which have been obtained or made and complete copies of which have
been provided to FSA, the Purchaser, the Custodian and the Administrative Agent
and continuation statements in respect of any such filings.
(g) No transaction contemplated by this Agreement requires
compliance with any bulk sales act or similar law.
(h) This Agreement and each Related Document to which the
Seller is a party constitutes the legal, valid and binding obligation of the
Seller enforceable against the Seller in accordance with its respective terms
subject to any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
enforceability of creditors' rights generally and general equitable principles,
whether applied in a proceeding at law or in equity.
(i) There is no pending or, to the best of the Seller's
knowledge, threatened, action, suit or proceeding against or affecting the
Seller, its officers or directors, or the property of the Seller, in any court
or tribunal, before any arbitrator of any kind or before or by any Governmental
Authority.
(j) No injunction, writ, restraining order or other order of
any nature adverse to the Seller or the conduct of its business or which is
inconsistent with the due consummation of the transactions contemplated by this
Agreement or the Related Documents has been issued by a Governmental Authority.
(k) The principal place of business and chief executive office
of the Seller, and the offices where the Seller keeps its Records and the
original copies of the Related Documents are located at the address of the
Seller for notices under SECTION 10.02 and there are currently no, and during
the past four months (or such shorter time as the Seller has been
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in existence) there have not been, any other locations where the Seller is
located (as that term is used in the UCC of the jurisdiction where such
principal place of business is located) or keeps Records.
(l) The Seller does not have any Subsidiaries and does not have
any investments in, or loans or advances of money to, any Person except for
Receivables and Eligible Investments.
(m) The Seller is adequately capitalized and will not become
insolvent after giving effect to the transactions contemplated by this Agreement
and the Related Documents. The Seller has no Indebtedness other than pursuant
to this Agreement and the Related Documents. The Seller is adequately
capitalized for its business as proposed to be conducted in the foreseeable
future and does not expect the commencement of any insolvency, bankruptcy or
similar proceedings or the appointment of a receiver, liquidator or similar
official in respect of its assets. The Seller executed and delivered each of
the Related Documents to which it is a party for fair consideration and without
the intent to hinder, delay or defraud any of its creditors or any other Person.
(n) Immediately prior to a Purchase hereunder, for accounting
purposes, the Seller will treat all of the Receivables and Vehicles as its own
property, and will account for the purchase, assignment or transfer of any such
Receivable or Vehicle pursuant to a Transfer Agreement as a purchase or absolute
assignment of the applicable Transferor's right, title and ownership interest in
such Receivable or Vehicle and the Seller has not in any other manner accounted
for or treated the transactions under the Transfer Agreements, except that such
transactions shall be treated as debt for tax purposes.
(o) The Seller has complied and will comply in all respects
with all applicable laws, rules, regulations, judgments, agreements, decrees and
orders with respect to its business and properties and all the Receivables and
related Contracts, except where the failure or failures to so comply could not
reasonably be expected, in the aggregate, to have a Material Adverse Effect.
(p) The Seller has filed on a timely basis all tax returns
(federal, state and local) required to be filed, is not liable for taxes payable
by any other Person (except for the payment of such amounts as a result of the
filing of a consolidated tax return) and has paid or made adequate provisions
for the payment of all taxes, fees, assessments and other governmental charges
due from the Seller, except where the Seller is contesting such tax, fee,
assessment or other governmental charge in good faith through appropriate
proceedings as to which adequate reserves are being maintained in accordance
with GAAP and with respect to which no Lien for payment has been filed or is
otherwise enforceable. No tax lien or similar Lien has been filed, and no claim
has been filed or is being asserted, with respect to any such tax, assessment or
other governmental charge, except for any contested proceedings as described in
the immediately preceding sentence. Any taxes, fees and other governmental
charges payable by the Seller in connection with the execution and delivery of
this Agreement and the Related Documents and the transactions contemplated
hereby or thereby have been paid or shall have been paid if and when due at or
prior to the Closing Date.
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(q) Immediately prior to a Purchase hereunder, the Seller shall
be the legal and beneficial owner of the Receivables, free and clear of any
Adverse Claim. This Agreement is effective to, and shall, upon each Purchase
and the filing of the financing statements referred to in SECTION 3.01(b),
transfer and assign to the Purchaser (and the Purchaser shall acquire from the
Seller) a valid and perfected first priority security interest (as defined in
the UCC) in and to the Purchased Receivables, all free and clear of any Adverse
Claim. No effective financing statement or other instrument similar in effect
covering any Purchased Receivables or Collections or Contract with respect
thereto is on file in any recording office, except (a) those filed in favor of
the Administrative Agent pursuant to this Agreement and the Secondary Purchase
Agreement and, (b) those filed in favor of the Seller pursuant to a Transfer
Agreement.
(r) The Contract File relating to each Purchased Receivable,
other than a Purchased Receivable purchased as part of the initial Purchase if
the related Contract File is in the possession of General Electric Capital
Corporation or any agent thereof, has been delivered to and reviewed by the
Custodian in accordance with the terms hereof and of the Custodial Agreement and
the Custodian has delivered a trust receipt with respect thereto in accordance
with the Custodial Agreement. The Contract File relating to each Purchased
Receivable purchased as part of the initial Purchase with respect to which the
related Contract File was in the possession of General Electric Capital
Corporation or any agent thereof, has been reviewed by FSA, shall be delivered
to the Custodian one Business Day after such Purchase and the Custodian shall
deliver a trust receipt with respect thereto in accordance with the Custodial
Agreement.
(s) All information heretofore or hereafter furnished by or on
behalf of the Seller to the Administrative Agent, the Custodian, FSA or the
Purchaser in connection with this Agreement or the Related Documents, or any
transaction contemplated hereby or thereby, is and will be true and complete in
all material respects and does not and will not omit to state a material fact
necessary to make the statements contained therein not misleading.
(t) The Seller is in compliance with ERISA and has not incurred
and does not expect to incur any liabilities (except for premium payments
arising in the ordinary course of business) payable to the PBGC (or any
successor thereto) under ERISA.
(u) The Seller is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act. The making
of the Purchases by the Purchaser, the application of the proceeds thereof by
the Seller and the consummation of the transactions contemplated by this
Agreement and the other Related Documents to which the Seller is a party will
not violate any provision of the Investment Company Act or any rule, regulation
or order issued by the Securities and Exchange Commission thereunder.
(v) The Lockbox Accounts specified in SCHEDULE 4.01(v) hereto
are the only accounts into which Collections of any Receivables are deposited.
All of the Obligors have been instructed to make deposits of Collections
directly to the Lockbox Account, all in accordance with the Cash Management
Systems.
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(w) The Seller has no knowledge of any fact which leads it or
should have led a reasonable person to expect that any payments on any Purchased
Receivable at the time of Purchase will not be paid in full when due or to
expect any other material adverse effect on (A) the performance by the Seller of
its obligations under this Agreement or any of the Related Documents, (B) the
validity or enforceability of this Agreement or any of the Related Documents, or
(C) the Receivables or the Contracts or the interests of the Seller therein.
(x) With respect to each Receivable, the Seller purchased such
Receivable from a Transferor in exchange for payment, made in accordance with
the provisions of the applicable Transfer Agreement, in an amount which
constitutes fair consideration and reasonably equivalent value. Each such sale
referred to in the preceding sentence shall not have been made for or on account
of an antecedent debt owed by the applicable Transferor to the Seller and,
accordingly, no such sale is or may be voidable or subject to avoidance under
the Bankruptcy Code, and the rules and regulations thereunder.
(y) With respect to each Leased Vehicle, the Seller purchased
the related Vehicle from a Transferor in exchange for payment, made in
accordance with the provisions of the applicable Transfer Agreement, in an
amount which constitutes fair consideration and reasonably equivalent value.
Each such sale referred to in the preceding sentence shall not have been made
for or on account of an antecedent debt owed by the applicable Transferor or the
applicable Manufacturer to the Seller and, accordingly, no such sale is or may
be voidable or subject to avoidance under the Bankruptcy Code, and the rules and
regulations thereunder.
(z) Each of the representations and warranties of the Seller
contained in the Related Documents (other than this Agreement) is true and
correct in all respects and the Seller hereby makes each such representation and
warranty to, and for the benefit of, the Administrative Agent, the Custodian,
FSA and the Purchaser as if the same were set forth in full herein.
(aa) No Servicer Termination Event or Insurance Agreement Event
of Default has occurred and is continuing.
(bb) Attached as SCHEDULE 1.01(c) is a true and correct copy of
the Credit and Collection Policy as in effect on the date hereof. All of the
Receivables and Contracts acquired from a Transferor have been originated in
accordance with the credit policy described in the applicable Transfer
Agreement, and are being serviced in accordance with the Credit and Collection
Policy.
(cc) Each Contract included in the related Contract File is
"chattel paper" (as such term is defined in the UCC) and is the sole original of
such Contract in existence and has been stamped with the notation "original
copy", and no Receivable is evidenced by any other Contract.
(dd) No broker or finder acting on behalf of the Seller was
employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and the Seller has
no obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
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(ee) The benefit of the representations and warranties of each
Transferor set forth in the Transfer Agreement executed by such Transferor have
been assigned to the Administrative Agent and the Purchaser. Each such Transfer
Agreement remains in full force and effect in accordance with its terms and the
representations, warranties, covenants and obligations contained in such
Transfer Agreement have, to the extent provided therein, survived the
consummation of the transactions contemplated by such Transfer Agreement.
(ff) Each Purchased Receivable shall at the time of Purchase be
an Eligible Receivable. At the time of Purchase no event has occurred which
could materially and adversely affect the collectibility of such Purchased
Receivable.
(gg) The Seller is treating the conveyance of the Receivables
and the Collections under this Agreement as a sale for purposes of GAAP.
Section 4.02 REPRESENTATIONS AND WARRANTIES OF THE SERVICER.
To induce the Purchaser to make the Purchases and the Administrative Agent to
take any action hereunder, the Servicer hereby makes the following
representations and warranties to Administrative Agent, the Purchaser and FSA as
of the Closing Date, each and all of which shall survive the execution and
delivery of this Agreement:
(a) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business, and is in good standing, in
every jurisdiction in which the nature of its business and the performance of
its obligations hereunder and under the other Related Documents to which it is a
party requires it to be so qualified, except where the failure to be so
qualified is not reasonably likely to have a Material Adverse Effect.
(b) The Servicer has the power and authority to own and operate
all of its properties, to conduct its business as now or proposed to be
conducted and to execute and deliver this Agreement and the Related Documents to
which it is a party and to perform the transactions contemplated hereby and
thereby.
(c) The execution, delivery and performance by the Servicer of
this Agreement, each other Related Document to which it is a party and all other
agreements, instruments and documents which may be delivered by it pursuant
hereto and thereto and the transactions contemplated hereby and thereby (i) have
been duly authorized by all necessary corporate or other action on the part of
the Servicer, (ii) do not contravene or cause the Servicer to be in default in
any material respect under (A) its certificate or articles of incorporation or
by-laws, (B) any contractual restriction with respect to any Indebtedness of the
Servicer or contained in any indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note or other agreement or instrument
binding on or affecting it or its property, or (C) any law, rule, regulation,
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and (iii) do not result in or require the creation of any Lien
upon or with respect to any of its properties.
(d) This Agreement and each other Related Document to which it
is a party has been duly executed and delivered by the Servicer.
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(e) No approval or consent of, notice to, filing with or
permits, licenses, qualifications or other action by any Governmental Authority
or any other party is required for the conduct of the Servicer's business as
currently conducted, for the ownership, use, operation or maintenance of its
properties and for the due execution, delivery and performance by the Servicer
of this Agreement, any Related Document to which it is a party or any other
agreement, document or instrument to be delivered hereunder other than (i) any
consents, notices, permits, filings, qualifications, or other actions which have
been obtained or made and complete copies of which have been provided to the
Administrative Agent and (ii) where the failure to obtain any such approval or
consent or make any filing is not reasonably likely to result in a Material
Adverse Effect.
(f) This Agreement and each other Related Document to which it
is a party is the legal, valid and binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the enforceability of
creditors' rights generally and general equitable principles, whether applied in
a proceeding at law or in equity.
(g) There is no pending or, to the best of the Servicer's
knowledge, threatened, action, suit, investigation or proceeding of a material
nature against or affecting the Servicer or its Subsidiaries or their respective
officers or directors, or the property of the Servicer or its Subsidiaries, in
any court or tribunal, before any arbitrator of any kind or before or by any
Governmental Authority (i) asserting the invalidity of this Agreement, any other
Related Document or any document to be delivered by the Servicer hereunder or
thereunder, or (ii) seeking any determination or ruling that would be reasonably
likely to materially and adversely affect (A) the performance by the Servicer of
its obligations under this Agreement or any other Related Document, or (B) the
validity or enforceability of this Agreement, any other Related Document or any
document to be delivered by the Servicer hereunder or thereunder.
(h) The Servicer has complied and will comply in all material
respects with all applicable laws, rules, regulations, judgments, agreements,
decrees and orders, and has obtained all necessary approvals, consents, permits,
licenses and qualifications from all Governmental Authorities, with respect to
its business and properties and the Receivables and Contracts serviced by it, in
each case except where failure to so comply or obtain could not reasonably be
expected, in the aggregate, to have a Material Adverse Effect.
(i) No injunction, writ, restraining order or other order of
any material nature adverse to the Servicer or the conduct of its business or
which is inconsistent with the due consummation of the transactions contemplated
by this Agreement and the Related Documents has, to the knowledge of the
Servicer, been issued by a Governmental Authority.
(j) The Servicer has timely filed all tax returns (federal,
state and local) required to be filed by it and has paid or has made adequate
provision for the payment of all taxes, fees, assessments and other governmental
charges due from the Servicer, except where the Servicer is contesting such tax,
assessment or other governmental charge in good faith through appropriate
proceedings as to which adequate reserves are being maintained in accordance
with GAAP and with respect to which no Lien for payment has been filed or is
otherwise enforceable.
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No tax lien or similar Lien has been filed, and no claim has been filed or is
being asserted, with respect to any such tax, fee, assessment or other
governmental charge, except for any contested proceedings as described in the
immediately preceding sentence. Any taxes, fees and other governmental
charges payable by the Servicer in connection with the transactions
contemplated by this Agreement and the Related Documents and the execution
and delivery of this Agreement and the Related Documents have been paid or
shall have been paid at or prior to the Closing Date.
(k) The Servicer is not an "investment company" or an
"affiliated person" or "promoter" or "principal underwriter" for an "investment
company", as such terms are defined in the Investment Company Act.
(l) The Servicer has no knowledge of any fact which leads it or
should have led a reasonable person to expect that any payments on any Purchase
Receivable will not be paid in full when due or to expect any other material
adverse effect on (A) the performance by the Servicer of its obligations under
this Agreement or any of the Related Documents, (B) the validity or
enforceability of this Agreement or any of the Related Documents, or (C) the
Receivables or the Contracts or the interests of the Purchaser therein.
(m) Each of the representations and warranties of the Servicer
contained in this Agreement and the Related Documents is true and correct in all
material respects and the Servicer hereby makes each such representation and
warranty contained in the Related Documents to, and for the benefit of the
Administrative Agent and the Purchaser.
(n) All information heretofore or hereafter furnished by or on
behalf of the Servicer to Administrative Agent, Custodian or the Purchaser in
connection with this Agreement or the Related Documents, or any transaction
contemplated hereby or thereby, is and will be true and complete in all material
respects and does not and will not omit to state a material fact necessary to
make the statements contained therein not misleading.
(o) Attached as SCHEDULE 1.01(c) is a true and correct copy of
the Credit and Collection Policy as in effect on the date hereof. All of the
Receivables and Contracts serviced by the Servicer are being serviced in
accordance with the Credit and Collection Policy. BusLease maintains such
insurance as is customary and desirable for companies engaged in its business
and as required by applicable law.
Section 4.03 REPRESENTATIONS AND WARRANTIES OF THE BACKUP
SERVICER. The Backup Servicer hereby represents and warrants to and covenants
with the Administrative Agent, the Purchaser and FSA, as of the date hereof and
during the term hereof, that:
(a) The Backup Servicer is, and throughout the term hereof
shall remain, a limited liability company duly formed, validly existing and in
good standing under the laws of the State of Delaware and the Servicer is, and
shall remain, licensed and in compliance with the laws of any state necessary to
perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement by the Backup
Servicer, and the performance and compliance with the terms of this Agreement by
the Backup Servicer, will not violate the Backup Servicer's articles of
organization or constitute a default (or an event
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which, with notice or passage of time, or both, would constitute a default)
under, or result in the breach of, any material agreement or other instrument
to which it is a party or which is applicable to it or any of its assets.
(c) The Backup Servicer has full power and authority to enter
into and consummate all actions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and has
duly executed and delivered this Agreement.
(d) This Agreement, assuming due authorization, execution and
delivery by each of the parties hereto, constitutes a valid, legal and binding
obligation of the Backup Servicer, enforceable against the Backup Servicer in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors' rights generally, and (B) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at law.
(e) The Backup Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and compliance with
the terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand of
any federal, state or local governmental or regulatory authority, which
violation, in the Backup Servicer's good faith reasonable judgment, is likely to
affect materially and adversely either the ability of the Servicer to perform
its obligations under this Agreement or the financial condition of the Servicer.
(f) No litigation is pending or, to the best of the Backup
Servicer's knowledge, threatened against the Backup Servicer which would
prohibit the Backup Servicer from entering into this Agreement or, in the Backup
Servicer's good faith reasonable judgment, is likely to affect materially and
adversely either the ability of the Backup Servicer to perform its obligations
under this Agreement or the financial condition of the Backup Servicer.
ARTICLE V.
COVENANTS
Section 5.01 COVENANTS OF THE SELLER. Until the date on which
the Investment shall be reduced to zero, the Yield shall have been paid, no
other amount shall be owing to the Purchaser, the Administrative Agent or FSA
under this Agreement and no further Purchases are to be made under this
Agreement:
(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The Seller
shall perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it and its business and properties, including the Contracts, the
Receivables and the related Vehicles and all Proceeds thereof, including those
relating to truth in lending, retail installment sales, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices,
privacy, licensing, taxation, ERISA and labor matters and Environmental Laws,
except to the extent that the failure to so comply, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. The Seller further
agrees that (i) without the prior consent of the Controlling Party, the
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Seller shall not give any consent, direction, approval, demand, extension or
waiver under or with respect to any Related Document (other than as permitted
in such documents or in the case of a Permitted Restructuring), (ii) upon the
request of the Controlling Party, the Seller shall be obligated to give or
withhold any and all such consents, requests, notices, directions, approvals,
demands, extensions or waivers as the Controlling Party may request, and
(iii) upon any failure by the Seller to comply with any such request, the
Controlling Party shall be entitled to give or withhold any and all such
consents, directions, approvals, demands, extensions or waivers, and to
enforce directly all of the Seller's rights and remedies under the Related
Document.
(b) MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. The
Seller shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder and in accordance with the terms of its
certificate of incorporation and bylaws and SECTIONS 5.01(l); (iii) at all times
maintain, preserve and protect all of its licenses, permits, charters and
registrations which are reasonably necessary for the conduct of its business;
and (iv) transact business only under its exact corporate name.
(c) CASH MANAGEMENT SYSTEMS; DEPOSIT OF COLLECTIONS. The
Seller shall direct, or cause to be directed, all Obligors to make payments on
the Receivables directly to a Lockbox Account. The Seller shall also direct
each of the other parties to the Related Documents, to the extent that any
amounts may be payable thereunder to the Seller, to make all deposits of such
amounts directly into the Lockbox Account. If notwithstanding the foregoing the
Seller at any time receives any Collections with respect to any Receivable or
any other proceeds of any Receivables, the Seller shall direct or cause to be
directed, the related Obligor to make such payments to the Lockbox Account and
shall promptly, and in any event no later than the first Business Day after
receipt thereof, deposit or cause to be deposited all such amounts into a
Blocked Account.
(d) USE OF PROCEEDS. The Seller shall utilize the proceeds of
the Purchases made hereunder solely for (i) the purchase of Receivables and
Vehicles from the Transferors pursuant to a Transfer Agreement from time to time
after the Closing Date, (ii) the payment of routine administrative or operating
expenses, in each case only as expressly permitted by and in accordance with the
terms of this Agreement and the other Related Documents, and (iii) the payment
of expenses hereunder.
(e) BOOKS AND RECORDS. The Seller shall keep proper books of
record and account in which full and correct entries shall be made of all
financial transactions and the assets and business of the Seller in accordance
with GAAP; maintain and implement administrative and operating procedures
(including, without limitation, the ability to recreate records evidencing the
Receivables and the Outstanding Balances thereof in the event of the destruction
of the originals thereof); and keep and maintain all documents, books, records
and other information necessary or reasonably advisable for the collection of
all Receivables and the disposition of all Vehicles.
(f) ACCESS; INSPECTION. The Seller shall permit the
Administrative Agent, the Purchaser and FSA, at the Seller's expense, to make or
cause to be made inspections and audits of any books, records and papers of the
Seller and to make extracts therefrom and copies thereof,
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or to make inspections and examinations of any properties and facilities of
the Seller, including ongoing inspections of the Vehicles which are in the
Seller's possession or under its control, from time to time as required in
order to assure that the Seller is and will be in compliance with its
obligations under this Agreement and the Related Documents; PROVIDED, that
unless a Servicer Termination Event has occurred and is continuing, or the
Administrative Agent, the Purchaser or FSA has reason to believe that a
Servicer Termination Event is imminent, (x) such audits shall be upon
reasonable notice and shall be conducted during normal business hours and (y)
no more than four (4) full audits per calendar year shall be made at the
Seller's expense, which audits shall be conducted by FSA who shall provide
the Administrative Agent and the Purchaser with written notice at least 5
Business Days prior to conducting any such audit and the opportunity to
accompany FSA on such audit. Notwithstanding the preceding sentence, the
Seller shall only be liable to the Administrative Agent, the Purchaser and
FSA for the actual reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Purchaser or FSA in connection with such
inspections and audits. The Seller shall, upon reasonable notice and during
normal business hours, make available its officers, directors, employees,
representatives, agents and accountants to discuss with the Administrative
Agent, the Purchaser and FSA all financial statements and other information
relating to the Seller or the Purchased Receivables and shall deliver any
document or instrument necessary for the Administrative Agent, the Purchaser
and FSA, as they may from time to time request, to obtain records from any
service bureau or other Person which maintains records for the Seller.
Representatives of other Affected Parties may, at their own expense,
accompany Administrative Agent's or the Purchaser's representatives on
regularly scheduled audits at no charge to the Seller.
(g) PAYMENT, PERFORMANCE AND DISCHARGE OF OBLIGATIONS. The
Seller shall pay, perform and discharge or cause to be paid, performed and
discharged promptly all Charges payable by it, including (A) Charges imposed
upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees and (B) lawful claims for labor,
materials, supplies and services or otherwise before any thereof shall become
past due.
(h) ERISA. The Seller shall give the Administrative Agent and
FSA prompt written notice of any event that could result in the imposition of a
Lien under SECTION 412 of the IRC or SECTION 302 OR 4068 of ERISA.
(i) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION
POLICY. The Seller shall, at its expense, timely and fully perform and comply
with all provisions, covenants and other promises required to be observed by
it under any Contracts and shall comply with the Credit and Collection Policy
with respect to all such Contracts and the Receivables and Financed Vehicles
relating thereto.
(j) RELATED DOCUMENTS. The Seller shall comply with all of its
obligations set forth in the Related Documents, and enforce all of its rights,
remedies and privileges under such Related Documents in accordance with the
terms thereof to the same extent it would enforce such rights, remedies and
privileges against an unrelated third-party; PROVIDED, HOWEVER, that the Seller
shall not, without the prior written consent of the Administrative Agent and,
provided that an FSA Default has not occurred, FSA, terminate or amend any
Transfer Agreement.
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(k) CERTIFICATES OF TITLE. The Seller shall deliver, or cause
to be delivered, to the Custodian, promptly but in any event within 120 days of
the date of Purchase of any Receivable with respect to which a Certificate of
Title applicable to the related Vehicle was not available on or prior to such
date of Purchase, such Certificate of Title which shall show the lien of the
Administrative Agent, for the benefit of the Purchaser and the Secondary
Purchaser, noted thereon.
(l) SEPARATENESS. The Seller shall be operated in such a
manner that the separate corporate existence of the Seller and Motor Coach or
its Affiliates (the "MOTOR COACH ENTITIES") would not be disregarded in the
event of a bankruptcy or insolvency of any Motor Coach Entity, and, without
limiting the foregoing:
(i) the Seller shall at all times be a limited purpose
corporation whose activities are restricted as set forth in its
certificate or articles of incorporation;
(ii) no Motor Coach Entity shall be involved in the
day-to-day management of the Seller (except to the extent expressly
contemplated by this Agreement or any other Related Document);
(iii) other than the purchase of Receivables and Vehicles
from the Transferors pursuant to the Transfer Agreements, the payment of
the Servicer Fees to the Servicer and other transactions permitted under
this Agreement, the Seller shall not engage in any intercorporate
transactions with any Motor Coach Entity;
(iv) the Seller shall maintain separate corporate records
and books of account from each Motor Coach Entity, hold regular corporate
meetings and otherwise observe corporate formalities and have separate
office space from each Motor Coach Entity, if any;
(v) the financial statements and books and records of
Motor Coach and of any other entity whose financial statements are
consolidated with the Seller prepared after the Initial Closing Date
shall reflect the separate corporate existence of the Seller;
(vi) the Seller shall not act as agent for any Motor
Coach Entity and shall hold itself out to the public as a corporation
separate from each such Motor Coach Entity;
(vii) the Seller shall maintain at least two independent
directors each of whom, at all times after the Initial Closing Date,
shall be an individual who (i) is in fact independent of the Seller, (ii)
does not have, and never has had, any direct financial interest or any
material indirect financial interest in the Seller or in any Affiliate of
the Seller and (iii) is not, and never has been, connected as an officer,
employee, promoter, underwriter, trustee, partner, director, creditor,
supplier, family member, manager or contractor or person performing
similar functions within the Seller or any Affiliate of the Seller or as
a Person who,
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directly, indirectly or otherwise, controls any such individual, entity
or its affiliates;
(viii) the Seller shall maintain its assets separately from
the assets of any Motor Coach Entity (including through the maintenance
of separate bank accounts and except for any Records to the extent
necessary for the servicing of the Receivables); the Seller's funds and
assets, and records relating thereto, shall not be commingled with those
of any Motor Coach Entity; and the separate creditors of the Seller will
be entitled to be satisfied out of the Seller's assets prior to any value
in the Seller becoming available to the Seller's equity holders;
(ix) except as expressly contemplated under this
Agreement and the Related Documents and those associated with the
creation and organization of the Seller and the preparation of this
Agreement and the Related Documents, no Motor Coach Entity shall (A) pay
the Seller's expenses; (B) guarantee the Seller's obligations, or (C)
advance funds to the Seller for the payment of expenses or otherwise; and
(x) all business correspondence of the Seller and other
communications shall be conducted in the Seller's own name, on its own
stationery and through a separately-listed telephone number; and
(m) The Seller shall not engage in any activity other than the
activities expressly contemplated by this Agreement and the Related Documents,
nor shall the Seller enter into any agreement other than this Agreement and the
Related Documents, and any agreement necessary to undertake any activity
expressly contemplated by this Agreement or the Related Documents.
(n) LETTER OF CREDIT. If (1) the short-term senior unsecured
and unsubordinated debt rating of the Transaction L/C Issuer shall be withdrawn
or reduced below A-1, in the case of S&P, or P-1, in the case of Moody's, or (2)
the Transaction Letter of Credit shall expire or be terminated prior to the date
on which the Investment shall be reduced to zero, the Yield shall have been
paid, no other amount shall be owing to the Purchaser, the Administrative Agent
or FSA and no further Purchases are to be made under this Agreement, the Seller
shall, not later than (x) thirty (30) days after such withdrawal or reduction in
debt rating or (y) thirty (30) days prior to such expiration or termination, as
the case may be, deliver or cause to be delivered, to the Administrative Agent a
replacement letter of credit, or other comparable form of credit enhancement
acceptable to the Administrative Agent and FSA, in their sole discretion, which
shall replace the initial Transaction Letter of Credit for all purposes of this
Agreement, and upon such delivery, the Administrative Agent shall return the
initial Transaction Letter of Credit to the initial Transaction L/C Issuer for
cancellation and all references to such Transaction Letter of Credit and such
Transaction L/C Issuer shall thereafter be deemed to refer to such replacement
letter of credit or other form of credit enhancement and the issuer thereof,
respectively, PROVIDED that the following conditions are satisfied:
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(i) The replacement letter of credit or other form of
credit enhancement shall be irrevocable, issued by a Transaction L/C
Issuer satisfactory to the Administrative Agent and FSA and shall be on
substantially the same terms and in substantially the same form as the
Transaction Letter of Credit, PROVIDED that the Stated Amount of the
replacement letter of credit or other form of credit enhancement,
together with the amount on deposit in the Cash Collateral Account and
the Stated Amount of any other Transaction Letter of Credit or other form
of credit enhancement which will be in effect following such replacement,
shall be at least equal to the Required Credit Enhancement. The
replacement letter of credit and the letter of credit reimbursement
agreement relating thereto or such other form of credit enhancement and
the reimbursement agreement relating thereto shall be consented to by the
Purchaser, the Administrative Agent and FSA, which consents shall not be
unreasonably withheld.
(ii) The Seller shall have delivered the proposed form of
the replacement letter of credit and the applicable letter of credit
reimbursement agreement or such other form of credit enhancement and the
reimbursement agreement relating thereto to the Purchaser, Administrative
Agent and FSA at least 10 days prior to the proposed date on which the
Transaction Letter of Credit is to be replaced.
(iii) The Seller shall have caused to be delivered to the
Purchaser, the Administrative Agent and FSA a certificate of a
Responsible Officer and incumbency certificate, duly executed by an
officer of the issuer of the replacement letter of credit or other form
of credit enhancement, together with an opinion of counsel to the issuer
of the replacement letter of credit or other form of credit enhancement,
all in substantially the same form as the certificates and opinions
delivered to the Purchaser and Administrative Agent in connection with
the issuance of the Transaction Letter of Credit, or in such other form
as may have been approved by the Purchaser, the Administrative Agent and,
provided that an FSA Default has not occurred, FSA.
If the Seller does not deliver a replacement letter of credit or
other form of credit enhancement as described above when required, the
Administrative Agent shall on the day such replacement letter of credit or other
form of credit enhancement was required to be delivered make, or cause the
Backup Servicer to make, a drawing on the Transaction Letter of Credit in an
amount equal to the Available L/C Amount, which amount shall be deposited in the
L/C Funding Account. All references in this Agreement to the Transaction Letter
of Credit and the Transaction L/C Draw shall, from and after the deposit in the
L/C Funding Account as set forth in the immediately preceding sentence, be
deemed to refer to the L/C Funding Account and withdrawals therefrom,
respectively. Upon delivery of a replacement Letter of Credit, or other form of
credit enhancement as described above, any amounts on deposit in the L/C Funding
Account at the time of such delivery (after giving effect to any withdrawals to
be made in accordance with Section 2.03(d) on the date of such delivery) shall
be paid to the Seller.
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Section 5.02 COVENANTS OF THE SERVICER. Until the date on which
the Investment shall be reduced to zero, the Yield shall have been paid, no
amount shall be owing to the Purchaser, the Administrative Agent and FSA under
this Agreement and no further Purchases are to be made under this Agreement:
(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The
Servicer shall perform each of its obligations under this Agreement and the
other Related Documents and comply with all federal, state and local laws and
regulations applicable to it and its business and properties, including the
Contracts, the Receivables and the related Vehicles and all Proceeds thereof,
including those relating to truth in lending, retail installment sales, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices, privacy, licensing, taxation, ERISA and labor matters and
Environmental Laws, except to the extent that the failure or failures to so
comply, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(b) MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. The
Servicer shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder; and (iii) at all times maintain, preserve
and protect all of its licenses, permits, charters and registrations which are
reasonably necessary for the conduct of its business.
(c) DEPOSIT OF COLLECTIONS; CASH MANAGEMENT SYSTEMS. The
Servicer shall direct all Obligors to make payments on the Receivables directly
to the Lockbox Account and shall deposit or cause to be deposited promptly into
a Blocked Account, in accordance with SECTION 6.02(b), all Collections it may
receive with respect to any Receivable or any other proceeds of any Receivable.
The Servicer shall, direct, or cause to be directed, such Obligor to make such
payments to the Lockbox Account and shall, to the extent it is responsible for
the administration of the Seller's funds, establish and maintain the Cash
Management Systems described on SCHEDULE 1.01(b).
(d) BOOKS AND RECORDS. The Servicer shall keep proper books of
record and account in which full and correct entries shall be made of all
financial transactions and the assets and business of the Servicer in accordance
with GAAP; maintain and implement administrative and operating procedures
(including, without limitation, the ability to recreate records evidencing the
Receivables and the Outstanding Balances thereof in the event of the destruction
of the originals thereof); and keep and maintain all documents, books, records
and other information necessary or reasonably advisable for the collection of
all Receivables and the disposition of all Financed Vehicles.
(e) ACCESS; INSPECTION. The Servicer shall permit the
Administrative Agent, the Purchaser and FSA, at the Servicer's expense, to make
or cause to be made inspections and audits of any books, records and papers of
the Servicer and to make extracts therefrom and copies thereof, or to make
inspections and examinations of any properties and facilities of the Servicer,
including ongoing inspections of the Vehicles which are in the Servicer's
possession or under its control, from time to time as required in order to
assure that the Servicer is and will be in compliance with its obligations under
this Agreement and the Related Documents; PROVIDED,
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that unless a Servicer Termination Event has occurred and is continuing, or
the Administrative Agent, the Purchaser or FSA has reason to believe that a
Servicer Termination Event is imminent (x) such audits shall be upon
reasonable notice and shall be conducted during normal business hours and (y)
no more than four (4) full audits per calendar year shall be made at the
Servicer's expense, which audits shall be conducted by FSA who shall provide
the Administrative Agent and the Purchaser with written notice at least 5
Business Days prior to conducting any such audit and the opportunity to
accompany FSA on such audit. Notwithstanding the preceding sentence, the
Servicer shall only be liable to the Administrative Agent, the Purchaser and
FSA for the actual reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Purchaser or FSA in connection with such
inspections and audits. The Servicer shall, upon reasonable notice and
during normal business hours, make available its officers, directors,
employees, representatives, agents and accountants to discuss with the
Administrative Agent, the Purchaser and FSA all financial statements and
other information relating to the Servicer or the Purchased Receivables and
shall deliver any document or instrument necessary for the Administrative
Agent, the Purchaser and FSA as they may from time to time request, to obtain
records from any service bureau or other Person which maintains records for
the Servicer. Representatives of other Affected Parties may accompany the
Administrative Agent's or the Purchaser's representatives on regularly
scheduled audits at no charge to the Servicer or the Seller.
(f) PAYMENT, PERFORMANCE AND DISCHARGE OF OBLIGATIONS. The
Servicer shall pay, perform and discharge or cause to be paid, performed and
discharged promptly all Charges payable by it, including (A) Charges imposed
upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for labor,
materials, supplies and services or otherwise before any thereof shall become
past due.
(g) ERISA. The Servicer shall give Administrative Agent and
FSA prompt written notice of any event that could result in the imposition of a
Lien under SECTION 412 of the IRC or SECTION 302 OR 4068 of ERISA.
(h) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION POLICY.
The Servicer shall, at its expense, timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under any
Contracts related to a Purchased Receivable (except, in the case of a successor
Servicer, such material provisions, covenants and other provisions shall only
include those provisions relating to the collection and servicing of the
Purchased Receivables to the extent such obligations are set forth in a document
included in the related Contract File) and shall comply with the Credit and
Collection Policy with respect to all such Contracts and the Receivables and
Financed Vehicles relating thereto, except where the failure to so comply is not
reasonably likely to result is an Material Adverse Effect.
(i) COLLECTIONS. The Servicer shall instruct all Obligors to
cause all Collections to be deposited directly to a Lockbox Account and, within
one (1) Business Day after receipt into a Lockbox Account, all such Collections
shall be remitted to a Blocked Account.
(j) FACILITY DOCUMENTS. The Servicer shall comply in all
material respects with the terms of and employ the procedures outlined in
this Agreement, and all of the other
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Related Documents to which it is a party and take all such action to such
end as may be from time to time reasonably requested by the Controlling Party.
(k) INSURANCE. The Servicer shall require, in accordance with
its customary servicing policies and procedures, that each Financed Vehicle, at
the time of origination of the related Receivable, be insured by the related
Obligor under an insurance policy and that such insurance policy names the
Administrative Agent, for the benefit of the Purchaser, the Secondary Purchaser
and FSA, as an additional insured. Each Receivable shall permit the holder
thereof to obtain physical loss and damage insurance at the expense of the
Obligor if the Obligor fails to maintain such insurance. The Servicer may sue
to enforce or collect upon the insurance policies in its own name or as agent of
the Administrative Agent, the Purchaser, the Secondary Purchaser or FSA. If the
Servicer elects to commence a legal proceeding to enforce an insurance policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Administrative Agent under such insurance policy to the Servicer
for purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce an insurance policy on
the grounds that it is not a real party in interest or a holder entitled to
enforce the insurance policy, the Administrative Agent, at the Servicer's
expense, shall take such steps as the Administrative Agent deems necessary to
enforce such insurance policy, including bringing suit in its name or the name
of the Administrative Agent for the benefit of the Purchaser, the Secondary
Purchaser and FSA.
(l) ORIGINAL CERTIFICATE OF TITLE. The Servicer shall, with
respect to each Vehicle related to a Purchased Receivable for which a
Certificate of Title described in paragraph (iii)(A) of the definition of
"Contract File" was not included in the related Contract File on the related
date of Purchase, deliver or cause to be delivered to the Custodian the original
Certificate of Title naming the Administrative Agent, for the benefit of the
Purchaser, the Secondary Purchaser and FSA, as the sole lien holder with respect
to such Vehicle promptly after the issuance thereof by the appropriate office in
the jurisdiction in which such Vehicle is titled but in any event not later than
120 days after such date of Purchase.
Section 5.03 NEGATIVE COVENANTS OF THE SELLER. The Seller
covenants and agrees that, from and after the Closing Date until the Termination
Date:
(a) SALE OF ASSETS. The Seller shall not sell, transfer,
convey, assign or otherwise dispose of, or assign any right to receive income in
respect of, any of its properties or other assets, including any Vehicle,
Receivable or Contract or any Related Document or any of its rights with respect
to Lockbox Account or any other deposit account in which any Collections of any
Receivable or other proceeds of any Receivable are deposited, except as
expressly permitted by this Agreement or any of the other Related Documents.
(b) LIENS. The Seller shall not create, incur, assume or
permit to exist any Lien on or with respect to the Receivables, Vehicles,
Contracts, the Lockbox Account, the Cash Collateral Account, the Blocked
Accounts, any other deposit accounts into which Collections of any Receivables
or other proceeds of any Receivables are deposited, or any other properties or
assets (whether now owned or hereafter acquired).
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(c) MODIFICATIONS OF RECEIVABLES OR CONTRACTS. The Seller
shall not extend, amend, forgive, discharge, compromise, waive, cancel or
otherwise modify the terms of any Receivable or amend, modify or waive any term
or condition of any Contract related thereto, except for Permitted
Restructurings and such other modifications of past due Receivables as the
Seller deems reasonably necessary to maximize the collection thereof to the
extent expressly permitted by the terms of the Credit and Collection Policy.
(d) CHANGES IN INSTRUCTIONS WITH RESPECT TO PAYMENTS ON
PURCHASED RECEIVABLES. The Seller shall not make any change in its instructions
to Obligors regarding the deposit of Collections with respect to the
Receivables, including its instructions with respect to payments to the Lockbox
Account, or in its instructions to any Person obligated to make payments in
respect of any other Receivables.
(e) CAPITAL STRUCTURE AND BUSINESS . The Seller shall not (i)
make any changes in any of its business objectives, purposes or operations, (ii)
without the prior written consent of the Administrative Agent, the Purchaser
and, provided that an FSA Default has not occurred, FSA, amend its certificate
or articles of incorporation or bylaws or (iii) engage in any business other
than the businesses currently engaged in by it or contemplated to be engaged in
by it under this Agreement and the other Related Documents.
(f) MERGERS, SUBSIDIARIES, ETC. The Seller shall not directly
or indirectly, by operation of law or otherwise, (i) form or acquire any
Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially
all of the assets or Capital Stock of, or otherwise combine with or acquire, any
Person.
(g) SALE CHARACTERIZATION; TRANSFER AGREEMENTS . The Seller
shall not make statements or disclosures, prepare any financial statements or in
any other respect account for or treat the transactions contemplated by the
Transfer Agreements (including for accounting, tax and reporting purposes) in
any manner other than as a true sale or absolute assignment of the title to and
sole record and beneficial ownership interest of the Receivables, Contracts and
Vehicles sold or purported to be sold thereunder.
(h) RESTRICTED PAYMENTS. Other than as contemplated by the
Related Documents, the Seller shall not enter into any lending relationship with
any of its Affiliates. The Seller shall not at any time declare any dividends,
repurchase any Capital Stock, return any capital, or make any other payment or
distribution of cash or other property or assets in respect of the Seller's
Capital Stock if, at the time of or after giving effect to any such dividend,
repurchase, return or other payment or distribution, a Service Termination Event
shall have occurred and be continuing.
(i) INDEBTEDNESS. The Seller shall not create, incur, assume
or permit to exist any Indebtedness except for (i) Indebtedness expressly
contemplated under this Agreement or the Related Documents (ii) deferred taxes,
and (iii) endorser liability in connection with the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
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(j) PROHIBITED TRANSACTIONS AND AMENDMENTS. The Seller shall
not enter into, or be a party to, any transaction with any Person except as
expressly contemplated hereunder or under any other Related Document. The
Seller shall not amend, waive or otherwise modify the Credit and Collection
Policy or any provision of any Related Document to which it is a party.
(k) INVESTMENTS. Except as otherwise expressly permitted
hereunder or under the other Related Documents, the Seller shall not make any
investment in, or make or accrue loans or advances of money to, any Person,
including any stockholder, director, officer or employee of the Seller or any of
its Affiliates, through the direct or indirect lending of money, holding of
securities or otherwise, except with respect to the purchases of Receivables and
Financed Vehicles contemplated hereunder and Eligible Investments.
(l) COMMINGLING. The Seller shall not deposit or permit the
deposit of any funds that do not constitute Collections of Receivables or other
proceeds of Receivables into any Lockbox Account.
(m) ERISA. The Seller shall not, and shall not cause or permit
any of its ERISA Affiliates to, cause or permit to occur an event that could
result in the imposition of a Lien under SECTION 412 of the IRC or Section 302
or 4068 of ERISA.
Section 5.04 NEGATIVE COVENANTS OF THE SERVICER. The Servicer
covenants and agrees that, from and after the Closing Date until the Termination
Date:
(a) LIENS. The Servicer shall not create, incur, assume or
permit to exist any Lien on or with respect to any of its rights under any of
the Related Documents, whether with respect to Receivables, Vehicles, Contracts,
the Lockbox Account, the Cash Collateral Account, the Blocked Accounts or any
other deposit account in which Collections of any Receivable of the Seller or
other proceeds of any Receivables are deposited or otherwise.
(b) MODIFICATIONS OF RECEIVABLES OR CONTRACTS. The Servicer
shall not extend, amend, forgive, discharge, compromise, waive, cancel or
otherwise modify the terms of any Receivable or amend, modify or waive any term
or condition of any Contract related thereto, except for Permitted
Restructurings and such other modifications of past due Receivables as the
Servicer deems reasonably necessary to maximize the collection thereof to the
extent expressly permitted by the Credit and Collection Policy.
(c) CHANGES IN INSTRUCTIONS WITH RESPECT TO PAYMENTS ON
PURCHASED RECEIVABLES. The Servicer shall not make any change in its
instructions to Obligors regarding the deposit of Collections with respect to
the Receivables, including its instructions with respect to payments to the
Lockbox Account, or in its instructions to any Person obligated to make payments
in respect of any other Receivables.
(d) CAPITAL STRUCTURE AND BUSINESS. The Servicer shall not (i)
change the Seller's capital structure so that it ceases to be a wholly owned
Subsidiary of MCII Coaches Inc., or (ii) make any changes in any of its business
objectives, purposes or operations that would be reasonably expected to have a
Material Adverse Effect.
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(e) MERGERS. The Servicer shall not directly or indirectly, by
operation of law or otherwise, merge with, consolidate with, acquire all or
substantially all of the assets or Capital Stock of, or otherwise combine with
or acquire, any Person, except that the Servicer shall be allowed to merge with
any Affiliate so long as the Servicer (i) remains the surviving corporation of
such merger and (ii) shall have given prior written notice of such merger to the
Administrative Agent.
(f) COMMINGLING. The Servicer shall not deposit or permit the
deposit of any funds that do not constitute Collections of Receivables or other
proceeds of any Receivables into the Lockbox Account.
(g) ERISA. The Servicer shall not, and shall not cause or
permit any of its ERISA Affiliates to, cause or permit to occur an event that
could result in the imposition of a Lien under SECTION 412 of the IRC or SECTION
302 or 4068 of ERISA.
(h) SERVICING OBLIGATIONS. The Servicer will not (i) amend,
waive or otherwise modify the Credit and Collection Policy in any material
respect without the prior written consent of the Administrative Agent and FSA
(ii) agree to any amendment, waiver or other modification of the Related
Document to which it is a party or (iii) interpose any claims, offsets or
defenses it may have as against the Seller as a defense to its performance of
its obligations in favor of any Affected Party hereunder or under any other
Related Documents.
Section 5.05 REPORTING COVENANTS OF THE SELLER AND THE
SERVICER. From and after the Closing Date and until the Termination Date, the
Seller and the Servicer shall furnish, or cause to be furnished, to the
Administrative Agent and FSA:
(i) monthly, as soon as available, but in no event
later than the Report Delivery Date, a Monthly Report in the form of
EXHIBIT A, together with a certificate of an officer of the Seller with
appropriate knowledge certifying that the Seller is in compliance with
respect to the maintenance of all insurance and the payment of taxes
required hereunder;
(ii) quarterly, with each Monthly Report delivered
pursuant to SECTION 5.05(i) in January, April, July and October of each
year, a computer tape in an MS-DOS, PC readable ASCII format or format
reasonably acceptable to the Administrative Agent, which shall contain
the following information with respect to each Purchased Receivable: the
name, address and telephone number of the related Obligor and the account
number for each Contract, the collection status, the contract status, the
Outstanding Balance for each Contract, the repossession agent for
repossessed Vehicles and the broker for sold or leased Vehicles;
(iii) (A) as soon as available and in any event within 120
days after the end of each Fiscal Year, a copy of the unaudited
consolidated financial statements for such year for the Servicer and its
consolidated Subsidiaries, including the prior comparable period (if any)
from the preceding fiscal year, together with consolidating financial
statements for the Servicer certified by an officer of the Servicer with
appropriate knowledge stating that the information set
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forth therein fairly presents the financial condition of the Servicer
and its consolidated Subsidiaries as of and for such Fiscal Year, with
all such financial statements being prepared in accordance with GAAP
applied consistently throughout the period involved (except for
changes in the application of GAAP approved by the Servicer's
accountants in accordance with GAAP and disclosed therein), and (B) as
soon as received by the Servicer with respect to any fiscal year, a
copy of the audited consolidated financial statements for such year
for Motor Coach and its consolidated Subsidiaries, including the prior
comparable period (if any) from the preceding fiscal year and
certified by a nationally recognized firm of independent accountants
(the report of which shall be unqualified), together with
consolidating financial statements for Motor Coach certified by an
officer of Motor Coach with appropriate knowledge stating that the
information set forth therein fairly presents the financial condition
of Motor Coach and its consolidated Subsidiaries as of and for such
fiscal year, with all such financial statements being prepared in
accordance with GAAP applied consistently throughout the period
involved (except for changes in the application of GAAP approved by
such accountants in accordance with GAAP and disclosed therein);
(iv) as soon as available and in any event within 45 days
after the end of each Fiscal Quarter of each Fiscal Year (other than the
last Fiscal Quarter of each Fiscal Year), an unaudited consolidated and
consolidating balance sheet of the Servicer and its consolidated
Subsidiaries as of the end of such Fiscal Quarter and including the prior
comparable period (if any), and the unaudited consolidated and
consolidating statements of income and retained earnings, and of cash
flow, of the Servicer and its consolidated Subsidiaries for such Fiscal
Quarter and for the period commencing at the end of the previous Fiscal
Year and ending with the end of such Fiscal Quarter, certified by an
officer of the Servicer with appropriate knowledge identifying such
documents as being the documents described in this PARAGRAPH (iv) and
stating that the information set forth therein fairly presents the
financial condition of the Servicer and its consolidated Subsidiaries as
of and for the periods then ended, subject to year-end adjustments and
confirming that the Servicer is in compliance with all financial
covenants in this Agreement;
(v) as soon as possible and in any event within five
days after the occurrence of a Servicer Termination Event, the statement
of an officer of the Seller setting forth complete details of such
Servicer Termination Event and the action which the Seller has taken, is
taking and proposes to take with respect thereto;
(vi) as soon as available and in any event within 120
days after the end of each fiscal year, a report from a nationally
recognized firm of independent accountants (upon which report, the
Administrative Agent, Custodian and the Purchaser may rely) to the
Administrative Agent and the Purchaser to the effect that such
accountants have applied the agreed upon procedures agreed to by the
Servicer, the Administrative Agent and, provided that an FSA Default has
not
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occurred, FSA with respect to (a) the Servicer's compliance with any
accounting and financial covenants in this Agreement and (b) the
substantial compliance with this Agreement in the preparation of the
Monthly Reports delivered during the previous fiscal year, and that, on
the basis of such procedures, such accountants have uncovered no
exceptions, except as set forth in such statement;
(vii) promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the Contracts
or the Vehicles or the condition or operations, financial or otherwise,
of the Servicer or the Seller, as the Administrative Agent, FSA or the
Purchaser may reasonably request from time to time;
(viii) upon any request from the Administrative Agent or
FSA and in any event, on or before 120 days after the end of each fiscal
year, (i) an officer's certificate of the Seller, dated the date of such
delivery, bringing down to such date the matters set forth in the
officer's certificate in the form of EXHIBIT H and (ii) an officer's
certificate of the Servicer, dated the date of such delivery, bringing
down to such date the matters set forth in the officer's certificate in
the form of EXHIBIT H;
(ix) promptly, notification in writing of any litigation,
legal proceeding or dispute, whether or not in the ordinary course of
business, which may in any respect materially and adversely affect the
Seller or the Servicer;
(x) prompt written notice of any ERISA Event;
(xi) within 10 days after receipt of any Revenue Agent
Reports (Internal Revenue Service Form 886), or other written proposals
of the Internal Revenue Service, which propose, determine or otherwise
set forth positive adjustments to the Federal income tax liability of the
affiliated group (within the meaning of SECTION 1504(a)(1) of the Code)
of which the Seller is a member which equal or exceed $1,000,000 in the
aggregate, telephonic, telex or telecopied notice (confirmed in writing
within 5 Business Days) specifying the nature of the items giving rise to
such adjustments and the amounts thereof;
(xii) promptly upon discovery thereof, written notice of
any other event, circumstance or condition that has resulted in or is
reasonably likely to result in a Material Adverse Effect with respect to
the Seller;
(xiii) promptly upon receipt thereof, copies of any notices
received from or delivered to the Transaction L/C Issuer, the Seller, the
Servicer or any Affiliate of any of the foregoing with respect to the
termination or extension of the Transaction Letter of Credit; PROVIDED,
that the Seller shall deliver, or cause to be delivered, not later than
60 days prior to the then current termination date of the Transaction
Letter of Credit, a request to the Transaction L/C Issuer for the
extension of the Transaction Letter of Credit for at least one additional
year; and
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(xiv) within 15 days after any Purchase (other than the
initial Purchase) in excess of $15,000,000, or if no such Purchase has
occurred during any Fiscal Quarter, on the last Business Day of such
Fiscal Quarter, an updated tax certificate, a tax lien search and the
information described in SECTION 3.01(c).
ARTICLE VI.
ADMINISTRATION AND COLLECTION
Section 6.01 RETENTION AND TERMINATION OF SERVICER.
(a) The servicing, administering and collection of the
Receivables shall be conducted by the Person (the "Servicer") so designated from
time to time in accordance with this Section 6.01. Subject to early termination
due to the occurrence of a Servicer Termination Event or as otherwise provided
below in this Section 6.01, BusLease shall serve as Servicer for an initial term
commencing on the date hereof and expiring on June 30, 2000, which term, unless
terminated, shall be extendible by the Controlling Party for successive terms
thereafter of one calendar quarter each (in each case on the next succeeding day
that is March 31, June 30, September 30 or December 31 of such year) as
specified in a writing (each a "Servicer Extension Notice") delivered by the
Controlling Party not later than the twentieth (20th) day prior to the
expiration of each current term to the Servicer and the Administrative Agent,
until the termination of this Agreement. The Servicer hereby agrees that, upon
its receipt of any such Servicer Extension Notice, the Servicer shall become
bound, for the duration of the term covered by such notice, to continue as
Servicer subject to and in accordance with the provisions of this Agreement.
The Administrative Agent agrees that if, as of the fifteenth (15th) day prior to
the last day of any term of the Servicer, the Administrative Agent shall not
have received any Servicer Extension Notice from the Controlling Party, the
Administrative Agent, shall, within five (5) days thereafter, give written
notice of such non-receipt to the Controlling Party (if not the Administrative
Agent) and the Servicer. Any designation of a successor Servicer under this
Agreement shall become effective upon such successor Servicer's agreement to
perform the duties and obligations of the Servicer pursuant to the terms hereof
and BusLease shall continue to perform the obligations of the Servicer hereunder
and be paid the Servicing Fee until such successor Servicer shall have assumed
the responsibilities and obligations of the Servicer. The Servicer may, with
the prior consent of Controlling Party, subcontract with any other Person for
the servicing, administering or collecting the Purchased Receivables; provided
that the Servicer shall remain liable for the performance of the duties and
obligations of the Servicer pursuant to the terms hereof.
(b) Upon the termination or resignation of the Servicer,
whether by reason of the expiration of the Servicer's term, a Servicer
Termination Event, or any other reason, the Backup Servicer shall, upon the
receipt of notice of such resignation or termination, within 30 days commence
servicing activities in place of BusLease, in accordance with the Backup
Servicing Agreement and shall, for the purposes of this Agreement, become
Servicer. Until such time as the Controlling Party notifies BusLease that the
Backup Servicer has commenced servicing activities in the place of BusLease,
BusLease shall continue to perform the obligations of the Servicer hereunder and
be paid the Servicing Fee. Upon the Backup Servicer's assumption of the
obligations of Servicer pursuant to this Agreement and the Backup Servicing
Agreement, the Servicer shall deliver to the Backup Servicer all documents and
instruments and
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monies held by it under this Agreement, and the Servicer and the
Administrative Agent shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting
and confirming in the successor Backup Servicer all such rights, powers,
duties, and obligations. Notwithstanding anything contained herein to the
contrary, the resignation or termination of the Servicer shall not become
effective until the Backup Servicer or an entity acceptable to the
Controlling Party shall have assumed the responsibilities and obligations of
the Servicer.
(c) Neither the Servicer nor the Backup Servicer shall resign
from the obligations and duties imposed on it by this Agreement as Servicer or
Backup Servicer, as the case may be, except upon a determination that by reason
of a change in legal requirements, the performance of its duties hereunder would
cause it to be in violation of such legal requirements in a manner which would
have a material adverse effect on the Servicer or Backup Servicer, as the case
may be, and the Controlling Party does not elect to waive the obligations of the
Servicer to perform the duties which render it legally unable to act or to
delegate those duties to another Person. Any such determination permitting the
resignation of the Servicer or Backup Servicer, as the case may be, pursuant to
this Section 6.01(c) shall be evidenced by an opinion of counsel to such effect
delivered and acceptable to the Controlling Party. No resignation of the
Servicer shall become effective until the Backup Servicer or an entity
acceptable to the Controlling Party shall have assumed the responsibilities and
obligations of the Servicer.
(d) Any Person (i) into which the Servicer or Backup Servicer
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which the Servicer shall be a party, (iii) which acquires by conveyance,
transfer or lease substantially all of the assets of the Servicer or Backup
Servicer, or (iv) succeeding to the business of the Servicer, in any of the
foregoing cases, shall execute an agreement of assumption to perform every
obligation of the Servicer under this Agreement and, whether or not such
assumption agreement is executed, shall be the successor to the Servicer under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement, anything in this Agreement
to the contrary notwithstanding; PROVIDED, HOWEVER, that nothing contained
herein shall be deemed to release the Servicer from any obligation.
(e) In the event the Backup Servicer assumes the obligations of
the Servicer pursuant to this Section 6.1, the Backup Servicer shall also
thereupon so assume all of the rights and obligations of the outgoing Servicer
under the Lockbox Agreement. In such event, the Backup Servicer shall be deemed
to have assumed all of the Servicer's interest therein and to have replaced the
Servicer as a party to the Lockbox Agreement to the same extent as if such
Lockbox Agreement had been assigned to the Backup Servicer, except that the
Servicer shall not thereby be relieved of any liability or obligations to the
Lockbox Bank under such Lockbox Agreement. The Servicer shall, upon request of
the Administrative Agent, but at the expense of the Servicer, deliver to the
Backup Servicer all documents and records relating to the Lockbox Agreement and
an accounting of amounts collected and held by the Lockbox Bank and otherwise
use its best efforts to effect the orderly and efficient transfer of any Lockbox
Agreement to the Backup Servicer.
(f) If the Backup Servicer assumes the role of successor
Servicer, (A) the Backup Servicer may appoint a subservicer to perform its
duties and obligations as successor
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Servicer or outsource any of its duties and obligations as successor Servicer
(PROVIDED that no such delegation or outsourcing shall relieve the Backup
Servicer of its obligations as the successor Servicer) and (B) the Backup
Servicer shall, by the fifth (5th) Business Day following the day of such
assumption of duties, determine which licenses, approvals and consents were
necessary or required to be obtained by BusLease (and BusLease shall promptly
provide the Backup Servicer a list of all licenses BusLease then has) in
connection with the performance of its obligations as Servicer and as soon as
reasonably practicable thereafter obtain all licenses, approvals and consents
necessary or required to be obtained in connection with the performance by
the Backup Servicer of its obligations as successor Servicer hereunder,
except where the failure to so obtain such licenses, approvals or consents is
not reasonably likely to have a material adverse effect on the Backup
Servicer's ability to perform its obligations as successor Servicer hereunder.
Section 6.02 DUTIES OF THE SERVICER.
(a) The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect the Purchased Receivables
from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy. Each of the Seller, the Purchaser and the
Administrative Agent hereby appoints the Servicer, from time to time designated
pursuant to SECTION 6.01 hereof, as agent for itself and in its name to enforce
and administer their respective rights and interests in the Purchased
Receivables, the Vehicles and the related Contracts.
(b) The Servicer shall administer the Collections in respect of
the Purchased Receivables in accordance with the procedures described herein and
in SECTION 2.03. The Servicer shall transfer, or cause to be transferred, all
Collections on deposit in any Lockbox Account to a Blocked Account by the close
of business on the first Business Day following the date such Collections are
received in such Lockbox Account. The Servicer shall promptly (but in no event
later than one Business Day after the receipt thereof) deposit all Collections
received directly by it into a Blocked Account. The Servicer shall make such
deposits or payments by electronic funds transfer through the Automated Clearing
House system, or by wire transfer, in immediately available funds.
(c) If no Servicer Termination Event shall have occurred,
BusLease, while it is the Servicer, may, subject to SECTION 5.04(b), extend the
Term (as defined in the related Contract) of any Contract or adjust the
Outstanding Balance of any Purchased Receivable as BusLease deems appropriate to
maximize Collections in respect thereof.
(d) The Servicer shall hold in trust for the Purchaser and the
Seller in accordance with their respective interests, all Records that evidence
or relate to the Purchased Receivables not previously delivered to the Custodian
and shall, as soon as practicable upon demand of the Administrative Agent, make
available, or, upon the occurrence and during the continuation of a Servicer
Termination Event, deliver to the Administrative Agent all Records in its
possession which evidence or relate to Purchased Receivables.
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(e) The Servicer shall, as soon as practicable following
receipt thereof, turn over to the Seller, any cash collections or other cash
proceeds received with respect to each Receivable which does not constitute a
Purchased Receivable.
(f) The Servicer shall, from time to time at the reasonable
request of the Purchaser, furnish to the Purchaser (promptly after any such
request) a calculation of the amounts set aside for the Purchaser pursuant to
SECTION 2.03 hereof.
(g) The Servicer shall prepare and forward to the Seller, the
Purchaser, the Administrative Agent and FSA Monthly Reports provided for in
SECTION 5.05(i) together with such additional information as may be reasonably
requested by the Seller, the Purchaser, the Administrative Agent or, provided
that an FSA Default has not occurred, FSA.
(h) The Servicer will, to the extent permitted by applicable
law and with respect to any amount received and not paid by the Servicer when
required to be paid hereunder, pay on demand interest to the Purchaser and/or
any other party entitled thereto at a rate per annum equal to [**]% above the
Base Rate, PROVIDED, HOWEVER, that such interest rate will not at any time
exceed the maximum rate permitted by applicable law.
(i) The Servicer's authorization under this Agreement will
terminate upon payment in full of all amounts payable to the Seller, the
Purchaser and the Servicer under this Agreement, provided that no further
Purchases are to be made under this Agreement.
(j) Upon the occurrence of an Insurance Agreement Event of
Default, the Servicer, at the written direction of the Controlling Party, shall
take or cause to be taken such action as may be necessary or desirable to
perfect or re-perfect the security interests in the Vehicles securing the
Contracts in the name of the Administrative Agent, on behalf of the Purchaser,
the Secondary Purchaser and FSA, by amending the title documents of such
Financed Vehicles or by such other reasonable means as may, in the opinion of
counsel to the Controlling Party, be necessary or prudent and shall deliver to
the Administrative Agent any Contract File or portion thereof that is currently
in the possession of the Servicer, including the original certificates of title.
Section 6.03 RIGHTS OF THE ADMINISTRATIVE AGENT. At any time,
upon at least five (5) Business Days' notice to the Servicer and the Seller
(unless either the Administrative Agent or FSA, as the case may be, determines
in its sole discretion that it would be reasonably impractical or inadvisable to
give such notice five (5) Business Days in advance (in which case notice shall
be given on the date any action described in clauses (i) through (iii) below is
taken, provided that the failure to give such notice on such date shall not
prohibit the Administrative Agent or FSA, as applicable, from taking any such
action) following the occurrence of a Servicer Termination Event:
(i) The Servicer shall, at the Administrative Agent's
or, provided that an FSA Default has not occurred, FSA's request and at
the expense of the Servicer, notify each Obligor of a Purchased
Receivable of the interest of the Purchaser under this Agreement and
direct the Obligors to make Scheduled
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Contract Payments with respect to the Purchased Receivables directly
to the Administrative Agent or its designee.
(ii) The Servicer shall, at the Administrative Agent's
or, provided that an FSA Default has not occurred, FSA's request and at
the expense of the Servicer, assemble all of the Records in the
Servicer's possession that evidence or relate to the Purchased
Receivables, and the related Contracts and Related Security, or that are
otherwise necessary or desirable to collect the Purchased Receivables,
and shall make the same available to the Administrative Agent or its
designee, at a place reasonably selected by the Administrative Agent.
(iii) The Seller and the Servicer hereby irrevocably
appoint the Administrative Agent their attorney-in-fact, with full power
and authority in place and stead of the Seller or BusLease in the name of
the Seller or the Servicer, as the case may be, or otherwise to take any
and all steps in the Seller's or the Servicer's name and on behalf of the
Seller or the Servicer that are necessary or desirable, in the reasonable
determination of the Administrative Agent, to collect amounts due under
the Purchased Receivables, including, without limitation, endorsing the
Seller's or the Servicer's name on checks and other instruments
representing Collections of Purchased Receivables, enforcing the
Purchased Receivables and the Related Security and related Contracts and
causing the title to each Vehicle related to a Purchased Receivable to be
retitled in the name of the Administrative Agent.
Section 6.04 RESPONSIBILITIES OF THE SERVICER. Anything herein
to the contrary notwithstanding:
(a) The Servicer shall perform its obligations under the
Contracts related to the Purchased Receivables to the same extent as if
Purchased Receivables had not been sold and the exercise by the Administrative
Agent and by the Purchaser of their rights hereunder shall not release the
Servicer or the Seller from any of their duties or obligations with respect to
any Purchased Receivables or under the related Contracts; and
(b) Neither the Administrative Agent, FSA nor the Purchaser
shall have any obligation or liability with respect to any Purchased Receivables
or related Contracts, nor shall any of them be obligated to perform the
obligations of the Seller or the Servicer thereunder.
Section 6.05 FURTHER ACTIONS EVIDENCING PURCHASES.
(a) The Seller shall, from time to time, at its expense,
promptly execute and deliver all further instruments and documents, and take all
further actions, that may be necessary or desirable, or that the Administrative
Agent, the Purchaser or, provided that an FSA Default has not occurred, FSA may
reasonably request, to protect or more fully evidence the interest of the
Purchaser in the Purchased Receivables, or to enable the Purchaser or the
Administrative Agent to exercise and enforce their respective rights and
remedies hereunder or under the other Related Documents. Without limiting the
foregoing, the Seller will upon the request of the Purchaser, the Administrative
Agent or, provided that an FSA Default has not occurred, FSA
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(i) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments and documents, that may be necessary or
desirable, or that the Purchaser or the Administrative Agent may reasonably
request, to perfect, protect or evidence such Purchased Receivables; and (ii)
mark its master data processing records evidencing Purchased Receivables and
the related Contracts with a legend, acceptable to the Purchaser, evidencing
that interests therein have been sold.
(b) The Seller authorizes the Administrative Agent to file
financing or continuation statements, and amendments thereto, relating to the
Purchased Receivables (other than Financed Vehicles securing a Purchased
Receivable), the related Contracts and the Collections with respect thereto
without the signature of the Seller where permitted by law, PROVIDED, that
nothing contained herein shall be deemed to give any Person authority to sign on
behalf of the Seller. A photocopy or other reproduction of this Agreement shall
be sufficient as a financing statement where permitted by law.
(c) If the Servicer fails to perform any of its obligations
hereunder, the Purchaser or the Administrative Agent may (but shall not be
required to) perform, or cause performance of, such obligation; and the
Purchaser's or the Administrative Agent's costs and expenses incurred in
connection therewith shall be payable by the Seller (if the Servicer that fails
to so perform is BusLease or an Affiliate thereof) as provided in SECTION 8.01.
Section 6.06 SERVICER FEE. The Servicer (if BusLease, an
Affiliate of BusLease or the Backup Servicer) shall be paid a collection fee
(the "Servicer Fee") at the rate of [**]% per annum on the Outstanding Balance
as of the last Business Day of each calendar month of the Purchased Receivables,
payable in arrears on the Settlement Date immediately following such calendar
month in accordance with, and subject to the priority of payment set forth in,
Section 2.03(c). If the Servicer is not BusLease, an Affiliate of BusLease or
the Backup Servicer, the Servicer Fee shall be calculated based on the average
of the market rates quoted by three Persons in the business of servicing assets
comparable to the Purchased Receivables, which Persons shall be selected by the
Controlling Party. The Servicer Fee shall not be amended by the parties hereto
without the written consent of the Backup Servicer and FSA.
Section 6.07 CLAIMS UNDER POLICY.
(a) In accordance with the provisions of the Policy, FSA is
required to pay to the Administrative Agent the Policy Claim Amount properly
claimed thereunder by 12:00 noon, New York City time, on the later of (i) the
third (3rd) Business Day (as defined in the Policy) following Receipt (as
defined in the Policy) on a Business Day (as defined in the Policy) of the
Notice of Claim, and (ii) the applicable Settlement Date. Any payment made by
FSA under the Policy shall be applied solely to the payment of Yield and the
Investment, and for no other purpose.
(b) The Administrative Agent shall (i) receive as attorney-in-
fact of the Purchaser any Policy Claim Amount from FSA and (ii) deposit the same
in the Purchaser's Account for distribution to the Purchaser. Any and all
Policy Claim Amounts paid to the Administrative Agent under the Policy shall not
be considered payment with respect to Yield or the Investment, and shall not
discharge the obligations of the Seller with respect thereto. FSA
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shall, to the extent it makes any payment with respect to Yield or the
Investment, become subrogated to the rights of the Purchaser to the extent of
such payments. Subject to and conditioned upon any payment with respect to
Yield or the Investment by or on behalf of FSA, the Administrative Agent, on
behalf of the Purchaser, shall assign to FSA all rights of the Purchaser to
the payment of Yield or the Net Investment, as the case may be, which are
then due for payment to the extent of such payment. The foregoing
subrogation shall in all cases be subject to the rights of the Purchaser to
receive all Scheduled Payments in respect of Yield and the Investment.
(c) The Administrative Agent shall keep a complete and accurate
record of all payments by FSA under the Policy and the allocations thereof to
the payment of Yield and the Investment. FSA shall have the right to inspect
such records at reasonable times upon one Business Day's prior written notice to
the Administrative Agent.
(d) The Administrative Agent shall be entitled to enforce on
behalf of the Purchaser the obligations of FSA under the Policy.
Notwithstanding any other provision of this Agreement or any Related Document,
the Purchaser is not entitled to institute proceedings directly against FSA
unless the Administrative Agent has failed to do so within 30 days after the
Purchaser has requested the Administrative Agent to institute proceedings
against FSA.
Section 6.08 PREFERENCE CLAIMS.
(a) In the event that the Administrative Agent has received a
certified copy of an order of the appropriate court that any payment on a
Purchased Receivable has been avoided in whole or in part as a preference
payment under applicable bankruptcy law, the Administrative Agent shall so
notify FSA, shall comply with the provisions of the Policy to obtain payment by
FSA of such avoided payment, and shall, at the time it provides notice to FSA,
notify the Purchaser by mail that, in the event that such payment is so
recoverable, the Purchaser will be entitled to payment pursuant to the terms of
the Policy. The Administrative Agent shall furnish to FSA its records
evidencing the payments on Purchased Receivables, if any, which are subject to
such recovery from the Purchaser, and the dates on which such payments were
made. Pursuant to the terms of the Policy, FSA will make such payment on behalf
of the Purchaser to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy named in the Order (as defined in the Policy) and not to the
Administrative Agent or the Purchaser directly (unless the Purchaser has
previously paid such payment to the receiver, conservator, debtor-in-possession
or trustee in bankruptcy, in which case FSA will make such payment to the
Administrative Agent for distribution to the Purchaser upon proof of such
payment by the Purchaser reasonably satisfactory to FSA).
(b) The Administrative Agent shall promptly notify FSA of any
proceeding or the institution of any action (of which the Administrative Agent
has actual knowledge) seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law
(a "Preference Claim") of any payment made with respect to the Purchased
Receivables. The Purchaser and the Administrative Agent hereby agree that so
long as an FSA Default shall not have occurred and be continuing, FSA may at any
time during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order
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relating to any Preference Claim and (ii) the posting of any surety,
supersedeas or performance bond pending any such appeal at the expense of
FSA, but subject to reimbursement as provided in the Insurance Agreement.
Section 6.09 SURRENDER OF POLICY. The Administrative Agent
shall surrender the Policy to FSA for cancellation upon the expiration or
termination of the Policy in accordance with the terms thereof.
ARTICLE VII.
SERVICER TERMINATION EVENTS
Section 7.01 SERVICER TERMINATION EVENTS. If any of the
following events ("Servicer Termination Events") shall occur and be continuing:
(a) the Seller or the Servicer (if BusLease or an Affiliate
thereof) shall fail to make any payment or deposit required hereunder on the
first Business Day after the due date thereof; or
(b) any representation or warranty made or deemed made by the
Seller, the Servicer (if BusLease or an Affiliate thereof), any Transferor or
Motor Coach (or any of their respective Responsible Officers) in this Agreement
or any Related Document or in any written report delivered by any of them
pursuant hereto shall prove to have been incorrect or untrue in any respect when
made or deemed made or delivered, the effect of which is to materially adversely
affect the Purchaser's interest in, or the collectibility of, the Purchased
Receivables; PROVIDED, HOWEVER, that the breach of any of the representations or
warranties contained in SECTION 4.01(n), (o), (q), (r), (s) (but only to the
extent that such representation or warranty relates to a Purchased Receivable),
(v), (x), (y), (cc) or (ff) shall not be a Servicer Termination Event hereunder
if the Seller or the Servicer, as the case may be, shall have complied with
SECTION 2.03(g) with respect thereto; or
(c) the Seller, the Servicer (if BusLease or an Affiliate
thereof) any Transferor or Motor Coach shall fail to perform or observe any
term, covenant or agreement contained in this Agreement or any Related Document
on its part to be performed or observed and any such failure shall materially
adversely affect the Purchaser's interest in, or the collectibility of, the
Purchased Receivables; PROVIDED, HOWEVER, that the failure to perform or observe
any term, covenant or agreement contained in SECTION 5.03(a) shall not be a
Servicer Termination Event hereunder if the Seller or the Servicer shall have
complied with SECTION 2.03(g) with respect thereto; or
(d) the Seller, the Servicer (if BusLease or an Affiliate
thereof), any Transferor or Motor Coach shall (i) default in making any payment
of principal of any Indebtedness on the scheduled or original due date beyond
the period of grace, if any, with respect thereto; or (ii) default in making any
payment of any interest on such Indebtedness beyond the grace period, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition
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exist, the effect of which default or other event or condition is to cause,
or to permit the holder or beneficiary of such Indebtedness (or a trustee or
agent on behalf of such holder or beneficiary ) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated
maturity or to become payable; PROVIDED, that, in each case, other than with
respect to the Seller, such Indebtedness is in excess of $5,000,000; or
(e) any assets of the Seller, the Servicer (if BusLease or an
Affiliate thereof), any Transferor or Motor Coach shall be attached, seized,
levied upon or subjected to a writ or distress warrant, or come within the
possession of any receiver, trustee, custodian or assignee for the benefit of
creditors of any such Person and such condition continues for thirty (30) days
or more; PROVIDED, that, in each case, other than with respect to the Seller,
the aggregate book value of such assets is in excess of $1,000,000; or
(f) a case or proceeding shall have been commenced against any
of the Seller, the Servicer (if BusLease or an Affiliate thereof), any
Transferor or Motor Coach seeking a decree or order in respect of any such
Person (i) under Title 11 of the United States Code, as now constituted or
hereafter amended or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any such Person or
of any substantial part of any such Person's assets, or (iii) ordering the
winding-up or liquidation of the affairs of any such Person, PROVIDED that if
such case or proceeding is not commenced against the Seller, then a Servicer
Termination Event shall not occur under this SECTION 7.01(f) or (g) unless such
case or proceeding shall remain undismissed or unstayed for sixty (60) days or
more or such court shall enter a decree or order granting the relief sought in
such case or proceeding; or
(g) any of the Seller, the Servicer (if BusLease or an
Affiliate thereof), any Transferor or Motor Coach (i) shall file a petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) shall fail to contest in a timely and appropriate
manner or shall consent to the institution of proceedings thereunder or to the
filing of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of any such Person or of any substantial part of any such Person's
assets, (iii) shall make an assignment for the benefit of creditors, or (iv)
shall take any corporate action in furtherance of any of the foregoing, or (v)
shall admit in writing its inability to, or shall be generally unable to, pay
its debts as such debts become due; or
(h) a final judgment or judgments for the payment of money not
fully covered by insurance in excess of $5,000,000 (net of insurance coverage)
in the aggregate at any time outstanding shall be rendered against the Servicer
(if BusLease or an Affiliate thereof), any Transferor or Motor Coach and the
same shall not, within thirty (30) days after the entry thereof, have been
discharged or execution thereof stayed or bonded pending appeal, or shall not
have been discharged prior to the expiration of any such stay; or
(i) any final judgment or order for the payment of money shall
be rendered against the Seller, and the same shall not have been discharged
thereof by full payment prior to the expiration of any period for filing appeal;
or
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(j) any Related Document or any material provision of any
thereof shall for any reason terminate or otherwise cease to be valid, binding
and enforceable in accordance with its terms (or the Seller, any Affiliate
thereof or any other party to any Related Document (other than the
Administrative Agent or the Purchaser) shall challenge the enforceability of any
Related Document or shall assert in writing, or engage in any action or inaction
based on any such assertion, that any Related Document or any provision of any
thereof has terminated or ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any security or ownership interest
created under any Related Documents shall cease to be a valid and perfected
first priority security or ownership interest or Lien (except as otherwise
permitted herein or therein) in any Purchased Receivables or property purported
to be covered thereby; or
(k) the Seller shall not be a 100% direct or indirect wholly-
owned Subsidiary of MCII Coaches, Inc. or the Servicer (if BusLease or an
Affiliate thereof) shall not be a 100% direct or indirect wholly-owned
Subsidiary of Motor Coach; or
(l) any change in ownership of any of the MCII Group or any
change in their respective roles under this Agreement or any other Related
Document that conflicts with the "Assumptions of Fact" section in the opinion of
Skadden, Arps, Slate Meager & Flom, dated the date hereof, relating to certain
nonconsolidation matters.
(m) any Governmental Authority (including the IRS or the PBGC)
shall file notice of a Lien with regard to any of the assets of the Seller, the
Servicer (if BusLease or an Affiliate thereof), any Transferor or Motor Coach;
or
(n) S&P's long-term issuer rating or Moody's issuer rating of
Motor Coach, or similar indication of the long-term, unsecured and
unsubordinated indebtedness of Motor Coach, shall have been withdrawn or
downgraded below "B" or "B2" by S&P or Moody's, as the case may be; or
(o) (i) any Transfer Agreement shall for any reason fail to
constitute the transfer to the Seller of the legal and equitable title to, and
ownership of, the Receivables, Contracts and Financed Vehicles purported to be
transferred thereunder, or (ii) a default or breach shall occur under any other
provision of any Transfer Agreement or under any other provision of any other
Related Document and the same shall remain unremedied subject only to cure
periods therein after written notice thereof shall have been given by
Administrative Agent to the Seller; or
(p) (i) the Four-Month Default Ratio shall at any time be
greater than [**]%, (ii) the Four-Month Net Default Ratio shall at any time be
greater than [**]%, (iii) the Recovery Rate shall at any time be less than
[**]%, (iv) the Consolidated Senior Leverage Ratio shall at any time be greater
than the Maximum Permitted Leverage Ratio for the fiscal period ending on March
31 most recently completed, (v) the Consolidated Fixed Charge Coverage Ratio
shall at any time be less than the Minimum Permitted Fixed Charge Coverage Ratio
for the fiscal period ending on March 31 most recently completed, or (vi) the
Delinquency Ratio shall at any time be greater than [**]%; or
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(q) the sum of the Stated Amounts of the Transaction Letters of
Credit PLUS the amount on deposit in the Cash Collateral Account shall be less
than the Required Credit Enhancement and such deficiency shall not be cured
within 30 days; or
(r) FSA shall be required to make a payment under the Policy;
or
(s) any Insurance Agreement Event of Default shall have
occurred and be continuing;
then, the Controlling Party shall, upon at least five (5) Business Days' notice
to the Servicer and the Seller (unless the Controlling Party determines in its
sole discretion that it would be reasonably impractical or inadvisable to give
such notice), remove the Servicer, appoint the Backup Servicer (who shall assume
the obligations of the Servicer within thirty (30) days in accordance with
SECTION 6.01(e)) or, if the Backup Servicer is in default under the Backup
Servicing Agreement, any other Person as the new Servicer, take control of the
Lockbox Accounts (by delivering to the Lockbox Banks a notice in substantially
the form of Attachment A to EXHIBIT I), take control of the Blocked Accounts (as
described in Section 2.06(d)), notify the Obligors of its interest in the
Purchased Receivables and exercise all other incidences of ownership in the
Purchased Receivables.
Following the occurrence of a Servicer Termination Event and the
appointment of a successor Servicer, the Purchaser shall have the right, with
the consent of FSA, to remove and, if requested by FSA, shall remove any
successor Servicer and to take the other actions described above at any time in
its sole discretion; PROVIDED, HOWEVER, that the consent of FSA shall not be
required and the instructions of FSA need not be followed if an FSA Default has
occurred.
ARTICLE VIII.
INDEMNIFICATION
Section 8.01 INDEMNITIES BY THE SELLER. Without limiting any
other rights that the Administrative Agent, FSA or the Purchaser or any
Affiliate thereof and their respective officers, directors, employees and agents
(each, an "INDEMNIFIED PARTY") may have hereunder or under applicable law, the
Seller hereby agrees to indemnify each Indemnified Party from and against any
and all claims, losses and liabilities (including reasonable attorneys fees and
expenses but excluding administrative overhead) (all of the foregoing being
collectively referred to as "INDEMNIFIED AMOUNTS") arising out of or resulting
from this Agreement or the use of proceeds of Purchases or the ownership of
Purchased Receivables or in respect of any Receivable or any Contract,
excluding, however, Indemnified Amounts (a) to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party or (b)
the effect of which would constitute recourse for nonpayment or delayed payment
of Receivables due to the creditworthiness or financial ability to pay of the
Obligors. Without limitation of the generality of the foregoing, the Seller
shall pay on demand to each Indemnified Party any and all amounts necessary to
indemnify such Indemnified Party from and against any and all Indemnified
Amounts relating to or resulting from any of the following:
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(i) the Seller's or the Servicer's failure to pay when
due any taxes (including sales, excise or personal property taxes)
payable in connection with the Receivables;
(ii) any Purchased Receivable not being at the date of
the Purchase an Eligible Receivable;
(iii) reliance on any written representation or warranty
made or deemed made by the Seller, the Servicer (if BusLease or any
Affiliate thereof), any Transferor or Motor Coach (or any of their
respective Responsible Officers) under or in connection with this
Agreement or any other Related Documents which shall have been incorrect
when made or deemed made;
(iv) the failure by the Seller, the Servicer (if BusLease
or an Affiliate thereof), any Transferor or Motor Coach to comply with
any covenant set forth in this Agreement or any other Related Document or
any applicable law, rule or regulation with respect to any Purchased
Receivable, or the non-conformity of any Purchased Receivable with any
such applicable law, rule or regulation;
(v) the failure to vest in the Purchaser a security
interest (as defined in the UCC) in a Purchased Receivable and the
Related Security and Collections in respect thereof, free and clear of
any Adverse Claim;
(vi) the failure to vest in the Seller all right, title
and interest in the Receivables purchased by the Seller from any
Transferor pursuant to a Transfer Agreement, free and clear of any
Adverse Claim;
(vii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws with respect
to any Purchased Receivable and Collections in respect thereof, whether
at the time of any Purchase or at any subsequent time, to the extent
contemplated by this Agreement and the Transfer Agreement;
(viii) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor or other similar statutory relief
applicable to an Obligor) of the Obligor to the payment of any Purchased
Receivable (including, without limitation, a defense based on such
Purchased Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim related to such Purchased Receivable;
(ix) any failure of BusLease, as the Servicer or
otherwise, to perform its duties or obligations in accordance with the
provisions of this Agreement;
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(x) the commingling of Collections of Purchased
Receivables at any time with other funds of the Seller or the Servicer;
(xi) any action or omission by the Seller or the Servicer
reducing or impairing the rights of the Purchaser with respect to any
Purchased Receivables or the value of any Purchased Receivables, except
in accordance with the Credit and Collection Policy and as permitted by
this Agreement;
(xii) any failure of the Seller to give reasonably
equivalent value to a Transferor in consideration of the sale by such
Transferor to the Seller of any Receivables, or any attempt by any Person
to void any such sale under statutory provisions or common law or
equitable action, including, without limitation, any provision of the
Bankruptcy Code;
(xiii) any products liability claim, personal injury or
property damage suit, any claim, loss, liability (including without
limitation, attorneys' fees) or damages related to the ownership,
leasing, operation or maintenance of the Financed Vehicles, the Purchased
Receivables or any part thereof, whether arising under strict liability
in tort or otherwise, or other similar or related claim or action of
whatever sort arising out of or in connection with any Receivable;
(xiv) any investigation, litigation or proceeding related
to or arising from this Agreement, the transactions contemplated hereby,
the use of the proceeds of the Purchases, the ownership of any Purchased
Receivable, or Contract or any other investigation, litigation or
proceeding relating thereto in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated hereby; or
(xv) any Servicer Termination Event described in clause
(f) or (g) of SECTION 7.01; or
(xvi) the assignment or termination (including the payment
of breakage fees) of any Hedge Agreement.
If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Seller hereby agrees to make the maximum
contribution to the payment of the amounts indemnified against in this Section
which is permissible under applicable law.
Section 8.02 INDEMNITIES BY THE SERVICER. Without limiting any
other rights that an Indemnified Party may have hereunder or under applicable
law, the Servicer hereby agrees to indemnify each Indemnified Party from and
against Indemnified Amounts arising out of or resulting from this Agreement,
excluding, however, Indemnified Amounts (a) to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party or (b)
the effect of which would constitute recourse for nonpayment or delayed payment
of Receivables due to the creditworthiness or financial ability to pay of the
Obligors. Without limitation of the generality of the foregoing, the Servicer
shall pay on demand to each Indemnified Party any and all amounts necessary to
indemnify such Indemnified Party from and against any and all Indemnified
Amounts relating to or resulting from any of the following:
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(i) the Servicer's failure to pay when due any taxes
(including sales, excise or personal property taxes) payable in
connection with the Receivables;
(ii) reliance on any written representation or warranty
made or deemed made by the Servicer under or in connection with this
Agreement or any other Related Documents which shall have been incorrect
when made or deemed made;
(iii) the failure by the Servicer to comply with any
covenant set forth in this Agreement or any other Related Document or any
applicable law, rule or regulation with respect to any Purchased
Receivable, or the non-conformity of any Purchased Receivable with any
such applicable law, rule or regulation;
(iv) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws with respect
to any Purchased Receivable and Collections in respect thereof, whether
at the time of any Purchase or at any subsequent time, to the extent
contemplated by this Agreement and the Transfer Agreement;
(v) any failure of the Servicer to perform its duties or
obligations in accordance with the provisions of this Agreement;
(vi) any action or omission by the Servicer reducing or
impairing the rights of the Purchaser with respect to any Purchased
Receivables or the value of any Purchased Receivables, except in
accordance with the Credit and Collection Policy and as permitted by this
Agreement; or
(vii) any Servicer Termination Event described in clause
(f) or (g) of SECTION 7.01;
If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Servicer hereby agrees to make the maximum
contribution to the payment of the amounts indemnified against in this Section
which is permissible under applicable law.
Section 8.03 INDEMNIFICATION DUE TO FAILURE TO CONSUMMATE
PURCHASE. The Seller will indemnify the Purchaser and FSA on demand and hold it
harmless against all costs (including, without limitation, breakage costs) and
expenses resulting from any failure by the Seller to consummate a Purchase after
the Purchaser has accepted an offer from the Seller to make such Purchase.
Section 8.04 INCREASED COSTS UNDER LIQUIDITY FACILITIES AND
CREDIT FACILITIES. If the Purchaser becomes obligated to compensate the lenders
under any of its Liquidity Facilities or Credit Facilities for a reduction in
the rate of return on their capital due to the adoption of any law or
regulation, or any change in or phase-in of any law or regulation or in the
interpretation or administration thereof, as more specifically provided in the
documents relating to such Facilities,
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then the Seller shall, on demand, reimburse the Purchaser for the amount of
any such compensation. A certificate setting forth in reasonable detail the
amount of such compensation submitted to the Seller by the Purchaser shall be
conclusive and binding for all purposes, absent manifest error.
Section 8.05 NOTICES. The Purchaser agrees to notify the
Seller upon its knowledge of a claim for which it intends to seek
indemnification under Section 8.01 or reimbursement under Section 8.03 from the
Seller. The Seller agrees to assist the parties indemnified under Section 8.01,
to the extent requested by them, in any action, suit or proceeding brought by or
against them in connection with the indemnification granted herein.
ARTICLE IX.
THE ADMINISTRATIVE AGENT
Section 9.01 APPOINTMENT OF ADMINISTRATIVE AGENT. The
Purchaser has appointed Canadian Imperial Bank of Commerce as its Administrative
Agent. The Administrative Agent is responsible for administering and enforcing
this Agreement and fulfilling all other duties expressly assigned to it in this
Agreement. The Purchaser has granted the Administrative Agent the authority to
take all actions necessary to assure the Seller's compliance with the terms of
this Agreement and to take all actions required or permitted to be performed by
the Purchaser under this Agreement.
Section 9.02 REPLACEMENT OF ADMINISTRATIVE AGENT. The
Purchaser may, at any time in its discretion, remove a Administrative Agent and
appoint a new Administrative Agent, which shall have the duties described in
Section 9.01.
ARTICLE X.
MISCELLANEOUS
Section 10.01 AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or consent to any departure therefrom shall be
effective unless (i) in a writing signed by the parties hereto and FSA (provided
that an FSA Default has not occurred), and (ii) confirmation is received by the
Administrative Agent from each rating agency then rating the Notes that the then
current rating of the Notes by such rating agency shall not be withdrawn or
downgraded after giving effect to any such amendment, waiver or consent, and
(iii) evidence is received by the Administrative Agent from each Rating Agency
that this Agreement and the transactions contemplated hereby have at least an
investment grade "shadow" rating; PROVIDED that the confirmation referred to in
clause (ii) above and the evidence referred to in clause (iii) above shall be
required only for material amendments, waivers or consents, as determined by the
Administrative Agent.
Section 10.02 NOTICES, ETC. All notices and other
communications hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be delivered or sent, as to each
party hereto, at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. Notices and communications by
facsimile shall be effective
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when sent, and notices and communications sent by other means shall be
effective when received.
Section 10.03 COSTS, EXPENSES. In addition to the rights of
indemnification granted under Section 8.01 hereof, the Seller agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution, delivery of this Agreement, the Related Documents and the other
documents and agreements to be delivered hereunder and thereunder, including,
without limitation, (i) the reasonable fees and expenses of Latham & Watkins,
counsel for the Administrative Agent and the Purchaser, (ii) all reasonable
costs and expenses (including reasonable counsel fees and expenses) in
connection with the amendment of this Agreement, the Related Documents and the
other documents and agreements to be delivered hereunder, (iii) all costs and
expenses (including counsel fees and expenses) in connection with the
enforcement of this Agreement, the Related Documents and the other documents and
agreements to be delivered hereunder and (iv) the reasonable preclosing fees and
expenses of PricewaterhouseCoopers LLP.
Section 10.04 PAYMENTS NET OF TAXES. All payments by the Seller
and the Servicer payable under this Agreement shall be made free and clear of,
and without deduction for, any present or future income, stamp or other taxes,
fees, duties, withholdings or other charges imposed by any taxing authority. If
any withholding or deduction from any payment by the Seller or the Servicer is
required to be made, then the Seller or the Servicer, as the case may be, will:
(a) pay to the relevant authority the full amount required to
be withheld or deducted;
(b) promptly forward to the Purchaser an official receipt or
other satisfactory documentation evidencing such payment to such authority; and
(c) pay to the Purchaser any additional amounts necessary to
ensure that the net amount actually received by the Purchaser will equal the
full amount it would have received had no such withholding or deduction been
required.
Section 10.05 NO WAIVER; REMEDIES. No failure on the part of
the Purchaser to exercise, and no delay in exercising, any right hereunder or
under any other agreement or document in connection herewith shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 10.06 ASSIGNMENT, SUCCESSORS AND ASSIGNS.
Notwithstanding anything to the contrary contained in this Agreement, except as
provided in the provisions of the Agreement concerning the resignation of the
Servicer and the Backup Servicer and the appointment of a successor Servicer,
this Agreement may not be assigned by the Purchaser, the Seller or the Servicer
without the prior written consent of the Controlling Party; provided, however,
that (i) the Purchaser may assign the Purchased Receivables and its rights and
obligations hereunder without the consent of the Controlling Party to CIBC, any
financial institution providing a Liquidity Facility or Credit Facility, an
Affiliate of CIBC, any securitization vehicle managed by
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the Administrative Agent, or the Secondary Purchaser and (ii) the Backup
Servicer shall not assign any interest herein without the prior written
consent of the Administrative Agent and FSA, which consent shall not be
unreasonably withheld. Prior written notice of any such assignment shall be
provided to each Rating Agency by the assignor. This Agreement shall be
binding upon the parties hereof and their respective successors and assigns,
and shall inure to the benefit of and be enforceable by the parties hereof
and their respective successors and assigns permitted hereunder. All
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, the Purchaser, the Administrative Agent and FSA and their
respective permitted successors and assigns, if any.
Section 10.07 CONSTRUCTION OF THE AGREEMENT. It is the
intention of the parties hereto that each Purchase of Receivables made hereunder
shall constitute a "sale of chattel paper," as such term is used in Article 9 of
the UCC, which sales are absolute, irrevocable and without recourse except as
specifically provided herein, and shall provide the Administrative Agent, on
behalf of the Purchaser and FSA, as applicable, with the full benefits of
ownership of the Purchased Receivables. None of the parties hereto intend for
the transactions contemplated hereunder to be, or for any purpose to be
characterized as, loans from the Purchaser to the Seller secured by the
Receivables. In this regard, the Seller hereby pledges and grants a security
interest in and assigns to the Administrative Agent, for the benefit of the
Purchaser and FSA, as security for such loans and for the payment and
performance of all obligations of the Seller hereunder, all of the Seller's
right title and interest in, to and under (i) the Receivables and Collections
related thereto, (ii) the Blocked Accounts, the Lockbox Accounts and all funds
and investments on deposit therein and credited thereto, (iii) the Transfer
Agreements and (iv) proceeds of the foregoing.
Section 10.08 NO PROCEEDINGS. The Seller, the Servicer and the
Administrative Agent each hereby agrees that it will not institute against, or
join any other Person in instituting against, the Purchaser any proceeding of
the type referred to in SECTION 7.01(f) or (g). Each of the Servicer, the
Purchaser and the Administrative Agent hereby agrees that it will not institute
against, or join any other Person in instituting against, the Seller any
proceeding of the type referred to in SECTION 7.01(f) or (g).
Section 10.09 CONFIDENTIALITY.
(a) Unless otherwise required by applicable law, rule or
regulation or by court order or process, the Seller and the Servicer agree to
maintain the confidentiality of this Agreement (and all drafts thereof) in
communications with third parties and otherwise; PROVIDED, that this Agreement
may be disclosed to the Seller's and the Servicer's legal counsel, auditors,
accountants and other advisers if they agree to hold it confidential.
(b) The Purchaser and the Administrative Agent agree to
maintain the confidentiality of any information regarding the Seller or the
Servicer obtained in accordance with the terms of this Agreement which is not
publicly available, but the Purchaser or the Administrative Agent may reveal
such information (a) to liquidity providers, credit providers and any rating
agency providing a rating for the obligations of the Purchaser or the Secondary
Purchaser, (b) as necessary or appropriate in connection with the administration
or enforcement of this Agreement or the Purchaser's funding of Purchases under
this Agreement, (c) as required
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by law, government regulation, court proceeding or subpoena or (d) to bank
regulatory agencies and examiners (including, without limitation, those
exercising jurisdiction over the Secondary Purchaser). In the event that the
Purchaser or the Administrative Agent is requested or required to disclose
any confidential information or any information developed from confidential
information, the Purchaser or the Administrative Agent, as the case may be,
will provide the Seller or the Servicer with prompt written notice of any
such request or requirement so that either the Seller or the Servicer may
seek an appropriate protective order or waive the Purchaser's or the
Administrative Agent's compliance, as the case may be, with the provisions
hereof.
Section 10.10 NO RECOURSE. The obligations of the Purchaser
under this Agreement or any other agreement, instrument, document or certificate
executed and delivered by or issued by the Purchaser or any officer thereof in
connection herewith are solely the corporate obligations of the Purchaser.
Except as expressly provided in this Agreement, no recourse shall be had for
payment of any fee or other obligation or claim arising out of or relating to
this Agreement or any other agreement, instrument, document or certificate
executed and delivered or issued by the Purchaser or any officer in connection
herewith, against any stockholder, member, employee, officer, director or
incorporator of the Purchaser. The provisions of this SECTION 10.10 shall
survive the termination of this Agreement.
Section 10.11 GOVERNING LAW; EXECUTION IN COUNTERPARTS.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THE LAWS
OF ANOTHER JURISDICTION GOVERN THE PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF SECURITY INTERESTS.
(b) This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
Section 10.12 SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT
TO ACCEPT SERVICE OF PROCESS. The parties hereto hereby submit to the exclusive
jurisdiction of the Courts of the State of New York and of any Federal Court
located in the State of New York in any action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. The parties
hereto irrevocably waive any objection which they may have to the laying of
venue of any such proceeding and any claim that any such proceeding has been
brought in an inconvenient forum.
Section 10.13 THIRD PARTY BENEFICIARY RIGHTS.
(a) Subject to any limitations contained in this Agreement, the
Seller hereby assigns to the Purchaser, to the extent of the Purchased
Receivables, all rights of the Seller against any Transferor under the Transfer
Agreements. Each of the Servicer and the Seller agrees that the Purchaser shall
be a third party beneficiary of the Seller's rights under the Transfer
Agreements and shall be entitled to enforce such rights against the Transferor
as if the Purchaser had been a party to the Transfer Agreements.
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(b) This Agreement shall inure to the benefit of FSA, and all
covenants and agreements in this Agreement shall be for the benefit of and run
directly to FSA, and FSA shall be entitled to rely on and, subject to the
limitations set forth herein, enforce such covenants to the same extent as if it
were a party to this Agreement.
Section 10.14 NO CLAIMS. Notwithstanding anything to the
contrary contained in this Agreement, on any day, no payments by the Seller to
the Purchaser, FSA, the Servicer, the Custodian or the Administrative Agent
under any provision in this Agreement providing for indemnification by the
Seller shall be made, and neither the Purchaser, FSA, the Servicer, the
Custodian nor the Administrative Agent shall have any claim (as defined in
Section 101(5) of the Bankruptcy Code) against the Seller for any such payment,
to the extent the amount of any such payment exceeds the cash available to the
Seller after the payment by the Seller of the Investment and all other amounts
payable (other than amounts paid by the Seller pursuant to provisions under this
Agreement providing for indemnification by the Seller) under this Agreement.
Section 10.15 WAIVER OF SET-OFF. Each of the parties hereto
waives any right of set-off it may have to which it may be entitled under this
Agreement from time to time against the Purchaser or its assets.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
MCII FUNDING II, INC.
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
[9787 Clifford Drive
Dallas, Texas 75220]
Attention: ____________________
Facsimile No.: ________________
SPECIAL PURPOSE ACCOUNTS
RECEIVABLE COOPERATIVE
CORPORATION
By: ____________________________
Name:
Title:
c/o Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: President
Facsimile No.: (212) 856-3643
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By: ____________________________
Authorized Signatory
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
Facsimile No.: (212) 856-3643
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BUSLEASE, INC.
By: ____________________________
Name:
Title:
[9787 Clifford Drive
Dallas, Texas 75220]
Attention: ____________________
Facsimile No.: 214-366-5951
BNY ASSET SOLUTIONS LLC, as Backup
Servicer
By: ____________________________
Name:
Title:
[address]
Attention: ____________________
Facsimile No.:
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EXHIBIT A
Form of Monthly Report
<PAGE>
EXHIBIT B
Form of Officer's Certificate
<PAGE>
EXHIBIT C
Form of Termination Notice
<PAGE>
EXHIBIT D
Form of Consent
<PAGE>
EXHIBIT E
Form of Performance Indemnity - Servicer
<PAGE>
EXHIBIT F
Form of Performance Indemnity - Transferors
<PAGE>
EXHIBIT G
Form of Vehicle Loan
<PAGE>
EXHIBIT H
Form of Vehicle Lease
<PAGE>
EXHIBIT I
Form of Lockbox Agreement
<PAGE>
EXHIBIT J
Form of Conditions Precedent Certificate
______ __, 20__
Financial Security Assurance Inc.
350 Park Avenue
New York, New York 10022
Re: Receivables Purchase Agreement ("Receivables Purchase Agreement")
among Special Purpose Account Receivable Cooperative Corporation,
Canadian Imperial Bank of Commerce, MCII Funding II, Inc. (the
"Seller"), BusLease, Inc. and BNY Asset Solutions LLC
Ladies and Gentlemen:
In accordance with the provisions of Section 3.02(c) of the
Receivables Purchase Agreement, the undersigned hereby certifies that:
(i) all of the conditions precedent set forth in Section 3.02
of the Receivables Purchase Agreement with respect to the Purchase to be made by
the Purchaser on _________, 20__ have been satisfied;
(ii) attached hereto as Schedule I is the calculation showing
that the condition specified in Section 3.02(b)(xi) has been satisfied; and
(iii) attached hereto as Schedule II is the confirmation to the
Hedge Agreement, if any, entered into in connection with such Purchase.
Capitalized words and phrases used herein and not otherwise
defined herein shall have the respective meanings assigned to them in the
Receivables Purchase Agreement. This Certificate is subject in all respects to
the terms of said Receivables Purchase Agreement.
MCII FUNDING II, INC.
By: _________________________
Name:
Title:
cc: Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: Asset Securitization Group
<PAGE>
Schedule I
<TABLE>
--------------------------------------------------------------------------------
<S> <C> <C>
1. Weighted average imputed rate of interest for ___%
all Purchased Receivables
--------------------------------------------------------------------------------
2. Weighted average of the rates at which the ____%
Guaranteed Yield is computed for the
immediately preceding Settlement Period (or
with respect to the initial Purchase only, the
average of the fixed periodic rates of
interest set forth in the Hedge Agreements
entered into in connection with such Purchase)
--------------------------------------------------------------------------------
PERCENTAGES USED TO CALCULATE:
--------------------------------------------------------------------------------
3. Premium [**]%
--------------------------------------------------------------------------------
4. Operating Expense Fee [**]%
--------------------------------------------------------------------------------
5. Program Fee [**]%
--------------------------------------------------------------------------------
6. Liquidity Fee [**]%
--------------------------------------------------------------------------------
7. Servicer Fee [**]%
--------------------------------------------------------------------------------
8. Backup Servicer Fee [**]%
--------------------------------------------------------------------------------
9. Sum of lines 3 through 9 [**]%
--------------------------------------------------------------------------------
10. Sum of lines 2 and 9 ___%
--------------------------------------------------------------------------------
11. Line 1 less line 10 ___%
--------------------------------------------------------------------------------
LINE 11 IS EQUAL TO OR GREATER THAN .50% (CHECK / / Yes / / No
APPROPRIATE BOX)
--------------------------------------------------------------------------------
</TABLE>
<PAGE>
Schedule II
Hedge Agreement Confirmations
(attached)
<PAGE>
Schedule 1.01(a)
Preclosing Consolidated EBITDA
<PAGE>
Schedule 1.01(b)
Cash Management System
<PAGE>
Schedule 1.01(c)
Credit and Collection Policy
<PAGE>
Schedule 1.01(e)
Stated Term of Eligible Receivables
<PAGE>
Schedule 1.01(s)
Special Concentration Limits
The Special Concentration Limit with respect to all Receivables
owing from each of the following Obligors, together with Receivables owing from
its Affiliates and Subsidiaries, shall be an amount equal to [**]% of the
Investment:
[***]
[***]
<PAGE>
Schedule 1.01(t)
Transferors
<PAGE>
Schedule 4.01(v)
Lockbox Accounts
