AMENDED AND RESTATED
RECEIVABLES SALE AGREEMENT
by and between
HARLEY-DAVIDSON CREDIT CORP.,
as Seller
and
HARLEY-DAVIDSON WAREHOUSE FUNDING CORP.,
as Purchaser
Dated as of April 30, 2009
TABLE OF CONTENTS
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ARTICLE
I
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1
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DEFINITIONS
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1
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SECTION 1.01.
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General
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1
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ARTICLE II
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9
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TRANSFER OF
CONTRACTS; ASSIGNMENT OF AGREEMENT
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9
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SECTION 2.01.
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Purchase,
Purchase Price
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9
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SECTION 2.02.
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Assignment of
Agreement
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10
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ARTICLE III
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10
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CONDITIONS
PRECEDENT
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10
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SECTION 3.01.
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Conditions
Precedent to the Effectiveness of the Agreement
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10
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SECTION 3.02.
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Conditions
Precedent to each Purchase: Documentation
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11
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SECTION 3.03.
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Conditions
Precedent to each Purchase: Other
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11
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ARTICLE IV
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12
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REPRESENTATIONS
AND WARRANTIES
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12
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SECTION 4.01.
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Representations
and Warranties Regarding Seller
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12
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SECTION 4.02.
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Representations
and Warranties Regarding the Contracts in the Aggregate
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15
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SECTION 4.03.
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Representations
and Warranties Regarding the Contract Files
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16
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ARTICLE V
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16
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PERFECTION OF
TRANSFER AND PROTECTION OF SECURITY INTERESTS
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16
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SECTION 5.01.
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Custody of
Contracts
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16
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SECTION 5.02.
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Filing
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17
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SECTION 5.03.
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Name Change or
Relocation
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17
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SECTION 5.04.
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Costs and
Expenses
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17
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SECTION 5.05.
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Sale
Treatment
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17
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SECTION 5.06.
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Separateness
from the Purchaser
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18
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SECTION 5.07.
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Negative
Pledge
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18
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SECTION 5.08.
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Credit
Policy
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18
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ARTICLE VI
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19
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REPURCHASE
OBLIGATION
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19
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SECTION 6.01.
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Repurchases of
Contract
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19
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ARTICLE VII
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20
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INDEMNITIES
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20
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SECTION 7.01.
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Indemnities by
the Seller
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20
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SECTION 7.02.
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Other Costs and
Expenses
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22
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SECTION 7.03.
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Liabilities to
Obligors
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22
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SECTION 7.04.
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Operation of
Indemnities
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22
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SECTION 7.05.
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Survival of
Indemnities, Representations and Warranties and Remedies
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22
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ARTICLE VIII
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22
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MISCELLANEOUS
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22
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SECTION 8.01.
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Merger or
Consolidation
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22
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SECTION 8.02.
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Termination
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23
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SECTION 8.03.
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Assignment or
Delegation by the Seller
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23
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SECTION 8.04.
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Amendment
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23
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SECTION 8.05.
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Notices
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23
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SECTION 8.06.
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Merger and
Integration
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23
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SECTION 8.07.
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Headings
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23
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SECTION 8.08.
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Governing
Law
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23
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SECTION 8.09.
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No Bankruptcy
Petition
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23
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SECTION 8.10.
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Amendment and
Restatement
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24
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EXHIBITS
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Exhibit
A
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Form of Notice
of Sale
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Exhibit
B
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Form of
Assignment
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Exhibit
C
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Concentration
Limits
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Exhibit
D
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Lockbox
Agreement
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THIS AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT (as
amended, restated, supplemented or otherwise modified from time to
time, this “ Agreement ”), dated as of April 30,
2009 is made by and between Harley-Davidson Credit Corp., a Nevada
corporation, as seller (together with its successors and assigns,
the “ Seller ”) and Harley-Davidson Warehouse
Funding Corp., a Nevada corporation and wholly-owned subsidiary of
the Seller, as purchaser hereunder (together with its successors
and assigns, the “ Purchaser ”).
WHEREAS , the Seller and the Purchaser are party to the
Receivables Sale Agreement dated as of December 12, 2008 (as
amended, restated, supplemented or otherwise modified from time to
time prior to the date hereof, the “ Initial Sale
Agreement ”), which sets forth the terms and conditions
pursuant to which the Seller conveys, transfers and assigns from
time to time, all of its rights, title and interest in, and the
Purchaser accepts such conveyance, transfer and assignment of, the
“ Contract Assets ” (as hereinafter defined);
and
WHEREAS , the Purchaser and Seller have, on the terms and
conditions set forth herein, agreed to amend and restate the
Initial Sale Agreement in its entirety.
NOW, THEREFORE , in consideration of the premises and the
mutual agreements hereinafter set forth, the Seller and the
Purchaser agree as follows:
ARTICLE I
DEFINITIONS
SECTION
1.01. General. Unless otherwise defined in this Agreement,
capitalized terms used herein (including in the preamble above)
shall have the meanings set forth below. If a capitalized term is
used in this Agreement and not otherwise defined herein, such term
shall have the meaning assigned thereto in the Loan Agreement (as
defined below). Unless otherwise defined herein or in the Loan
Agreement, all terms used in Article 9 of the UCC in any applicable
state are used herein as defined in such Article 9.
“
Assignment ” means an assignment executed by the
Seller, substantially the form of Exhibit B attached hereto
.
“
Closing Date ” means the date hereof.
“
Concentration Criterion ” means each of the criteria
identified in the column “Criteria” on Exhibit C
.
“
Concentration Limit ” means (a) in respect of any
Concentration Criterion, the percentage set forth opposite such
Concentration Criterion on Exhibit C and (b) such other
concentration limits as are set forth in Section 4.01(o)
.
“
Contract ” means any of the Motorcycle conditional
sales contracts or promissory note and security agreements
described on the Contract Schedule, and the rights to receive
payments associated therewith.
-1-
“
Contract Asset ” means:>
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(i)
the Receivables and the Contracts under which the Receivables arise
(including, without limitation, all security interests and all
rights to receive payments which are collected pursuant thereto
after the applicable Cutoff Date, including any liquidation
proceeds therefrom, but excluding any rights to receive payments
which were collected pursuant thereto on or prior to the applicable
Cutoff Date),
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(ii)
all rights of the Seller under any physical damage or other
individual insurance policy (including a “ forced
placed” policy, if any), any debt insurance policy or any
debt cancellation agreement relating to any such Contract, an
Obligor or a Motorcycle securing such Contract,
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(iii)
all security interests in each such Motorcycle and related goods
(including returned or repossessed goods),
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(iv)
all documents contained in the related Contract Files,
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(v)
all rights of the Seller in the Lockbox Account and the Lockbox
Agreement to the extent they relate to the Contracts,
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(vi)
all rights (but not the obligations) of the Seller under any
agreements between Eaglemark and the Seller to the extent they
relate to the Contracts,
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(vii)
all rights of the Seller to certain rebates of premiums and other
amounts relating to insurance policies, debt cancellation
agreements, extended service contracts or other repair agreements
and other items, in each case, financed under such
Contracts,
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(viii)
all guaranties, insurance, supporting obligations and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Contract,
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(ix)
all other security interests or liens and property subject to such
Contract from time to time, if any, purporting to secure payment of
such Contract,
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(x)
all accounts, chattel paper, instruments, payment intangibles,
promissory notes, goods, documents, investment property and
financial assets consisting of, arising from or related to the
foregoing, and
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(xi)
all proceeds and products of the foregoing items (i) –
(x).
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“
Contract Rate ” means, as to any Contract, the annual
rate of interest with respect to such Contract.
-2-
“
Contract Schedule ” means the schedule of Contracts
attached to the Initial Sale Agreement and incorporated herein by
this reference, which schedule (a) identifies each Contract
constituting part of the Contract Assets and the related Obligor,
and (b) sets forth as to each Contract, without limitation, (i) the
account number, (ii) the Outstanding Balance as of November 30,
2008, (iii) the origination date, (iv) the maturity date, (v) the
state in which such Contract was originated, (vi) the Contract
Rate, (vii) a notation identifying the Motorcycle secured
thereunder as being new or used, (viii) as of the date the related
Obligor applied for financing, the FICO score of the related
Obligor, (ix) as of the date the related Obligor was approved for
financing, the loan-to-value ratio, (x) the product type, (xi)
whether the payment obligation of the related Obligor is currently
past due, (xii) the number of times such Contract has remained
delinquent for at least thirty (30) days, (xiii) the number of
times such Contract has remained delinquent for at least sixty (60)
days, (xiv) the number of times such Contract has remained
delinquent for at least ninety (90) days, (xv) the number of times
such Contract has remained delinquent for at least one hundred
twenty (120) days, (xvi) the number of times such Contract has
remained delinquent for at least one hundred fifty (150) days and
(xvii) the original term and the remaining term of such Contract,
as such Contract Schedule shall be deemed supplemented as of each
Purchase Date with the delivery of a Notice of Sale and
accompanying Contract Schedule Supplement by the Seller to the
Purchaser.
“
Contract Schedule Supplement ” means, in connection
with any Notice of Sale, the accompanying schedule submitted by the
Seller to the Purchaser identifying the Contracts then being
proposed for sale to the Purchaser on the Purchase Date specified
in such Notice of Sale and containing information in respect of
each such Contract of the type contained in the original Contract
Schedule.
“
Credit Policy ” means, in respect of any Contract, the
Seller’s origination and underwriting procedures and
practices relating to conditional sales contracts and promissory
notes and security agreements of the same general type as the
Contracts, as disclosed to the Borrower and the Syndication Agents
and as in effect on the date hereof, with such modifications as may
be permitted in accordance with the terms of this Agreement
.
“
Custodian ” means Iron Mountain Information
Management, Inc. or such other custodian as shall have been
approved by the Syndication Agents.
“
Cutoff Date ” means, (i) in respect of the Contracts
identified in the original Contract Schedule provided in connection
with the Initial Sale Agreement, November 30, 2008 and (ii) in
respect of the Contracts identified in any Contract Schedule
Supplement issued in connection with a Notice of Sale on or after
the date hereof, the last calendar day of the month then most
recently ended, unless otherwise agreed upon between the
Syndication Agents and the Purchaser and specified in the
applicable Notice of Sale.
“
Defaulted Contract ” means, at any time, a Contract as
to which (i) more than 90 days have elapsed since the repossession
(and expiration of any redemption period) of the related
Motorcycle, (ii) the Servicer has received proceeds from the sale
of the related Motorcycle in connection with a repossession, (iii)
a determination has been made by the Servicer that all recoverable
amounts have been received, or (iv) any portion of the payments on
the Outstanding Balance remain unpaid for one hundred fifty (150)
or more days.
-3-
“
Eaglemark ” means Eaglemark Savings Bank, a Nevada
state thrift chartered as an Industrial Loan Company that is a
wholly-owned subsidiary of the Seller.
“
Eligible Contract ” means, as of any date of
determination, a Contract:
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(a)
that is not a Contract as to which any payment or part thereof (i)
remains unpaid for more than thirty (30) days from the due date
thereof, (ii) has remained unpaid for more than thirty (30) days
following the due date thereof two (2) or more times during the
life of such Contract and (iii) has at any time during the life of
such Contract remained unpaid for more than sixty (60) days
following the due date thereof,
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(b)
that constitutes “tangible chattel paper” within the
meaning of Section 9-102 of the UCC of all applicable
jurisdictions,
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(c)
that (i) was originated in the United States by an Originator in
the ordinary course of business, (ii) if originated in the state of
Pennsylvania or Maryland, was originated by HDCC or acquired by
HDCC at a time when HDCC had, and is being acquired by the
Purchaser hereunder at a time when the Purchaser has, all requisite
licensing and authority in such jurisdiction; provided that
if the Syndication Agents are provided evidence satisfactory to
them that the Borrower may acquire all right, title and interest in
and to a Contract originated in the state of Pennsylvania or
Maryland, as applicable, by HDCC or acquired by HDCC prior to HDCC
or the Purchaser being licensed in Pennsylvania or Maryland, as
applicable, and will thereupon have a perfected security interest
in the related Motorcycle, such Contract may be considered an
Eligible Contract notwithstanding this clause (c)(ii) ,
(iii) was not originated in the state of Texas (a “ Texas
Contract ”); provided, however , that after an
opinion of Texas counsel, in form and substance reasonably
satisfactory to the Syndication Agents, has been delivered to the
Syndication Agents providing that a Texas Contract is secured by a
first priority security interest in favor of the Purchaser (and,
without notation on the applicable certificate of title, its
assignees) in the related Motorcycle, a Texas Contract may be
considered an Eligible Contract notwithstanding this clause
(c)(iii) ; provided, further , that should the Purchaser
present the Syndication Agents with evidence which in the
Syndication Agents’ sole discretion is satisfactory in
establishing the Purchaser’s first priority security interest
in the Texas Contracts, such opinion of Texas counsel shall not be
required and (iv) if originated by Eaglemark, was sold by Eaglemark
to and taken into the possession of the Seller for value in the
ordinary course of business, free and clear of any Adverse Claim
and without any fraud or misrepresentation on the part of
Eaglemark,
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(d)
(i) that was fully and properly executed by the parties thereto,
(ii) that contains customary and enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for
realization against the collateral, (iii) that is evidenced by only
one original executed Contract, which original has been delivered
to the Servicer or the Custodian, (iv) the term of which has not
been extended, and (v) the terms of which have not been waived,
altered or modified in any respect, except by instruments or
documents included in the related Contract File,
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-4-
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(e)
that (i) is a conditional sales contract or a promissory note and
security agreement relating to the retail purchase of a Motorcycle,
(ii) has an Outstanding Balance of at least $500, (iii) is
denominated and payable only in Dollars, (iv) has a Contract Rate
not less than 1% per annum, (v) has an original term of not more
than eighty-four (84) months, (vi) provides that the Obligor shall
make monthly payments of principal and interest that (if timely
made) fully amortize the amount financed over the term of the
Contract, (vii) at the time of the related Obligor’s approval
for financing, has a loan-to-value ratio not more than (A) 120%, in
the case of an Obligor with a FICO score of less than 700 and (B)
140%, in the case of an Obligor with a FICO score of greater than
or equal to 700; provided that the Outstanding Balance of Contracts
having a loan-to-value ratio greater than 130% may not at any time
exceed 5% of the aggregate Outstanding Balance of all Contracts and
(viii) is not a Delta Loan as such term is used by the Seller in
its Credit Policy as in effect on the date hereof,
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(f)
under which the Obligors have been instructed to make payments to a
Lockbox Account (either directly by remitting payments to the
Lockbox Account, or indirectly by making payments through direct
debit, the telephone or the internet to an account of the Servicer
which payments will be subsequently transferred from such account
to the Lockbox Bank for handling in accordance with the Lockbox
Agreement),
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(g)
the Obligor of which (i) maintains an address in the United States,
(ii) is not an Affiliate of any of the parties hereto, (iii) is not
the United States government or an agency, authority,
instrumentality or other political subdivision thereof, (iv) had,
as of the date the related Obligor was approved for financing, a
FICO score not less than 640 and (v) has made at least one payment
on the Contract,
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(h)
that is not a Contract (i) under which the Obligor, to the
Seller’s knowledge, is or has been at any time since the date
one year prior to the applicable Cutoff Date, subject to any
bankruptcy proceeding or (ii) which, consistent with the Collection
Policy, has been or should be written off as
uncollectible,
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(i)
(i) with respect to which the Seller, in accordance with its
policies and procedures, has determined, as of the date of
origination of such Contract, that the related Obligor had obtained
or agreed to obtain physical damage insurance covering the
Motorcycle and (ii) the terms of which require that the Motorcycle
securing such Contract will be covered by physical damage insurance
for the term of such Contract,
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(j)
that is not assumable by another Person in a manner which would
release the Obligor thereof from such Obligor’s obligations
with respect to such Contract,
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(k)
under which, (i) no default, breach, violation or event permitting
acceleration existed with respect thereto and no event (other than
a payment default of 29 days or less) had occurred which, with
notice or the expiration of any grace period, would constitute such
a default, breach, violation or event permitting acceleration
thereunder and (ii) the Seller has not waived any default, breach,
violation or event permitting acceleration,
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-5-
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(l)
as to which (i) prior to the transfer of such Contract to the
Purchaser, the Seller had good and marketable title, free and clear
of any Adverse Claim and was the sole owner, with full right to
transfer such Contract to the Purchaser, and (ii) immediately upon
the purported transfer of such Contract by the Seller to the
Purchaser in accordance with the terms hereof, the Purchaser shall
have good and marketable title free and clear of any Adverse Claim
(other than the security interest granted by the Purchaser in favor
of the Program Agent, for the benefit of the Secured Parties,
pursuant to the Loan Agreement),
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(m)
that created a valid, perfected first-priority security interest in
a new or used Motorcycle (which has not been repossessed) in favor
of the Seller or the Originator thereunder, which (unless
originally granted to the Seller) has been validly assigned to the
Seller and which, pursuant to this Agreement, has been validly
assigned to the Purchaser, such that the Purchaser has a
continuing, valid, enforceable, perfected first-priority security
interest in the Motorcycle that is not subject to any Adverse
Claim,
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(n)
that (i) does not require the Obligor under such Contract to
consent to the transfer, sale or assignment of the rights and
duties of the Originator thereunder or the Seller or any of its
assignees under such Contract, (ii) does not contain a
confidentiality provision that could have the effect of restricting
the ability of the Purchaser or the Secured Parties to review such
Contract and (iii) was not originated in or subject to the laws of
any jurisdiction whose laws would make the sale, transfer or
assignment of such Contract under this Agreement or the pledge of
such Contract under the Loan Agreement unlawful, void or
voidable,
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(o)
that (i) is in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor to pay the
Outstanding Balance created thereunder and any accrued interest
thereon, enforceable against such Obligor in accordance with its
terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws
affecting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law), and (ii) has not been
satisfied or subordinated in whole or in part or
rescinded,
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(p)
that is not subject to any right of rescission, setoff,
counterclaim or other defense (including defenses arising out of
violations of usury laws) and for which the operation of any of its
terms or the exercise of any right thereunder will not render such
Contract unenforceable in whole or in part, nor subject to any
right of rescission, setoff, counterclaim or other defense
(including defenses arising out of violations of usury
laws).
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(q)
that does not contravene any law, rule or regulation applicable
thereto (including, without limitation, any federal or state law,
rule or regulation relating to truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices, usury, motor vehicle installment loans and
privacy) and with respect to which no part of such Contract related
thereto is in violation of any such law, rule or
regulation,
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-6-
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(r)
that satisfies in all material respects all applicable requirements
of the Credit Policy,
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(s)
as to which the Seller has satisfied and fully performed all
obligations on its part with respect to such Contract required to
be fulfilled by it, and no further action is required to be
performed by Eaglemark or the Seller in order to make the related
Obligor’s payment obligation thereunder unconditionally due
and payable,
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(t)
that is not a Defaulted Contract, and
(u)
that, if the Obligor thereon is a resident of the State of
Maryland, or the related Motorcycle was sold in the State of
Maryland, (i) was originated by Eaglemark as a loan to the Obligor
and was not acquired by Eaglemark as an installment contract or
conditional sales contract, (ii) has an original principal balance
of more than $6,000, and (iii) is (A) in a form substantially
similar to the Eaglemark form Promissory Note (Simple Interest) and
Security Agreement bearing the identification LEG21 1208 Revised
1/2009, (B) in another form as may be approved as a “Maryland
Note” in an opinion of K&L Gates (or other counsel
reasonably satisfactory to the Syndication Agents) and
substantially similar to the opinion dated as of April 30, 2009
rendered by K&L Gates in connection with the Loan Agreement or
(C) in a form otherwise determined by the Syndication Agents to be
satisfactory for purposes of eligibility as a Contract
hereunder.
“
Eligible Post-Sale Contract ” means, at any time, any
Contract, following its purchase by the Purchaser hereunder, that
(i) satisfied all the requirements to be an Eligible Contract on
its Purchase Date (or, in the case of the Contracts identified in
the original Contract Schedule provided in connection with the
Initial Sale Agreement, as of the applicable Cutoff Date) and (ii)
continues to satisfy all the requirements to be an Eligible
Contract other than the requirements set forth in the following
clauses of the definition of “Eligible Contract:”
clause (a) (provided that it is not a Contract as to which
any payment or part thereof remains unpaid for more than ninety
(90) days from the due date thereof and is not a Contract that has
been or should, in accordance with the Collection Policy, have been
charged-off), clause (d)(iv) (provided that any extension
thereof shall have been made in accordance with the Collection
Policy), clause (e)(ii) or clause (k) (provided that
the only default, breach or violation under such Contract is a
payment default, such payment default has not continued unremedied
for more than ninety (90) days from the due date thereof and such
Contract is not a Contract that has been or should, in accordance
with the Collection Policy, have been charged-off).
“
Initial Sale Agreement ” has the meaning set forth in
the preamble to this Agreement.
“
Loan Agreement ” means the Loan and Servicing
Agreement dated as of April 30, 2009, by and among the Seller, as
servicer, the Purchaser, as borrower, the commercial paper conduits
from time to time party thereto as conduit lenders, the financial
institutions from time to time party thereto as committed lenders,
the financial institutions from time to time party thereto as
administrative agents and JPMorgan Chase Bank, N.A., as program
agent, as such agreement may be amended, restated, supplemented or
otherwise modified from time to time.
-7-
“
Lockbox Account ” means the lockbox account maintained
by the Lockbox Bank and subject to the terms of the Lockbox
Agreement.
“
Lockbox Agreement” means that certain Fifth Amended
and Restated Agreement Regarding Lockbox Administration, dated as
of November 1, 2000, among HDCC, the trust depositors party thereto
and the Lockbox Bank and acknowledged by the trustees thereunder,
as the same may have been and may be amended or supplemented from
time to time, and attached hereto as Exhibit D .
“
Lockbox Bank ” means Bank of America, N.A. and its
successors and assigns.
“
Motorcycle ” means a new or used motorcycle
manufactured by Harley-Davidson Motor Company, the sale of which
shall have given rise to a Contract.
“
Notice of Sale ” means a written notice of a sale
substantially in the form of Exhibit A attached
hereto.
“
Purchase ” has the meaning set forth in Section
2.01(a) .
“
Purchase Date ” means the Closing Date and any
subsequent date on which any Contract Asset is acquired by the
Purchaser pursuant to the terms of this Agreement.
“
Purchase Price ” has the meaning set forth in
Section 2.01(c) .
“
Purchaser ” has the meaning set forth in the preamble
to this Agreement.
“
Receivable ” means any indebtedness owed by an Obligor
to the Seller (before giving effect to the sale of such Contract
hereunder) under a Contract.
“
Repurchase Price ” means, with respect to any Contract
(and the related Contract Assets), the sum of (i) the Outstanding
Balance of such Contract plus (ii) any accrued and unpaid
interest and fees related thereto.
“
Seller ” has the meaning set forth in the preamble to
this Agreement.
“
UCC ” means the Uniform Commercial Code as from time
to time in effect in the applicable jurisdiction.
-8-
ARTICLE II
TRANSFER OF CONTRACTS; ASSIGNMENT OF
AGREEMENT
SECTION
2.01. Purchase, Purchase Price .
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(a)
The Contract Schedule identifies all Contracts sold and assigned by
the Seller to the Purchaser under the Initial Sale Agreement. From
time to time hereafter the Seller agrees to sell, transfer, assign,
set over and otherwise convey to the Purchaser, and the Purchaser
agrees to purchase and accept from the Seller, without recourse
(except to the extent expressly provided herein), on a Purchase
Date, such additional Contracts and Contract Assets as may be
designated to be transferred by the Seller to the Purchaser on such
date (each such sale, transfer and assignment, a “
Purchase ”).
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(b)
Prior to each Purchase Date, the Seller shall deliver a Notice of
Sale to the Purchaser identifying the Contracts to be sold and/or
contributed by the Seller to the Purchaser and the Purchase Price
of such Contracts and their related Contract Assets to be
transferred on such Purchase Date. Each Notice of Sale shall be
accompanied by an executed Assignment and a Contract Schedule
Supplement setting forth a list of the Contracts being transferred
by the Seller to the Purchaser on such Purchase Date and containing
the requisite details in respect of each such Contract. The Seller
shall provide the Purchaser such additional information relating to
such Contracts as the Purchaser may reasonably request, including,
without limitation any information as may be required to
demonstrate that such Contracts are Eligible Contracts. From and
after such Purchase Date, the Contracts identified on the Contract
Schedule Supplement attached to such Notice of Sale together with
their related Contract Assets shall be deemed to be Contract Assets
hereunder.
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(c)
The “ Purchase Price ” for the Contracts and the
other Contract Assets that are conveyed to the Purchaser under this
Agreement on any Purchase Date shall be an amount equal to 100% of
the Outstanding Balance of the Contracts being sold on such
Purchase Date, as adjusted at or prior to such Purchase Date to
reflect such factors, if any, as the Seller and the Purchaser
mutually agree and represent will result in a Purchase Price
determined to be the fair market value of such Contracts and other
Contract Assets. The Purchase Price shall be paid by the Purchaser
to the Seller on the related Purchase Date in cash or, with the
consent of the Seller (i) by a contribution to the capital of the
Purchaser or (ii) any combination of cash and such a capital
contribution.
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(d)
Although the Seller and the Purchaser agree that any such transfer
is intended to be a sale of ownership in the Contract Assets, or a
contribution of capital, rather than the mere granting of a
security interest to secure a borrowing, in the event such transfer
is deemed to be of a mere security interest to secure indebtedness
(a “ Recharacterization ”), the Seller shall be
deemed to have granted, and the Seller hereby grants, to the
Purchaser a perfected first priority security interest in the
Seller’s right, title and interest in and to such Contract
Assets and this Agreement shall constitute a security agreement
under applicable law. In the case of any Recharacterization, each
of the Seller and the Purchaser represents and warrants as to
itself that each remittance of Collections in respect of the
Contracts to the Purchaser will have been (i) in payment of a debt
incurred by the Seller in the ordinary course of business or
financial affairs of the Seller and the Purchaser and (ii) made in
the ordinary course of business or financial affairs of the Seller
and the Purchaser.
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SECTION
2.02. Assignment of Agreement. The Seller acknowledges that,
pursuant to the Loan Agreement, the Purchaser will grant to the
Program Agent, for the benefit of the Secured Parties, a security
interest in all of its right, title and interest in and to the
Contract Assets and its right to exercise any and all of its
remedies hereunder, including without limitation, its remedies
under Section 6.01 hereof. The Seller consents to such
grant. The Seller acknowledges and agrees that the Secured Parties
may enforce directly, without joinder of the Purchaser, the
obligations of the Seller set forth herein, all in accordance with
and subject to the conditions set forth in the Loan Agreement.
Without limiting the generality of the foregoing, the Purchaser
hereby authorizes the Program Agent to make demand and the Seller
to honor any such demand, and the Seller hereby agrees to honor any
such demand made by the Program Agent, at any time for payment on
any claim of the Purchaser under Article VI or VII
hereof.
ARTICLE III
CONDITIONS PRECEDENT
SECTION
3.01. Conditions Precedent to the Effectiveness of the
Agreement . On or before the Closing Date,
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(a)
The Seller shall deliver or cause to be delivered to the Purchaser
each of the following:
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(i)
A certificate of an officer of the Seller in form and substance
reasonably satisfactory to the Purchaser;
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(ii)
An opinion of counsel for the Seller in form and substance
reasonably satisfactory to the Purchaser;
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(iii)
Copies of resolutions of the Board of Directors of the Seller or of
the Executive Committee of the Board of Directors of the Seller
approving the execution, delivery and performance of this Agreement
and the transactions contemplated hereunder, certified in each case
by the Secretary or an Assistant Secretary of the
Seller;
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(iv)
Officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of Nevada; and
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(v)
Evidence of proper filing with the appropriate office in Nevada (i)
a UCC-1 financing statement naming the Seller as debtor, the
Purchaser as assignor secured party, the Program Agent as assignee
secured party and identifying the Contract Assets as collateral and
(ii) a UCC-1 financing statement naming the Purchaser as debtor,
the Program Agent as secured party, and listing the Contract Assets
as collateral.
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(b)
Each of the conditions precedent to the effectiveness of the Loan
Agreement shall have been satisfied or waived.
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SECTION
3.02. Conditions Precedent to each Purchase: Documentation .
The Purchaser’s obligation to pay for any Contract Assets on
any Purchase Date shall be subject to the condition precedent that
on or prior to such Purchase Date it shall have received each of
(or satisfactory confirmation of) the following:
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(a)
a Notice of Sale together with the related Contract Schedule
Supplement identifying the Contract Assets to be transferred on
such Purchase Date;
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(b)
an Assignment dated as of such Purchase Date and executed by the
Seller;
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(c)
the Records related to the Contract Assets that are the subject of
such Purchase have been delivered to the Servicer or the Custodian
for the benefit of the Purchaser and the Secured Parties and such
Records, if delivered to the Custodian, remain subject to the terms
and conditions of the Custody Agreement; and
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(d)
such other information relating to such Contract Assets as the
Purchaser or any Secured Party may have reasonably
requested.
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SECTION
3.03. Conditions Precedent to each Purchase: Other . The
Purchaser’s obligation to pay for any Contract Assets on any
Purchase Date shall be subject to the further conditions precedent
that (a) the Termination Date shall not have occurred, (b) no Event
of Termination shall have occurred and be continuing, (c) each
Contract to be transferred on such Purchase Date constitutes an
Eligible Contract as of its respective Cutoff Date, (d) each of the
representations and warranties set forth in Article IV is
true and correct in all material respects on such Purchase Date
(except for those representations and warranties which are
specifically made only as of a specific date, which such
representations and warranties shall be correct on and as of the
date made), and (e) the Seller is in compliance in all material
respects with the covenants set forth in Article V . The
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