EXHIBIT 10.27 ACAS TRANSFER AGREEMENT

Exhibit 10.27

 

 

ACAS TRANSFER AGREEMENT

 

between

 

AMERICAN CAPITAL STRATEGIES, LTD.,

as the Originator ,

 

and

 

ACAS BUSINESS LOAN LLC, 2005-1,

as the Trust Depositor

 

Dated as of October 4, 2005

 

 

ACAS Business Loan Trust Notes, Series 2005-1

Class A-1, Class A-2A, Class A-2B, Class B, Class C, Class D and Class E Notes

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(Continued)

 

 

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TRANSFER AGREEMENT

 

THIS ACAS TRANSFER AGREEMENT, dated as of October 4, 2005, is between AMERICAN CAPITAL STRATEGIES, LTD., a Delaware corporation (together with its successors and assigns, “ ACAS ”), as the originator (together with its successor and assigns, the “ Originator ”) and ACAS BUSINESS LOAN LLC, 2005-1, a Delaware limited liability company, as the trust depositor (together with its successor and assigns, the “ Trust Depositor ”).

 

WHEREAS, in the regular course of its business, the Originator originates, purchases or otherwise acquires Loans (as defined in the Transfer and Servicing Agreement);

 

WHEREAS, the Trust Depositor desires to acquire the Initial Loans from the Originator and may acquire from time to time thereafter certain Additional Loans and Substitute Loans (such Initial Loans, Additional Loans and Substitute Loans, together with certain related property as more fully described in the Transfer and Servicing Agreement, being the Loan Assets as defined herein);

 

WHEREAS, it is a condition to the Trust Depositor’s acquisition of the Initial Loans from the Originator that the Originator make certain representations and warranties regarding the Loan Assets for the benefit of the Trust Depositor as well as the Issuer;

 

WHEREAS, the Trust Depositor is willing to purchase and accept assignment of the Loan Assets from the Originator pursuant to the terms hereof; and

 

WHEREAS, on the Closing Date, the Trust Depositor will sell, convey and assign all its right, title and interest in the Initial Loan Assets to ACAS Business Loan Trust 2005-1, a Delaware statutory trust (together with its successors and assigns, the “ Issuer ”), pursuant to a Transfer and Servicing Agreement, dated as of the date hereof (as amended, modified, restated, replaced, waived, substituted, supplemented or extended from time to time, the “ Transfer and Servicing Agreement ”) among ACAS, as the originator and as the servicer, the Trust Depositor, as the trust depositor, the Issuer, as the issuer, and Wells Fargo Bank, National Association, as the indenture trustee and the backup servicer.

 

WHEREAS, during the Ramp-Up Period and the Replenishment Period, the Trust Depositor intends to acquire Additional Loans from the Originator from time to time using the proceeds of Draws under the Class A-2A Notes (during the Ramp-Up Period) and Principal Collections with respect to the Loan Assets and convey such Additional Loans to the Issuer pursuant to the Transfer and Servicing Agreement and the Originator wishes to convey any such Additional Loans to the Trust Depositor;

NOW, THEREFORE, based upon the above recitals, the mutual promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.01.

Definitions .

 

Whenever capitalized terms are used but not defined in this Agreement, such terms shall have the meanings attributed to such terms in the Transfer and Servicing Agreement, unless the context otherwise requires.

 

Section 1.02.

Other Terms .

 

All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles. The symbol “$” shall mean the lawful currency of the United States. 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.

 

Section 1.03.

Computation of Time Periods .

 

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each mean “to but excluding”, and the word “within” means “from and excluding a specified date and to and including a later specified date”.

 

Section 1.04.

Interpretation .

 

In this Agreement, unless a contrary intention appears:

 

(i) the singular number includes the plural number and vice versa;

 

(ii) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Transaction Documents;

 

(iii) reference to any gender includes each other gender;

 

(iv) reference to day or days without further qualification means calendar days;

 

(v) unless otherwise stated, reference to any time means New York, New York time;

 

(vi) references to “writing” include printing, typing, lithography, electronic or other means of reproducing words in a visible form;

 

(vii) reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, supplemented, replaced, restated, waived or extended and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other

 

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Transaction Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefor; and

 

(viii) reference to any Requirement of Law means such Requirement of Law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any Section or other provision of any Requirement of Law means that provision of such Requirement of Law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision.

 

Section 1.05.

References .

 

All section references (including references to the Preamble ), unless otherwise indicated, shall be to Sections (and the Preamble ) in this Agreement.

 

Section 1.06.

Calculations .

 

Except as otherwise provided herein, all interest rate and basis point calculations hereunder will be made on the basis of a 360-day year and the actual days elapsed in the relevant period and will be carried out to at least three decimal places.

 

ARTICLE II.

 

TRANSFER OF LOAN ASSETS

 

Section 2.01.

Transfer of Loan Assets .

 

(a) The Originator shall sell, assign and convey assets to the Trust Depositor pursuant to the terms and provisions hereof.

 

(b) Subject to and upon the terms and conditions set forth herein, the Originator hereby sells, transfers, assigns, sets over and otherwise conveys to the Trust Depositor, for a purchase price of $850,000,000 in cash, all of the right, title and interest of the Originator in and to the following (the items in clauses (i) - (vi) below, but in each case excluding the Retained Interest and Excluded Amounts, being collectively referred to herein as the “ Loan Assets ”):

 

(i) the Initial Loans and all Collections and other monies due or to become due in payment of such Loans on and after the Initial Cut-Off Date, including any Prepayment Amounts, any Prepayment Premiums, any Late Charges, any payments in respect of a casualty or early termination, any Insurance Proceeds and any Liquidation Proceeds received with respect to the foregoing;

 

(ii) the Collateral related to such Loans (to the extent the Originator, other than solely in its capacity as collateral agent under any loan agreement with an Obligor, has been granted a Lien thereon), including the related security interest granted by the Obligor under such Loans, all proceeds from any sale or other disposition of such Collateral, and all Insurance Policies;

 

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(iii) the Loan Files and all documents and records (including computer records) relating thereto;

 

(iv) all guarantees, indemnities, warranties and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Loans;

 

(v) the Trust Accounts and all Trust Account Property (to the extent of the Originator’s interest if any therein); and

 

(vi) all income, payments, products, proceeds and other benefits of any and all of the foregoing.

 

To the extent the purchase price paid to the Originator for any Loan is less than the fair market value of such Loan, the difference between such fair market value and the purchase price shall be deemed to be a capital contribution made by the Originator to the Trust Depositor on the applicable purchase date.

 

(c) The Originator and the Trust Depositor acknowledge that the representations and warranties of the Originator in Section 3.01 , 3.02 , 3.03 , 3.04 and 3.05 will run to and be for the benefit of the Issuer, the Trustees and the Swap Counterparties, and the Issuer and the Trustees may enforce, directly without joinder of the Trust Depositor, the repurchase obligations of the Originator with respect to breaches of such representations and warranties as set forth herein and in Section 6.01 .

 

(d) The sale, transfer, assignment, set-over and conveyance of the Loan Assets by the Originator to the Trust Depositor pursuant to this Agreement does not constitute and is not intended to result in a creation or an assumption by the Trust Depositor or the Issuer of any obligation of the Originator in connection with the Loan Assets, or any agreement or instrument relating thereto, including, without limitation, (i) any obligation to any Obligor, if any, not financed by the Originator, (ii) any taxes, fees, or other charges imposed by any Governmental Authority and (iii) any insurance premiums that remain owing with respect to any Loan at the time such Loan is sold hereunder. Without limiting the foregoing, the Trust Depositor does not assume any obligation to purchase any additional notes or loans under agreements governing the Loan Assets.

 

(e) The Originator and the Trust Depositor intend and agree that (i) the transfer of the Loan Assets from the Originator to the Trust Depositor and the transfer of the Loan Assets from the Trust Depositor to the Issuer are intended to be a sale, conveyance and transfer of ownership of the Loan Assets rather than the mere granting of a security interest to secure a borrowing and (ii) such Loan Assets shall not be part of the Originator’s or the Trust Depositor’s estate in the event of a filing of a bankruptcy petition or other action by or against such Person under any Insolvency Law. In the event, however, that notwithstanding such intent and agreement, such transfers are deemed to be a grant of a mere security interest to secure indebtedness, the Originator shall be deemed to have granted (and hereby does grant) to the Trust Depositor a perfected first priority security interest in such Loan Assets, and this Agreement shall constitute a security agreement under Requirements of Law, securing the repayment of the purchase price

 

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paid hereunder, and the obligations and/or interests represented by the Securities and the obligations of the Issuer under the Swap Transactions and the Swaps, in the order and priorities, and subject to the other terms and conditions of, this Agreement, the Transfer and Servicing Agreement, the Indenture, the Trust Agreement and the Swaps, together with such other obligations or interests as may arise hereunder and thereunder in favor of the parties hereto and thereto.

 

(f) If any such transfer of the Loan Assets is deemed to be the mere granting of a security interest to secure a borrowing, the Trust Depositor may, to secure the Trust Depositor’s obligations under the Transfer and Servicing Agreement (to the extent that the transfer of the Loan Assets thereunder is deemed to be a mere granting of a security interest to secure a borrowing) repledge and reassign (i) all or a portion of the Loan Assets pledged to the Trust Depositor by the Originator and with respect to which the Trust Depositor has not released its security interest at the time of such pledge and assignment, and (ii) all proceeds thereof. Such repledge and reassignment may be made by the Trust Depositor with or without a repledge and reassignment by the Trust Depositor of its rights under any agreement with the Originator, and without further notice to or acknowledgment from the Originator. The Originator waives, to the extent permitted by Requirements of Law, all claims, causes of action and remedies, whether legal or equitable (including any right of setoff), against the Trust Depositor or any assignee of the Trust Depositor relating to such action by the Trust Depositor in connection with the transactions contemplated by this Agreement and the Transaction Documents.

 

Section 2.02.

Conditions to Transfer of Initial Loan Assets to the Trust Depositor .

 

On or before the Closing Date, the Originator shall deliver or cause to be delivered to the Trust Depositor, the Owner Trustee and the Indenture Trustee each of the following documents, certificates and other items:

 

(a) a certificate of an officer of the Originator substantially in the form of Exhibit C to the Transfer and Servicing Agreement;

 

(b) copies of resolutions of the Board of Directors of the Originator and the Servicer or of the Executive Committee of the Board of Directors of the Originator and the Servicer 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 Originator, the Servicer and the member of the Trust Depositor;

 

(c) officially certified recent evidence of due incorporation and good standing of the Originator, the Servicer and the Trust Depositor under the laws of the State of Delaware;

 

(d) the initial List of Loans, certified by an officer of the Trust Depositor, together with an Assignment substantially in the form of Exhibit A (along with the delivery of any instruments and Loan Documents as required under Section 2.08 of the Transfer and Servicing Agreement);

 

(e) a letter from each applicable Rating Agency assigning ratings not lower than those disclosed in the Offering Memorandum to each of the Class A-1 Notes, Class A-2A Notes,

 

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the Class A-2B Notes, the Class B Notes, the Class C Notes and, solely in the case of Fitch, the Class D Notes;

 

(f) a letter from Ernst & Young, or another nationally recognized accounting firm, addressed to the Originator and the Trust Depositor, (i) stating that such firm has reviewed a sample of the Initial Loans and performed specific procedures for such sample with respect to certain loan terms and (ii) identifying those Initial Loans that do not conform to the procedures;

 

(g) evidence of proper filing with appropriate offices in the UCC Filing Locations of UCC financing statements delivered by the Originator, as debtor, naming the Trust Depositor as secured party (and the Issuer as assignee) and identifying the Loan Assets as collateral;

 

(h) an Officer’s Certificate listing the Servicer’s Servicing Officers;

 

(i) evidence of deposit in the Collection Account of all funds received with respect to the Initial Loans on and after the Initial Cut-Off Date to the date two days preceding the Closing Date, together with an Officer’s Certificate from the Servicer to the effect that such amount is correct;

 

(j) evidence of deposit in the Reserve Fund of the Reserve Fund Initial Deposit by the Issuer;

 

(k) a fully executed copy of each Transaction Document;

 

(l) opinions of counsel for the Originator, in form and substance satisfactory to the Initial Purchasers (and including as an addressee thereof each Rating Agency);

 

(m) an opinion of Winston & Strawn LLP to the effect that, for federal income tax purposes, the Offered Notes will be characterized as debt and the Issuer will not be characterized as an association, taxable mortgage pool, or publicly traded partnership taxable as a corporation;

 

(n) an opinion of Winston & Strawn LLP to the effect that, for Maryland tax purposes, the Issuer will not be subject to income tax imposed by the State of Maryland, and Holders of the Offered Notes that are not otherwise subject to State of Maryland income tax jurisdiction will not become subject to income taxation by the State of Maryland solely as a result of their ownership of the Offered Notes;

 

(o) an opinion of Winston & Strawn LLP, in form and substance satisfactory to the Initial Purchasers, as to certain true sale, non-consolidation and perfection of security interests issues; and

 

(p) an opinion of Arnold & Porter LLP, counsel to the Company, (i) with respect to certain corporate matters and (ii) with respect to there being no consents required to transfer the Loans.

 

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Section 2.03.

Acceptance by the Trust Depositor .

 

On the Closing Date, if the conditions set forth in Section 2.02 have been satisfied or waived in writing, the Originator shall deliver, on behalf of the Trust Depositor, to the Issuer the Loan Assets and such delivery to and acceptance by the Issuer shall be deemed to be delivery to and acceptance by the Trust Depositor.

 

Section 2.04.

Conveyance of Substitute Loans .

 

(a) Subject to Sections 2.01(d) and (e)  and the satisfaction of the conditions set forth in paragraph (b)  of this Section 2.04 , the Originator may at its option (but shall not be obligated to) (I) deposit to the Principal Collection Account the Transfer Deposit Amount with respect to the Loan as to which a Substitution Event has occurred and, then, prior to the expiry of (A) during the Ramp-Up Period and the Replenishment Period, 90 days from the date of such deposit and (B) following the Replenishment Period, 180 days from the date of such deposit, convey to the Trust Depositor one or more Loans as described in the following clause (II) in exchange for the funds so deposited or a portion thereof, or (II) contemporaneously, sell, transfer, assign, set over and otherwise convey to the Trust Depositor (by delivery of an executed Subsequent Purchase Agreement substantially in the form attached as Exhibit J to the Transfer and Servicing Agreement), without recourse other than as expressly provided herein and therein (and the Trust Depositor shall be required to purchase through cash payment or by exchange of one or more related Loans released by the Issuer to the Trust Depositor on the Subsequent Transfer Date), all of the right, title and interest of the Originator in and to the following (the property in clauses (i)-(vi)  below, but in each case excluding the Retained Interest and the Excluded Amounts, upon such transfer, becoming part of the “ Loan Assets ”):

 

(i) the Substitute Loans identified in the related Addition Notice and all Collections and other monies due or to become due in payment of such Substitute Loans on and after the related Subsequent Cut-Off Date, including any Prepayment Amounts, any Prepayment Premiums, any Late Charges, any payments in respect of a casualty or early termination, any Insurance Proceeds and any Liquidation Proceeds received with respect to the foregoing;

 

(ii) the Collateral related to such Loans (to the extent the Originator, other than solely in its capacity as collateral agent under any loan agreement with an Obligor, has been granted a Lien thereon), including the related security interest granted by the Obligor under such Loans, all proceeds from any sale or other disposition of such Collateral and all Insurance Policies;

 

(iii) the Loan Files and all documents and records (including computer records) relating thereto;

 

(iv) all guarantees, indemnities, warranties and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Loans;

 

(v) the Trust Accounts and all Trust Account Property (to the extent of the Originator’s interest if any therein); and

 

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(vi) all income, payments, products, proceeds and other benefits of any and all of the foregoing.

 

(b) The Originator shall transfer to the Trust Depositor and the Trust Depositor shall transfer to the Issuer the Substitute Loans and the other property and rights related thereto described in Section 2.04(a) above only upon the satisfaction of each of the following conditions on or prior to the related Subsequent Transfer Date (and the delivery of a related Addition Notice by the Trust Depositor shall be deemed a representation and warranty by the Trust Depositor and of the Originator that such conditions have been or will be, as of the related Subsequent Transfer Date, satisfied):

 

(i) the Trust Depositor shall have provided the Issuer and the Indenture Trustee with a timely Addition Notice complying with the definition thereof, which notice shall in any event be no later than five days prior to the date of addition;

 

(ii) there shall have occurred, with respect to each such Substitute Loan, a corresponding Substitution Event with respect to one or more Loans then in the Loan Pool;

 

(iii) the Substitute Loan(s) being conveyed to the Issuer satisfy the Substitute Loan Qualification Conditions;

 

(iv) after giving effect to the inclusion of the applicable Substitute Loans in the Loan Pool effected after the Ramp-Up Period, the Portfolio Criteria are satisfied; provided that if any component of the Portfolio Criteria is not satisfied prior to giving effect to the inclusion of a Substitute Loan, the Portfolio Criteria shall be deemed satisfied with respect to such component if the component is maintained or improved by the inclusion of such Substitute Loan; provided that for purposes of determining compliance with the Portfolio Criteria, any Substitute Loan which does not have a rating from each Rating Agency as of the applicable Cut-Off Date will be deemed to have an S&P Rating of “CCC,” a Moody’s Rating of “Caa2” and a Fitch Rating of “CCC” pending receipt of a rating estimate from the applicable Rating Agency.

 

(v) the Originator shall have delivered to the Trust Depositor a duly executed written Subsequent Purchase Agreement, which shall include a Subsequent List of Loans listing the Substitute Loans;

 

(vi) the Trust Depositor shall have delivered to the Issuer a duly executed written Subsequent Transfer Agreement, which shall include a Subsequent List of Loans listing the Substitute Loans;

 

(vii) the Trust Depositor shall have deposited or caused to be deposited in the Collection Account all Collections received with respect to the Substitute Loans on and after the related Subsequent Cut-Off Date;

 

(viii) as of each Subsequent Transfer Date, neither the Originator nor the Trust Depositor was insolvent nor will either of them have been made insolvent by such transfer nor is either of them aware of any pending insolvency;

 

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(ix) no selection procedures believed by the Originator or the Trust Depositor to be adverse to the interests of the Holders or the Swap Counterparties shall have been utilized in selecting the Substitute Loans;

 

(x) each of the representations and warranties made by the Originator and the Trust Depositor pursuant to Sections 3.02 (including, without limitation, that such Substitute Loan is an Eligible Loan), 3.03(b)(i) and (ii)  (except that any reference in Section 3.03(b) to an Initial Loan shall be deemed a reference to a Substitute Loan) and 3.04 hereof and, with respect to the Originator only, this Agreement, and applicable to the Substitute Loans shall be true and correct as of the related Subsequent Transfer Date; and

 

(xi) the Originator shall, at its own expense, on or prior to the Subsequent Transfer Date, indicate in its Computer Records that ownership of the Substitute Loans identified on the Subsequent List of Loans in the Subsequent Transfer Agreement has been sold to the Issuer through the Trust Depositor pursuant to this Agreement.

 

Section 2.05.

Conveyance of Additional Loans .

 

(a) The Originator may, at its option (but shall not be obligated to) at any time during the Ramp-Up Period and the Replenishment Period and subject to the conditions set forth in this Section 2.05 , sell, transfer, assign set over and otherwise convey to the Trust Depositor (by delivery of a Subsequent Purchase Agreement in the form of Exhibit J to the Transfer and Servicing Agreement), the Trust Originator’s right, title and interest in Additional Loan Assets, which shall become part of the Loan Assets.

 

Upon the acquisition of any Additional Loan Assets pursuant to this Section 2.05 , such Additional Loan Assets shall thereupon be conveyed by the Trust Depositor to the Issuer and become part of the Indenture Collateral subject to the Lien of the Indenture. The Originator represents and warrants in connection with the foregoing that it will not cause the Trust Depositor to acquire any Additional Loan pursuant to this Section 2.05 for the primary purpose of recognizing gains or decreasing losses resulting from market value changes.

 

(b) During the Replenishment Period, each Additional Loan to be purchased by the Trust Depositor for conveyance to the Issuer for inclusion in the Loan Pool will be eligible for purchase by the Trust Depositor for conveyance to the Issuer and inclusion in the Indenture Collateral only if, after giving effect to the inclusion of the applicable Additional Loans in the Loan Pool, the Portfolio Criteria are satisfied; provided that if any component of the Portfolio Criteria is not satisfied prior to giving effect to the inclusion of an Additional Loan, the Portfolio Criteria shall be deemed satisfied with respect to such component if the component is maintained or improved by the inclusion of such Additional Loan. For purposes of determining compliance with the Portfolio Criteria, any Additional Loan which does not have a rating from each Rating Agency as of the applicable Cut-Off Date will be deemed to have an S&P Rating of “CCC,” a Moody’s Rating of “Caa2” and a Fitch Rating of “CCC” pending receipt of a rating estimate from the applicable Rating Agency.

 

(c) The Originator shall transfer to the Trust Depositor the Additional Loans and the other property and rights related thereto described in Section 2.05(a) only upon the satisfaction

 

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of each of the following conditions on or prior to the related Transfer Date (and the delivery of a related Addition Notice by the Trust Depositor shall be deemed a representation and warranty by the Trust Depositor and the Originator that such conditions are satisfied as of the related Subsequent Transfer Date):

 

(i) the Trust Depositor shall have provided the Issuer and the Indenture Trustee with a timely Addition Notice complying with the definition thereof contained herein, which Addition Notice shall be delivered no later than five days prior to the related Subsequent Transfer Date;

 

(ii) after giving effect to the inclusion of the applicable Additional Loans in the Loan Pool during the Replenishment Period, the Portfolio Criteria are satisfied; provided that if any component of the Portfolio Criteria is not satisfied prior to giving effect to the inclusion of such Additional Loan, the Portfolio Criteria shall be deemed satisfied with respect to such component if the component is maintained or improved by the inclusion of such Additional Loan;

 

(iii) the Originator shall have delivered to the Trust Depositor and Indenture Trustee a duly executed Subsequent Purchase Agreement in substantially the form of Exhibit J to the Transfer and Servicing Agreement, which shall include a Subsequent List of Loans listing the Additional Loans; and

 

(iv) the Trust Depositor shall have delivered to the Issuer a duly executed Subsequent Transfer Agreement, which shall include a Subsequent List of Loans listing the Additional Loans;

 

(v) the Trust Depositor shall have deposited or caused to be deposited in the Collection Account all Collections received with respect to the Additional Loans on and after the related Subsequent Cut-Off Date;

 

(vi) as of each Subsequent Transfer Date, neither the Originator nor the Trust Depositor was insolvent nor will either of them have been made insolvent by such transfer hereunder or under the Transfer and Servicing Agreement nor is either of them aware of any pending insolvency;

 

(vii) no selection procedures believed by the Originator or the Trust Depositor to be adverse to the interests of the Holders or the Swap Counterparties shall have been utilized in selecting the Additional Loans; and

 

(viii) each of the representations and warranties made by the Originator pursuant to Sections 3.02 (including without limitation that such Additional Loan is an Eligible Loan), 3.03(b)(ii) (except that any reference therein to an Initial Loan shall be deemed a reference to an Additional Loan) and 3.04 hereof applicable to the Additional Loans shall be true and correct as of the related Subsequent Transfer Date.

 

(d) the Originator shall, at its own expense, on or prior to the Subsequent Transfer Date, indicate in its Computer Records that ownership of the Additional Loans identified on the Subsequent List of Loans in the Subsequent Transfer Agreement has been sold to the Issuer

 

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through the Trust Depositor pursuant to this Agreement and the Transfer and Servicing Agreement.

 

Section 2.06.

Delivery of Loan Files .

 

The Originator shall deliver, on behalf of the Trust Depositor, possession of all “instruments” (within the meaning of Article 9 of the UCC) not constituting part of “chattel paper” (within the meaning of such Article 9) that evidence any Loan, including all Underlying Notes (other than in the case of Noteless Loans), and all other portions of the Loan Files, to the Indenture Trustee on behalf of the Issuer five Business Days prior to the applicable Assignment Date, in each case endorsed in blank without recourse, and shall deliver a copy of the Loan Register with respect to any Noteless Loan, together with an Officer’s Certificate of the Originator as to the accuracy thereof, in accordance with the foregoing delivery requirements. Pursuant to Section 3.06 of the Indenture, the Issuer is required to deliver such instruments and Loan Files to the Indenture Trustee as pledgee under the Indenture for the benefit of the Noteholders and the Swap Counterparties. Accordingly, the Trust Depositor hereby authorizes and directs the Originator to deliver possession of all such instruments and the Loan Files to the Indenture Trustee on behalf of and for the account of the Issuer, as assignee of the Trust Depositor, and agrees that such delivery shall satisfy the condition set forth in the first sentence of this Section 2.06 . The Originator shall also identify on the List of Loans (including any deemed amendment thereof associated with any Additional Loans or Substitute Loans), whether by attached schedule or marking or other effective identifying designation, all Loans that are or are evidenced by such instruments.

 

Section 2.07.

Release of Released Amounts .

 

Immediately upon the release to the Trust Depositor by the Indenture Trustee of the Released Amounts, the Trust Depositor hereby irrevocably agrees to release to the Originator such Released Amounts, which release shall be automatic and shall require no further act by the Trust Depositor; provided , that, the Trust Depositor shall execute and deliver such instruments of release and assignment, or otherwise confirming the foregoing release of any Released Amounts, as may be reasonably requested by the Originator.

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES

 

The Originator makes, and upon execution of each Subsequent Purchase Agreement shall be deemed to make, the following representations and warranties, on which the Trust Depositor will rely in conveying the Loan Assets on the applicable Assignment Date to the Issuer, and on which the Issuer, the Holders and the Swap Counterparties will rely. The Trust Depositor acknowledges that such representations and warranties are being made by the Originator for the benefit of the Issuer, the Holders and the Swap Counterparties.

 

Such representations and warranties speak as of the execution and delivery of this Agreement and as of the applicable Assignment Date, but shall survive the sale, transfer and assignment of the Loan Assets to the Issuer. The repurchase obligation or substitution right of

 

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the Originator set forth in Section 6.01 constitutes the sole remedy available for a breach of a representation or warranty of the Originator set forth in Sections 3.01 , 3.02 , 3.03 , 3.04 or 3.05 of this Agreement. Notwithstanding the foregoing, the Originator shall not be deemed to be remaking any of the representations set forth in Section 3.03 or 3.05 on a Subsequent Transfer Date with respect to the Additional Loans or the Substitute Loans, as such representations relate solely to the composition of the Initial Loans conveyed on the Closing Date; provided , that, any inaccurate representation as to concentrations contained in any Addition Notice shall be subject to the same remedies hereunder as if such representation were made under Section 3.05 on the Closing Date with respect to an Initial Loan.

 

Section 3.01.

Representations and Warranties Regarding the Originator .

 

By its execution of this Agreement and each Subsequent Purchase Agreement, the Originator represents and warrants that:

 

(a) Organization and Good Standing . The Originator is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite corporate power to own or lease its assets and to transact the business in which it is currently engaged. The Originator is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it requires such qualification, except where the failure so to qualify would not reasonably be expected to have a material adverse effect on the business, properties, assets, or condition (financial or otherwise) of the Originator or Trust Depositor. The Originator is properly licensed in each jurisdiction to the extent required by the laws of such jurisdiction in order to originate, and (if the Originator is to be the Servicer) service the Loans in accordance with the terms of the Transfer and Servicing Agreement.

 

(b) Authorization . The Originator has the corporate power and authority to make, execute, deliver and perform this Agreement and the