EXECUTION VERSION
LOAN SALE AGREEMENT
December 14, 2006,
between
GENERAL ELECTRIC CAPITAL CORPORATION,
as Seller,
and
CEF EQUIPMENT HOLDING, L.L.C.,
as Purchaser
Loan Sale Agreement
This LOAN SALE AGREEMENT ("Agreement" or "Sale Agreement") is entered into
as of December 14, 2006 by and between GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation ("GE Capital" or the "Seller") and CEF EQUIPMENT HOLDING,
L.L.C., a Delaware limited liability company (the "Purchaser").
In consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in Section 1 of Annex A to this
Agreement.
Section 1.2 Rules of Construction. For purposes of this Agreement, the
rules of construction set forth in Section 2 of Annex A shall govern. All
Annexes, Exhibits and Schedules hereto, are incorporated herein by reference
and, taken together with this Agreement, shall constitute but a single
agreement.
ARTICLE II
SALES OF CEF ASSETS
Section 2.1 Sale of Loans. (a) Subject to the terms and conditions hereof
the Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Purchaser, without recourse (subject to the obligations herein) all right,
title and interest of the Seller in:
(i) the Loans, including the Loan Files, and all obligations of the
Obligors thereunder, including the right to payment of any
interest accrued and to accrue from and after December 1, 2006
or finance charges and other obligations of such Obligor with
respect thereto due or to become due on or after the Cutoff
Date;
(ii) all Related Security and Collections with respect thereto;
(iii) all other property now or hereafter in the possession or custody
of, or in transit to, the Issuer, the Servicer, any Sub-Servicer
or the Seller relating to any of the foregoing;
(iv) all Records with respect to any of the foregoing; and
(v) all proceeds of the foregoing (collectively the "CEF Assets").
(b) On or before the Closing Date, the Seller shall (i) indicate in
its computer files that the CEF Assets have been sold to the Purchaser
pursuant to this Agreement by
Loan Sale Agreement
so identifying such CEF Assets with an appropriate notation and (ii)
deliver to the Purchaser or its designee the following documents
(collectively, the "Loan Files"):
(i) the original fully executed copy of the Loan;
(ii) a record or facsimile of the original credit application fully
executed by the Obligor;
(iii) the original certificate of title or file stamped copy of the
UCC financing statement or such other documents evidencing the
security interest of the Purchaser in the Equipment; and
(iv) any and all other documents relating to a Loan, an Obligor or
any of the Equipment.
Section 2.2 Grant of Security Interest. The parties hereto intend that the
sale pursuant to Section 2.1 hereof shall constitute a purchase and sale and not
a loan. Notwithstanding anything to the contrary set forth in this Section 2.2,
if a court of competent jurisdiction determines that the sale provided for
herein constitutes a loan and not a purchase and sale, then the parties hereto
intend that this Agreement shall constitute a security agreement under
applicable law and that the Seller shall be deemed to have granted, and the
Seller hereby grants, to the Purchaser a first priority lien and security
interest in and to all of the Seller's right, title and interest in, to and
under the CEF Assets sold and transferred by the Seller on the Closing Date. The
possession by the Purchaser of notes and such other goods, money, documents,
chattel paper or certificated securities shall be deemed to be "possession by or
delivery to secured party" for purposes of perfecting the security interest
pursuant to the UCC in force in the relevant jurisdiction (including, without
limitation, Section 9-313(c)(1) thereof). Notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law (except that
nothing in this sentence shall cause any Person to be deemed to be an agent of
the Purchaser for any purpose other than for perfection of such security
interest unless, and then only to the extent, expressly appointed and authorized
by the Purchaser in writing).
Section 2.3 Sale Price. (a) As consideration for the sale of the CEF Assets
pursuant to Section 2.1 hereof, the Purchaser shall pay to the Seller on the
Closing Date, the CEF Cash Purchase Price for the CEF Assets sold and
transferred by the Seller to the Purchaser on the Closing Date. The CEF Cash
Purchase Price for the sale of CEF Assets shall be an amount equal to the fair
market value thereof as agreed upon by the Purchaser and the Seller prior to
such sale.
(b) The CEF Cash Purchase Price for the CEF Assets sold by the Seller
under this Agreement shall be payable in full in cash by the Purchaser on
the Closing Date. On the Closing Date, the Purchaser shall, upon
satisfaction of the applicable conditions set forth in Article III, make
available to the Seller the CEF Cash Purchase Price in same day funds.
2 Loan Sale Agreement
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Sale. The sale hereunder shall be subject to
satisfaction of each of the following conditions precedent (any one or more of
which, except clause (e) below, may be waived in writing by the Purchaser) as of
the Closing Date:
(a) This Agreement or counterparts hereof shall have been duly
executed by, and delivered to, the Seller and the Purchaser, and the
Purchaser shall have received such documents, instruments, agreements and
legal opinions as the Purchaser shall reasonably request in connection with
the transactions contemplated by this Agreement, each in form and substance
reasonably satisfactory to the Purchaser.
(b) The Purchaser shall have received satisfactory evidence that the
Seller has obtained all required consents and approvals of all Persons,
including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby.
(c) The Seller shall be in compliance in all material respects with
all applicable foreign, federal, state and local laws and regulations,
including those specifically referenced in Section 4.2(c), except to the
extent that the failure to so comply, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
(d) The representations and warranties of the Seller contained herein
or in any other Related Document shall be true and correct in all material
respects (or, to the extent any such representation or warranty is
qualified by a materiality standard, such representation or warranty shall
be true and correct) as of the Closing Date, both before and after giving
effect to such sale, except to the extent that any such representation or
warranty expressly relates to an earlier date and except for changes
therein expressly permitted by this Agreement.
(e) At the time of such sale, the Purchaser shall have sufficient
funds on hand to pay the CEF Cash Purchase Price.
(f) The Seller shall be in compliance with each of its covenants and
other agreements set forth herein.
(g) The Seller shall have taken such other action, including delivery
of approvals, consents, opinions, documents and instruments to the
Purchaser as the Purchaser may reasonably request.
The consummation by the Seller of the sale of CEF Assets on the Closing Date
shall be deemed to constitute, as of the Closing Date, a representation and
warranty by the Seller that the conditions in clauses (d), (f) and (g) of this
Section 3.1 have been satisfied.
3 Loan Sale Agreement
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1 Representations and Warranties of the Seller. To induce the
Purchaser to purchase the CEF Assets, the Seller makes the following
representations and warranties to the Purchaser, as of the Closing Date, each
and all of which shall survive the execution and delivery of this Agreement.
(a) Corporate Existence; Power and Authority. The Seller (i) is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization; and (ii) has all requisite power
and authority and licenses to conduct its business, to own its properties
and to execute, deliver and perform its obligations under this Agreement.
(b) UCC Information. The true legal name of the Seller as registered
in the jurisdiction of its organization, and the current location of the
Seller's jurisdiction of organization are set forth in Schedule 4.1(b) and
such location has not changed within the past 12 months with respect to the
Seller. During the prior five years, except as set forth in Schedule
4.1(b), the Seller has not been known as or used any corporate, fictitious
or trade name. In addition, Schedule 4.1(b) lists the Seller's (i) federal
employer identification number and (ii) organizational identification
number as designated by the jurisdiction of its organization.
(c) Authorization, Compliance with Law. The execution, delivery and
performance by the Seller of this Agreement and the other Related Documents
and the creation and perfection of all Liens and ownership interests
provided for herein: (i) have been duly authorized by all necessary
corporate action, and (ii) do not violate any provision of any law or
regulation of any Governmental Authority, or contractual or corporate
restrictions, binding on the Seller, except where such violations,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
(d) Enforceability. On or prior to the Closing Date, each of the
Related Documents to which the Seller is a party shall have been duly
executed and delivered by the Seller and each such Related Document shall
then constitute a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms, subject as to
enforcement to bankruptcy, receivership, conservatorship, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general principles of
equity.
(e) Solvency. The Seller is Solvent.
(f) Use of Proceeds. No proceeds received by the Seller under this
Agreement will be used by it for any purpose that violates Regulation U of
the Federal Reserve Board.
4 Loan Sale Agreement
(g) Investment Company Act. The Seller is not an "investment company"
or "controlled by" an "investment company," as such terms are defined in
the Investment Company Act.
(h) Loans and Other CEF Assets. With respect to each Loan and the
other CEF Assets sold by the Seller on the Closing Date, the Seller
represents and warrants that (i) such Loan satisfies the criteria for an
Eligible Loan as of the Cut-Off Date; (ii) immediately prior to sale to the
Purchaser, such CEF Assets were owned by the Seller free and clear of any
Adverse Claim, and the Seller has had at all relevant times the full right,
power and authority to sell, contribute, assign, transfer and pledge its
interest therein as contemplated under this Agreement and, upon such sale,
the Purchaser will acquire valid and properly perfected title to, and the
sole record and beneficial ownership interest in, such CEF Assets, free and
clear of any Adverse Claim or restrictions on transferability, and the
Liens granted to the Purchaser by the Seller pursuant to Section 2.2 will
at all times be fully perfected first priority Liens in and to such Loans
and, in addition, following such sale, such Loan will not be subject to any
Adverse Claim as a result of any action or inaction on the part of the
Seller (or any predecessor in interest); and (iii) if such Loan is
cross-collateralized with a loan that is not a CEF Asset conveyed
hereunder, as of the Closing Date, either (x) the repossession or exercise
of other rights with respect to the related Equipment by the holder of such
loan would not materially impair the security intended to be afforded for
such Loan and result in a material adverse effect on the holders of the
Notes or (y) the holder of such loan and the Purchaser or its assigns as
holder of the Loan have entered into an intercreditor arrangement under
which each holder has agreed to subordinate its respective lien and rights
of enforcement against the Equipment financed by the other holder or its
predecessor in interest.
The representations and warranties described in this Section 4.1 shall survive
the sale of the CEF Assets to the Purchaser, any subsequent assignment or sale
of the CEF Assets by the Purchaser, and the termination of this Agreement and
the other Related Documents and shall continue until the payment in full of all
CEF Assets.
Section 4.2 Affirmative Covenants of the Seller. The Seller covenants and
agrees that, unless otherwise consented to by the Purchaser, from and after the
Closing Date:
(a) Records. The Seller shall at its own cost and expense, for not
less than three years from the date on which each Loan was originated, or
for such longer period as may be required by law, maintain adequate Records
with respect to such Loan, including records of all payments received,
credits granted and merchandise returned with respect thereto.
(b) Access. At any reasonable time, and from time to time at the
Purchaser's reasonable request, and upon at least seven days prior notice
to the Seller, the Seller shall permit the Purchaser (or such Person as the
Purchaser may designate), at the expense of the Purchaser (or such Person
as the Purchaser may designate), to conduct audits or visit and inspect any
of the properties of the Seller to examine the records, internal controls
and procedures maintained by the Seller with respect to the CEF Assets and
take copies and extracts therefrom, and to discuss the Seller's affairs
with its officers, employees and,
5 Loan Sale Agreement
upon notice to the Seller, independent accountants. The Seller shall
authorize such officers, employees and independent accountants to discuss
with the Purchaser (or such Person as the Purchaser may designate) the
affairs of the Seller as such affairs relate to the CEF Assets. Any audit
provided for herein shall be conducted in accordance with the Seller's
rules respecting safety and security on its premises and without materially
disrupting operations. If an Event of Default shall have occurred and be
continuing, the Seller shall provide such access at all times and without
advance notice and shall provide the Purchaser (or such Person as the
Purchaser may designate) with access to its suppliers and customers.
(c) Compliance With Agreements and Applicable Laws. The Seller shall
comply with all federal, state and local laws and regulations applicable to
it and the CEF Assets, including those relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices, privacy, licensing and taxation, except to the extent
that the failure to so comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(d) Maintenance of Existence and Conduct of Business. The Seller shall
preserve and maintain its corporate existence, rights, franchise and
privileges in the jurisdiction of its incorporation.
(e) Notice of Material Event. The Seller shall promptly inform the
Purchaser in writing of the occurrence of any of the following, in each
case setting forth the details thereof and what action, if any, the Seller
proposes to take with respect thereto:
(i) any Litigation commenced, or to the knowledge of the Seller,
threatened against the Seller or with respect to or in connection
with all or any substantial portion of the CEF Assets or
developments in such Litigation in each case that the Seller
believes has a reasonable risk of being determined adversely to
the Seller and that could, if determined adversely, have a
Material Adverse Effect; or
(ii) the commencement of a case or proceeding by or against the Seller
seeking a decree or order in respect of the Seller (A) under the
Bankruptcy Code or any other applicable federal, state or foreign
bankruptcy or other similar law, (B) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or
similar official) for the Seller or for any substantial part of
the Seller's assets, or (C) ordering the winding-up or
liquidation of the affairs of the Seller.
(f) Separate Identity. The Seller shall, to the extent applicable to
it, act in a manner that is consistent with the statements set forth in
Exhibit 4.2(f).
(g) Deposit of Collections. The Seller shall transfer and cause its
Subsidiaries to transfer to the Purchaser or the Servicer on its behalf,
promptly, and in any event no later than the second Business Day after
receipt thereof, all Collections it may receive in respect of CEF Assets.
6 Loan Sale Agreement
(h) Sale Characterization. For accounting purposes, the Seller shall
treat the sale made hereunder as a sale of the CEF Assets. The Seller shall
also maintain its accounting books and records in a manner which clearly
reflects such sale of the CEF Assets to the Purchaser.
Section 4.3 Negative Covenants of the Seller. The Seller covenants and
agrees that, without the prior written consent of the Purchaser, from and after
the Closing Date and until the later of the Redemption Date or the Class C
Maturity Date:
(a) Adverse Claims. The Seller shall not create, incur, assume or
permit to exist any Adverse Claim on or with respect to any CEF Assets.
(b) UCC Matters. The Seller shall not change its state of organization
or incorporation or its name, identity or corporate structure such that any
financing statement filed to perfect the Purchaser's interests under this
Agreement would become seriously misleading, unless the Seller shall have
given the Purchaser not less than 30 days' prior written notice of such
change.
(c) No Proceedings. From the Closing Date and until the date one year
plus one day following the date on which all amounts due with respect to
the Notes have been paid in full in cash, the Seller shall not, directly or
indirectly, institute or cause to be instituted against the Purchaser any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceeding under any federal or state bankruptcy or
similar law; provided that the foregoing shall not in any way limit the
Seller's right to pursue any other creditor rights or remedies that the
Seller may have under applicable law.
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification. Without limiting any other rights that
the Purchaser or any of its Stockholders, officers, directors, employees,
attorneys, agents or representatives (each, a "Purchaser Indemnified Person")
may have hereunder or under applicable law, the Seller hereby agrees to
indemnify and hold harmless each Purchaser Indemnified Person from and against
any and all Indemnified Amounts that may be claimed or asserted against or
incurred by any such Purchaser Indemnified Person to the extent arising from or
related to the failure of a Loan sold and transferred by the Seller to be
originated in compliance with all requirements of law; provided, that the Seller
shall not be liable for any indemnification to a Purchaser Indemnified Person to
the extent that any such Indemnified Amounts result from (a) such Purchaser
Indemnified Person's bad faith, gross negligence or willful misconduct, (b)
recourse for uncollectible Loans, or (c) any income tax or franchise tax
incurred by any Purchaser Indemnified Person, except to the extent that the
incurrence of any such tax results from a breach of or default by the Seller
under this Agreement.
NEITHER PARTY TO THIS AGREEMENT SHALL BE RESPONSIBLE OR LIABLE TO THE OTHER
PARTY TO THIS AGREEMENT, ANY SUCCESSOR, ASSIGNEE OR
7 Loan Sale Agreement
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION
CONTEMPLATED HEREUNDER.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other parties, or whenever any of the parties desires to
give or serve upon any other parties any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States mail as otherwise provided in this Section
6.1), (c) one Business Day after deposit with a reputable overnight courier with
all charges prepaid or (d) when delivered, if hand-delivered by messenger, all
of which shall be addressed to the party to be notified and sent to the address
or facsimile number set forth below or to such other address (or facsimile
number) as may be substituted by notice given as herein provided. The giving of
any notice required hereunder may be waived in writing by the party entitled to
receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any
Person (other than Purchaser) designated in any written communication provided
hereunder to receive copies shall in no way adversely affect the effectiveness
of such notice, demand, request, consent, approval, declaration or other
communication. Notwithstanding the foregoing, whenever it is provided herein
that a notice is to be given to any other party hereto by a specific time, such
notice shall be effective only if actually received by such party prior to such
time, and if such notice is received after such time or on a day other than a
Business Day, such notice shall be effective only on the immediately succeeding
Business Day.
If to the Seller:
General Electric Capital Corporation
00 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8 Loan Sale Agreement
If to Purchaser:
CEF Equipment Holding, L.L.C.
00 Xxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Capital Markets Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Section 6.2 No Waiver; Remedies. (a) Any party's failure, at any time
or times, to require strict performance by any other party hereto of any
provision of this Agreement shall not waive, affect or diminish any right of
such party thereafter to demand strict compliance and performance herewith. Any
suspension or waiver of any breach or default hereunder shall not suspend, waive
or affect any other breach or default whether the same is prior or subsequent
thereto and whether of the same or a different type. None of the undertakings,
agreements, warranties, covenants and representations of any party contained in
this Agreement, and no breach or default by any party hereunder, shall be deemed
to have been suspended or waived by any other party hereto unless such waiver or
suspension is by an instrument in writing signed by an officer of or other duly
authorized signatory of such party and directed to the defaulting party
specifying such suspension or waiver.
(b) Upon discovery by the Seller or the Purchaser of any breach of any
representation, warranty, undertaking or covenant described in Sections
4.1, 4.2 or 4.3, which breach is reasonably likely to have a Material
Adverse Effect, the party discovering the same shall give prompt written
notice thereof to the other party hereto. As liquidated damages, the
Purchaser shall, on the Transfer Date relating to the Collection Period
during which the breach is discovered, request the Seller to, and the
Seller shall pay to, or at the direction of, the Purchaser the Purchase
Amount for the applicable CEF Assets (measured at the end of the Collection
Period during which such breach is discovered). Upon such payment, all
rights, title and interest of the Purchaser in and to such CEF Assets will
be deemed to be automatically released without the necessity of any further
action by the Purchaser, the Seller or any other party and such CEF Assets
will become the property of the Seller.
(c) Each party's rights and remedies under this Agreement shall be
cumulative and nonexclusive of any other rights and remedies that such
party may have under any other agreement, including the other Related
Documents, by operation of law or otherwise.
Section 6.3 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Seller and the Purchaser and their
respective successors and permitted assigns, except as otherwise provided
herein. The Seller may not assign, transfer, hypothecate or otherwise convey its
rights, benefits, obligations or duties hereunder without the prior express
written consent of the Purchaser. Any such purported assignment, transfer,
hypothecation or other conveyance by the Seller without the prior express
written consent of the Purchaser shall be void. The Seller acknowledges that
under the Purchase and Sale Agreement the Purchaser will assign its rights
granted hereunder to the Issuer, and upon such assignment, the Issuer shall
9 Loan Sale Agreement
have, to the extent of such assignment, all rights of the Purchaser hereunder
and the Issuer may in turn transfer such rights. The terms and provisions of
this Agreement are for the purpose of defining the relative rights and
obligations of the Seller and the Purchaser with respect to the transactions
contemplated hereby and no Person shall be a third-party beneficiary of any of
the terms and provisions of this Agreement.
Section 6.4 Termination; Survival of Obligations. (a) This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
earlier of (i) the Class C Maturity Date or (ii) the Redemption Date.
(b) Except as otherwise expressly provided herein or in any other
Related Document, no termination or cancellation (regardless of cause or
procedure) of any commitment made by the Purchaser under this Agreement
shall in any way affect or impair the obligations, duties and liabilities
of the Seller or the rights of the Purchaser relating to any unpaid portion
of any and all recourse and indemnity obligations of the Seller to the
Purchaser, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any
transaction or event, the performance of which is required after the Class
C Maturity Date. Except as otherwise expressly provided herein or in any
other Related Document, all undertakings, agreements, covenants, warranties
and representations of or binding upon the Seller, and all rights of the
Purchaser hereunder shall not terminate or expire, but rather shall survive
any such termination or cancellation and shall continue in full force and
effect until the earlier of (i) the Class C Maturity Date or (ii) the
Redemption Date; provided, that the rights and remedies pursuant to Section
6.2(b), the indemnification and payment provisions of Article V, and the
provisions of Sections 4.3(c), 6.3 and 6.12 shall be continuing and shall
survive any termination of this Agreement.
Section 6.5 Complete Agreement; Modification of Agreement. This
Agreement constitutes the complete agreement between the parties with respect to
the subject matter hereof, supersedes all prior agreements and understandings
relating to the subject matter hereof and thereof, and may not be modified,
altered or amended except as set forth in Section 6.6.
Section 6.6 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement, or any consent to any
departure therefrom by any party hereto, shall in any event be effective unless
the same shall be in writing and signed by each of the parties hereto and their
respective permitted successors and assigns. No consent or demand in any case
shall, in itself, entitle any party to any other consent or further notice or
demand in similar or other circumstances.
Section 6.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF
EXCEPT SECTION 5-1401 OF THE GENERAL
10 Loan Sale Agreement
OBLIGATION LAW) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF
OR RELATING TO THIS AGREEMENT; PROVIDED, THAT EACH PARTY HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY;
PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE
TO PRECLUDE THE PURCHASER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION
IN ANY OTHER JURISDICTION TO REALIZE ON THE CEF ASSETS OR ANY SECURITY FOR
THE OBLIGATIONS OF THE SELLER ARISING HEREUNDER OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE PURCHASER. EACH PARTY HERETO SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH
PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH PARTY AT ITS ADDRESS DETERMINED IN ACCORDANCE WITH
SECTION 6.1 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT
IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED
AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO
APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND
OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY
11 Loan Sale Agreement
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 6.8 Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.
Section 6.9 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
Section 6.10 Section Titles. The section titles and table of contents
contained in this Agreement are provided for ease of reference only and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto.
Section 6.11 No Setoff. The Seller's obligations under this Agreement
shall not be affected by any right of setoff, counterclaim, recoupment, defense
or other right the Seller might have against the Purchaser, all of which rights
are hereby expressly waived by the Seller.
Section 6.12 Confidentiality. Notwithstanding anything herein to the
contrary, there is no restriction (express or implied) on any disclosure or
dissemination of the structure or tax aspects of the transaction contemplated by
the Related Documents. Furthermore, each party hereto acknowledges that it has
no proprietary rights to any tax matter or tax idea contemplated hereby or to
any element of the transaction structure contemplated hereby.
Section 6.13 Further Assurances. (a) The Seller shall, at its sole
cost and expense, upon request of the Purchaser, promptly and duly authorize,
execute and/or deliver, as applicable, any and all further instruments and
documents and take such further actions that may be necessary or desirable or
that the Purchaser may request to carry out more effectively the provisions and
purposes of this Agreement or to obtain the full benefits of this Agreement and
of the rights and powers herein granted, including authorizing and filing any
financing or continuation statements under the UCC with respect to the ownership
interests or Liens granted hereunder. The Seller hereby authorizes the Purchaser
to file any such financing or continuation statements without the signature of
the Seller to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Agreement or of any notice or financing statement
covering the CEF Assets or any part thereof shall be sufficient as a notice or
financing statement where permitted by law. If any amount payable under or in
connection with any of the CEF Assets is or shall become evidenced by any
instrument, such instrument, other than checks and notes received in the
ordinary course of business, shall be duly endorsed in a manner satisfactory to
the Purchaser immediately upon the Seller's receipt thereof and promptly
delivered to or at the direction of the Purchaser.
12 Loan Sale Agreement
(b) If the Seller fails to perform any agreement or obligation under
this Section 6.13, the Purchaser may (but shall not be required to) itself
perform, or cause performance of, such agreement or obligation, and the
reasonable expenses of the Purchaser incurred in connection therewith shall be
payable by the Seller upon demand of the Purchaser.
Section 6.14 Accounting Changes. If any Accounting Changes occur and
such changes result in a change in the standards or terms used herein, then the
parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such Accounting Changes with the desired
result that the criteria for evaluating the financial condition of such Persons
and their Subsidiaries shall be the same after such Accounting Changes as if
such Accounting Changes had not been made. If the parties hereto agree upon the
required amendments to this Agreement, then after appropriate amendments have
been executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained herein shall, only to the extent of
such Accounting Change, refer to GAAP consistently applied after giving effect
to the implementation of such Accounting Change. If such parties cannot agree
upon the required amendments within 30 days following the date of implementation
of any Accounting Change, then all financial statements delivered and all
standards and terms used herein shall be prepared, delivered and used without
regard to the underlying Accounting Change.
[Signatures Follow]
13 Loan Sale Agreement
IN WITNESS WHEREOF, the parties have caused this LOAN SALE AGREEMENT
to be executed by their respective duly authorized representatives, as of the
date first above written.
CEF EQUIPMENT HOLDING, L.L.C.
By:
------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By:
------------------------------------
Name:
Title:
Loan Sale Agreement
Schedule 4.1(b)
UCC INFORMATION
General Electric Capital Corporation
True Legal Name: General Electric Capital Corporation
Jurisdiction of Organization: Delaware
Executive Offices/Principal Place of 00 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx: Xxxxxxx, Xxxxxxxxxxx 00000
Collateral Locations: Danbury, Connecticut
El Paso, Texas
Mexico
Trade Names: GE Capital
FEIN: 00-0000000
Organizational Identification Number: 3174543
Loan Sale Agreement
Schedule I
Schedule of GECC Loans
[attached hereto]
LOAN ID NUMBER
--------------
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EXHIBIT 4.2(F)
SEPARATE IDENTITY PROVISIONS
The Purchaser, GECS and the Seller have and will continue (in each
case, to the extent within its control) to maintain the Purchaser's separate
existence and identity and have and will continue to take all steps necessary to
make it apparent to third parties that the Purchaser is an entity with assets
and liabilities distinct from those of the Seller or GECS or any other
Subsidiary or Affiliate of the Seller or GECS. In addition to the foregoing,
such steps and indicia of the Purchaser's separate identity include the
following:
(a) The Purchaser does and will maintain its own stationery and other
business forms separate from those of any other Person (including the Seller and
GECS), and will conduct business in its own name except that certain Persons may
act on behalf of the Purchaser as agents;
(b) The Purchaser maintains and will maintain separate office space of
its own as part of its operations, although such space is in a building shared
with GE Capital. The corporate records, the other books and records, and the
other assets of the Purchaser are and will be segregated from the property of
the Seller and GECS, respectively;
(c) The Seller will issue consolidated financial statements, which
financial statements will not show CEF Assets that have been sold by the Seller
to the Purchaser as assets of the Seller and its consolidated subsidiaries. Each
of the Seller, GECS and the Purchaser will take certain actions to disclose
publicly the Purchaser's separate existence and the transactions contemplated
hereby, including through the filing of the UCC Financing Statements. None of
the Seller, GECS or the Purchaser has concealed or will conceal from any
interested party any transfers contemplated by the Related Documents;
(d) The Purchaser will not have its own employees, and, as indicated,
the Purchaser's business relating to the CEF Assets may be conducted through the
agents. However, any allocations of direct, indirect or overhead expenses for
items shared between the Purchaser and GE Capital or GECS that are not included
as part of the Servicing Fee are and will be made among such entities to the
extent practical on the basis of actual use or value of services rendered and
otherwise on a basis reasonably related to actual use or the value of services
rendered;
(e) Except as provided in paragraph (d) above regarding the allocation
of certain shared overhead items, the Purchaser does and will pay its own
operating expenses and liabilities from its own funds, except GECS did and will
pay all expenses of the Purchaser incurred in connection with the transactions
entered into pursuant to the Related Documents, including those related to the
Purchaser's organization;
(f) Each of the Seller, GECS and the Purchaser does and will maintain
its assets and liabilities in such a manner that it is not costly or difficult
to segregate, ascertain or otherwise identify the Purchaser's individual assets
and liabilities from those of the Seller or GECS or from those of any other
Person or entity, including any other subsidiary or affiliate of the Seller or
GECS. Except as set forth below, the Purchaser does and will maintain its own
books of account and corporate records separate from the Seller and GECS or any
other Subsidiary or Affiliate of
Loan Sale Agreement
the Seller and GECS. Monetary transactions, including those with each other, are
and will continue to be properly reflected in their respective financial
records. The Purchaser does not and will not commingle or pool its funds or
other assets or liabilities with those of any Seller or GECS or any other
Subsidiary or Affiliate of the Seller or GECS except as specifically provided in
the Related Documents with respect to the temporary commingling of Collections
and with respect to, if applicable, any such Person's retention, in their
capacity as agent or Custodian for the Purchaser, of the books and records
pertaining to the CEF Assets. However, any such agent or Custodian will not
generally make the books and records relating to the CEF Assets available to any
of creditors or other interested persons of the Purchaser, the Seller or GECS.
The Purchaser does not and will not maintain joint bank accounts or other
depository accounts to which the Seller or GECS or any other Subsidiary or
Affiliate of the Seller or GECS (other than in their capacity as agent for the
Purchaser, if applicable) has independent access;
(g) The Purchaser will strictly observe corporate formalities, and the
Seller and GECS will strictly observe corporate formalities with respect to its
dealings with the Purchaser. Specifically, no transfer of assets between any of
the Seller and GECS, on the one hand, and the Purchaser, on the other, will be
made without adherence to corporate formalities;
(h) The transactions among the Purchaser and the Seller or GECS,
including, in the case of GE Capital, the terms governing any servicer advances
and the amount and payment of the servicing fee, are on terms and conditions
that are consistent with those of arm's-length relationships. Neither of the
Seller or GECS is or will be, or holds or will hold itself out to be,
responsible for the debts of the Purchaser, except as provided in the
representations made by the Seller (including, if applicable, as a servicer or a
sub-servicer) to the Purchaser relating to the CEF Assets and their prior
ownership and servicing thereof. The Purchaser will not guaranty the debts of
the Seller or GECS;
(i) All distributions made by the Purchaser to GECS as its sole member
shall be in accordance with applicable law;
(j) Any other transactions between the Purchaser and the Seller or
GECS permitted by (although not expressly provided for in) the Related Documents
have been and will be fair and equitable to each of the parties, have been and
will be the type of transaction that would be entered into by a prudent Person
or entity, and have been and will be on terms that are at least as favorable as
may be obtained from a third party Person; and
(k) The Purchaser is not named, or has entered into any agreement to
be named, directly or indirectly, as a direct or contingent beneficiary or loss
payee on any insurance policy covering the assets of the Seller or GECS.
* * * * * *
Loan Sale Agreement
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS AND INTERPRETATION.............................. 1
Section 1.1 Definitions............................................ 1
Section 1.2 Rules of Construction.................................. 1
ARTICLE II SALES OF CEF ASSETS......................................... 1
Section 2.1 Sale of Loans.......................................... 1
Section 2.2 Grant of Security Interest............................. 2
Section 2.3 Sale Price............................................. 2
ARTICLE III CONDITIONS PRECEDENT........................................ 3
Section 3.1 Conditions to Sale..................................... 3
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS................... 4
Section 4.1 Representations and Warranties of the Seller........... 4
Section 4.2 Affirmative Covenants of the Seller.................... 5
Section 4.3 Negative Covenants of the Seller....................... 7
ARTICLE V INDEMNIFICATION............................................. 7
Section 5.1 Indemnification........................................ 7
ARTICLE VI MISCELLANEOUS............................................... 8
Section 6.1 Notices................................................ 8
Section 6.2 No Waiver; Remedies.................................... 9
Section 6.3 Successors and Assigns................................. 9
Section 6.4 Termination; Survival of Obligations................... 10
Section 6.5 Complete Agreement; Modification of Agreement.......... 10
Section 6.6 Amendments and Waivers................................. 10
Section 6.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL............................................. 10
Section 6.8 Counterparts........................................... 12
Section 6.9 Severability........................................... 12
Section 6.10 Section Titles......................................... 12
Section 6.11 No Setoff.............................................. 12
Section 6.12 Confidentiality........................................ 12
Section 6.13 Further Assurances..................................... 12
Section 6.14 Accounting Changes..................................... 13
-i-
TABLE OF CONTENTS
(continued)
PAGE
----
Schedule 4.1(b) UCC Information
Schedule I Schedule of GECC Loans
Exhibit 4.2(f) Separate Indemnity Provisions
Annex A: Definitions and Interpretations
-ii-
FINAL VERSION
ANNEX A
to
LOAN SALE AGREEMENT
dated as of
December 14, 2006
Annex A to
Loan Sale Agreement
DEFINITIONS AND INTERPRETATION
SECTION 1. Definitions and Conventions. Capitalized terms used in the Sale
Agreement shall have (unless otherwise provided elsewhere therein) the following
respective meanings:
"Accounting Changes" means, with respect to any Person, an adoption of GAAP
different from such principles previously used for reporting purposes by such
Person as defined in the Accounting Principles Board Opinion Number 20.
"Administration Agreement" means the Administration Agreement, dated as of
December 14, 2006, between the Administrator and the Issuer.
"Administrator" means General Electric Capital Corporation, a Delaware
corporation, in its capacity as Administrator under the Administration
Agreement, or any other Person designated as a successor administrator.
"Adverse Claim" means any claim of ownership or any Lien, other than any
ownership interest or Lien created under the Sale Agreement or the Purchase and
Sale Agreement, any Lien created under the Indenture or any Permitted
Encumbrances.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, five percent (5%) or more of the stock having
ordinary voting power in the election of directors of such Person, (b) each
Person that controls, is controlled by, or is under common control with such
Person, or (c) each of such Person's officers, directors, joint venturers and
partners. For the purposes of this definition, "control" of a Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"Annual Percentage Rate" or "APR" of a Loan means, the interest rate or
annual rate of finance charges stated in or, if not explicitly stated, the
implicit finance charge used by the Servicer to calculate periodic payments with
respect to the related Loan.
"Appendices" means, with respect to any Related Document, all exhibits,
schedules, annexes and other attachments thereto, or expressly identified
thereto.
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq. as amended from time to time.
"Business Day" means any day that is not a Saturday, a Sunday or a day on
which banks are required or permitted to be closed in the State of New York or
the State of Connecticut.
"CEF Assets" is defined in Section 2.1(a) of the Sale Agreement.
Annex A to
Loan Sale Agreement
"CEF Cash Purchase Price" means, with respect to the sale of CEF Assets
sold and transferred by the Seller on the Closing Date, the portion of the sale
price therefor determined by the Seller and the Purchaser pursuant to Section
2.3(a) of the Sale Agreement to be paid in cash.
"CEF Limited Liability Company Agreement" means the Second Amended and
Restated Limited Liability Company Agreement of the Purchaser dated as of
September 25, 2003, as the same may be amended and supplemented from time to
time.
"Class C Maturity Date" is defined in the Indenture.
"Closing Date" means December 14, 2006.
"Collection Period" means, with respect to any Payment Date, the calendar
month preceding the month in which the Payment Date occurs (or, if for the first
Payment Date, the period from and including the day after the Cut-off Date to
and including the last day of the calendar month preceding the calendar month in
which the first Payment Date occurs).
"Collections" means, with respect to any Payment Date all payments made by
or on behalf of the Obligors received during the related Collection Period, any
Recoveries received during the related Collection Period, any proceeds from
insurance policies covering the Equipment or related Obligor received during the
related Collection Period, Liquidation Proceeds received during the related
Collection Period, and payments made by a lessee pursuant to its obligation (if
any) to pay the Termination Value pursuant to the related Loan received during
the related Collection Period; provided, that "Collections" for the first
Collection Period shall exclude interest accrued before December 1, 2006.
"Consumer Contract" means a contract entered into by an Obligor in
connection with a transaction in which the Obligor incurs the related
indebtedness primarily for personal, family, or household purposes.
"Credit and Collection Policies" or "Credit and Collection Policy" means
the policies, practices and procedures adopted by the Issuer on the Closing Date
for providing equipment loans secured by transportation equipment, industrial
equipment, construction equipment, furniture and fixtures, maritime assets,
technology and telecommunications equipment or other equipment, including the
policies and procedures for determining the creditworthiness of Obligors and the
extension of credit to Obligors, or relating to the maintenance of such types of
loans and collections on such types of loans.
"Cut-off Date" means November 4, 2006.
"Dollars" or "$" means lawful currency of the United States of America.
"Eligible Loan" means as to each CEF Asset as of the Closing Date:
(i) Characteristics of CEF Assets. Each CEF Asset: (A) was either
originated in the United States of America by GE Capital in connection with
the financing or lease of Equipment in the ordinary course of GE Capital's
business or acquired by GE Capital in the ordinary course of its business,
and, in each case, was fully and properly executed by
2 Annex A to
Loan Sale Agreement
the parties thereto, (B) has created a valid, subsisting and enforceable
first priority security interest (except to the extent the Equipment
secures any loan that is cross-collateralized with such CEF Asset) in the
Equipment in favor of GE Capital, that, as of the Closing Date, has been
assigned by GE Capital to Purchaser, and (C) contains customary and
enforceable provisions such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the benefits
of the security.
(ii) Schedule of CEF Assets. The information set forth on Schedule I
of the Loan Sale Agreement is true and correct in all material respects as
of the opening of business on the Cutoff Date and no selection procedures
believed by the Seller to be adverse to the interests of the Purchaser were
utilized in selecting the CEF Assets. The computer tape regarding the CEF
Assets made available to Purchaser and its assigns is true and correct in
all respects.
(iii) Compliance with Law. Each CEF Asset and the sale or lease of the
related Equipment complied in all material respects at the time it was
originated or made and at the execution of this Agreement with all
requirements of applicable Federal, State and local laws and regulations
thereunder.
(iv) Binding Obligation. Each CEF Asset represents the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable
by the holder thereof in accordance with its terms.
(v) No Government Obligor. None of the CEF Assets is due from the
United States of America or any State or from any agency, department or
instrumentality of the United States of America or any State.
(vi) Security Interest in the Equipment. Immediately prior to the
sale, assignment and transfer thereof, each CEF Asset shall be secured by a
validly perfected first priority security interest (as defined in Section
1-201(37) of the UCC) in the Equipment (except to the extent the Equipment
secures any loan that is cross-collateralized with such CEF Asset) in favor
of the Seller as secured party or all necessary and appropriate actions
have been commenced that would result in the valid perfection of a first
priority security interest in the Equipment in favor of the Seller as
secured party.
(vii) CEF Assets in Force. No CEF Asset has been satisfied,
subordinated or rescinded, nor has any Equipment been released from the
Lien granted by the related CEF Asset in whole or in part.
(viii) No Amendment or Waiver. No provision of a CEF Asset has been
waived, altered or modified in any respect, except pursuant to a document,
instrument or writing included in the Loan Files and no such amendment,
waiver, alteration or modification causes such CEF Asset not to be an
Eligible Loan.
(ix) No Defenses. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened or exists with respect to any CEF
Asset.
3 Annex A to
Loan Sale Agreement
(x) Lawful Assignment. No CEF Asset has been originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer and
assignment of such CEF Asset or any CEF Asset under the Loan Sale Agreement
would be unlawful.
(xi) All Filings Made. All filings (including UCC filings) necessary
in any jurisdiction to give Purchaser a first priority perfected ownership
interest in the CEF Asset have been made (except to the extent the
Equipment secures any loan that is cross-collateralized with such CEF
Asset).
(xii) One Original. There is only one original executed copy of each
CEF Asset.
(xiii) Insurance. The Obligor on each CEF Asset is required to
maintain physical damage insurance covering the Equipment in accordance
with GE Capital's normal requirements.
(xiv) No Bankruptcies. No Obligor on any CEF Asset as of the Cutoff
Date was noted in the related Loan File as being the subject of a
bankruptcy proceeding.
(xv) No Repossessions. None of the Equipment securing any CEF Asset is
in repossession status.
(xvi) Instrument or Chattel Paper. Each CEF Asset constitutes an
"instrument" or "chattel paper" as defined in the UCC of each State the law
of which governs the perfection of the interest granted in it and/or the
priority of such perfected interest.
(xvii) U.S. Obligors. None of the CEF Assets is denominated and
payable in any currency other than United States Dollars or is due from any
Person that does not have a mailing address in the United States of
America.
(xviii) No Delinquent Loan. None of the CEF Assets is more than 30
days past due.
(xix) No Consumer Contract. None of the CEF Assets constitutes a
Consumer Contract.
(xx) Finance Lease. With respect to each CEF Asset that is in form a
lease rather than a secured loan, the terms of such CEF Asset provides that
it is non-cancelable and that, by the end of the lease term, the lessee may
elect to purchase the related Equipment upon the exercise of a nominal
purchase option that satisfies Section 1-201(37)(a)(iv) of the UCC.
"Equipment" means any transportation equipment, industrial equipment,
construction equipment, furniture and fixtures, maritime assets, technology and
telecommunications equipment or other equipment, together with all accessions
thereto securing an Obligor's indebtedness under the respective Loan.
"Event of Default" is defined in Section 5.1 of the Indenture.
4 Annex A to
Loan Sale Agreement
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect on the Closing Date, modified by Accounting Changes as
GAAP is further defined in Section 2(a) of this Annex A.
"GE Capital" is defined in the preamble of the Sale Agreement.
"GECS" means General Electric Capital Services, Inc., a Delaware
corporation or any successors or assigns thereto.
"Governmental Authority" means any nation or government, any state, county,
city, town, district, board, bureau, office, commission, any other municipality
or other political subdivision thereof (including any educational facility,
utility or other Person operated thereby), and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Indemnified Amounts" means, with respect to any Person, any and all suits,
actions, proceedings, claims, damages, losses, liabilities and expenses
(including reasonable attorneys' fees and disbursements and other costs of
investigation or defense, including those incurred upon any appeal).
"Indenture" means the Indenture, dated December 14, 2006, between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Indenture Trustee" means The Bank of New York, not in its individual
capacity but solely as Indenture Trustee under the Indenture, or any successor
Indenture Trustee under the Indenture.
"Investment Company Act" means the provisions of the Investment Company Act
of 1940, 15 U.S.C. Sections 80a et seq., and any regulations promulgated
thereunder.
"Issuer" means GE Equipment Midticket LLC, Series 2006-1, a Delaware
limited liability company, until a successor replaces it and, thereafter, means
the successor and, for purposes of any provision contained in the Indenture and
required by the Trust Indenture Act of 1939, each other obligor on the Notes.
"Issuer Limited Liability Company Agreement" means the Limited Liability
Company Agreement of the Issuer, dated as of December 14, 2006, among the
Managing Member and the Issuer, as the same may be amended or supplemented from
time to time.
"Lien" means a security interest (as such term is defined in Section 1-201
of Article 1 of the UCC), lien, charge, pledge, equity or encumbrance of any
kind, other than tax liens, mechanics' liens and any liens that attach to the
related Loan by operation of law as a result of any act or omission by the
related Obligor.
5 Annex A to
Loan Sale Agreement
"Liquidated Loan" means any Loan (i) liquidated through the sale or other
disposition of all or a portion of the related Equipment or (ii) that has been
charged off in accordance with the Credit and Collection Policy without
realizing upon the Equipment.
"Liquidation Proceeds" means, with respect to any Liquidated Loan, the
amounts collected in respect thereof from whatever source (including the
proceeds of insurance policies with respect to the related Equipment or Obligor)
during the Collection Period in which it became a Liquidated Loan, net of the
sum of any amounts expended in connection with such liquidation and any amounts
required by law to be remitted to the Obligor on such Liquidated Loan or any
creditor of such Obligor to the extent required by applicable law or agreement.
"Litigation" means, with respect to any Person, any action, claim, lawsuit,
demand, investigation or proceeding pending or threatened against such Person
before any court, board, commission, agency or instrumentality of any federal,
state, local or foreign government or of any agency or subdivision thereof or
before any arbitrator or panel of arbitrators.
"Loan" means any Loan included in Schedule of Loans and any agreement
(including any invoice) pursuant to, or under which, an Obligor shall be
obligated to make payments with respect to any Loan.
"Loan Files" is defined in Section 2.1 of the Sale Agreement.
"Loan Value" is defined in the Purchase and Sale Agreement.
"Managing Member" means CEF Equipment Holding, L.L.C., a Delaware
limited liability company or any successor Managing Member under the Issuer
Limited Liability Company Agreement.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect on (a) the business, assets, liabilities, operations,
prospects or financial or other condition of such Person, (b) the ability of
such Person to perform any of its obligations under the Related Documents in
accordance with the terms thereof, (c) the validity or enforceability of any
Related Document or the rights and remedies of such Person under any Related
Document or (d) the Loans, as applicable, therefor, any interest related thereto
or the ownership interests or Liens of such Person thereon or the priority of
such interests or Liens.
"Notes" means the notes issued under the Indenture.
"Obligor" means, as to each Loan, any Person who owes payments under
the Loan.
"Payment Date" means, with respect to each Collection Period, the
15th day of the calendar month following the end of that Collection Period, or,
if such day is not a Business Day, the next Business Day, commencing on January
16, 2007.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental charges not yet due and payable;
(b) pledges or deposits securing obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation; (c) pledges or deposits securing bids, tenders,
6 Annex A to
Loan Sale Agreement
contracts (other than contracts for the payment of money) or leases to which the
Seller or any Affiliate thereof is a party as lessee made in the ordinary course
of business; (d) deposits securing statutory obligations of the Seller or any
Affiliate thereof; (e) inchoate and unperfected workers', mechanics', suppliers'
or similar Liens arising in the ordinary course of business; (f) carriers',
warehousemen's or other similar possessory Liens arising in the ordinary course
of business and securing liabilities in an outstanding aggregate amount not in
excess of $100,000 at any one time; (g) deposits securing, or in lieu of,
surety, appeal or customs bonds in proceedings to which the Seller or any
Affiliate thereof is a party; (h) any attachment or judgment Lien not
constituting an Event of Default; (i) presently existing or hereinafter created
Liens in favor of the Purchaser, the Issuer or the Indenture Trustee; and (j)
presently existing or hereinafter created Liens on personal property or
Equipment which are subordinate to or pari passu with the Liens in favor of the
Purchaser, the Issuer or the Indenture Trustee.
"Person" means any individual, sole proprietorship, partnership, joint
venture, unincorporated organization, trust, association, corporation (including
a business trust), limited liability company, institution, public benefit
corporation, joint stock company, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Precomputed Loan" means any Loan under which the portion of a payment
allocable to earned interest (which may be referred to in the related Loan as an
add-on finance charge) and the portion allocable to principal are determined
according to the sum of periodic balances, the sum of monthly payments or any
equivalent method or are monthly actuarial loans.
"Purchase Amount" means, as of the close of business on the last day of a
Collection Period, an amount equal to the Loan Value of the applicable Loan, as
of the first day of the immediately following Collection Period (or, with
respect to any applicable Loan that is a Liquidated Loan, as of the day
immediately prior to such Loan becoming a Liquidated Loan less any Liquidation
Proceeds actually received by the Issuer) plus interest accrued and unpaid
thereon as of such last day at a rate per annum equal to the APR for such Loan.
"Purchase and Sale Agreement" means the Loan Purchase and Sale Agreement
dated as of December 14, 2006, by and between the Transferor and the Issuer as
the same may be amended from time to time.
"Purchaser" is defined in the preamble to the Sale Agreement.
"Purchaser Indemnified Person" is defined in Section 5.1 of the Sale
Agreement.
"Records" means all notes, leases, security agreements 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 the Seller, the Servicer, any Sub-Servicer or the Issuer with
respect to the Loans and the Obligors thereunder, and the other CEF Assets.
"Recoveries" means, with respect to any Liquidated Loan, monies collected
in respect thereof, from whatever source (other than from the sale or other
disposition of the Equipment), in any Collection Period after such Loan became a
Liquidated Loan.
7 Annex A to
Loan Sale Agreement
"Redemption Date" is defined in the Indenture.
"Related Documents" means the Sale Agreement, the Purchase and Sale
Agreement, the Servicing Agreement, the Issuer Limited Liability Company
Agreement, the CEF Limited Liability Company Agreement, the Administration
Agreement, the Indenture, the Swap Agreement, and all other agreements,
instruments, and documents and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Person, or any
employee of any Person, and delivered in connection with any of the foregoing.
Any reference in the foregoing documents to a Related Document shall include all
Appendices thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to such Related Document as the same may
be in effect at any and all times such reference becomes operative.
"Related Security" means with respect to any Loan: (a) any interest
(including security interests), if any, in the related Equipment; (b) all
guarantees, insurance or other agreements or arrangements of any kind from time
to time supporting or securing payment of such Loan (including rights (if any)
to receive proceeds on insurance policies covering the Obligors); and (c) all
Records relating to such Loan.
"Sale Agreement" means the Loan Sale Agreement, dated December 14, 2006,
between GE Capital and the Purchaser, as the same may be amended or supplemented
from time to time.
"Scheduled Payment" on a Loan means that portion of the payment required to
be made by the Obligor during any Collection Period sufficient to amortize the
principal balance under (x) in the case of a Precomputed Loan, the actuarial
method or (y) in the case of a Simple Interest Loan, the simple interest method,
in each case, over the term of the Loan and to provide interest at the APR,
provided that Termination Values shall also constitute Scheduled Payments.
"Schedules of Loans" means the schedule of Loans attached as Schedule I to
the Sale Agreement (which schedule may be in the form of microfiche).
"Securities Act" means the provisions of the Securities Act of 1933, 15
U.S.C. Sections 77a et seq., and any regulations promulgated thereunder.
"Securities Exchange Act" means the provisions of the Securities Exchange
Act of 1934, 15 U.S.C. Sections 78a et seq., and any regulations promulgated
thereunder.
"Seller" means GE Capital, in its capacity as seller hereunder, and its
successors and assigns.
"Servicer" means General Electric Capital Corporation in its capacity as
Servicer under the Servicing Agreement, or any other Person designated as a
Successor Servicer under such agreement.
"Servicing Agreement" means the Servicing Agreement dated as of December
14, 2006, by and between the Issuer and the Servicer, as the same may be amended
or supplemented from time to time.
8 Annex A to
Loan Sale Agreement
"Servicing Fee" is defined in the Servicing Agreement.
"Simple Interest Loan" means any Loan under which the portion of a payment
allocable to interest and the portion allocable to principal is determined by
allocating a fixed level payment between principal and interest, such that such
payment is allocated first to the accrued and unpaid interest at the Annual
Percentage Rate for such Loan on the unpaid principal balance and the remainder
of such payment is allocable to principal.
"Solvent" means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person;
(b) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person's property would constitute
an unreasonably small capital. The amount of contingent liabilities (such as
Litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Stock" means all shares, options, warrants, membership interests in a
limited liability company, general or limited partnership interests or other
equivalents (regardless of how designated) of or in a corporation, partnership
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act).
"Stockholder" means, with respect to any Person, each holder of Stock of
such Person.
"Sub-Servicer" means any Person with whom the Servicer enters into a
Sub-Servicing Agreement.
"Sub-Servicing Agreement" means any written contract entered into between a
Servicer and any Sub-Servicer pursuant to and in accordance with the Servicing
Agreement.
"Subsidiary" means, with respect to any Person, any corporation or other
entity (a) of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person or (b) that is directly or indirectly controlled by such Person
within the meaning of control under Section 15 of the Securities Act.
"Successor Servicer" is defined in Section 6.2 of the Servicing Agreement.
"Swap Agreement" is defined in the Indenture.
"Termination Value" means the "Termination Value" (if any) payable by
lessee pursuant to the applicable Loan.
9 Annex A to
Loan Sale Agreement
"Transfer Date" is defined in the Indenture.
"Transferor" means CEF Equipment Holding, L.L.C. a Delaware limited
liability company, as seller under the Purchase and Sale Agreement.
"UCC" means, with respect to any jurisdiction, the Uniform Commercial Code
as the same may, from time to time, be enacted and in effect in such
jurisdiction.
SECTION 2. Other Interpretive Matters. All terms defined directly or by
incorporation in the Sale Agreement shall have the defined meanings when used in
any certificate or other document delivered pursuant thereto unless otherwise
defined therein. For purposes of the Sale Agreement (including in this Annex A)
and all related certificates and other documents, unless the context otherwise
requires: (a) accounting terms not otherwise defined in such Agreement, and
accounting terms partly defined in such Agreement to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles; and unless otherwise provided, references to any month,
quarter or year refer to a fiscal month, quarter or year as determined in
accordance with the GE Capital fiscal calendar; (b) terms defined in Article 9
of the UCC and not otherwise defined in such Agreement are used as defined in
that Article; (c) references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on such day; (d) the
words "hereof," "herein" and "hereunder" and words of similar import refer to
such Agreement (or the certificate or other document in which they are used) as
a whole and not to any particular provision of such Agreement (or such
certificate or document); (e) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to such Agreement (or the
certificate or other document in which the reference is made), and references to
any paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (f) the term "including" means "including without
limitation"; (g) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (h) references to any agreement refer to that agreement as from time
to time amended, restated or supplemented or as the terms of such agreement are
waived or modified in accordance with its terms; (i) references to any Person
include that Person's successors and assigns; and (j) headings are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
10 Annex A to
Loan Sale Agreement
